Chicago

Special Correspondence

Determined to Bring Business Back
to Normal

In counselling their customers, granting or withholding new loans or renewals and in appraising credit standing of borrowers the banks and trust companies are exerting a salutary influence over business and trade in this part of the country. The underlying motive is to face frankly and courageously the situation created by unavoidable deflation of values, prices, excessive costs of production and the reverses that became so pronounced with the last four or five months of the past year. The desire also is to guard all legitimate exchange of business and industry from needless hardship. What is even more to the point, the banking and credit conditions have assumed a decidedly more promising aspect in the application of restoratives. It is, moreover, recognized, that the lesson of sane living and reasonable return must be brought home to all classes, not by preachments, merely, but by hard and fast facts. Wholesalers, manufacturers, jobbers and others have and are taking their medicine with seemingly good grace. The laborer fattening on high wages for years, the farmer afflicted with visions of continued $3 wheat and the profiteering retailer with goods on his shelf, must also come down to hardpan. That is the reason why banking sentiment here is generally critical of the revival of the War Finance Corporation.

De

From the standpoint of net earnings the banks and trust companies look back upon probably their best year. For the same reason that the Federal Reserve banks have earned such high percentages on their capital the banks and trust companies have also had the advantage of high rates on money which failed to discourage the demand for credit until the slump in business came along and prices dropped. Although money is apparently easier and demand has relaxed there is little prospect of any but fractional declines from prevailing rates for some months to come. spite the recession in industry and business of the later months the volume of bank clearings in Chicago during 1920 scored the highest mark on record, aggregating $32,669,233,535 as against $29,685,973,091 in 1919. Board of Trade clearings of $248,217,259 showed a gain of $57,559,957 over the previous year. Despite the record yield of crops in 1920 marketing of grains at primary centers and in this city made the poorest showing in years, attributable both to the export situation and the holding campaign among farmers. Valuations of all live

"OUR TRUST SERVICE"

It is the personality behind the service we offer in our Trust and Banking departments that has obtained for us the accounts of many banks and bankers throughout the country.

When you are in need of the services of such departments, we shall be pleased to

serve you.

Chicago Trust Company

Lucius Teter, President

Trust Department

Willard F. Hopkins, Secretary
William T. Anderson, Assistant Secretary
Roy K. Thomas, Trust Officer

stock received at Chicago was $662,888,000, a decrease of $233,785,000 as compared with the previous year. Steel industry production was around 5,500,000 tons, or about two-thirds the aggregate capacity. It is estimated that there are upward of 150,000 idle industrial workers.

James B. McDougal, Governor of the Federal Reserve Bank of Chicago, has this to say on the situation:

"Fundamentally, there is some easing, but the general benefit thereof will not be felt much immediately. Many large and small concerns after inventory will find their current assets very much reduced, in a good many instances lower than supposed. Price declines, however, relieve the credit strain, and the commercial banks and Federal Reserve banks will incline toward leniency. I have not heard that the Federal Reserve Board contemplates any announcement on that subject, but integrity and efficiency of management will be the big factors. There is still much doubt as to the farmers' selling policy, although it appears less rigid than a few weeks ago."

The Federal Reserve Board has reappointed William A. Heath as Federal Reserve agent and chairman of the board of directors of the Federal Reserve Bank of Chicago for the year

1921.

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Earnings of Chicago Banks and Trust Companies

The

Bestdes dividend disbursements and fixed expenditures as well as taxes and generous allowances for working organizations the banks and trust companies of Chicago transferred substantial sums to surplus and undivided profits during the past year. In many instances net earnings and percentage on capital funds showed the highest figures on record. Continental and Commercial National Bank led, with net earnings of $6,107,000 leaving $2,975,000 to be transferred to surplus and profits, the net earnings representing 27.4 per cent. on average capital and 15.6 per cent. on capital, surplus and profits, according to a comparison of statements from November 17, 1919, to November 15, 1920. The First National Bank showed net earnings during this period of $3,323,000 and after payment of $2,337,000 in dividends including dividend on First Trust & Savings stock, added $986,000 to surplus and profits. Net earnings equaled 28.4 per cent. on capital and 9.1 per cent. on capital, surplus and profits.

Among the trust companies the Illinois Trust & Savings Bank showed net earnings of $2,601,000 and after payment of $1,000,000 in dividends added $1,601,000 to surplus and profits with net earnings equal to 52.1 per cent. on

capital and 17.2 per cent. on capital, surplus and profits. The Merchants Loan & Trust Company showed net earnings of $2,004,000 from which $1,000,000 was disbursed in dividends, leaving $1,004,000 addition to surplus and profits, with net earnings equal to 40.1 per cent. on capital and 13.1 per cent. on capital, surplus and profits. The Corn Exchange National Bank showed net earnings of $2,218,000 and $1,218,000 addition to surplus and profits. The Central Trust Company of Illinois showed net earnings of $961,000, leaving $361,000 addition to surplus and profits. The Harris Trust & Savings Bank showed net profits of $582,000, leaving $342,000 addition to surplus and profits after disbursement of $240,000 in dividends. The Northern Trust Company had net earnings of $508,000 and addition to $308,000 to surplus and profits after $200,000 payment in dividends. The State Bank of Chicago showed net earnings of $1,041,000 and the Chicago Trust Company $200,000.

Marshall Field, 3d, has entered the investment banking field in Chicago and has chosen for his associates in this work the partners of the firm of Glore, Ward & Company, and with them has incorporated under the name of Marshall Field, Glore, Ward & Company.

FRED G. BOYCE, Jr., Vice-President

Central Trust Company of Illinois Within the past five years the deposits of the Central Trust Company of Illinois, of which General Charles G. Dawes is president, have increased from $39,230,000 to $60,453,000. The November 15th official statement showed aggregate resources of $82,862,915 including cash and sight exchange of $15,374,000; time, demand and real estate loans of $54,791,000; bonds and stocks, $7,434,000; U. S. securities, $2,807,000. The capital is $6,000,000; surplus, $1,000,000; undivided profits, $1,965,466, and bond account reserve, $300,000.

The Merchants Loan & Trust Company

A year of unusual activity and one that called forth maximum service from all departments was experienced by the Merchants Loan & Trust Company of Chicago, of which Edmund D. Hulbert is president. The statement rendered at the close of the last year shows combined resources of $147,140,391 with loans and discounts of $68,274,968; cash resources of $39,584,555; bonds and mortgages, $15,684,539; acceptances and letters of credit, $15,446,806; other banks' liability on bills bought, $6,405,920. Deposits total $92,127,061 with capital of $5,000,000; surplus $10,000,000 and undivided profits, $1,017,112.

Chicago Trust Company's Steady Growth A further advance in deposits from $11,213,000 to $12,781,000 was made by the Chicago Trust Company during the past year. This trust company will soon occupy more commodious and handsome quarters in its newly acquired building. Resources aggregate $14,618,000 including cash and due from banks of $3,870,536; loans and discounts. $4,049,881; time and demand loans on collateral, $2,967,889. The capital is $1,000,000; surplus and undivided profits (net), $560,565.

A. H. S. POST, President

Harris Trust & Savings Employees Share

Earnings

The Harris Trust & Savings Bank, of Chicago, gave a bonus last year to all employees except officers and heads of departments. The bonus was in the form of a plus salary of 10 per cent. of the amount earned by each employee during the year 1920. This is in addi tion to the bank's contribution to the employees' savings and profit-sharing fund. The bank contributes semi-annually to this fund 5 per cent. of its net profits before paying dividends.

Record Year for Union Trust Company of Chicago

With the general tendency of bank deposits to contract during the latter half of the past year as a consequence of loan reduction and credit deflation it is noteworthy that the Union Trust Company of Chicago registered the largest increase in deposits during 1920 of any year in its history since it began business in 1869. During the past twelve months its deposits increased from $35,220,058 to $44,607,884, a gain of $9,387,800. Within the past five years the deposits of the Union Trust Company have more than doubled, the increase during that period amounting to over $23,000,000.

The financial statement rendered January 3d shows aggregate resources of $51,108,655 with capital of $2,000,000, surplus, $2,700,000 undivided earnings and reserves for depreciation, $396,629. Rediscounts at the Federal Reserve Bank have been reduced to $84,825, while acceptance accounts have been substantially developed.

During the past year the First National group of Chicago, added about four months salary to each employee's envelope.

The State Bank of Chicago was much gratified with the success of the employees' drive for savings accounts, the goal being placed at 6,000 new accounts.

Louisiana
Banking Laws

The laws of Louisiana are based chiefly on the "Code Napoleon" or from the French Law.

The laws of other states are based on the Common Law of England.

For the convenience of banks and bankers of the country we have prepared a booklet on the new Louisiana Banking Laws passed by the General Assembly of 1920.

We shall be pleased to send you a copy upon request.

Hibernia

Bank & Trust Co. New Orleans

First National of Chicago Shows Excellent

Earnings

Although the tense situation in regard to commercial credits finds reflection in increased loans and decreased deposits the operations of the First National Bank of Chicago during the past year resulted in exceptional earnings. According to the annual report of Mr. James B. Forgan, chairman of the board of the First National and of the allied First Trust & Savings Bank, the combined earnings of these two institutions amounted to $5,116,689, against $3,887,103 for the previous year. These profits are net after provision has been made for depreciation and for all losses realized or anticipated, including liberal provision for contingencies as well as for taxes. The profits represented 131⁄2 per cent. return on average aggregate capital employed. Dividends paid amounted to $2,475,000, leaving surplus earnings for the year of $2,641,689. On July 1st the capital of the First National was increased from $10,000,000 to $12,500,000 by issue of additional stock at par and capital of the First Trust & Savings Bank was increased from $5,000,000 to $6,250,000 by an issue of $1.250,000 in the form of a stock dividend to shareholders.

The statement of the First National shows an increase in loans of $17,353,712 and decrease in deposits of $31,293,718, the change being partially met by a decrease of $16,282,924 in amount of Government securities held by the bank. In the First Trust & Savings Bank savings deposits increased during the year from $54,342,641 to $62,875,151 with other deposits amounting to $24,851,338. Combined resources of both banks aggregated at the year's close $380,856,086 and combined deposits, $280,169,550. The First National, during the year, increased its holdings in the stock of the National Safe Deposit Company to 90.42 of the total issue. The stock of the First National is held by 391 woniea, 558 men, 16 firms and 147 trusteeships and estates.

Paul C. Peterson, cashier of the Merchants Loan & Trust Company of Chicago, retired January 1st after 37 years with the bank in various capacities. Entering as a clerk in 1884, he became the manager of the foreign exchange department in 1890. He was elected assistant cashier in 1902 and became cashier in 1913.

The Chicago Title and Trust Company has increased the annual dividend rate on its stock from 12 to 14 per cent.

Official Changes at First National and First Trust of Chicago

At the annual meeting of the stockholders of the First National Bank of Chicago and First Trust and Savings Bank the members of the board of directors were re-elected without change. At the meeting of the directors, R. Frank Newhall was elected vice-president and cashier of the First National Bank, having previously occupied the latter position. O. C. Brodhay, formerly assistant cashier, was made assistant vice-president and assigned to Division B. in the bank's official organization. A. B. Johnston was appointed assistant cashier and Walter Lichtenstein was appointed executive secretary. Dr. Lichtenstein was also appointed to the same position on the official staff of the First Trust and Savings Bank.

Northern Trust Company Gains During the past year the deposits of the Northern Trust Company of Chicago increased from $36,647,000 to $43,451,415. The year was one of exceptional expansion for all departments and many new innovations of service. Resources aggregated at the close of 1920 to $52.258,415 including cash and due from banks of $12,300,992. The capital is $2,000,000; surplus fund, $3,000,000, and undivided profits, $1,120,703.

James B. Forgan, chairman of the board of the First National Bank and chairman also of the Chicago Clearing House Committee has resigned as president of the Federal Advisory Board of the Reserve Banking system, an office which he has held since the organization of the Federal Reserve system, since its organization.

The Illinois Trust and Merchants Loan and Trust merger will be known as Illinois Merchants Trust Company. The Corn Exchange National, which also becomes a part of this consolidation, will retain its individual name and entity.

Latest Bank and Trust Company Returns

A decrease of $32,110,676 in deposits and an increase of $15,317,159 in loans and discounts, and a decrease of $21,321,089 in cash resources are shown by the National banks of Chicago in response to the latest call for statements under date of December 29th. Deposits now total $752,590,041, loans and discounts, $742,352,702, and cash resources, $251,662,262.

The larger trust companies and State banks show an improvement in position. Since the last previous call, November 15, 1920, deposits have increased $7,131,264 to a total of $695,399,843, loans and discounts have decreased $22,539,558 to a total of $549,487,891 and cash resources have increased $29,577,822 to a total of $191,169,184.

Continental and Commercial Banks

Although a period of readjustment and exceptional requirements, the past year witnessed substantial growth and earnings for the Continental and Commercial Banks of Chicago. The financial statement rendered last November 15th showed combined resources of $512694,221 and combined deposits of $351,776,741 for the Continental and Commercial National Bank and the affiliated Continental and Commercial Trust and Savings Bank. As compared with statements rendered November 17, 1919, the net earnings of the Continental and Commercial National for the twelve months to November 15th last totaled $6,107,000, out of which $3,132,530 was distributed in dividends, including dividends on capital of the Continental and Commercial Trust and Savings Bank, leaving increase in surplus and undivided profits of $2,975,000 and bringing this item to $19,704,000. During the same period the trust company increased its surplus and undivided profits by $924,000, bringing total to $6,194,000. The capital of the National bank is $25,000,000 and of the trust and savings. bank $5,000,000.