The Bismarck tribune., 1929-04-06
CONDITIONS IN 1928
PERMITTED PAYING
] SHORT.TlME DEBTS
Business, as Consequence, Bet.
tered When Farmers Had
Money for Goods, Service
BANKS ARE DECREASING
Dairy Income Helped Situation;
Gaining Ground and Has
Passed Hog Industry

Better business in 1928 in the ninth
federal reserve district was made pos
Sible by the farmers paying off their
short-time debts. A larger proportion
Of the farm income could. therefore,
be spent locally in payment for goods
and service.
This Is the deduction Of the annual
report OF J. r. Mitchell. federal re-
serve agent at Minneapolis. head
quarters Of the ninth district bank.
which has just been passed out to
the banks and newspapers of the dis
trict and deals with conditions In
the district up to December 81. last.
According to the report, the year
was one Of progress along the lines
Of readjustment to the changed eco
nomic background which had pre-
vailed since war times. Farm in
come was about as large in 1928 as in
1927. says the report, but business
nevertheless was able to show an in
crease over the prior year and in
some cases to establish new high
records.
Bankruptcies Decrease
The body of the report describes
conditions in farming and farm loans
rs follows:
The most convincing evidence that
rcadjustment to postwar conditions
made progress In 1928 was furnished
BY the records Of decreasing bank
ruptcies and failures. This decrease
continued for the second year and the
number OF failures In 1928 was the
smallest since 1922.
The banks of the district cxper-
Fenced q year Of Improvement, with
the single exception that prices Of in
vestment securities held by many
banks were lower than a year ago.
In December, 1928, deposits Of coun-
try member banks were per cent
higher than year ago. and were
fully as high as the average which
appears to have been established for
the postwar years. In other words,
4 satisfactory recovery occurred from
the slump in deposits Of 1926 and the
first half of 1927. Country bank loans
did not increase during the year and
in 1928 were at the lowest level since
1915. Investment holdings Of coun-
try banks were the largest in history,
and borrowings from other banks
we're small.
The reduction in country bank
loans without corresponding de-
crease in country bank deposits bears
witness to the fact that the short
term debt situation in the district
had improved. Outside OF the larger
cities. deposits exceeded loans by q
per cent. This situation has never
existed heretofore in the Is years for
which records have been compiled.
In the pre-war years Of 1918 and 1914.
deposits exceeded loans in the rural
portion Of the district by only IS
to 20 per cent.
Country Ranks Decrease
Probably the most significant
change In country banking is the
trend which has taken place towards
fewer and larger banking units. The
number Of country banks in the dis
trict decreased from $3.50 at the peak
In 1870 to 2,503 on the date Of the
October call In 1923. The average
amount Of deposits per country bank
on October was over 100000, the
largest amount on record. To show
the extent Of this change one needs
only to recall the situation In 1913,
when there were 1900 country banks.
with an average deposits of only
100000. The growth in the size OF
banking units means great deal tc
the district in the potential diversi-
fication OF assets. in improvement OF
bank management and earnings and
In stability Of deposits.
City banks in the district held