Chicago

Special Correspondence

Preserving the Integrity of the Farm

Mortgage Business

Because of a combination of unusual circumstances the reputable and conservative farm mortgage banking houses, which have built up a business of $3,500,000,000 in that class of securities, are confronted with the necessity of discouraging certain unwholesome tendencies which threaten to flood the market with inferior offerings. Probably never before has there been such a large demand for farm mortgages by investors and certainly there has at no time been such a volume of idle money secking investment. It is likewise true that the supply of high grade farm mortgages is limited and not equal to the demand. The farmers who are in position to offer the best security are not in the market for loans on their properties. In view of this situation the farm mortgage field has been invaded by concerns, many of which have no experience in farm mortgage banking.

The Farm Mortgage Bankers' Association, composed of the foremost and representative farm mortgage banking houses of the country, has called attention to this dangerous tendency. Unless proper and energetic steps are taken to counteract this evil, the Farm Mortgage Bankers' Association stated in a recent bulletin, there will be the inevitable crop of foreclosures and bankruptcy with the resulting discredit upon the farm-mortgage banking fraternity in general. In order to maintain the present high standard of the business, it is suggested that the reputable firms co-operate to prevent questionable methods and prevent the marketing of offerings which do not afford proper safety to investors. The bulletin of the Association says further:

"Farm-mortgage bankers necessarily are engaged in the business for profit, and competition is keen, but unless profits can come legitimately-unless they accrue through the producing and selling of mortgages at least of standard quality-it is better temporarily to do less business and be satisfied until present conditions have been corrected. The Farm Mortgage Bankers' Association of America was not organized by accident. The men who got together and formed the association were sincere, serious-minded men who recognized the importance of co-operating to preserve the integrity of the farm-mortgage business and of promulgating certain principles and purposes which would command and deserve the confidence of the investing public."

Prospect of Higher Money Rates in Middle West

A more optimistic sentiment prevails in regard to the money market and the possibility of an early enhancement of rates in response to continued activity in general business and mercantile branches. Up to the present time country banks were well supplied with funds; but they are now beginning to draw upon the comparatively large balances held in reserve centers. The very marked reduction in the surplus reserve of the New York Clearing House banks is also watched with interest. It is also believed that increased competition on the part of borrowers for long-term loans will eventually have the effect of establishing more normal rates. There is no getting away from the fact, however, that bank earnings have been substantially reduced because of the unprofitable loan rates and the huge accumulations of idle funds in banks. The banks and trust companies which conduct bond departments have been able to make up for the deficit in earning capacity because of the fairly good profits derived through this branch of service.

Commenting upon business conditions in this section and the future of money rates, Mr. Charles G. Dawes, president of the Central Trust Company of Illinois, was recently quoted as follows: "In spite of the numerous peace rumors in Europe and rumors of possible war in this country, business continues on an even keel, and these rumors seem to have no appreciable effect outside of the investment market, where they would naturally be felt first. Enormous exports continue, the volume of domestic trade is steadily increasing, and the sum total of commercial activity is only slightly less than a month ago. The difference is scarcely noticeable and applies to only a few lines. Demand for money is increasing and interest rates are slightly higher than a month ago."

Frank F. Winans, formerly with the Northern Trust Company, has been made sales manager of the Illinois Trust & Savings Bank.

Maurice H. Bent, formerly with the Harris Trust & Savings Bank, and Ralph L. Lapham, formerly with the Chicago Savings Bank and Trust Company, have been added to the force of salesmen. W. E. Colt, Jr., formerly of New York City, is in charge of the bond department.

Railroads are devoting $60,000,000 to the construction of new terminals in this city.

May bank clearings in Chicago increased nearly 10 per cent. over April and 28 1-3 per cent. over a year ago. This year's clearings are over a billion above the total for the corresponding period last year.

afforded.

Illinois Trust and Savings Appointed Trustee Chauncey J. Blair, senior vice-president of the Corn Exchange National Bank, and one of the most eminent figures in local financial affairs of this city for many years, who died at his home recently at the age of 71, provided in his will for the appointment of the Illinois Trust & Savings Bank as a co-trustec of a trust fund for the children of the testator. The estate is valued at $800,000, one-third of which is bequeathed to the widow and the remainder is reserved for a trust fund for the children. Mr. John J. Mitchell, Chauncey B. Blair and the Illinois Trust & Savings Bank are made co-trustees.

This appointment serves to direct attention to the fact that an increasing number of wills filed in the probate court call for the appointment of trust companies of this city as trustees, executors or administrators. Practically all of the important estates in this city are managed now by trust companies. This is largely due to the splendid record for economy and ability in the management of estate affairs and execution of trusts achieved by the trust companies of Chicago. It is estimated that the trust companies of this city have custody of considerably more than $500,000,000 trust and estate funds.

Success of the Farm Loan Department of Merchants' Loan & Trust Company

The Farm Loan Department of the Merchants' Loan & Trust Company of this city has experienced such success and expansion in business as to necessitate additional facilities for customers as well as for the executive and clerical staff. Exclusive and ample quarters have been provided for this department on the third floor of the modern Merchants' Bank & Trust Company Building. This branch was started eleven years ago, and now has loans in force and in the hands of investors in excess of $20,000,000. Vice-President F. W. Thompson, who is manager of the department is regarded as one of the foremost authorities on the subject of farm loans and as president of the Farm Mortgage Bankers' Association has rendered invaluable service in bringing about the adoption of a high standard in requirements as to farm mortgages and in safeguarding investors.

The Merchants' Loan & Trust Company has enjoyed exceptional growth in all its departments, the latest statement of financial condition showing aggregate resources of $86,549086 with deposits of $74,009,186, capital stock of $3,000,000, surplus fund, $7,000,000 and undivided profits, $1,037,894.

The First National Male Chorus

There is perhaps no bank in the country
where there exists a more wholesome and
genuine family spirit as well as co-operation
as among the hundreds of employees of the
First National Bank and the First Trust &
Savings Bank. This is primarily due to the
generous attitude of the management in pro-
viding a liberal pension system, maintaining a
gymnasium, reading and assembly rooms. Be-
şides there are annual outings and golf tourna-
ments at which prizes are offered in competi-
tive contests. There is also a male chorus
composed of sixty male voices, which is in
great demand, not only for entertainments
given by the employees of the First National
Bank, but is also frequently heard in the larger
churches of the city and suburbs. A program
of special artistic merit was recently rendered
by this chorus at the annual matinee concert
given in the big rotunda of the bank. The
officers of the Chorus Club are: Everett B.
Mann, president; Leigh Sargent, vice-president;
Harry Boyell, secretary and Samuel G. Givens,

treasurer.

Holders of Bank and Trust Company Stocks
A recent compilation of the stockholders of
the Chicago banks and trust companies issued

by the Evening Post shows that there are sev-
enteen individual and estate holdings which
aggregate over $31,500,000. During the past
twelve months there has been an increase of
$2,663,980 in the amount of capital employed;
aggregate deposits increased, $244,000,000;
loans and discounts increased, $122,000,000;
cash means increased, $91,079,000 and aggre-
gate bank clearings increased, $1,339,000,000.
Among the large holders of banks and trust
company shares are N. W. Harris, chairman
of the Harris Trust & Savings Bank,.J. Ogden
Armour, Frederick H. Rawson, president of
the Union Trust Company; James A. Patten,
Elbert H. Gary, John J. Mitchell, president
Illinois Trust & Savings Bank; A. C. Bartlett,
James B. Forgan, chairman First National
Bank; John A. Spoor and Guy H. Mitchell.
Among the estates which have large bank
stock investments are the Marshall Field Es-
tate, James J. Hill Estate, Byron L. Smith
Estate and Edward Morris Estate. The num-
ber of women stockholders is very large, some
of the important individual holdings including
those of Mrs. Jennie Mitchell, Lolita S. Ar-
mour, Catherin Barker, Mrs. Elizabeth S. Mc-
Elwee, Mrs. Elizabeth Clarke Spalding and
Mrs. Jesse S. Walker.

St. Louis

Special Correspondence

Crop and Business Prospects

Regardless of whether the war in Europe is indefinitely prolonged, or peace heaves in sight as suddenly as that calamity came upon the world, it can be accepted as a certainty that the demand for agricultural products and foodstuffs will continue to exercise a dominant influence in maintaining American prosperity. Sufficient data are available to arrive at the conclusion that crop prospects in Europe are not overbright this season and that importing countries will, perhaps, rely upon the surplus supplies of the United States to a greater extent than last year. That is why such keen interest is just now shown in the status of winter and spring wheat. Although there has been improvement in condition in a number of the large wheat growing States since the April Government report, the fact cannot be ignored that, due to reduction in acreage, scarcity of farm labor and unfavorable weather in some sections will bring our surplus supplies of winter and spring wheat considerably below last year's remarkable production. The June Government report places the prospective production at 715,000,000 bushels for both yields, which is a decrease of nearly 300,000,000, as compared with the harvest of 1915. Despite the reduction in yield, the price of wheat is about 30 cents a bushel below the quotations of last January. The corn and oats acreage and production, on the other hand, promise an exceptionally large harvest.

It is quite natural that the agricultural situation should be the factor of prime interest in banking and business circles of this city. Continued prosperity in the farming sections means greater stimulation of business and a more liberal distribution of earnings all around. The banks and trust companies of St. Louis are well supplied with funds to meet the larger demand for accommodation from country banks which is expected to materialize in July. Thus far the money market has not yet responded to the sustained activity in industry and trade. Bank clearings for May were the highest ever. Particularly gratifying is the settlement of most of the labor disputes, the splendid earnings of the railroads and the rapid pace held in retail trade. New high record deposits are reported by the banks and trust companies of this city, the combined returns, according to the St. Louis Clearing House tabulation, based on latest official reports, placing aggregate deposits at $355,445.000 an increase of $52,000,000 as compared with

Mercantile Trust Company of St. Louis, Mo.

The report of condition of the Mercantile Trust Company of St. Louis at close of business May 1st, shows substantial gains in deposits. Among the important items in the report are: Time loans, $17,550,313; cash, sight exchange and demand loans, $15,173,574: total resources, $42,045,930; deposits, $31,891,500. The capital is $3,000,000, surplus and profits $7,014,172. The combined deposits of the Mercantile Trust and Mercantile National aggregate $37,658,040.

The Mississippi Valley Trust Company, acting with Remick, Hodges & Company, and other Eastern houses, has purchased $1,150,000 Kansas City, Mo., 42 per cent. bonds, due July 1, 1935.

Festus J. Wade Urges Civic Co-Operation

Always a zealous and untiring leader in all organized efforts to increase the business and financial prestige of St. Louis among the big centers of this country Mr. Festus J. Wade, president of the Mercantile Trust Company emphasized the need of more effective cooperation. At a recent conference of the Business Men's League some interesting facts were presented by Mr. Wade, which promise to lead to greater unity among civic as well as banking and trust company organizations. In selecting as his theme "A New Phase of Preparedness," Mr. Wade said there were two kinds of preparedness, one of which is to get together and prevent the city from running backward, and the other is to apologize for St. Louis when the next Federal census returns are completed.

"The banks have been standing still," said Mr. Wade. "With a few exceptions, the banks have not been making any money for fifteen years. There are fifty-seven civic organizations in the city. All of them are good, but they are not working together. They need a master leader. The city should not attack the railroads and the public utilities. It should cause us to pause in our attack on the vested interests to consider that practically every trunk line running into St. Louis is in the hands of a receiver. All should work together for the economic benefit of the city. Vested interests must be given as much consideration as the laboring man, if we are to build up our city."

Mr. Wade was recently elected president of the St. Louis Commercial Club. Walker Hill was elected treasurer.

Several thousand officers and employees of St. Louis banks and trust companies marched in the "Preparedness Parade" which was recently held in this city as a demonstration in favor of greater naval and military efficiency. Large contingents were in line from the Mississippi Valley Trust Company, Mercantile Trust Company, St. Louis Union Bank and the St. Louis Union Trust Company. The length of the parade as well as the enthusiasm shown offered a striking example of the fervent patriotism and devotion to Mother Country which exists in this city among all members of the community. The Missouri Bankers' Association, as the recent annual convention also adopted a resolution calling for a vigorous "national defense" policy.

City Trust Company Service to Country Banks

The modern trust company with its halfdozen or more highly organized departments offers many opportunities for rendering valuable and mutually profitable services to country bankers. Aside from the facilities offered through correspondent relations in collections of drafts, checks, notes and coupons, in providing letters of credit which are honored in every city of the globe, there are special means of serving country banks through the investment, real estate and farm loan departments. The character of such services is described in an instructive article appearing in the last issue of "Service" the house organ of the Mississippi Valley Trust Company of St. Louis. Through the investment department the local banker is assisted in the final marketing of municipal bonds and represents the trust company when the latter decides to purchase such issues. In the real estate department co-operation is offered country bankers along similar lines by arrangements with them to take over deeds of trust in cases where the country banker wishes to serve in the development of his town but must have outlet for a long-time real estate security. The Mississippi Valley Trust Company has been especially successful in developing mutually satisfactory relations with country banks through the facilities offered by the splendidly equipped farm loan department. Whenever the farm loan department decides that farm values and farm profits in a given county justify its being included in the field of its loan operations, a local correspondent is appointed to make examinations and selections. Wherever possible this correspondent is the local banker. In fact there is scarcely one ofthe customers of the trust company, especially among depositors and investors, to whom service does not include some reasons for co-operation between the city trust company and the country correspondent.

An instructive feature of the recent annual convention of the Missouri 'Bankers' Association was the "forum" conducted by Chairman William McChesney Martin of the Federal Reserve Bank of St. Louis in the course of which he discussed the legal phases of what constitutes a binding signature for negotiable or trust documents.

Organization of the "Valley Trust Club" formed by the officers and employees of the Mississippi Valley Trust Co. has been completed with the election of the following officers: John P. Sweeney, president; G. P. Knapp, vice-president; S. B. Blair, secretary; Geo. L. Martin, treasurer.