St. Paul's "City Bank"

A walrus-mustached school principal named S. A. Farnsworth was St. Paul's city treasurer before World War I. In a 12-by-18-ft. corner room of his office he started to sell "participating certificates" in $1,000 St. Paul municipal bonds in small denominations to St. Paul's thrifty. The interest St. Paul had to pay on its bonds was less that way; St. Paul citizens liked it too. They dubbed Farnsworth's brain child "the city bank."

For almost 30 years everybody was pleased. But recently bankers have been able to float St. Paul bonds at interest rates lower than the "city bank" could afford. Depositors could get more than the "bank's" 2% from war bonds.

St. Paul's city commission decided to liquidate the "city bank," this week will sell its assets ($6,656,000 worth of St. Paul bonds), for which there is now an eager market. The commissioners also know the bank has a profit of $2,600,000, which will pay off more than half of a $4,500,000 deficit in St. Paul's permanent improvement revolving fund (about which the commissioners have become increasingly concerned).

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