Full text of The Northwestern Banker : September 1935, 40th Year, Number 578

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Federal Reserve Bank of St. Louis

Cedar Rapids Da

Servicing cÀll I ou)a
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MERCHANTS
N A T IO N A L B A N K
O FFIC ER S
Chairman, Janies E. Hamilton; President, S. E. Coquillette; Vice Presi
dents, H. N. Boyson, Boy C. Folsom, Marvin B. Selden; Vice President and
Cashier, Mark J. Myers; Vice President and Trust Officer, George F. Miller;
Assistant Cashiers, Fred W. Smith, B. W. Manatt, L. W. Broulik, Peter
Bailey, B. D. Brown and 0. A. Kearney.

C e d a r R ap id s

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Federal Reserve Bank of St. Louis

Io w a

N o r th w e s te r n B a n k e r
D e s M oines
T h e O ldest F in a n c ia l Jo u r n a l W est o f th e M ississip p i
SEPTEM BER, 1935

Num ber 578

40th Year

IN THIS ISSUE
Page
Across the Desk from the P ublisher.............................................. 4
Frontispiece— “Rosette” ......................................... Irene P atten

Follies of Federal F in an ce...............................Orval W. Adam s

South Dakota P re sid e n t....................................................................

Selling the B ank’s Services D irec t............................ C. L. Price

News and V ie w s...................................................Clifford De-Puy 10
The Teller— and the P ublic.................................A. T. Donhowe 11
Capital Stock Tax R e tu rn s............... Gray, H unter, Stenn Co. 12
F. A. A. Convention P ro g ra m ......................................................... 13
Here and There in Io w a......................................... J. A. Sarazen 14
A “Land of Milk and Honey”— and M oney................................. 15
The Insured Mortgage Loan for Bank
In v e s tm e n t............................................W illiam A. Bradley 19
The Flourishing Trade of F o rg e ry ......................H arry Haller 27
South Dakota N ew s..................................................................
N ebraska N ew s........................................................................
Minnesota N ew s........................................................................
N orth Dakota News. ................................................................
Iowa N e w s .................................................................................

31
33
35
39
41

C L IF F O R D D E PUY
Publisher
H. H. H A Y N E S
Editor

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

F. S. L E W IS
Special R epresentative
511 E ssex B uild ing
M inneapolis, Minn.
T elephone, Bridgeport 2523

FR A N K P. SYM S
V ice President
330 W e st 42nd Street
Phone Bryant 9-5491
N ew York

Member, Audit Bureau of Circulations

J. A. SA R A Z EN
C irculation M anager

Member,
Financial Advertisers Association

Northwestern Banker, published monthly by the De Puy Publishing Company, Inc., at 555 7th Street, Des Moines, Iowa.
Subscription, 35c per copy, $3.00 per year. Entered as second-class matter at the Des Moines post office. Copyright, 1935.
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Federal Reserve Bank of St. Louis

Septem ber 1935

cro ss hne D esI^
rom
the Pu blisher

S t a te Banks
In the Au£ust issue of
the N o r t h w e s t e r n
Make
*
B anker I referred to an
Good snow ing article by Marc A Rose?

ju st as rapidly as the tru e picture is presented of
the progress, the development and the improvement
which is being made by the banks of the country
today, both state and national.

published in the magazine Today, in which he said,

“ A bank has to earn money or eat up its capital.
A great many small banks are doing that—per
haps as many are in the red as in the black.”
I took exception to th a t statem ent because I did
not believe th a t 50 per cent of the sm aller banks of
the country were in the red. I believed th a t most
of them were showing an excess of profits over their
expenses.
In order to prove this statem ent, I wrote a letter
to the banking departm ents of a num ber of states
and asked them to give me the num ber of state
banks reporting expenses in excess of profits as of
Ju n e 29, 1935.
The reports which I received included 2,510 state
banks of which only 151 or 6 per cent showed ex
penses in excess of profits as of the above date.
Thus proving conclusively th a t Mr. Rose d id n ’t
know w hat he was talking about.
The reports from the various state banking de
partm ents were as follow s:
No. of
No. Reporting Expenses
State
Banks
In Excess of Profits
Nebraska ................. 299
2
M innesota ............... 473
8
Kansas ..................... 540
4
91
Wisconsin ............... 522
N orth Dakota ......... 140
39
South Dakota ......... 148
10
Iowa .......................... 536
7
2,658

161

Much of the unsatisfactory public attitude
tow ards banking has resulted through ju st such
m is-statem ent of facts as Mr. Rose im plied in his
article.
A better attitu d e tow ards banking will develop

N orthw estern B anker

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Federal Reserve Bank of St. Louis

Septem ber 1935

A dm its
The governm ent has gone
G overnm ent int0 the loanin£ business on a

/n
. .
dozen different fronts.
C o m p e titio n
Tllis is competitive w ith the
loans of banks and of individual capital.
A t the same time, the adm inistration says to
banks th a t they should make more loans to stim u
late more business although the governm ent is m ak
ing loans through its various bureaus which in
creases the competition w ith private capital.
This point about competition was brought out by
Jesse H. Jones, chairm an of the Reconstruction
Finance Corporation when he s a id :
“ Every governm ental loan to industry competes
w ith private capital and it is for congress to deter
mine how long it wishes such loans m ade.”
I am surprised th a t any governm ent official
would make such a statem ent but I congratulate
Mr. Jones upon his frankness, to say nothing of the
tru th of his remarks.
The sooner th a t congress gets out of its rubber
stam p complex which it has had during the session
ju st closed, and puts an end to m any of the various
lending functions of the government, the better it
will be for banking and for business as a whole.

Provisions
of the N e w

The maan provisions of the
new banking bill w h i c h
t>
R*11 emerge(l following the report
an m g
I
0£ £be conference committee of
both branches of congress, include the following
item s:

1. The present deposit guarantee plan covering
deposits up to $5,000 is made permanent.
2. All insured banks with average deposits of

10.

$1,000,000 or more must become members of
the Federal Reserve System by 1942, in order
to continue their status as insured banks.
The Federal Reserve Board will be known
as the Board of Governors of the Federal
Reserve System.
The seven members of the board will be
appointed by the President for terms of 14
years—the Secretary of the Treasury and
the Comptroller of the Currency will no
longer be ex-officio members as they now are.
A Chairman and Vice-chairman of the Board
of Governors will be designated by the Presi
dent for terms of four years.
Open market operations of the Reserve
Banks are to be controlled by a committee
consisting of the seven members of the Board
and five representatives of the Reserve
Banks.
The executive heads of the Federal Reserve
Banks will be known as ‘‘Presidents” in
stead of ‘ ‘Governors ’’ and will be chosen by
their boards of directors subject to the
approval of the Board of Governors.
Present reserve requirements for members
bank cannot be lowered but can be increased
up to 100 per cent by the board, which will
also have power to disapprove or alter re
discount rates proposed by the Reserve
Banks.
Federal Reserve Banks will be permitted to
make loans on paper otherwise described as
ineligible with a provision that such loans
shall not run for more than four months and
that an interest penalty of not less than onehalf of one per cent shall be added. Such
loans may be made regardless of whether the
borrowing bank has first exhausted all of
its eligible paper.
National banks will be allowed to make real
estate loans up to 50 per cent of the ap
praised value of the property for periods up
to five years.

The provision of the new law in which most state
banks are vitally interested is the one requiring
them to become members of the F ederal Reserve
System by 1942 if they wish to continue as insured
banks assuming th a t th eir average deposits are
$1,000,000 or more.
In the original d ra ft of the bill, state banks were
required to join the F ederal Reserve System by
J u ly 1st, 1937. Thus the time lim it has been ex
tended five years.
I t is to be hoped th a t before th a t time arrives this
featu re of the bill will be elim inated entirely as

membership in the F ederal Reserve System should
not be made compulsory for any reason, and cer
tainly not in order to include F D IC membership.
The Pacific Coast states
have long been known for
th eir developm ent of sta te
wide branch banking and I
was therefore especially in te r
ested in reading in the annual address of F red erick
Greenwood, president of th e Oregon B ankers
Association, th a t he did not believe there would
be any ra p id grow th of branch banking in the
country d u rin g the coming years, b u t on the
o th er hand, did believe, “ T hat fo r m any years
to come w ell-m anaged independent banks will
continue to serve their respective communities and
will be able successfully to compete w ith branch
bank organizations. I understand th a t there is a
movement on foot in this state looking tow ard the
form ation of an independent bankers association.
The viewpoint of the u n it banker is in m any p a r
ticulars different from th a t of the branch banker,
and it m ay be p ro p er th a t our u n it bankers should
form an organization as they have in other states,
to consider th eir p a rtic u la r problem s.”
The governm ent itself has ' already greatly in
creased its dictatorship over the banking business,
but so far, banking and the country has success
fully escaped a central bank. I hope th a t we may
continue to avoid such a dilemma through nation
wide branch banking.
Speaking fu rth e r on this point, Mr. Greenwood
says, “ There are some who predict a ra p id devel
opment of branch banking on a nation-wide basis
during the next few years and who point to Great
B ritain and Canada as examples of w hat we should
try to achieve as rapidly as possible in this coun
try . I do not share this view. I th in k it would
be extrem ely u nfortunate if we embarked hastily
on a nation-wide branch banking program . The
biggest problem in developing a branch bank or
ganization is th a t of personnel and it is question
able whether we have in this country more th an a
very few bankers of sufficient experience or capa
bility to direct the policies of a huge commercial
bank serving all p arts of the co u n try .”
The independent banker today has survived the
greatest economic storm in our co u n try ’s history.
He is a seasoned m ariner. He knows how to use
the chart and compass better th an ever before.
He knows his community. He knows the problems
of his individual customers. He is in a position to
serve adequately and well his depositors and his
borrowers. He needs no branch banking oligarchy.

Independent
Banks W i l l
Successfully
Com pete

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Septem ber 1935

ROSETTE”

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Federal Reserve Bank of St. Louis

Septem ber 1935

Fo llies
of Federal Finance
The ^Forgotten M a n * is the M an W h o W ill
Even tu ally Pay the Bill
AM conscious of the responsibility
resting upon anyone who assumes to
discuss matters relating to federal fi
nance in the face of all the theories that
have been and are being broadcast by ouinational leaders.
In years past we have been considered
as business leaders and advisers in our
several communities; our judgment has
been sought ; it has been assumed that we
owed a duty to our depositors to advise
with them respecting matters supposed to
he more within our knowledge than with
in the knowledge of the average business
man. If such a duty was ever owed then
today it is in a peculiar sense imposed
upon us by reason of the present condi
tion of affairs in this country.
The public looking to surface condi
tions, listening to the declamations of ad
ministration spokesmen, is disposed to'
hold the banker responsible for much that
cannot justly be charged to him. On the
other hand the banker has, I think, been
open to criticism for remaining silent
when he should have spoken, inactive
when he owed to his depositors a duty
to advise with them concerning matters
vitally affecting their interests, a duty to
oppose the doing of acts which of neces
sity operated to the peculiar injury of the
depositor in the bank.

Three Questions
Let us begin by considering three ques
tions :
First : Why have bank deposits grown
to almost unprecedented amounts?
Second : Why has interest paid on de
posits dropped to a new low level?
Third : Why aren’t these bank de
posits, the accumulated funds of the
people, loaned to private concerns to start
once more the wheels of industry ?
These are all practical, pertinent ques
tions; they are interrelated, and both the
public and our depositors are entitled to
have an answer to them from us.
It is true that bank vaults are filled with
accumulated deposits and Ave knoAv why.
Mr. Average Citizen has unemployed
money. Why does he put it in your bank
—why does he not invest it elseAvhere?

B y ORYAL W. ADAMS
V ice P resident
Utah State N ational B a n k
Salt L a k e C ity

Excerpts from address before
1935 convention of the W ashing
ton State Bankers Association.

Simply because he has faith that his
money in your bank will be returned to
him unimpaired—both principal and in
terest. He entrusts his money to you
noAv for the very reason he took it away
from you a few years ago. Now he has
confidence in you. Now he hesitates to
invest where once he felt he could do so
with complete safety.
We bankers are the custodians of the
savings which these citizens are placing in
our hands. What are we doing Avith their
money ?
Most of it we are investing in govern
ment bonds. In fact, about sixty per cent
of the bonds issued by the federal 'govern
ment are being taken up by the banks,
and at increasingly lowering rates of in
terest. The banks are the one dependable
reservoir upon Avhich the federal govern
ment is noAv draAving to finance its colossal
and amazing operations.
In the fact that of the deposits entruster to us part has been loaned to
the government at low interest rates, and
the remainder is lying idle in our vaults,
lies the answer to the question as to why
rates of interest on deposits have been re
duced to a neAV I oav level.
Loans

But, asks the public, AA?hy not loan these
funds to industry?
The answer is a dual one: You need
not be told that private enterprise cannot
compete with tax supported governmental
agencies, that the existence of such
agencies restricts the field for private en
terprise, that you cannot loan money in
competition with the government. Like-

vvise, you need not be told that business
cannot function without a knowledge of
costs and market. Today business is
Avithout such knowledge. It cannot antici
pate what is going to happen, Avhat field
Avill be left to it, Avhat its costs will be,
directly in the conduct of its business, and
indirectly in the proportion of the ex
penses of government to be saddled upon
it. That is why business men of experi
ence and ability hesitate to borrow and
in fact refuse to borroAV money. There is
no incentive for them to increase their
obligations. They do not dare add to
their present responsibilities. In the ag
gregate they are marking time Availing to
see Avhat is going to happen. That is
why the savings of the people lie idle
in our vaults. That is Avhy Ave, as custo
dians of their funds, are circumscribed
in our lending poAvers, for us bankers
Ave are determined to be worthy of the
trust reposed in us, to make of our banks,
despite their reduced activities, a refuge
of safety for the man with the dollar. We
are more than ever determined to do so
now that our banks seem to be the last
refuge left to that man.
Protect Depositors
Politicians are given to obscuring a fact
of Avhich the public should be reminded,
that the only money we bankers have to
lend consists of our OAvn capital and the
deposits of the people, and that for every
dollar of our capital Ave hold approxi
mately $9.00 of depositors’ money.
It is our first duty to protect the money
of our depositors. Profits must be sacri
ficed, the interests of our stockholders be
subordinated to the performance of this
first duty. We must not be coerced or
fooled into again doing acts or adopting
lending policies which sad experience has
taught us can lead to but one result loss to the depositor, loss to the stock
holder, injury to the entire country.
“Forgotten M a n '
We are sometimes moved to tears by
the lamentations of politicians concern
ing the sad fate of some unidentified for
gotten man. The politician does not
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Federal Reserve Bank of St. Louis

Septem ber 1935

point out to us just who this man is, for
whose welfare he professes such concern,
and we may have come to believe that he
was after all a myth. If so, we were mis
taken. The forgotten man actually exists.
He is among us in flesh and bone. There
are some 56,000,000 of him in this country.
He is the unknown defenseless bank de
positor. The man who represents the
very backbone of our citizenry.
It is this man who has been directly
and adversely affected to the extent of
one-half of his income from deposits in
banks by the policies of government; it
is this man who must still repay in large
part the borrowings of government. The
forgotten man is the bank depositor, the
man who must ultimately pay the bill.
This man has the right to look to us
as bankers to protect him and his savings
to the best of our ability. What does the
future hold for him?
To answer this, even in a tentative way,
requires that we look both at facts and
conditions existing today, and at proposed
changes in the banking system.
Seem ingly No E nd
There is nothing today to suggest any
approach to the end of excessive govern
mental expenditures, nothing to suggest
an early return to a balanced budget,
nothing to suggest the abandonment by
government of the visionary and socialis
tic schemes in which it has indulged in
recent years, nothing to suggest restora
tion of confidence and consequent revival
of private industry.
Increased returns to depositors in banks
can only come from increased earnings
by banks.
We bankers have stood the loss of good
will resulting from the reducing of in
terest and the imposition of service
charges, though powerless to prevent
either, without endangering the security

of our depositors. We owe it to our
selves to make the truth known, we owe
it to ourselves to make known to our de
positors the direct and special burden
cast upon them as a result of the low
interest policies of government, as a re
sult of government competition with
banks, and as a result of that attempted
mixture of reform and recovery which
has delayed recovery and rendered “re
form” obnoxious to the great majority of
our self-reliant citizenry.
Absurd as it is to assume that banks
turn voluntarily from high yield loans
to low yield investments, we have been
repeatedly charged with failing to do our
part towards recovery in industry, and
failure to defend ourselves, to make
known the real facts, has resulted in a
more or less general belief on the part
of the public and perhaps even on the
part of a considerable number of our de
positors that we have wilfully refrained
from doing our part,
As I see the facts, only a prompt and
complete about-face can save the day for
our depositors. I believe the present
policies of government and proposed
changes in the banking laws are leading
us inevitably to another national banking
crisis. I consider it our duty to our de
positors to state the facts and point to
the risks being run in as clear and simple
language as possible:
The continuance of excessive govern
mental expenditures, the continuance and
proposed increase in the volume of secur
ities of government purchased by both
member and Federal Reserve banks, the
subjection of the assets of sound banks
to the burden of supporting not only
badly managed banks but also banks
which are being slowly strangled as a
result of bad government, the proposed
extension of bank credit in long term real
estate loans without regard either to

South Dakota President
(See Cover P hoto )
EORGE C. FULLINWEID’ER, president of the National Bank of Huron, South
Dakota, and president of the South Dakota Bankers Association, started his
banking career as a bookkeeper in the First National Bank of Estherville, Iowa, ’way
back in 1891. In 1897 he came to Huron as manager of the Standard Savings Bank.
This bank later changed its name to the National Bank of Huron, and Mr. Fullinweider has been its president since 1911.
He has served four terms as a member of the Executive Council of the South
Dakota Bankers Association during the fiscal years 1901, 1902, 1929-32 and from
1932-35. During the fiscal year of 1903-04 he was secretary of the Association, and
he served as vice president during the fiscal year 1934-35, following which he is
serving as president.
He is the South Dakota member of the American Bankers Association nominating
committee for the year 1935-36.
Mr. Fullinweider is a past president of the Huron Chamber of Commerce, past
president of the Rotary Club and Past Exalted Ruler of the Elks.

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Septem ber 1935

liquidity or proper security—all these
point in the one direction, and if con
tinued, can lead but to the one end.
During the past three years the Con
gress has appropriated almost as much
money as was expended by the federal
government from its inception until the
commencement of the first term of Presi
dent Wilson, a period of one hundred
twenty-four years.
There must be a limit somewhere to
taxes, and when expenditures exceed re
ceipts by more than one-third, the limit
of expenditures also has been reached.
The continuance of excessive govern
mental expenditures cannot but delay the
revival of private enterprise and every
act tending to prevent such revival, every
act which tends to increase the public
debt, is an act tending toward outright
inflation of the currency. The larger the
public debt, the greater the temptation to
wipe it out by printing fiat money, the
greater the danger to our depositors.
Every act of government which ignores
the prime necessity of encouraging an
early revival of private enterprise must
be condemned.
Consider now the effect of an increase
in the holdings by banks of the obliga
tions of government.
In recent years sixty per cent of neAv
government borrowings have gone into
and remained in the hands of banks. This
could have occurred only because of the
confidence of bankers in the obligations of
government, and because the banks were
unable otherwise to make advantageous
use of their resources.
By rendering impossible loans in com
petition with government agencies, the
government has forced the commercial
banks to limit their activities largely to
serving as a clearing house for their
customers, and to speculation in govern
ment bonds. While a stabilization fund
was employed to maintain a fictitious
value for obligations of the government,
opportunity was afforded commercial
banks to make a profit out of this specu
lative business, but that such profits are
those which should be prohibited to com
mercial banks is elementary. Govern
ment bonds, as a secondary reserve, were
justified in the past because of the limited
volume of such bonds in comparison with
the market therefor. When the volume
so far exceeds the market that in fact no
market exists, the justification for hold
ing such bonds fails. The simple fact is
that the commercial banks today are in
vestment bankers dealing exclusively in
obligations of the United States, which
obligations they are unable to market be
cause no investment market exists for
them. They are therefore violating that
principle of banking which says that the
funds of depositors payable on demand
should not be invested in long term non(Turn to page 29, please)

"Now Is the Time— the Best Possible Time-—for a Bank to
Do An Effective Job of Selling"

SELLING
T he Bank 's Services
direct
B y C. L. PRICE
C. L. PRICE

A ssistant M anager, B u sin ess E xten sio n D e p a rtm en t
C ity N atio n a l B a n k & T ru st C om pany, Chicago

public which offers a market for our insti
tutions’ services? Just where do we need
to start our selling task? This is impor
tant, for by starting at exactly the right
place we are much more likely to make the
sale.
Banks today have something real to sell.
Much as we dislike to admit it, the public
lacks that broad confidence in banks and
bankers which was at one time almost uni
versal. A few years ago we would safely
start our sales approach whether face-toface or by mail or in our advertising, by
talking first and solely of the services we
were offering. No longer is this possible—
not if we want to get the business. Before
we do anything else, we must win that
prospective customer back to believing in
the integrity, if not of all banks, then of
our particular institution. We must con
vince him that we are not only safe—as
guaranteed by the FDIC — but also that
our management is sane and sound, honest
and competent. In short, that ours is the
very kind of bank that he has always pre
ferred doing business with and that he,
in this cynical atmosphere in which he
lives, had practically assumed was no
longer to be found.
First R equisite
Once we have the prospective customer
I
must point out that the first requisiteconvinced on this point, we are unlikely to
in selling is to have something to sell. As have a great deal of trouble selling the
trite as this statement sounds, strangely specific service. Remember this : The big
enough the point on which many bank sell gest hurdle to get across in these times is
ing efforts flounder is this very one. Eor the typical prospect’s conviction that
unless you have something to sell that is banks are mismanaged and hampered by
worth buying, unless you are using as your petty rules and regulations which retard
sales arguments those advantages which the efficient and expeditious transaction of
make the prospect eager to do as as you business. Just between ourselves, in the
want him to, your selling will not get to practical privacy of this room, there is
first base.
something of truth in this aspect of exces
Just what have we, as bank people, that sive ruling and regulating, at least as it
we can sell effectively to that section of the affects se’ling a bank’s services.
ELLING the bank’s services is. after
all, one of those functions without
which the institution could not sur
vive. Customers will die, despite the bene
ficial effect upon longevity of having their
accounts in our bank. They will move
away, no matter how inferior the banking
services offered them in their new location.
They will dwindle down and close out
though more of them would doubtless fold
up were it not for the sage advice obtain
able through our officers. And, unbeliev
able as it is to all of us, they will move their
accounts to other competing banks under
the hallucination that our service was less
than pluperfect.
So, even if our only ambition is to keep
our present size and to avoid drying up,
we must sell to replace the customers whom
time takes from us. Moreover, we all of us
have two further needs to obtain new cus
tomers : Most of us want to increase in size
and in earnings; all of us, whether or not
we consciously think of it in these terms,
have a good many accounts of marginal
desirability which we should like to hedge
by new accounts of unquestionable sweet
ness.

Too M any Questions
Suppose a man walks into a bank today
and announces his wish to open a commer
cial account. What happens? Well, the
rail officer asks him more questions than
you have to answer in getting a passport..
He listens to a request for references, to
a setting forth of rules and regulations as;
to balances, activity, charges, and so forth.
In fact, unless the rail officer is a model of
tact or unless our applicant is as spineless
as Caspar Milquetoast, it is a marvel if
they do not part hating each other within
the first five minutes.
Mind you, I am not advocating a form
less, ruleless, profitless kind of banking.
We must have rules, we must make
changes, we must have some specific goal
toward which we are working. Rather, I
am suggesting an attitude of mind which
will lead to a selling atmosphere. Where,
for example, a teller confronted by the
check of a good customer who has ob
viously made an unintentional slip in the
form of his authorized signature, will use
his own good judgment and pay the cheek,
rather than lean on his rule book. An
atmosphere where the standard response to
a new suggestion is, “Well, why not?”
rather than our old friend, “Yes, but . . .”
Banking should not be merely a business.
Properly it is a philosophical point of de
parture, an economic viewpoint, and a way
of life. Whether an individual be con
nected with a bank as director, officer, em
ploye, or customer, the first test of his de
sirability should be his conformance to this
philosophic, economic way of life. As the
simplest possible example, does he save
and invest, or does he live beyond his
means? If he is thrifty, he may properly
belong in banking as customer or some
where in the organization. If he is imN orthw estern B anker

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Septem ber 1935

H)
provident, then certainly his proper niche
is elsewhere.
The smallest account of an honest,
thrifty, resourceful day laborer is poten
tially valuable to any bank no matter how
large. Unfortunately, in this world where
we can seldom live up to our ideals, it is
necessary that Ave modify our abstract at
titude by the concrete need for a specific
profit. So of necessity we fail to seek out
some business Avhich in our hearts Ave know
Avill eventually be worth having. But, how
ever we must sacrifice to opportunism, let
us us never forget that the real, long-term
criterion is not the size of an account or
even the amount of clerical work involved
in handling it, but rather the customer’s
acceptance and demonstration of the prin
ciples which have built up all of the gen
uine Avealth which our civilization repre
sents today.

Three Bratiches
There are three branches to the yearround sales force which does the most ef
fective job of selling the bank and its
services. Of these, the first two exist in
every bank of Avhatever size — large or
small. The third exists in formal setup
only in larger banks, but its functions are
usually performed by some senior officer
(or by the senior officer) in smaller insti
tutions.
First of these sales divisions is made up
of the bank’s customers. When any welloperated bank analyzes the reasons Avhich
have brought new customers to it, whether
savings, commercial, trust, safe deposit, or
whatnot, the one reason which invariably
accounts for an overAvhelming majority of
all of the new business is the recommenda
tions given by old customers. Even if you
(Turn to page 32, please)

PEAKING OF FEDERAL TAXES
—or perhaps I shouldn’t speak of
them—you of course knoAv that the gov
ernment has so little confidence in its own
bonds that it Avill NOT accept them in
payment for federal taxes. UNCLE SAM
takes only cash and will not even accept
his own securities Avhen it comes to pay
ing the taxes.

you liaA^e not received a copy of the book
let, I know that Mr. Rabe Avould be glad
to send you one.
Of especial interest is the chart in the
back of the booklet showing the import
ant changes of the Federal Reserve Sys
tem in the Banking Act of 1935 under
Title II, and which became effective
August 23rd of this year.

IO H N J. R ASKOB, former chairman
of the Democratic National Commit
tee, does not believe in destroying the
form of government under which this
country, over a period of 150 years, in
spite of panics and depression, has made
greater progress than any other nation in
the Avorld.
“I should like to call upon every
leader,” says Mr. Raskob, “to rise to the
defense of the form of government under
which banking and industry have grown
and prospered Avith greater profit to
capital, labor and consumer than under
any other system of government in the
history of the world, and under which
every man and woman may Avork, earn,
saAre and acquire property and be pro
tected in the laAvful use of that property.”

ILLIAM G. RABE, vice president
of the Manufacturers Trust Com
pany of NeAv York, has just sent me a
very interesting booklet entitled, “An
alysis of the Banking Act of 1935.”
This is an up-to-date diagnosis of this
far-reaching piece of legislation and if

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Septem ber 1935

UDOLF S. HECHT, president of the
American Bankers Association, has
been definitely opposed to a central bank
and bases his opposition on the sad ex
perience this country has had on tAvo
former occasions when central banks were
organized.
“The bankers’ future in America,” says
Mr. Hecht, “would not be a promising
one if Ave were to turn back a hundred
years and experiment for a third time
with a central bank, and especially with
one whose stock would be OAvned entirely
by the government.”

RED M. BOWMAN, secretary of the
Kansas Bankers Association of To
peka, has announced the dates of their
nine group meetings Avhich begin at Val
ley Falls on October 8th and finish at
Parsons on October 22nd. Mr. BoAvman
very kindly invited me to be one of the
speakers at all of their group meetings
but previous engagements prevented me
from accepting his kind invitation.

HARLES F. COLLISSON, farm
editor of the Minneapolis Tribune,
expressed his appreciation of the North
western Banker by- saying, “What a
handsome paper you are getting out. It
is a pleasure to see how beautifully it is
printed and so full of good raw meat for
the ‘beef eaters’. That is a clever idea
of tipping in that beautiful three-color
frontispage in each issue.”

“THE INDEPENDENT BANKERS
OF OREGON” is the name of a neAv
bankers association in that state.
The Independent Bankers are those
Avho are not branch bankers, but this
new association will take over none of
the functions of the Oregon Bankers
Association, but will closely cooperate
with them except that the Independent
Bankers’ meetings would be devoted ex
clusively to their oavii problems.
The president of the Association, C. E.
WILLIAMSON, is cashier of the Bank
of Albany, Oregon. The secretary and
treasurer is WM. C. CHRISTENSEN,
vice president of the Commercial National
Bank, Hillsboro, Oregon.
“ 1") LEASE accept my congratulations
1 on the editorial in the August issue
of the Northwestern Banker entitled
‘Why Force Banks Into The Federal Re
serve’—it is Avell done.” MELVIN W.
ELLIS, president of the loAva Bankers
Association.

F YOU PAY ANY ATTENTION TO
THE STOCK MARKET, you Avill be
interested to knoAv that a ll listed stocks
on the New York Stock Exchange in
creased $8,000,000,000 from August, 1934
to August, 1935. The figures a year ago
being $30,752,000,000 compared Avith this
August of $38,913,000,000.
Incidentally, the all-time August high
Avas 1929 and amounted to $81,569,000,000
T. JAFFRAY, president of the and the August Ioav was in 1932 and Avas
. First Bank Stock Corporation of $20,494,000,000.
From August, 1932 to August, 1935 or
Minneapolis announces that the corpora
tion declared a dividend of 15 cents per a period of 3 years, the stock market
share payable October 1st to stockholders values increased $18,000,000,000, or 90
of record September 20th. This dividend per cent.
amounts to a total of $462,381.52, and
INFIELD JACKLEY, president
will be distributed to approximately 18,of Jackley & Company and a mem
000 shareholders. Added to the 10 cents
per share paid in April, the new dividend ber of the board of governors of the IoAva
Avill make a total of 25 cents per share for Investment Bankers Association, has an(Turn to page 48, please)
the calendar year 1935.

"It is estimated that our bank tellers alone deal with more
than 80 percent of our bank customers"

The Teller— and the Public
an opportunity to thoroughly study the
problem and to present his own ideas be
A ssistant V ice P resident
fore the class. It would also be a good
Central N ational B a n k and T ru st C om pany
plan to have the various bank officers visit
D es M oines
the class, giving talks on public relations.
Everything in connection with this class
should be well planned; an attendance rec
ord should be kept and any employe not
sufficiently interested in improving him
Promotions
self to attend these classes regularly
Even though every precaution be taken should be promptly removed from the
when promoting an employe, it is not teller’s cage. In addition to these classes,
enough that he be placed in a cage and an officer of the bank should be delegated
care taken to see that he is able to handle to have a talk with each individual teller,
his work so far as balancing his debits outlining policies in dealing with custom
and credits is concerned at the end of the ers. It might also be well to discuss bank
day. It is true we like to have employes policies with the employe so that he in
turn could talk intelligently with the cus
tomers about the different functions of his
bank. These important employes should
also be encouraged to enroll in public
speaking classes, thereby better fitting
themselves for advancement. He should,
of course, enroll as a student in the classes
offered by a chapter of the American In
stitute of Banking, continuing his studies
each year until he has acquired a certifi
cate. In other words, he should learn as
A Real Job
much as possible about banking. It is hL
The personnel officer in every bank has
duty to do this in order that he may effi
a real job. It is his duty to choose care
ciently represent his bank. In fact, the
fully all employes for each department.
bank teller should be given every possible
The most difficult is the selection of good
advantage for training for his particular
bank tellers as they should have certain
work.
qualifications that employes in many other
Public Servant
departments do not necessarily require.
Daily
the
bank
teller reflects his bank’s
Mr. Teller is a public servant and should
attitude, therefore he must always be
be selected with that thought firmly in
friendly and courteous. He can become a
mind and with the following qualifications
real asset, or a serious handicap to his em
considered: character, personality, ap
ployer. He is a public servant and at all
pearance, a willingness to serve, resource
times must conduct himself accordingly.
fulness.
A. T. D O N H O W E
When he closes the door of the bank at
It is usually the custom to have several
night, it does not mean that his responsi
employes who can be used as substitute
tellers and who can be called to duty when that maintain a good record in this re bilities end there. He must remember that
ever there is a temporary vacancy. This spect; our thought, though, in this discus wherever he goes, and whatever he does,
gives an ideal opening to try out several sion centers more on his attitude and abil there are people who know him and who
employes so that when a permanent va ity to deal with the public. When a teller judge accordingly. His behavior must be
cancy occurs the man best qualified may does not measure up to standard, it is up always becoming. His friendships, the
be chosen. Nevertheless, mistakes are to us to train him. It has been suggested contacts he makes, the impression he im
sometimes made because of friendship be that we conduct a special class for tellers, parts to those around him tend to help or
tween some officer and employe or because under the supervision of an officer, meet to hinder himself, as well as the bank he
of relationship. The fact that one is a ing twice each month for at least eight represents. He must remember that he
nephew of the bank president does not months in the year. The topics to be must at all times be loyal to his bank and
necessarily mean he will make a good bank taken up, of course, would include the its policies. It is needless to say that leis
teller. Therefore, it is of utmost impor more important duties in dealing with the ure time is an important factor. Does the
tance that the personnel officer have a free public. If the bank is large, it might be teller spend a part of that time bettering
hand, and that only those who are quali necessary to carry on more than one class, himself by study, proper recreation, selffied or who can be properly trained be as the enrollment should not exceed 15. improvement? Good health and a Avhole(Turn to page 16, please)
This would give each individual member
given these important posts.

EDERAL legislation has made a great
change in the attitude of the public
toward our banking institutions. The
Federal Deposit Insurance Corporation
law insuring deposits in banks has placed
all banks having a membership in this cor
poration on a par—although safety of de
posits is yet a fundamental principal in
the depositor’s mind. However, insurance
of deposits has relieved his mind in this
respect, and he now gives a great deal of
consideration to the bank with friendly
service.
We are particularly interested in quali
fying the personnel of our banks to deal
satisfactorily with the public. It is esti
mated that our bank tellers alone deal with
more than 80 per cent of the banking pub
lic. If this is true, more time and thought
should be given to the selection of em
ployes for this important work. Al
though the bank teller has various routine
duties, his main task is dealing with the
public, and employes for this work should
be so selected and trained that they will
truly represent their bank.

By A. T. DONHOWE

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Septem ber 1935

Capital Stock Tax Returns
A Comprehensive Explanation of How to Fill In
Government Form 707
CAPITAL STOCK TAX RETURN—Form 707—must be filed
for every corporation except three
classes of corporations which are exempt
as follows:
(1) Corporations specifically exempted
from tax under Section 101.
(2) Insurance companies subject to the
tax imposed by Section 201, 204 or 207.
(3) Any domestic corporation is ex
empt for the year 1935 if it did not carry
on or do business during a part of the
period from July 1, 1934, to June 30,
1935.
It is assumed that none of the member
banks are exempt under classifications
(1) or (2), and therefore each member
bank must file a return if it actually did
business for even one day during the
period from July 1, 1934, to June 30,
1935.
For corporations making their first re
turn, it is only necessary to fill out lines
1 to 9 inclusive, and 12 and 13 of page 1
of the Capital Stock Tax Return.
Line 9 provides for the original de
clared value of the corporation’s capital
stock as of the close of the income tax
taxable year ended subsequent to June 30,
1934, and on or prior to June 30, 1935.
Thus the date would be December 31,
1934, if the income tax Avas filed on a cal
endar year basis, or at the end of the fiscal
year, being the end of any month be
ginning Avith July, 1934, and ending with
June, 1935. In the case of a neAvly or
ganized corporation Avhieh does not have
an income-tax taxable year ended on or
prior to June 30, 1935, the value must
be declared as at the date of organization.
A corporation may declare as its orig
inal declared value of its capital stock,
any value Avhieh in its judgment is proper,
so long as the value is specific, unqualified,
and of the date required. In making the
original declaration it should be borne in
mind that the exemption of the corpora
tion from excess profits tax of 5 per cent
is dependent upon this declaration, the
corporation being allowed an exemption
of 12% per cent of the declared value or,
after the first year, 12% per cent of the
adjusted declared value, before the excess
jArofits tax becomes effective. It Avould
seem that the original declaration should
be of such size that 12% per cent of it
would at least equal the estimated taxable
profit of the corporation for a year.
For corporations which filed a Capital
Stock Tax Return for the year ended June
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Septem ber 1935

GRAY, HUNTER, STENN & CO.
C ounsellors on F ederal T axation
Illin o is B a n kers A ssociation

30, 1934, it is necessary to fill out lines
1 to 8 inclusive, line 10, and lines 12 and
13 of page 1 of the Capital Stock Tax
Return.
Line 10, the adjusted declared value of
entire capital stock is computed on page
2 of the return.
It is suggested that Schedule II on page
2 should be first completed as this schedule
gives the information necessary to com
plete Schedule I. Schedule II is a combi
nation of the capital stock accounts and
Schedule L, reconciliation of net income
and changes in surplus, as shoAvn by the
last income tax return.
On line 8 of Schedule II show the net
taxable income of the corporation as
shown on line 27 of page 1 of the last
income tax return.
On line 9 of Schedule II show the total
of any amounts in Schedule L of the last
income tax return appearing on lines
2(a), 2(b), 2(d), or 2(e) thereof. At
tention is called to the fact that the in
crease in cash surrender value of life
insurance and other similar credits should
show on line 11 rather than line 9 of
Schedule II.
On line 10 of Schedule II show the
amount appearing on line 2(c) of Sched
ule L of the last income tax return.
On line 11 of Schedule II show all other
credits appearing in Schedule L of the
last income tax return.
On line 12 of Schedule I I shoAV any
liquidating distributions, i. e., where a
corporation actually reduces its capital
by a payment to share owners.
On line 13 of Schedule II show divi
dends paid as shoAvn on line 15 of Sched
ule L of last income tax return, if these
dividends Avere declared during the in
come-tax taxable year ended on or prior
to June 30, 1935.
Include on line 16 of Schedule II the
amount shoAvn on line 27 of page 1 of
the last income tax return if line 27 in
dicates a loss for the year. If the
corporation shoAved a taxable profit on
the last income tax return, line 16 on
Schedule II would remain a blank as line
27 on the income tax return is shown on
line 8 of Schedule II.

On line 17 of Schedule II show any de
ductions disalloAved on the last income tax
return because they were incurred in
connection Avith non-taxable income. For
example any expenses in performing a
service, the compensation for which is
non-taxable income.
One line 18 of the Schedule II show the
total of items under 13 and 16 of Schedule
L of last income tax return.
Schedule I is completed as follows:
Fill in the declared Aralue as shown by
the first return for the taxable year ended
June 30, 1934, and then—
A ddLine 1—Amount shoAvn on line 5 of
Schedule II.
2— Amount shoAvn on line 6 of
Schedule II.
3— Amount shown on line 8 of
Schedule II.
4— Amount shoAvn on line 9 of
Schedule II less amount shown
on line 17 of Schedule II.
5— Amount shoA\m on line 10 of
Schedule II.
Deduct—
A—Amount shoAvn on line 12 of
Schedule II.
B—Amount shoAvn on line 13 of
Schedule II.
C—Amount shoAAm on line 16 of
Schedule II.

First National
Officer Dies
Philip Martin Riesterer, assistant vicepresident of The First National Bank o f
Chicago, died August 20 after a short
illness. He Avas born in Sandusky, Ohio,
February 25, 1875, and has been continu
ously connected with the First National
Bank for over forty-tAvo years, becoming
an official in 1928. He is survived by his
Av'ife, Janet (Turnbull) Riesterer, tAvodaughters, Mrs. W. D'. Heintz and Vir
ginia Riesterer, and sister, Mrs. Belle V.
Newhall. Mr. Riesterer Avas a Past Master
of Wheaton Lodge No. 269, A. F. & A. M.,
a member of Wheaton Chapter No. 242,
R. A. M., Siloam Commandery, Medinah
Temple A. A. O. N. M. S., Chicago, and
G-len Oaks Country Club.
Parent, concluding the recital of his
exploits: “And that, my boy, is Avhat I
did in the Great War.”
Son : “But Daddy, Avhy did they want
so many men besides you V’

F. A . A . Convention
O ffe rs Exceptional Program
President of the New York Stock Exchange, Comptroller of the Currency, Public
Relations Authority and Heads of Three Advertising Agencies to Speak
ERE it necessary to ballyhoo the
Financial Advertisers Association
Convention scheduled for Atlantic
City, September 9-11, it would not be
necessary to search beyond the names on
the program for material. The list con
tains the heads of two important bankers
associations and the incoming president of
the American Bankers Association, the
country’s number one public relations ex
pert, the president of the New York Stock
Exchange, the Comptroller of the Cur
rency, and the heads of three of the coun
try’s important advertising agencies.
They are :
Charles R. Gay, president of the New
York Stock Exchange.
Leslie G. MacDouall, president of the
New Jersey Bankers Association.
Frank F. Brooks, president of the Penn
sylvania Bankers Association.
Robert V. Fleming, first vice president
of the American Bankers Association.
•J. F. T. O’Connor, Comptroller of the
Currency.
Edward L. Bernays, authority on Pub
lic Relations.
H. B. LeQuatte, president of the Adver
tising Club of New York and president
of Churchill-Hall, Inc., New York.
Wilfred W. Fry, president of N. W.
Ayer Company, Philadelphia.
C. Munro Hubbard, president of Doremus Company, New York.

D epartm ent Sessions
These are all to be among the speakers
at the general sessions of the convention.
Specialists on various subjects will ad
dress a series of “brass tacks” department
sessions devoted to the technique of mer
chandising, advertising and publicizing
the various services of banking.
Mr. Brooks is expected to introduce the
public relations theme of the convention
with an address on “Merchandising of
Sound Economics.”
Mr. Fleming will speak on “The Spirit
of American Banking.”
Mr. Gay will discuss “Public Relations
and the Nerv York Stock Exchange.”
Mr. Bernay’s address will be on “Mould
ing Public Opinion.”
Comptroller O’Connor is expected to
present “A Code of Ethics for Banking.”

Mr. Fry’s topic will be “ What Shall We
Advertise ?”
The departmental sessions will cover
commercial banking, investment banking,
savings banking, and trust service.
The activities will really begin on Sun
day, September 8. Convention sessions
will be held all day each day from Mon
day, September 9, through Wednesday
afternoon, September 11, and will close
with the banquet Wednesday night at
which the Comptroller and Frank M.
Totton, vice president of the Chase Na
tional Bank, will be the guests and speak
ers.
All sessions will be held at the Ambas
sador Hotel.
Charles R. Gay
Charles R. Gay, new president of the
New York Stock Exchange, is the man
who has undertaken to resell the Stock
Exchange to the public. Indeed, his topic
will be, “Public Relations and the New
York Stock Exchange.”
Mr. Gay assumes the leadership of the
New York Stock Exchange at a time when

the Exchange’s prestige has fallen, per
haps to its lowest level, thanks to the ex
igencies of the World depression and po
litical attack.
Mr. Gay is senior partner in the firm of
Whitehouse & Company. He has been a
member of the New York Stock Exchange
since 1911. He was born in Brooklyn in
1875, and attended Brooklyn Polytechnic
Institute. Prior to joining the Exchange
he was associated with a fire insurance
company and was also for several years
assistant secretary of the Long Island
Loan and Trust Company.
In March, 1915, Mr. Gay formed the
Stock Exchange firm of Gay & Gopel,
which changed its name in 1918 to Charles
R. Gay & Co. In 1919 he joined the firm
of Whitehouse & Co., one of the oldest
firms in Wall Street, which traces its
history back for more than 100 years.
Mr. Gay has served as a governor of the
Exchange for twelve years, being first
elected to the Governing Committee in
May, 1923. At the present time he is a
member of the Committee on Admissions,
the Committee on Business Conduct, and

The ‘ ‘ Sun Deck ’ ’ on the Ambassador Hotel, Atlantic City. The Ambassador is
headquarters for the F. A. A. Convention.
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Septem ber 1935

14
of the Committee on Odd Lots & Spe
cialists, of which he has been vice-chair
man for the last five years. He was vice
chairman of the Arbitration Committee
from 1930 to 1934.
Mr. Gay is a resident of Brooklyn,
where he is active in community and
church affairs. He is a director of the
City Savings Bank of Brooklyn and a
trustee of the Young Men’s Christian As
sociation.
E . L. Bernays
Edward L. Bernays, who will address
the convention on the subject of “Mould
ing Public Opinion,” is rated as Amer
ica’s number one public relations author
ity.
Incidentally, he is a nephew of the cele
brated Dr. Sigmund Freud, considered to
be the father of psycho-analysis.
Mr. Bernays’ professional activities
have covered the most diverse fields. He
has been adviser on banks, bread and
books; on financial affairs as well as agri
cultural problems; on broad economic
policies of trade associations and large
corporations, as well as on Light’s Golden
Jubilee, the celebration of the fiftieth an
niversary of the invention of the electric
light, in which Thomas Edison, Henry

Ford and President Herbert Hoover par
ticipated. Both Time and Tide magazines
recently characterized him as the nation’s
No. 1 Public Relations Counsel.
He is eminently fitted to discuss the
subject of public relations at the conven
tion. Mr. Bernays was the first lecturer
on the subject at any American univer
sity. He gave a course of lectures at New
York University in 1924 and has since
then discussed public relations before
other learned groups including the Amer
ican Statistical Association, the Eco
nomics Club of Yale, American Marketing
Association, School of Public and Inter
national Affairs at Princeton University,
and others. He is a contributor to lead
ing publications, scientific and otherwise.
Mr. Bernays has been adviser to presi
dents and has represented the United
States government in numerous activi
ties. He served on the United States Com
mittee on Public Information during the
War and at the Peace Conference in
Paris; with the War Department after
the War in the re-employment of ex-serv
ice men; as assistant commissioner U. S.
Department of Commerce at the Paris
Exposition in 1925; and as member of
President Hoover’s Emergency Committee
for Employment.

HERE AND THERE IN IOW A
Brief News from the Hawkeye State

B y J. A. SARAZEN
F ield R ep o rte r

is a personal survey Gooselake, 2y2 per cent. Clinton 2 per
made the last three weeks on the rate cent.
of interest being paid on deposits by First National Bank, De Witt, 2 per
banks in the towns mentioned. The cent. D’e Witt Bank and Trust Co., De
names of the banks have been omitted Witt, 2y2 per cent. Grand Mound, 2
unless there is a deferential in the rate per cent. Wheatland, 1 per cet. Dixon,
where there are two or more banks in 2 per cent. Donahue, 2 per cent. Eldthe same town.
ridge, 2 per cent. Davenport, 2 per cent.
Durant, 2 per cent. Bennett, 2 per cent.
Tipton, 2 per cent on six months C. D.’s
Iowa Banks
and savings and 2y2 per cent on 12
West Union, 2 per cent. Cresco, 2 months C. D.’s.
per cent. Decorali, 2 per cent. Postville,
Dubuque, 2y2 per cent, which rvill be
2y2 per cent on C. D.’s and 2 per cent on reduced to 2 per cent very soon. Andrew,
savings. St. Olof, 2 per cent. Farmers 3 per cent, which probably will be reduced
burg, 2 per cent. Luxemberg, 2 per cent soon. Teeds Grove, 3 per cent, which no
for 6 months and 2y2 per cent for 12 doubt will soon be reduced. Amber, 3
months. Fredricksburg, 2% per cent.
per cent, not a member of the FDIC.
Monona, 2 per cent. McGregor, 2 per Onslow, 2y2 per cent, which probably will
cent. Elkader, 2 per cent. Guttenberg, be reduced to 2 per cent soon. This bank
2y2 per cent. Garnavillo, 2% per cent. is not a member of the FDIC.
Dyersville, 2 per cent for 6 months and
Lowden, 2 per cent. Clarence, 2 per
2y2 per cent for 12 months and savings. cent. Mechanicsville, 2y2 per cent on 12
Spragueville, 2% per cent. Monticello, months C. D.’s and 2 per cent for 6
2y2 per cent. Cascade, 2y2 per cent. months and savings.

M innesota Banks
Rochester, Olmsted Bank and Trust
Co., 2y2 per cent, the other two banks 2
per cent. Mable, First National Bank,
i y 2 per cent, the other bank, 2y2 per
cent. Big Lake, 2y2 per cent. Monti
cello, 2y2 per cent. Chatfield, 2 per cent.
Elgin, 2 per cent. Red Wing, 2 per cent.
TOTAL INTEREST bearing accounts
of the Decorah State Bank, Decorah, Iowa,
are $788,550 and checking* accounts are
$810,500.
THE CENTRAL TRUST & Savings
Bank, Eldridge, allows one free check
drawn or one foreign item deposited for
each average balance of $20 carried in
checking account. Accounts falling be
low $50 anytime during the month are
charged 25 cents.
THE UNION SAVINGS Bank, Grand
Mound, charge 50 cents on checking ac
counts having a minimum balance of less
than $100 during the month. For this
charge 10 free checks are allowed and
additional checks are 4 cents each. On
accounts having a minimum balance of
$100 or over, one check is allowed for
each $10 of minimum balance for the
month; each check in excess of the allow
able number is 4 cents each.
DUE TO A local situation the two
banks at De Witt have practically no
service charges in effect at present.
THE DONAHUE Savings Bank, Don
ahue, make a service charge of 3 cents
for each check drawn against the account
and 3 cents for each out-of-town check
deposited.

o l l o w in g

N orthw estern B anker

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

Septem ber 1935

AS YET NEW LIBERTY, Bennett
and Mechanicsville, have not gotten
around to install service charges on
checking accounts.
THE INTERIOR of the Clinton Na
tional Bank is being completely renewed
at this time and will have all the appear
ance of a new building when the work is
completed about the middle of September.
A new vault has been built on the rear
of the bank which has a 30 ton door, one
of the largest between Chicago and the
Pacific coast, 2,700 safe deposit boxes
have been installed. Ceilings have been
finished with Nu-Wood and the walls re
decorated. The floors will be re-tiled.
Fixtures will be replaced throughout the
bank including the tellers cages which
will be of the new dow type. A newsteam heating plant is also being installed.
These changes have given the bank many
additional feet of floor space.
(Turn to page 44, please)

A "Land oí M ilk and Honey"
— and M O N E Y
DVERTISERS and manufacturers
seeking new orders and larger out
lets for goods, need not wait for
fall harvests this year, to go after business
in our Northwest, Minnesota, the Dakotas
and Montana.
“The farm up-turn is here already, in
the ‘bread and butter country,’ formerly
called ‘our golden grain belt.’ ”
“Cash farm income, in Minnesota alone,
the first six months of this year is $135,860,000, a gain of 30 per cent or $32,013,000 over last year, 59 per cent or $50,549,000 over 1933. Only $11,000,000 of this
is crop benefits, but more than $108,400,000 is cash sales of cow-sow-hen livestock
produce, raised on Northwestern farms.
“Our crop outlook is fine, feed prices
are lower, livestock prices for butter, and
eggs, live pork and beef and mutton, are
higher. Feed costs are lower all over the
northwest.
“Half-a-billion bushels over 1934 is the
forecast increase now for four major
crops, wheat, corn, barley and oats—with
a twelve million-ton hay crop. These are
seme of the blessings that Mother Nature
promises on the August crop forecast, for
our four states.
“So wheat has ceased to be the index
of buying power, long ago.”
These striking signs of farm and busi
ness revival are cited by Charles F. Collisson, farm editor and lecturer of the Min
neapolis Tribune, in a recent address be
fore bankers’, farmers’ and merchants’
groups, in Chicago, the Twin Cities and
the midd'ewest.
“City business men watch wheat so
closely on the ticker,” said Mr. Collisson,
“that they forget that Old King Wheat
has abdicated the throne of northwestern
Agriculturia. Good Queen Bossy Cow,
the Sow and the Little Red Hen now
reign supreme in the old grain belt.
“All our cash crops now bow the knee,
in the Northwest, to four great feeding
crops, corn, oats, barley and hay.
“Minnesota grows more corn than any
other state except Iowa, Illinois and Mis
souri. This summer’s moist, sultry days
and nights, unfavorable to wheat, assure
us of high yields of ‘tall corn’—an abund
ance of cheap feeds for our cow-sow-hen
farmers. They now outnumber, by far,
our wheat croppers.
“Corn alone will roll up a crop of 237,800,000 bushels in our four states or 143,500,000 bushels more than last year.
“Even larger will be our oat crop, 284,900,000 bushels or 192,600,000 over 3934.

cows. South Dakota still has 539,000, or
48,000 more than five years ago.
“Consider now some of the striking
claims of the Queen of the Dairy and
of her two farm partners and rulers.
Let’s see how they now rule the grain belt.
“Minnesota wheat last year brought
farmers only $7,812,000. Yet 23,500,000
barn-yard biddies gave us $24,300,000
cash, more than three times wdieat cash.
That makes wheat look like chicken feed,
eh?
“In our four states, wheat paid farmers
only $36,472,000 cash. Yet 40,500,000
hens were on the job, laying their own
relief, then rising up, like good merchan
disers, and advertising their merchandise.
In North Dakota, South Da
They gossiped about the heat and dust,
kota and Minnesota, the
yet gave us $10,500,000 worth of fried
farm up-turn is now a real chicken and cream gravy, scrambled
eggs and broilers—besides all these good
ity. In addition to the gen things eaten by farm folks themselves.
“This shows what Mother Biddy does
erous contribution of the
for us all, in hard times.
cow, the sow, and the hen,
“We don’t appreciate her as we should.
We joke about her, and ask:
the Northwest will this year
“Why does the old hen cross the road ?”
“I ’ll tell you why. She’s going some
harvest half a billion bush
where—knows where she’s going and is on
els more of small grain than
her way—three speeds forward and no
reverse. You never saw a hen walking
it did last year.
backwards, even from a Ford car.
“As our former Congressman W. I.
Nolan said in Washington: ‘She’s the
great American bird—may her son never
“You may ask: ‘What can we feed all set.’ ”
this stuff to, with our last year’s emerg
“Minnesota pigs sold for $40,000,000
ency slaughterings of cattle and hogs, to cash, or exactly eight times wheat, for
feed the needy?’
po’ok chops and pigs knuckles, bacon
“The answer is, that while hogs are re sides, ham an’, and roast pork and apple
duced 36 per cent and 45 per cent, we sauce. (We raise lots of fine apple sauce
still had three million pigs left on farms in Minnesota, too, by the waters of Minne
January 1. Also seven million cattle and tonka). Compare that with our fourcalves, or 18,000 more than five years ago. state wheat cash of $36,472,000.
At that time, our feed supplies almost ex
“Queen Boss gives Minnesota farmers
actly equalled this year’s.
a milk crop of seven and one-third billion
“We are still milking 3,111,000 dairy pounds—and a pint is a pound—second
cows, or nearly 400,000 more than in 1930, only to Wisconsin’s ten and one-half
although they are fewer than last year. billion. Minnesota milk brings $73,700,The killing off of thousands of cull and
000 in cash and cream checks.
‘scrub’ cows has only improved our dairy
“Add to this the cow-offspring sold
herds, because most of them were always
($21,600,000)
and we can chalk up a
milked at a loss anyway.
“Minnesota, first butter making state, cash credit to the cow of $95,300,000; or
second only to Wisconsin in dairy cows more than 12 times Minnesota’s wheat.
and dairy products, still has 1,734,000 It is 2.6 times Northwestern wheat.
“Furthermore, it is more than all the
cows and heifers. This is 7 per cent less
than last year, but 43,000 more than in wheat money last year in our four states,
plus nine more, Michigan, Wisconsin,
1930.
“Even North Dakota has 90,000 more Iowa, Nebraska, Idaho, Wyoming, Colo
than in 1930, a total of half a million rado, Washington, Oregon, ($94,150,000).

Barley promises a crop (142,000,000
bushels) nearly as large as this year’s
wheat (148,600,000).
“This year’s gain, in these three feed
crops, will be 442,000,000 bushels over
1934. If we add to them the gain in
wheat, our four-crop increase is 528,000,000 bushels or MORE THAN HALF A
BILLION BUSHELS.
“The grand total of all four is forecast
to be 815,400.000 bushels. It wms little
more than 284,000,000 last year.

N orthw estern Banker

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

Septem ber 1935

16
“As Prof. Theophilus Levi Haecker,
great dairying expert, told his students in
Minnesota University, ‘Treat the cow
kindly, boys. Remember, she’s a lady—
and a mother’.”
“She mothered us last year by giving
Minnesota milkers $132,500,000 worth of
hne creamery butter, nippy cheese, butter
milk, skimmilk, ice cream, whipping
cream, fresh milk and other delicacies.
“That is more money than all the flour
brought in the two greatest milling
states of the world, Minnesota ($75,000,000) and New York ($56,060,000) a total
of $131,580,000. Every dollar of this
money was squeezed out of the friendly

udder of Queen Boss—giving her the Min
neapolis Tribune handshake night and
morning. This is a gain of $16,500,000
over 1933, because the butterfat price was
5.31 cents higher.
“Minnesota makes more creamery but
ter than any other state, or all of Canada.
Our creameries number 866, of which 639
are cooperatives, owned by farmers and
paying back to them all their profits.
“The creameries’ own cooperative mar
keting organization, to which most of them
belong, is in Minneapolis; the Land O’
Lakes Creameries. It handles $32,000,000
worth of dairy and poultry products a
year.

IS ALWAYS SPECIFIED

L ive Stock N ational m eets the m odern de
mand for quick action with sp ecialized fa
cilities and a trained personnel.
T ake the transfer of live stock sale receipts
for exam ple. T hey are handled h ere by a
specially trained staff. Funds are credited to
shippers at their local banks in the shortest
possible time. C ollections, too, are handled
with unfailing efficiency and precision — and
with all the speed that m odern transportation
and modern methods afford.
H undreds of correspondents are receiving
q u icke r serv ic e and saving the loss of incom e
due to excessive “float” by routing their C h i
cago transit item s through L ive Stock N ational
—“T he Bank at the Y ards.”

3L L IV E S T O C K
N ATIO N AL BANK
U N IO N ST O C K Y A R D S

N orthw estern B anker

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

Septem ber 1935

o jj-

“Minnesota creameries made 300,000,000 pounds of golden butter in 1933, and
8.5 per cent less last year, because of the
drouth. Yet the smaller make brought
about $5,000,000 more, or $67,185,000 in
cash.
“Of this vast amount, 90 per cent was
paid back into the blue jeans of the farmer
who milked the cows, in the form of $66,500,000 cream checks. This is the high
return to producers that cooperative dairy
marketing pays in Minnesota.
“So Queen Boss has completely made
over the whole grain belt, into a land flow
ing with milk, and honey, and money.
The livestock product income of Minne
sota farmers, from January to July this
year, was $108,500,000, 30 per cent or
$25,400,000 more than 1934; 53 per cent
or $37,600,000 more than 1933.
“She rules in North and South Dakota
also. Notice these striking comparisons:
North Dakota Farm Income 1934
Wheat ..................... $ 8,332,000
M ilk ......................... 18,302,000
Pigs
................... 3,804,000
Chix and Eggs...... 4,652,000
South Dakota Farm Income 1934
Wheat ......................$
89,000
Milk
................ 16,147,000
Pigs
................ 10,823,000
Chix and Eggs...... 8,541,000
“What would the Dakotas have done,
last year, without the Cow, the Sow and
the little Red Hen, to feed them and clothe
them and furnish them with cash buying
power, in the midst of drouth and wheatcrop failure?
“Today, new crops are in sight and all
but in the bin: HALF A BILLION
BUSHELS MORE than last year. New
money is already in circulation, buying
new merchandise, filling farm wants too
long denied.”

THE TELLER AN D
THE PUBLIC
(Continued from page 11)
some outlook on life are valuable assets to
anyone.
Each individual customer has a definite
reason for dealing with his bank. It may
be due to the acquaintance of some officer,
of a director, or because of some favor
extended to him by someone connected
with the bank. As stated heretofore, the
bank tellers take care of more than 80 per
cent of the banking public. It is almost
certain, then, that a large number of a
bank’s clientele deal with certain banks be
cause of their acquaintance and continued
good treatment on the part of some teller.
In many cases the customer knows no
other employe—in his eyes, and to him, the
teller is his banker. When he steps up to
the window, he parts with his money—
something that is very dear to him, and

1 H E “N O R T H W E S T E R N 99
is R e a d y f o r H a r v e s t T i m e !
S i n c e 1872 when the “N orthw estern” opened its doors for
business, this bank has taken an active part in the financing of
agriculture, the basic industry o f this territory. Crop indications
are that more twine, labor and supplies w ill be required this
year than normally.
N ow , as in past years, the facilities and resources of this
institution are available to our correspondent banks for moving
and financing this year’s crop. W e are w illin g and anxious to
serve our customers.
Department of Banks and Bankers
WM. N . JO H N SO N , V ice P residen t
D. E. CROULEY, R epresentative

F. W . C O N RA D, Assistant Cashier
L. GISVOLD, Representative

N ORTHW ESTERN NATIONAL BA N K
AND TRUST COMPANY
OF M IN N E A P O L IS
6th Street, 7th Street a n d M arqu ette Avenue

N orthw estern Banker

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

Septem ber 1935

Iowa’s Most Complete
Investment Service

I t M e a n s G re a te r P r o f i t s
for Io wa Banks

—

• Iow a banks and bankers prefer P o lk -P eterso n In
vestm ent Service because it is com plete— seeking out
from every leading m arket the m ost advantageous
price for securities w hether you w ish to buy or to sell.
P o lk -P eterso n Service provides —

A nationw ide private w ire system into every
■ im p o rtan t financial center, covering all types
of securities, both listed and unlisted.

A t r a d i n g d ep artm en t em ploying skilled
■ operators w hose years of experience in this
field are utilized to advantage by c l i e n t s
th ro u g h o u t Iow a, both in buying and selling.

A com plete analytical and legal departm ent.
■ (C om plete analysis of bond portfolios w ith
suggestions as to m ethods of stren g th en in g
holdings will be m ade upon request at no
expense to you.)

A com plete sales staff co n stan tly covering
■ I o w a both out of the hom e office in Des
M oines and out of advantageously located
branch offices.

V isit our trad in g d epartm ent the next tim e you are
in Des Moines. Give us an o p p ortunity to dem on
strate ju st how P olk -P eterso n service can m ean g reater profits to your
PRIVATE
institution. W ire or telephone o r
WIRES TO
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POLK-PETERSON
CORPORATION
INVESTMENT SECURITIES

a n d o th er p rin c ip a l
fin an cial m ark ets.

N o rthw estern B anker

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Federal Reserve Bank of St. Louis

he believes that he is bestowing a favor,
(which he is) by leaving his money with
his bank, and as a result is very sensitive
of the treatment lie receives. If he is a
newcomer, the teller should greet him in
a friendly manner, welcoming him tact
fully. The first impression is a lasting
one, and the teller’s part is a very im
portant one. Customers are our best ad
vertisers and their comments on the out
side about the “friendly spirit” of the
bank increases the patronage more than
any other advertising medium.

Des Moines Building, Des Moines
Telephone 3-3245
B ran ch Offices in S iou x C ity ,
O ttu m w a ,W a te rlo o , D a v e n p o rt ,
C edar R a p id s

Septem ber 1935

Difficult Customers

There are always “difficult” customers,
and it takes a well trained and tactful
teller to handle them. There are bound to
be customers that we do not like to deal
with—some who are hard to handle and
some who seem almost “impossible.” This
troublesome customer is generally a fre
quent visitor to the bank, and an alert
teller will soon learn his client’s peculiari
ties and adapt himself accordingly. Well
directed effort on the part of the bank and
its employes soon pleases such a cus
tomer, more easily than any other, as he is
not used to good treatment elsewhere. A
teller should never indulge in arguments
with a customer—if occasion for dispute
arises, the matter should be referred to an
officer, and he in turn can voice the bank’s
attitude.
The success of every banking institution
is in its ability to obtain and to hold pub
lic good will. Our future progress de
pends upon this factor and our patronage
can be measured by the good will we at
tain in our own community. We have
every reason to endeavor to improve—in
our methods and our service—to make our
place of business more inviting, cordial
and friendly—because in so doing it is
our own gain. One sure way of doing
this is to improve the service rendered by
our tellers. Therefore, we must select and
carefully train each teller to meet the pub
lic. It is imperative that every banker
give a great deal of time and thought to
this very important problem.
No two people are alike, and no two
bank depositors are the same. It is a lifesized job to please them all, or nearly so,
but it is our duty to see that everyone re
ceives friendly service.
After all, banking is interesting—it is
the customer that makes it so—and the
teller’s job IS important.

Dividend
The board of directors of The Chase
National Bank have declared a semi
annual dividend of 70 cents per share
on the common stock of the bank, as well
as the semi-annual dividend accrued to
August 1, 1935, on the preferred stock
of the bank, both payab'e August 1 to
stockholders of record July 13th.

B onds and In v e s tm e n ts
The Insured Mortgage Loan
for Bank Investment
Loans Guaranteed by the Federal Housing Administration Can Produce A
Real Income for the Lending Bank From Otherwise Idle Bank Funds

URING the past few years real es
tate mortgage loans have come into
more or less disrepute among banks
and bankers. Without attempting to an
alyze all of the factors contributing to
this situation, T feel it perfectly safe to
say that one of the principal causes has
been the tendency of such loans to develop
into P. O. R. E. or worse. Many of the
so-called 40 or 50 per cent loans on resi
dential property, made in 1928 and 1929
turned out to be, under a rapidly chang
ing and utterly unpredictable economic
condition, purchase bids of 140 to 150
per cent of the value of an unwanted
house.
In the short period of a year all of the
items which determined the collateral
value of a residential property had
changed. Labor costs, material costs, lot
values, resale values, even rental values,
had declined, leaving the mortgagee high
and dry. Bankers became convinced that
they should have long ago looked up the
derivation of the word “mortgage.” It
comes from the French and literally trans
lated means “dead pledge.” I recently
stated all of the above in a conversation
with a banker friend of mine and had
this response, “Granting the correctness
of what you have just said, Avhy in the
name of heaven does the Federal Housing
Administration now ask us to accept
loans, not for 40 or 50 per cent but for 60
or 70 or 80 per cent? If you admit we
cannot foresee conditions three to five
years in advance, why ask us to make
loans for twenty years ?” This sounds
like a sensible question and certainly is
one deserving of a sound answer.
In the beginning I want to make an
assertion which may seem somewhat
startling, and ask that you give it mature
consideration before forming your final
judgment. It is my opinion that prac
tically all of the real estate loans made
between 1921 and 1929 were predicated
upon a false premise. The borrower
signed a note which read “Five years from
date, I promise to pay to YOUR BANK

B y WILLIAM A. BRADLEY
Ioiva State D irector
F ederal H o u sin g A d m in istra tio n
D es M oines

the sum of five thousand dollars, etc.”
In ninety-nine cases out of a hundred,
the note should have read, “Five years
from date, I promise to renew this note
or try to borrow the funds elsewhere,-—
unless Uncle John dies and leaves me his
money, or unless the business does a
damned sight better than I think it will
do.” The mortgage should have read,
“If at the end of five years from date I
have not renewed the note for which this
mortgage is given as security, you may
take this house—IF you can get it,—but
I warn you now that I expect to take full
advantage of the time granted for re
demption, or granted under moratorium
law’s, and that I will not pay taxes or
insurance during this period.”
In other words, the borrower wTas ex
ecuting a promise to pay within a definite
term of years, with no thought that he
could actually liquidate the full amoufit
of the debt within the time granted. He
was gambling on the condition of the
money market five years in the future, and
he was not alone in the gamble. The
banker wdio made the loan was equally
guilty. He was not relying primarily
upon tile borroAver’s promise or ability to
repay the loan within the prescribed time,
but rather on the marketability of the col
lateral. In other words, he was gambling
on the condition of the real estate market
five years hence.
While chance is essentially present in
every loan transaction it can, and should,
be reduced to a minimum in the case of
real estate mortgage investments. But
the error of assuming that this may be ac
complished merely by limiting the amount
to be loaned to within a fixed percentage
of the value, has been a common one

indeed. Nor can risk be eliminated by
the simple expedient of forcing the bor
rower to agree to pay within a short term.
It must be remembered that once a real
estate investment is made, it remains in
the portfolio until it is liquidated, either
by repayment or sale, irrespective of the
fact that the borrower may have agreed
to the termination of the transaction
within five years. You, as a banker, would
submit the application of the prospective
industrial borrower to an analysis which
involves many more factors than value of
security and term of loan. Such a bor
rower’s operating and profit and loss
statements would be scrutinized with the
greatest care. The type, quality, and
future saleability of bis manufactured
product would be closely scanned for the
likelihood of obsolescence and disuse.
The factors of management, relative
standing in the trade, location, adequacy
of transportation and labor supply, and
many other items would be given the most
careful consideration before commitment
w7as made. The element of time is largely
important only as it relates to the bor
rower’s ability to pay. The ratio of phys
ical value to loan value may vary widely,
and is to a great extent dependent upon
other factors as outlined above. Why
then should we not recognize the presence
of these other factors in the making of
real estate mortgage loans?
Would you as a banker make a ninetyclay operating loan to a manufacturer
whose products could be sold only during
a short season nine months hence? Could
you reasonably expect such a loan to be
repaid at the end of ninety days? Yet
for years, so-called conservative bankers
have been making real estate loans with
interest payable semi-annually, or an
nually, with a principal payable in one
lump sum at a date three to five years
away, utterly disregarding the important
fact that the borrower’s income is received
and spent monthly, and often even disre
garding the maximum possible amount of
that income, which under any circumN orlhw estern Banker

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

Septem ber 1935

V
P erso n al
S upervision
•

Every individual security our
clients own receives our personal
supervision. Our complete facilities
function constantly, not for the
purpose of trading your securities
but to find for you sounder values
at equal or better prices.
Your account, as a client of this
firm, is constantly surveyed and
reviewed. When any change in the
status of one of your securities is
d iscovered , you are in fo rm ed
instantly by the most rapid means of
communication available.

★

We Have l\o Securities fo r Sale

★

C onsult

§H EA & CO.
INC.
39 South LaSalle St.
T elep h o n e C entral 8232
C H IC A G O
Iowa Representative

C. L. K luss
Telephone 4-3095

N o rthw estern B anker

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

DES MOINES

Septem ber 1935

stances, could be made available for the
liquidation of the loan. It is an accepted
fact that the average man cannot safely
spend more than 25 per cent of his annual
income for shelter and still live within
that income, and yet, to stay within this
limit, the average man who borrowed five
thousand dollars at 6 per cent for five
years, would have to earn an income of
at least six thousand dollars per year in
order to meet his obligation when due and
pay current taxes, insurance, and upkeep
during the term. Obviously, on this
basis, the field of eligible borrowers is
materially curtailed, if not practically
eliminated.
A recognition of this deficiency in the
short-term mortgage structure lias led to
the adoption of amortized loans by cer
tain loan companies and building and
loan associations. Bankers might well
consider it as a means of eliminating some
of the risks formerly encountered but, in
itself, it will not solve their problem.
Amortization is effective only when it is
predicated upon and balanced with the
borrower’s ability to pay, and in the av
erage case, a proper balance requires
much more than a five-year term. But if
we cannot foresee conditions for even
three to five years in advance, how then
can we safely loan for longer periods?
In this respect the amortization feature
itself provides a splendid safeguard, not
found in the term loan. The borroAver is
tried and proven, not once or twice a
year by the payment of a relatively small
amount of interest but once each month
by a much more substantial payment of
principal and interest. If the loan is
“going sour,” you know it sooner, which
is always an advantage in protecting value
of security. If the payments are made as
agreed, the relationship between physical
value and loan value is improving
monthly.
But even this advantage cannot alone
be depended upon. A mortgage extend
ing over a period of ten, fifteen or twenty
years involves careful consideration of
such items as structural soundness, re
sistance to elements, resistance to use,
suitability to climate, design, and the
livability of the house itself. These are
factors that can be determined only by a
skilled architect, whose services are costly.
Yet a definite determination of these fac
tors is highly essential to the safety of a
long term loan, since they reveal not only
the lasting quality of the physical prop
erty itself, but have a very definite bearing
on future value. Without definite knowl
edge of the above matters, caution Avould
certainly be justified, but with full assur
ance of the period of useful and practical
life of the property offered for secuurity,
we may agree that loan term can be fixed,
well within these limits, in which the prin

cipal amount will be completely liquidated
by amortization.
But Iioav about that eighty per cent
business? If, structurally and architec
turally, our house is good for thirty years,
a loan for twenty years may not be too
long but “how good is it in dollars and
cents if we loan eighty per cent to begin
Avith ?” That again depends upon a wholly
different, yet closely related, set of factors,
full knoAvledge of which is just as impor
tant to the safety of the loan. Certainly
the property cannot be good security be
yond the period of its physical life, and
very probably it will not remain attrac
tive to intelligent buyers that long. Is it
subject to a moderate or rapid rate of
depreciation in value? Here again the
amortized loan provides a safeguard, but
does not give us the complete answer.
Monthly repayment of principal and in
terest produces a depreciation of capital
investment to offset normal depreciation
of physical and sale value. It should be
remembered that in a term loan no simi
lar offset is proATided. However, a proper
determination of the probable rate of phy
sical depreciation, for which offset must
be made—i. e., the actual value of the
house’ at various periods during the loan
term,—may only be accompli shad after a
thorough consideration of a number of
factors which affect the stability of the
neighborhood; such as protection from
commercial encroachment; protection
from infiltration of inharmonious racial
or social groups; current and future pop
ulation trends; comparative levels of
taxes; percentage of owner occupancy;
percentage of vacancy; possibilities for
uniform development ; and some thirty or
forty more factors which pertain not only
to the neighborhood but to the relation
ship of the particular house thereto. When
all of these have been determined, Ave may
set up our loan as to ratio of loan value
to physical value, and as to amortization
provisions, with some basis of fact.
Impossible, you say ? Tor the individual
bank, yes; for an organization equipped
and trained for the task—no more difficult
than the accumulation of data going into
credit reports or the gathering of factual
statistics upon which insurance companies
base their premium rate. In fact this
service is available, without cost, to all
banks through the Federal Housing Ad
ministration, Avhich is, as a matter of fact,
nothing more nor less than an insuring
agency. The insurance is paid for by the
borrower (as it should be since he also is
afforded protection in many ways) and
affords one hundred per cent protection
to the lending agency against loss of prin
cipal. This insuurance plan operates on
the reserve principle but also incorpo
rates the good features of the mutual
benefit plan, which provides further pro
tection to both lender and borrower. Pre-

21
miums are set up on a basis which is
designed to make the whole plan selfsupporting, but initial reserves are pro
vided by the government, and as a further
protection, all insurance issued prior to
July 1, 1937, is backed by securities, un
conditionally guaranteed as to principal
and interest, by the United States Gov
ernment. Loans, to be eligible for insur
ance, must incorporate all of the features
set out above, must constitute first and
sole liens, must be amortized on a monthly
basis to completely liquidate themselves
within the term for which granted, and
such amortization must include, not only
interest and principal, but taxes and haz
ard insurance as well.
How does it work? Very simply, in
deed. Your bank may become an approved
mortgagee by making application on
forms furnished through your state in
suring office. As such, you are eligible

applications for new construction or ma
jor remodeling jobs. While the inspection
and appraisal made 'by the Federal Hous
ing Administration is thorough and com
plete, it does not require an unusual
amount of time, since the whole matter is
handled in the local insuring office, in
cluding the issuance of insurance.
If the loan is acceptable to the Federal
Housing Administration, a binding com
mitment to insure will be issued. Title
examination is left entirely to the lending
institution, and an initial fee or commis
sion is permitted to take care of this and
other expenses. When the loan is com
pleted, the borrower must remove all out
standing liens against the property, in
cluding taxes and special assessments, and
must pay the first year’s mortgage insur
ance premium of one-half per cent of the
face amount. Amortization payments be
gin one month after the interest date of

to make or purchase insured mortgage
loans. These loans may be extended to
borrowers in amounts not exceeding six
teen thousand dollars nor eighty per cent
of the value of the property (as deter
mined by FHA), for terms not exceeding
twenty years, for the purchase or con
struction of, the refinancing of, or the
initial encumbrance of, urban residential
property designed to house from one to
four families. You, as a banker, accept
or reject the application of the borrower,
fixing the term, the amount, and the in
terest rate (not over five per cent) within
the prescribed limits. When the applica
tion is prepared in acceptable form, you
forward it to the insuring office of the
Federal Housing Administration, located
within your state, together with appraisal
fees of thirty cents per one hundred dol
lars (paid by the borrower). Plans and
specifications must be submitted with

Iowa M unicipal Bonds
We are always in the market to buy Iowa municipal bonds.
If you have securities which you wish to liquidate, send us com
plete information and we will forward an immediate firm bid.

Write for Current List of Attractive Offerings

JACKLEY 6? COMPANY
INVESTMENT SECURITIES
210-11 EQUITABLE BUILDING

PHONE 3-5181

DES MOINES

Northwestern Banker

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Federal Reserve Bank of St. Louis

September 1935

22
the note, and, as stated above, include
not only principal and interest, but also a
pro-ration of the taxes, hazard insurance
premium, mortgage insurance premium,
and the service charge of one-half per
cent permitted to the lending institution
for handling the loan.

If you will familiarize yourself with
the Federal Housing Administration’s
insured loan plan, you will find that it
offers to the banker a five per cent, guar
anteed, self-liquidating investment, with
features which appeal to the conservative
borrower and thus insure good volume.

SHORT TIME
COMMERCIAL PAPER
W e are specializing in the handling of sh o rt tim e com m ercial
paper suitable for the investm ents of banks.
Ask us for our rates and m atu rities suitable for your req u ire
m ents and we shall be glad to send you the inform ation a t once.

WEBBLES & COMPANY, Inc.
In v e stm en t Securities
Des M oines B uilding

T elephone 4-0556

DES MOINES, IOW A

In the United States a total of $145,000,000 in insured loan applications has been
generated in the past nine months. Where
else can you find such an investment to
day? “Fine,” you say, “but what about
disposing of these twenty year loans. We
might, during that time, desire to turn
our holdings into cash?” There is an
answer for that one, too, and adequate
facilities for liquidity are provided. In
an emergency, the insured loans are sale
able, without recourse, and at par, to the
Reconstruction Finance Mortgage Com
pany; they are eligible for rediscount at
any time, at ninety per cent of par value,
with the Federal Home Loan Bank, by
either members or non-members; seven
large life insurance companies in Iowa
alone, with combined assets of over
$400,000,000 are now actively in the mar
ket for these loans; and they may be sold
at any time by one approved mortgagee
to another, in any part of the United
States. As a further factor of liquidity,
National Mortgage Associations, which
are nothing more nor less than insured
mortgage discount banks, are authorized
by the National Housing Act and will be
organized when there has been generated
a sufficient volume of business to justify
their existence.
Banking, like all other business, has
changed greatly during the past few years.
To the progressive banker, who desires to
maintain a well-balanced portfolio, the
Federal Housing Administration’s in
sured mortgage plan offers an interesting
and profitable subject for consideration.

Two Bank Sales
R.
W. Millen, assistant cashier of the
First State Bank of West Branch, Iowa,
has purchased a substantial block of stock
in the Citizens Savings Bank of Gilman,
Iowa, and has been elected cashier.
Ben B. McNair, formerly president of
the Duel County State Bank of Chappell,
Nebraska, has purchased the interests of
J. H. Moeller in the Columbus Bank of
Columbus, Nebraska, and has succeeded
Mr. Moeller as cashier of the Columbus
Bank.
Both of the above transactions were
handled by The Charles E. Walters Com
pany of Omaha, Nebraska.

IOWA • LITHOGRAPHING • COMPANY
FO U N D E D BY G E O R C E

H. RAGSDALE

515

•

T W E N T Y E IG H T H

E D W IN G. RA G SD A LE

SECRETA RY

ST R EET

DES • M O I N E S

QUALITY*

Northwestern Banker

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

E X P E R I E N C E

September 1935

* S E R V IC E

New Investment
Banking House
Formation of a new investment bank
ing house in Des Moines, to be known as
Graefe and Company, was announced re
cently by Harry B. Graefe, president of
the company.
The new company will deal in and
underwrite issues of municipal bonds, and
general market corporation bonds and
stocks. Offices have been opened in the
Equitable Building.

23
D. J. Metcalf, former president of D. J.
Metcalf and Company, and formerly con
nected with the bond department of the
Guaranty Trust Company of New York,
will also be affiliated with the new com
pany. He will be in charge of the cor
poration department of the company.
Mr. Graefe, who will direct the munici
pal business of the new concern, was for

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|= = =

Changing

Conditions in the

1 ......

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1

Bond Market

—’

necessitate a periodic realignment of
a Bank’s investments as influenced by
I

l==

N ew leg isla tio n

E co n o m ic trends

H3ZZZZÜ

F lu ctu a tin g earn ings

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H A R R Y B. G R A E FE

five years with the Cummins and Morrison
Company.
The company will maintain facilities
for executing both municipal and corpo
ration orders in all principal markets of
the country, and will likewise maintain
an extensive investment library for the
public.

Too Many
Financial Doctors

=^ =
■■
=
=

-=EE

In our COMPLETE INVESTMENT SERVICE
you will find particularly valuable
I. Our Analytical Department under the
direct supervision of Mr. Paul P. Krotzer.
2. The experience of many years of our
personnel in Iowa Bank investments.

In a letter written to the Northwest
ern Banker recently, Dr. E. C. Junger
of Soldier, Iowa, believes that we have
too many financial doctors. His letter fol
==
lows :
“I just spent a couple of hours reading
the Northwestern Banker for August,
and weighing your interpretation of Eco
nomic Symptoms and Suggestions of ===
Treatment, of the sick borrower. I won
der if your prognosis for recovery or
death is correct.
“I believe that if Mr. Sick Financial ...
World is going to recover, the bankers
will need to have a free hand to handle =
the patient. The government doctors are 1..
using too much Christian science to give
much aid to a real national disease. They
assume that the banks and large indus
trial concerns are full of too much money,
and all that is needed is castor oil. The = =
banks may be a little bound up, but they
should not be disturbed by artificial drugs.
“The political doctors in Washington

3. Our Trading Department with access by
private wire to all principal financial
markets.

■==

1=
1=
||§
B ::

1--

We invite you to consult with us frequently on
your Bank’s investments.

I ——

P RIESTER , Q U A IL & C O .

!==

1—
——
«
i ¡süiüü

Investm ent Securities
Des Moines Office

Davenport Bank Building

Dubuque Office

Tel. 3-3251

Tel. 2-2641

Tel. 651
=

IllllllllllllllllllllllllllllllllDlllllllllllll
Northwestern Banker

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

September 1935

24
are mostly quacks and their medicine
makes us sick. We need a one last effort
by financial institutions to demand ra
tional treatment, or discharge the cults
and rely on our own remedies. Hands
off, should be our demand.
“The administration is headed for bank
ruptcy—why should we acquiesce? The
average young banker got his training
during prosperous times, and does not
realize that values have vanished and un
certainties are in the seats of what used
to be a sure bet.
“The Northwestern Banker should
be a text book, indexed for subjects and
studied and reviewed and consulted by all
bank officials daily, or at least until the
Republicans direct our nation’s policies.”

W ebbies & Company
Organized
Webbies & Company, Incorporated,
dealers in investment securities, was or
ganized recently with offices at 432 D'es
Moines Building, Des Moines, Iowa.
The company is headed by Emil Web
bies, president, and S. E. Phillips, vice
president, and will specialize in the sale
of short time commercial paper, and will
represent the following companies:
Lion Finance Company, Des Moines;

SHORT TERM

Collateral Trust Notes
¡Rates an d M a tu r itie s on R eq u est
m

Fed er a l C o r p o r a t io n
D U B U Q U E , IO W A
N orthw estern B anker

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

Septem ber 1935

E M IL W E B B L E S

Continental Credit Corporation, Jackson,
Mich.; Commercial Investment Corpora
tion, Davenport ; National Collateral Loan
Company, Waterloo; Kewanee Citizens
System Company, Kewanee, Illinois;
Rockford Finance Corporation, Rockford,
Illinois; and Sherlock Finance Company,
Savannah, Illinois.
Emil Webbies is well and favorably
known to bankers of Iowa because of his
many years of activity in the Iowa Bank
ers Association of which he was president
in 1925 and 1926.

25
Mr. Webbies’ banking* experience in
cludes his association with the Muscatine
State Bank at Muscatine, Iowa, which in
stitution he left to become president of
the First Trust & Savings Bank at Bur
lington. Before organizing his own com
pany, he was more recently connected
with the Selected Investments Company
of Chicago.
S.
E. Phillips, vice president of the
company, originally entered the invest-

G M A C SH ORT TERM MOTES
available in limited amounts
upon request

G en er a l
A c c ep t a n c e
Executive Office "

Broadw ay

OFFICES

M o to rs
C o r p o r a t io n

at 57 t h

Street

- Mew Tor\, N Y.

PR IN CIPA L

CITIES

WE ANNOUNCE
T he O pening of O u r N ew Office
S. E. P H IL L IP S

ment business with White Phillips & Com
pany of Davenport, where he was munici
pal bond manager. Leaving this company
he represented the Walker D. Hanna
Company of Burlington at Muscatine,
having charge of that office for a period
of 10 years, following which he became
connected with the Selected Investments
Company for about a year previous to his
association with Mr. Webbies in the or
ganization of their own company.

Appreciates Fight
For Independent Banks
A. B. Larsen, president of the Fari
bault State Bank and Trust Company,
Faribault, Minnesota, in a recent letter
to the Northwestern Banker, expressed
his appreciation for our efforts to save the
independent banks by saying:
“I read with a great deal of interest
your editorial ‘Why Force Banks Into
the Federal Reserve’ in the August issue
of the Northwestern Banker. I was so
taken up with the clean cut way you cov
ered the subject in such a short article
that I was interested in giving a copy of
this editorial to the Senate Conference
Committee, that now has the Banking Bill
of 1935 under consideration.
“I wish you would forward to me about
eight copies of the Northwestern
Banker, if you do not have this editorial

D irect Private W ire to A ll M arkets

Scott McIntyre <&l Company
C om er 2nd A ve. at 3rd St.

Cedar Rapids
r ------------------------------------------------------------------------------------------------------- ^

SHORT TERM
C o ll a ter a l T r u s t *N o tes
IN Q U IR IE S
INVITED

Commerciai Investment
Corporation
Davenport,

Iowa

k ______________________________________________________
Northwestern Banker

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

September 1935

SOUND
Auto Insurance
a t B u sin e ss B u ild in g
R a te s
You can add to your premium income with Western
Mutual’s broadly written automobile policies—backed
by Western Mutual’s record for fair, prompt payment
of insurance claims. Owned by its policyholders and
operated entirely in their interests, Western Mutual
offers your car-owning clients dependable, conscien
tious insurance service—and a real saving. We write:

printed in pamphlet form. The Confer
ence Committee is composed of Senators
Fletcher, Glass, McAdoo, Bulkley, Town
send, and Norbeck. I want to be sure that
they received these copies as I wish to
mail them page 3, 4, and 5, of your maga
zine.
“I want to take this opportunity of
thanking you for the wonderful fight you
have so ably put up for the independent
bank. We need such friends as you, to
battle for us at this time, if Ave are going
to save the small country banks for their
community.”

For Vice President
Frank R. Curda, assistant vice presi
dent of the City National Bank & Trust
Company, Chicago, is a candidate for na
tional vice president of the American In
stitute of Banking. His name was placed
in nomination by the Chicago A. I. B.
chapter.
Mr. Curda is an Institute graduate, a
life member of the Chicago chapter, and
has served the Chicago chapter for the

Fire
Theft
Collision
Public Liability
Property Damage
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Place your casualty business on selected risks with
Western Mutual. Build your business on sound, lowercost rates plus the good will of quick, courteous service
we are equipped to give you and your clients.
A ls o g e t o u r a g e n c y p r o p o s itio n , f o r s e le c te d
a g e n c y m e n , o n F ire , W in d s to r m , H a il a n d
P la te G lass In s u r a n c e o n P r o p e r tie s ; a n d a sk ,
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W ESTERN MUTUAL
FIRE INSURANCE

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HUBBELL

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D E S M O IN E S ,IO W A

F R A N K R. C U R D A

past twenty-five years in almost every
capacity, principally as director, AÛce
president, and president. Recently he
completed a three-year term as a member
of the executive council of the national
organization, and has served on four na
tional committees. He acted as vice chair
man of the Chicago Convention Commit
tee in 1933.
Mr.. Curda is also active in the Illinois
Bankers Association, now serving his
fourth term on the Committee on Edu
cation, acting for tAvo years as chairman.
The shortest perceptible unit of time is
the difference between the moment the
traffic light changes and the boob behind
you honks for you to go.

N orth w estern B anker

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

Septem ber 1935

In su ra n c e

The Flourishing Trade of Forgery
Tricky Penmanship Costs the United States
$ 3 0 0 , 0 0 0 , 0 0 0 a Year

HOUGH the question of what to do
when one’s cheek is forged offers a
problem of slight import to the aver
age business man—until it actually strikes
home—the flourishing trade of forgery
becomes a serious business if one believes
insurance company statistics that in the
past year America paid over $300,000,000
to the wicked penmen. Annual losses
throughout the nation due to f orgery rank
second only to those caused by fire, and
the figures are increasing yearly.
Forgery is becoming one of the most
highly developed criminal arts in the
United States. It takes precedence over
kidnapping, blackmail and swindling, but
has not been so highly publicized. Espe
cially are the larger losses concealed inas
much as the average business man feels
that public knoAvledge might prove in
jurious to his credit. Consequently forgery
is no worry to most persons, who might
fear and fortify themselves against more
spectacular crimes which actually are
much farther removed from their horizons.

B y HARRY HALLER

make many duplicates by an ingenious
method.
N. Edward Bartlett, of the Maryland
Casualty Company, demonstrated in five
minutes how the expert forger would, in
as many hours of work, change a check,
Assuming that the forger has received a
check dated August 1, for $2,000 payable
to Clayton & Co., Mr. Bartlett explained
that the signature of the drawer was, of
course, the important thing and should not
be tampered with. The forger would then
take it for granted that, having missed the
check, the drawer would call his bank and
stop payment on it.
The first thing to do, then, is to make the
check over completely, except for the sig
nature. A stamping machine is of assist
ance in changing the number in the upper
right-hand corner. The date, August 1,
can, with careful labor, be changed to
August 11 or August 21. And the name,
Clayton & Co., can by the same procedure
be transformed into Clayton H. Cox.
Invisible Hands
Work on the amount of the check, stamped
Throughout the United States the crime in indelible ink, is a more tedious matter.
is perpetrated by invisible hands working With a chemical solution, Mr. Bartlett
with great skill and the forger classes him rubbed the figures, $2,000, through onto
self with the currency counterfeiter among a blotter he placed beneath the check,
the upper strata of criminals. Like the leaving the space blank. He then inserted
counterfeiter, his work requires finished the check in a standard stamping machine
technique and ingenuity, and the rewards to obtain new figures and in five minutes
it had become an order payable to Clayton
are high.
The business of stealing original blank II. Cox for a larger amount.
A number of avenues now lie open to
cheeks and securing the signatures of
treasurers and other company executives the fictitious Mr. Cox in the securing of
is an organized part of the check forgery the cash. Having investigated carefully
racket. The actual work is often carried the capital of the firm, lie knows that there
out by salaried craftsmen who take no is cash available for the payment of his
further part in the enterprise. Often the order. By careful timing, he can establish
“ring” that creates the forged checks, himself temporarily in the community,
from the stolen originals to the finished open a checking account and, before the
and signed counterfeits, withdraws from crime is discovered, leave town with the
the picture and splits its profits with an cash. If the prize involved is valuable
other group which takes the final risks of enough, the professional forger often
exchanging checks for currency.
establishes himself in some sort of trade
Usually, a band obtains the checks from or agency as a shield for his business.
The racket has been worked in various
stolen mail, forges the endorsements and
then secures the funds. If the check in states with the forgers representing them
question happens to have been issued by selves as census takers, Federal agents,
a large concern, chances are the crook will bank examiners and government repre
either raise the amount of the check or sentatives of the pensions bureau. Schemes

devised by experts to maintain accounts
at a score of different banks, until their
credit is well established, are constantly
coming to light. The operator usually
obtains a certified check for the total of
his balance in his largest account, makes
a dozen or so duplicates with forged cer
tifications and cashes them all at the var
ious banks where his credit is good. One
operator recently swindled thirty banks
of more than $150,000 by this method.
Padding Payrolls
During recent months some so-called
“trusted employes” have caused their em
ployers considerable grief through the
padding of payrolls. Usually such an
employe works in connection with others
in the perpetration of the crime. It is
often the timekeeper who robs his em
ployer either by failing to remove from
the payroll the names of employes who
have left the establishment or by placing
on the payroll the names of fictitious
employes. When the checks are made out,
they are abstracted from the packet of
envelopes and turned over to confederates
who can cash them.
Mr. Bartlett recalls an interesting case
of an employe who “went sour” recently
in a town in upper Maine. The town’s
purchasing agent was the criminal and it
was customary for him to receive bills for
the goods purchased by the town. After
confirming the purchase order, it was the
agent’s duty to make out a check and
attach it to the bill, which was then turned
over to the town’s treasurer for signature.
Check and bill were then returned to the
purchasing agent who would send them
through the mails to the payee.
This particular purchasing agent de
cided that he could improve his financial
status considerably by making out fake
bill heads and, after securing checks cov
ering these non-existent items, indorse the
checks with the names of the fictitious
payees and, as the second indorser, sign
his own name and get them redeemed at
the banks at which he was known. He
succeeded for a number of years, until it
finally was discovered that the losses to
the town had run into many thousands.
“When interviewed at the penitentiary
as to why he had done this,” Mr. Bartlett
N orthw estern B anker

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Federal Reserve Bank of St. Louis

Septem ber 1935

28
said, “we were amazed at his explana
tion.”
The purchasing agent, it seems, several
years before had occasion to issue a check
to a Canadian in upper Maine in payment
for log Avood to be used in the public
schools. The Canadian had told the pur
chasing agent that he was ignorant of the
procedure invoked in drawing the money
on a check. The agent accompanied him
to the bank and when the Canadian told
the teller he could neither read nor Avrite,
it was suggested that he place an “X”
mark and that the purchasing agent do
the indorsing. It all worked out very

t i g

nicely, and later on when the agent was
pressed for funds, he recalled hoAV simple
the business was and launched himself on
a startling career of forgery, Avhich ulti
mately Avrecked his life.
Recently a novel forgery racket Avas
discovered on the Pacific Coast. Taking
advantage of the ignorance of Avell-to-do
farmers concerning the workings of the
various New Deal agencies, two enterpris
ing check artists represented themselves
as Government agents as to ruse to inspect
their intended victims’ bank books and
canceled checks. They usually found it
a simple matter to obtain a specimen of a

ÌL©

is too m a n y
B ank d is h o n e s ty lo sse s p a id b y th is C o rp o ra tio n re v e a l a s ta g g e rin g
p e rc e n ta g e loss in e x c e ss of th e a m o u n t o"f b o n d . In n e a rly e v e ry c a s e
of this kind, th e cost of full c o v e ra g e w o u ld h a v e b e e n a trifling b u rd e n
c o m p a re d to th e u n p ro te c te d loss. W ith FULL in d e m n ity a v a ila b le a t
sm a ll cost, a s in g le e x c e ss loss is too m an y .
F idelity p ro te c tio n sh o u ld in c re a s e in p ro p o rtio n to th e in c re a s e in d e
posits. B anks still re ly in g u p o n F id e lity B onds a n d B u rg lary in s u ra n c e m a y
p ro fita b ly c o n sid e r th e lo n g -ra n g e e c o n o m y of th e B an k ers B lan k et Bond.
T hough m ost b a n k e rs stu d y c a re fu lly th e ir re q u ire m e n ts, a n o u tsid e
su rv e y often r e v e a ls h a z a rd o u s om issio n s, d e s ira b le c h a n g e s a n d , fre
q u e n tly , p o s s ib le e co n o m ies. T h ro u g h a n y N a tio n a l S u re ty re p re s e n ta tiv e ,
y o u m a y o b ta in this v a lu a b le se rv ic e w ith o u t cost a n d w ith o u t o b lig a tio n .
There are N ational Surety representatives everyw here. Each is a sp ecialist in
Fidelity, Surety, Forgery and Burglary protection, thoroughly equip ped to serve you.

NATIONAL SURETY
CORPORATION
VINCENT CULLEN, PRESIDENT

Northwestern Banker

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Federal Reserve Bank of St. Louis

September 1935

farmer’s signature and several blank
checks. KnoAving the exact amount of his
bank balance, they had little difficulty in
AvithdraAving the bulk of it.

Aside from losses caused by dishonest
employes and organized gangs of check
crooks, there is the menace of the “lone
Avolf.” A feAv months ago such a case was
brought to court in a city in upper Penn
sylvania, Avhere the forger had been suc
cessful to the extent of $47,000. He had
picked out five local concerns and, repre
senting himself as a salesman for a check
printing company, had interviewed the
financial man representing each concern.
The pose afforded him an excellent op
portunity of examining his prospects’
checks during the course of his sales talks,
thereby learning Avhicli banks their funds
Avere deposited in, as Avell as the number
series of the checks. The prices of his
product Avere, of course, so high that in
no instance Avas the prospect interested in
buying.
On the first of the month folloAving the
forger’s visits, he Avent to the banks at
AArhicli his prospects carried their checking
accounts, explaining that he Avas from the
respective offices and that he had come to
get their monthly statements. With this
information at hand, it Avas a simple
matter to forge signatures on the checks
Avhich he had stolen and make them out
for sufficiently large amounts, but not
large enough to arouse suspicions of the
bank officials should they see them before
payment was made. With the bank state
ment before him, there Avas no necessity
for guessing at the balance, and from the
canceled checks he Avas even able to deter
mine how large a check would pass
through the particular account without
suspicion.
The statements Avere then returned in
tact to the respective banks and an ex
planation made to a different teller that
they had been sent to him in error. Moving
the scene of his activities to New York,
the forger visited a reputable investment
house, Avhere he had previously opened an
account and established credit, and with
these “hot checks” from the Pennsylvania
town, purchased $47,000 of negotiable
securities Avhich he immediately disposed
of to a “fence.”
H ot C h ecks”
The unusual angle in this case is that
the shreAvd criminal then returned to the
scene of his theft and on the first of the
following month Avent to his “prospects’ ”
banks and again secured their statements.
He contented himself this time, hoAvever,
AAuth taking from the statements all the
“hot checks” Avhich he had put through
and destroying them. With the aid of an
eraser and typeAvriter, he removed the de
ductions resulting from the checks and
corrected the balance. He then returned
the statements to the banks, and by this

29
added safeguard gave himself an extra
month for a getaway, inasmuch as his vic
tims would not have knowledge of the
losses they had suffered until they re
ceived their statements the followingmonth. In this way he also destroyed
damaging evidence.
Case by case the artful trade of the
forger increases throughout the country
until, when a total is taken, it is found
that the nation is paying a staggering sum
to these deft criminals. A drain on legiti
mate business, it represents sudden, un
expected, often disastrous losses to indi
vidual business whose bank balances are
swept away over night. Check forgery on
a professional scale has long been high on
the list of “big business rackets,” but
many individuals and business firms who
suffer from it remain silent. And the
wily forger silently continues his flour
ishing trade.—Reprint from the Baltimore
Sunday Sun.

FO LLIES O F
FED ER A L F IN A N C E
(Continued from page 8)
self-liquidating loans. In fact, it is even
worse than this because we not only know
that we are using demand deposits to
speculate in such securities, but we know
further that the government may refuse
to give back value equal to what it takes
from us. We know that it is likely to
do so since it has already developed the
habit, and since its demands are becom-.ing increasingly pressing, and we know
also that in the event it elects to do so,
there is nothing we can do about it.
But that is not all: You either borrow
on your collateral or on your credit. When
your collateral is gone, when your word
is broken, you do not borrow. If you get
a loan, you get it in some other manner.
Is not that just what the government is
proposing to do?
When you have loaned so much money
to a man that you must support his credit,
you are no longer a free moral agent, and
no longer to be trusted with depositors’
money. That is why the law imposes
limits on the amounts which may be
loaned to any one individual or corpora
tion. The same result follows if your
debtor is a government, but it has not
heretofore been believed necessary to im
pose similar limitations on loans to gov
ernment. If the time has not already
come it soon will come, when maintenance
of the market value of government se
curities will become essential to the bank
ing system. Honesty and fairness to your
depositors demand that you do not per
mit that time to come, or that if it has
unwittingly crept upon you, you awake
and bend every effort to prevent increase
of the danger, and as rapidly as possible

Half way
across the continent from the
Eastern seaboard, where the
traditions and wisdom of old
England were first trans
planted to American soil,
there has grown a financial
community and an institution
characteristic of the best of
those traditions.
When a storm comes, the
strength of a house is tested.
During the depression, Min
neapolis as a community has
b e e n financially extremely
stable and solid . . . and the
record of Northwestern Na
tional Life has been unique,
even among life insurance
companies. Between 1929 and
1935 NWNL assets increased
33.1 per cent as compared to
an increase of 24.7 per cent
for all companies; insurance
in force increased 10.7 per
cent as compared to a de
crease of 5.4 per cent for all
companies. The statement at
the left exemplifies the Com
pany ’s e x t r a o r d i n a r y
strength and stability — a
condition w h i c h prevailed
throughout the period of the
entire depression.
Upon this sound founda
tion, NWNL begins to build
for a second half-century.
This com pany ha« p re p a re d a concise, up-to-date D ire c to ry of F ederal B e lie f and B ecovery
A gencies. Y ou can obtain a copy by ask in g a ny NwNL rep re sen ta tiv e , or by w ritin g th e com pany.

On-The-Ground Cooperation
Quicker service on claim settlem ents— a direct result
of our being a “home” company w ith home office right
in Des Moines—that’s one of the things our bankeragents like about us. Another is the fact that, being
Iowans ourselves, we understand the problems that
beset Iowa agents and can provide personal help and
cooperation. And there are other advantages to a
connection with this strong 19-year old Iowa institu
tion. W rite for details

N orthw estern Banker

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Federal Reserve Bank of St. Louis

Septem ber 1935

30
to restore to your depositors that to which
they are entitled—liquidity and security.
It is no more true today than it ever
has been in the past, that either liquidity
or conservatism in investments is un
necessary to sound hanking. Loans of
more than a conservative per cent of the
value of real estate cannot be justified by
any politically inspired demand. Neither
can such a demand justify the investment
of any substantial amount of demand de
posits in long term real estate investments.
The very essence of the policy of sepa
rating investment banking from com
mercial banking, lies in the recognition
of the danger and undesirability of fi
nancing long term needs by short term
methods.
The danger of permitting an extension
of real estate loans is not limited to the
effect it may have upon member banks :
It is proposed to make possible the use
of such loans in the issuance of notes of
the Federal Reserve Banks. This since
it is proposed to leave to the Federal Re
serve Board the power of decision to ac
cept for re-discount or as collateral for
loans to member banks, any and all assets
of member banks which the Federal Re
serve Board chooses to deem sound. Could
anything more completely ignore the
principle of liquidity upon which every
sound and enduring central bank has been
founded ?

Deposit Insurance
Finally, there is the matter of the in
surance of deposits and the obligation
assumed by every bank to answer for the
defaults or misfortunes of every other
bank. A bank may fail no less certainly
because it is compelled to operate at a
loss, than because of mismanagement.
The low interest policies of government;
the competition of government with busi
ness; the uncertainty as to the future re
sulting inevitably from the vacillating
conduct of the Administration prevent
ing a revival of industry, all more and
more are forcing banks into the position
of being obliged to operate without a
profit, are pointing more and more clearly
to the day when no matter how good the
management of banks, a loss will be
inevitable. And this is the burden we
are assuming under the federal guaranty
of deposits.
And even this burden is not to be fairly
apportioned among us. The essential lack
of fairness in the policies of the federal
government reflected in its repudiation of
its promise to pay its obligations in gold
—repudiation based not on right, but on
might alone, reflected again in its use of
an equalization fund made up of ill-gotten
gains, and employed to artificially support
the market for its securities and thereby
to mislead the people of the country is
shown again in the proposal to place the

burden of insuring deposits not on de
posits insured, and therefore presumably
benefited, but on the basis of total de
posits. When it appears that in some
instances only five or six per cent of the
deposits on which the cost is based will
be insured under the law, the unfairness
of the proposal becomes too obvious for
comment.
What can we do about it all?
For one thing, it seems to me a place of
refuge must be preserved for the sound
bank in the continued right to operate
under a state charter and without mem
bership in either the Federal Reserve
System or the Federal Deposit Insurance
Corporation. We should bend our efforts
to ensure the preservation of the system
of state banks so as to make it possible
for a bank to escape from the burdens of
the insurance of the deposits of other
banks, and conduct its business on its
own worth and merit.
For another, we can dicontinue the
purchase of obligations of government so
long as there appears no end to unbal
anced budgets.
Finally, we can learn a simple lesson:
$2,430,000,000 of government obligations
have been purchased by the Federal Re
serve Banks on the stated theory that the
creation of additional credit and conse
quent reduction of interest rates would
(Turn to page 38, please)

OUR CORRESPONDENT
in S i o u x C i t i
OFFICERS

Most bankers send their Sioux City live
stock, grain and hay items direct to this
institution in order to avoid the costly
delay of roundabout routes. M ake cer
tain of immediate return on your collec
tions by sending them direct to the Live
Stock National Bank of Sioux City.

A . G . Sam, President
C. L. Fredricksen, Vice-President
M . A . Wilson, Cashier
W. G . Nelson, Asst. Cashier
W . C. Schenk, Asst. Cashier

L i v e S t o c k Na t i o n a l Bank
S i oux C i t y , I owa
“
Northwestern Banker

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

T H E

September 1935

B A N K

A T

T H E

Y A R D S "

O TA

SOUfF
OFFICERS SOUTH DAKOTA BANKERS ASSOCIATION
GEO. C. F U L L IN W E ID E R
P re s id e n t

Vice President..............W. B. Penfold
President...........Geo. C. Fullinweider
Belle Fourche
Huron
Executive Manager...........Geo. A. Starring
Huron

A throng of patrons and friends moved
in and out of the new bank in the Hanten
F.
G. Grosz, vice-president of Bowdle building all day long, congratulating the
State Bank, and his wife and son have re leaders of Watertown’s latest banking en
turned from a 10-day vacation through terprise and wishing them well. Reports
western North Dakota and Black Hills. indicate that a goodly number of sizeable
Mr. Grosz reports, a most enjoyable trip. deposits were made during the bank’s
The crop conditions in western North Da initial business day.
kota and western South Dakota are some
Directing the bank’s affairs are Harmon
what better than in Bowdle vicinity, not Kopperud, well known among South Da
that the yield is any better, but they have kota bankers as managing officer of the
much better quality of wheat. The yield Community State Bank at Lake Preston,
on wheat at Bismarck was reported to be and Fred F. Pliillippi, former state bank
about 4 to 8 bushels with much wheat examiner, who comes to Watertown from
weighing only 40 lbs. to a bushel. At Oldham, S. D1., where he has been as
Bowman, N. D., they reported yields up to sociated with the Oldham National Bank
15 bushels with mostly No. 2 or No. 1 since 1928. Mr. Kopperud is president,
wheat. At Rapid City, S. D., what little and Mr. Pliillippi is cashier of the new
wheat is raised runs about 15 bushels per Watertown institution.
acre, all of good quality. At Philip, S. D.,
Mr. Kopperud, Mr. Phillippi and the
the crop is about the same as at Bowman, other bank officials said they were much
N. D. The corn crop is all dried up, except pleased over the many expressions of
about the Bowdle territory, where they good will they had received in connec
had some recent rains. There is one par tion with the bank’s opening.
ticular thing Mr. Grosz noticed in the
Black Hills—that about 50 per cent of the
tourists are Iowa ears, which would indi Bank at Colton
Colton expects to have a new bank in
cate that Iowa people must enjoy good
times. The tourist parks in Rapid City the near future. It became known that in
were full every night, and some people terested persons have been working on
the plan recently. It is stated the stock
had to be turned away.
holders of the Farmers’ State Bank at
Lyons are considering the question of
Final Dividend
moving their bank to Colton. If this plan
Depositors of the closed Farmers State does not materialize, it is said that capi
Bank of Jasper have received dividend talists at Hartford will consider the mat
checks representing 20 per cent of their ter of opening an entirely new bank in
deposits. These checks brought the final Colton.
returns of the depositors up to 100 per
cent.

Enjoyable Trip

New Bank Opens
Telegrams, flowers and cigars — all
tokens of good will—were in abundance at
the Farmers and Merchants Banks in
Watertown as the new bank opened its
doors for business.

G EO R G E A. S T A R R IN G
E xecutive M anager

Armour W ants Bank
T.
A. Heck, cashier of the Citizens Na
tional Bank & Trust Co. of Sioux Falls,
was in Armour recently looking after
business interests of his bank, which is
affiliated with the First National Bank and
Trust Company of Minneapolis, Mr. Heck
is a personal friend and business associate
of L. W. Scholes. While there Mr. Heck
had numerous requests that he try and
induce the First National group to or
ganize a bank for Armour, S. D.

Named Teller
Eleanora Kundert of Bowdle has ac
cepted a position as teller and bookkeeper
with Bowdle State Bank. Miss Kundert
assumed her position last month.

Moves to Summit
IT. A. Fenner has resigned his position
at the Corona State Bank and expects soon
to accept a position with the Summit
bank and move to that place. Mr. Fenner
has been serving the people of the Corona
community for the past fourteen years.

Assistant Cashier
At. a meeting last month of the board
of directors of the First National Bank
of Selby, Max Gutz was elected assistant
cashier. Mr. Gutz fills the vacancy caused
by the recent resignation of Henry Schendel.

Bank Exchange

Figures Larger

A banking exchange has been opened
in Herreid by the Pollock Land company
of Pollock. The office of the exchange is
located in the Blair Drug company build
ing and Irene Huber, assistant secretary
of the exchange, has been placed in charge
of the work.

Condensed figures by the Northern
Trust Company of Chicago show total
deposits increased $13,175,000 over those
of March 4, 1935. Likewise, total resources
have increased $14,357,000 in the same
period. Loans remain substantially the
same as on March 4.
Northwestern Banker

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

September 1935

SELLIN G THE BANK'S
SER V IC ES DIRECT
(Continued from page 10)
do not know it, even though you think it is
absolutely not so in your institution, the
bulk of any bank’s growth (after its first
year or two) comes from word-of-mouth
recommendations freely given by one cus
tomer, then another, then another—until,
behold, the man you may never have heard
of walks in one fine morning, comes up to
the first officer he sees and says, “I want to
open an account.” In other words, no mat
ter how much credit the heads of the busi

ness extension department may take unto
themselves, the most productive selling of
the bank is done by customers in the casual
conduct of their own business in the lockerroom at the golf club, over a neighborly
table of contract bridge.
How can we induce the customer to do
this selling? Well, the bulk of that is en
tirely out of the hands of the new business
men. To an extent it depends upon the
attitude of the officers who handle the ac
counts. To a far greater extent, I honestly
believe, it depends upon tellers and floor
men, upon the transit clerks and check
sorters, upon the bookkeepers and the ele
vator men. A satisfied customer is created,

HE M EA SU R E

OF VA LU E

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

CIRST NATIONAL BA N I/
I

IN S I O U X CI TY

A . S. Hanford, Sr., President

l \

Frederick R. Jones, V ic e Pres.

Fritz Fritzson, Cashier

more times than not, by a smile and a hu
man “Good morning!” at the payer’s win
dow. By loaning which hits that happy
medium of genuine helpfulness without
even a suspicion of recklessness. By
prompt collection of drafts and items on
out-of-town points. Most of all, if the
truth could be dug out, by those merit
marks acquired, unrealized by the cus
tomer, through statements which balance
out at the end of the month, returned
vouchers which never include those of
J. Smith in John Smith’s envelope, book
keeping which never debits an item to the
wrong account resulting in unwarranted
return of checks as N.S.F. when actually
there is money to spare in the account.
When all of these relations with the bank
are satisfactory, there develops in the
minds of the customers a conviction that
here is a really fine bank to do business
with, and in their hearts a determination to
do something to show their appreciation.
Whereupon we of the business extension
department are enabled to send in semi
annual reports starting, “The growth of
the bank through the addition of new cus
tomers has this year followed the prec
edent of former years, and reflects the
hard, intelligent sales effort which has been
applied by this department.”
“Selling ’ the Customer
But it is not enough merely to expect
good service to fill the minds and hearts of
customers a-bursting with sales enthusiasm
for our bank. Some of them will thus
spontaneously g e n e r a t e enthusiasm.
Others will go along for twenty years of
complete satisfaction, during which they
will keep their satisfaction completely to
themselves, and never send in a new ac
count. This passive state of mind can, how
ever, be turned into a more dynamic and
productive state by a little well-aimed mis
sionary work by the officers and employes
of the institution. Which leads me into
a No Man’s Land midway between two sub
headings of the outline so thoughtfully
supplied by your Program Chairman. One
heading is selling through customers. The
next is selling through the entire staff. My
intermediate heading, to which I shall de
vote a very few words though lightning
strike me down for thus deviating from
their road .map, might be termed “How
the entire staff can make customers want
to sell.”
For example, one department head of
my acquaintance is forever confiding to
customers that his institution does not need
an elaborate system for controlling check
ing against uncollected funds, that this is
taken care of by selecting carefully as
customers only those individuals and firms
who can be trusted both as to honesty and
resources. Now this is undoubtedly true
of his bank; it has a very high grade of
(Turn to page 40, please)

Northwestern Banker

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

September 1935

i
1

OTTO K OTOUC
P re s id e n t

OFFICERS NEBRASKA BANKERS ASSOCIATION
Treasurer................Fred W, Thomas
President....................... .Otto Kotouo
Omaha
Humboldt
Chm. Ex. Council. . . . J. M. Sorensen
Secretary................... Wm, B. Hughes
Fremont
Omaha

Dies in Vault

Business Good

Carl H. Malmberg, 42, teller at the
federal reserve bank in Omaha, was
stricken with a heart attack and died in
the bank’s huge vault before medical aid
could reach him. Malmberg had been
under a doctor’s care for a year. The
widow, a daughter, three brothers and two
sisters survive.

Since its opening, the Lynch Coopera
tive Credit association has been doing a
satisfactory business. Deposits of the first
day, about $700, were larger than ex
pected, and business each day since has
been satisfactory to the management.
Leslie F. Hall, formerly of Albion and
Neligh, has accepted the position of secre
tary and treasurer. Committee members
are:
Board of directors—Joe Rysavy, Ken
neth McMeen, Vac Jedlicka, Earl Rosicky,
Anto Wasatoko and Leslie F. Hall.
Discount—Joe Micanek, W. T. Alford
and Joe Slechta.
Supervisors — S. J. Mannen, Leonard
Wheeler and Earle Landholm.

Reorganized
The Union State Bank, Rushville,
opened for business Thursday, August 8,
by virtue of authority granted under
Charter No. 1633 issued by the State
Banking Department of the State of
Nebraska.
This bank was organized for the pur
pose of taking over the assets and assum
ing all the liabilities of the Union Bank,
Rushville, Nebraska, a dissolving corpo
ration.

Buys Building
The receiver of the First National Bank
at Leigh offered the building and fixtures
in auction sale, and the property was bid
in by the officers of the newly organized
bank in Leigh. The sum paid was $5000.
The new bank has opened for business and
the citizens of Leigh held a big celebration
for the event.

Check Fee
A number of banks, state and coopera
tive, in Nebraska, which do not clear their
outside checks through the Federal Re
serve system, are demanding a fee of from
five to ten cents for cashing checks. The
five-cent fee is for checks under $10 and
the ten-cent fee for larger amounts, this is
in addition to the regular three cent serv

W M. B. H U G H E S
S e c re ta ry

ice charge local banks make on outside
checks.

Now Operative
A bill designated to eliminate circum
stances which led to “depositors’ revolts”
in Nebraska 18 months ago is now opera
tive in the state.
The bill, H. R. 38, will permit depositors
of defunct state banks to select their own
receivers on petition of 51 per cent of their
number and representing 51 per cent of
claims against the institution.

New Cashier
H. W. Crandall came from Winnetoon,
Neb., recently to assume his duties as
cashier of the State Bank of Surprise, to
which position he wTas recently elected by
the bank officials to fill the vacancy caused
by resignation of T. E. Hattel on account
of ill health. Mr. Crandall is well known
in banking circles and has also had con
siderable experience in other lines of work.

Dies in Omaha
Leonard W. Scheibel, 62, assistant
cashier of the Nebraska National bank

Three Banks
Only three banks have been issued char
ters as a result of the 1935 law allowing
the organization of banks with $10,000
capital in the smaller communities, accord
ing to Ben N. Saunders, director of the
state banking department. Before the law
went into effect last spring, $25,000 was
the minimum capital allowed.
The trend in state banking circles has
heretofore been to eliminate the small
bank, and the 1935 law was passed to meet
an emergency, in the opinion of Saunders.

W e Specialize in Needs of Banks in Live Stock
and Agricultural Communities

L iv e S to ck N a tio n a l B a n k
OMAHA
N orthwestern Banker

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Federal Reserve Bank of St. Louis

Septem ber 1935

34
until its consolidation with the Omaha Na
tional bank, died recently at his home. He
had been ill since April 1st with heart
disease.
Born in Germany, Mr. Scheibel came to
Omaha when eight years old. He had lived
there since.

Harlan Cratty, who has been for some
time an employe of the National Bank of
Neligh, has resigned and accepted a posi
tion in Omaha, C. H. Page! takes his place
in the bank in Neligh.

New Bank

Bank Reports

St. Edward, in Boone County, is now
served with a bank. J. A. Indra of Clark
son, since 1918 connected with the F ar
mers State bank, now liquidated, is presi
dent, and E. W. Burdic of David City, as
sociated with the National City bank in
that city, is cashier. St. Edward people
are also interested in the new bank, which
has an authorized capital of $25,000, and
$2,500 surplus.

Assets of 294 going state banks in Ne
braska on June 30th, the date of their last
reports to the state banking department,
totaled nearly $76,000,000—an average of
about $258,000 apiece.
Their total deposits were a little over
$64,900,000 being an average of $220,000
per bank.
Loans and discounts on the date men
tioned stood at 26^4 millions; cash reserve

Change in Officers

★

in other banks, almost 27 millions; bonds
and securities, above 18 millions; cash in
own vaults and other cash items, about
$1,850,000.
The cash reserve of the 294 banking
houses was 43 per cent of deposits, with
an additional 28 per cent held in bonds
and other approved securities, making the
total reserve ratio 71 per cent—more than
four times as much as the state laws re
quire.
Capital stock of the banks totaled $7,736,500, of which $2,064,200 was preferred
stock sold principally to the RFC during
the past two years. The other $5,672,300
was common stock in the hands of officers,
directors, and shareholders.
Aggregate surplus and undivided profits
were over $1,800,000, with an additional
gross reserve of $442,000 for contin
gencies.

Fifty Years
Greetings in the form of magnificent
floral bouquets were received recently by
the First National bank of West Point
when it observed its fiftieth anniversary.
Hundreds of friends and patrons of the
bank called to extend good wishes and to
receive souvenirs of purses, key rings and
bill folds commemorating the occasion.
Among the floral displays were bouquets
from officers and directors of the Federal
Reserve bank of Kansas City, the First
National bank of Omaha, the Live Stock
National bank of Omaha and Mrs. Cathe
rine Moodie of West Point.

In Alliance
A proposal has been submitted to the
Alliance chamber of commerce by Alliance
bankers incorporating a plan to consoli
date the sixth and seventh districts of the
Nebraska Bankers association if the an
nual convention can be held at Alliance,
most centrally located city in the enlarged
district.
The district would include the western
half of the state and since bankers from
neighboring states, live stock men, far
mers, railway officials and many others at
tend the annual meetings the convention
would be about as large as the Nebraska
stock growers association annual meeting*.
Plans include a nominal assessment
against each bank in the district to pay the
expenses of the annual meeting, but the
convention city must provide the meeting
place.

connection with assurance
of in d iv id u a l a tte n tio n
It is traditional at The Northern Trust Company that our
officers and personnel devote close, individual attention to
the problems brought to us by clients. The development
of friendly customer relations is a requisite here. And in
the forty-six years o f its history the bank has made many
staunch friends. From bankers throughout the country
who appreciate a correspondent connection of this nature,
inquiries are invited.

THE NORTHERN
TRUST COMPANY

SELL YOUR BANK

N O R T H W E S T C O R N E R LA SALLE A N D M O N R O E S T R E E T S . C H IC A G O

★
Northwestern Banker

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

*
Septem ber 1935

T h e “W a lte r s” W a y
W ith o u t P u b licity
Q ualified, carefully investigated bank
em ployees furnished free
T H E C H A R L E S E. W A L T E R S CO.
O m aha, N ebrask a

W m. N. JO H N S O N
P re s id e n t

OFFICERS MINNESOTA BANKERS ASSOCIATION
Treasurer........................... W. C. Krog
Stillwater

President................. Wm. N. Johnson
Minneapolis
Vice President........... Oluf Gandrud
Benson

W IL L IA M D U NCAN, J r .
S e c re ta ry

Secretary...........William Duncan, Jr.
Minneapolis

President Johnson Names Committees
ILLIAM N. JOHNSON, presi
dent of the Minnesota Bankers
Association, announces his associa
tion committees as follows:

Agriculture

Henry A. Thoeney, First National, Glen
coe; F. E. King, First National, Grand
Rapids; 0. W. Lundsten, Minnetonka
State, Excelsior; P. 0. Holland, Northfield; Ray C. Kern, State Bank of Lake
Elmo.

G.
0. Hage, chairman, Crookston Trust
Membership
Co., Crookston; Park Dougherty, First
S. J. Egge, chairman, Merchants &
National, Austin; E. J. Feldman, First
National, Pipestone; J. Daniel Mahoney, Miners State, Hibbing; H. L. Sargent,
First & American National, Duluth; R. Security State, Waterville; Walter John
W. Barstow, First National, Sandstone; son, Red Lake County State, Red Lake
F. S. Peterson, Becker County National, Falls; D. L. Connolly, State Bank of
Detroit Lakes; 0. G. Jones, Goodhue Danvers; J. D. Doyle, First National,
Pine City; M. E. Kalton, Security State,
County National, Red Wing.
Wells; H. W. Schroeder, People’s Na
Advisory
tional, Long P rairie; F. A. Timm, Farm
Wm. N. Johnson, president, N. W. Na ers & Merchants State, Balaton; A. M.
tional Bank & Trust Co., Minneapolis; Eiken, Caledonia State, Caledonia; J. J.
D. J. Fouquette, retiring president, St. Sterner, Citizens State, Winsted; J. F.
Cloud State, St. Cloud; B. V. Moore, First Schneider, Farmers State, Elkton.
National Bank & Trust Co., Minneapolis;
Unit of Independent Bank
W. C. Krog*, Farmers & Merchants State,
J.
K.
Martin, chairman, First National,
Stillwater; H. R. Kurth, Citizens Bank,
Little Falls; E. W. Kane, Worthington
Hutchinson.
E.
C. Wingen, chairman, Security Na National; J. Osbolt, First National, Chis
tional Bank of Amboy; M. L. Lundsten, holm; J. A. Allen, First National, Milaca;
Buffalo National, Buffalo; Frank Mann, Elmer B. Hanson, First State, Fertile; E.
First State, Brownton; Guy Masters, J. LaFave, Citizens Bank, Morris; F. E.
N. W. National Bank & Trust Co., Minne Pieschel, Farmers & Merchants State
apolis; 0. A. Olson, First National, Bra- Springfield.
ham; Geo. E. Buscher, Farmers & Mer
Securities and Safety Deposit Box
chants State, Breckenridge.
A. J. Veigel, chairman, University
State, Minneapolis; D. E. Broadwater,
Legislative
J. E. Odegard, chairman, S»ntiago Fanners & Merchants State, Preston;
State; A. J. Veigel, University State, John Buettner, Zapp State Bank, St.
Minneapolis; C. F. Dabelstein, Olmsted Cloud; E. A. Stoll, State Bank of New
County Bank & Trust Co., Rochester; Ulm; L. L. Olson, First National, Barnes-

ville; I)'. W. Stebbins, American Exchange
National, Virginia.
Protection

John G. Maclean, chairman, First Na
tional Bank & Trust Co., Minneapolis;
0. H. Odin, Marquette National Bank &
Trust Co., Minneapolis; E. C. Souba,
First National, Hopkins; Henry Riley,
N. W. National Bank & Trust Co., Minne
apolis; A. P. Hechtman, Farmers State,
Osseo.
Taxation

R.
L. Griggs, chairman, Northern Na
tional, Duluth; R. E. Cryte, Farmers &
Merchants State, Ruthton; John C. Kettner, Courtland State, Courtland; J. R.
Chappell, Merchants Bank, Winona; C. G.
Leaman, State Bank, Wheaton; R. W.
Manual, Marquette National, Minne
apolis; R. W. Lindeke, First National, St.
Paul; E. L. Mattson, Midland National
Bank & Trust Co., Minneapolis; H. B.
Humason, American National, St. Paul;
A. McC. Washburn, First National Bank
& Trust Co., Minneapolis; W. J. Browne,
Wadena County State, Wadena; C. H.
Berge, Citizens State, Brainerd; Ben R.
Hassman, First National, Aitkin.
Public Relations

A. T. Scriver, chairman, First National,
Cannon Falls; R. E. Sprague, Sprague
State Bank, Caledonia; E. 0. Lund, State
Bank, Bricelyn; Edwin Elders, West St.
Paul State; V. E. Mikkelson, Fidelity
State, Minneapolis; Geo. J. Meins, Ameri
can National, St. Cloud; Edw. S. Olson,
First National, Starbuek; John T. Ring,
N orthwestern Banker

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Federal Reserve Bank of St. Louis

Septem ber 1935

36
First National, Nashwauk; D. G. John
son, First National, Hawley.

io Change Location
An application was recently made by
officers of the Farmers State Bank of
Urbank, Minn., to the State Securities
Division for authority to transfer the
charter of the bank to Morris and to
operate a bank there under the name, of
the Morris State Bank.
Urbank is located about 22 miles north
west of Alexandria. The officers of the
Urbank Farmers State Bank are George J.
Kraemer, president; Mary Kraemer, vicepresident ; and Daniel Stang, cashier.

G E N E R A L

To Princeton
M. A. Bell, who has been with the
Regional Agricultural Credit corporation
in Minneapolis, has moved to Princeton
to assume the position of cashier in the
Princeton State Bank. He succeeds Miss
Ruth Herdliska, who has accepted a po
sition with the Federal Housing Admin
istration in its offices in Minneapolis.
Mr. Bell was bom in Glencoe. He re
ceived his early training in the First Na
tional Bank in that city. In 1903, he was
transferred to Plato as cashier succeeding
his brother, George, in the bank at that
village. He filled that position until Jan
uary 9, 1933, when its owner, Charles H.

B A N K I N G

S E R V I C E

Klein,
on the
to the
gional

of Chaska, liquidated it 100 cents
dollar. From Plato, Mr. Bell went
Minneapolis head office of the Re
Credit Corporation.

Director Resigns
O. D. Ostby, a stockholder and director
of the Union State Bank, Thief River
Falls, since its organization in May, 1930,
recently tendered his resignation as di
rector. At the same time Mr. Ostby dis
posed of his stock in the institution to the
present stockholders. E. O. Peterson of
Belle Plaine was named to fill the hoard
vacancy, and was formally elected cash
ier.

New Bank
Within a few weeks, Pine River will
have a bank, after being without one for
nearly six years. This was learned follow
ing a meeting of some business men with
Oscar Dahl and Arthur J. Waldon, presi
dent and cashier of the Farmers State
Bank of Guthrie.
The name will be changed to the Pine
River State Bank. A location has not as
yet been selected.
Pine River men chosen as directors for
the new bank are P. E. Lindberg, F. L.
Hill, and T. E. Hill, all residents for
many years and closely associated with
the development of the community. F. L.
Hill is further qualified to serve as he was
formerly president of the State Bank of
Pine River. Mr. Dahl and Mr. Waldon
will continue as officers in the new bank.

A . I. B. Election

• PI GS IS PI GS •
A trem endous flow o f Banking T ransactions, based on
Pigs, passes daily across the counters o f the Drovers. For
the Drovers National cooperates closely with Country
Banks in rendering a specialized service to thousands of
Live Stock Shippers. From the Producer to the Com m is
sion Firm ; from the Packer to the M erchant, the Drovers
Service m ultiplies itself many tim es as Pork Products
speed along the channels o f distribution to the Ultim ate
Consumer.

ro vers

a t io n a l

n k

D r o v er s T r u s t K Sa v in g s B a n k
U n io n S tock Yards-CHICAGO
Northwestern Banker

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Federal Reserve Bank of St. Louis

Septem ber 1935

Lyle Morcomb of the First National
Bank was elected president of Winona
chapter, American Institute of Banking,
at a recent chapter meeting at the Wi
nona National & Savings Bank.
Other officers chosen by the chapter are
Harry Busdicker, Winona National &
Savings Bank, vice president, and Nor
man Schellhas, Merchants Bank, secre
tary-treasurer. Joseph H. Knopp and
Joseph E. Krier, both of the Merchants
Bank, were elected to the hoard of gov
ernors for three years and S. J. Kryzsko
of the Winona National & Savings Bank
Avas elected to fill a vacancy on the board
for a term of one year. Other members
of the board are Harold Workman and
Clarence Fiedler of the First National
Bank and Richard S. Deeren of the Wi
nona National & Savings Bank.

Propose New Bank
Possibilities of opening a bank in Wen
dell Avere discussed at a recent meeting
of business men. L. M. Severeid, a banker
from NeAv London, outlined a proposition
in Avhich he Avould furnish a certain
amount of capital, proA’ided the business

37
subscribed the rest. The present banking
law demands at least $12,500 as capital.

Move to New Prairie
Recently the Farmers State Bank com
pleted the moving of their banking equip
ment into temporary quarters in the va
cant bank building at New Prairie, where
they will continue their business in the
usual way. They report that their new
quarters are complete in every way as to
vault and fixtures.

Brief News
S.
E. PETERSON, assistant cashier of
the First State Bank, Wvkoff, for the
past four years accepted a position with
the Security finance Co., Spring Valley.
He is succeeded by Lyman Fries, for
merly with the First State Bank, Mable.
ACCORDING to a recent statement of
the Citizens State Bank, Big Lake, de
posits subject to check are $51,600 and
time and savings deposits are $52,758.
THE WRIGHT COUNTY State Bank,
Monticello, now has deposits of well over
$230,000, an increase of about $75,000
since moving here from a nearby town
about five months ago.
THE ELGIN State Bank, Elgin, which
was organized last May now has deposits
of around $85,000. The capital is $10,000.
THE FIRST NATIONAL Bank, St.
Charles, which consolidated with another
bank in the town last May, now has
deposits of over $700,000. Crops have
been severly damaged in this territory by
excessive rain and wind.
SERVICE CHARGES made by Hast
ings banks on checking accounts are as
follows: Accounts averaging less than
$50 on which checks have been paid are
charged 50c and 5 free checks are al
lowed. Additional checks over 5 are
charged 2c each. Accounts averaging $50
and over, one free check is allowed for
each average balance of $10. These banks
also make a float charge on out-of-town
checks deposited to the account which is
5c on items up to $10 and items between
$10 and $100, 10c. On all items over
$100 and up to $200, 15c. On all items
over $200 the charge is 17c per $1,000
per day.
Banks at Red Wing also use this same
service charge.
A MEETING of bankers of the five
counties comprising the Western Minne
sota Clearing House Association met in
annual convention recently at Morris.
Secretary Duncan, who was the principal
speaker at the meeting, discussed the 1935
Banking Bill.

Custom ers never, and banks
seldom, give thought to the
efficiency with which checks
are collected and accounted
for through the highly de
veloped system which char
acterizes the mechanical fea
tures of American banking
methods.
The country-w ide average
cost of less than three cents
per item is an achievement
not equaled by any other
business or governmental
agency.
We take pride in the daily
contribution which this bank
makes to this indispensable
public service.
...THE...

P H IL A D E L P H IA
N A T I » N A I. II A A K
ORGANIZED 1803

PHILADELPHIA, PA.
Capital and Surplus_________________ S 3 0 .0 0 0 .0 0 0

Northwestern Banker

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Federal Reserve Bank of St. Louis

September 1935

38
New officers elected are: Harry Frisbee, president, president of the Babcock
National Bank; C. G. Leman, vice presi
dent, vice president of the State Bank of
Wheaton; and secretary and treasurer,
E. J. LaFave, cashier, Citizens Bank,
Morris. Directors of the Association are:
F. L. Collins, J. P. Brendal, Edward S.
Olson, A. J. Reichmuth, and Gordon I.
Kristensen.
W. 0. SOHRE, cashier of the State
Bank of Wood Lake, has returned from a
three-week’s vacation in the east. His
trip included a trip to Washington, D. C.,
and other places of interest.

Company, succeeding the late E. V. Nel
son. Prior to his association with the
Northfleld National, he has been con
nected with the First Bank Stock Cor
poration offices in Minneapolis.
CHARLES BURDEAU has been
named manager of a branch of Harris,
Upham & Company which has opened
recently in Minneapolis. Mr. Burdeau
will handle the business of the grain de
partment.

INDEPENDENT BANKERS who re
cently took a trip to Yellowstone Na
tional Park have returned to their homes,
reporting an excellent trip to this popular
A.
F. MEYER is the new president of section of Wyoming. There were twentythe Northfleld National Bank & Trust three members of the party, and they oc

cupied a special car placed at their dis
posal by the Northern Pacific Railroad.
THE STATE BANK of Danube, a
new institution in Renville county, opened
last month. The new bank has a capital
of $10,000, and a surplus of $2,000. Offi
cers of the bank are : George Kircher,
president; and Frank Kireher, vice presi
dent. These men are also officers of the
Citizens National Bank of Olivia. G. H.
Klatt is cashier of the new institution.
ANOTHER NEW BANK opening last
month was the Greenbush State, capital
ized at $12,000. N. O. Follen is the
cashier. Other officers are: George P.
Pihlstrom, president; and Andrew W.
Clay, vice president. Carroll Anderson
of Greenbush is assistant cashier.
MEMBERS of the Hennepin Rural
Bankers Association met on August 22nd
for their annual meeting and election of
officers. The gathering took place at the
Hotel Del Otero in Spring Park.

In d e pe n d e n t
C ourse

T ra d itio n a lly , C en tral H a n o v er has
held to an independent course in the
financial world.
Its policies have always been free from
external control.
Custom ers k n ow that these traditions
govern Central H anover today.

e n t r a l

a n o v er

BANK A N D TR U ST COM PANY
NEW Y O R K

Northwestern Banker

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Federal Reserve Bank of St. Louis

September 1935

A. A. DAHLBERG, of the Northwest
Bank of Minneapolis, has returned from
his vacation. Mr. Dahlberg has been with
the Northwest National for the past fif
teen years.
GEORGE AY. PEARSON, formerly
vice president of the Continental Illinois
Company, Chicago, has been made vice
president of Stifel, Nicolous & Company
of Minneapolis, in the corporation de
partment. Mr. Pearson has been con
nected with the bond business since 1903.

FO LLIES O F
FED ER A L F IN A N C E
(Continued from page 30)
stimulate business. For two years large
amounts of unemployed funds in the form
of excess reserves have been available and
now aggregate more than $2,000,000,000.
These facts have not resulted in stimu
lating borrowing by business. The les
son is that further increases in surplus
funds will not do so.
We must realize that if confidence
exists, funds for the needs of business
will be found, but that so long as continu
ing and ever-changing experimental
monetary and fiscal policies of govern
ment prevent the return of confidence, so
long as government continues in compe
tition with private enterprise, and con
tinues its threats and attacks upon busi
ness, so long as no limit is in sight, to in
creasing debt and therefore to ultimate
taxes, no amount of surplus funds avail
able will result in the restoration of busi
ness activity.

OTA
OFFICERS
NORTH DAKOTA BANKERS
ASSOCIATION
President....................... Guy Cook
Carrington
Vice President. ..Frank T. Merrill
Minot
Treasurer................... A. C. Brown
Hannaford
Secretary...............C. C. Wattam
Fargo

G U Y COOK
P re s id e n t

Banker Dies
Milton T. Chase, Wimbledon banker
and business man, passed away recently
at the Worrall hospital at Rochester,
Minnesota.
Mr. Chase had been ill for about a year
and for three weeks was in the Rochester
hospital. The cause of his death was kid
ney trouble.
He was born January 21, 1888. He is
survived by his wife and several children.

Warning
The First National Bank of Bismarck
advises that an individual who repre
sents himself to be C. T. Boone, Jr., a
representative of the Associated Press,
has been operating in North Dakota and
South Dakota for the last two months,
during which time he has drawn in the
neighborhood of six or seven checks on
this bank. He has never carried an ac
count with them, and he is not a repre
sentative of the Associated Press. The
last check received was from the First
National Bank, Parker, South Dakota.

A . B. A . Convention
The, annual convention of the American
Bankers Association will be held at New
Orleans November 11th to 14th, inclusive.
Any bankers from North Dakota con
templating attending should address Dale
Graham, chairman of the Hotel Com
mittee, care of National Bank of Com
merce, New Orleans, for hotel accommoda
tions.
It is customary each year to run a
special train out of Chicago, known as
the Fall-Tonic Special. This special will
leave Chicago for New Orleans probably
on the evening of November 8th. It is
also reported that arrangements will be
made for a “get-together” affair in Chi
cago before leaving. Any banker de
siring to make reservation for space on
the special train should address W. G.
Edens, care Terminal National Bank,
Chicago.

New Cashier

of Lisbon for a period of twenty-five
K.
M. Orgain, of Wilbaux, has been years.
selected as cashier of the Farmers State
R. F. SHOEMAKER has accepted a
Bank, replacing Lou Thompson, who re
position as assistant cashier of the Far
signed.
mers & Merchants State Bank of Tolna,
succeeding Lars Frvdendal, who has re
Litigation
signed.
The State Bank of Streeter and the
First State Bank of Gackle, have pend
O. W. SMITH has been elected assist
ing some litigation involving the legality
ant
cashier of the Citizens State Bank,
of the law prohibiting the issuance of
Rugby,
succeeding John Finnegan, who
tax deeds on certificates that were issued
prior to the enactment of the tax deed has resigned.
moratorium law. This litigation will un
P.
J. EDKINS, formerly assistant
doubtedly go to the Supreme Court for
cashier
of
the Farmers & Merchants Bank,
final opinion, and both the Streeter bank
and the bank at Gackle ask that other Beach, is now cashier of that institution,
banks having an interest in similar liti succeeding C. 0. Halverson, who has re
gation take the matter up with them at signed.
once.
CONRAD FREEBERG succeeds C. M.
Freeberg as assistant cashier .of the Mer
Bank Robberies
cer State Bank.
The Criminal Identification Bureau at
the penitentiary at Bismarck, is interest
NEW OFFICIALS in the Merchants
ing itself in all major crimes committed National Bank & Trust Company of Fargo
in North Dakota, and endeavoring to do* are: Clarke Bassett, vice-president, and
what it can to assist in the apprehen Earl L. Shaw, cashier. Mr. Bassett comes
sion of the criminals. Often times when to Fargo from Bozeman, Montana, where
a bank robbery is committed, the banker he was vice-president of the Commercial
in another town may pick up some in National Bank.
formation which might be of invaluable
assistance in identifying the bandits. It
WARREN N. STEELE, formerly a
is suggested that should any of this in resident of North Dakota and well-known
formation at any time come into the hands as banker and business man in the north
of any banker in the state, that he for west, died recently in his home in Cali
ward it to the Criminal Identification fornia. Mr. Steele was the founder of the
Bureau, in care of the penitentiary at Bis First National Bank of Rolla and also was
marck.
in business for a number of years in Grand
Forks.

Brief News

THE LINCOLN State Bank, Glenburn,
has changed its corporate headquarters
to Hankinson, North Dakota, The title
of the bank remains the same.
THE SECRETARY of State has issued
a certificate renewing the term of corpo
rate existence of the Farmers State Bank

S E V E R A L THOUSAND people
gathered last month to welcome the open
ing of the Lincoln State Bank in Hankin
son. The Lincoln State moved to the latter
city from Glenburn. The bank occupies
the old First National building in Hankin
son and maintains an office at Greenbush.
F. 0. Foley is cashier of the institution.
Northwestern Banker

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Federal Reserve Bank of St. Louis

September 1935

40
SELLIN G THE BANK'S
SER V IC ES DIRECT
(Continued from page 32)
customers, and is pretty choosy about tak
ing on new ones. But note, please, the
keen psychology of that proffered confi
dence. It tells the customer in so many
words, “You’re one of a very carefully
selected class of people, and we trust you
because we know you are worthy of it.”
Likewise it gives the customer something
that he can tell to his friends as interest
ing chat about his bank, which at the same

A C O M M ER C IA L

time reflects great credit upon his char
acter and standing, and does so without
any direct bragging. And the friends'?
Why, they begin to wonder, “Do you sup
pose the Eighty-third National would take
me on? Why, doggone it, of course they
would. I ’m certainly as honest, and I think
I ’m a little sounder, financially, than my
friend, ‘Bill,’ who already banks there.”
After a man has been keeping in the back
of his head for years the conviction that an
account at the Eight-third is a badge of
distinction, some day when the teller at his
old bank gives him a dirty look, he
marches across the street and transfers his

BANK

THAT A FFO R D S

ITS C O R R E S P O N D E N T S C L O S E C O N T A C T
W IT H

EVERY

IM P O R TA N T

IN D U S T R Y

C o n t i n e n t a l I l l in o is
NATIONAL BANK AND
TRUST COMPANY
OF CHICAGO

Northwestern Banker

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Federal Reserve Bank of St. Louis

September 1935

business to the Eight-third. That is what I
mean by making customers want to sell.
The big advantage of a large force of
customers actually selling the institution is
their unbelievable effectiveness. Not to be
ignored, hoAvever, is the additional advan
tage that this sales force doesn’t cost the
bank a nickel. Just give ’em good service
to keep ’em satisfied. Then give ’em a few
facts to talk About, which facts can be
dragged naturally into conversation with
their friends. Man, alive, a big-city bank
can have thousands of unpaid salesmen
making a call or two per day in its behalf 1
And even in a small town, there may be
dozens of them.
Staff Selling
Here is another sales force that has the
self-same advantage of not costing any
thing : Your staff of employes and officers.
The entire bank force can and should be
equipped to sell the bank—everybody from
the Chairman of the Board down to the
women who scrub out at night and never
see the bank during banking hours. In
cidentally, a few years ago a bank in Chi
cago had a scrubwoman who sent in so
many savings accounts during a contest
that a vice president made a point of
stopping in at the bank one night after the
theatre to see what manner of person she
was. He found a plain, hard-working,
Polish woman, who speaks very poor Eng
lish, but who somehow had gained the unshakea'ble belief that her bank was the best
bank with which to do business. So, during
the waking hours of her comparative lei
sure, she was forever telling her Polish
friends that they ought to open savings
accounts with this bank. So far as I know,
she had never until this evening spoken
with either an officer or an employe of the
bank whose work had anything to do with
the banking functions. But she certainly
brought in a lot of business!
Tellers and officers have the best chance
to do effective selling, simply because they
are in direct contact with the public which
comes into the bank on banking business.
Obviously they need to be equipped with a
knowledge of those things which will help
them to sell. How about the folks behind
the scenes, whose existence is disclosed to
customers only by the sound of bookkeep
ing machines and by an occasional glimpse
through an opened door? Well, it seems
to me that these people are sufficiently im
portant in a comprehensive sales plan so
that they must not be ignored. Although
they do not meet customers of the bank
in the course of business, they have spread
ing circles of personal friends, many of
whom might be turned likewise into desir
able customers. And most of these friends,
knowing nothing about the details of bank
operations and little more about just what
jobs their friends occupy at the bank,
think of these friends as bankers even
(Turn to page 47, please)

OFFICERS IOWA BANKERS ASSOCIATION
President................... Melvin W. Ellis
Charles City
M. W . E L L IS
P re s id e n t

Vice President. . . .George C. Swiler
Burlington

Treasurer

N. P. Black
Perry
Secretary..................... Frank Warner
Des Moines

FRA N K W ARNER
S e c re ta ry

President Ellis Names Committees

LEVEN committees which will assist B. 0. Ball, West Burlington; Frank Hoff
in carrying on the work of the Iowa man, West Side.
Bankers Association for the coming year
FEDERAL RESERVE—S. E. Coquilhave been named by M. W. Ellis of lette, Cedar Rapids, chairman; A. M.
Charles City, association president.
Lowrey, Fort Madison; H. E. Ross,
Personnel of the committees includes Shenandoah; George W. Woods, Council
officers of all types of banking institu Bluffs; II. M. Carpenter, jr., Monticello;
tions and trust companies. The 96 bank E. W. Jones, Des Moines; W. K. Bramers composing the committee represent well, Hampton.
64 Iowa counties.
INSURANCE—J. L. Campbell, Hum
A complete list of committees follows : boldt, chairman; J. H. Peterman, ClarAGRICULTURE—C. S. Rye, Manly, inda; W. A. Lane, Marshalltown; E. E.
chairman; R. M. Messerschmidt, Des Sapp, Buffalo Center; J. W. Edge,
Moines; C. J. Obrecht, Holstein; H. J. Emmetsburg.
Richards, Allerton; A. J. Roberts, Albia;
LEGISLATIVE—H. R. Young, Ar
George H. Paulson, Onslow; H. T. Orr, lington, chairman; F. D. Williams, Iowa
Monona; Harry C. Faulkner, Anita;
City; G. L. Scoles, Manson; 0. A. Otto,
George A. Freeman, Cylinder; Thomas L. Atlantic; R. S. Kirkpatrick, West Lib
Evans, Beaman; M. H. McDonald, Morn erty; Wayne C. Currell, Estherville; V. 0.
ing Sun.
Figge, Davenport; V. D. Koons, Britt;
BANKING CODE—Frank C. Welch, B. A. Gronstal, Council Bluffs.
Cedar Rapids, chairman; L. J. Schuster,
GLASS-STEAGALL BANKING ACT
Clinton; E. C. Moody, Nora Springs; —Fred J. Figge, Ossian, chairman; F. E.
John A. Dunlap, Keokuk; R. W. Turner, Boyd, Colfax; George J. Hess, Carroll;
Council Bluffs; E. R. Haines, Decorah; Paul H. Huston, Cedar Rapids; J. E.
T. R. Watts, Grand Junction; D. H. Ellis, Ashton, Lone Tree; V. P. Cullen, FairGreene.
field; W. W. Blasier, Jesup; A. M.
BANK TAXATION—Herbert L. Hor Hauser, Charles City; D. W. Bates, Des
ton, Des Moines, chairman; Harry W. Moines.
Schaller, Storm Lake; E. D. Huxford,
TIME LOCK—J. H. Pullman, Sidney,
Cherokee; H. C. Burns, Auburn; J. F. chairman; Clay W. Stafford, Ames; A. J.
Kennedy, New Hampton; Rudolph W. Miller, Hopkinton; G. II. Bringolf, Graf
Weitz, Des Moines; Charles I. Danforth, ton; F. C. Moeller, Fort Dodge; A. C.
Burlington; J. P. Thomson, Cresco; R. D. Clapp, Harlan; L. T. Bicket, Reinbeck.
Swartslender, Tipton.
TRUST BUSINESS—C. F. Harris,
EDUCATIONAL—Ben S. Summer- Gladbrook, chairman; C. F. Fredrieksen,
will, Iowa City, chairman; W. R. Good Sioux City; I. L. Wright, Des Moines; G.
man, Greenfield; C. J. Adams, Dyersville;
0. Van Derveer, Waverly; F. R. Jones,
C. E. Baylor, Sigourney; C. 0. Wilkin Sioux City; Wayne C. Currell, Esther
son, Mason City; C. C. Cook, Booneville; ville; R. S. Howard, Oskaloosa; L. B.
H. C. Steele, Cherokee; C. E. Watts, Bartholomew, Des Moines; M. 0. Sagers,
Pocahontas; C. A. Edmonds, Muscatine: Maquoketa.

BANKING AND AGRICULTURAL
CREDIT FACILITIES—B. F. Kauff
man, Des Moines, chairman; W. T. Rob
inson, Newton; W. J. Lewis, Harlan; W.
N. Grant, Indianola; E. S. Van Gorder,
Audubon; Robert W. Waite, Waterloo;
Albert C. Lantzky, Dubuque; Horace B.
Olds, Charles City; W. G. C. Bagley,
Mason City.

Sells Stock
II. C. Schweppe has sold his stock in the
Titonka Savings Bank and is taking over
a bank at Cassville, Wis., a place of about
900 population. The Schweppes came to
Titonka from East Chain, Minn., where
Mr. Schweppe was cashier in a bank, ten
or twelve years ago.

Transactions Gain
A gain of $5,478,000 in check transac
tions through banks was rgeistered in nine
major Iowa cities for the week which
ended August 21st, as compared with the
like week of 1934.
Every reporting city in the state showed
gains, with the exception of Cedar Rapids,
where the loss was negligible.

New In Maquoketa
Officers and directors of the new Maquo
keta Bank & Trust Co. have announced
the opening of a new institution in Ma
quoketa. The new7bank is an outgrowth of
the Security Savings Bank of Zwingle
which consolidated with local stockholders
to form the new bank and add to the capi
tal.
The new bank occupies the building in
Maquoketa known as the First National
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Federal Reserve Bank of St. Louis

September 1935

42
bank building1 and is a member of the
Federal Deposit Insurance corporation.
F. J. Stebor, former cashier of the Se
curity Savings Bank, has been elected as
president; John A. Kaler is the new vicepresident, and H. R. Joiner, who has been
identified with the state banking depart
ment for several years, has been elected as
cashier.

Mr. Colby, born at Clifton, 111., August
12th, 1870, came with his parents to H art
ley, Iowa, when his father brought a
group of French settlers to take up rail
road lands thereabouts. He attended col
lege at Mount Vernon, Iowa, and later,
with his mother took over the Hartley
banking business of his father.

Increases Capital
Former Banker Dies
Charles Hayden Colby, 65, founder of
the town of Monet#, Iowa, formerly H art
ley, Iowa, banker and Des Moines real
estate man, died at his home recently.

The First National Bank of Hampton
has increased its capital from $50,000 to
$75,000, according to Willis K. Bramwell,
president. Fifteen thousand was taken
from the undivided profits and added to

the surplus fund making a total capital
and surplus of $100,000.

Stock Sold
The campaign to sell stock in the pro
posed State Bank of Wapello, was closed
last month when all stock was subscribed.
H. B. Hammer, who has been active in
promoting the organization, states that
notices have been sent to subscribers ask
ing them to deposit the money for their
stock in the Burlington Savings Bank at
Burlington, Iowa, for which interim re
ceipts will be issued.
The date of opening the bank depends
upon the promptness in paying the money
for stock subscriptions.

New Bank

O FFICERS

E. L. MILLER
Cbairman of the
Board

J. H. NISSEN
Cashier & Assistant
Trust Officer
E. JOHANNSEN
Assistant Cashier

W. A. ANDERSON
President

H. M. OLNEY
Assistant Cashier

MILO J. GABRIEL
Vice President
O. P. PETTY
Vice President and
Trust Officer

F. E. CONOVER
Assistant Cashier
F. H. HAMANN
Assistant Cashier

H. G. KRAMER
Vice President

R. A. W. LATIMER
Comptroller

A. R. THURN
Vice President

E. H . JO R G E N S E N

Asst. Trust Officer

Clinton County’s Largest Bank

For Your Business in Clinton
T he tradition o f years long past
built up w ithin the City National Bank
a standard o f service and cooperation
which won fo r it and lias held with it
a great num ber of loyal custom ers
and correspondents.
We w elcom e your account.

The City National Bank
CLINTON, IOWA
D IR EC TO RS
W . A. A N D ER SO N
P resid en t

G. L. C U R T IS
P resid en t C urtis Companies.
Inc.

F.
H . VAN A LLE N
P resid en t J . D. V an A llen
& Son. Inc.

O. A. A RM STRO N G
P resid en t C. F . Curtis
Company, Inc.

M ILO J. G A B R IE L
Vice P resid en t
P resid en t G abriel Lum ber
& F uel Co.

F . J. W A R D
Vice P resid en t and G eneral
M anager Eclipse Lum ber Co.

E. L. M IL L E R
A ttorney

G.
E. W IL SO N
Pres. C linton B ridge Works

A. A. B E N T L E Y

President

F idelity Life Association

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Federal Reserve Bank of St. Louis

September 1935

Last month it was definitely announced
that a new bank would be organized at
Galva, with W. H. Bisehel of Aurelia,
director of the bank in Alta, as vice-presi
dent. The new bank at Galva will be
known as the First Trust and Savings
Bank, and it is planned to have it ready
for opening early in September.

No Collateral
The Mason City Gazette prints the fol
lowing regarding W. G. C. Bagley, presi
dent of the First National bank of that
city:
“Mr. Bagley was presented to Iowa
publishers recently in happy manner by
John Huston, publisher of the Ottumwa
Courier and president of the Iowa Daily
Press association.
“ ‘Mr. Bagley is a banker/ said the
genial Ottumwan. ‘I am authorized to
announce to you that if any of you pub
lishers need a loan, you can get it from Mr.
Bagley’s bank without collateral. Friends,
I present Mr. Bagley.7
“The local banker arose and, with his
good-natured smile, made his speech in
these words:
“ ‘With regard to Mr. Huston’s an
nouncement of loans to you without col
lateral, may I say that he has his facts
about as straight as newspapers usually
get things.7
“And Mr. Bagley got a great laugh and
hand from those whom he chided so point
edly.77

On Banking Board
John L. Campbell of Humboldt has been
appointed to the state banking board.
The appointment, which runs until July
1, 1937, was made to fill the vacancy
created by the recent death of M. E. Tate
of Keokuk.
The banking board, composed of repre
sentative bankers throughout the state,
meets periodically to consult with the
state superintendent of banking on bank
ing laws and regulations.

43
They are operating under a capital
stock of $25,000 and $10,000 surplus.

fakes Life

Consolidation

Theodore Rohwer, 55, president of the
Schleswig Farmers State Bank, died re
cently from a wound self-inflicted.
Poor health is believed responsible. Two
sons and a daughter also are reported ill.
Two months ago another son was killed
in a California mine accident.
Rohwer shot himself in the temple with
a revolver.

The two banks in Silver City, the Farm
ers State Bank and the Silver City State
Bank, formed a merger recently, combin
ing their capital and resources under the
name of the latter and using their place
of business and electing officers from both
institutions for the neAV officiary Avhich is
as follows:
M. Kehoe, president; J. G. Flanagan,
A'ice president; R. P. Galt, cashier; J. H.
Kruse, executive vice president.
The neAV directors are: M. Kehoe, J. G.
Flanagan, James Burgoin, C. D. Green
wood, C. H. Kruse, Harry Maddocks, and
Otto Mass.

Vigilance System
A vigilance system around all Iowa
banks was suggested last month by the as
sociation, in a bulletin to its members.
It was urged that each bank employ a
plain clothes guard to keep a close watch
on strange persons and “suspicious char
acters” seen around the buildings.
The large number of unsolved bank
holdups in Iowa during recent weeks
prompted the bankers’ association to issue
the bulletin.

Resigns
Miss Marie Imhof, who has been asso
ciated Avith the banking institutions in
Wayland since January 1, 1917, had re
signed her present position as assistant
cashier of the Wayland State Bank. Miss
Imhof’s resignation will become effective
September 7th.

Fifty Years
Last month, on August 23rd, the First
National Bank of Wayne completed a

DIRECTORS
B. F. KAUFFMAN

Dispose of Office

President

S. C. PIDGEON

Vice President

R. R. ROLLINS

Assistant Cashier

PAUL BEER
President, The Flynn Dairy Co.

The Fanners State Bank of Merrill, has
disposed of its banking office in Westfield
to the Akron Savings Bank, which took
charge of the business last month. J. E.
Brady, cashier of the Akron bank will be
in charge of the office and will give three
hours a day service at Westfield.
The office has been in charge of Mrs.
M. 0. Nelson since the bank charter was
moved to Merrill several years ago.

DR. O. J. FAY

Surgeon

HENRY FRANKEL
Treasurer, Younker Bros.
J. G. GAMBLE

Attorney

J. W. HOWELL

Vice President, War•
field-Pratt-Howell Co.

F. W. HUB BELL
Vice-Pres.-Treas., Equitable
Life Ins. Company of Iowa

Banker Dies

Definite

J. W. HUBBELL

Funeral services Avere held recently in
Akron for Boyson Ross, 77, president of
the Akron Savings Bank, and pioneer citi
zen.
Mr. Ross died at the home of his son,
Dr. F. B. Ross, in Kalispell, Montana.
Mr. Ross, who retired from the grain
buisness in Akron tAventy years ago, Avas
accompanied to Kalispell by his nephew,
Karl A. Youngstrom, and Mrs. Youngstrom. Mr. Ross died several hours after
arriving at Kalispell.

w illin g n ess to serve, th e B ank

Name M cCleary

ers

R. J. McCleary, assistant cashier of the
Security State Bank, Keokuk, has been
named acting cashier of that institution,
thus filling the vacancy caused by the
death of M. E. Tate. The action Avas
taken by the board of directors of the
bank, at a special meeting.
Mr. McCleary will have been associated
with the Security State Bank for eighteen
years in October of this year. He entered
the bank in 1917 and served continuously
as assistant cashier with the exception of
a period of four months when he was in
Los Angeles, and was associated with the
Security Trust and SaAungs institution of
that city.

d efin ite advantages

S. L. SHEUERMAN

Advantages

Pres., Sheuerman
Brothers, Inc.

JOHN D. SHULER Pres., Shuler Coal Co.
L. B. BARTHOLOMEW

Trust Officer

In stren gth o f resou rces, in
ex p erien ce

T rust

o f p erso n n el,

C om pany

offers

to other

b anks w h o carry or co n tem
p late carrying accounts in D es
M oines.

OTHER OFFICERS
C. W. MESMER
C. H. STEPHENSON
F. S. LOCKWOOD

Vice President
Cashier
Secretary

F. C. ATKINS

Assistant Cashier

WM. ELLISON

Assistant Cashier

A. F. ERICKSON

Assistant Cashier

L. NEVIN LEE
L. W. WALLETT

Assistant Cashier
Assistant Secretary

BANKERS TRUST CO.
6th and Locust

DES MOINES

Capital $1,000,000

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Federal Reserve Bank of St. Louis

Vice President, F. M.
Hubbell Son & Co.

September 1935

44
half century of uninterrupted activity
and service to its community, all that time
under the same management. John T.
Bressler, one of the founders of the insti
tution, is still connected with the bank.
Officers are John T. Bressler, Jr., presi
dent; B. F. Strahan, vice president; L. B.
McClure, cashier; and Eben C. Holmberg,
assistant cashier.

Washington, D. C., to confer with officials
of the FHA and officials of the Com
modity Credit Corporation with reference
to making corn loans in Iowa. Mr.
Kauffman is chairman of the “Committee
on Banking and Agricultural Ci’edit
Facilities” of the Iowa Bankers Associa
tion.

Visits Des Moines

Traveler
B. F. Kauffman, president of the Bank
ers Trust Company, Des Moines, has re
turned from a business trip to Chicago
and plans to make a business trip to

R. H. Barber, recently associating him
self as executive vice president of the
Citizens National Bank of Boone, was a
business visitor in Des Moines recently.
Mr. Barber formerly lived in Kearney,

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OFFICERS
C h a irm a n

of the

WILLIS G. C. BAGLEY
CARL A. PARKER
ROBERT P. SMITH
FRED C. HENEMAN
WILLIAM W. BOYD
HARRY C. FISHER
ROY B. JOHNSON
RALPH E. WILEY

B oard

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P resid en t
V ice P resid en t
V ice P re s id e n t
V ice P re s id e n t
C a sh ier

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A sst. C a sh ie r

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Herbert L. Horton, president of the
Iowa-Des Moines National Bank & Trust
Co., and Mrs. Horton have driven to
northern New York to spend a month’s
vacation with Mrs. Horton’s family.
They will return early in September.

Coquillette Wins
Frank C. Welch, president of the
Peoples Savings Bank, Cedar Rapids (re
tiring president of the Iowa Bankers As
sociation) and Mrs. Welch recently en
tertained their local club at their annual
“sweet corn dinner.” It is understood this
annual dinner is a sweet corn eating con
test and a prize appropriate to the dinner
is awarded. It is reported that S. E.
Coquillette, president of the Merchants
National Bank, Cedar Rapids, carried off
the honors, closely seconded by Harold
Trewin, prominent attorney of Cedar
Rapids. Mr. and Mrs. Frank Warner, of
Des Moines, were among the invited outof-town guests.

Iowa bankers are evincing more interest
for attending the coming A. B. A. Conven
tion than for a number of years past,
which manifests that bank tension is a
thing of the past. Bankers and their
families can again, as formerly, begin to
make plans for taking this or that trip.
The Falltonic Special will probably have
the largest delegation from Iowa this year
than it has had for some years.

Back From Vacation

N. P. Black, cashier of the Perry State
Bank, Perry, and treasurer of the Iowa
Bankers Association, and Mrs. Black, have
just returned from a three week’s fishing
and vacation trip in the Black Hills. Mr.
Black owns a cottage in close proximity
of Mt. Rushmore and he found enjoy
ment in watching the daily work of the
sculptors carving the monumental figure
of George Washington.

1
j

A sst. C a sh ie r

Vacation

Going to À . B. A,
I

HANFORD MacNIDER

Nebraska, and is still interested in the
Fort Kearney State Bank at that point.
Mr. Barber was former president of the
Nebraska Bankers Association.

H ERE A N D THERE
IN IO W A
(Continued from page 14)
OTTO KORTH, cashier of the First
State Bank, Fredricksburg, says business
is fair and he is making a few good real
estate loans.

m m
: /1 ' . ^5
Northwestern Banker

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Federal Reserve Bank of St. Louis

September 1935

1®®1

A:-

GOOSE LAKE Savings Bank make a
service charge of 50 cents on checking
accounts averaging under $50 during the
month. For this charge the customer is

45
entitled to draw 5 free cheeks and each
additional check is 4 cents. Accounts
having an average balance of $50 or
over, one free check is allowed for each
average balance of $10, additional checks
are 4 cents each.
THE FIRST NATIONAL BANK,
Dubuque, is Iowa’s eldest national bank,
being established in 1864. Deposits are
$7,037,260, United States Bonds are listed
at $4,750,272. Capital is $300,000, sur
plus and profits $397,288, reservations
$70,000.

CARL GRADERT, director of the
Iowa State Savings Bank, Clinton, and
brother of Gustave Gradert, president of
the bank, passed away August 20, at the
age of 76. He died suddenly from a
heart attack. Mr. Gradert was a prom
inent farmer and a director of the bank
for many years.

every three months against all checking
accounts except churches.

BREMER COUNTY has 20 creameries,
four more than any other Iowa county.

A VERY PROGRESSIVE small town
bank is the Onslow Savings Bank, Onslotv.
Deposits here are nearly $400,000 with a
population of only 200 people. The bank
has made money every year. Last year

THE AMERICAN SAYINGS Bank,
Tripoli, make a service charge of 50 cents

C. V. NELSON, cashier, Farmers and
Merchants Savings Bank, Waterville, will
return the latter part of August after
spending his vacation with relatives at
Stockton, Kansas.

THE CASCADE State Bank has time
deposits of $236,227 and demand deposits
of $276,000.
CHECKING ACCOUNT s e r v i c e
charges in Dubuque are $1.00 per month
on accounts averaging below $100. Busi
ness checking accounts subject to analysis.
H. G. KRAMER, vice president, City
National Bank, Clinton, believes banks
should be careful not to go too far with
excessive service charges. He says good
will of the depositor and keeping them
coming into your bank is essential.
CLINTON BANKS and most banks in
the county make the following service
charges on checking accounts: Average
balance falling under $100, 50 cents and
entitles customer to 10 free checks. Aver
age balance between $100 and $200, 15
free checks. Average balance between
$200 and $500 entitles customer to one
free check for each $10 of average bal
ance. Extra checks are 4 cents each.

f \ Complete

T p jp ftr

Service To

Wp'il

THE FIRST NATIONAL Bank, West
Union, has demand deposits of $550,000
and time deposits of $103,000. This gives
them a ratio of better than five to one
which is what most bankers are working
for today.
THE FARMERS STATE Bank, St.
Olaf, charge 50 cents per month on check
ing accounts falling below $50 anytime
during the month, do not specify any
number of free checks. The Farmersburg Savings Bank, make the same ser
vice charge.
D.
W. MIER, president of the Union
State Bank, Monona, left August 14, for
London, England to visit his daughter
and will be gone about 6 weeks.
THE UNION STATE Bank, Monona,
make a service charge of 3 cents for
each check drawn against the account,
charge 5 cents per hundred float on
foreign items deposited. For cashing
checks for non-customers: $1 to $15, 10
cents. $15 to $50, 15 cents. $50 to $100,
25 cents.

Iowa Banks

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EN TRAI. NATIONAL’S forty years’ experience,
its ability and capacity to offer com plete banking
service, m ake this your ideal correspondent in
Des Moines.
WM. J. GOODW IN
Chairman of the Board

G R A N T M cPHERRIN
President

LYN N FULLER
V ice President

E. F. BUCKLEY
V ice President
J. R. CAPPS
Cashier

t h e

o l d

r e l i a b l e

C en tra l Na tio n a l
BAN K

F IF T H

TRU ST CO M PA N Y

A V £ , B e t w e e n WALNUT and LOCUST

D e s M o i n e s - _______ I o w a
Established 1895

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Federal Reserve Bank of St. Louis

September 1935

46
extensive remodeling* was done on the in
terior of the bank costing* $5,000 and a
6 per cent dividend was paid. Another
dividend will be paid this year amount
ing to 10 per cent. Officers say they are
now working for worthwhile checking ac
counts. This bank is not a member of
the FDTC.
LITTLEPORT and Garber banks
charge 25 cents per month on all check
ing accounts, (active). Also charge 5
cents per hundred float on out-of-town
cheeks deposited.
THE CLAYTON County State Bank,
Guttenberg, make a service charge of 5
cents for each out-of-town item deposited
to the account. No other charge is made.
THE GARNAVILLO Savings Bank,
Garnavillo, follow the service charges as
suggested by the Iowa Bankers Associa
tion very closely.
MAQUOKETA has a newT bank, the
Security Savings Bank, Zwingle, having
moved there and opened up for business
in the building formerly occupied by the
First National Bank, August 24th. It
will be known as the Maquoketa Bank
and Trust Company. Capital has been
increased from $15,000 to $30,000 which
will be increased to $50,000 a little later
on. All new stock was taken by Ma
quoketa business men and farmers. The
building which will be occupied was pur
chased and very little re-modeling was
necessary as it is in excellent shape.
Officers are: F. J. Stebor, president,
who was cashier of the Zwingle Bank; J.
A. Kahler, vice president, retired busi
ness man; H. R. eloiner, cashier, who has

been with the State Banking Department
liquidating two banks in Maquoketa.
V. O. FIGGE will return from his
honeymoon in Europe about September
10th.
THE DECORAH State Bank make a
service charge of 50 cents per month on
all checking accounts on which four or
more checks have been drawn during the
month. This charge entitles the customer
to 15 free checks and each additional
check is 3 cents. The bank also charges
3 cents for each foreign item deposited.
THE SECURITY TRUST and Sav
ings Bank, Decorah, charge 50 cents on
checking accounts averaging under $100.
For each average of $100 balance carried
the customer is entitled to ten debits.
Items over allowable number, 3 cents
each.
A RECENT STATEMENT of the
Union State Bank, Winterset, shows
checking accounts of $343,280 against time
money of only $36,893. This bank was or
ganized early in 1935.
NORTH ENGLISH uses the measured
service charge of 50c on checking ac
counts falling below $50 which entitles
the customer to ten free checks and each
additional check 3c each. Accounts having
a balance of $50 or over, one check is al
lowed for each $10 balance. Checks over
allowable number are 3c each.
THE CLARENCE Savings Bank, has
time money of $144,500 and checking ac
counts of $203,000.

Our complete banking facilities in
sure out-of-town banks and bankers
prompt, efficient and economical handling of ac
counts in Chicago—we invite you to use our facilities.

it y

AND

TRUST

2 0 8

S O U T H

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Federal Reserve Bank of St. Louis

a t io m a l
COMPANY
L A

September 1935

S A L L E

H
of

ank

Chicago
S T R E E T

THE UNION State Bank, Richland,
makes a service charge of 50c per month
on all checking accounts. The charge has
been in effect for some time and the bank
is located right in the center of a territory
where no service charges are made. F. S.
Bridger, cashier, says people are perfectly
willing to pay a reasonable amount for
bank services rendered today and do not
shop around much.
FETV FAMILIES, if any, can boast of
more brothers in the banking business in
Iowa, than the Buenneke brothers. L. H.
Buenneke is cashier of the Maynard Sav
ings Bank, Maynard. E. F. Buenneke is
cashier of the Security Savings Bank,
Scranton, and Walter Buenneke is cashier
of the Iowa Savings Bank, Coon Rapids.
THE FARMERS TRUST & Savings
Bank, Williamsburg, has checking ac
counts of $224,600 and time money of
$174,000.
SERVICE CHARGES installed at the
Delta office of the Hayesville Savings
Bank which was opened for business Aug
ust 1st, are $1.00 every six months on ac
counts showing normal activity and $2.00
every six months on accounts showing ab
normal activity and business houses.
THE GIBSON Savings Bank makes a
service charge of $1.00 every six months
on checking accounts averaging under
$500,00. Accounts averaging over $500.00
are analyzed. One dollar is charged when
the account is opened and if the account
is closed before the six months are up, no
refund is made.
INQUIRING about business conditions
in a south centrally located bank in Iowa,
the cashier of the bank called upon handed
me a letter which he had just written to
a depositor who had inquired when his
trust certificate would be paid. The
cashier remarked that the letter would ex
plain the exact condition facing him and
people in the community. The letter is
repreduced below and we can be thankful
that this condition extended over a very
small portion of Iowa.
“Mr. John Smith,
“St. Petersburg, Fla.
“Dear Mr. Smith:
“We have your letter of the 16th, in re
gard to the $50.00 trust certificate you
hold. This section of Iowa had an absolute
crop failure last year, due to the drouth.
The farmers sold their live stock off for
almost nothing in order to buy feed to
winter the balance. They paid $1.00 a
bushel for com and $20.00 a ton for poor
hay. Those who had credit borrowed the
money to buy it, while others let their
stock practically starve.
“We now have an abundant crop with
two articles ready for market, timothy seed

47
and oats. Timothy seed has gone from
$20.00 a hundred to $2.00 a hundred and
oats from 75c a bushel to 20c a bushel.
If other farm products, as they are pro
duced by the drouth farmers drop in price
in the same proportion, it will be hard to
tell when the notes in our trust will be
paid, as they are all farmers’ notes.
“We are very sorry that this situation
is as it is, and we are trying to do the
best we can under the circumstances.
“Your truly,
“Cashier.”

S ELLIN G TH E BANK'S
SER V IC ES DIRECT

only way we can upset this lack of confi
dence is by intelligent selling. And the
best time to upset it is now, when we are
not losing money by every day’s delay in
getting an account. Then, when better
times return, our missionary work will have
been done and we can cash in on it.
Again, consider these almost obvious ad
vantages of selling in times like these. We,
and every other bank, are maintaining a
skeleton organization which is materially
larger in some fields than the force we ac
tually need to handle our present volume
of business. If we were to let some of these
key people go now, we should be endanger
ing our readiness for a quick start when

business activity resumes. This surplus
personnel permits taking on a good deal
of new business at no appreciable increase
in operating expense, and thus nursing it
along until times and, presumably, earn
ings will be sufficient to make this good
business judgment.
On the official side, the same sort of con
sideration prevails. The officers as a group
are today not particularly busy handling
their business, principally because there is
so little activity in each account requiring
an officer’s attention. It is, then, a particu
larly good time for the officers to get out
and call on customers and prospects—thus
they can make their time profitable, if not

(Continued from page 40)
though their jobs may be operating a
machine.
H ealthy Increase
With this kind of setup, satisfied cus
tomers, informed staff, and intelligent co
ordination of these activities by a cen
tralized department, a bank which deserves
to grow can count on a healthy increase in
business. Moreover, it can rely on obtain
ing this business at a cost per thousand of
deposits, per dollar of earnings, or how
ever you compute the statistics, at a cost,
I say, which is not only reasonable but is
downright thrifty. And because the busi
ness is put on the books by low-pressure,
rather than by high-pressure salesmanship,
it is the kind which does not shift easily
from institution to institution ; likewise the
customers obtained :n this way are from
the outset in a frame of mind which leads
to contentment and staying with the bank.
All of which, I think you must agree, con
stitutes a set of specifications for just
about the ideal set of sales activity and
sales results.
As I look at your faces, I can see form
ing in many of your minds the question,
“But why should a bank go after new busi
ness now, anyhow, when it is impossible to
earn a profit on it ?” Admittedly, this is a
natural question under current circum
stances of interest rates, yields, and the
rest. Savings interest has almost nowhere
been cut low enough to prevent a loss on
every interest-bearing- deposit in the de
partment. Commercial loan rates ai*e so
low, and commercial loan demand is so
feeble, that commercial deposits tend to
cost more to handle than they can possibly
be made to yield in earnings. With every
deposit dollar a source of expense rather
than of profit, why should a bank try to
sell nowadays?
Now is the time, the best possible time,
for a bank to do an effective job of selling.
In the first place, as we have previously
discussed, there exists a public psychology
which distrusts all financial institutions,
yours and mine among all the rest. The

The Omaha
National Bank
Northwestern Banker

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Federal Reserve Bank of St. Louis

September 1935

48
in immediate earnings of the bank then
certainly in future earnings.
Again, a good many admittedly shrewd
bankers have expressed the opinion that
the institution which takes on these cus
tomers who have managed to come through
the depression years will have, when pros
perity resumes, a handpicked list of cus
tomers who have proved themselves in the
hottest crucible to which this generation is
likely ever to be subjected. A list of cus
tomers who came through the troubled
years from 1929 and did not lose out will,
when it becomes an active borrowing list
under conditions of active business, be
likely to prove very successful and to pro
vide a negligible proportion of collection
losses.

N EW S A N D VIEW S
(Continued from page 10)
nounced that the first meeting of the As
sociation will be held September 11th in
Des Moines with headquarters at the
Wakonda County Club.
L. M. BARLOW, of Babcock, Rushton
& Company is chairman of the entertain
ment committee for the meeting.
This will be a get-together meeting for
all of the salesmen and officers of the
Iowa members of the Association.
JAMES A. CUMMINS, president, lias
appointed a committee to take charge of
the meeting.
At the board meeting it was decided
that the two divisions, municipal and cor

porate, would select their own legislative
committees to watch their respective in
terests. President Cummins will also ap
point another committee to act for the
whole group in matters needing attention.
NE HUNDRED AND FIFTY
THOUSAND NEW FEDERAL
EMPLOYES have been added to the gov
ernment payroll and 31 new boards and
commissions created since March, 1933.
In wages alone these have added more
than $300,000,000 a year to the federal
budget—but perhaps definite promises of
the present administration to reduce ex
penses before election don’t mean any
thing afterwards.

o f y o u p a r - s h o o t in g
GOLFERS probably would not
agree with the plan which was adopted by
the UTAH BANKERS who selected a
convention place where there were no
golf links and as a result of this, they
had a 100 per cent attendance at the
sessions.
I can’t imagine any place that doesn’t
have golf links, but perhaps they picked
the top of a mountain where there were
no fairways and plenty of bunkers, so
in preference to getting out of the rough
the boys heard the orations.

come in since the new banking bill places
the rate at one-twelfth of 1 per cent an
nually of the average daily deposits.
UY EMERSON, vice president of
the Bankers Trust Company of New
York, believes that the bankers of the
country have a big job ahead of them
which they must do and expresses his
thoughts on this subject by saying, “The
banking business has survived a great
shock; bankers have passed through a dis
tressing experience. Those who have sur
vived will not be true to their responsi
bilities if they now sit back and feel that
the trouble is over and the job done. We
have passed through a hurricane and find
ourselves still alive. But we have before
us a far-reaching job of rebuilding. If
we don’t do the job, it will be done for us
and we shall have only ourselves to blame.
Now, it is up to the bankers.”

Soil Conservation

Under the title “Protecting Investment
Values in Land,” the American Bankers
Association Agricultural Commission has
published a booklet dealing with the con
servation of soil resources as a pressing
national problem.
“Careful estimates indicate that 750,000,000 tons of soil, suspended and dis
solved, are carried off to the sea each year
M. NICHOLS, president of the First by running water,” the commission’s book
# National Bank of Englewood, who re declares. “An equal amount removed
fused to join the Federal Deposit Insur from its source is left en route. This
ance Corporation so long as the assess means a total of 1,500,000,000 tons, equal
to approximately one ton for each acre of
ments were unlimited, has now agreed to
land in this country. The Soil Conserva
tion Service estimates that already 35,000,000 acres have been practically ruined.
“There are 125,000,000 more acres that
have lost the valuable topsoil, and it is
estimated that still another 100 million
acres are being converted into marginal
or sub-marginal land, bringing disaster to
those trying to eke out a living from
erosion enfeebled soil, and threatening
ruin to the next generation, since these
destructive forces are going on at an ever
increasing rate.”
In a chapter devoted to* control and
preventive measures for soil losses it de
scribes terracing, strip cropping, wind
erosion control, gully control and the con
trol of losses from leaching.

Manager For
National Surety

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hotels, located in the heart of everything in Minneapolis
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Famous for its hospitality, food, beautiful rooms and
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E a r l W . P a y n e , Manager

Northwestern Banker

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Federal Reserve Bank of St. Louis

September 1935

A1 E. Fuller has been appointed man
ager of the Branch Office of National
Surety Corporation in San Francisco with
general supervision over the Pacific Coast.
Mr. Fuller for the past two years has been
manager of the Milwaukee Branch Office
of the Corporation and previous to that
time acted as regional representative, with
headquarters in Chicago.
Frank D. Madden, formerly assistant

49
manager of the Milwaukee Branch, has
been appointed to succeed Mr. Fuller at
that point.
G-. T. Kerlin, formerly of Joyce Insur
ance, Inc., of St. Paul, Minnesota, has
been made assistant manager of the Mil
waukee Office.

Nationwide Co m
mencement Exercises
More than 200 chapters of the American
Institute of Banking Section of the Amer
ican Bankers Association in towns
and cities throughout the United States
will hold their annuual commencement
exercises at the same hour and will be
joined together by a nationwide radio
hookup the evening of Monday, Septem
ber 9, 1935, it is announced by Maynard
W. E. Park, president of the institute.
The arrangements are in charge of Earl
Y. Newton of the Cleveland Trust Com
pany, Cleveland, Ohio, as chairman of the
radio commencement committee.
The exercises will be featured in the
various chapters by talks, the presentation
of diplomas to this year’s institute grad
uates, numbering about 2,500 in all, and
by the reception of a nationwide broad
cast of an address by Dr. Rufus B. von
KleinSmid, president of the University
of Southern California, on “A Challenge

Glorious A utum n days at
Excelsior Springs — golf at
its best, horseback riding, ten
nis and every outdoor sport.

to Adults.” Dr. von KleinSmid's address
will be bi’oadcast from Station K. F. I.,
Los Angeles, at 9 :30 o’clock, Eastern day
light saving time, and will be carried over
the W. E. A. F. Red Network of the
National Broadcasting Company in the
United States and Canada.
Thousands of students, graduates and
members of the institute are expected to
¡participate in the exercises which are
unique in the educational field. It is esti
mated that the broadcast will be heard by
more than 100,000 men and women ac
tively employed in banking, assembled in
the chapter meetings and class rooms
throughout the nation. The interested as
sistance of bankers has been enlisted to
increase the effectiveness of the event as a
means of educating the public regarding
sound banking.

Association of
Bank Women
The 13th Annual Convention of the
Association of Bank Women will be held
in New Orleans, November 10th-13th in
clusive, with headquarters at the Jung
Hotel, according to an announcement
made by Miss Susan B. Sturgis, assistant
branch manager, The First National Bank
of Boston, president of the Association.

In discussing the Convention, Miss
Sturgis stated that members of the va
rious convention committees were bending
every effort to make this the largest of all
conventions held by the Association of
Bank Women.
“The Association,” she said “was or
ganized in 1921 by a small group of
women connected with some of the New
York banks; it was only a short time,
however, before it was expanded into a
national organization.
“The purpose of the Association is to
bring together women in executive posi
tions in various banking institutions
throughout the country for mutual ex
change of ideas and experiences ; to pro
mote the interests of its own members and
of all women in the banking profession.
“Today there are members in 34 states,
the District of Columbia, and Hawaii,
who occupy official or executive positions
in national, state and savings banks, and
trust companies.
“It has been customary for the Asso
ciation of Bank Women to hold its con
vention at the same time as that of the
American Bankers Association in order
that the members of our organization
might have the privilege of attending
sessions of both conventions.”

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Northwestern Banker

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Federal Reserve Bank of St. Louis

CHICAGO

September 1935

Comment On
Banking A ct
Belief that “on the whole the Banking
Act of 1935 is an acceptable piece of
legislation,” and that the new law is “ba
sically sound and merits confidence on the
part of banks,” is expressed by the Ameri
can Bankers Association through its
Special Committee on the Banking Act
of 1935 in a communication to all banks
in the United States accompanying an
annotated copy of the measure.
“Although many extreme measures per
taining to banking were introduced dur
ing this session, none of those which
threatened serious danger to sound bank
ing prevailed,” the committee says. “We

HOTEL•
★

A'REAL

believe that on the whole the Banking
Act of 1935 is an acceptable piece of
legislation.
“Title I of the bill as enacted affords a
practical plan of operation for the Fed
eral Deposit Insurance Corporation, and
the assessment of 1/12 of one per cent
is as low as seemed practicable at this
time. While some of the provisions of
Titles II and III will not be entirely sat
isfactory to various groups of our mem
bers, it must be borne in mind that legis
lation of this sort is inevitably the result
of compromises and adjustments, but we
feel that the new law is basically sound
and merits confidence on the part of the
banks.
“However, it must be remembered that
in a number of sections of the act pro
vision is made for rules and regulations
to be hereafter formulated by the Federal
Reserve Board, the Comptroller of the
Currency and the Federal Deposit In
surance Corporation. Obviously, until
such regulations are issued, the full im
port of this law and its effect upon bank
operations cannot be definitely known.
The association will follow this phase of
the matter closely and the offices of the
association will be continually at the
service of its members.”

Bankers' Wants
This department of The Northwest
ern Banker is at your service. A
charge of five cents per word is
made for all insertions. In answer
ing key numbers, please enclose
postage for forwarding purposes.

Casualty Man—Now employed super
vising Mid Western state for large Old
Line Stock Company desires connection
as manager of local bank agency or gen
eral insurance agency. Married, good
appearance, age 32, excellent references.
12 years experience. Address North
western Banker No. 3233.
Position Wanted—As assistant cashier
in going bank or interested in organizing
a bank. 38 years of age, 12 years bank
ing experience, one year Department ex
perience. Will make nominal investment.
Town of 1500 or larger preferred. Address
Northwestern Banker No. 3232.
“You don’t love me just for my father’s
money, do you, dear?”
“No darling, I love you for your own
account.”

BARGAIN
IN
COMFORT
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tality.
It is Omaha’s
outstanding hotel, un
questionably the center
of things. Here you w ill
find all the service, cour
tesy and comfort that
have made Eppley Ho
tels famous everywhere.
If you want a bargain
in comfort, stay at the
Fontenelle.
There are
two
luxurious
dining
rooms where you w ill
find excellent food at
sensible prices.

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B a n k e r s T r u s t C o m p a n y , D e s M o i n e s 43

J a c k l e y & C o ................................................... 21

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C e n t r a l N a t i o n a l B a n k & T r u s t Co.
C i t y N a t . B a n k & T r u s t Co., C h i c a g o
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45
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24
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r* i

D rovers
B a n k s
(A lien-C entury
P h o t o s ) ......................
36
E

E l m s H o t e l .................................................. 49
E p p l e y H o t e l s ............................................ 50

L e a m i n g t o n H o t e l .....................................
L i v e S t o c k N a t . B a n k , C h i c a g o ...........
L i v e S t o c k N a t . B a n k , O m a h a .............
L ive S to c k N at. B a n k , Sioux C ity . . .

48
16
33
39

M e rc h a n ts N at. B a n k , C e d a r R a p id s

N a t i o n a l S u r e t y C o r p o r a t i o n ................
N o r t h e r n T r u s t C o m p a n y .......................
N o r t h w e s t e r n N a t ; B a n k & T r. Co.
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 . Co.

28
34
17
29

O
F

F e d e r a l C o r p o r a t i o n , D u b u q u e . ......... 24
F i r s t N a t i o n a l B a n k , M a s o n C i t y . . . . 44
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EPPLEY
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Federal Reserve Bank of St. Louis

I
Io w a -D e s M oines N at. B a n k & T r u s t
C o ....................................................................... 52
I o w a G u a r a n t e e M t g . C o r p ....................... 24
I o w a L i t h o g r a p h i n g C o ............................ 22
I o w a N a t i o n a l F i r e I n s u r a n c e C o . . . 29
I o w a - N e b r a s k a B a n k D i r e c t o r y ......... 51

★
Northwestern Banker

G e n e r a l M o t o r s A c c e p t . C o r p ................ 25
G r a e f e & C o m p a n y ...........................
24

September 1935

O m a h a N a t i o n a l B a n k .............................. 47
P

P h i l a d e l p h i a N a t i o n a l B a n k ................ 37
P o l k - P e t e r s o n C o r p o r a t i o n ................... 18
P r i e s t e r , Q u a i l & C o m p a n y ................... 23
S
S c o t t M c I n t y r e & C o ................................... 25
S h e a & C o m p a n y .......................................... 20

AV
C h a r l e s E . W a l t e r s C o m p a n y ............ 34
W e b b i e s & C o m p a n y ................................. 22
W e s t e r n M u t u a l F i r e I n s . C o ......... .. 26

“OF GREAT VALUE”
Iowa banks are w riting to us every day, tellin g
us “ o f the great value” they place on the new
1 9 3 5 I o w a -N e b r a s k a B a n k D i r e c to r y .
T hey are finding it u sefu l, con ven ient, com pact
and in d isp en sable to the daily operations o f
th eir bank.
M arvin

Selden,

Vice

President

the

M erchants N ational Bank o f Cedar Iiapids,
wrote us as follow s:
“We

are

certainly

to get your new

d elighted

1 9 3 5 Iowa-

Nebraska Bank D irectory.

look s better than ever, and we
lon g ago learned to appreciate
the great value o f your Bank
D irectory.”
If you have not already received your IowaNebraska Bank D irectory, send fo r your copy
now.
Just use the convenient coupon at the bottom
o f this page----fill it in , m ail it to us today and
we w ill send you this new directory at once.

Iowa-Nebraska Bank Directory Con
tains:
1. Officers o f Iowa Bankers A ssociation.

Iowa-Nebraska Bank Directory
555 Seventh Street
Des M oines, Iowa

_________________________, 1935.

G entlem en:
Please send--------------- copies of your 1935 Iowa-Nebraska Bank
Directory to us, and we w ill remit at the rate of $2.00 per copy
upon receipt of your Directory.

2 . N am es o f all Group Officers in Iowa.
3 . The officers o f the Iowa County Bankers
A ssociations.

Bank

4. The latest in form ation about the p erson
n el and financial statem ent o f each bank
in Iowa.

Officer --------------------------------------

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Federal Reserve Bank of St. Louis

City

__________________________

State

4 . Credit Inform ation

1. D ep ository for
R eserv es

5 . Prompt C ollection s
2 . S a fe-K eep in g of
S ecu rities

6 . U. S. G overnm ent and
M u n icip al B on d s
for In vestm en t

3 . Trust S erv ices

Banks and Bankers of lawa are Invited to
ese Services
Make Use o|

IO W A -D ES M d I
S ' TRUS

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Federal Reserve Bank of St. Louis

NATIONAL BANK
om pany

Full text of The Northwestern Banker : September 1935, 40th Year, Number 578

FRASER