The Reserve Law is a piece of very remarkable legislation when one considers not only the difficulties inherent in the situation, but the nature of the various forces employed both in opposition to and in advocacy of the bill. Conditions had become so fixed during fifty years in which banking in this country was conducted under artificial and unscientific conditions that the banks of the country had come to regard practices altogether unsound and unsafe as having in them something of the nature of a vested right which should not be disturbed. On the other hand, the Reserve Act in seeking to serve the interests of the country as a whole at the same time extended to the banks certain privileges not heretofore enjoyed by them, which in connection with the safety for the future almost guaranteed by its provisions, very much more than compensated for sacrifices involved in yielding practices which, after all is said, were based upon tolerated but unscientific procedure.

In banking operations proper, there were two situations crying for remedy, which in their abuse had been largely responsible for recurring panics, namely a fictitious character and a pyramiding of reserve and the use of checks at a charge for the cost of their handling and collection, not to the makers of the checks or of the banks holding the accounts against which they were drawn, but at the expense of the creditors to whom the checks were dispatched, or their depository banks. The two things are so closely related that the law would fail of its purposes should it be attempted to adjust one without the other. The subject is altogether too large to be considered from the

viewpoint of individual banks or any number of them when it is considered that directly or indirectly the entire country under the old order of things has been paying tribute either in the form of millions of dollars annually or in waste caused by panics through a false situation.

Affiliation a Matter of Self-Protection

Assuming that the National banks, city or country, willingly or unwillingly subscribed to a collection system at par, it would almost necessarily follow that State chartered institutions, as a matter of self-protection if for no other reason, would either be obliged to join the system or set up at an extravagant cost their own clearance agencies. I am sure that the Reserve Board has no desire to put any banks under duress but rather is it preferred that the banks themselves in owning full appreciation of the benefits of attachment to the system will voluntarily ally themselves with it. On the other hand, it must be evident that the Board in furthering the large purposes of the law would be required to do everything within its power to make it effective and if after offering every inducement to banking concerns to join the system its efforts fail, it is easily conceivable that steps will be taken to deny non-members all the privileges enjoyed by those assuming the responsibilities of membership. It might be ordered that clearance through the reserve system be denied checks drawn on non-member concerns, excepting for some actual charge in money. Many other plans would be available, but of these it is not necessary to refer in detail.

Again, the country as a whole would soon learn that banks, members of the Reserve system, were in position in times of emergency not only to act as a unit, but to be mutually helpful upon all occasions, whereas State institutions would be required to rely as heretofore upon their individual resources plus such aid as might be had from correspondents all acting more or less independently of each other and all apt to be poor reliance at the very time they are needed most. Manifestly, it would be very selfish for non-member banks to expect to have their wants cared for by members either in the way of loans or clearances and it is hardly conceivable that the Reserve Board would encourage or permit such aid after a reasonable time being given non-members in which to attach themselves to the system.

Present Clearing House machinery should be used in the future only in connection with the exchange of local checks and even such machinery will not be necessary in cities the seat of Reserve banks. It by all means is the case that State chartered institutions should have a

voice in arranging for any definite plans determined upon for the future, but such discussion to be helpful should be from the inside and not outside the bulwarks. It is hardly to be conceived that any bank seriously would ask to enjoy essentially all the privileges of membership and these are many-and at the same time desire to be a free lance in directions with which it is not possible for member banks to compete. The regulations providing for the admission of State banks are most liberal in that they, while seeking the allegiance of all State banks as such, do not attempt to fetter them in the pursuit of activities which long have been the field of operation of such banks. I feel that publications devoted primarily to the furtherance of the interests of State institutions would do well if they in looking at the subject in its broad aspects would stress to their clients the benefits of attachment to the Reserve system and in doing so serve not only their patrons, but through them that generous share of the business of the country to which they immediately minister.

Among the tangible results of the so-called "Banker-Farmer movement" may be cited the establishment of a better understanding and a growing spirit of co-operation between bankers and farmers. On the one hand the banker is helping the farmer not only in solving his credit problems but also to increase productive capacity per acre by improved methods and equipment. The farmer gains a clearer knowledge of the functions and services rendered by banks and trust companies. A cordial relationship is created which not only means greater prosperity for the farmer but also increased business for the bank or trust company located in smaller cities or operating in rural communities. Indeed, the personal element is a more important factor in developing the business of a bank in agricultural communities than it often is in larger cities.

Many banks and trust companies located in smaller cities are confronted with the question as to the best and most effective method of securing new business from the rural sections. The business and mercantile as well as industrial concerns already use the bank or trust company to the fullest extent. Wageearners may be reached through the savings department and induced to add to their accounts from week to week or month to month. But very often these sources of new business do not offer sufficient increase and it is therefore necessary to extend the scope of operations to outlying agricultural regions.

What are the best methods for the banker to pursue in getting this additional business? It is a fact presumed to be known alike to all men that:

First: All business flourishes as the farmer prospers.

Second: All business is more or less inactive when farming is cramped.

Third: When farm profits are increased bank deposits, loans, and sales, and profits in all lines of business increase.

Fourth: Farmers in every section of the country can double their profits by better farm

ing and better market methods, and these can be obtained only by the co-operation of all business interests, and more especially by bankers.

Fifth:

The greatest efficiency in farming, and the most prosperous sections of the country are found where co-operation and helpfulness have for some time been the keynote of the policy of business men and bankers. Creating a Method of Contact with the Farmer It is obvious that the real live banker who wishes to build his business would soon realize that the best thing he could do is to establish a method of contact with the farmer, and to make that method as personal and helpful as consistent, avoiding the dictatorial attitude, thereby eliminating the danger of the farmer thinking that someone else is trying to run his farm or telling him how to do so. This work is growing in favor among bankers especially among those in rural communities, a number of which are establishing publicity departments, employing agricultural agents and men who have it in charge to especially cultivate the country people.

The Wachovia Bank & Trust Company of Winston-Salem, N. C., have arrived at a very satisfactory method of promoting these relations by offering cash prizes for farm products. Credit for originating the idea with this particular institution is given to its personal solicitor and agricultural agent, who was by profession a good farmer, raised in the heart of the territory from which the bank draws the greater part of its country deposits. It is said that in this section a contest arose as to who could make the best hickory axe helve. The traveling solicitor was pleased with the idea and brought in the suggestion that the bank offer a cash prize to the successful contestant.

The publicity idea did not at first find favor in the eyes of the officers who believed that a banking institution should promote more dignified propositions which would foster local upbuilding, and, as far as possible, inculcate the

lessons of thrift and prosperity. The idea, however, lodged and finally crystalized in a policy of helpfulness, based on the theory that you cannot get a man to bank more money unless you help him make more money to bank. With this policy in view the publicity department launched a campaign promoting the intensified cultivation of tobacco, which is the principle crop of the community.

Offering Cash Prizes for Quantity and Quality of Production

A number of cash prizes were offered for the farmers who would raise the largest number of pounds and another set for the ones who would raise the best quality tobacco on one acre of land, the quality and pounds to be judged on marketing day. A hundred or more farmers entered, and the contest was carried through with a moderate amount of success. It began to make more friends for the institution, and the bankers could see the change of attitude.

The contest was repeated with a greater success, more than three hundred farmers in four counties entering. The managers profited by their former experiences, supplying each contestant with blanks outlining the purpose, setting forth rules that must be observed, and the blanks on which the reports were to be

Object of Tobacco Contest

THE WACHOVIA BANK AND TRUST COMPANY desires to become better acquainted with the farmers of this section and to see them prosper. We want to see them make more money on their land by raising better crops and by leaving their land in better condition for future crops.

To this end the Tobacco Contest was instituted and we offer prizes worth competing for. We believe in "Intelligent farming, fewer acres, greater production and more clear profit." Raise the necessities. Land that will make a good crop of tobacco will make a good crop of grass or a good crop of grain and the diversity of crops prevents exhaustion of the soil.

With the raising of more stock, better crops and an improved soil the farmer has more money. With more money there arises the question of the best way of handling it and that you may know the "WACHOVIA WAY" we want every farmer to become better acquainted with this bank. We invite you to come and see us in our handsome banking home. Better acquaintance will benefit both the farmers and the bank.

No account is too small to receive the proper attention and none too large for us to handle carefully.

Checking accounts afford the proper means of paying accounts and keep a record of such payments.

Certificates of Deposit and Savings Accounts earn interest. Whatever business is entrusted to us we pledge the ability of our management backed by more than $3,000,000.00 to safeguard you and to make your banking here helpful and satisfactory.

ANNOUNCING THE TOBACCO CONTEST

made on the closing day. During the year those registered were furnished with the best literature that could be had on tobacco culture. It was read with a great deal of interest, and at the top of each page, were short, crisp statements about the bank. Every few pages and the inside and outside covers carried good educational ads. for the bank, telling why farmers should deposit their money in bank, and giving good logical reasons why they should select this depository. A sample is shown in the following Figure 1:

The returns were satisfactory, the contestants were competing with each other, showing their neighbors the prize acres, and talking favorably about the bank promoting the work, and this is good publicity. As to yields some were almost phenomenal, the contestants bringing in reports, properly vouched for, showing increases in production of from twenty to fifty per cent. on the contest acres.

Plan to Encourage Grass Culture

The bankers feeling that their efforts were being spent in the proper direction, entered into the field of diversified farming, by encouraging grass culture as its basis, for it is evident that unless the Southern farmer has the hay on which to feed his stock, he cannot have the pvt necessary to cultivate the soil deeper and more extensively. Realizing that more than fifteen million dollars was sent out of the State annually to pay for hay, a grass contest was inaugurated, $250 in cash prizes

DIRECTIONS FOR

Growing Grass

In Piedmont North Carolina

Also Showing Some Results of the Grass Growing Contest of 1914-1915

CONDUCTED BY

WACHOVIA BANK & TRUST CO. WINSTON SALEM, N. C.

COVER OF BOOKLET OF INSTRUCTION FOR GRASS CULTURE

being offered to the eighteen farmers who would raise the largest number of pounds of bay on one acre of ground, a method of encouraging grass culture and putting the functions of the institution before the farmer in such a way that additional business would come, and it did.

The contest was limited to counties from which the home bank and its branch offices drew their deposits, and when the registration books closed they showed five hundred farmers in sixteen counties entering, with the determination to raise more grass and to tell their neighbors about it, and in the process the bank got its due amount of credit by way of reflection. Besides it kept in personal touch with a large number of contestants, sent its representatives to look over their grass, and employed County Farm Demonstrators. The best available literature on grass was furnished them boiled down to the every day language of the farmer. An occasional personal letter was sent all the contestants, encouraging them in their efforts, and when the day of the awarding of prizes came, it was encouraging

to see the groups of farmers coming to the bank bringing their reports, some of whom had never been to the city before, as they sold their products on rival markets.

The daily papers gave space on their front pages, besides running editorials on "Hay and Banking" and numerous out-of-town, and State papers commented on the plan. This proved to be good advertising, not to mention the friendly feeling created among other classes of people.

Of this work the Manufacturers Record in a recent issue, said:

The

"The contest matured October 6, 1915, and with such good results that the bank officers and directors decided to repeat it. eighteen prize winners showed splendid yield some of which were almost phenomenal, the three highest being 13,494, 12,548, and 11,374 pounds per acre. A number of the contestants produced over five tons, a yield which two years ago was thought by intelligent - farmers of this section to be impossible. Numbers of farmers are going to hay making next year who have never before been interested in it."

While the institution has enjoyed steady growth in deposits almost every year since it began this work, yet it cannot be attributed entirely or directly to these prize contests. Nevertheless, their value in making friends as a part of its assets cannot be fully measured in dollars and cents.

Soliciting Deposit Business

The time to impress upon the public the advantage of securing safe deposit facilities is during the early months of summer when plans are under way for summer vacations and people expect to close up their homes or apartments. The Union Trust & Savings Bank of Spokane, Wash., is conducting a campaign along lines which has proven decidedly effective. In addition to carrying cards in street cars with the catch line "Here's the Place" the company runs a series of live advertisements in local newspapers of which the accompanying illustration is a sample. The Union Trust & Savings Bank also issues a monthly house organ, known as "The Marble Bank Monthly," which is mailed to regular and prospective customers. The June issue has several timely articles describing vacation pleasures and the saving of worry by using safe deposit and storage facilities.