Full text of The Northwestern Banker : September 1931, 36th Year, Number 530

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Federal Reserve Bank of St. Louis

Heads Committee on
A id to Germany

A L B E R T H . W IG G IN
C h a irm a n o f the B oa rd
C h ase N a tio n a l B a n k

4

Champion Pen of Three
Barrows, International
Live Stock Show at Chi­
cago. Just one of the
hundreds o f champion­
ship and blue ribbon
awards won by entries
in national, interstate
and state shows, fed
and fitted on the F ox
Chemical
Company’s
Experimental Farm.

HOGS
ARE

S T IL L

I O W A ’S

BEST C O L L A T E R A L
A R M E R S who raise hogs have a much better

F

chance o f repaying loans fro m income than

those depending upon grain.

W h ile this fact

has alw ays been true, present conditions prove it
again.
In the face o f declining fa rm prices, where in­
come fro m grain is practically swept aw ay, hogs

The F ox organization has devoted over tw enty
years to im proving hog raising conditions.

A t our

large experim ent fa rm , north o f Des M oines, we
hold a constant series o f 60 day tests on feeding
hogs.

H ere we have shown fa rm ers that it is

possible to produce pork for as low as $3.20 per

continue to bring in a profit IF P R O P E R L Y F E D .

100 lbs.

“ B ringin g home the bacon” with hogs is a m atter

lots every day helping bring sick pigs back to

o f producing pork at a cost sufficiently lower than

health.

the m arket price.

men who work with farm ers show ing them how

o f fa rm ers.

This is being done by a number

H elpin g farm ers to make hogs pay

larger profits is a duty for bankers as well as
ourselves.
B y encouraging farm ers to look into proved
feeding methods and to overcome disease at all

F ox Service men are out in Iow a’s hog
These men are not salesmen, but service

to increase hog profits.
It is indeed a pleasure to send the facts we
have uncovered by feeding tests to bankers who
realize that “ H ogs are Still Iow a’s Best Collat­

tim es, bankers aid in bringing back Io w a ’s pros­

eral.”

perity.

copies o f our latest complete H og Feeding Bulletin.


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Iowa bankers are urged to write for free

F O X C H E M IC A L C O M P A N Y
Manufacturers of the famous F ox Mineral Powder
Des Moines, Iowa

%

3

N o rth w e ste rn Banker
Des M oines
The Oldest Financial Journal West of the Mississippi
September, 1931

Number 530

36th Year

In
Heads

Committee on
Germany

A id

to

A c ro ss fro m the P u blish er

(See cover photo)

-

Albert H. Wiggin, chairman of the
board of the Chase National Bank
of New York City, is assuming a
prominent place in world banking
affairs at the present time, due to his
appointment on the committee set up
by the Bank of International Settle­
ments to study means of assisting
German finance. Mr. Wiggin is now
in Europe on this mission.
Mr. Wiggin began his banking
career at the bottom of the ladder,
as a clerk in the Commonwealth Bank
of Boston, in 1885. In 1891 he be­
came a bank examiner in the Boston
district and three years later became
assistant cashier of the Third N a­
tional Bank of that city. He later
became vice president of the Elliot
National Bank, then went to New
York City as vice president of the
National Park Bank in 1899.
He was one of the organizers of
the Bankers Trust Company of New
York in 1903, then became vice presi­
dent and a director of the Chase N a­
tional in 1904. He later became presi­
dent of the bank and during the first
decade of his presidency its deposits
increased from $26,000,000 to $300,000 , 000 .
Mr. W iggin has an extensive ac­
quaintance in banking circles, being
known as the banker “ with a million
friends.”

*

G E R A L D A. S N ID E R
A ssocia te Publisher

10

T w o K in d s o f B an k H ero es

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K e e p in g D irectors Sold on T h eir Job

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N e w B an k in g D evices

13

By Boscoe Macy

U n m a sk in g the F o r g e r

14

By Blanche Holmes

L eg a l Lore

16

N e w s and V ie w s

17

By Clifford DePuy

O p tim ism in B an k A d v e rtisin g

19

By Alice Moshier

G roup B an k A c c o u n tin g

24

By G. T. Cartinhour

B onds and In vestm en ts

2 9 -4 5

F ixed T ru st S hares as P referred C o lla te ra l

29

By Charles W. Isaacs, Jr.

R eal E state Bond B rok era ge

37

By F. N. Kneeland

Insurance

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B a n k ers W a n ts
South D a k o ta N e w s

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Io w a N e w s

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In d e x to A d v e rtise rs

72

• ONE

OF

TH E

•

DePu y Bankinci Publications

R. W . M O O R H E A D
E d itor

W M . H. M A A S
V ic e President
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C hicago
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M em ber,
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F ron tisp iece, “ G o d ’s G rea te st G ift”
By E. A. Buden

f

C L IF F O R D D E P U Y
P ublisher

ThisIssue

O FFICES

_

OM AHA

D E S \ M ^ IN E S "

C H IC A G O

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MILW AUKEE

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F . S. L E W I S
S pecial R epresentative
840 L br. E x. B ldg.
M inn eap olis, M inn.

Northwestern Banker, published monthly by the DePuy Publishing Company, Inc., at 555 7th Street, Des Moines, Iowa.
Subscription, 50c per copy, $3,00 per year. Entered as second-class matter at the Des Moines post office. Copyright, 1931.


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Federal Reserve Bank of St. Louis

Northwestern Banker

September 1931


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Federal Reserve Bank of St. Louis

Credit Information
*$*

C o n t in e n t a l I l l in o is
BANK AND TRUST
COMPANY
C H IC A G O

R E S O U R C E S

A

BILLION

DOLLARS


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o4 Cedar Rapids Dank
unlit t 41 ; h¡ h'í¡,.j
t IISISI I i l 11 II II Mini «

S e rv ic in g c A ll I o u ) a
W e work with

and for our

correspondent accounts to the
end of bringing to them the
highest degree of satisfaction.

M ERCHANTS
NATIONAL BANK
C edar R apids

Iow a

Northwestern Banker

September 1931

6

" . . . .

a cry of defiance and not of fear”

The Cradle of Liberty
will

bethe

Birthplace of New Ideas-

Come to Boston, Sept.

14- 17.

F or s o u n d Financial
advertising and business
pr o mo t i o n suggestions
atte nd the

16th A

F in

a n c ia l

n n u a l

A

FOR BANKS

Northwestern Banker


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o n v e n t io n

d v e r t is e r s
Learn

/✓

C

A

ssn

about

The Creative Force in Finance
TRUST C O MP A N I E S

September 1931

INVESTMENT C OMP A NI E S

Broadened Facilities
and Experience
In a small, almost frontier city, The First National Bank of
Chicago was organized in 1863* Its growth has reflected the
growth of the territory of which Chicago is the commercial
and financial center.
From little more than a local bank the First National and
its affiliate, the First Union Trust and Savings Bank, have
developed nation-wide and international connections with
facilities for the prompt and efficient handling of financial
business in every part of the world.
The Banks and Bankers Division is a feature of the specialized
organization which has characterized this bank for the past
twenty-five years. A n intimate contact with business de­
velopments, national and international, is maintained.


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Federal Reserve Bank of St. Louis

The First National
Bank of Chicago
Affiliated

F irst Union T ru st
and Savings Bank

Northwestern Banker

September 1931

cross bAe P e sics

'T h e P u b lish e r

y

“ Believe it or not,” many of

tainly someone should sound a caveat emptor —

Investm ent
H ouses '

the

U p tim iS U C

more optimistic view of the sit­

The last paragraph is also very interesting and

uation as indicated by a letter which we received

proves the point which we have stated heretofore,
that prosperity is not just around the corner but
is actually here, when the fake stock-selling houses

investment

LaSalle

Street

houses
are

along

taking

a

from a prominent Chicagoan recently, and which
reads as follow s:
“ There is a renewed enterprise on the part of
LaSalle Street investment houses to develop busi­
ness again in the so-called Chicago territory— par­
ticularly in Iowa.
‘ ‘ One of the prominent houses is now, and has
for the past six months, listed Iowa as its best terri­
tory. It has four aggressive salesmen in that state
at the present time and is now advertising for more
sales representatives.
“ One of the country’s largest security companies
is doing a splendid business throughout Iowa, Ne­
braska, and the whole middle west.
“ Another house cited the case of th e ir --------------representative, who during the past month de­
veloped 23 new clients and sold 319 bonds.
‘ ‘ H alf an hour’s talk with the Chicago vice presi­
dent of one of the large utility underwriting firms
brought out the information that they are enjoying
a comfortable business.
While they materially
reduced their sales force six months ago, they kept
their best salesmen at points like Minneapolis and
Des Moines, and are confident conditions are going
to improve with the fall months.

Let the Buyer Beware— warning, so that only reli­
able investment houses are patronized.”

commence to get active again.
There certainly is no better barometer of im­
proved conditions or at least the opportunity for the
sale of securities than to ascertain when the “ blue
sky artists” are again in evidence with their high
powered methods.
The big problem now for every banker is to see
that his customers when they come to him for advice
on investments are given the right information and
sold the right kind of securities.
Likewise, investment houses have a double duty
to perform in seeing that the advantages of their
bonds and stocks are advertised sufficiently to offset
the so-called high yielding securities offered by the
fly-by-night investment houses.

G vO U p
r> i n h i n n
j
”
LiUWS

Group banking has brought out
new legislation in some states, but
in many states there has been no
legislation passed at all covering

the responsibility of a holding company of bank
dock.
In Wisconsin, no corporation organized under

“ The one bad omen in Chicago at the present
time is the activity of a number of dubious stock

the laws of the state is allowed to hold more than
10 per cent of the stock of any bank or trust com­

selling houses, that are spending great sums of
money on elaborate house organs and long distance
telephone and telegraph to inveigle the public to
participate in their offerings of issues of doubtful
value. They figure that there is a good buying
public now— even for their type of offerings. Cer­

pany unless 75 per cent of the stockholders of both

Northwestern Banker


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Federal Reserve Bank of St. Louis

September Î93Î

3orporations

vote in favor thereof at a meeting

especially called for that purpose.
In New Jersey, a law was passed in 1928 prohib­
iting a holding corporation from owning more than
10 per cent of the shares in more than one banking

9

institution, whether it was a state bank, trust com­
pany, or national bank doing business in the state.
In Minnesota there are no laws dealing specifi­
cally with this question, although holding corpora­

concerning any financial institution which are un­
true and which may result in serious consequences
to that particular institution and to the community
which it serves.

tions organized in other states may acquire the stock
of Minnesota state banks and are not subject to
control by the commissioner of banks according to
the assistant attorney general of the state.
In W est Virginia, a new banking code has been
enacted in which group banking is prohibited.

A recent “ Whispering Campaign”

concerning

the condition of the Chatham Phenix National
Bank and Trust Company was started by James II.
0 ’Connell, a twenty-five year old employe of Bur­
ley and

Company,

Broadway.

investment

bankers,

at

115

A s a result of the false reports circu­

In Oregon, corporations owning stock in banks

lated by Mr. O ’Connell he has been indicted and

or trust companies are not subject to the double

will be prosecuted by the bank to the very limit

indemnity provision applicable to holders of bank
or trust company stock.

of the law.
That the bank is in excellent financial condition

These few examples indicate that there is consid­

is shown by their statement at the close of business

erable uncertainty and no general definite legisla­

August 15, 1931, when they had total resources of

tive policy concerning the liability of stockholders

over $254,000,000, of which 66 per cent were of a

owning stock in holding corporations.

liquid character including cash, government bonds,

A s time goes on no doubt these differences of
state laws will be changed and legislation enacted
which will be more uniform in its character.

and other loans.
It is to be hoped that the example of the Chath­
am Phenix National Bank and Trust Company
in

Capitalizing
on
W ithdraw als

A n interesting story is
told of a banker in a com­
munity which had been more

or less disturbed by the clos­
ing of two other banks, and who realized that his
institution was being subject to the withdrawal of
deposits, although his financial statement showed
large cash reserves. He advertised that all custom­
ers of his bank could have the use of the bank’s
safety deposit boxes without charge in order that
they might put their currency and cash in a place
of safe keeping.
This banker believed that if he could keep the
money within the four walls of his bank that he
would have a better chance to have it redeposited
when the storm of uncertainty had blown over.
This was certainly capitalizing on an unfortunate
situation, but it helped to regain a large amount of
the money which was withdrawn from his bank dur­
ing a crucial period.

Stamping O u t
False R um ors

The action of the Chatham Phenix National Bank

and Trust Company in
taking immediate steps to prosecute the originator

of false rumors concerning the financial condition
of their bank is both a courageous and admirable

its

courageous procedure

to

eliminate

false

statements about its institution will be followed
by other banks if similar circumstances should
occur to them.

Comparing
State and
National
Banks

Figures recently compiled as
of March 25, 1931 show interest­
ing figures for state banks and
national banks.

The total number of banks in
the the United States is as follow s:
State banks........................... ............... .....................15,865
National banks_____ __________________________ 6,935
Total ...................................................................22,800
The total amount of capital, surplus, and undi­
vided profits for these two classes of banks, is as
follows :
Capital, surplus, and undivided
profits for state banks................. ...... $5,950,000,000
Capital, surplus, and undivided
profits for national banks............ .
3,778,000,000
Total __________

$9,728,000,000

The total amount of deposits for these two clas­
sifications gives the following interesting figures:
Deposits of state banks....................... .$34,266,000,000
Deposits of national banks................. 22,344,000,000

step in the right direction.
The N o r t h w e s t e r n B a n k e r has been a firm be­

Total ................................................. $56,610,000,000

liever in the policy of prosecuting any individual

It is interesting to note that the state banks have

who maliciously and willfully circulates statements

53 per cent more deposits than the national banks.


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Federal Reserve Bank of St. Louis

Northwestern Banker

September 1931

1

“ GOD’S GREATEST GIFT”
B . P o l h a s t, w h o p a in te d «G o d ’s G r e a te s t G if t ” w a s h o rn in H o lla n d in 1879 and re c e iv e d h is
e a r ly tra in in g' u n d e r h is f a th e r , an a r tis t w e ll-k n o w n fo r h is co p ie s o f th e w o r k o f th e
old m a s te r s .

C opyright by The G erlach-Barklow Co., Joliet, Illinois.

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Federal Reserve Bank of St. Louis

September 1931

11

Two Kinds of
BANK H ERO ES
By E. A. RUDEN
Superintendent of Banking, South Dakota
(From

address before South
convention)

Dakota

the impairment.
The first man,
who wins out by being able to make
good the impairment, is a real hero
and receives his reward by being
enabled to keep his institution go­
ing, maintaining his standing in the
community and has the satisfaction
o f knowing that he has made a suc­
cess. The other man who is a hero
is one who realizes that he cannot
make good the impairment o f his
capital and closes his bank voluntarily
before the bank’ s losses are so great that
its closing will mean any serious loss to
the depositors. It takes more courage to
accept the stigna o f failure and the re­
sultant unpleasantness incident thereto
than it does to follow the line o f least
resistance and to continue running a bank
that the directors know to be insolvent.

tion unless the stockholders are able and
willing to make good losses that have been
sustained.
Simply increasing deposits
will not take out bad paper. A greater
volume o f business, will o f course, in­
crease profits and if the losses are not too
great they can be absorbed but the de­
partment is not justified in permitting an
insolvent bank to continue operating sim­
E. A . E U D E N
ply because its reserve is ample. In my
opinion reserve is a secondary matter, be­
HE other day that grand old man,
cause all bankers know that a bank’ s re­
Thomas A. Edison, gave an address
serve may be entirely depleted but if the
over the radio in which he said, ‘ 1My
note pouch is good and other assets are
message to you is ‘ be courageous.’ I have
satisfactory, the bank may be entirely
lived a long time. I have seen history
solvent. In justice to the depositors and
repeat itself again and again. I have
the better banks, we should face the truth
seen many depressions in business. A l­
and I believe that I express the unani­
ways America has come out stronger and
mous opinion o f the South Dakota Bank­
more prosperous. Be as brave as your
ing Commission when I say that we are
fathers were before you! Have faith !
endeavoring to put into practice a policy
Belongs to Depositors
Go forward ! ” I f men with the mature
that will eventually mean that only sol­
judgment, wonderful intellect and busi­
pO R T U N A T E L Y there are only a few
vent state banks will be permitted to
ness experience o f Thomas A. Edison have
operate in South Dakota. In other words,
r bankers who adopt the attitude that
faith in the future prosperity o f this na­
because they own a few shares o f stock
we are working to bring about a condi­
tion and believe that history will repeat
in a bank that the business belongs to
tion that will eventually mean that the
itself and that we will come out stronger
them, whereas, as a matter o f fact the
capital and surplus in any bank that sus­
and more prosperous than ever before, I
major part belongs to the depositors. In
pends business will be sufficient to take
b e l i e v e that we should
care o f all losses and that
have the same faith and
depositors will receive 100
make our p l a n s accord­
“ The banking failures of the past which have deprived many com ­
cents on the dollar.
munities o f banking facilities have brought hom e to the people the value
ingly. By this I do not
The interest o f solvent
and necessity of bank service to a com m unity. In the future the com ­
mean that we should ne­
banks and the public is
munities can reasonably be expected to give to the banks a greater degree
glect to take every precau­
identical. It is the duty
of cooperation than they have heretofore sh ow n !”
tion in so shaping our a f­
of the banking department
fairs that even if condi­
to enforce the provisions
tions get worse than at present we will
o f the constitutiton and the laws enacted
checking over the affairs o f some o f the
still be able to function. In other words,
banks that have closed it is apparent that by the legislature o f South Dakota. Some
we should follow the advice o f the gen­ very little consideration was given to the
state bankers object to the reserve re­
eral who told his soldiers that they should
rights o f the depositors and that the offi­ quirements and other provisions o f the
“ Have faith in God but keep their pow­
cers were only concerned with the incon­ law which are not in harmony with the
der d ry .”
venience and unpleasantness that would
national banking law, and seem to feel
In speaking o f courageous bankers, I
attach to them when the time came for that the banking department has the right
believe there are two classes o f heroes in
the closing o f the institution, and con­
to interpret the law in line with these
the banking business. One is the man
tinued to accept deposits despite the fact
objections. In answer to these objections
who continues to put in his personal re­ that the officers must have known that
I will simply say that those who choose
sources to keep his bank going and bat­ they had no way o f taking care o f the
to operate banks under the South Dakota
tles his way through in the face o f di­
losses sustained. I do not consider it
laws know, or should know, the rules o f
minishing profits and increased losses.
smart or courageous to continue operat­ the game, and should try to abide by
Losses caused by conditions over which
ing a bank after it is insolvent. To con­ these rules as nearly as possible. A man
he has no control. The other is the man
tinue operating a bank after it is hope­ is not compelled to select the banking
who closes his doors when he realizes that lessly insolvent in the hope that condi­ business as his career, therefore, he can­
the capital o f his bank has become seri­ tions will improve, is only a delusion.
not consistently object to abiding by the
ously impaired and knows that he has no
Good times, good crops and big prices will rules. If he does not want to be a banker
further personal resources to make good
not necessarily help an insolvent institu­
(Turn to page 25, please)

T


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Federal Reserve Bank of St. Louis

Northwestern Banker

September 1931

12

Keeping D IR E C T O R S Sold on
TH EIR

By CARL D. GANZ
Cashier, Farmers and Merchants Bank, A lvo,
Nebraska

A N KS being corporations owned by
stockholders necessarily must have
their business policies shaped and
determined by a committee elected by the
stockholders. W e call this committee the
board of directors. Theoretically and in
the eye o f the law the duty of this board
is to authorize all the acts o f the corpora­
tion. Let us consider then what an ideal
board would be with a few observations
thrown in as to what kind o f boards we
actually have.
The first breakdown in this set-up comes
from the human failing among any group
o f citizens in practically always failing to
elect the most competent and capable men
to represent them. The board acting as
the connecting link between the stock­
holders and the executives who actually
run the bank are in fact trustees. Being
trustees fo r the capital of the bank and to
a large extent the deposits o f the public,
only the most capable should be placed
upon the board. This board should be
large enough to represent the various in­
terests o f the community and stockholders
but not so large as to be unwieldy. W e
must not forget then in talking about the
responsibility o f directors and in realiz­
ing the shortcomings o f many boards that
the stockholders in the first instance have
not fulfilled their responsibility in elect­
ing the most capable board possible.

JO B S

B

Leadership
FTER the board has been elected it
necessarily must create the charac­
ter o f the institution and largely establish
its degree of leadership. As I said a
minute ago you can define their entire
duty by the one word, “ authorize”— that’ s
their business— to first authorize the pol­
icies o f the bank and then see that they
are carried out. They don’t need to be
technical bankers to do this as the funda­
mental principles underlying all busi­
nesses are identical. Outside o f firmly
insisting that the policies they lay down
are carried out, I feel that they can safely
confine their other interests in the bank to
two departments, viz., the note case and
the profit account.
In the past bank
critics have always preached the idea that
the heart, lungs and all the other vital
organs o f a bank was in the note case. It
has only been recently that anyone has
paid any attention to the profit account.
Not fo r one minute I decry any effort to
make better note cases but I can’t help but

A

Banker
Digitized for Northwestern
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Federal Reserve Bank of St. Louis

C A R L D. G A N Z

feel that many a dead bank today first took
sick with a subnormal temperature in the
profit account. A fter all the note case
in every bank has some good, some fair,
and some rotten paper in it— they only
vary in degrees (we are considering only
honest banks)— but there is a whale of
a difference in the profit accounts o f
banks operating under the same circum­
stances. Many times the heart trouble
caused by the note case can be cured by
a sugar-coated physic taken from the
profit account. It is the directors’ duty to
see to it that these two departments are
kept healthy and in tune with each other.
That is their biggest duty and if per­
formed religiously they need have little
fear o f being charged with malfeasance
or nonfeasance.
It’s Our Fault
OW you know and I know that we
do not always have this ideal board
nor do the boards that we do have dis­
charge in full the responsibilities that we
have been discussing. As a. matter o f fact
it has been my observation that the aver­
age board o f directors in a small bank
(mind you I said small) is about as use­
less as a painted ship upon a painted
ocean. Now why and whose fault is it?
I ’ll tell you, it’s yours, Mr. Executive
Officer— we can talk all we want to about
the primary duty o f the stockholders to
elect the best board possible and about

September 1931

N

what the board should do after it is elected
but if they don’t do it, whose fault is it?
It’s yours and mine. We are the execu­
tive officers o f the bank— if our bank
makes good we take the credit and we
hand darn little o f it to the directors— if
our bank fails the general public cusses
and the board usually gets sympathy for
having lost their capital. I fear that as
executives we have been prone to lend
our influence to the election o f those
stockholders who would consider the elec­
tion not as a responsibility but as an
honor and who we felt would least likely
interfere with our management o f the
institution. That’s a severe indictment
but in all honesty I ask you, isn’t it true?
We have failed to cash in on our most
valuable asset— a real board o f directors;
if our policies are sound the board will
authorize them— if they are not we should
be corrected. W e have failed to see that
the possibilities o f help from an efficient
board are unlimited— they can tap re­
sources in our communities that no ex­
ecutive would ever discover— and just
think of the shock absorbing a real board
can take off the shoulders o f the executive
if they are made to realize that the pol­
icies of the bank are theirs and not the
cashier’s— let your board take the cussings on the street instead of you for all
o f our new service charges, etc., etc,— they
will really enjoy it and, gentlemen, just
stop and think fo r a minute how much
easier it would be to install these new de­
partures in our business if you have a
half dozen enthusiastic board members
explaining and defending them in your
community instead o f having to do all o f
this yourself— and furthermore your cus­
tomers will become convinced in the
soundness o f these new practices a whole
lot quicker if the propaganda is spread
by the board members instead o f you.
Now to get your board to do all these
things is your job— if you succeed your
reward will be a good bank. And, gentle­
men, don’t forget that if members o f your
board pull off their coats, roll up their
sleeves and put the job across fo r you,
it then becomes your duty to dust off those
coats and help them put them on again.

13

New Banking Devices from the
M a cy L aboratory
By ROSCOE MACY
T H A S been the practice in this depart­
ment to advance and demonstrate
periodically the most modern devices
and inventions fo r the alleviation o f suf­
fering bankerhood. These devices, as they
were placed on the market, have been
seized upon and placed in operation by
progressive bankers everywhere. Prob­
ably it is no more than fair to say that
they have been instrumental in revolution­
izing the theory and practice o f country
banking; anyhow, I ’ll go ahead and say it.
It will be remembered that the automatic
fly-swatter, the Clerkit, and other inven­
tions o f like ingenuity have contributed
their full quota to the ameliorization o f
the conditions under which country bank­
ers have to work, if we grant that they do
have to work.
Unfortunately, however, I am a slow
writer, and my inventive genius has far
out-distanced my typewriter. W e have
installed in our bank a great many me­
chanical improvements o f which the rank
and tile o f country bankers have never
even heard, and in order to bring the
reader’s information up to date, we can
perhaps do no better than to conduct him
upon a personal tour o f observation
through our banking quarters, and to
permit him to see and inspect the various
late model devices in actual operation.

I

Our Asset-Oven
HE first thing to strike the attention
o f the stranger entering our bank is a
large kiln-like container, o f 60-gallon
capacity. This apparatus is electrically
operated, by means o f an automatic ther­
mostat. Its technical name is the AssetOven, and it is guaranteed to thaw out the
most solidly-frozen asset, without chil­
blains or other complications. A ll that is
necessary is to place the asset in the oven;
the machine does the rest.
Upon the counter near the door is an
interesting piece o f machinery, which gives
outward evidence o f frequent usage. This
instrument is known as the self-container,
or temper-holder. It is constructed to
hold, under extreme tension, the temper
o f the most cantankerous cashier. Smaller
models are available fo r tellers.
Here on the table is a complicated ar­
rangement o f weights and pulleys which
has a very important place in any wellmanaged bank. It is called the book-bal­
ancer. It is operated in a very simple
manner. A bookkeeper is delegated to
place all the books o f the bank, arranged
according to weight, upon the opposite

T


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

**°p/1

,

“Bx [pssfASli*
Yearly

“ Our profit-finder and this is the latest
model, especially designed for 1931 use. I f
you can’t find a profit with this delicate in­
strument, there simply isn’t any profit there,
—which is just what I thought all the time. ’ ’

PROFIT.
tJmst

sides o f the platform— a ledger on this
side, say, and couple o f draft registers on
that; then a tickler and a couple o f cash
books— until a state o f perfect equili­
brium as between the two sides, is attained.
When the examiner comes, he is led to
this machine by the officer in charge, who
says, with a perfectly straight fa ce: “ You
see, all our books are in balance!” This
will make a hit with any bank examiner.
I f he doesn’t die laughing on the spot, he
will at least be so weak with suppressed
laughter that he will collapse when he
tries to lift the note-case— thus adding
to the general merriment and good feeling.
Over in that corner near the window is
one o f our most highly-prized instruments.
It resembles a laboratory outfit, its prin­
cipal feature being a combined micro­
scope-telescope. These instruments are
both o f exceedingly high power, which any
banker will easily understand when it is
explained that this is our profit-finder,
and that it is the latest model, especially
designed fo r 1931 use. I f you cannot find
a profit with this delicate instrument, there
simply isn’t any profit there, which is just
what I thought all the time.
Our Note-Conditioner
UT the most useful gadget o f all is
this large machine out in the center
o f the room. W e are especially proud o f
our patented note-conditioner. Bankers

B

universally recognize the importance o f
keeping the bank’s notes in spick and span
condition, always ready fo r exhibition to
the most exacting scrutiny. Bank ex­
aminers, fo r example, are suspicious o f
the note from which the maker’s name has*
disappeared, as the result of careless and
over frequent handling. They are usually
inclined, too, to favor the plain edges in
notes.
The serrated borders which a
note can attain only through age and ex­
posure may add considerably to its value
as an antique, but to the examiner they
spell only depreciation and obsolescence.
Observe, now, how the note-conditioner
operates. First let us take a note whose
only serious weakness lies in its antiquity.
It is not excessively large, and the maker’s
name is still legible ; it has merely been
sticking around quite a while. W e place
this note in the renovating vat, and leave
it there a few minutes. Upon withdraw­
ing it, we find that it has been completely
resurfaced, so that the most casual in­
spection will convince the observer that it
is good fo r another five years in the case.
Here, though, we have a note which is
excessive in amount. The past few years
have witnessed radical changes in the ap­
proved styles o f note-figures. An obliga­
tion which a few years ago was considered
reasonably slender bears now at least the
(Turn to page 69, please)

trthwestern Ranker

September 1931

14

Despite the utmost precautions forgery continues to exact its toll from
hanks and bankers, hence it is advisable for executives and employes of
banks to have a reasonable knowledge of handwriting and graphology.

U N M A S K IN G T H E F O R G E R
OMEONE has truly said, “ What man
has done, man can do,” and this is
unfortunately true in regard to the
imitation of signatures. Despite the fact
that the most skilful forgeries can be de­
tected by the handwriting expert, the num­
ber o f successful attempts to pass spurious
checks still continues. Many a. bank in
the United States has, at one time or an­
other, been taken in by some clever forger.
This fact seems to indicate the advisability
of a more general knowledge of the sub­
ject on the part of the business world, and
in particular for executives and the em­
ployes' of banks.
The handwriting expert has many in­
struments winch enable him to accurately
and readily discriminate between a gen­
uine signature and a traced or faked copy.
The microscope, the magnifying glass, the
protractor and the art o f photography, are
all valuable appliances for unmasking the
forger, but very different is it with the
bank teller or bank executives. The bank
teller is called upon to immediately deter­
mine whether a check passed across the
counter should be honored or rejected.
Here he is at a great disadvantage. In
determining, almost at a glance, whether a
signature is really that o f the supposi­
tional endorser or not, the tellers are con­
fronted with a difficulty— handicapped by
the possession o f only one original signa­
ture o f the depositor, that penned by him
in the first instance for the purpose o f
identification by the bank.
Unfortunately, as all handwriting ex­
perts know, this single specimen o f a de­
positor’s signature provides very unsatis­
factory data fo r identification, and that
for two reasons. In the first place the
penman seldom sits down to write the sig­
nature for the bank, but does so standing,
an unnatural position fo r holding the pen,
and also what is still more important this
position lends a different appearance—
however slight the difference may be— to
the writing.

S

By BLANCHE HOLMES
International Graphologist and Handwriting
Expert, P. O. B ox 1050, H ollyw ood , Cal.

These two factors might appear o f little
import, but this is far from being the case,
since it must be remembered that there is
no other combination o f words in a letter,
or any other document, which being con­
stantly written in the same consecutive or­
der of words and sequence o f letters, be­
comes an almost automatic action, thus
imparting to the signature a significance
and individuality which is not expressed
by any other words in a document. Expe­
riments have also proved that the proba­
bility o f a writer signing his name exactly
alike in every particular are one in a mil­
lion, but there are certain features common
to the signature o f any given writer, from
which he seldom, if ever, departs.
Any departure from the usual position
and conditions under which a name is writ­
ten, tends to modify the natural, spontane­
ous appearance of the signature. There is
also this important factor to be taken into
account. Signatures written almost auto­
matically, under ordinary conditions, may
vary to a greater or less degree in regard
to the minor details, such as the spacing
o f wTords, etc.— unless the penman is in the
habit of joining the initials o f his name,
or the given name to his surname— but
minor variations are peculiar to every
writer and follow no given rule. They are
graphological indications o f his individu­
ality. Such natural variations o f signa­
tures differ radically from the divergence
caused by a change o f position, from sit­
ting to standing, and from the self-con­
scious signature referred to.

Is Self-Conscious
UT of greater significance is the fact
that the average man or woman who
is required to sign his name, for the pur­
pose o f subsequent comparison and verifi­
cation, does so more or less self-con­
sciously, and consequently with marked
attention and effort, so that the writing
thus produced lacks the spontaneity o f its
usual outlines. It is not written with the
same free movement o f the pen.

B

Northwestern Banker


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

September 1931

There are, however, one or two features
common to most genuine signatures which

the bank teller should not overlook. The
natural variations seldom affect the height
o f the individual letters, that is to say a
writer will reproduce any particular let­
ter o f the alphabet, a, o, or e, etc., at the
same height, and the alignment of certain
letters will be found to differ somewhat
when the letter in question is immediately
followed by another particular letter. For
example if the writer is in the habit o f
slightly raising the “ e” when it is pre­
ceded by “ r,” this peculiarity will be no­
ticed in every instance where these two
letters are in sequence.
The forger, on the other hand, is careful
to keep his alignment on the level, and
will overlook a departure from this prin­
ciple on the part o f the original writer.
Then again, the genuine writing will show
more ease and spontaneity in the upward
strokes o f letters, such as the strokes of
the m, n, r, etc., than in the downward
movements of the pen. The contrary is
the case with forged specimens.
The
handwriting expert therefore, pays special
attention not only to the above details but
also to the speed o f the writing, the ease
with which it has been written, the retouch­
ing o f certain letters in order to make
them resemble the original and to any hesi­
tating tell-tale strokes o f the pen.
The shading o f certain letters, or the
pen pressure brought to bear more specifi­
cally on one stroke than another must be
noted. The graphologist, whose science
differs so radically from that of the hand­
writing expert, also carefully notes the
shading o f letters— dividing them into two
classes, the conscious and the unconscious
shading— but fo r a different reason and
objective. The graphologist discriminates
between the natural and conscious shading
as indicative o f two types o f character.
Writers who shade their letters in order to

lo
give what they believe to be a pleasing,
artistic effect, are generally persons of a
mediocre turn o f mind, somewhat preten­
tious, or at least possessed with the desire
for approbation and a love o f ostentation.
They are also apt to be conventional, pay­
ing marked regard to what others think of
them. Here is a good example of the
handwriting shaded for effect, in Illustra­
tion No. 1.
Even to the uninitiated, the untrained
eye, the deliberation with which the capital
letters have been shaded is very obvious.
The exaggerated size o f the capitals is
scarcely necessary, in such a case, to fu r­
ther disclose vanity and superficiality. It
is only necessary to contrast the above ex­
emplar with that o f the illustration which
follows to discover that the second writer
shades his strokes without specific effort.
(See Illustration No. 2.) When this is the
case we may expect to find one who has a
genuine artistic appreciation and who is a
lover o f nature. The writer is o f an in­
sistent disposition and belongs to the su­
perior type.
The shading o f so-called
cross strokes— principally the letter “ t” —
implies more sensuousness o f color or
form, sensuousness— not sensuality.
Although with the exception of the shad­
ing of letters and the alignment, graphol­
ogists and handwriting experts are con­
cerned with entirely separate features of
handwriting, yet both sciences may be said
to be intimately associated in regard to
crime. While the mission o f graphology
bears directly on the prevention o f crime,
that o f the handwriting expert is the de­
tection o f crime. With this exception the
two sciences have nothing in common.
Graphology by pointing out the weakling,
the victim of hereditary taints, those sus­
ceptible to temptation or with an inherent
tendency to stray from the path o f recti­
tude, plays an important part in sociology,
while handwriting expert work throws the
searchlight o f its knowledge to aid the law
in bringing offenders to account.
Dates Back to 1622
HE former science dates back to the
year 1622, Avhen an Italian, Baldo,
called attention to the remarkable associa­
tion o f certain types of handwriting with
specific traits o f character. His research
work was not followed up until in 1875 the
Abbe Nichon came across a copy o f Baldo’s
book, entitled “ A Method o f Ascertaining
the Habits and the Qualities o f a W riter
by Means o f His Written Letters.” The
Abbe himself became an enthusiastic stu­
dent o f these projections o f personality,
the human documents of character. Un­
fortunately the Abbe left no written ac­
count o f his own discoveries.
Forty years later Baldo’s book on
graphology was translated into Latin by
Petrius Vellius. Then came the famous
German philosopher, Leibnitz, who in a
treatise on morals stated: “ The hand-

T


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

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Illustration No. 2

writing also nearly always expresses in
one way or another the natural tempera­
ments, unless it be that of a writing master
which lacks spontaneity.” Another equally
famous author, the German poet, Goethe,
expressed his opinion that, “ There does
not exist the shadow o f a doubt but that
handwriting has its analogies with the
character and with the human mind.”
In the United States, Chief Police Com­
missioner Wentworth o f Dover, New
Hampshire, appears to have been the first
official to endorse the truth o f graphology
as a science worthy of close investigation.
In his book on “ Personal Identification of
the Living and the Dead,” published in
1868, Wentworth wrote: “ More than any
other single gesture or habitual pose a
man’s handwriting is the product of all
that he has experienced and lived through,
mind and body cooperating with every
stroke o f the pen.” The most celebrated
o f all modern vouchers for the truth of
graphology is undoubtedly Professor Ein­
stein, who has openly acknowledged his
belief in handwriting as a valuable and
most reliable index to character. At one
time a skeptic, an account o f his conver­
sion to a belief in this science was pub­
lished in last year’s issue o f the Living
Age, fo r June fifteenth.
To enumerate all the earlier students
and advocates o f this science would be
superfluous, since it is no longer empirical
but an established fact that handwriting is

a projection o f the personality o f the
writer— the real man as he is— not as he
would desire to appear to be. The chief
interest to the banking world lies in the
ability to discriminate between the genuine
signature o f a bank depositor and its imi­
tation. He should therefore pay particu­
lar attention to minor discrepancies,
breaks in the letters or touched up letters
which can readily be discovered by the use
o f a magnifying glass, also to any hesitat­
ing strokes and to terminals.
Forgery appears easy, but actually it is
one of the most difficult tasks to which a
potential criminal may turn. The first
difficulty a forger encounters is in control­
ling the weight brought to bear on the pen
point, so that the width o f the lines and
the curves would appear to be an exact
replica of the original signature. In fo ­
cussing his attention on what he deems to
he the essentials, he generally overlooks
minor details which characterize the writ­
ing* o f the original penman, and the careful
copying process he employs requires a
much slower movement o f the pen than
that o f a genuine specimen o f writing.
(Jnlike the writers o f anonymous let­
ters the forger is careful to maintain the
exact slant, size, shading and shape o f the
letters, but however skillful he may be in
this respect some trifling feature invari­
ably betrays him. This is often found in
the labored formation o f his up strokes
(Turn to page 70, please)

/ M crta cc
Illustration No. 3
The Genuine Signature

The Forged Signature

'Northwestern Banker

September 1931

16

/. A Minnesota Deposit

2. A North Dakota Guaranty
3. An Iowa Co-Maker

L E G A L LO R E FO R BU SY
BA N KERS

SOUTH D A K O T A seller shipped
bank to procure the guaranty, and his
live stock to a Minnesota agent,
knowledge is the knowledge of the bank,”
the agent sold the stock, drew a
the guarantors contended, as a last re­
check for the proceeds on a Minnesota
sort, but the court decided against them
By THE LEGAL EDITOR
national bank, payable to a Minnesota
on this point as well.
“ The customer made no representations
state bank, and delivered it to the state
bank with instructions to credit it to the
agreed to advance the money if the cus­ to the guarantors that he was acting as
seller’s bank in South Dakota.
agent fo r the bank. In fact he was not.
tomer would give a written guaranty o f
The check was collected by the state
payment satisfactory to the bank, the He was acting solely fo r himself. He
bank from the national bank on which it customer got a guaranty form from the
wanted to secure a loan. He applied to
was drawn on January 14, but in the bank, and induced two guarantors to sign
the bank. The bank refused to make it
meantime, on January 12, the South Da­ it.
unless he secured a guaranty which was
kota bank had closed its doors, and the
satisfactory to the bank. The bank speci­
“ You’re not to deliver it to the bank
seller found himself in a deep and dan­ until you’ve got the signatures o f at least
fied no particular guarantors, imposed no
gerous hole. He could not collect the two more good guarantors,” the guaran­ requirements as to the number, and had
proceeds o f the check from the South tors stipulated.
no knowledge as to whom the customer
Dakota bank, as that institution was
“ That’s satisfactory, and you can de­ might approach and secure as guarantors.
hopelessly insolvent, and he could not pend on me to get the additional names,”
These things being so, we cannot see how
collect from his agent, as the latter had the customer agreed, went straight to the it can be said that there is the slightest
carried out the seller’s instructions to the bank, handed over the guaranty, and ob­ ground to urge that the customer was the
letter. Consequently, his only recourse
agent o f the bank in securing the guar­
tained the loan, and the bank, o f course,
was to demand payment from the state knew nothing o f the customer’s breach of
anty,” said the court on this point.
bank in Minnesota.
agreement with the two guarantors.
A n Iowa. Co-Maker
“ You merely received the check for col­
Then, when the loan fell due, the cus­
1 F A BORROW S money from a bank,
lection, and the title to the proceeds never tomer was in bankruptcy, and the bank
I and A and B give a “ joint and several”
passed to you,” the seller contended.
sued the two unlucky guarantors.
promissory note fo r the amount o f the
“ Under the circumstances, title passed
“ The guaranty was executed by us on
loan, the bank can collect the note from
to us, and we’re bound by the instruc­ the express condition that at least two
tions we received at the time,” the state additional guarantors were to be ob­ either A or B, as both have received value
— A has the cash, and B
bank maintained, and the
has had the satisfaction o f
Minnesota Supreme Court
procuring a loan for his
upheld the bank in a case
‘‘But when he signed after the hank had taken the note and
friend.
reported in 205 N. W . 447.
without any new consideration moving to the signer of the
Suppose, however, that
“ There w as n o t h i n g
note or from the bank, the latter was not a holder for value as
A borrows money from a
about the deposit indicat­
against him because he was not a party to the note prior to
bank, gives his own note,
ing that it was fo r collec­
the time the bank took it for value, the court said!”
pockets his cash, and, a
tion only. Although the
few days later, the bank
state bank may properly be
held to have had knowledge that the check tained. That condition was never fu l­ gets ‘ ‘ cold feet, ’ ’ and, without any
was the property o f the shipper, there filled, and we are not liable,” the guaran­ new consideration, B comes in and signs
the same note as a co-maker with A.
was nothing to qualify the authorized di­ tors contended.
rection by the shipper’s agent to place
When the note falls due, the bank
“ W e took the guaranty in good faith,
the deposit immediately and uncondition­ and with no knowledge o f the breach o f
sues B and he sets up the defense that he
ally to the credit o f the South Dakota
agreement,” the bank pointed out, and received no consideration fo r signing the
bank. That was done, and the operation
the North Dakota Supreme Court ruled note.
amounted to an absolute assignment o f
“ You secured a loan fo r A by doing
that the guarantors were liable.
the title o f the check and the proceeds to
so ,” the bank points out.
“ Assuming that there was a conditional
“ I f I had, I would be bound to pay the
the state bank. It is the law that The
title o f the money, drafts, or other paper’ delivery o f the guaranty to the customer, note, but the loan was made before I
signed, so therefore there is no consider­
so deposited ‘immediately becomes the the bank had no knowledge or notice o f
property o f the bank, which becomes the condition. There is no question but ation whatever moving to me, ’ ’ B retorts,
that the bank made the loan relying on and the Supreme Court o f Iowa has ruled
debtor to the depositor fo r the amount,
unless a different understanding affirma­ the guaranty. Under the circumstances, in his favor on this point in a case re­
the guarantors, though the guaranty was ported in 205 N. W . 863.
tively appears.’ In this case there is no
conditionally delivered, are bound thereby,
“ It, o f course, cannot be doubted that
evidence o f any different understanding,
under
the rule that where one o f two inno­ had B signed the note prior to the time it
except that the South Dakota bank and
cent parties must suffer, he who by his act
was accepted by the bank he would have
not the shipper was to have the credit,
which was to be immediate and uncondi­ or negligence has made the loss possible been liable to the bank as a co-maker,
must be the one to settle,” the court said. although the bank then had knowledge
tional,” the court said.
“ Assuming that that is the law, in this that he was only an accommodation
A North Dakota customer applied to a
case the customer was the agent o f the
(Turn to page 27, please)
North Dakota bank fo r a loan, the bank

A

Northwestern Banker


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

September 1931

17

I presume that we will never get over
the idea that there are always greener
pastures over yonder, but I was attending
a luncheon the other day which was ad­
dressed by J. R. H O W A R D , field repre­
sentative o f the Federal Farm Board, and
former president o f the American Farm
Bureau Federation, and during the course
of his remarks he told about meeting one
o f the officers o f the B A N K OF IT A L Y
when he w7as in California, and this officer
told him that last year they foreclosed on
825 farms, and ranches in one California
county.
I suppose that the regular California
booster would say that this was very
unusual, but that’s what they always say
about the “ Land o f the lemons and the
home o f the nuts.”
A B A N K E R F RIE N D OF MINE IN
CHICAGO sends me a clipping concern­
ing the suit being brought by the
Guaranty Trust Company and the Chase
National Bank fo r $4,500,000 against
the Foreman family, and then he writes
along the edge o f the newspaper, “ C liff:
How would you like to be sued for
$4,500,000 ?”
Well, as far as I am concerned it would
probably be a great thrill, but I frankly
have no worries about being put in such
a high bracket when it comes to law suits.
This indebtedness, by the way, occurred
in connection with the consolidation of
the State Bank o f Chicago with the
Foreman banks, and in order to make it
possible, members o f the Foreman family,
according to their attorney, “ personally
purchased a substantial block o f stock in
the State Bank, borrowing over $5,000,000
fo r that purpose.”
When I read a few weeks ago o f the
closing o f the STATE B A N K OF OM A­
H A, Nebraska’s largest state bank, I re­
called a conversation which I had with
A LB E R T L. SHANTZ, three or four
years ago when the N o r t h w e s t e r n
B a n k e r was making a survey o f the ad­
vantages and disadvantages o f the Guar­
anty o f Bank Deposits.
A t that time Mr. Shantz wTas upholding
it very strongly, and said that it was a
fine thing, and remarked that his bank
was paying $30,000 a year into the fund.
Now, since the bank has closed he
blames the declining amount of deposits,
and the continuous drain into the State
Guaranty Fund.
I told him then, that $30,000 a year
wrnuld pay a very substantial dividend

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Federal Reserve Bank of St. Louis

on the stock, or add very nicely to the
surplus fund, which in turn might have
assisted materially in preventing the clos­
ing o f the bank.
Discussing the future o f the small
town DR, JULIUS K L E IN o f the De­
partment o f Commerce, tells the story of
two strangers who got to talking to each
other on a railroad train.
“ Where yuh going?” asked one. “ To
Jonesville,” replied the other— “ town o f
about 5,000 up the line a ways.” “ Better
steer clear o’ Jonesville, pardner,” yawned
the first speaker; “ everything’s frightfully
dull up there.”
The other man’s eyes
beamed : “ That’s great,” he cried, “ that’s
fine. I ’m a scissors grinder!”
Fewer
yawners and some additions to our al­
ready great army o f “ scissors grinders”
will sharpen up the business prospects
of the American small towns.
That’s a good story, and good gospel,
and if the business leaders o f the small
towns continue to also sharpen their wits
and make it easy, desirable, and con­
venient fo r members o f their community
to shop in town, there will not be so
much worry about the future o f their
town.
All o f the financial advertising execu­
tives will be on their way to Boston this
month to attend the annual convention
which takes place September 14th to 17th,
and according to PRESTO N E. REED,
executive secretary, this will be another
outstanding meeting o f the master minds
o f financial literature.
I am also confident that before the
orations, speeches, papers and general
convention broadcasting has finished, that
the delegates will know the real meaning
o f Bunker Hill.
W IT H THE B AN K S F ILLE D W IT H
MONEY, and with blue-sky salesmen
more active than ever, I have advocated
editorially, and otherwise, that bankers
should be on the lookout to urge their
customers to consult with them about the
purchase o f securities, and I wTas inter­
ested in reading a full page advertisement
which C. J. Weiser o f Decorah recently
published on this same subject, and the
opening paragraph o f this “ Open letter
to the public,” is so timely, that I am
giving it here in full fo r what benefit it
may be to other bankers who have to com­
bat this same problem.
Here’s the first paragraph o f the ad­
vertisement :

“ The time lias come when we feel it
is our duty and privilege to caution our
citizens against buying securities o f any
kind from strange traveling salesmen.
Many o f our people have already been
desperately hurt through the purchasing
of same, such as building and other bonds,
and stocks in all sorts o f untried and
dangerous enterprises. The tendency to­
wards H IG H R A T E S o f IN TE RE ST has
caused much o f this wreckage. W hy is
it that concerns in the cities have to
come out into the country and solicit
funds for the purpose o f erecting all sorts
o f hotels, tenement houses, wholesale
houses, etc.? Why, we say, do they have
to come H ERE when there is more money
in the cities than they know what to do
with ? Simply because there is grave
danger in the securities. W H Y is it that
they pay 6 per cent or 7 per cent when
there are worlds o f money fo r investment
where the security is unquestioned? W e
know o f cases where stock has been sold
here, where the company has been paying
dividends out of the principal so they
could come back and sell them some more.
W e beg o f you, in case you have an idea
o f buying a certain bond or stock, to
COME IN and SEE US. These slick
agents will tell you not to go to the
banker because he wants to keep your
money.
Is the stranger interested in
YOU OR IN H IS COM M ISSION S?”
W . HARO LD BRENTON, president of
the Iowa-Des Moines National Bank and
Trust Company, has become famous as a
convention speaker, lunch club speaker,
after dinner speaker, before dinner speak­
er, and he has closed his remarks on the
“ Business Outlook” with his famous poem
about the Little Red Rooster, and Harold
has had so many requests fo r copies of
this pat piece o f poetry, that I am passing
it along to you herewith, as I think it is
just the kind o f business tonic that we
need at the particular moment.
N E W BUSINESS
Said the little red rooster, “ Believe me,
things are tough.
Seems that worms are scarcer, and I can­
not find enough;
What’s become o f all those fat ones is a
mystery to me;
There were thousands through that rainy
spell, but now" where can they be ?”
Then the old black hen who heard, didn’t
grumble or complain—
She had gone through lots of dry spells,
she had lived through flood and
rain.
She flew up on the grindstone, and she
gave her claws a Avhet,
As she said, “ I ’ve never seen the time
there weren’t worms to get.”
She picked a new and undug spot; the
earth was hard and firm.
The little rooster jeered: “ New ground!
That’s no place fo r a worm.”

Northwestern Banker

September 1931

18

A n Intelligent Advertisement

FIVE HUNDRED THOUSAND
---DOLLARS —
is the same amount of money as One-Half a Million Dollars. It is the same amount of money
that the Breda Savings Bank, of Breda, Iowa, can place upon its counters on short notice.
TThis Bank can get this amount of money and in Cash, if necessary, and without causing any
hardship of any kind on any One, of its Customers.

Comparative Statement of Our Deposits
On June 30, 1930, our Total Deposits were
On June 30, 1931, our Total Deposits were
Loss in Deposits during the past year

$969,083.00
915,109.62
$ 53,973 38

W e are using these dates because the Superintendent o f Banking for Iowa called fora Sworn Statement o f our condition
on June 30, 1930, and again called for a Sworn Statement o f all State and Savings Banks in Iowa on June 30, 1931.
He is the Big Man, w ho sends out Bank Examiners at his pleasure.
these statements and all o f them are on file in his Office.

He checks us over and verifies everything including

BREDA SAVINGS BANK
"Bank With Us and You Can
Bank On Us”

BREDA, IOW A

3 1-2 % and Safety
F. Van Erdewyk, President

A b o v e , s ta te m e n t o f th e B r e d a S a v in g s B a n k , B red a , I o w a . A s a n e w s p a p e r
a d v e r tis e m e n t, it is c le a r ly e x p la in e d an d sh o u ld be e a s ily u n d e r s t o o d
b y its c u s to m e r s .

The old black hen just spread her feet,
she dug both fast and free.
“ I must go to the worms,” she said, "The
worms won’t come to me.”

I ’m full o f worms and happy, for I ’ve
eaten like a p ig;
The worms are there as always, but BOY,
I H AD TO D IG !”

The rooster vainly spent his day, through
habit, by the ways
Where fat, round worms had passed in
squads back in the rainy days.
When nightfall found him supperless, he
growled in accents rough,
" I ’m hungry as a fowl can be. Conditions
sure are tough.”

J. K. DEMING, president o f the Con­
solidated National Bank o f Dubuque,
Iowa, told a very interesting story at the
ex-presidents’ dinner at Waterloo, during
the state convention, about the cashier of
a bank in a small town who embezzled
$5,000 and after it got on his conscience
he went to his lawyer and asked him what
to do.
The lawyer said, “ Can you get another
$5,000?” and the banker said, "Yes, but
what’s the big idea?”
The lawyer said, "Never mind about
that, get another $5,000 and bring it to
me.”
In about a week’s time the cashier came
back with another $5,000, and the lawyer
said, "Meet me in my office at eight o’clock
tonight.”
When the cashier returned at eight
o’clock, all the directors o f the bank were

He turned then to the old black hen and
said, "I t’s worse with you;
For you’re not only hungry, but must be
tired, too.
I rested while I watched fo r worms, so I
feel fairly perk.
But how are you, without worms t o o ; and
after all that work ?”
The old black hen hopped to her perch
and dropped her eyes in sleep
And murmured in a drowsy tone, "Young
man, hear this and weep ;

Northwestern Banker


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Federal Reserve Bank of St. Louis

September 1931

present. He told them that John Jones
had embezzled $10,000 from the bank, but
that if they would not prosecute him that
he would return $5,000 o f it, and this the
directors agreed to do, and John escaped
without prosecution.
That’s a true story, according to Mr.
Deming, and proves that there are still
smart lawyers, and perhaps not so smart
bank directors still in the world.
R EPORTS H A V E COME TO ME
that the attitude of national bank exam­
iners on farm loans and real estate has
been very unsatisfactory. The report I
get is that national bank examiners are
throwing out all real estate loans o f all
kinds, and I would appreciate receiving
word from any o f our subscribers if this
is the experience that they have actually
had when their bank has been examined.
P. K. LORGE, cashier of the Pocahon­
tas State Bank, o f Pocahontas, Iowa, has
invented a method fo r reducing expenses
in every bank, and it is based on a very
simple and delightful formula o f employ­
ing only blonde stenographers, as they all
have a light "overhead.”
A banker went into a drug store in a
middlewestern town not so long ago and
asked the druggist fo r a bottle of poison
which the druggist later on assumed might
be used fo r suicide purposes. The drug­
gist sent one of his clerks up to the banker
and said that they had made a mistake
and given him the wrong bottle, and ex­
changed the bottle which the banker
originally purchased fo r another one
which would only give him a stomachache.
At six o’clock that night he called his
wife in the bathroom and told her that he
had embezzled $90,000 o f the bank’s funds
and then drank the second bottle, but he
lived to tell the story o f how it all hap­
pened after he got rid o f his stomach
trouble.
As a matter of fact he had internal
difficulties o f more kinds than one.
J. W . B RY AN T, vice president o f the
Commercial Trust and Savings Bank of
Mitchell, South Dakota, who was recently
elected president o f the South Dakota
Bankers Association, expressed his ap­
preciation fo r the valuable work which the
N o r t h w e s t e r n B a n k e r has always done
fo r the bankers o f his state by saying : "I
appreciate very much the interest and
consideration which the N o r t h w e s t e r n
B a n k e r has always shown the South
Dakota bankers and the affairs of the
South Dakota Bankers Association.”
Thank you, Mr. Bryant.
Mr. Fullmer, in General Science class:
"Now then, students, we have come to the
conclusion that nothing is impossible.”
Amy Bryans : "Let’s see you stick this
umbrella down your throat and open it.”

19

A cheerful display, on business revival, with a very broad idea back of it.

Putting Optimism Into
O U R B A N K A D V E R T IS IN G
S W E think together a little about
appropriate bank window displays,
suppose we think encouragingly!
These days, to remember that the
words “ courage” and “ hope” still have
true meaning, seems to mark one as a back
date. Always fear has been a destroying
element. The tendency o f the normal per­
son has been to quell fear, and yet today
as business men meet they preface their
remarks by “ I am afraid this is going to
be the worst winter we have seen” ; “ I am
afraid we are not at the bottom yet” or “ I
am afraid we must lower our standard of
living” — always “ afraid,” always express­
ing “ fear.” W hy has it become seeming y
popular to talk o f the 10 per cent who are
idle instead o f the 90 per cent who are
employed? Surely the banker, as perhaps
no other, needs to sound an encouraging
tone through their statements, their serv­
ice, and their window displays, right now.
With this in mind, the window display
illustrating Uncle Sam, stands out encour-

By ALICE MOSHIER

A


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Federal Reserve Bank of St. Louis

W indow

Display Specialist

agingly. Uncle Sam stands upon a grassy
shore, while the greater part o f the floor
o f the window is covered with blue crepe
paper, rolled to give the effect o f waves.
Coming from across the water toward
Uncle Sam is an airplane marked “ Busi­
ness Revival” ; while beside Uncle Sam is
a poster “ And now fo r another safe land­
ing.” His smile; his attitude o f expectancy
is heartening in this “ fear sick” world.

A Message of Hope
NOTHER smiling face is that o f our
president, Herbert Hoover, and be­
side his picture a poster bearing this mes­
sage : “ History repeats itself. In every
crisis o f America, savings have increased.
It is not how much but how regularly you
save that determines success or failure.”
This display might well bear, also, this
message to American business men, from

A

the pen o f Herbert N. Casson, editor of
the Efficiency Magazine, London, Eng­
land :
“ You are depressed. You think you are
crippled. You are afraid of the future.
You are full of fears.
“ You have half the gold o f the world
and half o f the machinery and most of the
automobiles and all the skyscrapers.
“ You have the greatest home market in
the world and the largest corporations that
the world has ever seen.
“ You are ruled more by ideas and less
by tradition than any other people in the
world. You have usually done what you
thought you could do.
“ The prices that were forced too high
had to come down. Today all the prices
are too low.
“ There is now a golden opportunity for
every man who has eyes to see it.
“ The way to create a fortune is to buy
from pessimists. Pay your money and take
the risk.

Northwestern Banker

September 1931

20

Above, a good display to urge the savings habit. It capitalizes the old adage, “ Save for a rainy day.’ 7

“ Frick started his career by buying coke
ovens in the slump o f 1873.
Carnegie
made $300,000,000 by buying steel plants
in slumps.
“ Hundreds o f fortunes have been made
by buying from pessimists. Ye Gods!
What a chance there is at this moment.
“ In five years from now most American
business men will belong to the ‘I-wish-Ihad-club’.

“ When a horse balks, the balk is in his
head and not in his legs. He moves on
when he thinks he will.
“ And when an American business man
is depressed, the slump is in his head.
There is nothing serious to prevent him
from making money if he thinks he will.
“ When fear rules the will, nothing can
be done, but when a man casts fear out o f
his mind, the world becomes his oyster. To

lose a bit o f money is nothing, but to lose
hope or lose nerve and ambition— that is
what makes men cripples.
“ This silly depression has gone on long
enough. Get rid o f it. It is inside o f you.
Rise and walk.”
A note o f encouragement fo r the small
saver is featured by the display which cen­
ters a cut-out figure o f the Goddess o f
Liberty, bearing aloft an electrically-

l f this happened
to your t a w tofthjht
tvottlJ you; valuable :
papara Iv.deafi\yeâ

or are they in a

jj

BOX in our FIR E­
PROOF VAULT {
V •- thun ft i'etrt .

A window display that helps sell safe deposit boxes.

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Federal Reserve Bank of St. Louis

September 1931

21

MEASURE THE “AMERICAN”
BY THIS CHART
HOWN here are the replies in their order of percentages of the leading Banks in
Iowa, Nebraska, Minnesota, North and South Dakota to the question “ What
principal factors prompted you to select your present city correspondent?” The
“ AMERICAN” measures up to an outstanding degree in every requirement of these rep­
resentative Banks.

S

CHART NO. 2

What principal factors prompted
you to select your present city corre­
spondent?
Service
30%

Financial
responsibility
30%

Personnel
26%

Location

11%

I

Knowledge o f local
conditions

3%

In equipment and facilities that mean for prompt
and efficient service the American Savings Bank and
Trust Company is unsurpassed by any Bank in this
State.
Total r e s o u r c e s of more than $36,000,000,
$1,600,000 in capital and the capable and conserva­
tive management of its Officers and Directors are
an unqualified assurance of its financial reliability.
Not only does the “ AMERICAN” offer a highly
trained and loyal personnel, but also an unusual
diversified experience both in hanking and of general
business.
Located in Davenport, mail to and from the
“ AMERICAN” is promptly received and meetings
with representatives from its correspondent Banks
can he conveniently held.
A close contact with so many of the leading indus­
tries in this territory and its extensive facilities for
getting accurate information gives this Bank a timely
and an authoritative knowledge of local conditions.

A request for further information as to hoiv this hank can serve you as your correspondent
in this territory will he promptly acknowledged.

SAVINGS BANK AND TRUST COMPANY
DAVENPORT, IOWA
THE ONLY MEMBER OF THE FEDERAL RESERVE SYSTEM IN THIS TERRITORY


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Federal Reserve Bank of St. Louis

Northwestern Banker

September 1931

22
lighted torch. On either side, as a back­
ground American flags are used. The
large poster bears the question “ Are you a
good American? The United States leads
the world in most things, but is seventh in
per capita savings. It needs your help to
make it lead in savings” . On the floor at
the feet o f the goddess o f liberty is shown
a group o f smaller cards, each one bearing
the colored flag of a foreign country, and
figures give the per capita savings in each
case. The old expression, “ Save for a
rainy day,” has long ceased to apply for
that day seems to have arrived, and to be
reminded that our savings not only help
toward our own personal self-respect, but
help to swell the national figures, is truly
encouraging.
The urge to rent a safe deposit box for
valuable papers is prompted with the man
of means by fear o f burglars, while the
man of limited means fears fire. That
being true, the window display featuring
a burning house drives home, to many, the
fact that a safe deposit box is important
to even the man with only a few valuable
papers. While any doll house could be
used, the one shown here was especially
made of c-ompre board. Behind the cur­
tained windows red crepe is stretched to
give the reddish glow o f fire and one side
o f the roof has been cut out irregularly
and the rafters and edges blacked with
either charcoal or black chalk to give the
burned effect. Small pointed bits o f red

crepe paper pasted on the back o f each
rafter give quite a realistic look o f flames.
The floor o f the window is covered with
grass and details, such as a walk leading
to the front door, flowers on either side
and trees may be used to elaborate the
scene. The poster states “ I f this hap­
pened to your home tonight would your
valuable papers be destroyed or are they
in a safe deposit box in our fire proof
vault. Less than a cent a day will keep
misfortune away” . In addition, one or two
of the smaller safe deposit boxes may be
shown in one end of the window.
“ The Bank Book”
OME years ago H. G. Wells gave a list
o f what he considered the ten most
important books of the world. He listed
the Old Testament, the New Testament,
the Koran, History o f Animals (Aris­
totle), The Republic (Plate), Revolution
o f the Heavens (Copernicus), The Travels
o f Marco Polo, The Great Learning (Con­
fucius), The New Atlantic (Sir Francis
Bacon), The Origin o f Species (Darwin).
It was making no change at all in the list
o f Mr. Wells to include both the Old and
New Testament under the one name “ The
Bible” . This left an opportunity fo r the
addition o f a tenth book, “ The Bank
Book” , and an excellent window display
was outlined. A large poster centered the
display worded “ The Ten Most Important
Books o f the W orld” . Ribbons ran from

S

illit:;.

loiva Litlio(frapliiiiff Ccunpaiiii
5 1 5 TW ENTY EIGHTH S T R E E T

D e s M o in e s

this poster to each o f the ten books. Each
book should bear a small card, lettered
with the title of the book, first because of
the fact that the ordinary size o f book
titles is not readable from the window,
and second, because it is rarely possible to
obtain every one o f the nine books and
some can be faked by placing them in such
a way that the title will not show. This is
especially appropriate in early Septem­
ber, when school begins, as it is o f special
interest to teachers, and their accounts are
usually quite desirable.
An important by-product of bank win­
dow displays, is the educational effect
upon the bank’s employes.
As a rule,
banks do little in educating their own
workers, in any broad sense, as to the
intricacies o f their own service. Especially
is this true in the larger institutions, and
yet who can better carry the bank’s mes­
sage than its employes? Large concerns,
such as the telephone companies, spend
thousands o f dollars annually in making
movies, solely to enlighten their own work­
ers as to their varying services, equipment,
methods and ideals. It is not unusual for
the employes o f one o f these huge con­
cerns to be asked to appear at the theater
at 6 :30 in the morning fo r the running o f
their educational films. These concerns
realize that in no better way can this tech­
nical knowledge be gotten to their workers
than through the eye. They realize, also,
that to make of each worker an intelligent
salesman is to broaden the scope o f service
exceedingly. Facts visualized are retained
when the spoken or printed word is fo r­
gotten. No amount o f loyalty will help
the untutored bank clerk to actively sell
the bank’s service to those with whom he is
associated when off duty. The use o f bank
windows to emphasize each department
may put sales talk before the newest clerk
and perhaps send him out an intelligent
booster fo r his bank. Windows, the eyes
o f an institution, may be made to carry
information, as well as to attract the
passer-by.
To trust a bank with our confidence, our
valuables or our money, is a compliment
to that institution and its dignity and
friendliness is our pride, whether repre­
sented by balances, personalities or window displays.

New Iowa Company

EDWIN

G. R A G S D A L E

SECRE TAR Y

Ky¥ŒJK KW )( W K Ü Œ

Northwestern Banker


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Federal Reserve Bank of St. Louis

September 1931

Articles o f incorporation fo r the Old
Counsellors o f America Life Savings A s­
surance Co. have been filed at Waterloo,
Iowa. The company will operate on the
mutual legal reserve plan fo r the time be­
ing. It is planned to put the company on
a stock basis as soon as sufficient business
warrants.
Dan C. Rogers, well known insurance
man in northeastern Iowa, is president.
Paul W . Eighmey, first vice president,
secretary and chairman o f the finance com­
mittee, is a well known banker in
Waterloo.


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Federal Reserve Bank of St. Louis

23

Innoiah r
Central Republic Ban k
AND TRUST COMPANY

208
S

o u t h

La Salle
C

St

r e e t

h ic a g o

Capital, Surplus and
Undivided Profits
$ 28 , 000,000

Member of Federal Reserve System

A Consolidation of

C entral Trust
COM PANY OF ILLINOIS

T h e N a t i o n a l B a n k o f th e
R E
P U B L I C
• • o r

C H IC A G O

• •

Northwestern Banker

September 1931

24

Group Banking Accounting
NE o f the disadvantages o f group
banking is the ease with which ac­
counts or resources can be manip­
ulated between the banks in the group in
order to create the appearance o f large
assets when desired, or, in rare cases per­
haps, conceal them fo r the purpose o f
showing an ultra-conservative statement.
In a group o f banks controlled by a bank
holding corporation there is opening for
much that is questionable because when a
company holds among its investments
stocks o f other controlled concerns, it can
easily be seen what an opportunity exists
fo r creating more or less arbitrary values
in the company’s financial statement.
The analysis presented in this article is
limited because o f the incompleteness or
lack o f comparability o f much o f the pub­
lished data. Further segregation o f bal-

By G. T. CARTINHOUR

O

N ew York University

ance sheet data as well as income and ex­
pense accounts is desirable. I f further
detail were available, a more thorough
analysis of the accounting policies o f the
various group banking systems would be
possible. Since no uniformity exists at
the present time, the writer’s statements
in this article should be considered merely
as his personal opinion as to what is de­
sirable and practical.
Probably bank holding companies’ bal­
ance sheets, in practice, are not subjected
to adjustment to any greater extent than
balance sheets o f other organizations.
However, there is little doubt that where
holding company balance sheets are being

The Problem of W e t or Dry
(Little Talks on Tiling, No. 33)
Weather runs in cycles.

A long period of dry weather is very likely

to be followed by a period of too much moisture.

Some farm

lands that are likely to produce fairly well with comparatively little
moisture will fail to produce satisfactorily with too much rain.

The

reason is that lands which are not drained properly hold the moisture
to too great an extent and fairly drown out the crops.

Such lands,

in order to become profitable under varied conditions of moisture,
should have a tile drainage system.
beyond its cost.

It increases farming profits far

Loans for this purpose are safe and sound.
When Farmers A re Successful,
Bankers Follow Suit

Mason City Brick and Tile Company
312 Denison Building

Mason City, Iowa

60 YEARS SUCCESSFUL OPERATION
DESIGNING AND MANUFACTURING FIXTURES
FOR

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

T H E FISHER C O M P A N Y
CHARLES CITY, IOWA
SPECIALIZING ON FIXTURES FOR BANKS.

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Federal Reserve Bank of St. Louis

September 1931

W RITE FOR PRICES

adjusted it is difficult for the outsider to
trace it. While there is no single remedy
fo r this condition, much can be accom­
plished by a demand on the part o f the
stockholders fo r more details. Those in­
vestors in group systems, who wish to keep
informed as to the actual value o f their
investment, should endeavor to familiar­
ize themselves with the particular method
o f presentation o f accounts followed by
their corporations. In cases where the
holding company owns outright or has a
substantial majority control, two balance
sheets should be submitted; first, its own
balance sheet as shown by the books; and
second, a consolidated balance sheet o f the
holding company and its subsidiaries, pre­
pared in the generally accepted manner
fo r preparing balance sheets. Those in­
vestors in group systems who wish to have
a concise explanation o f consolidated bal­
ance sheets and income accounts Avill find
Robert H. Montgomery’s Auditing Theory
and Practice text very helpful. One chap­
ter is devoted exclusively to this subject.
Should Be Clarified
E R T A IN points in connection with
the statements o f various bank hold­
ing corporations might lend themselves to
unfavorable interpretation in connection
with the accounting policy o f the group.
One o f these corporations published a
statement merely aggregating the respec­
tive balance sheet accounts for all the
banks in the group. Obviously it would
be impossible to make certain calculations
in connection with the stock o f the hold­
ing company. Such a statement should be
supplemented by a consolidated balance
sheet of the group. The statements o f a,
number o f other group systems simply in­
corporate the surplus and profits o f the
affiliated banks with the surplus and un­
divided profits o f the holding company
itself. The facts do not justify such a
procedure. Since the affiliated banks are
corporately independent legal entities,
their earnings should become part o f the
income o f the holding company only when
they have been declared and paid as a
dividend on its stock and when such earn­
ings are from operations subsequent to
the acquisition o f the bank.
Other bank holding corporations do not
follow the desired policy o f submitting
a profit and loss statement. Frequently
the paid-in capital and the earned surplus
is not segregated but is grouped in a
single item. Some do not give their own
statement o f earnings but instead give a
combined statement o f the earnings o f the
group. Of course such a statement gives
no indication whatsoever of what will be
considered as income by the holding com­
pany. Balance sheets should contain an
account which might be called ‘bank

C

25
stocks at cost’ that states the market value
o f these stocks. This information should
be given to stockholders.
Many o f the group systems whose ac­
counts have been considered have just been
recently organized and naturally wished
to have their statements indicate a credit­
able record. The combined form o f finan­
cial statements obviates the necessity o f
having to disclose inconvenient facts, and
gives them additional time in which to put
their house in order. The writer under­
stands that the Economic Policy Commis­
sion o f the American Bankers Association
is endeavoring to develop a proper method
o f preparation and presentation o f the
financial statements o f bank holding cor­
porations.
Mr. Prank W . Blair, chairman o f the
board o f the Guardian Detroit Union
Group and Union Guardian Trust Com­
pany o f Detroit, Michigan, in a discussion
o f the group banking movement, referred
to the danger o f manipulation o f accounts
in a group organization in a very optimis­
tic manner. Mr. Blair said : “ During this
transitory banking period the opportunity
for manipulation reaches its apogee. For
the obscure complex accounts o f many
group and holding companies, understood
only by the insiders in the companies, and
probably so confusing that even the major
executives have to be led by the hand by
skilled counsel and expert accountants,
provide the most fertile o f all fields for
financial malpractice. This is not sug­
gested in a spirit o f pessimism, but rather
in one o f optimism; fo r the greatest o p ­
portunities fo r malpractice are now pres­
ent and they are being availed o f but
sparingly.”

Two Kinds of Bank Heroes
(Continued from page 11)
he has the privilege o f engaging in some
other line o f endeavor. The banking de­
partment was created fo r the protection
o f the public. So far as the bankers are
concerned the banking department is an
unnecessary evil and unless we enforce
the laws the department is a handicap to
the conservative and well managed bank,
because it places such a bank on a par
with a weak bank if both are permitted
to continue in operation and receive the
deposits o f the public. It is to the inter­
est o f the strong banks to coojmrate with
the banking commission in seeing that
the banking laws are enforced.
The
banker who deserves very little praise, is
the one who continues to operate his bank

just as long as he can simply draw a
salary, and only closes his doors when he
is unable to meet the demands o f his
depositors in the usual course o f business.
By this delay he has simply preferred the
nervous depositor and leaves only the
dregs fo r those who are loyal and con­
tinue leaving their money with him.
Friendly Cooperation

W

HILE the superintendent o f banks
represents the public only so far as
the state banks are concerned, yet we are
interested in the success o f the national
banks as well. The greatest degree o f
friendly cooperation exists between the
national department and the state bank­
ing department. Our interests are com­
mon and no cause exists fo r rivalry

1812

—

1031

110 Y e a rs
of C o m m e r c ia l

ATlOKAl-

Ba nK

B a n k in g

ID

»MPANT
TRUST CO
Charter Member
New York Clearing House
Association

More than a century of coopera tio n w ith th e b u sin e ss and
banking progress of the nation

Bank holding corporations should pre­
sent a conservative but thorough state­
ment. Particulars should be given which
will disclose the general nature o f the
assets and liabilities and how the values
have been arrived at. Expense and in­
come accounts should also be made avail­
able in considerable detail. The fact that
the American Bankers Association is con­
cerned over the matter indicates the prob­
able existence o f a very definite problem
with respect to the accounting policy o f
bank holding corporations.

lias established the fortunate
position of Chatham Phénix as
an experienced, conservative
and thoroughly satisfactory New
York correspondent. To banks,
hankers and corporations re­
quiring New York facilities, it
offers “ the friendliness o f a

Goes To Wisconsin
F. N. Brushington, fo r the past several
years manager in Milwaukee fo r the
branch office o f the Travelers Fire Insur­
ance Co., has been appointed manager fo r
the state o f Wisconsin, succeeding W . W .
Sukow, who has been appointed manager
fo r the company in the state o f Iowa.
Clarence A. Boe succeeds Mr. Brushing­
ton as manager in Milwaukee.

neighborhood bank with all the
resources and facilities o f a
great metropolitan institution.”

C H A T H A M P H E N IX
NATIONAL

Friend— “ What were your father’s last
words V’
Friendless— “ None. Mother was with
him till the end.”

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

BANK AND TR U ST COMPANY
N ew Y o rk City

MAIN
R esou rc es

OFFICE:

149

M ore

T h an

BROADWAY
$30 0 ,0 0 0 ,0 0 0

Northwestern Banker

September Î93Î

26
between the two systems.
They each
serve a useful purpose and the field is
large enough fo r both. The institutions
belonging to each system are in turn ad­
versely affected by the same unfavorable
conditions and benefit from the same
favorable sources. The banking failures
o f the past which have deprived many
communities o f banking facilities have
brought home to the people the value and
necessity o f bank service to a community.
In the future the communities can rea­
sonably be expected to give to the banks
a greater degree o f cooperation than they
have heretofore shown. To establish and
maintain a high degree o f mutual confi­
dence, self-respect and good will between
the banking department, the members o f
the system and the public is one o f the
aims o f the South Dakota banking de­
partment.

Her lost purse was never re­
turned— but she got back the
$120 which was in A. B. A.
Cheques. She had only to
report their loss to the bank
across the street and the re­
fund was paid in a few days.
A.B. A. Cheques are money
insurance. They may be lost,
stolen or destroyed — but the
money they represent will be
restored. They are easy to carry,
convenient to use anywhere—
and your funds are safe.
Carry them at home or
abroad. Keep them in the
house for emergencies instead
o f cash. Your own bank will
recommend them and will
supply you with them.

A -B -A
C H E Q U E S
CERTIFIED
OFFICIAL TR AV EL CHEQUE OF
AM ERICAN BAN KERS ASSOCIATION

Northwestern Banker


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Federal Reserve Bank of St. Louis

September 1931

It is needless to say that I am rather
hesitant about appearing before the
group composed o f men o f far greater
experience, ability and better judgment
than I can ever hope to acquire, and it
would be presumptuous o f me to attempt
to tell you how to run your banks, there­
fore, my remarks are primarily intended
to indicate how we hope to administer the
affairs o f the banking department.
In speaking o f the banking department
I want to take this opportunity o f pub­
licly expressing my appreciation to the
other members o f the banking commis­
sion fo r the interest they have shown, the
advice they are giving me and the many
hours o f arduous labor they are devoting
to the work. These men receive practi­
cally no remuneration for their services,
nevertheless, they are devoting their time
and energy in the interests o f the public
in general as well as the bankers in South
Dakota in endeavoring to solve the many
problems that are submitted to them fo r
consideration.
I also wish to publicly express my ap­
preciation to the entire personnel o f the
banking department fo r the wonderful
cooperation they are giving me in making
my new job o f superintendent o f banks
as easy as possible. V ery often the pub­
lic, which also includes many o f the bank­
ers, are prone to criticize the work o f the
examiners in charge and intimate that
the assets o f the closed banks are being
dissipated through the payment o f exor­
bitant salaries and that these examiners
are negligent in enforcing payment on
obligations due the closed banks. There
may have been isolated instances where
an examiner in charge did not do his
duty, but as a whole these men are ca­
pable and industrious and they have one
o f the most unpleasant and difficult tasks
to perform. Bankers sometimes do not
take into consideratiton the fact that it
is often the case that when a bank sus­
pends business the only notes left to col­
lect are the hard ones, and for that rea­

son an examiner in charge cannot make
the showing in making collections that
the officers o f the bank did prior to sus­
pension when they made a special effort
to liquidate their loans and discounts be­
cause naturally the good notes were col­
lected first.
I also believe that sometimes bankers
adopt the wrong attitude in not cooperat­
ing -with the department and the examin­
ers in charge to the fullest extent in con­
nection with the liquidation o f a closed
bank, so that the depositors may receive
the greatest amount o f dividends possible.
It is obvious that where substantial divi­
dends are paid to the depositors, it indi­
rectly creates confidence in the going
banks.

BACK OF YOUR CHECK stands

your bank— strong and stable.
That your check may reflect
yourstanding adequately and
accurately it should be made

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New

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27

Organize Sickle, Nast & Co.
A t the present time speculative trading
on the major exchanges o f the country is
at a minimum. The public, therefore, is
naturally paying more attention to its un­
listed investment securities, which are
dealt with in the “ over-the-counter” mar­
ket. Very few people, not actively en­
gaged in the business o f trading unlisted
securities, have any idea o f its wide scope ;
or o f the tremendous number o f securities
that come under this heading. The great
majority o f all municipal, semi-municipal,
public utility and real estate bonds; bank
and insurance company stock, and the
preferred and common stock of almost all
small industries fall into this class. The
reason that these securities are not listed
on one o f the major exchanges o f the
country is because they are usually not
issues o f any great size, and were
originally sold to individual investors for
investment purposes and not fo r specula­
tion. As a result, these do not easily lend
themselves to marginal or speculative
trading, nor is there at any time a large
floating supply.
Naturally, these securities, while not
listed, do come into the market constantly,
through the liquidation o f estates, loans,
financial distress o f the owner, change of
opinion, and the like. Therefore, trading
houses with facilities to link together the
buyer and seller o f unlisted stocks and
bonds are set up to take care o f these
transactions in what is known as the
“ over-the-counter” market. These trans­
actions are on a strictly cash basis, the
actual ownership o f bonds or stocks going
from one individual to another, and are
made through the service of trading
houses specializing in unlisted issues.
One o f the outstanding houses in Chi­
cago handling this type o f business is
located at 111 West Washington Street,
and is the unlisted trading house o f Sickle,
Nast & Co. A house o f this nature is
naturally equipped with trading desks
with private wires to the leading invest­
ment houses o f the city, and wire connec­
tions with all the principal financial cen­
ters, which enables other houses, when
they receive inquiries on unlisted securi­
ties, to communicate easily and quickly
with the traders o f Sickle, Nast & Com­
pany.
The traders of a house o f this type have
the facilities o f files and records on thou­
sands o f companies that are not listed on
the major exchanges o f the country, which
enables them to locate the best buyers and
sellers in any particular securities. In
other words, the highest bid and lowest
offering. This business is not a business
o f merchandising securities, but of locat­
ing actual bids and offerings fo r the same
security and then linking together the
buyer and seller at a satisfactory price
to both, the dealer making his profit for
this service rendered.

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

The firm mentioned above, namely,
Sickle, Nast & Company, is headed by
M. S. Sickle, Jr., and A. D. Nast, Jr.,
which firm bears their names. Mr. Sickle
is a graduate o f the University o f Chicago,
and Mr. Nast a product o f the University
o f Michigan. While both are compara­
tively young they have had years of ex­
perience in the selection o f competent and
intelligent traders, and in building up a
house founded on the one principle o f
service, which must be rendered impar­
tially to the buyer and seller alike.
“ This is how the story ends,” yodelled
the bricklayer, as he put the last brick o f
the forty-third floor in place.

Legal Lore for Busy Bankers
(Continued from page 16)
party, fo r the bank would then have
taken his note fo r value. But when he
signed after the bank had taken the note
and without any new consideration mov­
ing to the signers o f the note or from the
bank, the latter was not a holder for
value as against him because he was not
a party to the note prior to the time the
bank took it fo r value,” the court said.
Stenographer— “ Howja spell sense?”
Employer— “ Dollars and cents or horse
sense ?”
Stenographer— “ Well, like in ‘I ain’t
seen him sense.’ ”

H E S E facts in regard to the
Drovers are significant when
you consider a Ch icago Corre­
spondent.

T

Established 1882 . . . a long
period of years of specializing
in service to Correspondent Banks;
conservative management; an en­
viable reputation
among the
banks it serves.
Your bank, too, will find Drovers
Service genuinely helpful.

rovers

D

N A T IO N A L R A N K
TR U ST# SAVINGS BANK

Union Stock Yards

Chicago, 111.

Northwestern Banker

September 1931

28

W ise Bankers Know
Where to STOP
Trying to squeeze higher and higher yields out of investments
is like the drug habit— eventually you take an overdose, with
V' j

'fe

disastrous results.
Many a hank has lost by trying to get an extra 2 %

interest

beyond the boundaries of safety.
Authorities have proved over a period of many years that no
investments will bring you a yield higher than the average of
good municipal bonds.

Y ou can buy plenty of bonds that will

promise more returns, but the losses of principal over a period
of years often offset the slight difference in interest— bringing
your net even below what municipals would have paid you.
For safety, for yield, for peace of mind of the investor, there is
no substitute for good Iowa Municipal and County Bonds.
company specializes in them exclusively.

This

Write for our latest

list showing attractive offerings, yields, and prices.

Carleton 1). B eh Co.
Investment Securities
Suite 518 Liberty Building

D E S M O IN E S , IO W A
Dial 4-8161

'r
CC[

IBS 1

(t(U

Northwestern Banker


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

September 1931

y

29

Bonds and Investments

Should Fixed Trust Shares Be
Preferred Co lla tera l ?
H R EE quarters o f a billion dollars
worth o f collateral is a figure large
enough to command national respect.
When it appears that still a rather large
percentage o f banks in this country are
not utilizing it for profitable loans, some
inquiry seems desirable.
This for-the-most-part-overlooked col­
lateral— and the three quarters o f a billion
dollars figure is generally conceded to be
a conservative estimate— consists o f fixed
trust shares. Perhaps it would be more
significant to state— and the statement
would be essentially true— that this col­
lateral is common stocks.
It would also be accurate to say that
these common stocks are, fo r the most
part, the aristocrats o f all common stocks.
There is good reason fo r this. The purpose
o f the fixed trust, or unit type trust as it
is sometimes more accurately called, is to
make available fo r the investor in a single
convenient security, the equivalent o f
ownership o f a great many selected and
diversified common stocks. It is presumed,
and no one will seriously dispute it, that
such diversification is much safer than the
choice o f any one common stock, no mat­
ter how distinguished its record may be.
Since safety is an important element in
the conception o f the fixed investment
trust, it is corollary presumption that a
well conceived fixed trust would select the
best common stocks as its underlying
securities.
It has an additional reason fo r doing so,
however. W idely known common stocks
simplify the problem o f distributing the
trust shares, since it is not necessary to
prove to a prospective investor the desira­
bility o f owning the stocks themselves
before demonstrating the advisability of
owning them in the fixed investment trust
form.
The largest fixed trust, North American
Trust shares, numbers well over 100,000
investors among its shareholders. More
than 21,000,000 o f its shares have been
sold to men and women not only in the
greater centers o f population, but in
smaller communities as well. There are
eight other fixed trusts whose outstanding
shares number at least one million, so that,
in all likelihood, there are well over 300,000 fixed trust shareholders in the United
States today. To a large extent, these
represent the heart o f the investor market

T


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

By CHARLES W. ISAACS, Jr.
Manager, Mid-W est Division, Distributors
Group, Inc.

and are therefore a substantial portion of
the average bank’s best customers.
It is obvious that no banker can give
carte blanche acceptance to fixed invest­
ment trusts as collateral— any more than
he can do so fo r common stocks, preferred
stocks or even bonds. Two facts make
investigation simple in the case of fixed
trusts, however.
I f he will determine
whether three or four o f the leading
fixed trusts are acceptable to him, he will
have made a decision covering some 75 to

80 per cent o f this three quarters of a
billion dollars worth o f collateral. The
remaining 20 to 25 per cent o f the out­
standing trust shares will be distributed
among more than 100 fixed trusts.
Besides, his first decision may be taken
as final in the case o f the fixed trust
because, unlike the management or semimanagement type trust, the underlying
securities can seldom be replaced and
usually only eliminated for what are con­
sidered sound investment reasons. The
elimination probabilities are slight in most
cases and in any event the cash received by
the trusts sponsor or its trustee upon
such sale is paid to shareholders with their
next succeeding distribution.
Fixed Trust Shares A re Liquid

C H A R L E S W . IS A A C S , JR.

This is the first of a series of articles
written for the Northwestern Banker
by M r. Isaacs, Chicago investment
banker, who for the past ten years has
been prom inently identified with the
security business and is well and fa­
vorably known throughout the M iddle
W est.
Distributors Group, Inc., is
owned by a nation-wide group of
bankers
and
investment
banking
houses and are sponsors of North
American Trust Shares, largest fixed
trust in the world and Cumulative
Trust Shares, the only trust to date
that accumulates capital to a maximum
degree.

I N examining the handful of leading
I fixed trusts, there are only two essential
points on which the bank need assure itself
in determining the collateral value o f the
trust shares:
1. The value o f the underlying securi­
ties as collateral, fo r loans.
2. How quickly and for how much the
trust shares may be converted into cash if
necessary.
The value of the underlying stocks he
can usually determine at a glance. In
the case o f North American Trust shares,
fo r example, every one o f its underlying
stocks is listed on the New York Stock
Exchange and all are probably being ac­
cepted daily as collateral for loans by any
large bank. Stocks not listed on the Big
Board are probably actively traded on the
Curb in New York or on other important
exchanges. In any event they are prob­
ably well known.
The only other question in the mind of
the banker i s : How may I liquidate this
collateral quickly and easily?
Sponsor’s Bid Market
EADING- fixed trust sponsors maintain
a bid market fo r their trust shares at
a price ordinarily one-half point under
the prevailing offering price o f the trust
shares to the public. While this bid price
is maintained it will thus be possible for
the bank to obtain an immediate sale of
the fixed trust shares either to the local
dealer or directly to the sponsor. It should
be noted that this bid price does not
necessarily relate to the market value of

L

Northwestern Banker

September 1931

30
the underlying securities, being in some
cases more than such value and in other
eases less. It should also be noted that,
although this repurchase market is gen­
erally maintained by the sponsor that it is
not a guaranteed market ; i.e., the sponsor
is under no obligation to maintain this bid
and may lower or discontinue it in its dis­
cretion. While maintained, however, it
results in ready ability to liquidate the
trust shares.
The shares o f leading trusts are also
listed on the Chicago Board o f Trade or
on the Chicago Curb Exchange, however.
Such listing affords a second outlet for
quick and ready sale.
It should be observed at this point that
in the case o f most securities the bid mar­
ket, whether over-the-counter or on an
exchange, is the only source o f liquidation

to which the banker may look. In the
case o f fixed investment trusts, however,
there is, in addition to the above, a reserve
outlet fo r most fixed trust shares which
should make them to some degree a pre­
ferred form o f collateral. Its significance
has seldom been commented upon. This
outlet results from provisions incorpo­
rated in practically every indenture by
which a fixed trust is created which en­
ables the holders o f the trust shares at
any time to convert their shares into cash
by surrendering them to the trustee and,
in addition, the holders o f a number o f
trust shares sufficiently large to represent
one or more full shares o f the underlying
stocks may surrender to the trustee and
receive the actual underlying stocks in
kind. When received (or even before re­
ceipt since the banker knows they will be

SPONSORSHIP
. . . is important
things equal, there is sub­
stantial advantage to the investor
in choosing the shares of a fixed trust
sponsored by an organization of long
experience in the trust field; which
knows the practical needs of shareholders and how
to provide for them; which is actively creating
wider markets and reputation for the shares.
t h e r

The organization which sponsors Corporate Trust
Shares is a pioneer in its field and is one of the
largest devoted exclusively to the creation and
distribution of investment trusts of the fixed type.
Ask your Investment House or Bank about

CORPORATE
TRUST SHARES
SMITH, BURRIS & CO.
Central Syndicate Managers
120 S o u t h L a Sa l l e St r e e t , C h ic a g o
DETROIT — NEW ORLEANS — OMAHA

Northwestern Banker


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Federal Reserve Bank of St. Louis

September 1931

received) they may be sold on the ex­
changes where listed.
Details of Conversion Outlet
LL fixed trusts have their provisions.
They are clearly set forth in the
trust indenture and are readily available
fo r examination. The provisions in each
trust, however, should be examined.
In ascertaining the extent o f the right
to convert into cash several things should
be borne in m ind:

A

1. Does the trustee determine the mar­
ket value fo r purpose o f conversion?
In most instances it does. In some in­
stances, however, the depositor corpora­
tion determines this market value. The
former is obviously more desirable.
2. How is the market value determined ?
The trust indenture contains in every
instance a paragraph describing in minute
detail the method o f calculating the mar­
ket value. It may be the closing price of
each o f the underlying stocks on the day
succeeding surrender; it may be the clos­
ing bid p rice; it may be the mean between
the high of the day and the low of the
day. It would seem that any method
which is reasonably fair should not be
criticized.
3.
How long will it require to get the
cash from the trustee?
The normal period set forth in the trust
indenture is three days, excluding days
when the stock exchange is closed. Usu­
ally the cash is available in a shorter time.
4.
Is the ability to receive cash in full
in any way restricted?
In most trust agreements the ability so
to convert the trust shares for cash is not
surrounded by limitations as to the source
from which the cash will come. In others
there is provision relating to a revolving
fund and a requirement that the cash
shall be paid from such fund. In these
latter instances the possibility o f the de­
pletion o f that fund, thereby removing
the source from which payments may be
made, should be considered.
5.
What are the charges for this con­
version privilege?
Many trusts make no charge for this
service at all. Others require reimburse­
ment o f the trustee for its out-of-pocket
expenses incurred in making the conver­
sion. Others charge a fee based upon the
certificates surrendered, irrespective of
the number of trust shares represented
thereby, which fee ordinarily may run
from 50 cents to $1.00 per certificate. Still
others charge a percentage o f the cash
paid out, while others make a charge for
each share converted. The banker should
not be concerned with the size o f the fee,
but in its existence, and should take the
amount involved into consideration to de­
termine the liquidating value o f the trust
shares he will hold as collateral. This
article will, therefore, not concern itself
with the size of the fee except to say that

31
it should be commensurate with the value
o f the service rendered.
Conversion into Underlying Stocks
S to conversion into underlying
stocks, it would seem that this privi­
lege will give the banker practically the
same security as if the stocks themselves
were pledged with him. Normally he will
be able to receive the stocks just as soon
as they can be transferred by the trustee.
He should note, however, the number of
shares that must be surrendered in order
to receive the underlying stock, bearing in
mind that unless he has the requisite num­
ber or a multiple o f that number the
conversion right is limited to the ability to
receive cash.
The right to convert trust shares into
the underlying stocks enables the banker
who finds it necessary promptly to liqui­
date a loan, to forward the trust shares to
the trustee and, since he knows the securi­
ties he will receive, place an order with his
own broker for the sale o f those securities
and make delivery against such sales two
or three days later when the certificates are
sent to him by the trustee.
Here, again, as in the case of conver­
sion, the banker should consider what
charges are made by the trustee for this
service. The charges are much as sum­
marized above in the discussion relating
to the charges when conversion is made
into cash.

A

Fair Trade

The suit involved the reorganization
contract made in 1919. The appellate
court held the society was not liable for
taxes on its nonparticipating business as
profits from this class o f business went
directly to 14 stockholders. Nonpartici­
pating business o f the society since 1928
is affected by the decision and the case is
settled unless the Board o f Tax Appeals
appeals to the United States Supreme
Court.

An illusionist performing in a northern
town put a woman into a box from which
there was no apparent outlet and shut
the lid. When he opened it again there
was nothing inside but a couple o f rabbits.
A fte r the performance a Scotsman Avent
to the illusionist and asked him if he could
perform the same trick if his (the Scots­
man’s) wife were to get into the box.

“ W hy yes,” answered the illusionist.
“ But are you anxious to get rid o f your

As a result o f the decision, the govern­
ment will return to the society that por­
tion o f taxes paid pending outcome o f the
case. The society was not required to pay
fo r the years from 1923 on, pending set­
tlement o f the action.

Avife ? ”

“ Weel,” answered the Scot, “ It’s no
sae much that, but wee Wullie got me tae
promise him tAva, rabbits for his birthday!”

The Security Market
of today offers the discriminating

Investigation Simple
HE investigation required to be made
o f a given fixed trust from the stand­
point o f its acceptability as collateral,
when confined to the essential elements dis­
cussed in this article, is by no means an
arduous task. A few minutes consultation
with the local dealer o f the trust in ques­
tion, supplemented by a short examination
o f the offering circular and a few o f the
provisions o f the trust agreement, will
suffice. When compared with the examina­
tion necessary before making a loan sup­
ported by unlisted securities or second
grade bonds it would seem that the shares
o f a fixed investment trust offer far more
opportunity fo r profitable loans than
many bankers have heretofore realized.
The growth o f the fixed investment trust
during the last two and one-half years
and the wide popularity that it enjoys
among all classes o f investors would seem
to make it desirable fo r every banker to
recognize this new form o f investment.

T

banker

greater

opportunities

for

profitable investment than ever before.

Y et these securities must be

chosen only after the most exacting
analysis.
W e are prepared to assist you in
the selection of those securities which
will meetyour individual requirements.

Wins Tax Suit
The Central Life Assurance Society o f
Des Moines won an income tax suit involv­
ing approximately $75,000 in a decision
handed down by the United States Circuit
Court o f Appeals in St. Louis, reversing
the Board o f Tax Appeals at Washington
and ordered that taxes assessed against
the society on $2,108,619.13 earnings from
1921 to 1928 be abated.

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

W .D .TTanna and Company
INVESTMENT

BANKERS

BURLINGTON, IOWA
WATERLOO

CEDAR RAPIDS
Northwestern Banker

KEOKUK
September 1931

32

Report on Real Estate Bonds
N IN TE N SIV E investigation of the
real estate bond situation, giving
suggested plans fo r working out
defaults and for restoring real estate
financing to a sound basis, is given to
the investment banking business and the
public by the Investment Bankers Associa­
tion of America in the latest interim report
o f the association’s real estate securities
committee. The report was presented at
the recent May meeting of the associa­
tion’s board of governors at White Sul­
phur Springs. A fter giving a brief his­
tory o f real estate bond financing and o f
rental and real estate value trends since
1914 the report divides outstanding real
estate bonds into five classes and says:
“ The real estate bond situation is one
o f the blackest spots in our present finan-

A

cial outlook, made so to some extent by
general ignorance as to how the situation
should be handled. Estimates o f the
total outstanding volume o f real estate
bonds vary from $8,000,000,000 to $12,000,000,000. Ten billion dollars may be a
fairly correct estimate. In the city o f
Chicago $400,000,000 in real estate bonds
are in actual foreclosure and similar con­
ditions exist in most of our larger cities.
The $10,000,000,000 o f real estate bonds
should be considered in groups and a
classification follow's which your commit­
tee believes is more or less correct.”
The classification places in Class 1,
$2,000,000,000 o f real estate bonds “ in
good standing with good record.” Class 2,
$2,000,000,000 which “ appear to be able
to work out without foreclosure or loss.

$650,000.00 IN PENNIES
♦♦♦
For the restoration of their be­
loved

“ Old

Ironsides,”

the

school boys and girls of America
contributed

$650,000.00

mostly

in pennies.
Now the famous old ship has
been

rehabilitated and is just

starting on a long cruise during
which she will visit every sea­
port in the United States.
This beautiful big indoor billhoard in full color, 22 inches
wide and 45 inches high, shows
“ Old Ironsides” in all her glory,
together with portraits of 12 of
the men who are responsible for
the romance and traditions of
the American Navy.
Hanging in the schoolrooms of
your

community,

bearing

the

advertisement of your bank, it
is one of the strongest builders
of prestige and good will ever
offered.
The cost is small— Results big.
Sold to only one bank in each
community.

Ask us to reserve

it for you until you see the orig­
inal.

No obligation to buy.

♦ ♦♦

TH E G E R L A C H -B A R K L O W C O .
Originators and Creators of Good Will Advertising Mediums

JOLIET, ILLINOIS
Northwestern Banker


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

September 1931

Class 3, $2,500,000,000, “ where foreclos­
ure or workout with small loss is probable
(Losses 10 per cent to 25 per cent).”
Class 4, $3,000,000,000, “ with losses from
25 per cent to 60 per cent when fore­
closure and sale are completed. Class 5,
$500,000,000; “ incompleted, ill conceived
and misplaced buildings, including many
leasehold and second mortgage bond issues.
Losses in this class will run from 60 per
cent to 100 per cent and items should often
be entirely abandoned.”
Bonds in classes 1 and 2 are well se­
cured, the committee believes, and are
entitled to a preferred market and invest­
ment houses should endeavor to maintain
such a market. In classes 3, 4 and 5, the
committee advises that each bond holder
should be furnished with information as to
the probable liquidating value and that
when possible some price fo r these bonds
should be maintained by the originators.
Where liquidation is necessary originators
should take the leadership in liquidating
each issue and should at least absorb their
own expenses, to make the burden on the
property as light as possible. The report
adds: “ We do not believe that the invest­
ment house need absorb the loss on real
estate bonds and mortgages. W e do be­
lieve that investment houses which expect
to stay in business should help to pre­
serve the integrity o f their real estate
bond issues as fa r as possible.”

¥

M any Plans Offered
HE committee reports that it has re­
ceived many plans that propose to work
out defaulted bond issues in groups. As a
general rule, says the report, these plans
o f including several different defaulted
issues in a group are not fair to all de­
positing bond holders, some o f the plans
are sponsored by individuals who are in­
tent on making a profit from the situation
and all the plans are primarily weak in
that no capital is furnished.
The report then offers a definite plan
and proposes that, where state laws per­
mit, corporations be organized by substan­
tial interests in leading cities to acquire
distress income property. These corpora­
tions should have adequate, paid-in capital
and holders o f defaulted bonds should have
a choice o f selling their bonds to the cor­
poration at a fair price or o f exchanging
bonds fo r 5 per cent preferred stock, each
share o f which would carry with it one
share o f common stock. The corporation
might also acquire the equity and junior
claims, either by foreclosure or purchase,
and, the report adds, “ W e believe it is
advisable fo r the principal banking inter­
ests in all the cities where the foreclosure
problem is a serious one to organize and
get the defaulted real estate bonds out of
the way as quickly as possible.”

T

y

33
The report refers to the conservative
type o f real estate loans held by insurance
companies and conservative mortgage
quarantee companies and says that,
“ While some o f their assets are tied up in
present foreclosures, they all feel that
their eventual losses will be negligible.”
Looking to the future, the report says:
“ Until the present situation has cleared,
there will be little real estate bond financ­
ing done. I f the business continues at all
the new issues will be more in accord with
the standards o f safety followed by life
insurance companies. This means a sharp
curtailment o f new building projects, un­
less borrowers can be found to supply the
required 40 per cent to 50 per cent margin
o f security.”
The curtailment o f real estate develop­
ment means a partial paralysis o f many
industries, the report declares, and adds
that, “ We believe that the most important
problem is to provide the machinery by
wdiich confidence in real estate securities
can be re-established and through which
the investing public be willing to make
their savings available to finance proper
and reasonable real estate undertakings
and new construction.
“ Your committee is o f the opinion that
a good method to accomplish this result
may be through the medium of guaranty
companies, specifically organized for the
purpose o f guaranteeing mortgages. The
subject, however, is one o f great import­
ance, and without further investigation we
make no specific recommendation at this
time.”
The report was presented by Louis K.
Boysen of the First Union Trust and Sav­
ings Bank, Chicago, chairman o f the
committee. Other members o f the commit­
tee are Thomas W . Banks, Banks, Huntley
& Co., Inc., Los Angeles; W. F. Finley,
Cleveland Trust Company, Cleveland; R.
K ing Kauffman, John R. Thompson Se­
curities Corporation, Chicago; Sidney
Maestre, Mercantile-Commerce Company,
St. Louis; Conner Malott, Spokane East­
ern Company, Spokane; John R. Milligan,
Edward B. Smith & Co., New Y ork; Irv­
ing H. Overman, First Securities Corpo­
ration o f Minnesota, Minneapolis; Otho
C. Snider, Prescott, Wright, Snider Com­
pany, Kansas City.

Flower Show
The Northwestern National Bank, Min­
neapolis, again this year housed the second
annual exhibit o f the Minnesota Gladiolus
Society, August 10th and 11th.
Growers from all over the state entered
their choicest blooms in the show, which
flooded the mammoth bank lobby with
bright vari-colored gladioli. Many new
and recent introductions o f this popular
flower were exhibited. Four varieties that
Avere just developed last year and never
exhibited before in the northwest were
Picardy, a common p in k ; Bill Sowden, an
Australian red variety; Maid o f Orleans,

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

The Northwestern National Bank Band
o f 30 musicians played both evenings dur­
ing the shoAv. The bank lobby was open
from 9 a. m. to 9 :30 p. m., and hundreds
o f people crowded the lobby both after­
noons and evenings viewing the exhibit.

a white; and a remarkable German de­
velopment, called Commander Koehl.
Over $1,000 in bulbs, plants, and mer­
chandise were awarded to the winners in
the three classes, which were the open
class, the advanced amateur, and the
novice class. In addition to this group of
prizes, the American Gladiolus Society,
with Avhich the Minnesota society is a f­
filiated, awarded gold, silver, and bronze
medals to the highest point winners in each
class.
“ There were many more baskets, bowls,
vases, and other receptacles filled with
mixed gladioli in this year’s shoAA” than in
last year’s due to the fact that there is an
increased desire to use flowers for decora­
tive purposes all through the home,” Mr.
G. H. Greaves, chairman o f the show com­
mittee, declared.

Ripley Speaks in Des Moines
There is almost no such thing as a
saturation point fo r the power and light
industry, in the opinion of C. M. Ripley,
noted engineer, formerly with the General
Electric Company, who addressed a meet­
ing o f Des Moines investment bankers and
investors recently. Mr. Ripley made his
address under the auspices of the Calvin
Bullock Company and was introduced by
C. B. Kloppe, Des Moines investment
banker.

LIQUID
COLLATERAL
N

orth

A

m e r ic a n

T r u s t S h a r e s a re e x c e p t i o n a l l y l i q u i d c o lla t e r a l.

T h e y m a y b e q u ic k ly l iq u i d a t e d b y c o n v e r s io n i n t o c a s h a t a n y t im e
w i t h o u t p e n a lt y t h r o u g h
of N ew

Y ork. I f

th e t r u s te e ,

th e

G u a ra n ty T r u st C o m p a n y

5 00 tr u st s h a r e s o r a n y m u l t i p l e t h e r e o f a r e h e ld ,

th e y m a y b e c o n v e r t e d in t o t h e u n d e r l y i n g s to c k s at a n y t i m e w i t h ­
out

p e n a lt y

th rou gh

th e

tr u s t e e .

P rom pt

d e liv e r y

of

u n d e r ly i n g

s to c k s m a y b e a n t ic ip a t e d w h e n l iq u i d a t i o n is a c c o m p lis h e d t h r o u g h
c o n v e r s io n .
I n a d d i t i o n th e y a r e a c t iv e ly t r a d e d o n t h e C h i c a g o B o a r d o f T r a d e .
T h e s p o n s o r , D is t r i b u t o r s G r o u p , I n c o r p o r a t e d , o w n e d b y a n a t i o n ­
w i d e g r o u p o f i n v e s t m e n t h o u s e s , h a s at a ll t im e s m a i n t a i n e d a b i d
at h a l f a p o i n t u n d e r t h e o f f e r i n g p r i c e t h r o u g h o v e r 1 5 0 0

a u th o r­

iz e d s e c u r ity d e a le r s . D a i l y p r ic e s a r e q u o t e d in l e a d i n g n e w s p a p e r s
o f th e co u n try .
M o r e th a n 2 1 ,0 0 0 ,0 0 0
tod a y

by

w e ll

over

N

orth

1 0 0 ,0 0 0

A

m e r ic a n

m en

in v e s t e d m o r e t h a n $ 1 8 0 , 0 0 0 , 0 0 0

and

T r u s t S h a r e s a re o w n e d
w om en

th rou gh

w ho

have

th is la r g e s t

of

a lr e a d y
a ll

fix e d

in v e s t m e n t tr u sts.
T h e t w e n t y -e i g h t c o m m o n s t o c k s u n d e r l y i n g t h e s e tr u s t sh a r e s a r e a ll
lis t e d o n t h e N e w Y o r k S t o c k E x c h a n g e . A l l a re c o n s t a n t ly b e i n g a c­
c e p t e d d a ily b y la r g e b a n k s as g o o d a n d su ffic ie n t c o lla t e r a l. T h e y a r e :

A m e r ic a n T e l . & T e l . C o m p a n y
W estern U n io n T elegraph C o .
A t c h i s o n , T o p e k a & Sa n t a F e R y . C o .
S t a n d a r d O il C o m p a n y (N . J .)
C a n a d ia n P a c if ic R a i l w a y C o .
R o y a l D u t c h C o m p a n y (N .Y . Shares)
L o u is v i l l e & N a s h v il l e R .R . C o .
O t is E l e v a t o r C o m p a n y
I n g e r s o l l -R a n d C o m p a n y
S o u t h e r n P a c if ic C o m p a n y
S t a n d a r d O il C o m p a n y o f C a l i f .
U n i o n P a c if ic R a il r o a d C o .
C o n s o l id a t e d G as C o . o f N . Y .
A m e r ic a n T o b a c c o C o m p a n y

F. W . W o o l w o r t h C o m p a n y
G e n e r a l E l e c t r ic C o m p a n y
P e n n s y l v a n i a R a il r o a d C o .
Ea st m a n K o d a k C o .
A m e r ic a n R a d . & St a n d . S a n . C o r p .
N e w Y o r k C e n t r a l R .R . C o .
S ta n d a r d O il C o m p a n y o f N . Y .
I l l i n o i s C e n t r a l R a il r o a d C o .
U n it e d S t a t e s S t e e l C o r p .
U n it e d F r u i t C o m p a n y
W e s tin g h o u se E l e c . & M f g . C o .
T ex a s C o r p o r a t io n
N a t i o n a l B is c u it C o m p a n y
E. I. d u P o n t de N e m o u r s & C o.

North ¿\m erican
TRUST^

\_ S HARES

D is t r i b u t o r s G r o u p , I n c o r p o r a t e d , 6 3 W a l l S t., N e w Y o r k

{Owned by a Nationwide Group of Investment Houses)
CHICAGO

•

PHILADELPHIA

•

LOS ANGELES

•

ATLANTA

Northwestern Banker

September 1931

34
Pointing out that there are 10,000,000
dwellings in the United States that do not
have electric lights, Mr. Ripley said, in
p a rt:
“ Of the 30,000,000 dwellings in the
United States, 11,000,000 have no electric
iron; 22,000,000 have no electric power;
20,000,000 have no electric radio, and 27,000,000 have no electric refrigerator.
“ In addition to this, we have numerous
other electrical features, such as the radio,

washing machines, cooking and beating
appliances, electric irons, refrigerators, re­
frigerating systems and other appliances,
which are present in only a fraction o f the
homes.
“ The use o f electric heat in the manu­
facturing o f metal articles is a field that is
far from fully explored. W e have tele­
vision at the present time not fa r from its
infancy.
“ I predict that in a few years the

theater, with its unlimited electricity and
capital, will, through television, bring to
the screen not scenes and recording of
months past, but pictures and sound of
events as they are happening miles away.”
Mr. Ripley also pointed out that one of
the best features o f the industry results
from the fact that the more electric power
used the cheaper it can he sold.
The farmer will especially benefit by
this element in that he has need of more
power than the city dweller and it can be
furnished him by the power company
cheaper than he can obtain it from his
present machinery, Ripley said.
“ The time is coming when no home will
be complete without all the electric ap­
pliances,” Mr. Ripley stated, “ and I pre­
dict that the bride and groom o f a few
years will start in a home where all these
are furnished and the cost is part of the
rent or the initial price of the house.”

On Special Committee
Don C. Lewis, formerly insurance com­
missioner o f South Dakota, has been re­
quested by C. R. Horswill, the new com­
missioner, to represent him on the special
surety subcommittee o f the national con­
vention o f insurance commissioners, which
has under advisement the recent address
o f William B. Joyce, chairman o f the Na­
tional Surety Company. Mr. Joyce ad­
vocated, in his address before the com­
missioners in June, vigorous steps by the
commissioners to stop rate cutting and
high commission paying by surety com­
panies, and the subcommittee is planning
to hold hearings in the near future. Mr.
Lewis, during the four years that he was
an insurance commissioner, was a member
of the surety committee o f the commis­
sioners.

With Advertising Agency

We

w illB U Y ,

SELL

or Q U O T E

Public Utilities
Municipal and Industrial
BONDS
Real Estate Bonds Issued by
S. W . STRAUS & C O M P A N Y
A M E R IC A N BOND & M O R TG A G E C O M P A N Y
G R EEN EB AU M & SONS IN V E S T M E N T C O M P A N Y
H. O. Stone & Company
Jacob Kulp & Com pany
L ackner-B u tz & Com pany
L eigh t & Company
M a d ison -K ed zie State Bank
Straus B rothers Investm ent Co.

Baer, E isendrath & Co.
Cochran M cC luer & Co.
E qu itable B ond & M ortg ag e Co.
Garard T rust Company
George M. Form an & Co.
De W o lf & Company

K|a

s t

&

Q

//? ves im en f Securities
111 W. Washington St.

Northwestern Banker


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

September 193t

j,
CHICAGO

The affiliation o f Edwin G. Foreman,
Jr., with Blackett-Sample-Hummert, Inc.,
advertising agency, 221 North LaSalle
Street, as vice president has been an­
nounced. Mr. Foreman fo r many years
served as vice president and director o f
the Foreman-State National Bank.
Little Albert came home from school
with a new book under his arm. “ It’s a
prize, mother,” he said. “ A prize ? What
for, dear?”
“ F or natural history.
Teacher asked me how many legs an os­
trich had and I said three.” “ But an
ostrich has two legs.” “ I know that now,
mother, but the rest o f the class said fo u r ;
so I was nearest.”
The college professor and his wife were
entertaining at dinner. Suddenly a child’s
voice was heard from the floor above:
“M other!”
“ What is it, A rchie?” she asked.
“ There’s only clean towels in the bath­
room. Shall I start one?”

35

S tability

as an A

sset

That bankers fully appreciate the confidence building value of a
record of stability and good management is clearly indicated by the
frequency with which this point is stressed in hank advertising.
Just as a long record of good service is a valuable asset for a bank,
so also such a record is of equal value to an investment hanking
house.

The fact that Geo. M. Bechtel & Co. have served Iowa

bankers, and individual investors, for a period of four decades is the
best possible evidence of our experience, the excellence of our
service, and the sound character of our offerings.
If you are not familiar with the policies, personnel, and the offer­
ings of this pioneer Iowa investment house, it might prove profitable,
both to you and to us, if we could get better acquainted.

As a start,

you might write for our September list of offerings suitable for bank
investment.

Inquiries regarding any phase of investment are in­

vited and will receive our prompt attention.

Please address our

Davenport office.

Geo. M. B eehtel

Established. 1 8 9 1

ór Co.

Bechtel Building, Davenport,Iowa.
First Iowa Trust Bldg.
Burlington

I O W A ’ S

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

O L D E S T

Equitable Building
Des Moines

AND

Grand Opera House Bldg.
Dubuque

L A R G E S T

BON D

Northwestern Banker

H O U S E
September 1931

36

PFhat other L o c k has these

PLUS VALUES?
o you know of a safe deposit lock whose
key cannot be seen or touched by anyone
until your customer has rented his box?

custodian together can enter the box. And the state­
ment your renter signs, that he is first to touch or
see his key, is court evidence against fraud!

A lock whose maintenance cost is practically
nothing?

This S&G Lock can be reset to an infinite num­
ber of key-and-lock changes. It is manufactured
by the same pioneering organization which made
the first time lock ever to be installed on a bank
vault door. It is used by such banks as Bank of
America, New York; Union Trust, Detroit; North­
western National, Minneapolis. The coupon will
bring you a sample of this lock, and a complete
explanation of its plus values and how they can
increase your safe deposit box business.

D

A lock which protects not only your customer,
but your bank, from every form of thievery and
error ?
A lock which has been declared pick-proof by
Underwriters Laboratories?
A lock which offers more exclusive safety fea­
tures than all other safe deposit locks combined?
There is but one such lock in existence— the S&G
Secret Key Changing Sealed Key Safe Deposit
Lock. Its plus values eliminate at their source the
possibilities of loss by your customer
or your bank. For your renter must
choose his own key, sealed in its im­
pression-proof metal scabbard; he
and your custodian together must set S & G , m anufac­
of Tim e , Com­
the lock he chooses to fit the key he turers
bination and Safe
has selected (see illustrations), and D eposit Locks have
been pioneers in pro­
thereafter only your renter and your tection since 1865.

S A R G E N T & G R E E N L E A F IN C .
ROCH ESTER, N. Y.
(Check square f o r information desired)
□ Please send me a sample o f the new patented S&G Sealed Key.
□ Please send me a sam ple o f the S&G Secret K ey Changing Sealed
K ey Safe D eposit L o ck , with sample keys and instructions.
N a m e .........................................................................................
Position or Title ..........................................................................
N am e o f B a n k ............................................................................
A ddress .....................................................................................

Sargent & Greenleaf Inc.
N

ew

Y

ork

•

R

ochester

Northwestern Banker


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

•

C

h ic a g o

September 1931

•

B

oston

City and State .............................................................................
Check here □ i f you wish a cop y o f A Quick T rip T hrough a L ock
Factory.

37

Real Estate Bond Brokerage
H AT considerable confusion and un­
certainty exists in the real estate bond
market is recognized by everyone.
Much has been said and written regarding
the probable outcome of the present situ­
ation and the chaos that will ensue should
prevailing conditions be permitted to con­
tinue fo r any indefinite period. However,
practically nothing o f a truly constructive
nature has been done to provide a logical
remedy which would serve to stabilize real
estate bonds on the firm basis warranted
by their inherent soundness as investment
securities.
At the present time there are many
millions o f dollars worth of real estate
bonds in default, either in interest pay­
ments, amortization requirements, or in
both interest and principal. Unsettled
conditions in the real estate field, due to
abnormal vacancies, decreased rentals,
mismanagement or some other affiliated
cause, have made it extremely difficult, and
in most cases almost impossible, to re­
finance the majority of defaulted issues
on an equitable basis. Up to about three
years ago, practically all maturing bond
issues were refinanced up to or close to
the amount due at final maturity. Holders
o f maturing bonds were paid in full or
exchanged their old bonds fo r new. To­
day, refinancing in this manner is the ex­
tremely rare exception.

T

By F. N. KNEELAND

cannot be conducted on the same general
principles as are dealings in stocks on the
stock market. Here, stocks, listed and
unlisted, are bought and sold on definite
orders and on established commission
rates.

President, Kneeland & C o., Inc., Chicago

at all justified when analyzed from the
viewpoint o f security and income.
Establishment of legitimate markets fo r
real estate bonds, based upon true security
values, and governed by actual demand
fo r investment purposes, would undoubt­
edly go far toward improving prevailing
conditions. There is no reason why the
buying and selling o f real estate bonds

Brokerage service has been very suc­
cessfully applied to the buying and selling
o f real estate bonds, and the legitimate
real estate bond broker is doing much
good in getting fo r his selling customer
the very best price obtainable fo r his

Fo

P o r t e r .

x

& Go.

INCORPO RATED

In
N EW YORK
50 Pine Street
Telephone John 4-2757

v e stm e n t

S

e g v r it ie s

CHICAGO
120 South La Salle Street
Telephone Central 270Ï

SAN FR A N C ISC O
Russ Building
Telephone Sutter 0330

Resulting Difficulties
S A RESULT o f this situation, and
because o f the tremendous amount of
publicity given to the dark side o f the
picture, even the best and most solidlysecured real estate bonds, on well-occupied
and substantially-rented properties, were
subjected to severe price depression when
offered fo r sale. Present conditions have
been aggravated to a considerable extent
by the necessity fo r liquidating a tremend­
ous volume o f real estate securities held
by banks which have closed their doors.
It has been estimated that approximately
50 per cent o f the bonds issued by small
outlying banks are now in difficulties.
Many o f the bonds sold by these banks had
been purchased upon the understanding,
sometimes written, but more often verbal,
that they would be bought back at a dis­
count of 1 per cent. This policy has, o f
course, been discontinued for some time,
and the resultant dissatisfaction upon the
part o f the purchasers has brought about
a literal “ dumping” o f real estate bonds.
F or a large proportion o f these bonds
there is no market at any price. Thou­
sands o f owners o f good, substantial
bonds, even though not forced to sell, are
anxious to take any price offered. The
result is that real estate bonds as a class,
good, bad and indifferent, are being f orced
down to exceptionally low price levels not

A


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

Illinois Local Improvement Bonds
Are Especially Fitted to Meet
Secondary Reserve Requirements
Short Maturities— Tax Exemption— 6 %

Yield

Descriptive Circulars on Request

Lansford 0 & Company
Securities
33 North La Salle Street, Chicago
Specializing in Illinois Local Im provem ent Bonds . E xem pt from A ll Federal Incom e Taxes

Northwestern Banker

September 1931

38
securities. Orders to buy as received by
the real estate bond broker are taken at
a definite price, with a stipulated com­
mission; selling orders are accepted on
the same basis, and the buyer and seller
are brought together on the most equitable
terms obtainable through the agency o f
the broker.
Should Sell on Merits
HE real estate bond broker, conduct­
ing his business on the basis of fair­
dealing to both buyer and seller, takes
definite stand that every real estate bond
should be bought and sold on its own
merits, and not at a price based upon the

T

fact that the owner is forced to sell. When
a bond owner insists on selling, the con­
scientious bond broker makes every effort
to get fo r him the highest possible price.
The legitimate broker in real estate bonds
will not buy or sell any bonds on his own
account ; he receives a definite order to
buy or offer to sell, each case being ac­
companied by a set figure at which the
bond is to be bought or sold, and entirely
on a commission basis.
Brokerage service as applied to real
a estate bonds has been used considerably
in recent months by banks in process of
liquidation, receivers who are endeavoring
to obtain quickly the largest possible

M unicipal B onds
Y ie ld in g 4 .5 0 % to 6%

Circulars on Request

5heMnnchett$$ondCk
Incorporated 1910

39 South La Salle Street, Chicago
N EW

YO R K

D E T R O IT

P H IL A D E L P H IA

ST.

L O U IS

6% and
Municipal Security
Io w a

M u n ic ip a l

s e c u r ity ,

lib e r a l

E le c tr ic

in te r e s t,

L ig h t p la n t b o n d s

and

are

a v a ila b le

in

o ffe r

e x c e p tio n a l

c o n v e n ie n t

m a­

tu r itie s fo r b a n k s .

T h e s e m u n i c i p a l p la n ts a r e so p r o fi t a b l e th a t

m any

th e ir

are

c a llin g

bonds

tw o

and

th ree

years

ahead

of

W rite for circular
and offerings

B A L L A R D -H A S S E T T

Northwestern Banker


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

September 1931

Financial Reverses
Financial reverses among young and
able bodied men and women are not nec­
essarily serious.
Ofttimes indeed they
may be a blessing in disguise, making
necessary, as they frequently do, the ex­
ertion o f latent power and ability pre­
viously unrealized.
But financial reverses in old age are
frequently tragic. The new bureau in the
Department of Public Welfare in New
York City, designed to extend relief to
the aged, had 1,800 superannuated ap­
plicants in the first week of its existence.
Among those who applied for assistance
were many who had previously been wellto-do, and the New York Times reported
a number o f such cases.
There was, fo r instance, the man wlm
prepared ostrich feathers fo r women’s
wear who lost his entire fortune o f $100,000 when the women stopped wearing his
product. There was the man who lost
$60,000 through the disappearance o f a
friend whose bond he had signed in this
amount. There was a prominent engineer
who had completely lost his grip through
repeatedly being told he was “ too old” or
“ too good a man fo r this place.”
Among the group was a famous bal­
lerina who had danced before royalty and
had long been welcomed in aristocratic
circles. Several had lost their lifetime
savings in bank failures. And, the swift
changes o f modern industry had outdis­
tanced many o f the aged applicants.
The radio and the talkie deprive thou­
sands o f musicians o f their means of live­
lihood; bus and air travel alarm the rail­
roads; the electric refrigerator banishes
sleep from the homes of ice manufactur­
ers and retailers. W e could list a hundred
SAvift changes within the past decade
Avhich have brought ruin to thriving indus­
tries.
But the sound protection o f life
insurance goes on unaffected by the amaz­
ing changes that surround it.

Men are recognizing this more keenly
each day and the sale o f life insurance is
measurably affected by the increased re­
ceptivity o f buyers. Nothing is as cer­
tain in this world o f change as is life in­
surance.— Fidelity Fieldman.

s c h e d u le .

1114-1120 Commonwealth Bldg-.

amount o f cash for assets in the form of
real estate securities, building owners who
believe that present market conditions
provide unusual advantages in enabling
them to buy in the open market bonds on
their own properties, and syndicates which
are operating as buying groups who are
convinced o f the soundness o f real estate
bonds as long term investments.

C O

D E S M O IN E S

“ Ladies and gentlemen,” said the lec­
turer, “ I understand the language of wild
animals.”
From the back o f the hall came a voice :
“ Well, the next time you see a skunk,
ask him what’s the big idea.”

39

W ill Head Investment Bankers
LLAN M. POPE o f New York, ex­
ecutive vice president o f the First
National Old Colony Corporation,
has been nominated fo r the presidency o f
the Investment Bankers Association of
America fo r the year 1931-32. As nomina­
tion by the association’s board o f gov­
ernors has always been equivalent to
election, it is expected that Mr. Pope will
take office at the close o f the association’s
twentieth annual convention, which will be
at White Sulphur Springs, W . Va.,
November 7 to 11. He will succeed Henry
T. Ferriss o f the First National Company,
St. Louis. Mr. Pope has taken a prom­
inent part in activities o f the association’s
board o f governors and foreign securities
committee fo r several years. Other nomi­
nations to be voted on at the annual con­
vention in November a re:

A

For executive vice president: Alden H.
Little o f Chicago, to succeed himself. For
vice presidents: James H. Daggett,
Marshall & Ilslev Bank, Milwaukee;
Charles D. Dickey, Brown Brothers, Harriman & Company, Philadelphia; William
H. Eddy, Chase Harris Forbes Corpora­
tion, New Y ork ; Dietrich Schmitz, Pacific
National Company, Seattle; C. T. W ill­
iams, C. T. Williams & Company, Inc.,
Baltimore. F or treasurer: William T.
Bacon, Bacon, Whipple & Company,
Chicago. F or secretary: C. Longford
Felske, Chicago. Nominations to p o­
sitions on the board o f governors for terms
expiring in 1934 are :
J. Augustus Barnard, Dominick &
Dominick, New Y ork; Frank L. Scheffey,
Callaway, Fish & Company, New Y ork;
T. J. Bryce, Continental Illinois Company,
Chicago; Duncan J. McNabb, Guardian
Detroit Company, Inc., Detroit ; Francis
Moulton, R. H. Moulton & Company, Los
Ang’eles; Russell D. Bell, Greenshields &
Co., Montreal; Harry F. Stix, Stix &
Company, St. Louis; William Cavalier,
Wm. Cavalier & Company, San Fran­
cisco; John J. Rowe, First Investment
and Securities Corporation, Cincinnati;
Charles B. Engle, International Company
o f Denver, Denver.
Nominations to fill unexpired terms
ending in 1932:
Henry T. Ferriss, First National Com­
pany, St. Louis, ex-officio, as retiring
president, a member o f next year’s board;
Francis A. Bonner, Lee, Higginson &
Company, Chicago; Henry Hart, First
Detroit Company, Inc., Detroit; Ralph
Hornblower, Hornblower & Weeks, Bos­
ton; George II. Nusloch, Hibernia Se­
curities Company, Inc., New Orleans;
David H. Martin, Fidelity National Cor­
poration, Kansas City.
The newly nominated president o f the
Investment Bankers Association o f Amer­
ica is a graduate o f West Point and

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

served on the general staff o f the A. E. F.
in France as a m ajor and as a lieu­
tenant colonel.
He resigned from the
United States army in 1920 to enter
the investment banking business in Boston,
with the First National Corporation o f
that city. In 1921 Mr. Pope became
manager of the corporation’s New York
office and in 1928 was elected president of
the corporation. In 1929 the consolidation
of the First National Bank o f Boston and
o f the Old Colony Trust Company, also of
that city, resulted in a merger o f their
respective investment banking affiliates
and the formation o f the First National
Old Colony Corporation, which is now one
o f the largest investment banking insti­

tutions in the country, with offices in 21
American cities and representatives in
London, Paris, Berlin and Buenos Aires.
Mr. Pope was born in Boston November
24, 1879, and is a descendant o f two o f
New England’s oldest families. He re­
ceived his early education at the Prince
School and Boston Latin School. In 1899
he entered the United States Military
Academy, from which he was graduated
in 1903 and commissioned a second lieu­
tenant o f cavalry. He served in the
Philippines and in 1916 was commissioned
a captain. On the entry of the United
States into the world war he was advanced
to the rank o f major and attached to the
general staff.

D ecora h
Dubuque
Clinton
Oelwein
are included in the 348 communities in eight states
served by the Interstate Power System.

Nearly 9 5 % ol

gross revenues is derived from the sale of electricity
and gas.

INTERSTATE POWER COM PANY
««

First M ortgage 5 % Bonds due 1 9 5 7

»»

The Bonds have been outstanding since 1927 and are
available at the New York Curb Market to yield about
5 .90% .
The replacement value of the properties is estimated
at approximately twice the amount of first mortgage
bonds.

Net earnings for the year ended March 31, 1931,

were equal to 2.4 times annual interest on these bonds.
Recent summary available upon request

INVESTMENT SECURITIES

American Bank Building

Davenport, Iowa

Northwestern Banker

September 1931

40

Exclusively for Banks
B

Y catering solely to the invest­
ment needs of Iowa Banks we are able to give
you exceptional service on high grade, short time
Bonds, Notes and Commercial Paper.

Mr. Pope is chairman o f the advisory
council and a member o f the executive
committee o f the Institute o f International
Finance, a fact finding organization which
is conducted by New York University, in
co-operation with the Investment Bankers
Association, fo r the benefit o f dealers and
investors in foreign securities. He is also
chairman o f the association’s foreign se­
curities committee and is a member o f the
executive committee of the American A c­
ceptance Council.

Write for our latest list
With Sickle, Nast & Co.

IO W A B O N D

C O R P O R A T IO N

IN V E S T M E N T

S E C U R IT IE S

Represented by ./. C. Enyart
Insurance Exchange Bldg.

Of interest to his friends throughout the
middle west is the announcement that
Carroll S. Felter, investment banker and
statistician, who has been ill for some

Des Moines, Iowa

Brokerage Service on

Real Estate Bo n d s
Banks, R eceivers, Build ing O w n e rs and S y n d icate s are
invited to take advantage of our sp e c ia liz e d Service
Departm ent for Real

Estate Bonds.

W e w ill accept

orders to b u y and sell all First M o rtg age Bonds strictly
on a Brokerage basis, at the low com m ission rate of
one point.

Call, Phone, or Write for Quotations

Kneeland & Co.
I N C O R

P O R A T E D

Board of Trade Building, Chicago
Telephone Wabash 9292

La m so n B r o s . & Co.
E s t a b l i s h e d 1874

Members of Leading Exchanges
OM AH A . N E B R A S K A
202 City National Bank Bldg.

L IN C O L N , N E B R A S K A
333 Stuart Bldg.

D U B U Q U E . IOWA
1005 Federal Bank Bldg.
C E D A R RAPID S, IO W A
503 Merchants Nat’l Bank Bldg.

D A V E N P O R T . IOW A
305 Union-Davenport Bank Bldg.

M A R S H A L L T O W N , IOW A
201 Masonic Temple Bldg.

S IO U X C I T Y , IOWA
620 Warnock Bldg.
S TO R M L A K E , IO W A
Brader Block

DE S MOIN ES. IOWA
304 Liberty Bldg.

MASON C I T Y , IOWA
216 Bagley-Beck Bldg.

W A T E R L O O , IOWA
203-205 Marsh Place Bldg.

IO W A F A L L S , IO W A
618'/2 Washington Avenue

F O R T D O D GE , IOWA
404 Snell Bldg.

C A R R O L L S. F E L T E R

time, has entirely recovered. He has be­
come affiliated with the firm o f Sickle,
Nast & Co., I l l West Washington, Street,
Chicago. This firm specializes in the un­
listed trading market. Mr. Felter spent a
number o f years, prior to his later resi­
dence in Chicago, with several houses in
Pittsburgh and New York.

Misinformed
“ I understand,” began the large, scrappy-looking ward politician, “ dat youse
had a piece in your paper callin’ me a
thief.”
“ You have been “m isinformed,
sir,” said the editor, calmly; “ this paper
publishes only news.” — Cleveland Leader.

Leased W ire s

2200 Board of Trade Building, Chicago
T elep hone W A B a sh 2400

STO CKS

Northwestern Banker


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

G R A IN

September 1931

COTTON

BONDS

Hammond— “ Do you know how the
Scotch prevent seasickness?”
C abb age— ‘ ‘N o.”
Hammond— “ They merely hold a silver
coin in their mouths.”

41

Survey of insurance Holdings
N A N A L Y S IS o f the investment
holdings, as o f December 31, 1930,
o f 46 leading insurance companies
licensed to do business in New York state,
just completed by J. G. White & Com­
pany, shows that life insurance companies
were the only group able to report an
increase in value o f security holdings dur­
ing 1930, and that depreciation in security
values for all other groups, namely, fire,
casualty and miscellaneous companies, and
United States branches o f foreign fire
companies, was substantially greater in
1930 than in 1929. In general, the quality
o f investment performance, by groups of
companies, varied inversely with the per­
centage o f stocks held.
The survey, which is the fifth annual
edition of a continuing study o f insurance
company investments covering companies
with combined holdings in excess of $14,700,000,000, shows that despite heavy
losses suffered in stocks during the past
two years, there is no indication that those
companies which have heretofore invested
primarily in equities have undergone any
basic change in investment policy. Such
companies, as a group, continued to invest
primarily in stocks during 1930. More­
over, those groups o f companies which
heretofore had relatively small stock hold­
ings invested more than their usual quota
in stocks during 1930.
From the standpoint o f diversification,
the study shows that the year 1930 marked
a sharp reversal o f the trend toward rela­
tively smaller bond holdings, which had
been in evidence since 1924. Much o f this
gain in the percentage of bonds to total
investments in 1930, however, was oc­
casioned by the decline in value of stock
holdings, which automatically increased
the ratio o f bonds to total investments.
Another outstanding feature from the
standpoint o f diversification, is that the
increasing preference fo r public utility
bonds among all classes o f companies,
which has been characteristic o f recent
years, is again clearly apparent in 1930.
Except for the group comprising life
companies, investment results in 1930
were substantially poorer than in 1929.
The 33 life insurance companies included
in the study showed an appreciation of
.99 per cent in value o f stock and bond
holdings in 1930. This gain in values rep­
resents the only time in the past two years
that any group has been able to report
appreciation in security values. The group
of 20 fire insurance companies classified
as those investing over 40 per cent in
stocks, showed the poorest investment per­
formance o f any group, reporting depre­
ciation of 19.12 per cent, as compared with
depreciation of only 2.64 per cent in 1929.
The 43 fire insurance companies included

A


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

in the group classified as those investing
less than 40 per cent in stocks reported
depreciation o f 6.95 per cent in value of
security holdings during 1930, as com­
pared with depreciation of only 1.10 per
cent in 1929. Twenty-five United States
branches o f foreign fire insurance com­
panies, with depreciation o f only 2.99 per
cent in 1930, show the best experience of
any group other than life companies. De­
preciation o f the same group in 1929 was

B O N D

only 1.09 per cent. The 25 casualty and
miscellaneous companies included in the
study show depreciation of 5.46 per cent
in security values in 1930, as compared
with 1.53 per cent in 1929.
Analysis o f the uses to which new money
was put in 1930 indicates that no basic
change o f investment policy took place in
the past year in any group o f companies,
as between relative importance o f bond
and stock commitments. The group o f 20

I N V E S T M E N T

F O R

B A N K S

INVOlVES THREE MAIN STEPS
1 Determining, as precisely as possible, the nature
and extent of present and future needs which may be
served through investment in bonds.
2 Planning and adopting a policy of sound invest­
ment which is calculated to meet those needs most
completely and most economically.
3 Selecting bonds which provide the structural and
functional features prescribed in the policy of invest­
ment which has been adopted.

©

O f t h e s e s t e p s , n o n e is m o r e i m p o r t a n t t h a n t h e fir st. U n t i l

t h e n e e d s o f a n y b a n k i n g i n s t i t u t i o n a r e k n o w n a n d m e a s u r e d as d e f i n i t e ly as p o s s i b l e , it is
i m p o s s i b l e t o s e l e c t b o n d s w h i c h w i l l in s u r e t h e g r e a t e s t v a l u e p e r d o ll a r i n v e s t e d . E v e n t h e
u n v a r y i n g p r a c t ic e

o f c h o o s i n g o n l y “ g i l t - e d g e ” is s u e s w i l l i n m o s t c a se s i n v o l v e c e r ta in

sa c r ific e s t h a t m a y s a f e ly a n d l e g i t i m a t e l y b e a v o i d e d .

•

T h e r e c a n b e n o s u b s titu te fo r c o m ­

p le t e k n o w le d g e . O n l y a t h o r o u g h stu d y o f th e s itu a tio n a n d o p e r a tio n s o f th e b a n k can p r o ­
v i d e t h e d a ta f r o m w h i c h a s o u n d a n d r e l i a b l e p o l i c y o f i n v e s t m e n t c a n b e c o n s t r u c t e d . H a v i n g
w o r k e d o u t a n d a d o p t e d s u c h a p o l i c y , h o w e v e r , t h e s e l e c t i o n o f b o n d s t h e r e a f te r a c q u ir e s a
d e g r e e o f p o s i t i v e n e s s th a t c a n b e r e a liz e d t h r o u g h n o o t h e r m e a n s .
o n th e s e p o in ts w ill b e f o u n d in o u r fo ld e r ,

*

F u rth e r s u g g e s tio n s

Sound Investment Practicefor the Commercial Bank.

A n y b a n k o f f ic e r m a y h a v e a c o p y o n r e q u e s t .

HALSEY,

STUART

& CO.

I N C O R P O R A T E D

C

h i c a g o

, 201 S o u th L a S a l l e S tr e e t

.

N E W Y O R K , 35 W a l l S tr e e t

A n d Other P rin cip a l Cities
•

THE P R O G R A M TH AT DOES MORE T H AN EN T E R T A IN

thousands increase their knowledge o f sound
investment by listening to the O ld Counsellor on the Halsey, Stuart & Co.
program. Broadcast over a nation-wide N B C network. • 8 p . m . Eastern
Time 7 p . m . Central Time 6 P. m . Mountain Time 5 p . m . Pacific Time.
E v e r y W e d n e s d a y E v e n in g

D a y lig h t sa v in g tim e— one hour later.

BONDS

TO

FI T

THE

Northwestern Banker

INVESTOR

September 1931

42

WE ARE

PLEASED TO

M r . Ro ber t

ANNOUNCE THAT

H. M c C r a r y

IS A S S O C I A T E D

W ITH

AS O F TH IS

DATE

AUGUST

US

1, 1931

JACKLEY-WIEDMAN & COMPANY
IN V ESTM EN T SE C U R IT IE S

R

e g ist e r

and

T

r ibu n e

B

u ild in g

d e s

Mo

in e s

Diversified
Trustee Shares

Further information
upon request

American Trustee Share Corporation
59 Wall Sireei, New York
Chicago

Northwestern Banker


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

Philadelphia

September 1931

Los Angeles

fire companies which have been essentially
stock investors continued to invest pri­
marily in equities in 1930, but in a slightly
lower ratio to total investments. All othergroups invested in stocks a percentage of
new funds greater than their respective
ratios o f stocks to total investments at the
beginning o f the year. In no case, how­
ever, was the difference so significant as
to indicate a change in basic policy.
As of the close o f 1930, the 33 life com­
panies included in the study had 46.3 per­
cent of total funds invested in bonds, as
compared with 45.6 per cent at the close
o f 1929 and 50.2 per cent in 1924. Mort­
gage holdings declined from 51.8 per cent
to 50.5 per cent in the past year, while
stock holdings, comprising chiefly pre­
ferred and guaranteed issues, rose from
2.6 per cent to 3.2 per cent of total invest­
ments. Diversification o f the combined
bond accounts o f the 33 life companies
shows a sharp decline in the percentage of
railroad bond holdings and United States
government obligations and a further in­
crease in holdings o f public utility bonds.
These changes are continuations o f trends
that have been apparent since 1924, and
which in that period have reduced govern­
ment bond holdings from 18.0 per cent of
total bond holdings in 1924 to 4.8 per cent
in 1930, and rails from 53.0 per cent to
48.0 per cent during the same period.
Utility bond holdings, meanwhile, have in­
creased from 11.0 per cent to 26.2 per cent.
The 20 fire insurance companies classi­
fied as those investing more than 40 per
cent in stocks showed 72.2 per cent so in­
vested at the close o f 1930, as compared
with 73.6 per cent at the close o f 1929.
The percentage of bond holdings rose from
25.0 per cent to 26.1 per cent in the past
year, while mortgages increased from 1.4
per cent to 1.7 per cent. The decrease in
ratio o f stock holdings and the increase in
the percentage o f bonds to total invest­
ments represent reversals of trends that
had been uninterrupted since 1924. Bond
holdings o f 26.1 per cent, although show­
ing a slight increase in 1930, are still far
below the 1924 figure o f 41.5 per cent.
The bulk o f new money invested in 1930
by companies in this group again went
into stocks, notwithstanding the heavy
loss suffered in stocks in the past two
years.
The group o f 43 fire insurance com­
panies originally classified as those invest­
ing less than 40 per cent in stocks, had
41.7 per cent so invested at the close of
1930, as compared with 41.2 per cent at
the end o f 1929. The percentage o f bonds
to total investments declined from 55.6 per
cent in 1929 to 54.8 per cent in 1930, while
mortgages increased from 3.2 per cent to
3.5 per cent o f total holdings. The diver­
sification o f bond holdings fo r this group,
as of the close o f 1930, shows a reduction
in the percentage o f United States Govern­
ment and railroad obligations, and in­
creases in the percentages of public utility,
industrial, Canadian and municipal bonds.

43
The 25 casualty and miscellaneous com­
panies included in the J. G. White & Com­
pany study show 34.6 per cent o f total
investments in stocks, 62.0 per cent in
bonds and 3.4 per cent in mortgages at
the close of 1930. These percentages rep­
resent a slight decline in stock holdings, a
slight gain in bonds, and no change in
the case o f mortgages. The diversifica­
tion o f bond holdings, at the close o f 1930,
shows reductions in the percentages o f
United States Government, municipal and
rail bonds and increases in percentage
holdings o f utility, industrial and Cana­
dian government obligations.

Is Iowa Manager
Emil
Webbies, former Burlington
banker, and at one time president o f the
Iowa Bankers Association, has been made
manager for Iowa for Selected Shares
Corporation.
He will headquarter in
Burlington.
Selected Shares Corporation, the spon­
soring and distributing company, is
owned and controlled by a group of well
known business men and bankers. Max
Adler, former vice president and a direc-

F ew

infant

//

industries

are as assured of future
success as the natural gas
industry.
Increasing de­
mand and an unlimited nat­
ural supply guarantee rapid
d e v e l o p m e n t for many
years to come.
W e offer for your consid­

E M IL W E B B L E S

tor o f Sears, Roebuck & Company, is
chairman o f the board. It was Mr. Adler
who recently gave the planetarium to the
city o f Chicago. Among other directors
are P. W . Trudeau, bank executive in
Chicago; Martin H. Burns, president of
Tebbetts & Garland Company, and Hill­
man’s, Chicago; David Copeland, first
vice president and a director of General
American Tank Car Company; James O.
McKinsey, professor of economics, Uni­
versity o f Chicago.

eration the O n e Year Six
Per Cent G o ld Notes of
the Arkansas V alley N at­
ural G as Company. H d V ing a satisfactory yield and
short maturity, they consti­
tute an admirable invest­
ment for your secondary
reserve.

Win Cash Prizes
David Ward and G. E. Gustafson of
the White & Odell agency, Minneapolis,
Avere recently a warded cash prizes by
NortliAvestern National Life fo r long mem­
bership records in the company’s A pp -A Week club. Mr. Ward ended his sixth
year of consistent Aveekly production
August 7th, Avhile Mr. Gustafson finished
three years. There are noAv 70 North­
western National Life agents who have
produced a minimum o f one application a
Aveek for at least 13 consecutive weeks
holding memberships in the club.

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

D utro & C ompany
E. RAYMOND DUTRO, President

American Bank Building

DAVENPORT, IOWA

Northwestern Banker

September 1931

44

With Jackley-Wiedmaii
Robert H. (Bob) McCrary, of I)es
Moines, has joined the staff of JackleyWiedman & Company, Des Moines invest­
ment securities firm, it is announced by
Winfield C. Jackley, president of the
company.
Mr. McCrary has been associated with
investment securities sales in Iowa the
past six years. He is widely known as
trans-Mississippi golf champion, captur-

\A / e l c o m e
T O

NEW YORK

AND

THE
fiO T E L
Go v e r n o r
Cl i n t o n
31- ST<mo7 -AVE

The proved and unques­
tioned security o f Munici­
pal Bonds appeals to the
true investor.

O P P O S IT E

W e have available at this
time an attractive list of
municipals o f Iowa and
other states.

PENNA. R.R. STATION

The White-Phillips Co., Inc.
Investmen t B an kers
D A V E N P O R T , IO W A

R O B E E T H. M cC R A R Y

ing that title in 1929 and 1930. In the
western amateur tournament in 1930 he
went to the semi-finals, defeating Sir
Cyril J. H. Tolley, holder o f the British
open amateur title.
Other golf titles
which Mr. McCrary has gathered are Des
Moines city championship in 1923 and
1927 and last month won the Iowa open
title, fo r 1931.
Mr. McCrary is a member o f Golf and
Country club, Des Moines; Chi Delta, so­
cial and Delta Phi Omega, national aca­
demic fraternities. He resides at 1055
44th Street, Des Moines.

I NVESTORS SYNDICATE main­
tains loan offices in 20 important
cities in the United States and
Canada. These provide ample facil­
ities for the prompt investment of
its available funds in diversified
high grade residential mortgages at
profitable rates of interest—and
contributes to the soundness of the
Syndicate's Investment Certificates.

Becomes President

ASSETS OVER $40,000,000

t\ I n
^ S

v e s t o r s

y n d ic a t e

m
/£

FOUNDEDI894

MINNEAPOLIS

__
BOSTON-LOS ANGELES
X w V 'lN
MONTREAL

Northwestern Banker


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

September 1931

The election o f Jevne Haugan as presi­
dent of the Mid-West Company, mort­
gages and investments, and the affiliation
o f five new associates with the company, is
announced.
Mr. Haugan formerly was vice presi­
dent o f the State Bank o f Chicago and
more recently vice president o f the F or­
man-State National Bank. He has been
affiliated with-the Mid-West Company fo r
a number o f years during which time he
has been a director o f the company.
The new associates in the company are
Roy G. Johnson, William B. Lassen,

A pre-eminent Hotel
of 1200 Rooms, each
having

Bath, Cir­

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and many other in­
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a sincere spirit of
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ROOMa n d BATH $3 UP

Herbert C. Anderson, Arthur P. Petersen,
and Frank F. Healey. All formerly were
with the State Bank of Chicago and later
with the Foreman-State Trust and Sav­
ings Bank.
Mr. Lassen will head the title depart­
ment o f the Mid-West Company and Mr.
Healey, well known in the field of en­
gineering, will he manager o f appraisals
and inspection. Mr. Anderson will be
manager of the insurance department and
Mr. Petersen and Mr. Johnson will be in
charge o f sales.
The Mid-West Company is engaged in
the first mortgage real estate investment
field. Mr. Haugan announces that it will
extend its activities in this field to include
refinancing, extensions, and other service
in connection A v i t h the handling o f real
estate mortgages. The company has taken
over additional space at 33 North La Salle
Street, Chicago, to accommodate the addi­
tions to its staff and the extension o f its
interests.

SIX PER CENT

Collateral Trust Gold Notes
IS S U E D

B Y

ATLAS SECURITIES COMPANY
of

Illin o is

A “ Lewis E. Bower” Corporation
Automobile Bankers Since 1912
Maturing from 6 months to 5 years
Interest Payable Semi-Annually at the
Chicago Trust Company, Trustee
A non-speculative investment, secured by
Automobile Installment paper not
affected by market fluctuations

Midland Bank, Limited
Total assets and liabilities o f the Mid­
land Bank, Limited, as o f June 30, 1931,
were 428,905,511 pounds, according to the
last statement o f condition o f this institu­
tion. Current, deposit and other accounts,
including balance o f profit and loss ac­
count, totaled 375,119,144 pounds.

Correspondence solicited from Banks, Insurance Companies,
and Distributors

W . L. T A Y L O R , Executive V ic e President
35 East Wacker Drive, Chicago
W e handle only our own securities

Minneapolis Man Honored
Frank T. Heffelfinger, a member o f the
board o f directors of Northwestern Na­
tional L ife of Minneapolis, and president
o f F. H. Peavey & Co., world’s largest
grain company, has been named to serve
on a new American committee o f the
International Chamber o f Commerce.
This committee, composed o f 64 leading
business men from all parts o f the coun­
try, Avi l l direct American participation in
the affairs o f the chamber.

Case Dismissed
The Judge (sternly)— Well, what’s
your alibi for speeding 60 miles an hour
through the residence section?”
The Victim— I had just heard, your
honor, that the ladies o f my w ife’s church
were giving a rummage sale and I Avas
hurrying home to save my other pair o f
pants.

OUR

OFFERING

LIST

W ILL

BE

MAILED

REGULARLY

UPON

REQUEST

G M A C obligations
enjoy the protective background of highly liquid assets,
with credit factors widely diversified in region and
enterprise. Long regarded as a national standard for
short term investment, they have been purchased by
individuals, institutions and thousands of
banks the country over.
available in convenient maturities and
denominations at current discount rates

Mistress— “ W hy did you leave your last
place, M ary?”
Maid— “ Because I did not knoAv Avhat
this one was like.”
“ Whatcha mean by saying that Thomp­
son Avears Indian neckwear ?”
“ Bow tie and arroAv collar.”
Tramp— “ Hive me a penny fo r my
wife.”
Professor (absently)— “ I regret I must
decline. The price is low, but I already
have one.”

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

G e n e r a l M otors
A c c e p t a n c e C o r p o r a t io n
OFFI CES
Executive Office

CAPITAL,

SURPLUS

"

IN

P RI NCI P AL

BR O AD W AY a t 5 7 T H STREET

AND

UNDIVIDED

PROFITS

CI TI ES
N[ew Y or\ City

-

-

OVER

Northwestern Banker

$ 8 0 ,0 0 0 ,0 0 0

September 1931

46

T H E SEPTEM BER H O R O S C O P E

Northwestern Banker

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

Pride and selfishness are the two great faults of September horn folk.
Nevertheless, people of this month are invariably clever, and they
are blessed with so many talents that success is open to them in
almost any field of work they choose.

In finances they are keenly

shrewd, and when they speculate they can be relied upon to get
good returns for their money.
Originality is strongly marked in September people, and inasmuch
as the world pays a long price for originality, you should make the
most of this trait.
The Sapphire should he worn constantly, and your dress attire
should have either scarlet or light blue in its make-up.
If you are in the life insurance business but not now under contract
you should by all means investigate the Royal Union s agency propo­
sition.

Seek success and you will find it with us.

ROYAL UNION LIFE
INSURANCE COMPANY
DES M OINES, IOW A
A. C. TUCKER, Chairman of the Board
B. M. KIRKE, Vice Pres, and Field Mgr.
September 1931

SHAMBAUGH, President
W. D. HALLER, Secretary

J. J.

47

Insurance

Forgery Insurance and W hat It
CO VERS
N

O LESS o f an authority than James
E. Baum, deputy manager o f the
American
Bankers
Association,
estimates that forgery losses annually run
not less than $25,000,000. W e believe
this statement to be a conservative one,
and certainly the last 12 months will show
a substantial increase in forgeries sus­
tained by the banking fraternity over any
other period in the history o f banking.
But not all o f those who have sustained
such losses can in all cases rest easy—
that is, if the loss in question was not col­
lectible under the particular insurance
policy which the banker was relying unon
fo r protection. There are so many differ­
ent varieties o f forgery and so many forms
o f insurance contracts that even the Phil­
adelphia lawyer is in a daze, to sav noth­
ing o f the confusion that exists in the
mind o f the banker. Then again, the
laws determining the liability o f the banks
have so many shades or degrees o f in­
terpretation that the subject is quite in­
volved and complex. The following con­
tracts are available to the banker fo r his
protection against loss due to forgery and
each one should be studied closely to learn
if it meets with the needs o f his institution.

By H. SCARBOROUGH, JR.
and last, the contract covering any instru­
ment that may be forged, invalid or stolen.
This rich assortment o f contracts has d if­
ferent premium costs predicated upon
broadness o f cover and the hazard in­
volved. The low rated contract has less
protection, more clauses restricting pos­
sible claims; so don’t sit back with that
secure feeling when your forgery insur­
ance bill is small. The saddest o f awaken­
ings is one caused by some unkind insur­
ance adjuster who tells you that the
“ item is not covered.”

once; instead he goes to the bathroom and
shoots himself.
Where are you now?
Does your bank carry insurance against
such a loss?
Can You Collect?

CUSTOMER comes to an officer’s
desk to obtain the initialed O.K. on
an out-of-town check fo r $50.00.
He
immediately leaves the bank, returning
with the forged initials on another check
fo r $3,800 which the teller promptly
cashes. The check is bogus. Do you col­
lect under your forgery contract?
Payroll accounts carry trouble and
should be watched. A foreman fo r a
concern caused checks to be issued to a
fictitious employe each week covering two
years o f time. The customer brought suit
against the hank which, incidentally, was
Forgery Losses
not the cashing bank. The court held that
ORGED mortgages are rather uncom­
the bank was not liable. There are some
mon, yet losses have been sustained and
very interesting decisions on this point
paid during the past year. One banker showing a tendency to not hold the bank
had been doing business with a local real
liable fo r the fraudulent acts of an em­
ploye o f a customer. There is a ray o f
estate dealer fo r years and had accepted
a mortgage as collateral on the dealer’s
hope for the banker and there should be an
ever increasing trend to place the blame at
loan. It was an abstract title and not
guaranteed. The dealer suddenly went
its source. Likewise, the cashing bank, in
west, and the banker upon investigation
the case o f most forged checks, is “ stuck”
Limited Forgery Contract
found his document was forged. It is
with the loss, especially if reasonable no­
HE Bankers’ Limited
tice is given by the bank
Forgery Contract is de­
upon which the check is
“ Payroll accounts carry trouble and should be ivatched. A foreman for
signed to cover the bank’s
drawn.
a concern caused checks to be issued to a fictitious employe each week
own paper— drafts, cash­
The accumulated liabil­
covering tivo years of time. The customer brought suit against the bank
ier’s checks, etc., and sav­
ity extending over a period
which, incidentally, was not the cashing bank. The court held that the
bank was not liable. There are some very interesting decisions on this
ings withdrawals.
The
o f years on forged endorse­
point, showing a tendency to not hold the bank liable for the fraudulent
Bankers’ Blanket Forgery
ments brings up a serious
acts of an employe of a customer!”
Bond is designed to cover
point. A recent claim was
forged customers’ checks or
made against one bank for
forged endorsements o f customers’ signa­
$120,000 and another bank for over
suggested that the bank obtain from the
tures on checks drawn upon the assured
$90,000 originating from the same source.
maker o f a mortgage a “ Waiver o f De­
bank.
In Form No. 8 and Lloyd’s fense Clause” before accepting a mort­
A fair settlement was made outside o f
H AN “ C” Blanket Bonds, the forgery
court, the claiming institution accepting
gage for a collateral loan— (the writer
clause is designed to cover all checks that
the settlement rather than entering into a
will gladly furnish you a form upon
are forged, or checks (genuine in one
long drawn out litigation. The size o f
request).
these two claims, based upon forged en­
bond, not mentioned in the other) that
The tidy sum of $25,000 was lost by
dorsed checks covering over five years
bear forged endorsements, also forged
means o f a forged promissory note.
time, is alarming and there is not a bank
saving withdrawals, certificates o f deposit,
“ Can’t happen in my bank,” say a dozen
in ten who can say their forgery protec­
bank drafts, pensions, or express, postal
bankers. Well, let’s see: The Avife o f a
tion would have been adequate.
or bank money orders. There is the
customer signed the original note some
Blanket Securities Contract that is so
years ago fo r a collateral loan. The col­
Big M oney
designed to compel the banker to pre­
lateral is stock in the wife’s name and
determine the type o f securities upon
RECENT loss running into big
happens to increase in value, and new
which he will sustain a loss as it per­ notes purporting to have been signed by
money was sustained by means o f
mits a selection o f eight insuring clauses
warehouse receipts which were bogus. No
the wife are brought in by friend husband.
descriptive o f the various instruments
goods were in the warehouse, but attached
Sometime later the wife is called to ,the
covered. Then there is the contract cov­
to the receipts were the forged notes o f
bank to liquidate her loan.
She is
ering any loss due to forgery which :is startled at the increased size of her h'ote;
customers whose goods were supposed to
comprehensive including all documents,
be in the warehouse, accompanied by fire
calls the husband to come to the bank at

A

F

T


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

A

Northwestern Banker

September Í931

48
insurance policies. A perfect setup, espe­
cially where the credit o f the warehouse
had been well established over a period of
years. A loss of this nature, while infre­
quent, is always large and so very few
banks have any insurance against such an
event.
The word invalid comes as close to be­
ing a term that is all inclusive as can be

imagined. A president o f a life insurance
company, just before the company be­
came insolvent, issued more shares of
stock than the authorized capital o f the
company. A bank loaned on these in­
valid (not forged) certificates and the
underwriters paid out $175,000. In this
case the bank was fully protected. The
American Bankers Association spends

thousands o f dollars annually on investi­
gation o f forged checks reported by its
member banks. The banker should report
his forgery losses to the William J. Burns
International Detective Agency, the o f ­
ficial investigators fo r the bankers asso­
ciation, and he should cooperate to the
fullest extent in a nation-wide effort to
stamp out the forgery circles such as the
“ Adler Gang,” and others, i f he has any
desire to eventually lower the price he
must pay fo r insurance protection.
And, needless to say, a review of your
present forgery contracts is in order, fo r it
is in this field that a new high record in
amount o f losses will be set at the close
o f 1931.

Reports Excellent Progress

(Facsimile of Illustration in Lapse Letter No. 3050)

When Policyholder 318714 Saw This Picture He Said:
“ When a company renders such a service as this and puts such a picture
before a man’s eyes, he would be a nut to allow his policy to lapse. With
the unique extension service this company affords it is possible fo r anyone
to keep his insurance.”

Northwestern National
LIFE INSURANCE COMPANY
O. J. ARNOLD.

President

S T R O N G ^ M iimeapolis.M inn. — L I B E R A L

B. M. Kirke, vice president and agency
manager o f the Royal Union Life, reports
very satisfactory progress for that com­
pany since the consolidation of the Des
Moines Life & Annuity and the Royal
Union Life.
The agency is producing
business with consistent regularity, said
Mr. Kirke. July’s production figures ex­
ceeded June’s by one quarter of a million
— reaching the total o f $1,750,000.
Fortunately, when the Des Moines Life
& Annuity and the Royal Union L ife were
merged, one o f the attractive and stabiliz­
ing features o f the consolidation was the
lack o f many agency conflicts. This was
unusual in view o f the fact that both com­
panies had been writing the larger por­
tion o f their business in the Mississippi
valley. The natural merger of the agency
forces made it possible for the company to
go ahead with a constructive development
program instead o f untangling conflicts.
A new rate book has been issued which
includes figures on attractive policies new
to the agency forces of either company
before the merger.
The Royal Union Life, of which J. J.
Shambaugh is president, has a bright fu ­
ture ahead o f it. The agency force is
loyal and tvell directed, the company is
confining its activities to states in which it
already has well organized agencies, and
it shows a well balanced financial state­
ment. Insurance in force totals over $190,000,000. Assets are $40,000,000, and the
company’s capital and surplus, including
contingency reserve, is approximately
$3,000,000, which is all surplus as to
policyholders.

On National Surety Board

4 0 0 R O O M S <fc
WITH BATH
FROM

. 5 0

*+>
2

loo Rooms Priced
From $ 3 DOWN!
150 Rooms Priced
From $ 3 .5 0 DOWN!

OMAHA, NEBRASKA
Northwestern Banker

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

September 1931

Craig B. Hazelwood, vice president of
the First National Bank o f Chicago, has
been elected a member o f the Chicago, Illi­
nois Advisory Board o f the National Sure­
ty Company. Mr. Hazelwood is a former
president o f the American Bankers Asso­
ciation.
Given the love and the wisdom, life’s
code of action follows.— A. Bronson
Alcott.

49

Northwestern Mutual Life Agents in
Convention
O

NE thousand agents from every
section o f the United States par­
ticipated in the Pre-Prosperity
convention o f the Northwestern Mutual
Life Insurance Company Association o f
Agents, last month in Milwaukee. Cheer­
ing messages and pledges o f increased
production were brought to the officials o f
the company by these agents who traveled
a distance approximating more than
750,000 miles at their own expense. It
was estimated that these agents spent
$60,000 out o f their own pockets to come
and learn how to better serve their policy­
holders.
President Wm. D. Van Dyke, o f the
Northwestern Mutual Life Insurance Com­
pany, in addressing the convention, in
response to the inquiry, “ How soon is
business going to pick u p ?” replied, “ I
do not know,” but he supplemented this
brief response by an interesting discussion
of the question. He said, “ W e have faith
in the certainty o f a revival o f business
in the not distant future. Some men are,
however, constitutional pessimists, looking
fo r trouble, insisting on having it, even to
the extent o f borrowing it. Personally, I
am confident o f an early revival o f busi­
ness because:
“ I believe a little optimism never hurt
anyone and that much o f the world’s de­
pression is due to repetition by the mirrors
and the echoes o f pessimism.
“ I believe in hard work, common sense
and natural vision as opposed to the use
o f blue glasses when anything seems to
go wrong.
“ I believe that what the country needs
more than anything else is a restoration of
the ducking stool fo r professional pessi­
mists, squawkers, calamity howlers and
confirmed grouches.
“ I believe in the American ability to
beat any set o f circumstances and come
up smiling; and in the capacity and power
o f the average American to fight his way
out o f any difficulty.
“ I believe in the silver lining, the rain­
bow after the storm, the plunge through
the center, and the potency o f the cries,
‘Block that kick’ and ‘Hold the lin e!’ ”
President Van Dyke also dwelt upon
the experiences o f life insurance com­
panies with their total and permanent dis­
ability clauses, and referred also to the
policy loan demand, which has very con­
siderably increased in the last two years.
He said, in part, “ The unfortunate but in­
evitable effect o f policy loans is that they
lead to lapses and surrenders, often fo l­
lowed by deplorable results to the policyholders and to their beneficiaries. It is,
therefore, our duty and the duty o f each
and every agent in the field to use, to the
utmost, his persuasive powers to impress

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

By WM. H. MAAS
Vice President, Northwestern Banker

upon each o f our policyholders the risk
and danger o f the loss to- himself and to
his dependents by his delay in the prompt
and early repayment or reduction o f his
policy loan, even if in small installments.”
Speaking o f the farm loan situation,

President Van Dyke made some inter­
esting statements, among the outstand­
ing features o f which were:
“ A t the close o f 1930 our farms on hand
and unsold at cost were, in number, only
about i y 2 per cent (1.56 per cent) o f our
total farm loans; and in amount only
about y2 of 1 per cent (.548 per cent) of
our total admitted assets.
“ The average cost o f such farms per
acre was less than $45, and the asset value
less than $38 per acre.
(Turn to next page, please)

-JOHN HANCOCK SERIES-

Life Underwriters and
Trust Officers
I t seems evident that there
will be an increasing number of cases where
the insurance trust will be required instead
of the option settlement, and we believe
that frank and active co-operation with local
banks and trust companies in such cases,
to the end that they may administer the
estate we create, will bring the best results.

The co-operation so long tacit between life under­
writers and trust officers has been more firmly established
by their official joint statement, as voiced by the American
Bankers Association and the National Association of Life
Underwriters,— a statement which marks the beginning of
an era of definitely expressed co-operation between the life
underwriter and the trust officer, in the best interests of
their clients.

(T yA L

L i f e I n s u r a n c e C ompany "
of

Bo s t o n , M a s s a c h u s e t t s

Any reader of this advertisement interested in the subject can obtain
a copy of our valuable booklet, “ Estate Conservation and Life
Insurance Trusts,” by addressing our Inquiry Bureau,
-yy g
197 Clarendon Street, Boston, Mass.
-OVER SIXTY-EIGHT YEARS IN BUSINESS-

Northwestern Banker

September 1931

50

This department of THE NORTHWESTERN BANKER is to
assist subscribers in obtaining goods or service hard to find.
It is free to subscribers. To non-subscribers the charge is
five cents per word. Use it. ASK US, as we can tell you
where to buy anything you need in your bank or for your
bank. TELL US, as your “ want” will be published under
the above heading free o f charge. In answering classified
advertisements which have key numbers please enclose a
two-cent stamp. This is used to forward your letter.
Foreclosed Farms— Can be made to pay
even under present farm prices if given
proper management. Highly trained and
experienced farm manager seeking lo­
cation. Will consider connection with
bank to supervise bank’s farms and build
up a service department through the bank
for non-resident land owners on a fee
basis. Best of references from banks and
state colleges. Prefer Iowa. Address the
Northwestern Banker, No. 3175. 9-10-11.
Wanted— Bank Executive from 30 to 35
years of age to assist in the management
of a $9,000,000 bank. Give complete de­
tails of past experience. Address No.
3174, care Northwestern Banker. 8-9.
Wanted— By young man, 25, position
in bank in progressive rural or other com­
munity. Four years’ experience covering
positions in large Chicago bank, and A s­
sistant Cashier in country bank. A d­
dress M. B. McLaughlin, 220 Peoples
Bank Bldg., Galesburg, Illinois.
Somebody asked a college professor
how science helped business, and he re­
plied, “ What would the suspender busi­
ness amount to without the law o f gravi­
tation ?”

Francis Dr E
« W k -H O T E M »

200

POOMS ¿ j j

Guest rooms Z) * i
and kitchenette *
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2 0 0 BATHS
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MINNEAPOLIS
Accountants
Oldest firm in Des Moines
Call us for certified work
MUEHLE, REAM & McCLAIN
1106 C o m m o n w e a l t h

B u ildin g

Steel and Copper Engraved
S T A T I O N E R Y , B U S IN E S S
ANNOUNCEM ENTS AN D CARDS
F o r q u a lity w o r k a d d ress
W a lla c e -H o m e s te a d C o., D e s M oin e s

Northwestern Banker

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

September 1931

Stress Life Insurance Trust
Cooperation
HE first necessity in the building up
o f an estate is an adequate life insur­
ance program. This point is empha­
sized in an official statement on “ Life
Insurance Trust Cooperation” prepared
by a joint committee representing the
trust division o f the American Bankers
Association and the National Association
o f Life Underwriters. The John Hancock
Mutual Insurance Company, in particular,
has called the particular attention o f the
bankers to these rules o f cooperation and
is making them the subject o f a general
advertising campaign.

T

The official statement o f the joint com­
mittee is as follow s:

6. The life underwriter and the trust
officer should collaborate in advising the
creation o f insurance estates and the ad­
ministration o f the proceeds o f the poli­
cies by trust companies when that is for
the best interests o f the insured and his
family.
7. Fees, commissions and other com­
pensation resulting from any business in
which the life underwriter and trust officer
may collaborate should pass to the person
to whom they would ordinarily belong in
the regular course o f business, and neither
shall expect or be entitled to a share in
the financial return o f the other.

Northwestern Mutual Life Agents
in Convention

1.
The way to begin to build up an
(Continued from page 49)
estate is to buy life insurance. A fter the
“ The total interest on farm loans which
payment o f bare living expenses, the first
was collected in 1930, was over 94 per
item in the family budget should be for
cent (94.38 per cent) o f the amount col­
the payment o f premiums. It is the only
lectible ; and of the total collectible inter­
safe and sure way to create a capital fund
est in 1930, only 2.69 per cent thereof re­
payable in cash in case o f death.
mained unpaid on April 30, 1931.”
2.
Every estate requires cash fo r the He reported progress in the erection of
payment o f debts and inheritance taxes.
the addition to the present Home Office
Life insurance will meet this need.
building, and predicted the addition would
3.
There are two principal methods of be ready fo r occupancy before the next
distributing life insurance proceeds— (1)
annual meeting o f the agents. “ This addi­
through the optional settlements o f the life
tion to our Home Office,” President Van
insurance policies, (2) through a corpo­
Dyke said, “ is an expression o f our faith
rate trustee. Life underwriters realize
in the Northwestern now and in the fu ­
the value and advantages o f life insur­
ture— faith in its well-established prin­
ance trusts, and the trust officers likewise
ciples, faith in the public recognition of
recognize the value and advantages o f the
the value o f its service— and faith in its
optional settlements provided in the life
continued upbuilding.”
insurance policies.
4.
The trust company is in the business
Advises Wage Reductions
o f administering estates, whether these are
composed entirely o f life insurance pol­
Theodore E. Gregory, British economist
icies or include other assets.
and professor of banking of the London
5.
The principal advantages o f the life School of Economics, recently concurred
insurance trust for the administration o f
in the view advanced at the Institute of
policy proceeds a re :
Politics by Col. Malcolm C. Rorty of New
a.
That it provides a single and uni­ York that adjustment o f wage rates is
one way toward getting out o f the diffi­
form plan fo r the management o f the
culties of the present economic situation.
proceeds of policies in several different
Colonel Rorty, who is a consulting en­
companies.
b.
That it provides a convenient, ex­ gineer and former vice president of the
perienced, and impartial financial ad­ International Telephone & Telegraph Co.,
told members o f the institute that wage
viser fo r the family o f the insured.
c.
That it affords flexibility o f man­ reductions must take place and pointed
out that many reductions have already
agement and may be used to meet unforactually taken place.
seen emergencies and family misfortunes.

51
Commercial & Savings Bank of Daven­
port, fo r Iow a; Elroy Westbrook, presi­
dent o f the Midland National Bank of
Billings, for Montana, and A. H. Marble,
president o f the Stockgrowers National
Bank o f Cheyenne, for Wyoming.

South Dakota
Bank News

Herbert Woodward, formerly vice
president and cashier of the First Na­
tional Bank of Hobson, Montana, is north­
west manager. He has had the Associ­
ation’s temporary office for the northwest
at Lewistown, Montana, since last March,
but will establish the permanent office at
956 Northwestern Bank Building, Minne­
apolis, early in September.

Officers South Dakota Bankers
Association
P resid en t........................J. W . B ryant
M itchell
V ice P resid en t.............T. M. Brisbine
W oonsocket
T reasurer....................... Russell Bard
M iller
Executive M anager.G eo. A . S tarring
Huron

New V ic e President
F7

ERVICE
AND

ECURITY
IN
B

IOUX CITY

T. M. B R IS B IN E
V ice P resident, South. D a kota Bankers
A ssocia tion

H. M.

Hanten

H on ored

H. M. Hanten, vice president o f the
Citizens National Bank & Trust Company
o f Watertown, South Dakota, mailed a
letter August 10th to all the banks in
South Dakota urging them to join the
Security Owners Association. The Associ­
ation is a nation-wide organization of
banks, insurance companies and other in­
vestors, opposing radical legislation and
particularly government entry into busi­
ness.
Mr. Hanten recently accepted the state
vice presidency o f the Association for
South Dakota. Other state vice presi­
dents in the northwest district are Thos. F.
Wallace, president o f the Farmers and
Mechanics Savings Bank o f Minneapolis,
for Minnesota; E. J. Weiser, president of
the First National Bank & Trust Com­
pany o f Fargo, for North Dakota; Ray
Nyemaster, vice president of the American

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

FIRST NATIONAL BANK
IN SIOUX CITY
A.

S.

H a n fo rd ,

F r e d e r ic k

Sr.

R.

Jones

Vice President

President
F r itz F r itz s o n

Cashier

Northwestern Banker

September 1931

52

To Pay 20 Per Cent Dividend
C. W . Hookway, receiver of the Ameri­
can National Bank, o f Redfiield, South
Dakota, which closed last fall, announces
that the bank is ready to pay 20 per cent
o f the money as the first dividend, which
will amount to $90,000. Almost a half
million dollars was tied up in the hank last
year and the officials are trying to liqui­
date it as quickly as possible to help the
farmers.

S A LM O N P. C H A S E , S e c r e t a r y o f t h e T r e a s u r y u n d e r L I N C O L N

THE

C hase N ational Ban k
of the City of New Yor\

Capital $148,000,000
Deposits (June 30,

Surplus $148,000,000
. $1,897,000,000

1931)

A lbert 1 H .
C h a irm a n

John

M cH u g h

C h arles

C h a irm a n

W ig g in

G o v er n in g B o a rd

S. M c C a i n W

in t h r o p

C h a irm a n

E x e c u t i v e C o m m itte e

B o a rd

of

W.

A ld rich

P resid en t

D ir e c to r s

The Chase National Bank invites the
accounts of banks, bankers, corporations,
firms and individuals.
General Banking

Foreign Department

Trust Department

Affiliations

Appoints Committees
J. W . Bryant, president o f the South
Dakota. Bankers Association, has ap­
pointed the following committees fo r the
current year:
Agriculture : Walter Dickey, Spearfish ;
R. G. Eilers, Hudson; H. T. Haynes,
Spencer.
Banking Practice: L. M. Larsen, AVessington Springs; W . H. Jarmuth, Ver­
milion; Charles E. Barkl, Huron; Ered B.
Stiles, Watertown.
Insurance : M. Plin Beebe, Ipswich ;
Ira A. Moore, Sioux Falls; L. L. Branch,
Pierre.
Legislation : The executive council ; J.
V . Bryant, Mitchell, chairman.
Protective : O. A". Meyhaus, Sioux
Falls; Ed A. Porter, Aberdeen; H. M.
Hanton, Watertown.
Public Relations: J. P. Shirk, Faulkton; N. J. Thomson, Platte; AV. W .
Bassett, Aberdeen ; M. F. Patton, Mitchell.
Taxation: AVm. C. Rempfer, Parkston;
J. AI. Lloyd, Yankton; George C. Fullinweider, Huron; H. A. Schueller, Canova.
A motorist, who was picked up uncon­
scious after a smash, opened his eyes as
he was being carried into a garage close
at hand. He began to kick and struggle.
When he was afterwards asked the reason
he explained that the first thing he saw
was a Shell sign, and that “ Some darned
fool was standing in front of the “ S.’ ”
Grocer (rushing into the newspaper
office)— “ See here, you’ve published an
announcement o f my death by mistake.”
Editor— “ AArell, we never contradict any­
thing we have published, but I ’ll put you
in the births column tomorrow and give
you a fresh start.”

C h a s e Se c u r it ie s C o r po r a tio n
C h ase

H a r r is

F or bes

C o r p o r a t io n

A m e r ic a n E x p r e s s C o m p a n y
A m e r ic a n E x p r e s s B a n k a n d T r u s t C o m p a n y
E q u it a b l e E a s t e r n B a n k in g C o r po r a tio n
T h e C h a s e S a f e D e p o s it C o m p a n y
T h e C h a s e B a n k ( P a ris— M e x ic o C i t y )
T h e E q u it a b l e T r u s t C o m p a n y of N e w Y o r k
T h e C h a s e N a t io n a l E x e c u t o r s a n d T r u s t e e s C o r p o r a t io n , L t d ., ( L o n d o n )

Northwestern Banker

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Federal Reserve Bank of St. Louis

September 1931

The reckless motorist is usually the fel­
low who has no place to go and is in a
hurry to get there.
“ And as I stepped off the train I Avas
met by a squad o f detectives— ”
“ A h ! P ’lice to meetcha, eh?”
“ Just where did the automobile hit
you ?” asked the magistrate.
“ AVel-l-l,” said the injured young lady,
“ if I had been wearing a license plate,
it would have been pretty badly dam­
aged.”

53

J. H. Barnes to Address Bankers

Nebraska
B ank N ew s
Officers Nebraska Bankers
Association
P resid en t..............................J . G. Low e
Kearney
Chairman, E xecutive C o u n c il....
................................E. N. V an H orne
Lincoln
Treasurer ...............Denman Kountze
S ecreta ry..................... W m . B. Hughes
Omaha

OM AHA

BANKS

SO LVE

B A N K IN G CRISIS
o l l o w in g
the closing, within a
week, o f fou r state banks, the Omaha
banks on Saturday, August 15th ex­
perienced an unusual demand for deposits
from depositors who had been suddenly
alarmed.
The banks met the situation by provid­
ing extra service for the withdrawal of
funds, and after a day not without its
worries, the situation was cleared. Most
o f the deposits that had been withdrawn
came back to the banks, a certain portion,
however, finding their way into the postal
savings bank.
The previous Monday morning the
State Bank o f Omaha, o f which A. L.
Schantz was president, did not open for
business. Heavy withdrawal o f deposits,
together with depreciation o f some o f the
bond holdings, had been experienced, and
the bank was turned over to the state
department of trade and commerce fo r
liquidation.
A s a result o f the closing o f the State
Bank the Farmers and Merchants Bank of
Benson, an Omaha suburb, was also
forced to close. It had a heavy deposit
in the State Bank.
Benson depositors and stockholders,
however, have been holding a series of
meetings with George W . W oods of the
state banking department, with a view to
reorganizing and reopening their bank.
The next day the South Omaha State
Bank, John S. McGurk, president, was
forced to summon state officials. Following
the closing o f the other banks it, too, had
suffered excessive withdrawals o f deposits,
A similar drain upon the Union State
Bank, F. C. Horacek, president, resulted
in its directors also closing the bank, to
guard the interests o f loyal depositors.
The banks were thus caught in a situation
which made them helpless due to the un­
reasonable fears o f depositors.
The closing o f the Union State Bank
was the occasion for the lobbies o f the
larger banks, the Omaha, First and United
States National Banks downtown, and the

F


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Federal Reserve Bank of St. Louis

Packers, Livestock and Stock Yards Na­
tional Banks in South Omaha, being the
scene o f lengthening lines o f depositors
withdrawing funds.
To meet this demand and reassure the
depositors, the banks quickly decided that
instead o f closing at the usual hour o f 12
noon, they would remain open as long as
any depositor wished to withdraw his ac­
count, So through Saturday afternoon,
and in some instances until 9 o’clock that
night, the banks remained open.
In the Omaha National customers wait­
ing in line were served sandwiches and
lemonade, and this also helped restore
good humor and confidence.
The Omaha Clearing House Association,
in a public statement, pointed out that
during the 47 years o f the clearing house
no member bank had failed to repay de­
positors in full. L. H. Earhart, o f the
Omaha branch o f the Kansas City Federal
Reserve Bank, also made a public state­
ment pointing to the strength o f the banks.
Public attention was called to the fact
that the four closed banks had oidy 6 per
cent o f the total deposits in Omaha.
The fear and excitement quickly died
away. The banks opened at 8 o’clock on
the following Monday morning, an hour
earlier than the usual time, but with­
drawals had ended.
Many depositors, indeed, came back to
the bank to reopen and reconstitute their
accounts, and, in the savings department,
asked that they be permitted to do this
without loss o f interest. In several of
the banks this was permitted.
The Federal Reserve branch brought in
$3,000,000 in cash by airplane from Kan­
sas City, but it was found that this sum
o f money was not needed.
The situation was an uncomfortable one
fo r a day or two but the promptness o f
the banks in meeting all demands without
delay, and their anticipation o f the de­
positors’ wishes saved the incident from
becoming distressing.

Julius II. Barnes, chairman of the board
o f the United States Chamber o f Com­
merce, has definitely accepted the invita­
tion o f the Nebraska Bankers Association
to speak at the annual convention, which
will be held this year at Lincoln, October
22d and 23d.
C. Q. Chandler, chairman o f the board
o f the First National Bank, Wichita,
Kan., and Fred W . Sargent, president of
the Chicago & North Western Railroad,
are also definitely upon the program, with
a number o f other speakers being secured
hv William B. Hughes, the secretary of
the association.
The railroads have given a special rate
o f a fare and one-half for the round trip.

Banks Get Service Charge
Fifty-three Nebraska counties now pay
their banks a service charge for handling
county funds, most o f them paying the one
per cent prescribed by the law passed by
the last legislature. The state treasurer
has offered one-half o f one per cent for
handling state funds, and there is a dis­
pute between the banks and the state over
this, most banks believing the one-half per­
cent is not enough.

End Battle for Receiverships
The fight, waged in many district courts
o f the state, between Clarence G. Bliss,
former secretary o f the state department
o f trade and commerce, and his successor,
E. H. Luikart, over receiverships o f failed
state banks, has been ended with the turn­
ing over o f the banks to Mr. Luikart.
Bliss had held about 200 receiverships
when Luikart was named as his successor.
He held that Governor Bryan could not
order the transfer o f assets to Luikart,
and appealed from the governor’s order in
the various judicial districts o f Nebraska.
The decrees o f the judges, however,
overruled his contention, although several
o f them conditioned the transfer upon
final approval o f reports by the former
department secretary.
“ The courts gave me just what I thought
was right,” said Mr. Bliss, “ and that was
from 30 to 40 days in which to prepare
final reports and be discharged from lia­
bility as the receiver.”

Six State Banks Close
Six Nebraska state banks, which had
deposits in the failed Omaha, state banks,
closed August 17th.
Officers and deposits of the banks that
closed were:
First State o f Pleasant D ale: Deposits,
$140,000; F. C. Horacek, president, L. A.
Horacek, cashier.
Dwight State Bank: Deposits, $180,000 ;
F. J. Novak, president; G. J. Tomes,
cashier.
Northwestern Banker

September 1931

54
Brainard State Bank : Deposits, $280,000; C. J. Davis, president; Fred S. Sennin, vice president; J. A. Proskovec,
cashier.
Bruno State B ank: Deposits, $140,000;
F. J. Rohn, president; A. C. Tomek, vice
president; A. Y. Rohn, cashier.
Butler County State B ank: Deposits,
$180,000; Joseph Shramek, president;
Peter Meysenberg, vice president ; R. F.
Havelka, cashier.
Lehigh State B ank: Deposits, $200,000;
F. L. Vlach, president; W . A. Ylach, act­
ing vice president; E. M. Nelson, cashier.

Com plete
Com m ercial Banking
Facilities

Final Dividend

The close relationship that develops be­
tween this bank and its out-of-town
customers is due chiefly to the personal
service a compact organization like ours
can render.
Here you have a metropolitan financial
institution geared to meet your require­
ments satisfactorily.

THE NORTHERN
TRUST COMPANY

Depositors o f the failed Meisner, Ne­
braska, State Bank have received the final
dividend from liquidation of the assets of
the failed institution.
The final payment consisted o f an ap­
portionment from the $5,010 received
from the sale at Kearney o f the final
assets o f the bank. The assets sold con­
sisted o f $59,453.54, bills receivable ; $70,623.39 in judgments, and a small amount
o f real estate and stocks and bonds.
The purchase was made by S. E. Yogler, formerly of the department of trade
and commerce.
Clarence Bliss, who sold the bank assets
as receiver fo r the state, also sold the
notes, judgments, fixtures o f the defunct
Commercial Bank at Gibbon. They were
purchased by Vogler at a price o f $2,240.
The Gibbon bank had bills receivable of
$83,694.21; judgments, $35,217.21 and
fixtures valued at $2,776.19.

Takes Over Barada Bank
The Falls City State Bank, Falls City,
Nebraska, has acquired all the deposits of
the Barada State Bank. No notes were
assumed, but deposits approximating $40,000.00 were taken over. Officers o f the
bank said the reason fo r the transaction
was because the town of Barada is without
a railroad and has only limited territory.

Northwest corner LaSalle and Monroe Streets

CHICAGO

Merger at Indianola
Representing- a merger o f interests of
the State Bank o f Indianola, Nebraska,
and the Farmers State Bank, a new insti­
tution, to be known as the Indianola State
Bank, opened its doors in Indianola last
month.
The consolidation was brought about,
the bank officers said, to form a single,
strong banking house.
The president o f the consolidated bank
is H. J. Southwick; vice president, C. S.
Quick, Jr. ; cashier, W . A. Reynolds.
The capital stock o f the merged institu­
tion was listed as $30,000 ; surplus, $6,000 ;
undivided profits, $5,000, and deposits,
$400,000.
A new charter was issued the consoli­
dated institution by the state department
of trade and commerce.

Write
usregarding
your feed lot requirements

Live Stock National Bank
Union Stock Yards

OMAHA
Officers

W . P. Adkins, Pres.
A lvin E. Johnson, V . Pres.
H oward O. W ilson,
R. H. K roeger, A ss’t. Cash.
L. V . Pulliam , A ss’t. Cash.
W . S. Hogue, A ss’t. Cash.

Northwestern Banker

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Federal Reserve Bank of St. Louis

September 1931

Cash.

55

Bertrand Banks Consolidate
The First State Bank of Bertrand, Ne­
braska, has taken over the deposits o f the
First National Bank o f that city, and
Moritz Aabel is now cashier o f the con­
solidated institution.
In making this move, Mr. Aabel says,
they are following in the steps of many of
the better banks all over the country. The
trend is toward fewer and stronger banks.
They can operate with greater economy
than was possible when the business was
taken care o f in two separate institutions.
The First State Bank is- assuming only
those assets which have been approved by
the state banking department and are con­
sidered 100 per cent good. No “ other real
estate” has been taken in. The move was
made after very careful consideration on
the part o f both banks and under the
supervision o f the banking department.

nary Citizen how the 1930-1931 depres­
sion has reduced the cost o f various things
that are needed in ordinary life or busi­
ness.
“ During the past 25 years the average
fire rate in the United States has held
steadily downward, so that in 1930 it stood
at 86 cents per $100 fo r the country-wide
average. Thirty years ago this average
rate was nearer $1.56, 20 years ago it was
around $1.36, 10 years ago it was around
96 cents. The average cost o f fire insur­
ance to the property owner in the United
States has steadily decreased during this
period, in the face o f mounting cost fo r
many other things, and in spite o f in­
creased expenses in the handling o f insur­
ance. Many such property owners really do

not know the true picture and would un­
doubtedly be pleasantly surprised to find
their fire insurance cost is actually less in
1931 than in the boom days o f 1928-1929.
Fire and theft insurance on automobiles
provides an excellent illustration that this
reduction in cost does not apply solely to
fire insurance on buildings, but extends
into other lines.

Changes to National Bank
The Antelope State Bank, o f Neligh,
Nebraska, has received authorization for
its conversion to a national bank. Officers
said the change had been in prospect since
reorganization o f the institution a year
and a half ago. Stockholders and officers
will not be changed.

Candidate for Treasurer
At the suggestion of many o f his friends
in banking circles, Hal Y. Lemon, vice
president o f the Commerce Trust Com­
pany o f Kansas City, Mo., has decided
to become a candidate fo r the office of

Conservative

Banking
for
Sixty-Three
Years

H A L Y. LEM ON

treasurer o f the American Bankers Asso­
ciation, subject to the action o f the 1931
convention o f the A. B. A. to be held in
Atlantic City in October. Mr. Lemon is
widely known in banking circles and a
popular figure at the national conventions.

1

8

6

8

—

1

9

3

1

Insurance Costs Decreasing
Agents have a good selling point in the
year 1931 in the fact that their clients can
buy protection today at a lower cost than
20 years ago. Commenting on this situa­
tion, Autograph, agency publication o f
the America Fore group, says that insur­
ance makes a very favorable showing in
the numerous tables o f statistics that have
recently been compiled to show Mr. Ordi­

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Federal Reserve Bank of St. Louis

THE STOCKYARDS NATIONALBANK
THE STOCK YARDS TRUST & SAVINGS BANK
CHICAGO

Northwestern Banker

September 193Î

56

Minnesota Bank N ew s
Officers Minnesota Bankers Association
P resid ent................................................................................ J- R- Chappell
W inona
V ice P resident. . . . ................. ........................................... M artin F. E rnst
St. Paul
T reasurer............................................................................ W alter L. Brooks
B em idji
S ecreta ry................................................................................. George Susens
M inneapolis

Protest to President Hoover
As a part o f its recent activities in be­
half o f independent banking, the Inde­
pendent Bankers Association o f Minne­
sota, o f which Robert D. Beery is secre­
tary, has sent the following letter to Pres­
ident H oover:
“ Dear Mr. President:
“ The Independent Bankers Association
has repeatedly protested to the comptrol­
ler of the currency fo r permitting branch
banking in the state o f Minnesota, by cer­
tain national banks, also against his con­
tinued public utterances favoring branch
banking. Your attention has been called
to this matter several times by this as­
sociation.
“ It is quite apparent that Hon. J. W .
Pole, comptroller o f the currency, has
no intention o f taking action to have
illegally operated branch banking in the
state o f Minnesota discontinued. Mr.
Pole, being a direct appointee o f yours,
we appeal to you fo r such action as nec­
essary to have branch banks, now operat­
ing in Minnesota, discontinued at once.
“ The continued discrediting o f our pres­
ent unit banking system through public
utterances of the comptroller o f the cur­
rency and widely published in newspapers
and magazines, is we believe, resented by
the majority o f banks and thousands o f
depositors. No matter how sincere Mr.
Pole may be in making the statements he
has against our present banking system,
the effect is as harmful as if made fo r the
deliberate purpose o f destroying public
trust and confidence in thousands o f these
public institutions, and it is our honest
opinion that many banks recently closed
have done so as a direct result o f such
official utterances. The statements made
are so official that it is difficult to appeal
to the public. Your public addresses re­
cently have all appealed to business; that
business must be built largely on confi­
dence. Surely no business on earth de­
pends more upon faith and confidence than
does banking.
“ W e refer specifically to but two o f
the many such cases which might be cited.
W e call attention to an article in the St.
Paul Daily News, under date o f June
26, 1931, in which Mr. Pole quotes you as
Northwestern Banker

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Federal Reserve Bank of St. Louis

GEORGE SUSENS
Secretary

President, forecasting ‘that the administra­
tion in the next congress will have enacted
branch bank legislation to take effect be­
fore the end of 1932.’ The clipping is
enclosed fo r your convenience and con­
sideration.
“ W e refer also to an Associated Press
dispatch from Washington, D. C., under
date o f July 6, 1931, in which Mr. Pole
belittles the present system o f unit country
banking and strongly urges branch
banking.
“ Such statements we are sure you will
agree with us, are not only destroying
public faith in the present republican ad­
ministration, but is also destroying public
trust in these financial institutions which
have contributed so largely to the success
of this nation.
“ W e have heard from many bankers in
various parts o f the United States, who
heartily condemn the public attitude o f the
comptroller o f the currency. W e feel
sure many protests have been made di­
rect, while others fear that protests on
their part will only bring retaliation.
“ Believing this is a matter o f the most
vital importance to the state o f Minnesota
and the nation at large, we respectfully
bring this matter to your attention, trust­
ing that illegal branch banking in the
state o f Minnesota, will not be allowed to
continue and that the comptroller o f the
currency will desist making further state­
ments tending to destroy confidence in our
present unit banking system.
Respectfully,
(Signed) Robt. D. Beery,
Secretary.”

September 1931

Beg Pardon!
It has been called to our attention that
in reporting the bank change at Lewiston,
Minnesota, in the August issue o f the
N o r t h w e s t e r n B a n k e r , an error was
made in certain o f the statements. W e are
happy, indeed, to publish this correction.
The officials o f the Security State Bank
make the following rep ort:
“ On March 6, 1931, the Pirst State
Bank was closed by the state banking de­
partment, o f which bank J. W . Rice was
president, George C. Rice, vice president,
and H. H. Matzke, cashier.

“ A fter a lapse o f two months, the o f­
ficers of the Security State Bank sub­
scribed for and put up a capital and
surplus o f $48,000, reopened the bank,
operated same for a period o f 30 days and
took over into the Security State Bank 60
per cent o f the assets and liabilities, and
are now liquidating the remaining 40 per
cent under the direction o f the state bank­
ing department.
The officers and directors remain the
same. The officers are J. W . Koepsell,
president; J. J. Litcher, active vice pres­
ident; H. J. Busdicker, cashier, and H. J.
Litcher, assistant cashier. The directors
are J. H. Neuman, John Ronan, J. H.
Simon, W . N. Eusterman and R, H. Sulir.”

Bank Gets Charter
The Security State Bank o f Pine Island,
Minnesota, has been granted a charter by
the State Commerce Commission.
The corporation was formed by consoli­
dation o f the Citizens State Bank and the
Farmers State Bank, both o f Pine Island.
The new bank has capital of $30,000 and
surplus o f $6,000. J. A. Bringgold is
president. J. A. Diercks, vice president,
and H. H. Billings, cashier.

Kenyon Banks Merge
Merger o f the Citizens State Bank and
the Kenyon State Bank o f Kenyon, Min­
nesota, into an institution to be known as
the State Bank o f Kenyon was effected
last month under direction o f J. N. Pey­
ton, state banking commissioner. The new
bank has a combined surplus and capital
of $75,000 and deposits o f more than
$ 1,000,000.

Prinsburg Bank Reopens
The Prinsburg State Bank o f Prins­
burg, Minnesota, has been reopened after
being closed fo r several weeks. The capital
stock is owned by business men and farm­
ers o f the Prinsburg community. Martin
Iv. Breems, Sr., is president of the bank
and George H. Wahler is cashier.

Banks Consolidate
Consolidation o f the First State Bank
o f Mountain Lake, Minnesota, with the
Farmers State Bank was announced last
month by J. N. Peyton, state commissioner
o f banks. The combined institution, which
will do business under the name o f the
Farmers State Bank, will have deposits of
approximately $740,000.

To Have New Bank
The village of Rice, Minnesota, will
again have a bank in the near future.
The charter fo r the Bank of Buckman
is being amended and when this has been
completed, it will move to Rice.
The building which housed the former
Rice State Bank has been purchased and
it is expected the new institution will open
fo r business around September 1st.

57

New Bank at Dawson
A petition signed by 130 business and
professional men in Dawson, Minnesota,
was received recently by Northwest Bancorporation officials, requesting the or­
ganization of a strong bank equipped to
provide financial service fo r the residents
o f Dawson and Lac Qui Parle county.
Acting upon this petition, the Northwest­
ern National Bank o f Dawson Avas or­
ganized as the one hundred thirty-seventh
affiliate o f the group. It was capitalized at
$25,000 and has a surplus of $5,000.
Officers of the DaAvson bank are Dr.
C. M. Johnson, president; Henry Gold­
stein, vice president; C. T. Harding,
cashier, and Glenn E. Blomquist, assistant
cashier. The directors, in addition to Dr.
Johnson, Mr. Goldstein and Mr. Harding,
include J. E. Lund, hardAvare dealer, and
J. L. Mahlum, general merchant.
In the two weeks after its opening, de­
posits o f approximately $100,000 were
made in the NorthAVestern National Bank
o f DaAvson, according to Paul E. Hoover,
assistant secretary o f the Northwest Bancorporation.
DaAvson, with a population o f approx­
imately 1,500, is located in Lac Qui Parle
county, bordering South Dakota. It is 172
miles directly west o f Minneapolis. The
territory has agriculture, cattle feeding,
live stock and grain interests, and is served
by the Milwaukee and the Minneapolis and
St. Louis railroads.

Waseca Banker Dies
R. P. Ward, 59 years old, president o f
the Fanners National Bank of Waseca,
Minnesota, and fo r many years recognized
as one o f the most successful financiers in
southern Minnesota, died last month. He
had been seriously ill fo r several weeks.
In addition to his banking interests, he
A v a s interested in real estate both in the
United States and Canada. He also or­
ganized the W ard Dry Milk Company,
which grew to be a million dollar concern
and was sold to eastern interests about a
year ago.
During his life-long residence in Waseca
he took an active part in civic affairs
and served on the city council, school board
and other organizations.
He is survived by his Avidow and one
son, Emerson Cole W ard; one brother,
t A v o sisters, a half sister and two grand­
daughters.

Experience
Is Strength
W e take pride in the age
and strength o f this institu­
tion, but our policy is based
upon the belief that the bank
is old because it is strong—
not strong because it is old.
For the com plete and effi­
cient service o f our corresp o n d en t banks

every

modern facility is afforded,
backed b y the experience
o f a century and a quarter
and total resources of over
fourhundred milliondollars.

PHILADELPHIA
N A T IO N A L

BANK

O rganized 1803

Banks Name Officers
NeAV officers o f the Kandiyohi County
Bankers Association are N. H. Tallakson
o f the Bank o f Willmar, Minnesota, pres­
ident; L. E. Coveil o f the Fanners State
Bank o f NeAV London, vice president, and
E. J. Rykken o f the Green Lake State
Bank at Spicer, secretary and treasurer.
C. F. Reitan is the retiring president.

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Federal Reserve Bank of St. Louis

PH IL A D E LP H IA , PA.
Capital, Surplus and Profits, $46,000,000

Northwestern Banker

September 1931

58

President at New England
C. B. Little, Bismarck, North Dakota,
has been named president o f the First
National Bank o f New England, according
to an announcement made by the First
Bank Stock Corporation. He succeeds
August Peterson, Harvey.
Mr. Little is a member o f the executive
committee o f the First Bank Stock Corpo­
ration and president of the First National
Bank o f Bismarck.

North Dakota
Bank News
Officers North Dakota Bankers
Association
P resid en t............ Paul T. Kretschm ar
V enturia
V ice P resid en t............T. A. Tollefson
Dickinson
P A U L T. K R E T S C H M A R
President

S ecreta ry.................W . C. M acfadden
Fargo

North Dakota News
JOHN MOSES, JACOB K R A U SE
and PAU L GOETZ have been elected
directors of the Union State Bank of
Hazen to succeed John Young, C. G.
Fuerst and R. J. Sailer, who have re­
signed. Messrs. Moses and Krause also
succeed Messrs. Young and Fuerst as
president and vice president, respectively.
C. S. FLA G STA D has accepted a posi­
tion as teller o f the Security State Bank
o f Robinson.
JENNIE H ERN ETT has been elected
president and director o f the First State
Bank o f Burnstad, succeeding E. E. Peck
o f Herman, Minnesota, who has resigned.
THOM AS KEOGH, L. F. TEMME
and F. E. M A R S H A LL have been elected
directors o f the German State Bank, Beu­
lah, succeeding John Young, G. G. Radke
and Robert M. Stroup, who have resigned.
Mr. Keogh also succeeds Mr. Young as

W. C. M A C FAD D E N
Secretary

president, and Mr. Temme has been elected
vice president to succeed Mr. Stroup.
THE F IR S T STATE B A N K o f La
Moure received its charter and opened for
business last month. This bank assumed
the deposit liabilities of the LaMoure
State Bank and the First National Bank
o f LaMoure, which banks discontinued
business and went into voluntary liquida­
tion. The officers and directors of the
new bank are : Directors— C. H. Porter,
Herman Goehl, F. P. Bennett, David
Lloyd, W . D. Lynch, Paul Adams and
O. M. Adams. Officers— President, C. H.
Porter; vice president, Paul Adams, and
cashier, F. P. Bennett.
C. H. A LIN lias accepted a position as
assistant cashier, and Ann L. Maltby has
been appointed teller and bookkeeper of
the First State Bank of LaMoure.
C. B. AANDERUD has accepted a po­
sition as assistant cashier of the German
State Bank, Beulah.

MIDLAND

BANK

Warns Against Bandits
In a recent bulletin issued by the
Minnesota Bankers Association, George
Susens, secretary, again warns the mem­
bers against bank bandits. Emphasis is
placed on taking every possible precaution
against the depredation o f these vandals.
The bulletin lists twelve suggestions
which are well worth heeding. They are as
follow s:
1. Keep only limited amount o f cur­
rency on hand.
2. Keep this under time lock or where
it can’t be found during the day.
3. Never keep securities on hand.
4. Keep back doors and all doors to the
cages locked at all times.
5. I f possible, never open the bank with
only one in charge.
6. Do not expose currency in or out
o f the safe.
7. Watch fo r the advance agent who
looks you over.
8. Have your neighbors keep an eye on
the bank and get license numbers, de­
scription, etc.
9. Look out for the car parked parallel
with engine running.
10. What are you doing to make your
hank attractive to the yegg?
11. Get the cooperation o f the oil sta­
tions and garages.
12. Are you insured? Go over your
policies now. Are you helping to keep the
rates down?

LIMITED

Bottineau Again Has Bank

A Com plete

Banking

Service

The Midland Bank offers exceptional facilities
for the transaction of banking business of every
description. It has offices in the Atlantic Liners
“ Aquitania”

“ Berengaria”

“ Mauretania”

and with affiliated banks operates over 2550
branches in Great Britain and Northern Ireland.
The offices in Poultry and at 196 Piccadilly are
specially equipped for the use of American visitors.
Head Office:
Overseas Branch: 122

T O T A L RESO U RCES

Northwestern Banker

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

P O U L T R Y ,

O L D

B R O AD

EX CEED

September 1931

L O N D O N ,
ST R E E T ,

E .C

.2

L O N D O N ,

E .C . 2

$ 2 ,0 0 0 ,0 0 0 ,0 0 0

Bottineau, North Dakota, seat of the
Bottineau county government, without
banking facilities fo r two months, again
is a banking center.
The First National Bank of Kramer,
North Dakota, moved its business to that
city and was opened for business under
the name o f the First National Bank of
Bottineau.
The last bank in Bottineau was closed
in June and since that time financial deal­
ings in which the county government wras
interested, were carried on in other cities.
The bank is capitalized at $25,000. Its
assets are placed at $148,727.26 and de­
posits are given as $112,160.25. W. H.
Gjerdingen is president o f the bank and
other directors are P. O. Holland, O. A.
Hefling, R. M. Sletten and H. M. Rossero.

59

Issues Warning
The following warning regarding a cer­
tain form of restrictive depository bond
has been issued by James E. Baum, man­
ager Protective Department, American
Bankers Association, on behalf o f the as­
sociation’s Insurance Committee:
Among bank depository bonds avail­
able to insure the safety and return of
public funds on deposit, one form issued
by a large surety company contains the
following “ express condition,” ]No. 5 :
“ That if at any time during the curren­
cy o f this bond there shall come to the
notice or knowledge of the obligee, . . .
any information tending to indicate that
the bank has not paid promptly on demand
any o f its obligations or is doing anything
irregular or unusual, or is dishonestly or
improperly managed, or that it is in an
unsound, insolvent or failing condition,
the obligee shall immediately notify the
surety and shall forthwith withdraw from
said bank the entire amount o f the deposit
covered by this bond and upon such with­
drawal liability under this bond shall
terminate.”
The words not only give the surety com­
pany a wide latitude to evade liability, but
also overload the public official with a
heavy responsibility. Interpreted broadly,
“ any information tending to indicate”
could be applied to any flimsy and un­
founded rumor, criticism or whisperings
which may be imagined or can be so con­
strued as to reflect upon the bank’s finan­
cial condition. Moreover, many banks
“ doing anything irregular or unusual,”
may be the soundest in their community.
It is conceivable, for example, that a bank
Avhich adds service charges on unprofitable
checking accounts, or those adopting the
most stringent protective measures', might
be accused of doing something “ irregular
or unusual.” Also, banks which require
advance notices for withdrawal o f funds
above certain amounts, solely because they
are trying* to reduce the hazard o f loss
through daylight holdup, might be sus­
pected of being in an “ unsound,” if not
an “ insolvent or failing condition,” as ex­
pressed in this condition o f the bond.
Obviously, no public official should be
expected to deposit or continue carrying
funds in a bank which is dishonestly or
improperly managed, or is in an unsound,
insolvent or failing condition. Nor should
any public official depend entirely on a
depository bond fo r indemnity o f loss,
once he knows the depository is in an un­
sound or failing condition. But strict ad­
herence by these public officials to the ex­
tremely broad requirements o f this clause
might cause them to lead a run on any
bank.
Despite the underwriters’ contention
that in 1930, loss payments on depository
bonds exceeded $11,000,000, or more than
double the amount o f premium revenue,
no bank should expose itself to the pos­
sible effects o f a contractual binder written

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Federal Reserve Bank of St. Louis

in such sweeping terms as outlined above.
Other forms o f depository bonds make no
such proviso and for many years they have
been available from the leading surety
companies.
Although we have no knowledge that the
surety company writ! ng this bond has
evaded liability by a strict interpretation
o f this condition, member banks are cau­
tioned against the use o f any form o f bond
containing this objectionable clause.
Meanwhile, our insurance committee is ne­
gotiating for its elimination or modifica­
tion.
“ Could you pass the bread?”
“ I think I can. I moved pianos all
summer.”

New Ulm Banks Merge
The Citizens State Bank has purchased
the Brown County Bank, reducing the
number o f banks in New Ulm, Minnesota,
to three. The Brown County Bank is the
oldest in the city and was organized in
1871. Resources o f both banks will be
$3,500,000 with deposits of $3,000;000.
Lady Glow-worm— “ I never want to see
you again.”
Boy Glow-worm— “ All righ t; you glow
your way, and I ’ll glow mine.”
A woman went into a chemist’s shop
and said : “ Have you any L ife Buoy ?”
The assistant, a young American, re­
plied : “ Set the pace, lady.”

'AN ADDRESS
OF DISTINCTION"

Unusual Facilities
For Small Meetings Too!
The Drake
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T H E

C R A K E
H O T E L ,

C H I C A G O

Under Blackstone Management

Northwestern Banker

September 1931

60

I O W A

SECTION
Officers Iowa Bankers
Association
P resid en t............ Ivan O. H asbrouck
Jefferson
V ice P resident. . . .C . J. W eiser, Sr.
D ecorah
T rea su rer...........................Jos. J. B rus
Davenport
IV A N O. H A S B R O U C K
President

Secretary. .

.F ran k
Des Moines

W arner

FRANK W ARN ER
Secretary

Harlan, Iowa, last month with a very good
attendance.
This was the meeting fo r the election of
officers fo r the ensuing year and the fo l­
lowing named men were elected to head
the organization fo r the one-year term :
G. K . Swift, cashier o f the Farmers &
Merchants Savings Bank of Harlan, was
elected president.
E. A. Schell, cashier of the State Bank
o f Portsmouth, was elected vice president.
J. J. Norgaard, cashier of the Harlan
National Bank, Harlan, was elected secre­
tary and treasurer.

Opens Office at Washta
Goes To Three Per Cent

Office at Melclier

Effective August 1, 1931, the Iowa-Des
Moines National Bank & Trust Company
o f Des Moines reduced the rate paid on
certificates of deposit from 3% per cent
to 3 per cent, and effective September 1,
1931, a like reduction will be made on
savings accounts. The other banks in Des
Moines are continuing to pay 3^ per cent
on both classes o f deposits.

With the announcement that the Iowa
State Savings Bank of Knoxville will
open a branch office to serve Melclier and
Dallas, these communities will immediately
have banking facilities.
The new office will be in charge o f L. B.
Paulson o f the Citizens National banking
staff and will be open three hours each
day unless longer hours are required. The
office will be housed in the building of the
First Trust & Savings Bank.

Vice President at Bloomfield
Sherman E. Rowe has resigned as
cashier o f the State Bank o f Davis County,
in Bloomfield, Iowa, and has been elected
to the position o f vice president of the
institution.
Other vice presidents are
L. F. McConnell and O. D. Wray.
Clarence C. Day, who has been an as­
sistant cashier, was elected cashier. A s­
sistant cashiers are William J. Brown,
Donald M. Rowe and Harold D. Rowe.

Nashua Banks Consolidate
The two banks o f Nashua, Iowa, the
First State Bank and the Nashua State
Bank, have consolidated. The name of
the new bank will be First Nashua State
Bank and it will be the largest bank in
the county.
The officers of the new bank will be as
follow s: Ward B. Smith, chairman of
the board of directors; H. M. Walleser,
president; A. L. Kout, vice president; W.
R. Clampit, vice president ; R. R. Waite,
vice president ; L. E. Harrison, vice presi­
dent; J. II. Nafus, cashier ; C. R. Dexter,
assistant cashier; W . H. Christenson, as­
sistant cashier; R. D. Staley, assistant
cashier. The new bank will occupy the
old Nashua State Bank building, and
while this building is being remodeled, the
new institution will transact business in
the First State Bank building.

Consolidation at Knoxville
The Columbia Savings Bank was con­
solidated with the Iowa State Savings
Bank o f Knoxville, Iowa, last month, ac­
cording to J. C. Collins, president, and
E. L. Job, cashier o f the latter institution.
Although the Columbia bank was in excel­
lent condition, overhead expenses did not
warrant the continuation o f the institu­
tion.
The Iowa State Savings Bank is a state
bank affiliated with the Citizens National
Bank. An office will be established in
Columbia with A. L. Maddy, former Co­
lumbia bank president, in charge. This is
the second office the Knoxville bank has
•established, the first being at Melcher.
The Columbia bank had a capital and
surplus o f $62,000 and deposits o f
$95,000.

Changes at Avoca
Rudolph Stender, cashier o f the Avoca
State Bank, Avoca, Iowa, fo r some years,
has been elected president o f the institu­
tion to succeed the late John Jenks, who
died recently. Mr. Stender is to be suc­
ceeded as cashier by Frank C. Yierhus,
formerly assistant cashier.
Northwestern Banker

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Federal Reserve Bank of St. Louis

September 1931

The Central Trust & Savings Bank o f
Cherokee, Iowa, has opened an office in
Washta. Washta has been without a bank
since the Washta State Bank closed last
December 13th.

Merger at Stanhope
A merger o f the Stanhope State Bank
and the Farmers Savings Bank, also of
Stanhope, Iowa, was effected last month.
Stanhope, in Hamilton county, will be
served by the one institution, which will be
known as the Farmers State Bank of
Stanhope.
The bank will have a paid-up capital o f
$25,000 and a surplus o f $5,000. N. L.
Peterson will be president; C. R. Read,
vice president; E. J. Johnson, cashier, and
A. N. Fardal, assistant cashier.

Joins Bancorporation
The First National Bank o f Denison,
Iowa, has became affiliated with the North-

New Bank Building
Construction work has begun on a $10,000 bank building in Hornick, Iowa. The
building will provide quarters fo r the
State Savings bank, a subsidiary o f the
Toy National Bank o f Sioux City.
Contracts have been awarded as fo l­
lows: Rowles Construction Company,
Onawa, Iowa, general; D. Sawyer, H or­
nick, heating and plumbing, and J. Saw­
yer, Hornick, electric wiring.
Plans fo r the brick building were drawn
by A. Moorman & Company o f Minne­
apolis, Minn.

Bankers in Annual Meeting
The annual meeting of the Shelby
County Bankers Association was held in

W IL L IA M A D A M S

west Bancorporation, an association o f
138 banking and financial institutions
throughout the northwest.
The First National is the largest bank
in Crawford county, according to the state
banking directory, having deposits o f more
than a million dollars. It is capitalized at

61
$100,000 and lists surplus and proflits at
$55,000.
The Denison bank is the fifth bank in
Iowa to become affiliated with the group.
The others are the Iowa-Des Moines Na­
tional Bank & Trust Company of Des
Moines, the First National Bank and the
Northwest Savings Bank, both o f Mason
City, and the Livestock National Bank at
Sioux City.
William Adams is president of the Deni­
son bank. W . A. Glotfelty is cashier.

Heads County Bankers
W . F. Daubenherger of the First Na­
tional Bank at McGregor, Iowa, is the new
president o f the Clayton County Bankers
Association. C. J. Adam o f the Clayton
County State Bank, Guttenberg, is the new
vice president ; H. L. Swenson o f the First
National Bank o f Elkader, secretary, and
F. S. Richards o f the First National of
McGregor, treasurer.
Sixty bankers o f the county were in
attendance at the annual meeting, repre­
senting all but two o f the county’s banks.

County Bankers Elect Officers
At the meeting o f the Buena Vista
County Bankers Association, held at the
Bradford Hotel in Storm Lake, IowTa, offi­
cers were elected fo r the ensuing year.
E. M. Duroe o f Sioux Rapids was elected
president; A. J. Scott o f Linn Grove, vice
president; C. G. Kislingbury o f Alta, sec­
retary, and C. E. Kind wall of Albert
City, and E. P. Lomen of Marathon, as
members o f the executive committee. A
banquet was served to the members, after
wliich Mr. Duroe gave an address on
“ Bank Ethics.” Each of the 14 banks in
the county were represented, with a total
attendance o f 20 members.

To Build Rifle Range
A t the annual meeting o f the Tama,
Iowa, County Bankers Association it was
voted to select a suitable site fo r a rifle
range and to build one according to the
specifications sent out by the government.
The site Avas selected two and a half
miles north of Montour on a gravel road.
It lies off this road about a half-mile and
the range faces the nortliAvest. A cement
pit was made to hold two target carriers.
This Avas built at the base o f a high bluff
and all danger from ricochet bullets has
been eliminated. A target house suitable
for housing all equipment was constructed
and a telephone line installed from the pit
to the point o f firing. The range has a
two, three and five hundred yard distance
and is one o f the best in that part o f the
state.
A ll bankers and vigilantes o f the county
are members o f the rifle club and the sec­
retary, Lynn Bailey, of Tama, is Avorking
on a plan to bring together the men o f the
different toAvns for a competitive shoot.
Out o f this group will be selected a team


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Federal Reserve Bank of St. Louis

Joins State Banking Department

to represent the Tama County Bankers
Association and shoots will be held with
other counties.

Opens Branch at LeGrand
Announcement was made last month by
J. P. Cooper, president o f the loAva
Savings Bank, o f Marshalltown, Iowa,
that his institution had opened a branch
bank at LeGrand under the management
o f G. C. Ogier. This is the first branch
bank opened in the county since the last
legislature passed the new la.Av permitting
institutions to open branches in com­
munities that have no banking facilities.
LeGrand has been without a bank fo r sev­
eral years.

Richard D. Ryan, for the past ten years
assistant cashier o f the Farmers Savings
Bank of Massena, Iowa, has accepted a
position Avith the state banking depart­
ment, in the receivership division. F or the
past five years, Mr. Ryan has been a stock­
holder and director o f the Farmers Sav­
ings and still retains his stock in that
institution.

Elect Officers
A t the regular meeting o f the board o f
directors o f the Commercial Savings Bank
o f Marion, IoAva, held last month, the fo lloAving officers A v e r e elected : G. H. Clark,

YOUR
DES M O IN E S
BUSINESS
W hen handled through
this bank, your Des Moines
business has the personal at­
tention o f principals whose
interests, like yours, are
centered in Iowa— a dis­
tinct advantage.

BANKERS TRUST CO.
B A N K.

Cor. 6th and L o c u st Sts., D es M oines
Capital $1,000,000.00

Surplus $200,000.00

Northwestern Banker

September 1931

62
president; J. A. Cooper, vice president,
and W. A. Bell, cashier.
Mr. Clark’s former position was that of
cashier and Mr. Bell’s, assistant cashier.

Association has pointed out the impoi*tance of having able bank directors ; they
have also called attention to the fact that
the deflation period has shown that bank
directors must be ‘hand picked’ ; that a
board of directors o f a bank is not ‘every­
Outlines Qualifications of
body’s party’ ; simply because a man who
Good Bank Directors
has retired, who has financial means or is
locally prominent in business, manufac­
C. JACOBSEN, vice president o f
turing, or politics or in society is no reason
the Secxxi’ity National Bank o f
* Sionx City, in a recent statement why his request to serve on the board o f
dii’ectors should ever be accepted on that
recollecting some o f the important work
qualification alone ; that a member o f the
carried on during* last year while he was
board o f directors at least o f a bank
president o f the Iowa Bankers Association
should have the opportunity to sex*ve in
said that he recalls vividly one of the out­
such an honorable and responsible posi­
standing recommendations o f the officers
tion through ‘invitation’ only ; that the
o f the association.
bankers o f this state believe and have been
He says “ For years the Iowa Bankers

C

Northwestern Banker

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Federal Reserve Bank of St. Louis

urging for a number of years that the
‘invitation’ should come from the bank
and not from the individual desiring to
serve as a bank director ; that the deflation
period has impressed bank directors with
the seriousness o f bank directorships ; that
there is attached to that position great
responsibility and even legal liability as
well as fine prestige; that while on the
whole boards o f directors, like the great
rank and file of the stockhoklers of the
Iowa banks, during this deflation period
have made prodigious sacrifices for the
survival of their banks in order to pro­
tect their depositors, yet the deflation
period disclosed on the one hand those
bank directors who were serving for selfish
interests or fo r personal prestige and
who constituted mere personal scenery,
and on the other hand, the bank director
who had fully realized the responsibilities
that the bank directorship carried with
it in the interest o f the local community
and unflinchingly met those responsibil­
ities in the face o f the greatest holocaust
o f bank adversities this state has ever in
all its history witnessed.
“ That the banket's o f this state are proud
to say that the bank director who did not
do his part during that deflation period
was only the exception but it was sufficient
to shoxv the fundamental importance of
vigorously applying the principle of
‘selectivity’ fo r future bank directors; that
the board o f directors of a bank hand
picked as being successful exponents rep­
resenting every line o f profession, business
and farming can bring to a banking insti­
tution a fund o f general experience on
every line o f business and farming and
manufacturing endeavor possible to assem­
ble; that with such a group of successful
men and who hold the general esteem of
their community they enable that bank to
advise and assist their citizenry to bring
about the greatest development of their
community as no other means can afford;
that when borrowers and customers of
banks are soundly advised a mass result
inures to the greater upbuilding o f the
local community, due in a large way to
the efforts put forward by the Iowa Bank­
ers Association, to quietly but with cer­
tainty weed out the bank director who
has merely used that position to enhance
his own local business or social prestige;
that the Iowa banker in the future must
be a man o f intrinsic worth, ready to give
unlimitedly o f his time and talent to his
banking institution, not only because of
the greater success that he can thereby
bring to his own bank but also because of
what it means to assist his people in mak­
ing their community a better place in
which to live and a better place in which
to do business ; that to do that must neces­
sitate giving much time by the average
bank director ; he must attend the board
meetings regularly, faithfully and un­
grudgingly and when he does that he invaluates his own bank holdings and adds

September 1931

63
to the dividends o f his own bank shares;
but more than that he has the personal
gratification of knowing that he has had
an honest-to-goodness part in building up
his village, town or city and surrounding
farms. Is there a greater contribution
that any person can give to his neighbor?”

Muscatine Banker Dies
James L. Giesler, 74, vice president of
the American Savings Bank o f Muscatine,
Iowa, and an official in several other Mus­
catine business enterprises, died at his
home last month.
He had been identified with the bank
since its organization in 1899. He was
elected to the state legislature in 1896 and
served one term.
The American Savings Bank is capital­
ized at $200,000 and has deposits of $2,390,680.

house, consisting o f the banks in a natural
trade area region. Every reason fo r the
founding o f a city clearinghouse applies
with equal logic to the founding o f a
regional clearinghouse, and every benefit
enjoyed by the former can be employed
by the latter.
“ The bank management commission,
in the conduct of its program o f better
management studies, authorized at the
Cleveland convention the preparation o f
a comprehensive treatise covering the
origin, the organization and the operation
o f regional clearinghouses, and asked C. A.
Chapman, chairman o f the commission’s
committee on clearinghouse and inter­

bank relations, and president of the First
National Bank of Rochester, Minnesota,
to undertake the job. How well he has
done in assembling and compiling the
wealth o f data on the subject, and present­
ing it to the members o f the American
Bankers Association, may he readily deter­
mined by a studious reading of this
pamphlet.”
The topics presented in the booklet are
regional clearinghouse associations, man­
ual o f organization and management, typi­
cal articles o f association, functional
activities fo r regional clearinghouse asso­
ciations, credit bureaus, and clearinghouse
examinations. Copies may be obtained

Officers Re-elected
At the annual meeting o f the stockhold­
ers o f the State Bank o f Latimer, o f Lati­
mer, Iowa, all o f the officers were re­
elected for another year. The officers are
F. H. Dohrman, president; F. H. Freise,
vice president; J. C. Sorensen, cashier;
P. IT. Boreherding, assistant cashier. The
directors are F. H. Dohrman, F. H. Freie,
J. C. Sorensen, Fred Harris and H. H.
Koenen.
During the business session o f the meet­
ing it was voted to pay the usual 15 per
cent dividend to the stockholders. The
State Bank o f Latimer has paid this divi­
dend regularly fo r many years.

CENTRAL NATION,

bank

and

trust COMPAS

New Clearinghouse Manual
A manual o f the organization and man­
agement o f regional clearinghouse asso­
ciations has been published by the bank
management commission o f the American
Bankers Association in its series cov­
ering commercial bank management. Fred
W . Ellsworth, chairman o f the commis­
sion, says in the introduction :
“ The unqualified success of the clear­
inghouse idea has long since become an
established fact. Originally organized by
a group o f city banks fo r the sole purpose
o f facilitating the trading o f checks
among themselves, the clearinghouse has
gradually developed into an association
o f banks fo r self examination ; fo r inter­
change o f vital credit information; fo r
the joint consideration o f those problems
that are common to all banks, and which
can better be solved by joint study and
joint action; and fo r the consideration of
principles and methods which will con­
serve resources, and improve the service
rendered to the community.
“ Those organization facilities which fo r
so long a time and in so unmistakable a
manner have been beneficial to the city
bank, are now available to the banks in
smaller towns and villages by means o f
what is known as the regional clearing­

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Federal Reserve Bank of St. Louis

Throuqhthis door

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

C entral
National
and t r u s t

bank

F I F T H AVE. - Bet ween WALNUT and L O C U S T
DES M O I N E S ----------------------------------------------------— I O W A .

Northwestern Banker

Sentember 1931

64
without charge from the Bank Manage­
ment Commission, American Bankers
Association, 22 East 40th Street, New
York City.

F. A. A. Convention
M E R IC A ’ S financial advertising
leaders will meet in Boston, on
September 14th, to open the six­
teenth annual convention o f the Financial
Advertisers Association. F or three days a
business conference will be held to con­
sider the many serious problems which
financial advertisers recognize as existing
at the present time. A program has been
prepared which will be completely in ac­
cord with the spirit o f the time— one
which will give answer to many o f the
questions o f importance which confront
the average financial advertising man.

A

The officers o f the association under the
direction o f Mr. F. R. Kerman, vice presi­
dent, Transamerica Corporation, and pres­
ident o f the association, started early in
the year to prepare a program built
around the theme “ The Creative Force in
Finance.” In selecting this theme it was
recognized that we are in an era today
when the creative force o f sound banking
must lead the nation out o f the present
wilderness, and into the next great period
o f prosperity and growth. It was thought
that too much stress could not be laid upon

the part bankers are playing in our eco­
nomic reconstruction.
The creative force as a general theme,
has been broken down into the depart­
mental subjects o f creative ideas in new
business, and creative ideas in advertising.
The many subjects which have been de­
veloped under these two general heads
give assurance that the convention will be
one o f the most important and construc­
tive ever held by the Financial Advertisers
Association.
In commenting on the program, Mr.
Alva Gl. Maxwell, vice president, Citizens
& Southern National Bank, Atlanta, and
general chairman o f the convention, said:
“ The creative side o f banking has not
been sufficiently stressed to the public.
The reaction to current events demon­
strates that we have all taken too much
fo r granted the public understanding o f
the basic soundness o f bank methods.
And it is time to get a fresh perspective
on this problem.
“ By presenting ‘A Creative Force’ as a
general subject, we feel that a tremendous
amount o f valuable and constructive data
along these lines will he produced— data
which will give all o f the advertising men
in attendance a new viewpoint on public
relation problems.
“ In the course o f their deliberation the
directors placed great emphasis on the
unusual appropriateness of the coinci­

dence that such a meeting should be laid
in Boston— which has not only played so
great a part in America’s economic de­
velopment, but which has always been one
o f America’s greatest cultural centers. It
was our feeling that in such an atmosphere
our deliberations would take on something
o f the spirit with which our historic city
is endowed-—the spirit which had so much
to do with molding the early days o f the
United States.”

Comparing 1931 and 1921
Allowing fo r split-ups and larger stock
dividends, a comparison o f 1921 and 1931
low o f 260 common stocks shows that
140 issues sold lower ten years ago and
that 120 have sold lower this year, accord­
ing to a survey recently published by
Frazier Jelke & Co. Ready comparison
is complicated by changes in share units
in the case o f 145 stocks, some o f which
have been altered by two or more splitups or stock dividends.
Of the 35 rails tabulated in the survey,
17 have sold lower this year than at any
time in 1921; while only one o f the 16
utilities has dropped below the poorest
price o f ten years ago. Fifteen o f the 25
mining issues, 20 of the 25 oil stocks, nine
o f the 17 automotive shares, seven o f the
11 steels, and seven o f the 14 retail shares
have declined below the lowest prices o f
1921.

O u r 35 Years o f Experience

Northwestern Banker

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Federal Reserve Bank of St. Louis

—and what it means to you
Established in 1895— eight years after the Sioux City
stock yards were opened— the Live Stock National Bank
has grown steadily. The rapid development of the stock
yards lias been side by side with the sound progress of this
bank.
To correspondent hanks and to live stock interests in
the Northwest, our 35 years of experience at the Sioux
City yards mean expert handling of all items— sound de­
cisions— a background of valuable knowledge tempering
present-day outlooks in this specialized field.

Live Stock National Bank
SIOUX

CITY,

IOWA

A ffilia te d w ith

NORTHWEST

September 1931

BANCORPORATION

65
More than half o f the 260 stocks tabu­
lated in the survey have been split up.
Out o f 137 issues, 28 have been split 4-for
1 ; 24, 2 -f o r -l; 16, 3 -fo r -l; 15, 5 -f o r -l;
and 7, 8-for-l. One stock has been split
100-for-l; 1, 5 0 -fo r-l; 2, 40-for-.l; 1, 46for 1; and 1, 25-for-l. “ Forty-six o f the
137 split-ups or recapitalized issues have
shrunk to a price level loAver than the 1921
bottoms o f the predecessor stocks, even
after allowing fo r the change in the size
o f the ownership fraction ; but on the
whole, the split-ups have justified them­
selves, except that a few have proved to
be too radical.”
“ The bear market of 1930-1931, which
really began in September, 1929, started
from a more elevated price area than that
o f 1920-1921, has been more drastic and
o f longer duration,” says the Jelke an­
alysis. “ It has had to contend with a less
electric, but more persistent and more
serious, collapse of business activity.
“ A decade ago economists had much
to say about the shortage o f capital being
a world problem o f the first magnitude.
Money rates were high. F or five years
almost the whole world had been busy
destroying and using up capital without
replacing it— going in debt to itself.
Europe was even more impoverished than
it is today; and international debts were
just as much o f an issue.
“ In theory, dividend yields in this bear
market should be much lower than in
1921, and probably would be were it not
for the lack o f confidence o f investors in
the continuity o f distributions. Actually,
the spread between the commercial paper
rate and the average dividend yield on
good common stocks lias been wider than
in 1921 for over a year.
“ Many companies are better oft now
than in 1921, and some are much worse
off. A stock may be selling higher, much
higher, and still be a bigger bargain; and
the stock which is lower in price may not
be as cheap,” the survey concludes.

Give Her Time
Irate Father (discovering daughter on
young man’s la p ) : M y ra ! What does
this mean ?
Daughter : Come back in about 15 min­
utes, dad. I ought to know by then.

Cop— “ Madam, didn’t you see me hold
up my hand?”
Woman at the Wheel— “ I did not.”
Cop— “ Didn’t you hear me blow my
whistle ?”
W . A. T. W .— “ I did not.”
Cop— “ Didn’t you hear me holler at
you to stop ?”
W . A. T. W .— “ I did not.”
Cop— “ Well, I guess I might as well go
home. I don’t seem to be doing much
good here.”

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

J. H. NISSEN
Assistant Cashier

G. L. CURTIS
President

H. G. KRAMER
Assistant Cashier

MILO J. GABRIEL
Vice President

H. M. OLNEY
Assistant Cashier

W. A. ANDERSON
Vice President

F. E. CONOVER
Assistant Cashier

O. P. PETTY
Vice President and
Cashier

F. H. HAMANN
Assistant Cashier

Clinton County’s Largest Bank

T >A N K E R S w h o ch oose

th e

C ity National as their cor­
respondent bank rest in the as­
surance that the smallest item o f
their business will receive our most
careful consideration.

THE

CITY NATIONAL BANK
C L IN T O N , I O W A
A ssets O v e r $ 8 ,5 0 0 ,0 0 0 .0 0

DIR EC TO R S

W. A. ANDERSON
Vice President
C. A. ARMSTRONG
President C. F. Curtis
Company, Inc.
A. P .BRYANT,
Manager of Operations
Clinton Com Syrup
Refining Co.
O. D. COLLIS,
President The Collis Co.
E. J. CURTIS,
Vice President Curtis Bros.
& Co.
E. L. MILLER
Attorney

G. L. CURTIS.
President
President Curtis Companies,
Inc.
G. W. DULANY, JR.
President Eclipse Lumber
Co.
Chairman Climax Engineer­
ing Co.
MILO J. GABRIEL,
Vice President
President Gabriel Lumber
& Fuel Co.
B. M. JACOBSEN,
Congressman Second Iowa
District
G. E. WILSON
Pres. Clinton Bridge Works

J. PETERSON.
O. P. PETTY.
Vice President and Cashier
H. W. SEAMAN
J. O. SHAFF.
Farmer and Live Stock
Dealer
W. R. SMITH
General Manager
Clinton Corn Syrup
Refining Co.
F. H. VAN ALLEN,
President J. D. Van Allen
& Son. Inc.
R. C. STEWART

Northwestern Banker

September 1931

66

M eeting Bank 77Run$77
IRSTH A N D dramatic experiences o f
two large banks which recently dealt
successfully with the crisis o f “ runs”
were related at the eastern regional sav­
ings conference held under the auspices
of the Savings Bank Division, American
Bankers Association. Officers o f the a f­
fected institutions gave details as to what
a bank should do in a case o f a “ run” and
made some practical suggestions as to the
prime importance of maintaining at all
times the quick liquidity o f a bank’s
assets.
Lucius H. Holt, vice chairman o f the
board o f the City Bank and Trust Com­
pany, Hartford, Connecticut, told o f the
genesis o f a “ run” on his bank in the fail­
ure of a large unrelated private bank of

F

the Italian quarter which was in a ferment
o f excitement. As was to be expected, he
said, Italian depositors next turned their
attention to his institution which had large
savings deposits but was above suspicion.
Two incidents, which at the time appeared
trifling in themselves, said Mr. Holt, pre­
cipitated the run. First, an Italian woman
presented her husband’s passbook and
asked fo r the balance of about $3,000 but
she had no written order from him and was
told courteously that she would have to
have one. She returned to the Italian
quarter and spread the report that the
bank would not let her have the money.
The same morning an Italian man pre­
sented a $340 check at the commercial
department o f the bank, but as he was

your service

PEOPLES
TRUST &

SAVINGS

in Eastern Iowa

BANK

and

Western Illinois

Peoples T rust &S avihgs Bank
e:=

:::

:

C L I N T O N , I O W A ======

REMEMBER

IT THIS WAY — “ PEOPLES

s

TRUST”

O F F IC E R S
C.?,?.Ko^President
J ‘ Q ' J E F F E R IE S , Vice Pres.
J. C. L A N G A N , Vice Pres.
W M . M. W IL S O N , Vice Pres.
J. L. BO H N SO N , Cashier
C. S. H A R R IS , Assistant Cashier
F . W . S P A L D IN G , Asst. Cashier
E M IL JO H A N N S E N , Asst. Cashier

1876

1931

Speed—accuracy—personal
attention are the three prin­
cipal features of our cor­
respondent service.

Consolidated N ational B ank
D U B U Q U E , IO W A
J. K . Deming, President
Geo. W . Myers, Vice President

Northwestern Banker


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Federal Reserve Bank of St. Louis

September 1931

Jos. W . Meyer, Cashier

entirely unknown he was asked to identify
himself.
He did not understand and
rushed out highly excited, a1so going to the
Italian quarter and spreading the report
that the bank would not pay him out
money on the check.

Began on Saturday
HE run started that evening which was
a Saturday wThen normal gains o f from
$5,000 to $20,000 in deposits, said Mr.
Holt, switched to withdrawals of over
$56,000. The frightened depositors would
not accept checks but demanded cash, Mr.
Holt said, and although with the tremend­
ous resources o f the bank there was never
the slightest fear o f not being able to meet
all obligations, there was a practical d if­
ficulty in finding enough actual currency
to make payments at the rate demanded.
Realizing that there was not sufficient on
hand even in the other Hartford banks,
where the institution had large credits, to
meet the situation the bank communicated
with its correspondents in New York and
Boston. In response an armored automo­
bile with $500,000 in currency arrived
from New York and another from Boston
with $250,000 Monday morning. The
bank also drew from other banks in Hart­
ford as much cash as they could spare
and before noon had more than $1,000,000
in actual currency stacked on tables be­
hind the tellers in full view of the deposi­
tors under guard o f special police. A
panicky crowd developed as expected and
by the end o f the day $557,741 had been
withdrawn while deposits had been only
$8,459.
Mr. Holt told how, as news o f the un­
justified “ run” became public, the better
informed elements o f the city voluntarily
declared their faith in the soundness of
the institution. Public statements o f con­
fidence were issued by the State Bank
Commissioner and the Hartford Clearing
House Association, which in a half-page
newspaper advertisement pledged the re­
sources of the other member banks to aid
the beleaguered bank. The head o f a big
New York City bank voluntarily sent up
$250,000 fo r deposit and some of the large
insurance companies in Hartford sent
word that they were ready to assist in any
practical manner, while many individuals
o f large means came to the bank with
offers o f aid. The bank, however, did not
have to ask aid o f anyone, said Mr. Holt.
“ Our own resources were ample and in
such liquid form that they could be made
available at short notice,” he said. “ We
never even considered the possibility o f
any use of the 30-day clause. Every de­
positor had the right to have his money
on demand and we prepared to give it to
him.”

T

67
The run continued the next day, said
Mr. Holt, but the attitude o f the Bank
Commissioner, Clearing' House Associa­
tion, and many individuals o f influence
who came and talked with depositors
singly and in groups, together with edi­
torials in the daily press and the action of
a local radio station that voluntarily in­
terrupted its program several times to
broadcast a message o f confidence in the
bank all served in allaying the fears o f the
depositors. By closing time that day the
line had disappeared from the street,
traffic was reopened and even the lobby
o f the bank was almost clear.
The point of first importance, Mr. Holt
told the conference, is to keep savings de­
partment investments always liquid enough
to meet abnormal demands. His institu­
tion planned, he said, to have at all times
between 40 per cent and 50 per cent o f
deposits in such a way that they can be
realized on immediately. At the time of
the “ run” it had savings deposits o f about
$18,000,000 and was in position to realize
more than $8,000,000 on bonds and bank
stocks within 24 hours. On the two days
o f the “ run,” he said, it actually needed
but little over $1,000,000.

Value of Good Friends
E. HOLT placed second in impor­
tance for a bank the acquisition o f
a circle o f good friends, whether clients
or not, as illustrated by the effect the
friendship of important elements in the
community had in restoring confidence in
his institution. Also during the “ run”
it was specially impressed upon the tell­
ers that they must maintain the same
spirit of friendliness and courtesy which
they maintain during normal timès to
cheer up worried depositors.
One conclusion Mr. Holt drew from his
experience was that the liquidation of
mortgages in case o f necessity is one of
the most serious problems confronting
banks, declaring that many a bank has
failed not through mismanagement but
through inability to liquidate mortgages.
The solution might be through organiza­
tion of great bank mortgage securities
companies, he said, or, through a war­
rantable extension o f insurance business.
Mr. Holt said well managed and sound
institutions are too prone to rely on
merely defensive measures in a deposi­
tors’ panic. “ When we know we are safe
and sound,” he said, “ it might be better
psychology to adopt aggressive tactics— to
invite our patrons to come get their
money, instead o f to put forth extreme
efforts to persuade them to leave it. The
very effort to persuade them to leave their
deposits may strengthen their suspicion
that there is something wrong with the
bank.”
Heady liquidity o f assets also saved the
day fo r the Bank o f Morgantown, West
Virginia, when failure o f another bank
subjected it and others to a “ run,” D. R.

M


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Federal Reserve Bank of St. Louis

EDM U N D W . M IL L E R , President

C O M M ER C IA L
JAM ES M. GR A H AM
V ice President

H. W . W EN TE
Cashier

H. A . M A IN E
V ice President

S. C. KIMM
A ssistant Cashier

A . M. P L A C E
V ice President

R. L. PE N N E
A ssistant Cashier

W . A. LANE
V ice President

C. S. M cK IN ST R Y
A ssistant Cashier

NATIONAL BANK

The friendly understand­
ing with which the Com­
mercial National handles
each correspondent item,
is indicative of our thor­
ough experience in bank­
ing procedure.
This

experience

is

at

your disposal when you
choose this as your cor­
respondent bank.

The Comm ercial National Ba n k
W

a t e r l

o o ,I o m

Northwestern Banker

September 1931

()8
Richards, vice president o f the bank, told
the conference. News of the closing o f
the other bank traveled like wildfire, he
said, and in half an honr the streets
were crowded with people. Before any
preparation could be made his bank was
filled with people who were orderly hut
there fo r a very definite purpose, very
largely foreigners and uneducated Amer­
icans.
“ Our first move was to greet them

pleasantly, showing no concern over what
was taking place,” said Mr. Richards.
“ We next had a mutual understanding
that we should take plenty of time, han­
dling each case naturally and with great
caution and care. The first day we paid
every depositor who called for it his bal­
ance in full. We had plenty of money
with our Pittsburgh correspondent and
in twenty-five minutes after we called
them they had an armored truck on the

road with our supply of currency, which
arrived ahead o f time. Never in the history o f our city had an armored truck ar­
rived fo r the benefit o f one of our finan­
cial institutions. It had a great psycho­
logical effect. I am not sure that it did
not turn the tide. The bank also had
talks made in its banking room by some
o f the highly respected citizens o f the
community. These were o f great value.”

New Hotel Director

O F F IC E R S
Leonard R. M anley............................. President
C. C. Jacobsen........................ Vice President
R. Earl Brow n.....................................Cashier
Delko Bloem . . . ; ........................ flss’t Cashier
Albert C. Eckert........................... Ass’t Cashier
Daniel B. Severson.......................Ass’t Cashier
Elmer O. Smeby...........................Ass’t Cashier

I HE member of our
personnel who super­
vises your account is
a banker of seasoned
experience. He is
vitally interested in
seeingthat your Sioux
City business is han­
dled to your utmost
satisfaction.

Leonard Hicks was recently elected vice
president and managing director o f the
Morrison Hotel, Chicago. Mr. Hicks is
chairman o f the executive committee o f
the Chicago Hotel Men’s Association, and
past president o f the Hotel Greeters.
In accepting this position Mr. Hicks
returns to the house in which he first

C T C U R IT !/
N A TIO N AL

BANK

Of SiOUX CitN

LE O N A R D H IC K S

started his career as a hotel man 27 years
ago.
Mr. Hicks is one o f the best amateur
golfers in Chicago, and president o f the
Chicago Hotel Men’s Golf Association.

Bankers wlio demand the best in correspondent
service know they will secure:
— ACCURACY
— SPEED
— PERSONAL ATTENTION
— SATISFACTION
AT THE

F IR S T

IO W A S T A T E
in
T R U S T & S A V IN G S

BURLINGTON, IOWA

Capital $600,000
Resources Over $9,000,000

Northwestern Banker


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

September 1931

\

D/YlNI IV

New Bulletin
The hog feeding tests conducted at
Tamfalfa Farm by the Fox Chemical
Company o f Des. Moines have again shown
interesting facts on costs of producing
pork at present prices fo r feeds. This
report is extremely complete and proves
that hogs can be raised at a good profit
even on present market prices.
Bankers who have farmer customers
should be intensely interested in this new
bulletin. It is well worth filing fo r definite
information on what hog raisers can do in
the way o f making profits, if proper feed­
ing methods are followed. Costs as lowTas
$3.70 per 100 pounds of gain have been
developed in the Fox tests.
The Fox Service Bulletin gives essential
facts on the many feeding tests in tabu-

69
lated form. Bankers who realize that hogs
are one o f the most important and reliable
sources o f income for farmers are devoting
more attention to the feeding methods fo l­
lowed by their customers. Investigations
among farmers have shown that only a
small minority feed correctly in order to
make the largest possible profit from their
hogs.
E. F. Fox, president o f the Fox Chem­
ical Company, is one of the pioneers in
devoting private funds to conducting o f
feeding tests and building up o f pure bred
hogs in order to help farmers obtain bet­
ter gains at lower costs.
The Fox organization o f service men
are out in hog lots daily showing farmers
the best way o f feeding to increase hog
profits. Bankers are in a position to assist
this educational work by suggesting that
farmers send fo r the Fox Bulletin or by
having one in file to show customers when
going into their credit standing.
E. F. Fox will be glad to send bulletins
free to any banker interested. A goodly
number o f bankers have already written
fo r this bulletin and it is hoped a large
per centage o f all interested in helping
farmers will have this information in
their files.

For sixty-two years the First
National has had the con­
fide nee
And

of
this

its customers.
confidence

is

responsible for the steady,
stur d y growth we have

New Banking Devices from the
Macy Laboratory

enjoyed.

(Continued from page 13)
suspicion of over plumpness, even if it
is not definitely too fat. W e now place
this note in the reducing compartment
and start the motor. Oftentimes a single
treatment is sufficient to reduce the figure
to normal; occasionally two, or even three
or fou r trips to the vibrator are needed,
but the final result is bound to be a figure
so sylph-like as to satisfy the most ex­
acting.
In the more serious and weather-beaten
cases, it is possible with this machine to
give the note a permanent wave. Theo­
retically, o f course, one might even kiss it
good-bye, but the wave is generally con­
sidered sufficient.

Stopping Runs
D E V IC E which is kept fo r emer­
gency use is the one which we call
our run-stopper.
It is guaranteed to
terminate even the most persistent run on
any bank. It closely resembles a type­
writer— as a matter o f fact, that is exactly
what it is. Whenever it is desired to stop
a run on the bank, we have only to place
this machine in operation, and in an
astonishingly short interval it will turn
out a placard reading : “ By order o f the
board o f directors, this bank has been
placed in the hands o f the department
o f banking for liquidation.”
ifc ^ %

A

O F F IC E R S

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

SMHHHHHHMMMHI

m

First National B ank
gM a so n

Cit y , I owa

Affiliated With Northwest Bancor por ation

Combined Resources $495,000,000

Quite naturally, I have at odd times out­
side banking hours turned my inventive
resources to personal ends, and in one o f
these intellectual forays, I worked out an

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

Northwestern Banker

September 1931

70

ingenious article-writer fo r use in the com­
position o f these magazine contributions.
Recalling the days o f spiritualism and
slate-writing, I purchased a pair of slates
and a pencil. It is now my custom, when
an article is due, to place the pencil be­
tween the slates and go into a trance.
Upon awakening, and separating the
slates, I find the monthly article ready for
publication. Observant readers have al­
ready guessed at the existence of this prac­
tice, and have filed written protests; these
will be taken up and considered in the
order o f receipt. No crowding.

Unmasking the Forger
(Continued from page 15)
in the joining o f one letter to another.
Illustrations Nos. 3 and 4 disclose this
discrepancy.

More Customers
More Service
In the last year our list of Iowa bank
connections has shown further substan­
tial increases. Fifty-eight years of corre­
spondent service pays our customers in
dividends of satisfaction, as well as
otherwise.

Established 1872

VALLEY

NATIONAL BANK
DES MOINES
OFFICERS
R. A. C r a w fo r d , P r e s id en t
C h a r l e s W. E n y a r x , V ic e P r e s id en t
D . S. C h a m b e r l a in , V ic e P r e s id en t
C. T . C o l e , J r ., V ic e P r e s id en t
W. E. B a r r e t t , C a sh ier

Northwestern
Banker

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Federal Reserve Bank of St. Louis

The attempt to reproduce the above
genuine name shows an awkward com­
mencing stroke to the capital “ C” and the
lower portion o f this letter is more heavily
rounded off than the original. The slant
o f the “ C” slopes more to the right in the
copy, while the small “ u” shows a heavier
pen pressure and a hesitating movement
in the second stroke o f this letter.
The dot after the capital “ S” has been
placed right up to the “ S” while in the
original it is further to the right. Note
also the patched appearance o f the first
upward stroke o f the capital “ M” and the
variation in the slope o f the small “ a.”
The “ n” is rounder at its base than the
original, and the terminal to this letter
stops more abruptly. It is in these minor
details that the forger betrays himself and
it is precisely these which the handwriting
expert regards as significant.

C. O. Talmage Reorganizes
C. 0 . Talmage of Omaha has announced
that the business o f C. O. Talmage and
C. O. Talmage Co., relating to insurance
o f all kinds, the purchase and distribution
o f insurance securities, ownership and
management o f insurance companies, has
been consolidated under the name of Gen­
eral States Insurance Corporation, of
w’hich Mr. Talmage is president. The
headquarters o f the corporation are in
the Arthur Building, 210 South Eight­
eenth Street, Omaha, Nebraska. The Gen­
eral States Insurance Corporation will
have a. wide organization with connections
in the larger cities o f the country.
Mr. Talmage fo r many years was secre­
tary o f the Columbia Fire Insurance Co.
o f Omaha and after its reinsurance by the
National of Hartford was manager o f the
Columbia Fire Underwriters until a few
months ago. He has recently organized a
general agency, representing several com­
panies in Nebraska and adjoining states.

September 1931

Politeness

Lost Time

They Wanted Shot

What a pity if politeness is tinged with
self-interest!

Time is never so precious as when we
have to pay fo r it.
The profiteer’s wife gave a. musical eve­
ning. She was uneasy at the beginning
because the music didn’t start. She went
to the conductor of the orchestra she had
engaged and said:
“ W hy don’t your men begin to play ?”
“ Oh, they are tuning up.”
“ Tuning up? W hy are they doing it
now? I ordered you a week ago.”

Zeke, Tim and Joe, three timid boys,
entered the village hardware store. The
rather gruff proprietor said to the oldest,
“ What do you want, Zeke?”

The motorist had lost his way on a
country road. Hailing- the first pedestrian
he overtook, he asked the way to Penville.
“ I don’t know that I can explain it very
clearly,” replied the pedestrian, “ but if
you’ll take me in your car I ’ll point it out
to you as we go along.”
“ Good,” said the motorist. “ Jump in.”
“ First,” directed the man, as he took his
seat, “ you drive straight ahead fo r about
two miles.”
When the two miles had been traversed,
he continued: “ Now, if you’ll drop me
here, I can show you the rest o f the way
without going along. Just turn around
and go back three miles and there you
are.”
“ W hy didn’t you tell me that in the first
place instead o f taking me two miles in
the wrong direction?” demanded the mo­
torist.
“ I didn’t want to hurt your feelings
right away by telling you you were going
the wrong way,” replied the other, “ and,
besides, I live here.”

College Education
Freshman: Matriculated.
Sophom ore: Sophisticated.
Junior: Emaciated.
Senior : Satiated.— S. C. Wampus.
A business man was near death. In
dictating his will to his lawyer, he said:
“ And to each o f my employes who has
been in my employ fo r 20 years, I give and
bequeath $50,000.”
“ But,” remonstrated the lawyer, “ you
have been in business only 19 years.”
“ Ah, I know that, but it will be good
advertising.” — Shelly Oil News.
A stout woman drove up to a filling sta­
tion— “ I want two quarts of oil,” she said.
“ What kind, heavy?” asked the at­
tendant.
“ Say, young man, don’t get fresh with
me,” was the indignant response.
Magistrate (to prisoner)— “ How big
was the brick you threw? Was it as big
as my head?”
Prisoner (after period o f deep thought)
— “ Yes, your honor; but not so thick.”

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Federal Reserve Bank of St. Louis

“ A dime’s worth of BB shot, please.”
The old man climbed the ladder, brought
down the shelf box that contained the
air-rifle shot, made up the packet and re­
turned the box to the shelf above. Then he
asked the second boy, “ What do you want,
Tim ?”
“ A dime’s worth o f B B ’s, please,” was
the meek answer.

Guarantee
What constitutes a guaranteef is al­
ways a fair question.
An angry woman rushed into the regis­
trar’s office. In her hand she bore a
license. To the registrar she said:
“ Did yon, or did you not, issue this
license for marryin’ me to Albert Briggs ?”
“ Yes, I believe I did. W h y ?”
“ Well, what are you going to do about
it ?” she demanded, “ he’s escaped!”

No Need to Worry
“ Have you ever been sentenced to im­
prisonment?” the judge asked sympatheti­
cally.
“ Never,” exclaimed the prisoner, burst­
ing into tears.
“ Don’t cry— don’t cry,” said the judge,
consolingly. “ You’re going to be now.” —
Pathfinder.

Shore
A m os: “ Do you know what surrounds
the ocean, A nd y?”
A ndy: “ Sho,’ Amos, sho’.” — Amherst
Lord Jeff.

“ Why didn’t you say so before?” said
the old man, irritably, as he went for the
ladder again. He made up the packet as
before, and then turned to the third.
“ And do you want a dime’s worth o f
B B ’s too ?” he demanded.
“ No,” replied Joe, hesitatingly.
The old man climbed laboriously to the
shelf again and deposited the box o f shot.
Then he returned to the counter.
“ Well, my boy, what do you want?” he
demanded o f Joe.
“ A nickel’ s worth o f BB shot,” said Joe.

Bringing Up Children
Bringing up children “ by the book”
isn’ t alivays a pronounced success.
A nursemaid rushed into the presence
of her mistress and shrieked: “ Oh, my
goodness, ma’am, the twins have fallen
into the well. What shall we do ?”
The mother lit a cigarette and calmly
replied: “ Go to the library and bring me
the last number o f ‘Modern Motherhood.’
There’s an article in it on ‘How to Bring
up Children.’ ”

Worst Pun of the Year

Shocking!

Zoology Note: The penguin is might­
ier than the sword fish.— Northwestern
Purple Parrot.

“ W h i t h e r away, stranger. What
wouldst?” cheerioed St. Peter as he leaned
over the pearly gates.
“ Gosh, let me in,” muttered the wander­
ing soul o f convict No. 999, just released
from the electric chair. “ I just had the
shock o f my life.” — Lord Jeff.

Sounded Punny
Judge: “ Fine day, isn’t it?”
Prisoner: “ Please don’t pun, judge.” —
Wisconsin Ostopus.
In that worthiest o f all struggles— the
struggle fo r self-mastery and goodness—we are far less patient with ourselves
than God with us.— Timothy Titcomb
(J. G. Holland).

“ Those are my mother’s ashes in the jar
on the mantel.”
“ So she has passed on to the Great
Beyond ?”
“ Heck, n o; she’s just too lazy to look
fo r an ash tray.”

Northwestern Banker

September 1931

Anèex Qio ¿A d vertisers
A
A. B. A. C h e q u e s .......................................... 26
A m e r i c a n S a v i n g s B a n k & T r u s t Co.. 21
A m e r i c a n T r u s t e e S ha re C o r p ............. 42
A t l a s S e c u r it ie s C o m p a n y .................... 45

F i r s t N a t io n a l B a n k , C h i c a g o .............. 7
F i r s t N a t io n a l B a n k , M a s o n C i t v . . . . 69
F i r s t N a t i o n a l B a n k , S io u x C i t y . . . . 51
F i s h e r & C o m p a n y ...................................... 24
F o x C h e m i c a l C o m p a n y .........................
2
P o r t e r F o x & C o m p a n y ............................ 37

It

B a l l a r d - H a s s e t t C o .....................................
B a n k e r s T r u s t Co., D es M o i n e s .........
Ban kers Trust Company, N ew Y o rk
C it y ..............................................................
B a n k e r s ’ W a n t s ........................................
Geo. M. B e c h t e l & C o ...............................
C a r l e t o n D. B e h C o ...................................

38
61
26
50
35
28

C
C ed a r R a p i d s N a t io n a l B a n k ................
C e n t r a l N a t i o n a l B a n k & T r u s t C o.. .
C e n t r a l R e p u b l i c B a n k an d T r u s t Co.
C h a se N a t i o n a l B a n k ...............................
Chatham P h en ix N at’l B an k & Trust
C o .....................................................................
C ity N a t i o n a l B a n k ..................................
C o m m e r c i a l N a t i o n a l B a n k ....................
C o n s o l i d a t e d N a t i o n a l B a n k ................
C o n t i n e n t a l I l l i n o i s B a n k & T r u s t Co.

73
63
23
52

25
65
67
66
4

G

N

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 . . . 45
G e r l a c h - B a r k l o w C o m p a n y ................ 32

N o r t h e r n T r u s t C o m p a n y ...................... 54
N o r t h w e s t e r n N a t i o n a l L i f e I n s . C o . 48

II
H a ls e y , S tu ar t & C o ...................................
H a n c h e t t B o n d C o ......................................
John H a n c o ck M utual L ife Insurance
C o .....................................................................
W . D. H a n n a C o m p a n y ...........................
H o t e l F r a n c e s D r a k e ........................
H o t e l G o v e r n o r C l i n t o n ...........................
H o t e l H a r r i s o n ..........................................

o
41
38
49
31
50
44
34

44
40
74
22

J

D i s t r i b u t o r s G r o u p ................................. 3 3
D r a k e H o t e l ................................................. 5 9 J a c k l e y - W i e d m a n & C o m p a n y .............
D r o v e r s N a t i o n a l B a n k & T r u s t C o.. 27
D u t r o & C o m p a n y ...................................... 4 3
K
K n e e l a n d & C o m p a n y .............................

E p p l e y H o t e l s C o m p a n y .........................
F
F i n a n c i a l A d v e r t i s e r s A s s ’ n ................
F i r s t I o w a S ta te T r u s t & S a v i n g s
B a n k ............................................................

6
68

42

40

L,

43

Geo. L a M o n t e & S o n ..................................
L a m s o n B r o s ..................................................
L a n s f o r d & C o m p a n y ...............................
L ive S tock N ational Bank, O m a h a ..
L i v e S t o c k N a t i o n a l B a n k , S io u x C ity

O m a h a N a tio n a l B a n k

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

62

P e o p l e s T r u s t & S a v i n g s B a n k ............
P h i l a d e l p h i a N a t i o n a l B a n k .................
P r i e s t e r , Q u a i l & C u n d y ...........................

66
57
39

P

R

T

I n v e s t o r s S y n d i c a t e ...............................
I o w a B o n d C o r p o r a t i o n .........................
I o w a - D e s M o in e s N a t i o n a l B a n k . . . .
I o w a L i t h o g r a p h i n g C o ..........................

n

E

M
M a s o n C it y B r i c k & T i l e ........................... 2 -t
M e r c h a n t s N a t i o n a l B a n k .........................
5
M id la n d B a n k L t d ........................................... 58
M u e h le , R e a m & M c C l a i n ........................... 50

R o y a l U n io n L if e I n s u r a n c e C o . . . . .

S
S a r g e n t & G r e e n l e a f I n c ............................. 36
S e c u r i t y N a t i o n a l B a n k ........................... 68
S ic k l e , N a s t & C o m p a n y . . . .................... 34
S m it h , B u r r i s & C o m p a n y ........................ 30
S t o c k Y a r d s N a t i o n a l B a n k ................. 55

V
V a l l e y N a t i o n a l B a n k ................................

26
40
37
54
64

THE NORTHWESTERN BANKER AND THE TERRITORY IT COVERS
555 Seventh Street, Des Moines
C L IF F O R D D E P U Y
Publisher

R. W . M O O R H E A D
E d itor

G E R A L D A . S N ID E R
A ssocia te Publisher

L. D. V A N D O R A N
A sso cia te E d itor

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

W M . H. M A A S
V ic e President

J. A. S A R A Z E N
C irculation M anager
C hicago O ffice: W m . H. Maas, 1221 F irst N ational Bank B ld g., Phone Central 3591
N ew Y ork O ffice: Frank P. Sym s, 19 W e s t 44th St., Suite 412
M ilw aukee O ffice: 110 E. W isco n sin A ve., Phone D a ly 6154
M in n eap olis O ffice: Frank S. L ew is, 840 Lum ber E xch an ge, Phone A tla n tic 6458
O fficial P u b lica tion o f
T H E S O U T H D A K O T A B A N K E R S A S S O C IA T IO N
T H E I O W A F A R M M O R T G A G E A S S O C IA T IO N
T H E I O W A I N V E S T M E N T B A N K E R S A S S O C IA T IO N

orthw estern B anker
Digitized forNFRASER
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Federal Reserve Bank of St. Louis

S eptem ber

1931

70

AV

W a l l a c e - H o m e s t e a d C o m p a n y ............
W h i t e - P h i l l i p s C o . I n c ...............................

m

P ublish ed by D e P u y P u b l is h in g C o m p a n y

46

50
44

O R G A N IZ E D

MEMBER

1 8 7 7

FEDERAL RESERVE


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Federal Reserve Bank of St. Louis

° ^ /V E C T \ ° ^

f I 'HE banking pioneers who established
this institution back in the seventies
were men who tempered their enthusiasm
with sound business judgment and their
caution with ambition and determination.
They visioned Cedar Rapids as an indus­
trial, commercial and banking center, but
erected their “castles in the air11upon solid
foundations.
These ideals have been retained during
the entire life o f the Cedar Rapids Nation­
al. It is still a bank rigidly conservative
in safeguarding the interests of its deposit­
ors, but with a service as modern as to­
morrow. It’s the kind of bank where you
can find both unquestioned security
and forward-looking cooperation.
s
Glenn M. Averill, Pres.
E. M. Scott, Vice Pres.
C. C. Kuning, V. P.
and Cashier
Van Vechten Shafler,
Vice Pres.
Geo. F. Miller, V. P.
and Trust Officer
Marvin It. Selden,
Vice Pres.
Assistant Cashiers
Peter Bailey
Bertha M. Wolf
Geo. W. Swab
Maud W. Carpenter
It. D. Brown
O. A. Kearney

C ed ar T^apids National Dank
Cedar T^aj3ids,Io\*)a

IOWA Leads in Literacy
99-54% of the people of Iowa are literate—
the highest percentage of literacy of any state
in the Union!
One child for every four persons attends
school, college or university. The average for
the United States is less than one to five.
A m b itiou s, progressive, eager to keep
abreast of the most advanced methods in
industry, commerce and scientific farming,
Iowans have provided for themselves unsur­
passed educational facilities. Expenditures
for education in this State average $107.24
per pupil per year— which is $12 more per
pupil than the national average.
Recognizing the importance of diversifica­

tion for a stable source of income— Iowans
are constantly developing new opportunities
for profit. They are building up the State’s
many diversified manufactures as rapidly as
its agriculture. The output 'of Iowa’s facto­
ries is increasing at the rate of $60,000,000
a year.
This Bank has been identified closely with
Iowa’s progress for the past 56 years. To
bankers and business men, this rich back­
ground of experience and the influential and
far-reaching contacts thus established are
assurance of authentic data on Iowa condi­
tions and prompt service in the handling of
all correspondent duties.

Correspondent matters requiring able representation in D es Aioines receive, at this Bank, immediate
and undivided attention from responsible officers of your selection. Your business is cordially invited.

Io w a - des Moines national
fir Trust Company


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Federal Reserve Bank of St. Louis

^Affiliated ’with

NORTHWEST

BANCORPORATION

bank