BANKING: 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....

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