V
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10
THE BEE: OMAHA. MONDAY, OCTOUER 24. 1921.
Fremont Banker
Answers Earhart
On Discount Rate
Dan V. StrjtJif n Det tret One
Nfbrka Rank Wrecked
By Action of Federal
Reserve Officer.
aanasssnssannnsi
Fremont, Nth., Oct. JJ. (Special
Telegram.) la rripoiue to the
statement made by 1- II. Ear
hart, manager of the Omaha branch
of the Federal R'itrve bank,
Pan V. Stephrni, member of the
bankers' committee appointed by
Governor McKelvie to make a for
mal protest againit the high discount
rates and general management of the
Federal Reserve bank, issued the fol
lowing :
"Mr. Earhart will find great diffi
culty in explaining to the people of
the Tenth dittrict why the discount
rate should be 6 per cent, while a dis
trict of a similar character, namely
the Chicago district, is operating
under a 5 1-2 per cent rate.
"Doth districts are agricultural,
with manufacturing and commerce
predominating in the Chicago dis
trict Will Mr. Earhart explain to
the people why agriculture, which
furnishes more deposits in the banks
than both the manufacturing and
merchandising interest combined,
should be penalized by being charged
a discount rate 1-2 per cent higher?
Want Chicago Rate.
"The bankers' committee does not
contend that there should be a flat
discount rate for the whole United
States, but it does contend that the
Kansas City district is entitled to the
same rae of discount that the Chicago
district now has. There isn't any
thing more certain than the Kansas
City bank will be compelled to make'
such a rate.
"Mr. Earhart makes an amazing
declaration, that the facts do not
justify the charge made by the bank
ers' committee that liquidation has
been foremost in the minds of the
officers of the Federal bank at Kan
sas City. It is unbelievable that
Manager Earhart should be unmind
ful of the fact that at a meeting of
100 bankers at Omaha, called by the
governor, there was but one voice
raised in defense of the management
of the Federal Reserve bank, and
that was from a banker in the sand
hills, who had but very little expe
rience to justify his position.
Bankers Will Testify.
"Mr. Earhart can find hundreds
of bankers who will absolutely deny
his statement, or we can find them
for him, if he don't believe it. The
cold-blooded truth is that the unrea
sonable demands for liquidation
made by the Omaha branch upon
its member banks drove them prac
tically to a position where they were
unable to serve any useful purpose
in their respective communities.
This insistent demand for liquida
tion, if it had continued, would un
doubtedly have closed the doors of
scores of banks.
"One bank we know of was abso
lutely forced to close its doors, whol
ly ' due to its action of the federal
reserve bank in Omaha. It has earned
the title in this case of being a bank
wrecker and should be prosecuted
as such if there was a statute al
lowing such action.
Charges Bank Wrecked.
"Governor Miller ana his wrecking
crew at Kansas City will have to an
swer to the people yet for the man
ner in which they have managed the
peoples' business. Manager Ear
hart would have done well not to
have offered a defense, unless he had
something to offer that would ap
peal to rational minds.
"Manager Earhart makes the
astonishing statement, which he
thinks shows the liberality of the
federal bank, to the effect that 37
per cent of the loans made by that
. bank at the peak of the season last
November was made for agricul-
ture. He apparently does not know
;' that the business of SC per cent of
' the people of Nebraska is agricul
ture, and on his own statement, his
bank has failed to serve it only in a
minor degree. - .
."At the present time he alleges
; that SO per cent of the loans are
made to agriculture. When Manager
Earhart can state that 90 per cent
of the loans from the federal bank
have been made to agriculture, then
we -can praise his management for
serving the people as the law con
templated." .
Bargain Days Are Huge
Success at Plattsmouth
" Plattsmouth, Neb., Oct. 23. (Spe
cial.) Plattsmouth's fifth monthly
: bargain day brough buyers from far
removed sections, and during part
of the afternoon parking space for
' cars Could scarcely be found any-
' where in the business section. The
bargain days, sponsored by the
Plattsmouth Ad club and participated
in by nearly every business house in
' the city, are carried out without en
tertainment features of any kind, the
merchants believing the buyers would
rather have the cost of such handed
"down to them in the form of lower
' prices. Last morith it was voted to
"Continue the sales days at least six
months.
Raid on Private Yacht
Yields 600 Cases Whisky
New York, Oct 23. The private
steam yacht John Scully, tied up at
Martins dock, Stapleton, Staten Is
land, was raided by .customs
officials, who. claim to have found
600 cases of liquor on board.
The federal authorities started an
investigation which they believe will
connect the yacht with a gigantic
plot for smuggling liquor into this
country.
' Customs agents who boarded the
vessel said they found most of the
crew Intoxicated and the captain ab-
; sent. . ,-
Winter Wheat . Situation
Serious, Due to Lack of Rain
" Beatrice, Neb., Oct 23. (Special.)
. No rain has fallen in this section
of the state for some weeks and as a
result the- winter wheat situation is
growing more serious from day to
day. Some farmers have plowed up
their fields and expect to resow the
., grain when rail Jails.
Hunter Killed After
Argument Over Duck
Antioch. III.. Oct 23. Dispute
ever the ownership of a dead duck
resulted in the fatal shooting of
John L. Johnston, 30, member ol
the hardware specialty firm of Ack
crman-johnston company ot tin
cairo.
Johnston and George Kiggemeyer,
the latter owner of a boat livery
here, were shooting ducks on Fox
lake, tioth fired at a duck which
fell and both claimed it A heated
argument ensued, but, according to
witnesses, Johnston started to ro
liis boat away from the spot, when
Niaaemeyer fired at him. Johnston
was shot in the back of the head
and died almost immediately.
Following the shooting, Nigge
rreyer rowed hastily to shore and
disappeared.
Monthly Review
Reports Steady
Business Growths
Fall and Winter Goods Show
ing Activity Rise in Cotton
Prices Lif esaver for South
ern Farmers.
Cblr( Tribune-Omaha Bee Leased Wire.
Washington, Oct 23. Business
conditions continue to show a mod
erate improvement in nearly all sec
tions of the country, Archer Wall
Douglass, chairman of the commit
tee on statistics and standards of the
Chamber of Commerce of the United
States, announces in his monthly re
view of the business situation.
"Fall and winter seasonal goods
are beginning to move and the out
look is for -fairly good business the
remainder of the year," he says. "As
the season advances there appears
to be a better prospect of a good
holiday and Christmas trade.
One of the most striking devel
opments is the great improvement
that has come about in the south,
due to the rise in cotton prices. The
good effects of this boom will not
be confined to the southern states,
but will be reflected in other dis
tricts.
Dramatic Story.
"The story of the sudden rise In
the price of cotton is a dramatic
one. In August there seemed noth
ing ahead for another 12 months but
the practice of grim fortitude and
endurance which carried the south
through periods of depression and
trial. In fact, hard times and the
people of the south are old acquain
tances, and more than once they have
ben close to the ragged edge of dis
aster. This time they were dead
broke, although they possessed all
manner of real wealth in an abun
dance of food, the greatest crop of
corn ever raised, more live stock
than ever before and much cotton
carried over from the previous sea
son.
"But there was scant demand for '
these commodities and then only
ruinous prices, bo they obligations
could not be met for lack of ready .
funds. Then came the government's
September report . and the south
came back after a sudden and dra
matic fashion. The burden of obli
gations will be mostly disposed of
before the winter is past ' Cotton
is being sold freely and the farmer
will dispose of most of his holdings
by the new year, s
Change for Better.
"Business already has 'felt the im
pulse of the incoming currency and
will grow gradually better.
"Such change as i apparent in
industrial life generally is rather for
the better. Textiles are in fair shape
and leather maintains both its de
mand and appreciation in prices.
there is some increse in the output
in steel and iron products, but the
recent rise in prices is not altogether
convincing as to its being perma
nently higher. , .
"There is better demand for lum
ber at somewhat higher figures. The
belief is general that next spring will
usher in renewed .construction ac
tivity.
Ihe oil business seems to have
struck bottom and started upward."
Prospect for
Agreement On
. Shantung Gone
Chicago Tribune-Omaha Pee Leased Wire.
Washington, Oct. 23. Prospect of
a settlement of the Shantung issue
between the governments of China
and Japan before the -international
conference on limitation of armament
convenes in Washington next month,
went glimmering with the pub
lication through the Japanese em
bassy here, of Japan's reply to
China on the tetter's memorandum
of October 5 bearing on the contro
versy. The ' Japenese government ex
presses a keen desire for speedy
settlement of the Shantung dispute
and invites further negotiations to
that end, but takes decided views in
opposition to the Chinese plan as ex
pressed in reply to Japan's proposals
of an earlier date.
The failure to agree upon a basis
of settlement will, in the opinion of
Washington statesmen, preclude any
further progress in the negotiations
between the two powers before the
date set for the Washington confer
ence which will primarily difuss the
problems of the Pacifie and far east.
Such a result will leave Shantung
one of the outstanding sources of
dispute and make it a subject of su
preme importance before the con
ference, in all probability.
" Japan, in the latest note to China,
feels agrieved at the attitude of
China toward the -former Japanese
proposals regarding ' Shantung and
flatly denies the claim of China that
it is entitled to return to former
German territory unconditionally.
This, the Japanese government ob
serves, has no justification either in
international law or nnder existing
treaties between China and Japan.
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Manufacturers of
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Advertising as an
Investment
By ROY DICKINSON, in Printers' Ink.
C( ND the banker said to him, unless you cut down
l this appropriation you intend to spend in adver
tising, I will call your loan.'
This conclusion to a talk which I had recently with
the vice-president and general manager of a big in
dustrial corporation, himself a user of big space, made
me wonder whether there is still much of this attitude
among bankers toward advertising appropriations. A
trip to several agencies and talks with men from various
parts of the country, makes me believe there are two
divergent views and that a discussion of them may help
clear up one of the things which is holding back better
-sales and advertising plans at the present moment.
'First, let it be understood that the quotation at the
start of this article refers to a banker in a small city
where there are two big manufacturers who were na
tional advertisers. In addition to' the definite instruc
tions to this particular advertiser, this small-town
banker said that his bank was a conservative busi
ness institution and preferred to deal with conservative
business men. His definition of a conservative business
man seemed to be a man who does not advertise.
' Whether advertising is a bankable asset, just what
a conservative manufacturer is, and why the banker in
the small town should take a different attitude toward
advertising from that of his big-city brother, are points
which have an important bearing upon the present busi
ness and advertising situation. For the banker in the
big city, my investigation showed, is not taking the
mall-town attitude. -
Two groups, representing a great deal of capital,
have recently taken over the management of several
corporations that are national advertisers. In four
separate and distinct cases, at almost the same moment
they assumed the management of the company,' putting
in one of their men as president or vice-president, these
bankers announced that they had selected a certain ad
vertising agency and that advertising plans would be
carried out advertising appropriations in some cases
increased. " ' ';. .
Just what, is "a conservative manufacturer?"
George Eastman, president of the Eastman Kodak com
pany, says this : "Right now the economical production
of goods is most important, for not only are people
spending less freely, but; competition is keen. .. Other
manufacturers, including foreign manufacturers, with
low labor costs, are after our markets. To. offset this
we are increasing our sales force and increasing our
advertising." j
I believe that George Eastman is a conservative
and successful manufacturer. I believe that his plan
to increase his sales force and his advertising appropria
tion, to put more men back at work producing, is a sound
business proposition. ."rtJ.; ; :
Is the Victor Talking Machine company a conserva
tive institution? This company may well, be called
conservative, if a 23-year record of steady development
and an increase of $2,500',000 of cash on hand since
January is any criterion. But the Victor company
would scarcely fit the country banker's definition of .
conservatism, because the amount it is spending for. ad
vertising this year is greatly in excess of the appropria
tion for 1920, which up to that time had been the com
pany's biggest advertising year. Yet the country banker
stated that people have no money . to buy clothing,
breakfast food or alarm clocks, let alone Victrolas. He
would probably refuse to see any connection between
the Victor increased advertising appropriation and the
fact that Victor sales for the first five months of 1921
are larger than for any other period in' the company's
history. Conservative companies, in my opinion, can
by no means be considered to consist exclusively of non
advertisers. I am no banker, but it would seem to me
than any force which results in breaking down sales
resistance, in putting more men back producing, and
thus giving them more money to spend upon another
manufacturer's products and which increases sales in
slack times, should be considered a bankable asset. .
A. well-known company got into financial diffi
culties through too rapid over-expansion and by tying
up a great deal of money in inventories, A committee
of bankers took over the management of the company.
They put in a man of their choice as head. One of the
first moves they made would be surprising to the small
town banker who made the remark quoted at the open
ing of this article. A dividend date was almost due.
When the company could not borrow money at the bank
a few months before, it had been forced to cut down its
advertising appropriation. The big city bankers did
this : , At the meeting of the board of directors they
suggested a postponing of the dividend on the common
stock, and urged that the money which would have been
sent out to the stockholders of the company be spent
upon an intensive advertising and sales campaign. In
this action of theirs, right or wrong, there was the
realization that the buyer of the product is in the last
analysis the person who pays both dividends to stock
holders and wages to the factory worker. They be
lieved that in a crisis in the company's affairs the best
use to which they could put any ready money , was in
the building up of sales and good-will. "
Advertising can, and does build up tangible good
will assets and increases the sales of any product which
is made right and merchandised right. :
TEETH
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-VI