"Bonds Favored by Banks in 1915" Their Safety, Yield and Market Stability The contents of this new booklet which we have just issued include: Deposit-Building Bank Letters One of the ablest and most successful producers of effective bank and trust company publicity literature in this country is Mr. W. R. Morehouse, assistant cashier of the GermanAmerican Trust & Savings Bank of Los Angeles, Cal He is the author of a series of bank letters relating not only to securing new deposit or savings accounts, but also to stimulating inactive accounts and conserving business. These letters have been reproduced and published in book form. The conclusion must be drawn from a reading of these letters, that Mr. Morehouse is not only a past master in the art of correspondence, but has also an exceptional command of the psychology which enters into the composition of letters inviting new business and to give new life to accounts which have been inactive. The series of letters covers every possible phase of inviting savings as well as commercial accounts, emphasizing the advantage of inter-department connections, the opportunities for profitable investment. Mr. Morehouse shows fine tact in dealing with delicate reminders such as overdrafts, where accounts are unprofitable, where payment of interest on note is overdue, etc. The letters are collected in handsome book form and published by the Bankers Publishing Company of New York. Why He Distrusted the Cashier In a small Kentucky town there is a little bank which is presided over by a cashier who was accustomed to wearing his hat at all times, indoors and outdoors. The premises were kept clean by an aged darky who received $20 a month for his services. One day the cashier accosted the darky as follows: "Jasper, I have employed you steadily now for eight years. Every time I hand you your twenty-dollar check you go across the street and deposit it in the trust company. Now, don't you know that our bank is just as good, if not better, than the concern across the street. Why don't you put the money in this bank and we'll pay you the same rate of interest." Jasper shuffled uneasily, scratched his head and was evidently embarrassed. "I'd rather not tell yo', boss," he replied. Threatened with the loss of his position he finally stammered: "Yo' see, it am jes like this. I allus sees yo' with yo' hat on yo' head an' I allus specs yo' am goin' somewhar." John C. McKeon, vice-president of the National Park of New York since 1904, and formerly known as one of the ablest National Bank Examiners in the country, died recently, at his country home at Hempstead, L. I. "Checks are money" NATIONAL SAFETY PAPER A Prophecy "The time will come no doubt when all checks drawn on plain paper will be looked upon with suspicion." This was said in 1880 by George G. Williams, President of the Chemical National Bank, New York City. The truth of this prophecy is proved. 80% of the New York banks, and thousands of banks in the smaller cities, have abandoned checks on plain paper, and now use National Safety Paper, the logical check paper for all banks. Ask your stationer, printer or litbographer for checks on National Safety Paper, or write us for samples. Foreign Trade Representative for Irving National Bank To assist its large and steadily increasing clientele of exporters and importers in the development of their business with oversea countries, the Irving National Bank of New York, has appointed G. A. O'Reilly, formerly assis tant secretary of the Latin-American Return Visit Committee, as its foreign trade representative. Mr. O'Reilly brings to the Irving National Bank a broad experience in foreign conditions having spent seventeen years in foreign countries as a special representative of the Government, a part of the time being devoted to the study of industrial, commercial and economic conditions in Europe and Asia. In the ca'pacity of assistant secretary of the LatinAmerican Return Visit Committee, Mr. O'Reilly had charge of the arrangements concerning the visits of parties of United States bankers and business men to South and Central America, in connection with the Federal foreign trade campaign. Spokane Foundation Meeting The Spokane Foundation, of which the Union Trust & Savings Bank of that city is trustee, is meeting with encouraging recognition. At the regular meeting of the Foundation Committee on May 19th at the offices of the trustee. Mr. W. J. C. Wakefield was elected chairman and Mr. James C. Cunningham, vice-president of the Union Trust & Savings Bank, was elected secretary for the ensuing year. Since the organization of the Foundation, May 13 1915, two of the original members of the com mittee have died, namely, Mrs. May Arkwright Hutton and John A. Finch. These vacancies have been supplied by the selection of L. A Hutton and W. J. C. Wakefield. Additional members of the committee are: Edward O'Shea and W. S. Gilbert. Practice of Closing Transfer Books Secretary George W. Ely of the New York Stock Exchange has forwarded a circular letter to corporations which still adhere to the old method of closing transfer books either for dividend or meetings of stockholders urging the adoption of the more satisfactory and efficient practice of taking a record of stockholders on a fixed date. Most of the larger corporations observe the improved method and avoid the inconvenience as well as unnecessary tying up of funds which attends the closing of transfer books. Bankers and lenders of money are in favor of the general adoption of the plan of taking a record on fixed dates for the reason that they are called upon to carry their customers for longer periods and for larger amounts than where deliveries are made from day to day. In his letter Secretary Ely stated: "The old method of closing a company's books results in the tying up of large sums of money at recurrent periods. For example, the capitalization of companies whose books are closed during March and whose stocks are listed on this Exchange amounts to nearly three billion dollars; for April this amount is a little over one billion. This is capitalization; but in a recent month actual sales of these securities, on a par of $100, represented $388,400,000 and $129,700,000, respectively. In case of a serious collapse of the market the inability to secure ready transfers must produce unfortunate situations. During panicky conditions small buyers have always appeared, to purchase at the low prices for cash; this relief will be seriously impeded, because the dealers in small lots are prevented from splitting up the hundreds bought against such sales and are obliged to receive and carry the hundreds so purchased, while unable to secure from companies the smaller lots sold." The United States Mortgage & Trust Company has published and is distributing a booklet which contains a series of a number of the most striking features of the great "Parade for Preparedness," held in New York on May 13th. The publication of this record is most fitting and timely because the significance of that demonstration of patriotism and loyalty cannot be too strongly impressed upon the public mind. The views are reproduced in clear half-tones and illustrations are also included of preparedness activities in various other parts of the country. A list of the organizations and trades with the number of paraders in each classification shows a total of 140,139 men and women participating. The bankers and brokers' division alone had 15,000 men in line, which was by far the largest of any participating group, while members of the National Guard had 10,000 and insurance companies 9,500. A specially prepared map shows the line of march and through a series of key numbers, reveals the various points at which the different organizations assembled and fell into line. Logan C. Murray with Irving National Mr. Logan C. Murray, chairman of the board of the American Southern National Bank of Louisville, Ky., one of the best known bankers of the South, has accepted the position of "Southern Adviser" with the Irving National Bank of New York City. He will devote his attention specially to serving the southern connections and interests of this bank. > Strictly A Commercial Bank Capital and Surplus $7,000,000 CONTROLLING FACTORS IN BUSINESS SITUATION The persistent strength shown in both the stock market and general investment field may be ascribed chiefly to the influence of continued large earnings and capacity production in most branches of industry and trade. There is, however, another feature which makes for buoyancy and which seems to be overlooked in current calculations. It is the settlement of the submarine controversy with Germany and the removal of war clouds. It is now reasonable to assume that the peaceful status of this country will not be interrupted except insofar as it is necessary to impress upon the turbulent Mexican patriots that United States troops will be used so long as the threat of border outrages continues. It is, therefore, of interest to note that on June 14th the average price of 40 of the most active stocks traded on the New York exchange was 88.86. This is nearly 8 points above the low level for the present year recorded April 28th when such grave uncertainty prevailed as to a break in diplomatic relations with Germany. This price recovery has been going on slowly but steadily, without any forced speculative movements. The volume of transactions on the Exchange has likewise increased the total number of shares changing hands in May amounting to 16,277,467 as compared with 12,552,073 in April. During the days when attention generally was centered upon the political conventions at Chicago and St. Louis trading was of somewhat smaller volume without any very material change in the average price. In the investment field the demand for high grade bonds and notes continues with an even broader inquiry notwithstanding the reports of reduced surplus bank funds and the promise of higher money rates. It is quite apparent that the course of the stock market is more responsive to domestic business influences than to any development in the European war situation or the political campaign at home. The death of James J. Hill created only passing interest from the market standpoint inasmuch as the "Hill properties" are in excellent financial position and efficiently managed. Announcement of the abandonment of the projected $200,000,000 automobile merger was not a cause for serious regret because of the general feeling in conservative, financial circles that this is not the proper time for financing of that character. Except as it may induce higher money rates the marked reduction in surplus reserves of New York Clearing House banks is without any apparent influence on general business prospects, nor indicative of weakness in the banking position. New York City Stability of Business and Finance The best proof that business and finance are strongly entrenched and that faith in the economic future of this country is not grounded on transient factors is offered by the remarkable display of strength in domestic markets during the past four weeks, despite stirring events in Europe the serious aspect of Mexican relations, and the excitement which attends the holding of two great National political conventions. The Wall Street interpretation is that the strong, conservative men of business and finance are in the saddle; that reactionary influences have been truly appraised and to a large degree discounted and that there is little ground to fear the much-debated readjustments which shall take place when peace returns. At the same time optimism is not unrestrained as to the permanence of the present high tide of activity in American industry and business generally. Signs have not been absent within the last month or two that the maximum point has been reached and mercantile agencies report a lull in some trades. That the conclusion of peace must bring in its train certain changes in prices, values and espccially in the wage scale is generally understood. But that reconstruction to a more normal basis will be gradual instead of violent is also the general conviction. Naturally, therefore, considerable significance is attached to such major developments in Europe as the naval battle in the North Sea, the death of Lord Kitchener, the new Russian offensive and the struggle around Verdun, so far as they may have a bearing upon peace overtures. But instead of encouraging the hope of a cessation of hostilities the recent dramatic happenings have apparently strengthened the determination on all sides to carry on the war to the bitter end. Our own domestic troubles seem merely academic when contrasted to those of the belliger ent nations. Hardly ever has there been less interest manifested in Wall Street in the outcome of National political conventions as this year. The doings and sayings of party chieftains at Chicago and St. Louis did not attain the dignity of "market factors." Trading on the New York Stock Exchange during Republican and Democratic convention weeks was dull and within narrow price range. The one tangible result, however, is to interpret the elimination of the Progressive party and the assurance of a united Republican party as a bullish argument. At the same time it was the prevailing conclusion that campaign issues will center upon the question of what constitutes "all-Americanism" and that policies affecting business, tariff or finance will be of comparatively minor importance. Influences of High Commodity Prices In a review of current business conditions President Gates W. McGarrah of the Mechanics and Metals National Bank calls attention to some of the influences likely to have a repressive effect on large activities and states: "We have in mind the steady rise in commodity prices. Compared with the period before the war, costs have increased all the way from ten to several hundred per cent. A standard index number names 146.2 as the average price-level of a group of American materials on May 1, as compared with 126.6 on the same date last year, and 120.7 on August 1, 1914. This means that in less than two years commodity prices in the United States have moved up, on an average, more than 20 per cent. "There is no possible way of determining whether prices have gone as high as they are going to go; scarcity of supplies, shortage of labor, Europe's military necessities and freight congestion all contribute to exert a powerful lifting force on values. But prices cannot go on rising indefinitely without affecting new orders, at least for domestic consumption. It is encouraging to note, in this connection, that the business community is not seeking by hasty and unnecessary buying to cover itself against a further rise in prices. Impulsive buying at this time would inevitably put prices to a level where all but the most necessitous buyers of goods would withdraw from the market." |