The Red Cloud chief. (Red Cloud, Webster Co., Neb.) 1873-1923, May 31, 1923, Image 8

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How a Debt Can Be Put to Work to Increase Earnings
Thrift and Loans Go Hand in Hand to
i d Aid the Industrious. ., l
The true use of debt in personal and business affairs
remains something of a puzzle to many people. To some the
very word "debt" signifies misfortune, while others merely fail
to understand the ways in which they can put a debt to work
for them to increase their earnings. The Committee on Public
Education of the American Bankers Association has under
taken in the following discussion of how and why banks loan
money to clear up these misunderstandings:
Sonio peoplo think that to incur a
debt at tho bank Is unwiBC, or a re
flection on their business standing.
This Is not tho caso wlioro tho debt
Is contracted for legitimate) business
purposes. Incurring debt to Uvo bo
yond ono'a Incomo Is something no
thrifty porson would do, and careless
use of crodit leads to extravagance
and disaster, but wise borrowing Is
an encouragement to thrift and in
dustry. Tho first function of tho. banker Is
to oncourago Industry and thrift so
that a largo fund of bank deposits
may bo accumulated. This fund Is
often likened to a roscrvolr In whclh
water Is accumulated for community
needs. Tho banker then loans from
this fund to thoso conducting the
business of tho community.
The banker bases credit on what
are known as tho threo C's of credit
Character, Capacity and Capital.
Character Is an lmporatlvo business
qualification. Allied with character
Is Capacity. Beforo making a loan a
hanker takes Into consideration tho
capacity of tho applicant that Is, his
ability to earn through his honi'sty
and his Industry. Capital Is a man's
worth In money, merchandise, stocks
and bonds or lands, which may bo
given as collateral In security of a
loan to mako It safe.
Let us consldor tho business trans
actions of Mr. Smith, tho storekeep
er. Ho nnds, with hlb business In
creasing, that ho needs a larger Mock
of goods. Also, somo of his cuiitom
crs do not pay cash, and their ac
counts must bo carried until "pay
day." Ho must hnvo more money for
his business, so ho goes to his banker
for advice. Tho banker asks Mr.
Smith to submit a statement of his
business, showing what ho owns and
what he owes. Ho knows Smith's
tharacter and responsibility from his
observation of his dealings and from
tho confidence thnt peoplo havo In
Urn. If ho finds Mr. Smith's state
ment, and tho progress ho Is mnklng,
satisfactory ho will bo glad to con
sider the best method of loaning him
the needed funds.
How Money Is Loaned
Monoy 13 loaned by banks on
straight notes, on indorsed notes, on
collateral notes, on bills receivable
and on trado acceptances. Mr.
Smith may be told by tho banker
that, because ho has sufficient money
In his business and mnnages It well,
the bank will oxtend him credit with
out his putting up any security be
yond his own word of honor, evi
denced by his note.
Let us say that Mr. Smith needs a
maximum amount of I2.G00 during
Ills busiest season and that tho bank
has consented to grant him such a
-line of credit." Mr. Smith could
come to tho bank and mako out a
note for any portion . all of this
amount for any time up to six months.
To pay some bills ho needs, say,
1500. Ho estimates that within sixty
days ho will receive from his charge
customers enough monoy to repay
this amount. Ho therefore makes a
sixty day note, which fie banker
"discounts" at tho prevailing rato of
interest, let us say C per cent, and
places tho proceeds to Mr. Smith's
credit. How much does ho credit to
Mr. Smith's account? Six per cent
on $500 for sixty days Is $5. This
amount the bankor deducts nt tho
time the nolo Is made, It being tho
Interest which he charges Mr. Smith
Northeast Pawnee
Tho man who claims to bo unlucky
s most often just plain lazy.
A really pretty man is usually tho
moat useless work of an nll-wiso
for tho uso of tho money. Ho then
credits Mr. Smith with tho proceed
of tho noto, or 5493. When tho noto
Is duo In sixty days Mr. Smith has re
colyed payment from his customers,
and he pays the bank 3500. Tho
bank marks tho noto paid and returns
It to Mr. Smith.
If Mr. Smith's business condition
wore not sufficiently strong to war
rant granting him unsecured credit the
banker might say to Mr. Smith, "I want
to help you, but you will have to got
tho indorsement of your friend, Mr.
Jonos." Jones Is known to tho bank
er as a very rollablo and responsible
business man. Should ho bo willing
to help Mr. Smith ho will wrlto his
name on tho back of Mr. Smith's noto
and If Smith cannot pay the note
when duo Mr. Jones will have to pay.
In another caso tho bankor, still
anxious to help Smith,-ulght say, "I
am willing to loan you up to (2,500,
but you must socuro the loan with tho
goods which you purchase for that
amount and with somo additional
goods." Mr. Smith would have to
warohouse tho merchandise used as
collateral In such a way that It might
be easily Identified through ware
house receipts no being tho bank's
property until tho noto Is paid. If
Smith finally found himself unablo to
rmy, tho banker could sell tho mer
chandise and uso tho proceeds to pay
the noto. It tho goods brought more
than the amount of tho note tho bank
would pay tho excess to Mr. Smith;
It tho amount wuro not enough tho
hnnk would look to Mr. Smith to
mako good tho difference.
Mortgage Loans
Loans against farm lands, called
mortgago loans, aro frequently made
In country districts'. If Mr. Smith,
lacking an Inddrser or sufficient col
lateral or busiuess standing, owned a
farm frco of debt ho might glvo n
mortgago on It nB security.
Tho procedure would bo Bomowhat
differont from loaning against mer
chandise. Tho law, realizing tho use
ful place farm nnd homo ownors oc
cupy, protects them 1l a special man
ner. It says to tho lender, In case of
default on a mortgago loan, "You
must glvo this owner of land one
year after serving notlco that you ex
pect to sell his land to pay the
mortgage and redeem tho debt." This
Is called tho period of redemption.
Mr. Smith has still another method
open to obtatn funds from his banker.
He has sold, say, a $600 bill of mer
chandise to Mr. Brown, a dealer in a
smaller community, who must sell
tho goods to his own customers bo
fore he can pay Smith. Smith says to
Brown: "If you can't pay cash give
mo a ninety day noto. I will discount
it and get Imtnedlato cash on It from
my bank. I will have to pay 6 per
cent Interest to do so, and I shall
want you to pay that Interest." Mr.
Brown agrees and makes his ninety
day note for $500 with interest at 6
per cent. Mr. Smith takes this note
to the bank, which advances him
credit for $500. When the bank col
lects the noto from Brown ninety
days later It receives $507.50, the
added $7.50 bolng the 6 per cent In
terest charge for tho use meanwhile
of the money for tho ninety day pe
riod of tho note.
These are the various ways In
which tho hank serves Its community
by placing, through loans, the accu
mulated thrift cl tho community at
the disposal of business and Industry.
In theso dnys of automobiles Nn
.ure should supply pedestrians with
pare parts.
Another characteristic of magazine
story men is that they never talk,
'.hey always "boom."
Tho most important part of a
shurch or lodge doings is the com
mittco on refreshments.
In spite of tho obligations he takes
a lodge brother can skin you a3 neat
ly and completely as anyone else.
A lot of folks will be unhappy in
heaven when they find that their
own denomination does not run it.
.Mr Mtnl Mi. Uurt Pane note
Ui-tl C'oiul one day ln-,t week.
Place Your Coal
High schools don't advertise a
course in mail order buying but too
many of them have it, just the same.
All over Nebraska high school
grnduntes arc now saying, back up
hero old world and get your tail
Some men would look better if
they would muke n practice of wear
ing shirts that mutch their chewing
Tho cost of living has gone up G8
percent in the hist ton yenrs. But
dying i3 no more popular than it
ever was.
A Goring man used mighty poor
judgment tho othen day. He stopped
into Bill Maupin's oflice to get out
of the wind.
Speaking of fooling yourself, thV
chap who thinks" ho pays no taxes
because lie lias no property leads nil
the rest.
One way to avoid collisions is to
finuro that the other diiver will havo
no more sense in a tight place than
you will have.
Fifteen dead rats were found ind
Scottsbluff still recently. The peoplb
out thnt way like their hootch with
a real kick in it.
Someone remarks that the differ
ence between the people and politi
cians is that tho politicians know
whnt they want.
One advantage a man has over a
boy is that he can go to a barber
shop and hnvo the dirt scraped off
of the back of his neck.
Your competitor may be just as
low down a senmp as you think he
is. But you lower yourself to his
level when you adopt his plans.
Frank Drown ami Hum Ululr drove
to Smith Center on Mitutday after,
A number of farmers were listing
coin ltibt Suuduy piobahlj f.xuhtuiging
John Brown, Everett Myers and
Clifford Noble traded at Woiaer Satur
day litt.
Air. and Mis. Fiank Rvan, und Mr.
iind Mr.s. .Mm llyan woie at Womei
doing their muling.
Harve Ilialr shipped a car of cattle
to Kanshs City on Monday. Ho is to
accompany the shipment
John Collins, Bonnie Mohlor and Jim
Leadiibronil were doing their shopping
at Wouier lust Saturday
Mr. and Mrs. Everett Myers Mrs. Tat
Gouldle and daughter Anna Kent to
Smith Center last Sunday.
Mr. and Mrs. Jim Collins were visit,
ing with the latters folks Mr. and Mrs
Herb Barber one day last week.
The mall carriers of the various.
routes havo had a good rest as no mail
wast received du: ing the greater part
ot tho week so the people in general
are at a loss for reading matter as well
as over anxious to hear from those
they like best.
Owing to the inecsaut rains which
prevailed during the greater part of
lust week considerably lotardfd corn
planting. Nothing done in that liue
during the four leniaining days of the
week consequently a good many will
be in fir June listing besides some
will have to ifllst mi account of cut
woriiis as well as vvushouis.
Well diggers who wete shrewd ami
fur cooing enough would make some
iiiciiey und lots of it if they had to
tike contracts in digging wells, niace
irnnil ht'tulwii'y and lln,-h or accom
plish tlieii contracts iti short notice
as thoy ctmid strike water befoie they
st.irt theieby start in atal, thereby
saving ci ii'ideial.le toil and oxprnse.
Though the farmers of Smith count)
suffeied inucii from pntches of wash.
outs etc. they did not in a long wins
come to such a big los as hundreds of
fiumeis in tho bottom lauds along the
Republican river which for miles eusi,
and west w&a completely innundatcd
foinung au immense lake. Still the
loss sustained may not be so bad as
one might itmigiue. A month or so
later the devastation would be many
times greater.
A great many from this vicinity
went up north to the Republican these
last few days. Some went for curiosity
sake to sec the Hood, some others in
the hope of getting to town to get their
mail as well as to transact business,
but nothing doing in ttiat line. Alas
between them and town aud surround
ing county there is a great chaos, one
could not get hither the other could
notccme thither.
I '
Orders Now
The Mallone-Gelatly Co.
Of the John Galbraith Property by order of G.
Norberg, Referee in Bankruptcy, on the A.T. Walker
farm. Vx miles North and 2 miles West of Inavale.
THURSDAY, JUNE 7, 1923, at 1:00
69 Head of Stock
Team Good Grey Geldings, wt. 2800: Black Mare,
wt. 1200; Bay Mare, wt. 1200; 2-yr. old Colt.
Consisting of 8 Cows, some A No. 1 Milk Cows,
and some with calf at side: Good Durham Bull: Some
Good Yearling Steers and Heifers: Few Young Calves
43 Head of Good Sows and Pigs: 1 Good Boar
Deering Mower, new; John Deere Single Row Culti
vator; Disc: Hay Sweep; P. & O. Corn Planter; King
man Gang Plow: John Deere G-shovel Cultivator:
Weber Wagon: John Deere Lister; 2 Sets of Work
Harness: Dodge Auto and Numerous Other Articles.
TERMS: 10 and under cash. Sums over $10. 6
monts time at 10 per cent.
J. H. ELUNGER. Auct. S. R. FLORENCE. Clerk
I've got to find something to do
out in the state. The Boss had mo
working in the garden last week.
Next, she will expect me to help
clean house.
What Farmers Need
Added to Credit
1? And Good Advice
Lew Shelley's idea of heaven is to
spend the rest of his days playing
sevenup. If he were ns up to date as
ho pretends to be he would want to
play golf or pinochle.
Commencement Exercises
v r
First Vice President American Bank.
era Association.
II tho farmer Is not prosperous
thero can bo no permanent prosperity
In other Industries, because tho farm-
e r ' s purchasing
power, under
normal condi
tions, Is ono of
the most potent
Influences wo
havo In tho Unit
ed States. When
conditions with
tho farmor aro
good, and he Is
receiving tho
cost of produc
tion plus some
thing more tor hln labor, he Is in a
position to buy from tho manufac
turer. A condition that nffects the farmer,
cutting off his purchasing powor, de
stroying his belief In himself, In tho
banker nnd in everybody else, can
Walter W. Head
advlco he needed during the period ot
prosperity, hut he, with us all, suffer
ed depression. There clearly must
have been something lacking to en
able him to go on the oven tenor ot
bis- way. Tho answer Is very plain.
It Is that somo means need to bo pro
vided to enable tho farmer, attor his
labor has been expended, when tho
crops have boon harvested, or when
hls.livo stock have reached tho stage
where ho must ship It, to liquidate his
indebtedness. Ho must havo some
body Interested in him Dufllclontly,
not altogether from his own stand-
pplnt, but from tho standpoint of tho
banker and business man, so that ho
can put his products on tho market at
the time when they will bring him the
I do not mean to indorso every Im
aginable Bchomo for co-oporatlvo
marketing, but 1 do bellove the basic
Idea la worthy of consideration from
tho banker's standpoint as well as
the farmer's standpoint. Hankers aro
certainly Interested In tho farmer, by
reason of the fact that they cannot ho
prosperous in their own business un
less the farmer also Is prosperous.
They must Interest themselves In the
furmcr, not only In giving him the
business advlco he heeds and In
financing him during the period of
construction, but also in helping him
place his products on tho market at a
I might be more enthusiastic about
hot lunches for school children if I
didn't know so many hnrd baked old
codgers who lunched on cold pan
cakes, cold fried eggs and other such
fodder when they went to school.
And they hnve lived many years to
ell the tale.
Hank Leggctt thinks that the ren
son the women swarmed around Jack
Kroh nnd Emerson Purccll so much
in the legislature is because they
loved them. Evidently, Hank has
never heard of feminine lobbyists.
Among Nebrnskn women who are
expert interior decorators nre The
Boss, Mrs. Jack Kroh, Mrs. Ase
Wood, Mrs. George Snow nnd Mrs.
Harry Flory. The tools of their
art nro n skillet and other similar
Last Thur&duy evening, May 24, at
the Auditorium, the commencement
program for the thirty-tlve graduates
of the Red Cloud High School for the
class of l!'i.T was rendered to ti large
The overture was played by tne high
school orchestra, also the march. The
graduates marched down the north i&le
aud to their respective seats on the
stage, nnd tiie larue class made a
splendid showing in their very pretty
graduation clothes.
The invocation was read by Rev H.
A, Fruntz. and the salutatory whs
given by Erwin Schnelber, after which
a solo was letulered by Mrs. dial.
The oration, "Strong in the Pinches"
was by E L Rouse of Scottsbluff, and
he gave mauy tacts throughout his
A song by the Seuior girls octet wn
muoh appreciated, after which E. J
Ovcring gave a short talk and then
presented the diplomas to the gradu
ates. Valedictory by Miss Novallruner
who received the highest scholarship
of the class, nnd benediction by Rev.
C II. Nelson, closed the exercises.
Wheat Comes Out Rapidly I
Wheat has made wonderful strides
in Soutwest Nebraska in the tho past
three weeks aud in many fields where
it was feared the crop would not be
worth harvesting it is said the condi
tions are now promising for a big
yield. Tho ground is soaked and con.
ditious are ideal for tho crop to con
tinue growth and development.
That was the report brought back
to Lincoln, M nday morning by Gen
eneral Superintendent L. B Lyman of
the Burlington who had spent four
day in the flood country of the south
west. He says some corn was washed
out on the lowlands and this will be
replanted The ground is soaked and
conditions were never better foracrop
in that section tliim uow.
He noted the transformation In the
wheat fields. Where a few weeks ago
the fields were thin, almost bare, the
plant has stooled out until it covers
the ground and gives promise of a big
yield where no to turn at all was look
ed for Lincoln State Journal.
State Line
Mrs. Noble was trading in Womer
Mrs. Harve Uiair went to Ducker
ville Friday.
No mall since Tuesday on accountof
the high water.
Several from this corner viewed the
high water Friday.
P. M. Brown and family made a trip
to famlth Center Saturday
Frank Brown and Minor Hubbard
went to Lebanou Saturday.
Ralph and Marion Drown spent Sat
urday night and Sunday with Lester
Why do magazine story chnracter3
nlwnys eat jam, drink hootch, pay no
attention to speed limits nnd other
wise flout most of the decencies of
life? And whoever heard of any
man, except a magazine chnrnctor,
"singing discordantly in his bath?"
"Crocodile Tears" Real Thlnai.
It Is said that crocodiles moan and
Rich like a Derson in distress to at-
'tract peoplo to the spot. They even
shed tears over their prey while de-
' vouring It
No ad writer has ever yet tried
to make it appear that a pipe is
dainty and sanitary.
nnlv brine about a chaotic condition.
which affects every business man and tlmo when they will bring htm tho
laboring man In tho United States, tvst of production. tiu a re-nionabl
regardless of what Job he may have.
The farmor hud all tho credit nnd
addition for his sonlcoi, 'and In pay
ment for his labor expodod.
Chnttie Coleman growls because so
mnny people do not do their work as
promptly r.s they show up for their
Gus Bucchlcr declares that if he
over fjcts into trouble he will refuse
to be trLd by n woman jury. Yenrs
of experience in married lifo have
convinced him thnt ho can't fool ono
woman, say nothing of twelve.
The Margin of Safety
Is represented by tho amount of
insurance you carry.
Don't lull yourself into a fancied
Because fire has never touched you
it doesn't follow that you're immune
Tomorrow no todny, if you have
time and vn bettor find time
conn' to the otllco and we'll write
a policy on your liouso, furniture,
fatore or morchandlbo.
Reliable Insurance
Cu now ever, wemee now 1
oectoe nwEues no pla.cs:
Vaan be. bigger t&wws nuku
Annual Meeting of
School Dist. No. 36
The annual meeting of School Dis
trict No 3U will be held at that school
house, Monday, June 11, at 1 p. m,, for
the purpose of electing officers and
voting a levy for taxation.
B. P. Watt, Director.
Order and Notice of Probate
In the County Court of Webster Couu-
ty, Nebraska.
To all Persous Interested in said Estate
TAKE NOTICE, That a petition has
been filed herein, praying for the pro
bate of a certain written instrument,
now on fllo in this court, purporting to
be the last will and testament of Mich
ael Donovan, Deceased: and that Miid
instrument bo admitted to probate,
and that administration of said estate
be granted to F. E. Maurer, as admin
istrator with tho will annexed,
It is hereby ordered that you and all
persons interested in 6aid matter, may
appear at the County Court room, in
the City of Red Cloud, in Miid county
uud state, on the 8th day of June, 102.'),
at ten o'clock, A M, to show cause If
any there bo, why the prayer of tho
petitioners should not be granted, and
that notice of tho peudoucy of bald pe
tition, nod tho hoaring thereon, be
given to all persons interested, by pub.
lishing u copy of this order In the Red
Cioud Chief, a legal noddy newspaper
published in said county, for three
successive weeks prior to said day of
WltucsB my hand and the seal of the
County Court this 21st day of May, A.
D. 1023.
(Seal ) A. D. RANNEY,
Judgo of the Couuty Court.