E.S.C. quarterly

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ESC QUARTERLY
INANCE EDITION
olume 24, No 3-4
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CHAIRMAN'S
COMMENTS
Henry E. Kendall
Chairman
N. C. Employment
Security Commission
KENDALL
Our bankers tell us we're not too far away from a check-less
society. Technological advances in data processing has
caused "revolutionary changes in the area of record keeping
and the compilation of credit information." Credit cards
will allow us to purchase all goods and services, and perhaps
the entire banking and lending processes may someday
operate like the flick of an eyelash through nationwide net-works
of electronics.
Whatever the future of banking and finance in North
Carolina, the past decade has seen remarkable growth in
assets and services to the public, and the future of the in-dustry
seems unlimited. In Charlotte, Raleigh, Winston-
Salem and our larger metropolitan areas the tallest, newest
and biggest buildings are banks and the old graystone
structures of a century ago have gone completely modern.
This issue of the Quarterly featuring the finance industry
updates a prior issue of 1961. In 1967 there were 1,120 banks,
savings and loan associations, credit unions and small loan
companies reporting employment and wages under provisions
of the N. C. Employment Security Law. Average monthly
employment among this group of employers was 23,125
persons and their total wage payments were $120.5 million.
Unemployment among this group was remarkably low. We
see an indication of the good employment conditions within
the finance industry by observing the very low unemployment
insurance taxes its companies pay the Employment Security
Commission. In 1966, our latest available data on employer
contribution taxes, the average tax rate paid by all industry
in North Carolina under the Employment Security Law
(about 40,000 firms) was 1.29 percent. In that year banks
had an average tax rate of only .68 percent. Savings and
loan associations and farm credit institutions paid taxes of
only .8 percent while business credit companies had an
even lower tax rate of .7 percent. Personal credit agencies
had a tax rate approaching the State average at 1.27 percent.
We appreciate the cooperation given us in preparation of
this issue of the Quarterly by many finance officials, and we
understand the pride reflected by the authors of their
articles. Working with the counsel of the N. C. Bankers
Association, we tried to select banks representative of many
activities and the N. C. Insurance Department advised us on
the selection of savings and loan associations to feature.
Because of their uniqueness, two projects of the Employ-ment
Security Commission's farm placement division are
featured in this issue. Last year the first federal-State train-ing
classes in the nation under the Manpower Development
and Training Act for farm labor crew leaders were held
in North Carolina, one in Lumberton, another in Wilson
(page 9). The woods program (page 17) is a different, and
so far successful, attempt to provide jobs for farm workers
during the off season.
Another North Carolina program, unique in the nation, is
the foster grandparent project at Western Carolina Center,
an institution for mentally retarded children, and because the
ESC office in Morganton was instrumental in its beginning
we asked our local Employment Counselor to prepare a
story on Western Carolina's foster grandparent plan.
ESC QUARTERLY
BANKING AND FINANCE INDUSTRY
Volume 24, No. 3-4
Issued at Raleigh, N. C, by the
EMPLOYMENT SECURITY COMMISSION
OF NORTH CAROLINA
Commissioners
Billy Earl Andrews, Durham; Charles L. Hunley
Monroe; James W. Seabrook, Fayetteville; Henry E
Kendall, Raleigh; Harold P. Coffey, Lenoir; R. Dav<
Hall, Belmont; Samuel F. Teague, Raleigh.
State Advisory Council
Public representatives: James A. Bridger, Bladen
boro, Chairman: Sherwood Roberson, Robersonville
Mrs. W. Arthur Tripp, Greenville; Employer repre
sentatives: A. L. Tait, Lincolnton and G. Mauri«
Hill, Drexel. Employee representatives: Melvh
Ward, Spencer, AFL, and H. D. Lisk, Charlotte, CIO
HENRY E. KENDALL Chairmen
R. FULLER MARTIN Directo
Unemployment Insurance Division
ALDEN P. HONEYCUTT Directo
State Employment Service Division
H. E. (Ted) DAVIS Edit©.
Public Information Officer
Sent free upon request to responsible individuals,
agencies, organizations and libraries
Address: E.S.C. Information Service,
P. O. Box 589, Raleigh, N. C.
COVER LEGEND
Bank buildings, such as the headquarters of the Wa
chovia Bank and Trust Company in Winston-Salem an<
the N. C. National Bank in Charlotte, are the sky
scrapers of North Carolina. Big city and small towr
banks are going through enormous building and expan
sion programs with modern exterior architecture am
fashionable interior design. Inside, there are new tech:
niques such as the NCNB BankAmericard account cente;
in Greensboro and its new data processing center ii
Raleigh. There are fewer banks in North Carolina toda
but they are larger, and their growth has been describe!
as "phenominal." Savings and Loan Associations, ac
cording to the N. C. Insurance Department, have "gorv
through an almost complete transformation" in the pas
two decades, and in the stories about banks, loan assc
ciations and credit unions, the word "automation'
continually appears.
ESC QUARTERLY
Sixty-six year old J. H. Brcedlovc, retired
maintenance machinist from the Morc,rm-ton
area, is one of over three dozen elder
men and women selected to work with
mentally retarded youth. Each "grand-parent"
spends time each day with two
children. The children are mostly between
five and 16 years old.
AGED AND YOUTH
EXCHANGE LOVE AT
WESTERN CENTER
By James W. Gnatt
Employment Counselor
Morgan ton ESC Office
Western Carolina Center is a 574-
d facility for the care and treat-mt
of mentally retarded children
the western one-third of North
irolina. Construction of three build-
?s is now in progress which will
d 310 more beds, bringing the total
pacity, including the infirmary to
4 beds.
The Center is staffed by 353 paid
ofessional, technical, and service
lployees. Included on the staff are
! professional and technical persons,
i3 cottage parents (attendants), and
'8 service workers.
The Center opened December 16,
'63, with Dr. J. Iverson Riddle as
5 Superintendent. Dr. Riddle is a
itive of Morganton, a brilliant
>ung psychiatrist. He is completely
;dicated to the Center and is ever
ert and sensitive to the needs of
ie children under his care. He ex-
2nds immeasurable energy in the
ursuit of a total, child-centered pro-ram
which will achieve the greatest
3od for each individual child at the
enter.
The entire staff of the Center is
dedicated to the proposition of pro-moting
a program which will invade
every area of the environment of the
individual child. Each child is a hu-man
entity, and the children are never
categorized. A child-centered objec-tive,
even more surely than a children-centered
program, will safeguard
against custodial, institutional, or
regimental treatment of the residents
of the Center. The only collective
function is to simulate family-type
relations.
Dr. Riddle and the staff are always
seeking new activities which will en-rich
the lives of children. In pursuit
of these objectives the possibility of
a new service was observed, which
was to be known later as the Foster
Grandparent Project.
There are several versions of the
story of how the Foster Grandparent
Project was first conceived, but per-haps
the following is the most pleas-ing
and appropriate.
Some officials from Health, Educa-tion
and Welfare were visiting men-tal
health institutions for children.
When they entered a residential
building of one such facility they
found a group of boys sitting in a
row on a bench. They were looking
straight ahead, motionless. The scene
reminded one of the visitors of a
military inspection, and when he
caught the eye of a particularly sad-faced
little boy, he winked and
grinned at him. The child threw off
all restraint, abandoned his instruc-tions,
ran over to the man, threw his
arms around his legs, and hugged
him. It was from this simple gesture
of a lonely child who demonstrated
such a great need for personal hu-man
contact that the idea of the
Foster Grandparent program was
born.
The story goes on to relate that
these particular HEW representatives
went back to Washington and related
the incident to HEW's Committee on
Aging. This agency sent out "feelers"
to some of the larger mental health
facilities to get their opinions of and
reaction to a project whereby older
ESC QUARTERLY
people could be brought into service
as foster grandparents to their chil-dren.
When such an inquiry came to
Western Carolina Center, Dr. Riddle
and his staff began a vigorous cam-paign
to bring this much needed
service to the Center.
Would It Work?
Many questions had to be met and
resolved before any real meaning
could be given to the idea. Prelimi-nary
conferences were called at the
Center to discuss the issues. Staff
members of the local Employment
Security Commission were called in
to evaluate the manpower situation.
Was a sufficient number of qualified
applicants available? How could they
best be recruited? What will be the
objectives of the project?
When the ESC, public welfare
agency, CAP, and other interested
groups expressed the opinion that
applicants were available, the Center,
under the guidance of Dr. Tong-su
Kim, Project Director (Director of
Psychiatric Service at the Center),
proceeded to develop aims and objec-tives
from which they prepared a
formal proposal to be submitted to
the Office of Economic Opportunity
of HEW.
Another meeting of community
agencies was called to formulate a
plan of action, adopt selection cri-teria,
and adopt methods of recruit-ment.
The ESC volunteered to provide
publicity, recruit, counsel, screen, and
refer applicants. To do this all news
media in the area were utilized to
publicize the project and solicit ap-plicants.
Personal contacts and tele-phone
calls were made to individuals
who appeared to meet the criteria
for employment, which were, basical-ly,
that they must have reached their
60th birthday, be reasonably sound
of mind and body, have an annual
income not in excess of $2,000 for a
couple, and $1,500 for a single per-son.
They must also show an interest
in children, along with personal
warmth, intelligence, literacy, willing-ness
to serve, and be amenable to
supervision.
The Foster Grandparents would
work five four-hour days per week.
Each would be assigned two children
with each of whom he should spend
two hours per day. This entire time
must be spent in a work-play situa-tion
on a one-to-one relationship with
the child. Foster Grandparents were
not to be assigned any work or other
responsibility than to be a "grand-parent"
to their children.
The response from elderly people
in Burke County and surrounding
areas was so great that within a very
GNATT
short time a sufficient number of ap-plicants
had been received to employ
the number needed.
A day was set for applicants to
report to the center. They were asked
to complete a questionnaire and pre-sent
themselves to the screening line.
They were first interviewed by the
ESC counselor, and then by Miss
Tillinghast, Social Work Supervisor;
Mrs. Glasco, Project Secretary; and
Dr. Tong-su Kim, Project Director.
The Nursing Supervisor conducted a
tour of the cottages to provide an
opportunity for the applicants to see
the children in their natural setting.
The psychologist administered an at-tendant-
attitude test to evaluate the
applicants' reactions to the job as
they now understood it.
Thirty-eight men and women were
selected and employed. They would be
paid at the rate of $1.50 per hour,
per week, $1560 annually. They would
receive a nine-day training and ori-entation
period, with pay.
Fifty children were selected from
Spruce and Pine cottages to partici-pate
in the project. It should be noted
that these children were not selected
at random, but only after being care-fully
evaluated by professionally
trained staff members to determine
which children could best relate to
such activities and for whom it could
be most beneficial.
The children, for the most part
range in age from seven to 16 years,
chronologically, with a mental age oi
5 years and under.
Thus was born a Foster Grand-parent
Project at Western Carolina
Center.
Has It Worked?
What has it meant? What has i1
accomplished? What benefits have
been realized, and by whom? The
answer to these questions would fiT
many volumes. The foster grandpar
ents and the children could best an
swer these questions. However, some
results are obvious enough to b<
noticed by outsiders.
The children have become happiei
and healthier. They have progresset
more rapidly because of their "grand
parents" and their daily lives havi
become more meaningful.
The foster grandparents have re
learned the art of loving and carinj
for others, and are again enjoyinj
the happiness that comes with beinj
loved and needed. They, too, hav
shown a highly rewarding improve
ment in their general health and hap
piness.
Families of the foster grandparent
have observed remarkable changes ii
their attitudes, habits, and emotiona
enrichment. Sons and daughters hav
experienced a measure of relief fron
their financial responsibilities towari
their parents who are now gainfull;
and happily employed.
The following is a reprint from
report on the project prepared b
supervising staff members, and sura
- irftMfirtJ
Western Carolina Center in Morganton, home for mentally retarded children and site of
the unique foster grandparent program.
ESC QUARTERLY
narizes some of the more pertinent
•esults.
Relation of Project to beneficiaries
Children: The children's relatedness
to other people has been improved.
The scope and range of their ac-tivities
have increased.
The amount of physical activities
of the children in the Project has
increased.
Quite a few children in the Project
seem to experience less traumatic
separation from their own parents.
There has been improvement in the
attention span among the Project
children.
FGPs: The sense of self-respect, self-worth,
and self-dependence is con-tributing
a great deal to the well-being
of the FGP's who have
recaptured a very important posi-tion
in life since this Project began.
Otherwise, they could have re-mained
on the outer fringe of com-munity
activities becoming some-what
of a burden on their families,
friends and society as a consequence
of the decline in their physical,
mental, and emotional well-being.
Institution: We can proudly say that
the Foster Grandparent Project is
one of the most constructive and
rewarding projects which has made
an enormous contribution to the
total therapeutic efforts in this in-stitution
for the benefit of the
children. The hard-working foster
grandparents have convinced the
project staff of worthiness enabl-ing
staff personnel to have no hesi-tation
in disseminating pertinent
information for those who have
interest in starting a similar pro-gram
elsewhere in the country. In
some ways, foster grandparents
have been instrumental in making
us realize how much can be done
for these children if you are will-ing.
Their unwavering devotion to
their daily work is inspirational to
the other personnel throughout the
entire institution.
It has been observed that much of
the time previously utilized by Cot-tage
Parents in "housekeeping
chores" has been reduced, since the
children spend less time in the
cottages, but when they are in the
cottages they present fewer man-agement
problems. This frees more
time of Cottage Parents to serve
as leaders in the small groups in-volved
in purposeful activity pro-grams.
The Foster Grandparent
Program is also integrated into the
total treatment program for the
Center.
Community: The Foster Grandparent
Project has gained recognition
throughout the area served by the
Center. It has proved to be a worth-
(See HOUSEPARENT, page 60)
SPECIAL DURHAM OFFICE ESTABLISHED
TO HELP SEVERELY DISADVANTAGED
By William H. Vinson, Jr.
Counseling Supervisor, Special Services Center
"Special Services Center," a unit
of the Durham Local Office of the
Employment Security Commission of
North Carolina, opened March 6,
1967. The new building, which houses
the Center, was planned for its func-tions
and adjoins the Local Office.
Services of the Center are those pro-vided
by the Youth Opportunity Cen-ter
and the Human Resources Devel-opment
Program. Specifically, this
means to reach out and provide spe-cialized
employment assistance to the
hard-core unemployed and underem-ployed
who are severely disadvan-taged
in seeking employment because
of age, race, national origin, physical
handicap, prison record, or education-al
deficiency.
To accomplish this basic purpose,
a staff of ten people has been as-signed
to the office. The manager
works under the supervision of the
Durham Local Office Manager. There
are three interviewers, two whose
work is in outreach, application tak-ing,
and community service, and one
who serves as test administrator and
relief receptionist. The stenographer
also serves as receptionist. Complet-ing
the present staff is the Selection
and Referral Officer (MDTA), a
counseling supervisor and three em-ployment
counselors.
A tri-county area of around 200,000
population, Durham, Orange, and
Person, is served by the Center. Dur-ham,
a city of 96,500 population, is
the largest city in the tri-county area.
It is a city primarily of manufactur-ing
and education, with a 35 percent
Negro population and 65 percent
white population.
To accomplish the goal of reaching
the hard-core unemployed, contacts
have been made with community agen-cies
who work primarily with these
persons. Welfare case workers, Voca-tional
Rehabilitation Counselors,
Community Action personnel and
church leaders have cooperated by
making referrals to the Center. These
referrals are in addition to walk-in
traffic and referrals made by inter-viewers
in the employment division
of the Local Office.
Principal Services
Counseling, testing, and training
are the principal services offered by
the Center. The age range of those
receiving counseling has been from
14 to 78. This youngster was mis-taken
about his age, as was dis-covered
through a contact with school
officials. The elder citizen points to
the need and desire to work, even by
Manager Louis Berini of the Durham State Employment office explains testing
procedure at the Special Service Center. Center manager Ralph Faulkner,
Durham mayor Wense Grabarek and ESC Chairman were on hand for the new
unit's formal opening.
ESC QUARTERLY
those who have reached so-called re-tirement
age.
An example of counseling is that
of a 52 year old man with extensive
skilled experience who had not work-ed
for over a year, because of em-physema.
He decided on drafting, a
field related to his work experience,
but two previous attempts in this type
of training were unsuccessful. As a
result of contacts with a technical
institute and a Vocational Rehabili-tation
counselor, the way appears
open for this man to receive training,
with the expectation of again becom-ing
gainfully employed.
The story of a 38-year-old handi-capped
man illustrates the importance
of communications in counseling. His
work history was a series of short-term
jobs. He was familiar to every
interviewer in the office and had re-ceived
counseling with no positive
results, because of lack of communi-cations.
A change in counselors re-sulted
in good rapport, work in the
area of adjustment, job development,
and satisfactory adjustment on the
job. Some five months later this man
is still working on his job and is
happy in his work, an unusual ex-perience
for him.
Group counseling is the newest
service of the Center. After initial
interviews with enrollees in a Man-power
Development and Training
Act course, a counseling group was
formed. It has been well received by
the participants who are finding it to
be a valuable experience for verbaliz-ing
feelings and in gaining self-understanding,
as well as understand-ing
and acceptance of others. One
practical goal the MDTA School has
for the group is to prevent drop-outs.
More such groups are planned.
An unusual testing program took
place recently when 28 young women
were administered typing tests. This
was a cooperative effort of ,the local
Community Action prograjm, busi-nesses,
and the Employment Security
Commission. From the group tested,
21 were selected to receive: 14 weeks
of training to improve their skills,
with employment as the goal upon
completion of training.
Training is the key to employment
for most of the people served by the
Center. At present, 85 people are en-rolled
in seven different MDTA
courses, and an additional 40 people
have been enrolled in on-the-job
training. Four courses for youth are
planned for the immediate future,
and four additional courses for youth
and adults will begin in about six
months. Identifying training needs,
planning proper courses and motivat-ing
people to complete training are a
few of the problems we are facing.
An outreach station has been opened
at one of the housing projects in the
city. Although there has been some
response from the people of that area,
the response was not what we had
anticipated. This has led us to re-evaluate
our procedure, with regard
to publicity and overall approach to
work toward a plan that will elicit a
greater response from the people.
The Durham Special Services Cen-ter
is still in its beginning stages.
What we knew to be true about the
difficulties encountered in changing
the work behavior of people has been
confirmed. Yet, we have observed pos-itive
changes in the work behavior of
many. Probably, the most significant
fact learned, obvious yet often over-looked,
is that each person who comes
for services is an individual with his
own set of values, goals, and expecta-tions.
To understand him from his
frame of reference is the beginning
point in providing services that lead
to a job and satisfactory adjustment
in our labor market.
Selected by national office to test continuing
employment aid to rural areas, North Carolina's
Smaller Community Project visits areas of high
unemployment and low per-capita income, ex-panding
its services with additional mobile
offices.
Mobile Units Take Employment I
Services To Rural Counties
By Ben Johnson
Supervisor, Smaller Communities Project
The Employment Security Commis-sion
of North Carolina is presently
involved in "modernizing" its objec-tives
and approaches to employment
service needs in our State. Among
the several changes is the establish-ment
of three ES Mobile Offices. The
program of services provided by the
ES Mobile Offices is referred to as
the Agency's "Smaller Communities
Program."
The SCP has a two-fold objective.
Primarily, Mobile Offices literally
take employment services to the resi-dents
of selected rural counties in the
State. All employment services, in-cluding
employment counseling, re-ferral
to vocational training, referral
to other agencies for supportive ser-vices,
and referral to job openings,
which are now provided by the 54
established local offices over the
State are provided by our ES Mobile
Offices. This, of course, does not in-clude
Unemployment Insurance ser-vices.
Local offices are totally respon-sible
for UI services in the counties
served by Mobile Offices.
For some time our agency heads as
well as our Bureau of Employment
Security representatives at our re-gional
and national offices have real-ized
that primarily because of staff
limitations employment services have
been restricted mostly to those coun-ties
in which local offices are located.
Residents of counties in which there
is no local office are just as entitled
to employment services as those living
in counties with local offices. This is
one major factor which prompted th<
Mobile Office idea.
For several months after the incep
tion of the SCP in March, 1964, th(
program emphasis primarily was
that of assisting in industrial develop
ment efforts in rural areas. This in
volved collecting personal data oi
county residents and publishing tb
information in "Manpower Resoura
Reports." These reports were pre
pared as a promotional item an<
distributed to a mailing list of mon
than 75 organizations and individual;
all over the Nation interested in in
dustrial development. Local count;
leaders also were provided a quantit;
of the MRR's for their use in nego
tiating with prospective industry
While this manpower data collectin;
phase is still a significant part of th
SCP, more emphasis is continuall;
being placed on applicant services i)
employability development.
Frequently, the question is askeC
"How does a county go about gettinj
a ES Mobile Office to provide
SCP?" There are several factor
which are considered by the SCI
administrative staff in recommendin;
to the ES Director the countie
which should be considered. The S£
lection factors include: (1) Mobil
offices serve only those countie
6 ESC QUARTERLY
- ---^ I
in the county team members use
tever office space is available. In
a their office was set up in the old
taseegee bank.
ich do not have an established
il office; (2) areas with high un-ployment
as compared with State
1 National unemployment rates are
tfble; (3) counties must be pri-rily
agricultural counties; and (4)
State Employment Service must
eive a formal invitation from the
ard of County Commissioners to
wide the service.
Vs a part of the overall planning
the conduct of the SCP's, the ES
"ector has tentatively approved the
ection of counties which may be
ved during the next two years,
jure 1 illustrates those 26 counties
itatively selected. They are con-ered
tentative at this point since
?otiation with all Boards of Coun-
Commissioners have not been com-bed;
therefore, some official invi-tions
to provide the service have
t been secured.
Invitations to provide the service
e essential since the county must
sume certain responsibilities in
ier to be eligible. The counties
ast assume the responsibilities of
oviding suitable office space and
ilities. All salaries and equipment
e provided through supplemental
nds administered through the reg-ar
Employment Security Commis-
)n budgeting system.
Here is how the program works in
typical county. The SCP Supervisor
along with the Mobile Office Area
Coordinator and the appropriate
local State Employment Office Man-ager
meet with the Board of County
Commissioners to explain the SCP
and secure an invitation to provide
the service. After suitable space is
arranged, the Area Coordinator
moves in his Mobile Office staff and
equipment. A Mobile Office staff in-cludes,
in addition to the Area Co-ordinator,
a manager, an employment
counselor, a Farm Placement repre-sentative,
a selection and referral
officer for vocational training under
the provisions of the Manpower De-velopment
and Training Act, two or
three employment interviewers, a
typist, and a clerk-receptionist. The
typist and clerk-receptionist are hired
for temporary assignment from
available local residents.
After the details involved in "set-ting-
up" are accomplished, the Mobile
Office begins the first of its two
phase operation. The first phase, or
"basic operation" for some two or
three months, offers a full range of
employment services to as many local
residents considered to be immediately
available for employment as can be
attracted to the Mobile Office through
several promotional media.
In addition to seeking the help of
local newspapers and radios, the Area
Coordinator solicits the active sup-port
of other local agencies and or-ganizations
in encouraging their
clientele to take advantage of the
Mobile Office services. Employers are
contacted by staff members to solicit
job openings for which qualified .ap-plicants
may be considered. Other
agencies which have interest in and
facilities for improving the employ-ability
of those applicants in need of
such services are contacted and asked
to participate in the joint effort of
getting the applicants job-ready and
placed into gainful employment.
Even though a great majority of
residents in need of employment ser-vices
will be interviewed during the
basic operation, there will be others
who will decide later to "come in."
With this consideration, the second
phase or "continuing service" begins
immediately after the basic opera-tion,
or the point at which the Mobile
Office moves to another county.
A continuing service includes a
Mobile Office representative on a
permanent, part-time basis, return-ing
to the county at an established
time each week to continue providing
employment services. In those in-stances
when there is a need for the
services of the technical staff such
as the Employment Counselor and
FPR, the continuing-service repre-sentative
arranges an appointment.
The part-time services of the continu-ing-
service representative vary from
one to three days per week, depending
on the need.
The North Carolina Agency was
fortunate to have been selected by
the National office from some 16
states with SCPs to conduct an ex-perimental
and demonstration proj-ect.
The primary object of the E & D
project is to determine the extent to
which employment services can be
effectively provided on a continuing
basis to rural counties through mobile
offices. During the E & D project,
which will last for some 18 months,
experiences related to the program,
techniques used in providing services
to applicants and employers, and the
quality and quantity of services are
some of the items which will be
documented and evaluated at the end
of the project. From the evaluation
procedures for the conduct of effec-tive
SCPs in other states may well
evolve.
The administrative staff of the
SCP includes a supervisor, an assis-tant
supervisor, a labor market
analyst, and one stenographer. The
program is under the general direc-tion
of Hugh D. Cashion, the agency's
Community Employment Develop-ment
Sunervisor. In this capacity,
Mr. Cashion is responsible for not
only the SCP but also the agency's
MDTA program.
i Figure 1.
jThese are the counties in which the mobile team ha:
jworked or plans to work. Note they are in the far western
and far eastern portions of the State, those areas where
per capita income is lowest.
ESC QUARTERLY
the North Carolina Chapter of IAPES
membership climbed to its highest
point, 936 members. She was also a
member of a "special work" com-mittee
established by Former Presi-dent
James Filipski to rewrite the
duties of the chapter officers and
committee chairman and this required
a complete knowledge of each office.
Murle has attended all institutes and
all State conventions with only one
exception. She has attended four In-ternational
conventions.
After graduating from Central
High School in Charlotte, Murle came
to Raleigh and attended business
school while working. She married
Frank H. Martin and they have three
daughters, Betsy, an airline steward-ess
with TWA, makes her home in
New York City; Karen, 14, attends
Martin Junior High School in Raleigh
and Mrs. Tommie Little (Marilee)
of Greenville.
Living with Murle and her family
is her cousin Mrs. Wilma Meredith
who has taken over a lot of the house-work
and cooking chores, thus per-mitting
the new IAPES President
more time to participate in her many
outside activities. In her "spare time"
Murle also teaches dancing. The
Martins are members of the Fairmont
Methodist Church in Raleigh.
MARTIN
ESC CENTRAL OFFICE
EMPLOYEE DIRECTS
STATE ASSOCIATION
For the second time in the North
Carolina Chapter of the International
Association of Personnel in Employ-ment
Security history a woman has
been elected president! Mrs. Murle
Martin was elected to the top IAPES
office at the State Convention March
30-31, after serving one year as First
Vice President.
Since joining the Employment Se-curity
Commission in 1946, Murle has
climbed from the position of Clerk I
to Clerk IV. She works in the office
of Business Management and is re-sponsible
for preparing the payroll
for approximately 1200 employees, is
the "middle man" for insurance pro-grams
and Workmans Compensation,
and furnishes pertinent information
to administrative officials for compil-ing
the Employment Security Com-mission
Budget.
Murle has had varied working ex-perience.
Before coming with the
Commission she worked in a printing
office, as an auditor for the Federal
Government and as a secretary.
She joined the International Asso-ciation
of Personnel in Employment
Security in 1947 and has been an
active member ever since. She has
served on practically all standing
committees and served as Secretary
for two consecutive years under presi-dents
C. P. Rogers and B. C. Wilson.
She has served one year terms as
Treasurer, Eastern Vice President
and First Vice President. During 1966
when she was Membership Chairman,
YEAR SEES NUMEROUS CHANGES IN
COMMISSION MANAGEMENT PERSONNEL
A number of Manager appointments
have been made at local Employment
Security Commission offices in recent
months, and death claimed the lives
of three long-time local office direc-tors.
George Everett, Jr., "Mr. Employ-ment
Office" in Charlotte, died June
22 after what apparently was suc-cessful
open heart surgery at the
Cleveland Clinic in Ohio. Everett had
been recuperating at his home in
Mecklenburg County when he died.
He was 64 years old and had man-aged
the Charlotte office since 1944.
He came to work for the ESC in
1938.
Clay Rich, Manager of .the Golds-boro
ESC office, died in April. He
was 62 years old and had been in
charge of the local State Employment
Office since 1945. A 1931 graduate of
N. C. State University, Rich had
worked for the State 26 years and
began his career in Asheville. He held
positions with several offices, stepping
across the State, until his permanent
assignment in Goldsboro.
Buell Bailey, Manager in Shelby,
died in August from self-inflicted
wounds after an extended illness.
Bailey joined the ESC in 1958 at
the Roanoke Rapids office and worked
in the offices in Shelby and Edenton
before assuming Managership of the
Cleveland County office in 1962.
The retirement of office Manager
W. B. Dillingham in Greenville high-lighted
the ESC news from Pitt
County recently. Dillingham, who had
managed the local office since 1946,
was a 24 year State employee, having
worked in the Elizabeth City employ-ment
office prior to his Greenville
appointment.
Replacing Dillingham as Manager
was Lloyd Nooe, a 29-year veteran of
the Employment Security Commis
sion. Nooe had previously served as
Manager of the employment offices
in Spray and Concord and at the timt
of his appointment to Greenville was
W. H. Pitman, (left), chief auditor with the Employment Security Commission
since 1938 retired in July. His successor, J. B. Harris, joins Mrs. Pitman and a
host of auditing department personnel for a departure party.
8 ESC QUARTERLY
EVERETT
n Appeals Deputy working in the
[organton area. He also worked as
apervisor of Claims Deputies in the
iSC Central Office for about 17
ears.
Mrs. Viola Billings was transferred
•om her interviewer post at the
Ireensboro local office to become
[anager in Goldsboro after Rich's
eath. For 22 years Mrs. Billings,
widow, worked in every phase of
ISC operations in Greensboro. At the
ime of her transfer she was serving
s Supervisor of the youth employ-lent
section.
Don Hudson, leaving his post as
lanager in Wilmington, replaced
Iverett as Manager of the Charlotte
]SC office. Hudson had served as
lanager in Wilmington only a short
/hile before his assignment to the
arger Charlotte office. His replace-fient
in Wilmington was James
knight who was promoted from in-erviewer
to Manager of the Port
]ity office.
Replacing Bailey at the Shelby of-ice
was Franklin Ware. A former
Manager of the office in Kings Moun-ain
before it closed, Ware was a
Veterans Employment Representative
n Gastonia before his move to Shelby.
There were other moves within the
Manager ranks due to various promo-ions.
John Fleming was promoted
'rom Manager of the Raleigh local
iffice early this year to Area Super-visor,
replacing Phil Bunn who was
noved up to Assistant Director of the
State Employment Service. Fleming,
;oo, is a long-time State employee
ind worked as a Manager in Shelby
ind Roanoke Rapids and manpower
-oordinator in the ESC central office
oefore his assignment in Raleigh.
Fleming's replacement was Lee Roy
Singleton, a relative newcomer to
:he Employment Security Commis-sion.
Singleton was an interviewer
ind employment counselor in two of-fices
before coming to the Central Of-fices
as a Claims Deputy. At the time
of his promotion to Office Manager
he was in charge of the agency's Older
Worker Program.
When James Filipski left his
Greensboro Manager job to come to
Raleigh in charge of the Human Re-sources
Development Program, John
Ervin moved from Burlington to take
over the vacated Guilford County
Post. Everett McNeilly, who was an
Evaluation and Training specialist at
the Shelby local office since 1960,
was promoted to Manager in Burling-ton.
Meanwhile, back at the Central
Office in Raleigh, a real old-timer
with the Employment Security Com-mission
announced his retirement af-ter
30 years with the State. W. H.
Pittman, chief auditor with the ESC
since 1938, was one of the original
employees of the old Unemployment
Compensation Commission when the
agency was formed in the mid 30's.
Replacing Pittman was former super-visor
of Field Representatives J. B.
Harris who moved up to the top audi-tor
post after many years employment
with the Employment Security Com-mission.
CREW LEADERS GO TO SCHOOL, FIRST
SUCH TRAINING PROJECT IN NATION
By Albert D. Hickman
ESC Farm Placement Representative
During the 1967 harvest season,
State Farm Placement personnel and
those of related agencies pooled their
resources and cooperated in placement
of 4,000 local workers in money-mak-ing
jobs in selected localities in North
Carolina.
How was this accomplished? Forty
farm crew leaders were training
through the federal Manpower De-velopment
and Training Act. We esti-mated
that each crew leader would
place at least 100 workers on farm
jobs during the season and we believe
our estimation was surpassed.
The first approach to this type of
training for North Carolina crew
leaders came at the 1966 Farm Place-ment
annual conference in Wrights-ville
Beach when Farm Placement
Representatives Frank Nance of
Morehead City and Paul Nance of
Washington discussed the idea with
Hugh Cashion, MDTA Supervisor
with the Employment Security Com-mission.
Various types of courses and
training were discussed but no official
recommendations were agreed upon
due to special forms and procedures
as well as justification which had to
be prepared and approved to establish
the need for such training. It was
agreed that if a need for this train-ing
could be shown, a class in this
category could be developed under
MDTA.
How great was the need to train
crew leaders ? Who would take the
training? How many schools were
to be held and where were the classes
to be taught? What courses were
most needed by trainees and what
instructors were available? These
were a few of the many questions
which had to be answered, and the
need for training was agreed upon
by all farm placement personnel, in
the central office as well as in the
field.
The number of farm workers has
A tour of the Mount Olive pickle Company was on the agency of the Manpower
Development and Training Act courses started last year for farm crew leaders in
North Carolina.
ESC QUARTERLY
been dwindling over the years. The
flow of migrants has decreased in the
last few years. Organization of local
workers under crew leaders seemed
to be the only salvation of harvesting
crops grown by farmers in which they
needed supplemental labor. Realizing
this, we knew that if we could train
our organized crew leaders we could
do a more efficient job for the grower,
harvest more acreage and upgrade
the farm worker's earning capacity.
From a survey taken among farm
placement men across the State, we
found that this type of training was
very much in demand.
As for the selection of trainees, each
Farm Placement Representative was
,
asked to make a detailed survey of
his crew leaders and submit the
names of those available for training,
number of dependents, amount of edu-cation
and kind of transportation. It
was decided to limit trainees to crew
leaders v. ith transportation because
it is to the crew leader's advantage
as well as the effectiveness of his
operation to be mobile or able to move
to different parts of the area in which
he resides—even different parts of the
State—for harvest operations.
While farm placement men were
busy with the needs and selection of
trainees, Mr. Cashion's MDTA staff
was busy gaining approval for the
official project proposal. Through the
persistence of his office and through
the many meetings with farm place-ment
staff, tentative approval of the
program was obtained if certain cri-teria
were met. With the ground work
tentatively approved, we were faced
with the task of establishing the first
MDTA training of this kind in the
nation. We had to establish the loca-tion
of the school, the number of
trainees to be instructed and the
courses to be taught.
We met this obligation determined
to succeed. And succeed we did, but
not without the splendid cooperation
of MDTA officials, Technical Institute
personnel, and many others who made
this training possible!
Many hours of planning, discussion,
and related meetings were held to
determine the best ways to handle the
many problems which faced us in this
pilot training program. In these
meetings three school sites were
chosen and the number of trainees
for each class. Everyone agreed that
a class of 20 trainees should be held
at the Fayetteville Technical Insti-tute,
Robeson County unit 10 miles
from Lumberton. Crew leaders to at-tend
this school were to be chosen
from the Lumberton, Wilmington,
Fayetteville and Rockingham areas.
Another class of 20 trainees would
be held at the Wilson County Techni-
HICKMAN
cal Institute in Wilson for trainees
from the Wilson, Roanoke Rapids,
Goldsboro, Kinston, Washington,
Rocky Mount, New Bern and More-head
City areas. Another school would
be held at College of the Albemarle
for 20 students from the Elizabeth
City section—making a total of 60
crew leaders to be trained at three
locations within the State.
In November, 1966, our first meet-ing
was held in Lumberton to formu-late
the actual curriculum for train-ing.
State and local MDTA officials,
technical institute representatives,
and personnel from the Lumberton
Employment Security Commission
joined local and State Farm Place-ment
men at the meeting. With all
these people pooling their thoughts
on what should or should not be in-cluded
in a course of this kind, a
rather comprehensive curriculum was
agreed upon. In general, plans were
made to give information and train-ing
in basic education and in special
subjects which would benefit people
dealing with farmers and farm labor.
A similar meeting was held on
January 9, 1967, at the Wilson Coun-ty
Technical Institute which was at-tended
by local and State officials.
With the experience gained at the
meeting in Lumberton, and with the
many helpful suggestions offered by
various representatives at the Wilson
meeting, a definite training course
was established.
Being a pilot training school and
the first established in the United
States, the North Carolina plan to
train crew leaders had to be flexible,
which means schedules could be
changed and courses inserted to fit
the needs of the students. It was not
feasible to establish a training course
in Elizabeth City because selected
crew leaders were employed at this
time and could not attend.
The training all representatives
agreed upon included basic education,
record keeping, Social Security re
sponsibilities, public relations — t(
include both growers and crew lead
ers—basic living requirements foi
personal and camp sanitation, drive]
education for truck and bus, contrae
system for harvesting crops, and har
vest methods of crops grown in Nortl
Carolina. The instruction on auto ant
truck driving included information or
laws, safety practices, licenses am
vehicle maintenance.
Each subject was allotted a certaii
number of hours of instruction. A
total of 400 hours was required foi
graduation—or 10 weeks at 40 hour;
per week.
Frank Page of Elm City, N. C.
was instructor and coordinator of th<
class in Wilson. B. E. Lohr was in
structor and coordinator of the class
in Lumberton. These men schedulec
courses to be taught and visiting in
structors. We are also indebted t(
representatives of the following or
ganizations for their cooperation: Th(
State Board of Health, Division ol
Sanitation; State Department of Ag
riculture, Agriculture Extension Di
vision; The Pioneer Corn Companj
of Laurinburg; The State Board o1
Education; the blueberry industry
the Division of Forestry, Departmem
of Conservation and Development
the local Social Security offices; th<
Riegel Nursery farms; the N. C. Coun
cil of Churches; the State Collegi
Extension Service; the State Depart
ment of Public Welfare; Gates Pickli
Company of Faison; Farmers Horn
Administration; N. C. Sweet Potati
Association; N. C. Department o
Insurance; N. C. Peach Growers As
sociation; and the State Departmen
of Motor Vehicles (local and State)
Plans are already underway for tw>
more schools of this type in 1968. W
feel sure that with the cooperation o
all agencies concerned these training
classes can be even more successfu
than those held in 1967.
Having been associated with thes
schools from the very beginning an
seeing class room instruction tur
into actual experiences, I am cor
vinced that the long hours spent i
planning and establishing the school
was worthwhile. I sat in on mani
classes, instructed in others, and ot
served the interest shown by student;
It gives all of us a deep sense
personal satisfaction to know w
have helped our fellow man in hi
efforts to help himself.
^VSIGN UP FOR U.S.
VV. SAVINGS BONDS/
FREEDOM
SHARES
vv*
10 ESC QUARTERLY
Federal grant provides means for Board of Juvenile
Correction to establish experimental project in voca-tional
a>id social education.
TRAINING SCHOOLS TEST GUIDANCE COUNSELING FOR STUDENTS
By Alvis M. Whitted, Jr.
Project Director, State Board of Juvenile Correction
During recent years the North
'arolira Board of Juvenile Correct-ion
has made many advances in all
reas of its program under the dy-amic
leadership of Commissioner
Uair.e M. Madison. In the educational
rogram, instructional classes are
resently held 240 days per annum,
nd this makes it possible for students
o achieve more in their educational
:rowth. Each school in the State,
nder the Director of Education, J.
Valter Bryan, has a staff of certified
eachers, along with the supervision
nd leadership of a principal. Allot-aent
of teachers is based on a pupil-eacher
ratio of 15-1. A special effort
s made to adapt or modify the basic
urriculum to meet the educational
leeds of the many children who come
o us.
Integrating academic and vocation-
.1 services provide an effective ap-iroach
to the individual needs of the
tudents. Whenever individual needs
.re identified, appropriate emphasis
s placed. Teachers with special skills
n working with these exceptional
'outh create and maintain an atmos-
)here that brings forth abilities here-ofore
unrealized.
Students spend a minimum of four
lours per day in academic classes
vith the remainder of the day in
'ocational classes, on-the-job training,
>r special subjects.
Special subject areas have been
xpanded in recent years and include
idustrial arts, home economics, art,
ihysical education, weaving, library
nd music.
On-the-job training encourages the
evelopment of skills in various
rades, textile mill operation, print-ing,
barbering, modern farming and
airying methods, shoe repair, motor
Inechanics, food service, laundry and
ither trades. Girls are offered oppor-tunities
in homemaking activities
uch as food preparation, commercial
erving, gardening, weaving, arts and
;rafts and beauty culture.
\ In January, 1967 the Board further
xpanded its instructional program
hrough a planning grant under Title
II, Elementary and Secondary Edu-cation
Act. The purpose of the plan-ning
grant is to test the feasibility
and role of professional guidance
counselors and social education teach-ers
in North Carolina training
schools.
Guidance Program
Several characteristics about older
delinquent youth stimulated the Board
to plan for a program in guidance
and social learnings. One character-istic
of the older delinquent strongly
indicates that he eventually winds up
as a drop-out, leading to an occupa-tional
history of unskilled jobs in a
variety of vocations. For those who do
indicate adequate intellectual abili-ties,
most have no motivation to com-plete
their education, or if they do,
their home environments are such
that frustration and anxiety prevail
and they give up. Culturally, the
training jschool youth are physically,
morally and educationally deprived.
Many come from broken homes which
are usually in a chaotic financial sit-uation.
They usually are not able to
respond or participate in the academic
or cultural programs within the com-munity.
Usually, his family is rela-tively
unconcerned about him or if
concerned, unable to help him.
During this planning time, within
each pilot school there have been
meetings with all staff members re-
WHITTED
garding the project. Individual con-ferences
have been held with social
workers and some cottage life parents
concerning the goals and objectives.
Meetings have been held to help get
an internal feeling and a chance for
the administration and teachers
within the schools to have a part in
the planning activities.
During the planning phase, project
members have worked with a select
number of students in two training
schools, Stonewall Jackson and Sam-arcand
Manor. It was determined
through committee meetings and con-sultant
services that the guidance
counselor and social education teacher
should place main emphasis on how
they can help delinquent children
make a positive transition from train-ing
school back into their home com-munity.
The main emphasis of coun-seling
during the planning grant has
been in the following areas: (1) the
individual's self worth, values and self
esteem (2) the students' families (3)
individuals' aptitudes and interests
(4) planning for further vocational
training (5) preparation for employ-ment
(6) preparation for release back
into the community with their peer
group and (7) placement within vo-cational
and academic curriculum in
public school.
Positive Attitude
One of the main objectives of the
counseling interviews during the plan-ning
grant was to help each student
develop a more wholesome and posi-tive
attitude toward work opportuni-ties.
As a service to the planning
project, the Employment Security
Commission provided testing, counsel-ing
and placement services for young
men and women prior to their release
from our schools. The members of
the senior class at Samarcand Manor
were chosen as the first group to be
offered these services. During the
month of May, the GATB was ad-ministered
by the Industrial Service
staff, and initial counseling inter-views
were held. with all 30 seniors.
A follow-up study of these girls at
Samarcand is being made during the
planning grant.
ESC QUARTERLY 11
During the planning grant, the so-cial
education classes were set up in
small groups of eight to ten students.
There have been many supplementary
books, films, filmstrips and tapes and
records used in the classes. Many
units of study have come out of
teacher-pupil planning. Examples of
units of study used during planning
were: Justification of School, Anti-
Drop Out Information, Study Skills
and Test Taking Emotions, Develop-ing
Self-Confidence, Abilities, Interest
and Aptitudes, Communication, and
Techniques of Success.
Committee meetings have been held
with consultants from North Carolina
State University, Raleigh, and staff
from the State Department of Public
Instruction.
Through our planning activities, we
felt other knowledge and findings
were extremely helpful in helping us
understand, to a degree, the nature of
the children involved. Some of these
findings and knowledge are:
1. The counseling process is a
learning situation in which the
counselor aids the counselee in
learning those behaviors neces-sary
to the solution of his prob-lems.
2. Adolescence is a process of
identifying himself in the world
around him.
3. Delinquent children are con-sciously
rejected children who
have identified with an authori-tative
figure who has failed
them.
4. One aim of counseling is to aid
the child to help himself so
that he can find his own capa-cities.
Counseling should enable
him to leave the counselor and
make adjustments through his
own strengths.
5. Threats and punishment have
variable and uncertain effects
upon learning.
6. One study has shown that an
effective relationship is created
by showing interest in the boy
and his problems, giving him a
chance to express himself and
bringing out a sense of per-sonal
worth.
7. True growth actualization of
one's potential occurs in a setting
where the person is felt and
experienced as a sheer personal
being of worth.
8. There should be a deep respect
for the individuality or unique-ness
of the individual.
9. People come to view themselves
the way people have looked at
them for a long time.
From the planning activities, we
hope it will develop into an opera-tional
grant. In this operational grant,
it would give us a social education
teacher and guidance person in all
seven training institutions in the
State. Within each individual school,
the guidance counselor will be respon-sible
for the guidance services.
Social education teachers will work
as "team members" with the guidance
counselor. The social education classes
will stimulate questions, broad topics
and problems which can be explored
in a one-to-one relationship in a coun-seling
interview.
The specific goals that this team
will be working toward are:
1. To present to youngsters a
positive authoritative image to
imitate.
2. To help reduce anxiety and ag-gression
in children through a
special class, guidance program
combination.
3. To provide opportunities for ego
strength development in young-sters.
4. To provide opportunities for
role playing and a chance to
act out in class what would be
fantasied attacks on authorita-tive
figures in the home.
5. To provide experiences in the
class setting and guidance serv-ices
in which youngsters will be
able to achieve goals.
During the anticipated operational
grant, we will collect data concerning
the causes and why's of hostile and
negative attitudes of delinquent youth
toward school. Also data will be col-lected
on how to reduce or alter these
negative attitudes. There will be op-portunities
for delinquent students
within an institution to visit industry,
business and other work opportunities.
Procedures will be provided for per-sons
from industry and business to
make talks to students through the
efforts of the guidance counselor.
We are all optimistic about the
potentialities of guidance services and
social learnings contributing to the
enrichment of the lives of young peo-ple
with behavior problems.
A wooded drive approaches the adminis-tration
building and visiting parlor at
Samarcand Manor.
\
"V
A director of crafts at Samarcand teaches
weaving. Other courses include home ee,
art, music and physical education.
% >«o<<y>wy?
The Samarcand chorus practices before a mural of the Holy Land painted by
(right). Athletics are popular. Students spend a minimum of four hours each day in
classes, then attend vocational classes or special subjects.
12 ESC QUARTERLY
IOB COUNSELOR SEES STRONG NEED FOR
VOCATIONAL GUIDANCE AT TRAINING SCHOOL
By Sylvia Clayton, Employment Counselor
Greensboro Employment Security Co7tunission Office
In an era when so much attention
s given to various underprivileged
societal groups, little is heard about
jorrectional homes for youth. These
/oung people seldom make front page
headlines, yet their problems and
leeds are pressing. They are the vic-tims
who emerge when unable to
;ope with the challenge of changing
family relationships and the break-down
of traditionally accepted values.
Out of the State Employment Serv-ice's
increased emphasis on the dis-advantaged
and the development of
human resources emerged a pilot
project with much potential, aimed at
meeting the needs of such young
persons. In a cooperative agreement
Mrs. Sylvia H. Clayton has been
an Interviewer I and Counselor I
in the Greensboro Local Office of
the Employment Service during
her three years with the Com-
| mission. Presently she counsels ap-plicants
21 years of age and older.
She held the position of Psycho-metrist
at the Wake Forest Uni-versity
Center for Psychological
Services prior to joining the Com-mission.
She received her under-graduate
degree in Psychology
from Wake Forest in 1963, and is
currently working toward an M.Ed,
in Guidance at UNC-Greensboro.
with the Juvenile Board of Correc-tion,
the Employment Service agreed
to test and counsel some 30 young
women due to graduate from Samar-cand
in June, 1967.
It should be pointed out that a
pilot project of vocational counseling
had been established at the school
by the Board of Juvenile Correction
in the spring of 1967, but it was aimed
only at senior girls for the purpose
of the study. The persons responsible
for this program asked the Employ-ment
Service to participate.
No Walls, No Bars
My first impression of the campus
was one of keen surprise. It appeared
far more like a technical institute or
community college than a correction-al
institution. There were no walls,
no bars, and no uniforms, but I dis-covered
there were rules and regula-tions.
It was very revealing to learn
that the school is almost completely
self sufficient. All its food products
are grown there, and all its clothing
needs are provided by the hands of
the girls as well as food and laundry
services. There is much pride in these
efforts, especially in the decorative
arts and crafts.
The faculty and staff gave an in-stant
impression of dedication and
enthusiasm for the work they do.
They appeared to give more of them-selves
than is required of one's job,
and it was evident that they were
doing their best to prepare their
students for the return home. Much
informal guidance had been done
prior to the project begun in the
spring, and since its inception, as
much counseling and occupational in-formation
as time allowed has been
imparted by persons in charge of the
program.
Another counselor and I spent
three days at Samarcand for initial
interviews with each girl prior to her
return to her home community. I
found much to wonder about as I
talked to each girl. They did not
appear to be "bad people" but per-sons
whom circumstance had over-whelmed.
Most of them volunteered
they had been placed at Samarcand
after repeated efforts to run away
from home or after much truancy
from school. Some had come simply
because there was no other place to
go, and the school, in the court's
view, would give them a good home
atmosphere and social training. There
were accounts of parents breaking
up, death of a parent, resentment of
step-parents, lack of love and atten-tion,
and lack of money. In almost
every case, the problem seemed to
stem from the home and yet it was
to this same environment that most
of these girls would be returning
in a short time.
All the girls were excited to be
leaving, but some were concerned
about whether anyone would welcome
them or be prepared to take them in
when they left the school. Some won-dered
if they could now get along
or cope with their families, and some
felt that in spite of problems of fi-nancial
stress, there was no better
place to be than home.
Something Deeper?
During these interviews I was
troubled by the feeling that these
girls had had society's values imposed
on them, but most had not developed
their own system for evaluation of
good and bad. They followed the
school's rules out of necessity and
conformed because it was the best
way to progress. Many seemed bare-ly
able to conceal their rebellion
against regulations and seemed des-perate
to "try their wings" once they
left the school. They appeared to
lack the maturity to exercise restraint
once placed on their own. The school,
it is certain, is caught in a dilemma,
for these girls were sent to the school
initially for inability to obey basic
rules, with the idea that the school
could teach them.
How is this done when a person is
14 or 13 years old? Is there still time
or does one have to learn these things
in early childhood? It is true that the
school has done an exceptional job
in teaching social skills, politeness,
and cooperation, but is this what is
desired or is it something deeper?
What will happen when these young
people once again return home to
cope with or accept many of the
problems that overwhelmed them be-fore?
Another impression was that here
lay much undeveloped potential, wait-ing
and even begging to be channeled
into some meaningful use. Most all
the girls had better than average ap-titudes,
some even for college level
work. However, due to lack of a full-time
guidance program, many lacked
information about themselves in re-lation
to the world of work. Some
ESC QUARTERLY 13
wanted to attend training institutes
for preparation in careers for which
they lacked proper course-work. There
were not enough funds or perhaps
enough pupils to meet their needs,
although what courses they had were
good. Many of them seemed awed by
the scope of their aptitudes and had
underevaluated their potential or im-properly
related their capabilities to
occupational requirements.
It was evident in the initial inter-view
that like most seniors the girls
had many ideas but no definite plans.
For this reason, each girl was referred
to a Youth Counselor or to a regular
Employment Service Counselor in her
hometown or nearest Employment Se-curity
Commission office and told how
to contact that person upon her re-turn.
She was told that this counse-lor
would explore her plans more
fully with her. The girls were urged
to realize that this was a voluntary
service and to accept this opportunity
to establish ties in their community.
Their records were sent to the local
counselor with a request to offer em-ployment
and counseling service and
follow-up on the girls.
Live A Little
Two girls came to the Local Em-ployment
Service Office in Greensboro,
both having called for appointments
on their return from Samarcand. At
this point I began to fully appreciate
the complexity of the problems I an-ticipated.
Both girls, according to
their caseworker, quickly became en-meshed
in family conflicts again after
returning home, and each had changed
residences at least once since return-ing.
They gave evidence of being un-able
to cope with their freedom, and
despite Employment Service and Vo-cational
Rehabilitation Service offers
of training and job placement, they
seemed primarily motivated, for the
present at least, "to live a little."
They were not yet ready to settle
down to more commitments and rules,
but it is hoped that this reaction is a
temporary one and that enough rap-port
and confidence has been estab-lished
between counselee and counse-lor
that they will call when the need
is felt to come to grips with reality.
This appears to be the crux of the
problem: Will these girls ever come
to grips with reality, or will society
once again have to do it for them?
Have we or can we train them to
govern their own lives and live with-in
bounds accepted by the majority
of people ? If not, where have we
failed? We must find the answer.
There are several overall impres-sions
formulated after my three day
visit to Samarcand. First, there is
certainly a strong need for a counse-lor
to work at the school on a full-time
basis, devoting time to vocation-al
guidance alone. It might be de-sirable
for this person not to be a
part of the regular staff. The girls
wanted to believe that what they said
would be confidential and not passed
on to staff members of teachers, al-though
the information might seem
inconsequential to the counselor. It
appeared they needed one person who
had no obligation to share their con-fidences
or questions with anyone
else. They also need this person to
be a contact with the "world outside"
and to coordinate efforts with com-munity
agencies, training facilities,
and the home. It is felt that this
should be a voluntary service so that
the girls will take responsibility for
the decision-making process, and it
should surely be offered to all high
school age students, not just seniors.
Second, funds should be available
to buy books, pamphlets, films, etc.,
to help these girls discover for them-selves
something about careers.
A third suggestion is that the State
Employment Service continue supple-menting
the school's regular counsel-ing
program by offering testing, em-ployment
counseling, training and
placement services. It seems valuable
to continue to see the girls initially
at the school and to refer them to
counselors in their hometowns for
post-graduation talks. Another pos-sible
need would be for psychological
services set apart from the regular
vocational program to meet the per-sonal
problems of the girls and to
help them build the inner strength
to go back out into society and take a
responsible part.
Finally, there is the ever-present
need for more funds and more public
concern.
In short, this counseling program
is one that has been long overdue.
These girls should not be denied
services that other persons their age
receive routinely as a part of their
education. I believe that those girls
who have a job, schooling, or even an
interview with a concerned individ-ual
lined up before leaving the Manor
will have a better chance of making
it in our society.
SAMARCAND SENIORS TAKE APTITUDE
TESTS AS EXPERIMENT IN REHABILITATION
By Bobbitt Faulk
ESC Evaluation and Training Specialist
One of the few generally accepted
principles in the field of rehabilita-tion
is the need for the rehabitant
to find suitable and interesting work
during the rehabilitation process. It
was for this reason the General Ap-titude
Test Battery was given to each
graduating senior at Samarcand
Manor.
By giving the GATB to measure
potential job capabilities, an Interest
Check List to obtain interest infor-mation,
and an individual counseling
session with each girl, we attempted
to bridge the chasm between the care-free
days of the school girl and the
life of the reliable, realistic employee.
Over the past few years, the recog-nition
of the value of pre-employment
testing has grown tremendously. Ap-titude
testing not only tells the pros-pective
employer whether a person
is able to learn a job within a reason-able
length of time, but it also tells
the prospective employer, the employ-ment
counselor, and the counselee
which jobs should be avoided.
There are really two reasons for
not pursuing a particular job. One,
if the job requires higher aptitudes
than the job applicant has potentials,
the time for training would be so
long it would be too expensive for the
employer and a very traumatic ex-perience
for the trainee to meet defeat
almost daily. Secondly, if the po-tenials
of the applicant are a great
deal higher than the required apti-tudes,
loss of interest in the job
comes very quickly and this inat-tentiveness
often results in accidents
on the job and loss of man hours.
The aptitude test is designed to
measure the capacity and the capa-bility
an individual has for learning
a job. This is the only thing that it
does measure. It does not suggest
jobs, as does the inventory, it only
predicts success in areas of interest.
At no time should an aptitude test
be confused with an interest inven-tory.
These are different instruments
of testing and do not measure the
same type information.
There are two types of aptitude
test used: paper and pencil, and ap
paratus test. The general formula
followed in aptitude tests is to have
a battery of combined tests to meas-ure
many different aptitudes. The
14 ESC QUARTERLY
feneral Aptitude Test Battery, for
xample, has 12 separate parts. Eight
f these are the paper and pencil
ype and the remaining four are the
pparatus type.
Development
Possibly there should be included
t this point a brief history of the
!evelopment of the General Aptitude
?est Battery.
Prior to its development, separate
ests had been developed which seemed
o be related to success of different
iccupations. Each time a new ovu-lational
study was carried out, a
lew test would be developed, unless
t was decided one of the previously
leveloped tests would meet the re-tirements
of the new study. Over
i period of several years, nearly 100
lifferent tests were developed to meas-lre
the aptitudes needed for different
obs. These tests measure such things
is arithmetic ability, verbal usage
md understanding, and surface de-
/elopment. In addition to these, many
ipparatus tests were also developed.
The United States Employment
service realized that the over abun-lance
of tests and testing procedures
Deing used by its affiliates were both
confusing and wasteful. From this
nass of testing material, a selection
)f 11 paper and pencil tests and four
ipparatus tests were chosen as being
;he best measures of ten factors or
abilities. These comprised the first
edition of the GATB, B-1001. It was
now possible to measure all the abili-ties,
once measured by many separate
tests, with one battery which took
about two and one-half hours.
In 1945 the GATB became the
standard battery to measure apti-tude
in every job study of importance,
as opposed to 10 to 15 tests chosen
from the mass prior to this time.
This early battery was printed in two
booklets (to be used only one time).
The answers were put on the page
of the test booklet and was then de-stroyed
after the test had been com-pleted.
As acceptance became more uni-versal,
a new battery was developed.
This new battery, designed B-lOOs,
had a separate answer sheet. This al-lowed
the same test booklet to be used
many times and the expense was
greatly reduced. Another added fea-ture
of the new battery was the
development of two forms. These
forms, B-1002-A and B-1002-B, allow-ed
a job applicant to be retested with-out
the fear of distorted results be-cause
of test familiarity and question-answer
retention. The new battery
also reduced the number of test parts
from 15 to 12 and the number of
aptitudes measured from ten to nine.
The nine aptitudes that were de-
E. BOBBITT FAULK is a 1960
graduate of Guilford College with
an AB degree in psychology. He
attended Campbell College before
entering the Army in 1956, and has
taken graduate work in counseling
at Marshall University, Hunting-ton,
West Virginia, and at N. C.
State University. He has worked
with the Employment Security
Commission for five years with two
years in employment counseling.
When he wrote the accompanying
article, Mr. Faulk was an Employ-ment
Counselor with the Sanford
ESC office. He is currently an
Evaluation and Training Specialist
with the State agency's central of-fice
in Raleigh.
cided important for the new battery
and which are now in use are:
1. Intelligence — General Learning
Ability (G)—The ability to "catch
on" or understand instructions and
underlying principles; the ability
to reason and make judgements.
2. Verbal Aptitude (V)—The a-bility
to understand meanings of
words and ideas associated with
them and the ability to use them
effectively. The ability to compre-hend
language, to understand rela-tionships
between words, and to
understand meanings of whole sen-tences
and paragraphs. The ability
to present information or ideas
clearly.
3. Numerical Aptitude (N) — The
ability to perform arithmetic opera-tions
quickly and accurately.
4. Spatial Aptitude (S) — The a-bility
to comprehend forms in space
and understand relationships of
plane and solid objects. Frequently
described as the ability to "visual-ize"
objects of two or three dimen-sions,
or to think visually of geo-metric
forms.
5. Form Perception (P) — Ability
to perceive pertinent details in ob-jects
or in pictorial cr graphic
material. Ability to make visual
comparisons and discriminations
and see slight differences in shapes
and shadings of figures and widths
and lengths of lines.
6. Clerical Perception (Q) -— The
ability to perceive pertinent detail
in verbal or tabulated material.
The ability to observe differences
in copy, to proofread words and
numbers, and to avoid perceptual
errors in arithmetic computation.
7. Motor Coordination (K) — The
ability to coordinate eyes and hands
or fingers rapidly and accurately
in making precise movements with
speed. The ability to make a move-ment
response accurately and swift-ly-
8. Finger Dexterity (F) — The
ability to move the fingers and ma-nipulate
small objects with the
fingers rapidly and accurately.
9. Manual Dexterity (M) — The
ability to move the hands easily and
skillfully. The ability to work with
the hands in placing and turning
motions.
The first seven aptitudes listed are
obtained from paper and pencil parts
of the battery, while the dexterities
are obtained from an apparatus type
test.
Use of the Test Scores
After completion of the develop-ment
of the GATB, it was readily
noticeable how many jobs and occu-pations
were very closely related ac-cording
to the aptitudes for success-ful
learning. These relationships were
further studies and a group of occu-pational
norms were compiled. It was
found that these occupational norms
could be grouped in terms of a struc-ture
consisting of a group or series
of occupational aptitude patterns.
Each Occupational Aptitude Pattern
(OAP) consists of the most signifi-cant
aptitudes and the critical scores
on these aptitudes established as min-imum
scores for a group of occupa-tions
having similar aptitude require-ments.
In the Occupational Aptitude
Patterns, there are never more than
three aptitude scores used for this
grouping. In some of the specific test
cutting scores, it has been determined
that four are necessary for a com-plete
aptitudinal coverage.
These OAP groups are the tools
that the Employment Counselor uses
to aid the counselees in making occu-pational
choices. These are used in
the broadest sense, or the areas of
work, never in the specific job cate-gory.
The Employment Interviewer,
when talking to a prospective appli-cant
for a job referral, does not con-sider
the aptitude score in the same
manner as the counselor would with
the counselee. The ccores which a
job applicant has made on an apti-
( Continued on page 16)
ESC QUARTERLY 15
tude test are used as cutting scores.
Anyone who did not make the neces-sary
scores would not be referred to
the job. The Interviewer uses just a
few of the total nine aptitudes when
talking to an applicant. These parts
are grouped into another type group-ing
called the specific test and usually
referred to as "S" scores.
In some cases the employment spe-cific
test will have as many as four
aptitudes grouped together. In others,
two or three may be used, but there
are no known jobs which require all
nine aptitudes.
Quite often when talking to a group
of the students about the GATB, I
will tell them the test covers every-thing
from brain surgery to chicken
plucking. Actually, this is true.
OAP-1, which is the highest of all
the OAP's, requires very high scores
on G, V, and N. Brain surgery is
one of the occupations listed under
it. OAP-35 deals with scores from
K, F, and M and the scores here are
all in the lower percentile of the
total population. Under this OAP is
listed a job titled Laborer, Poultry.
This is the title given a chicken
picker or someone who plucks chicken
feathers. There are many jobs which
have not had test studies run on them
and there have never been specific
test scores set for them. However,
most of the production jobs and skilled
jobs in industry today have been
studied and test scores for predicted
success are available.
Administration of the Test
In the administration of the com-plete
test battery, generally, but not
necessarily, the paper and pencil tests
are given first and the apparatus tests
at the end. The instruction manual
is followed exactly each time the test
is given. It makes no difference if the
test is given in a school room in
Alaska or in an air conditioned em-ployment
service office in Florida, the
administration is always the same.
Demonstrations of the proper method
of taking the apparatus test follow
the same rigid control and each per-son
taking either part of the test
battery or the total battery get the
same possibility of making a good
score no matter where the test is
taken. The reason for this tight con-trol
on the administration is obvious
since the test results are transferred
from one office to another, state to
state.
Each test administrator is given
special training before he is allowed
to give the test. This training is giv-en
by a training specialist, usually
from the State central office, and the
administrator-trainees are given a
basic understanding of how and why
the test measures the nine aptitudes.
During these sessions, emphasis is
given to the proper administration of
the test and new administrators are
forbidden to interject additional word-ing
into the testing instructions.
In the Samarcand Project the nor-mal
procedure for testing and scoring
was followed. The test was explained
to the group before any testing ma-terial
was issued. The girls were told
something of the history and develop-ment
of the test, how it is constantly
being studied and improved and the
purpose for testing the group. Em-phasis
was given to the fact that
aptitude tests do not tell people what
occupations they should follow, only
what occupations they have aptitudes
for or capabilities of learning in a
relatively short time. It was explained
to the group how their scores would
be used in the counseling session
which was planned and that these
same scores would be sent to the
closest state employment service of-fice
to their home town. They were
encouraged to make a visit to the
local employment service office and
talk to the youth counselor as soon
as they had returned.
The written parts of the test were
then given to the entire group of 29
girls. A break of approximately five
minutes was given between the first
and second booklets. After completion
of the paper and pencil tests, the
girls were divided into two groups
for the apparatus tests.
Group one was given the finger
dexterity test which has two parts
and group two was given the two-part
manual dexterity test. When these
were completed the groups were re-versed
and the tests were admin-istered
again.
The scoring of the tests was done
by hand, in this case, because the
end of school was very near and
there was not time to send them to
the computer service for scoring and
have time to do the individual coun-seling
sessions which had been sched-uled.
Each test score record card was
completed, the OAP's were marked
and specific tests were entered on
the card.
Each girl had been given an Inter-est
Check List on the day the tests
were administered. These were to be
completed and returned to the office
of Alvis Whitted of Juvenile Correc-tion
who, in turn, mailed them to the
Sanford local Employment Security
Commission office.
Upon receipt of these Interest
Check Lists, a work sheet was pre-pared
for each girl. A typical example
of the information on these work
sheets follows. The name has been
omitted but the other information is
exactly the same.
Name Birthdate: 12-21-50
Scores
G VNSPQK FM
104 121 95 88 99 103 128 101 98
OAP's 6, 9, 11-14, 16-22, 26-29, 31-35
In general she made average scores
with the exception of the Spatial Ap-titude.
Verbal Aptitude and Motor
Coordination were very high, being
in the 80-90 percentile band. The
Spatial score fell in the 20-30 per-centile
band.
Highest norms OAP-6, indicates a
file clerk or some type of clerical work
just below the stenographer, she
should be able to master this work.
The other norms indicate she could
do almost any type factory work
available in this area.
Interest Check List:
Points of Interest:
Nursing: Made both nursing
specific tests
Typing: Passed OAP-1 and
missed OAP-36 by just one
point on G
Switchboard Operator: Passed
S-9, the specific test for the
job-Areas of Interest:
Laboratory Science Work
Kecording Work
Public Contact Work
Summary: Has very good aptitudes
in all interest areas. Missed making
the stenographic battery by only one
point in the learning area. Probably
should be encouraged to get some
further training if possible, because
all interest areas are going to require
further training.
A copy of these work sheets sent
to Mr. Whitted's office, were copies
and placed in the permanent record
of each individual at the school. This
gave the project coordinator a record
of the results of the testing and an
evaluation of interest demonstrated
by the individual girls.
Preparation for the Counseling
Sessions
Before the counseling sessions were
held a folder was made for each girl
with the test score record card, a
counselor's work sheet, the Interest
Check List, and a completed work
application enclosed. These were car-ried
to the initial counseling sessions.
After the counseling sessions were
held and the initial counseling infor-mation
was entered on the counselor's
work sheet, the folders were mailed
to the Employment Security Com-mission
Central Office in Raleigh. In
Raleigh, a cover letter was put with
each of the folders and they were
then mailed to the local office which
could best serve the girl.
Test Observations
This group did not show any dif-
16 ESC QUARTERLY
North Carolina State Library
NEW WOODS PROGRAM PROVIDES JOBS
TO FARM WORKERS IDLED BY SEASON
By Hughlon B. Garriss
Farm, Placement Representative, Wilmington ESC Office
Lumber and wood today is one of
North Carolina's major industries. It
is an industry that represents great
Bconomic opportunities for land own-ers
and workers. Throughout the en-tire
State there are many thousands
Df acres of land which could be de-veloped
into a source of profitable
income for many land owners. The
?reat percentage of this land is owned
by individual farmers, and with the
increasing demand for pulpwood by
paper manufacturers it is imperative
that more and more trees be planted.
Profits will not be as instant as in
3ther crops but in the long run is
jften just as lucrative.
N. C. State Forester Ralph C.
Winkworth states that it would re-quire
from 2% to 3-million man days
for tree planting and six to seven
million man days for hardwood con-trol
to put North Carolina woods in
?ood condition. As one can see, North
Carolina has a great potential in
Forestry. Pulpwood profits will grow
as new mills are built and established
mes expand. Pulpwood demand will
increase and the development of un-ised
acreage to plant pine seedlings
is essential.
Some farmers and land owners
lave realized the benefits that can be
;heirs in making use of land that has
jeen dormant. Some have used land
;hat they formerly used for other
?rops. For example, one farmer I
mow had a 20-acre blueberry farm.
The plants had passed their more
productive state so he replaced them
with pine seedlings. Today he has a
fine growth of trees on this tract of
land and they are less expensive to
plant and require very little work.
Recently the Farm Placement Di-vision
of the N. C. Employment Se-curity
Commission was assigned
labor-recruitment responsibility in
this growing industry. On November
6, 1966, a directive from the State
Employment Service transferred the
responsibility for manpower programs
in forestry, logging and pulpwood
cutting to the Farm Placement Ser-vice.
Farm Placement now has woods
industry responsibility in all states.
The program was new to our Farm
Placement representatives and be-came
effective after the pine tree
setting operation had begun, and
even though it was new we were
ready to enter into the "woods pro-gram"
with every effort to make a
good start. Realizing there would be
problems to cope with, as there are
in any new program, an effort was
made to start the job as best we
could.
The woods program provides man-power
services to the worker and em-ployers
in forestry, logging and
pulpwood industries. Workers are
selected and referred to employers or
various contractors. In my area so
far we have emphasized referring
workers to set pine seedlings. More
accomplishments were realized from
this operation than logging or pulp-wood
cutting. Crews of workers bene-fited
more from this operation because
trees are set from November through
March when there is very little sea-sonal
farm work available. Some
crew leaders contract tree setting on
the basis of so much per acre. Out of
their contract price they will pay
their workers as well as transport
them to and from the forest areas.
Some of the companies have their
own crews.
Realizing the growing shortage of
male workers in some areas, the Farm
Placement representatives were able
to place a great many women in tree
planting operations. They proved to
be very good workers.
As the demand for more wood
products grows and the acreage in-creases,
more workers will be needed
for these operations. Additional work-ers
will have to be trained and more
crews mobilized. Some crew leaders
attended Manpower Development and
Training Act courses for ten weeks
during January-March. In these
classes they were trained in setting
pine seedling, logging and pulpwood
cutting. With instructors supplied by
the North Carolina Forestry Service,
these courses relieved the employer
of having to provide training.
Some of the crew leaders and work-
GARRISS
ers will have a greater opportunity
this season than last because they
will have some experience in these
"phases of the woods program. Many
thousands of acres will be planted or
set with new seedlings this season
as well as several hundred acres to be
reset that were destroyed or damaged
by forest fires last April.
The Farm Placement representa-tives
this season will do extensive
employer visiting to offer our services
to ascertain their worker needs.
Recruitment of workers and crew
leaders will be a must. Contractors
will be registered. We will endeavor
to offer all assistance possible to
both the employers and workers.
We will be called on to refer
workers to set many hundred acres
of seedling pines in my area next
season. We hope to get into logging
and pulpwood cutting on a larger
scale. I find it very stimulating to
work in the woods program because
sound forestry practices benefit
workers, land owners and greatly en-hance
the overall economic picture of
our State.
Typical of the southeastern areas to be
seeded is this stretch in Pender County.
Many local farmers are beginning to put
acreage in pine trees to utilize land which
normally would be unproductive.
ESC QUARTERLY 17
RESEARCH DIRECTOR
RETIRES AFTER 40
YEARS EMPLOYMENT
Hugh M. Raper, Director of the
Employment Security Commission's
research department since 1949, re-tires
December 31 after over 40 years
of State employment.
As chief of the Bureau of Employ-ment
Security Research Raper has di-rected
a staff of approximately 40
labor market analysts and other per-sonnel
who are responsible for furn-ishing
all unemployment insurance,
employment service and job market
statistics.
In addition to compiling all employ-ment
and wage data from the State's
40,000 employers covered by the
Employment Security Law, Raper's
department has published periodic
information on job shortages in se-lected
Tarheel industries as well as
working closely with industry pro-motional
groups on manpower avail-ability.
His BSCR reports on local and
statewide labor markets are used by
other State agencies and local develop-ment
groups as the basis of industrial
development and as a source of neces-sary
data to establish federal-state-job
training programs.
A 1926 graduate of Duke Univer-sity
in Business Administration,
Raper was a teacher and principal for
10% years in Buncombe, Rutherford
and Guilford county schools before
joining the Employment Security
Commission as a claims examiner in
1937.
Sixty-two years old, Raper is a na-tive
of Davidson County.
Henry E. Kendall, Chairman of the Employment Security Commission (right), and Frank
Kivett, director of the Sandhills Community Action Program, (left) sign an agreement to
sponsor the mobile job office and Sanford ESC manager Garland Scott observes.
STATE JOB MOBILE GOES TO MOORE COUNTY
18
RAPER
ESC QUARTERLY
A rolling State employment office,
first project of its kind in North
Carolina, has begun operations in
Moore County.
The "job mobile" is staffed by a
State Employment Service counselor.
It functions under the auspicies of
the Employment Security Commission
and the Sandhills Community Action
Program of Carthage.
The panel vehicle, complete with
furniture, is being used on regularly
scheduled visits over Moore County
as an extension of the employment
services provided by the local San-ford
ESC office.
Operating from the vehicle, the
counselor will work with industry
over the county and will provide job
information, interviews and prelimi-nary
screening for job applicants.
With the exception of unemploy-ment
insurance claims, no counseling
or other employment service is cur-rently
being offered in Moore County.
CHARLOTTE MAN NAMED
TO DIRECT GOVERNOR'S
HANDICAPPED COMMITTEE
Governor Dan K. Moore has ap-pointed
Stephen H. Van Every of
Charlotte Chairman of the Governor's
Committee on Employment of the
Handicapped succeeding John B.
Hatfield of Greensboro. Hatfield an-nounced
his resignation at the conclu-sion
of the Committee's annual awards
ceremony in October in Charlotte. He
had served three years vice chairman
and three years chairman of the
group.
The Governor's Committee coordi-nates
and promotes employment of
handicapped workers in North Caro-lina.
It's new Chairman is a former
leader of the Mayor's Employ the
Handicapped Committee in Mecklen-burg
County. Joining Van Every as
officers of the statewide committee are
Stanley Frank, Greensboro, vice-chairman,
and Louie Woodbury, Jr.,
Wilmington, secretary.
At the October awards ceremony,
The job mobile hopes to reach resi-dents
who could not get to Sanford
to use the employment services of
the local ESC office.
The job mobile concept is being
operated as part of the State's
Human Resources Development pro-gram
of the Employment Security
Commission. The HRD program is a
new approach launched by the ESC
to reach low-income and hard-core un-employed
persons.
Growing demands of the labor mar-ket
have required concerted action
in this area, officials said. So far
Moore is the only county selected for
this experimental project.
Garland Scott is the manager of
the Sanford office of the Employment
Security Commission. Frank Kivett
is executive director of SCAP, an
agency administering the anti-poverty
program in Moore, Lee, Hoke and
Montgomery counties with headquar-ters
in Carthage.
STEVEN
VAN EVERY
several persons were awarded presi-dential
citations for their outstanding
contributions to rehabilitation and
employment of workers in North
Carolina. They were : Elon G. Barton,
Society for Crippled Children and
Adults; Sarah Bray, Handicapped
Workshop in Salisbury; Harry Clark,
Western Carolina Industries; Grady
Galloway, Commission for the Blind;
C. L. Haney (retired), Vocational Re-habilitation
Division; J. B. Hatfield,
former Chairman of the Governor's
Committee; Jewell Osborne, Employ-ment
Security Commission and Claude
A. Myer, Division of Vocational Re-habilitation
Director.
The awards were presented State
Treasurer Edwin Gill.
HARRELSON
State Commission Enforces Bank
Examination And Finance Licensing
By Frank L. Harrelson
Commissioner, State Banking Department
Commercial banking in North Caro-lina
since 1961 has undergone almost
revolutionary changes in the area of
record keeping and the compilation of
credit information. This is attribut-able
to the application of technologi-cal
advances in data processing to
problems in banking and finance. The
computer has enabled banks to assem-ble
economic data and credit infor-mation,
expedite bookkeeping opera-tions,
the handling of checks, transit
functions, and trust activities. Many
other operations that heretofore re-quired
large staffs and time in assem-bling
statistics are now done by
electronic data processing techniques.
It must be recognized that a bank
is a business and, as such, is organ-ized
for profit. In recent years we
have seen the rising costs of loan and
investment funds occasioned by the
mixing of demand and time deposits.
Most of the deposit growth is in time
deposits and the interest paid on these
funds has constantly increased along
with the over-all cost of doing busi-ness.
This is the primary reason why
automation is vital because it allows
the best means for reducing the ser-vicing
costs of the dollar the bank
must buy to sell. Automation is vital
in this historic role and also essen-tial
for marketing internal and ex-ternal
services. A bank can know with
certainty the extensive cost of servic-ing
an account. This involves not only
the number of items processed but
also a precise automatic determina-tion
of the float involved and a true
status of collected and uncollected
funds. Obviously, the small bank can-not
afford this expensive hardware.
Instead, the trend is for the large
banks to provide many of these func-tions
for the smaller institutions.
ESC QUARTERLY 19
Special programs for business and
professional firms are developing
through electric data processing. We
could go on but the list is as long as
the imagination and ingenuity of the
program director.
International Developments
Another interesting development
during this period has been the
growth of international operations.
The advantage of a North Carolina
based bank operating in the common
market is of tremendous importance
in expediting the export of goods and
commodities grown and manufactured
in our state. The banks have not neg-lected
consumer demand and install-ment
loan departments have greatly-expanded
in size and services in re-cent
years. This is not only true with
respect to state banks. It applies with
equal force to the national banks op-erating
in this state. It must be recog-nized
that, in preparing an essay on
state banking, we must necessarily
limit statistical information to the
state-chartered banks since this office
does not have access or regulate in
any way the operation of the na-tional
banks.
The banking structure in the State
has changed with amazing speed in
recent years. There are fewer banks
but all of them are larger, some few
state-wide system of branch offices.
North Carolina was one of the first
states to permit statewide branch
banking. The advantages of branch
banking are obvious since it brings
banking facilities to remote areas and
small communities that could not sup-port
an independent bank.
In April, 1961, there were 145
state banks and 387 branches with
aggregate resources of $2,072,598,-
766.30. In April, 1967, the number
of unit banks had been reduced to
109 but there were 528 branches and
resources reached $3,436,208,929.93,
an increase in resources of 75.4 per
cent. So far this year the State Bank-ing
Commission has approved the
establishment of two new banks. The
total capital funds of these banks
during this period increased from
$185,309,723.20 to $292,582,482.47, or
approximately 58 percent. In addi-tion,
increases in "Valuation Reserves
allocated to Loans and Securities"
have increased at a great rate.
Phenominal Growth
The industrial economy of the
state has experienced phenominal
growth in recent years and the banks,
both state and national, have made a
very significant contribution to this
vital part of the State's economic
life.
The various indicators compiled by
the Federal Reserve Bank of Rich-mond
of conditions in the Fifth Fed-eral
Reserve District, which includes
North Carolina, indicates that there
probably will be some leveling off of
the economy but that it will continue
to operate on a high plane relative
to just a few years ago. There is
nothing in the picture at the moment
that would indicate that the banks
are not in a position to finance all
reasonable demands of industry, agri-culture,
and the consumer for the
foreseeable future.
The State Banking Department is
interested in the well-being of the
State banks and, in fact, all banks,
because the General Assembly has
placed the responsibility of the en-forcement
of the State's banking
laws in the State Banking Commis-sion.
Prior to 1931, the banks were
supervised by a division of the State
Corporation Commission. The 1931
General Assembly created a new
banking department, transferring the
supervisory function of state-char-tered
banks to this department. Mr.
Gurney P. Hood was appointed Com-missioner
of Banks by Governor
Gardner and he served for 20 years.
There have been four other Commis-sioners
since that time. The State
Banking Commission is the legally
constituted governing body of the
department. It consists of ten mem-bers
appointed by the Governor, five
of whom are practical bankers and
the other five represent industry,
Frank L. Harrelson, 56, a career
employee of the State Banking
Department of North Carolina for
the past 20 years, was appointed
in August, 1966, by Governor Dan
K. Moore to the position of Com-missioner
of Banks. He has now
been reappointed by Governor
Moore to a new term expiring
April 1, 1971. Prior to August of
1966, he had been Acting Commis-sioner
since January 13.
Commissioner Harrelson is a na-tive
of Shelby, attended Ruther-ford
College and N. C. State Uni-versity
at Raleigh and holds the
standard certificate of the Ameri-can
Institute of Banking. His
service with the Banking Depart-ment
began in 1946 as assistant
examiner; in 1950 he was promoted
to senior examiner; and in 1959
he was named Deputy Commis-sioner,
a post created that year by
the General Assembly. He served
in the U. S. Navy during World
War II.
He and his wife, the former
Martha Langston of Arden, live at
402 Forsyth Street in Raleigh.
agriculture, and the general public.
The State Treasurer is an ex officio
member of the Commission and acts
as its chairman. The Commissioner
of Banks is the chief executive officer
of the Commission. The staff of the
department consists, in addition to
the Commissioner of Banks and the
Deputy Commissioner of Banks, a
Consumer Finance Administrator, 22
field examiners, and seven secretaries
and clerical personnel in the Raleigh
Office.
The department's primary function
is to administer the State banking
laws as they affect state-chartered
banks by a program of examination
and licensing of new banks and
branches of existing banks. The pur-pose
of the banking law and the
regulatory program is the protection
of the public interest. The depart-ment
is likewise charged with the
responsibility of regulating consumer
finance licensees and the licensing of
qualified businesses to sell checks and
money orders under the Sale of
Checks Act.
Laws Passed
We believe it is pertinent to men-tion
that at its last session the Gen-eral
Assembly passed a number of
laws affecting the operation of state-chartered
banks as a result of recom-mendations
made by a study commit-tee
of the State Banking Commission.
In the banking committee hearings,
much was said about the dual bank-ing
system and the necessity of state
banks maintaining a relatively com-petitive
parity with national banks.
The dual banking system, in its brief-est
explanation, is that every com-mercial
bank in North Carolina falls
into one of two groups. Supervisory
responsibility for the first group, con-sisting
of state-chartered banks, is
vested in the State Banking Commis-sion.
The second group, consisting of
national banks operating under fed-eral
charters, is supervised by the
Comptroller of the Currency within
the U. S. Treasury Department. The
State law and the National Bank Act
provide for conversion, the right of
a bank to switch from one system to
the other. This offers broad advan-tages
to the banking public since it
encourages a wholesome competitive
spirit among banks.
The need for a modern banking law
is manifest because if the law ir
unduly restrictive in relation to the
federal law state banks can convert
to a national charter and the possi-bility
of a monolithic banking system
emerges. In summary, banking is
offering greater services today to the
banking public than ever before anc
the trend will continue.
20 ESC QUARTERLY
North Carolina Bankers Association
By Harry Gatton
Executive Vice President, N. C. Bankers Association
North Carolina, as it is often said,
s a State on the grow. Dramatic
ividence of the validity of this state-nent
is found in the growth of com-nercial
banking in the Old North
state since 1945.
The commercial banks in this State
lad total resources of $1,913,200,000
is of December 31, 1945. The June
10, 1966, reports show a growth of
.3,636,800,000 in resources to $5,550,-
100,000. Deposit figures are about the
;ame — $1,817,840,000 as compared
vith $4,911,000,000 as of mid-point
ast year—with a gain of $3,093,160,-
)00.
Capital Requirements
This growth in North Carolina's
inancially sound banking system has
provided the capital requirements for
ts burgeoning industrial and agricul-
;ural development. Business and gov-ernment
have been able to turn home-ward
for capital requiz-ements that
would have been impossible in the not
;oo distant past. A good example of
;his was seen last year when North
Carolina's banks purchased a $60
million issue of North Carolina High-way
Bond Anticipation Notes.
In concert with this growth of
banking has gone a rapid expansion
}f banking services. Banking is the
nation's oldest service industry. In
North Carolina it began in 1804
when the Bank of Cape Fear was
established at Wilmington and the
Bank of New Bern a little later that
year in that city. Although North
Carolina was the late comer in char-tering
commercial banks, it did per-mit
State-wide branching from the
outset. Banking developed extensively
up to the period of the Civil War. With
its conclusion there came a period
of total eonomic chaos during which
all banks were closed. From the size
and vitality of banking today it seems
incredible that North Carolina was
the last of the 13 original states to
enter banking. After holding out un-til
full assurance had been given
that certain freedoms and protections
would be guaranteed by the Bill of
Rights, the Old North State joined
the Federal Union in 1789. At that
time, various issues of paper money
were in circulation. The economy
needed the stability that a banking
system offers.
As previously noted, the ravages of
the Civil War and Reconstruction
forced every bank into liquidation.
Out of this chaos rose a hardy group
of bankers who set the foundation
stone for today's sound, competitive,
private enterprise system of banking.
Innovations Expected
A look around the corner reveals
the innovations that may be expected
in banking. The inescapable chain of
innovation is propelled by a rapidly-changing
technology. You can see its
dimensions in the talk and planning
for a checkless society and the activ-ity
of the credit card. Authorities
say flatly that the checkless or cash-less
society is actually just around
the corner. Bankers in North Carolina
and the country are on top of this
development, realizing that the neces-sary
electronic equipment is now
available for this change. Banking is
measuring with greater dedication
the needs, the aspirations, and the
changing economic conditions of its
customers. Consumer credit has grown
beyond the imagination of bankers of
only a few years ago and banks in
North Carolina have met this need by
continuing to increase their proportion
of the installment credit market. All
of these services of full-service com-mercial
banking have increased the
costs of operating and competition has
become more keen. In the areas of
service, banking has followed the old
dictum that ideas won't keep—some-thing
has to be done about them.
In Seventieth Year
The North Carolina Bankers Asso-ciation
was organized on a summer
day in 1897 at Atlantic Beach. It
was started by an enthusiastic group
of bankers led by Thomas H. Battle
of Rocky Mount, who felt the neces-sity
for bankers associations. "It is
not necessary for me to discuss here
the advantages accruing from them,"
he wrote many of his banker friends.
He became the NCBA's first presi-dent.
Today all of the banks in North
Carolina are members of the NCBA.
The constitution of the Association
gives the reasons for its existence:
"In order to promote the general wel-fare
and usefulness of banks and
banking institutions, and to promote
co-operation, together with the prac-tical
benefits to be derived from per-sonal
acquaintance and from discus-
BARRETT FORD SAFRIET STANLEY GATTON
ESC QUARTERLY 21
sions of subjects of importance in
banking and commercial interests of
the State of North Carolina, and
especially in order to secure proper
consideration of questions regarding
the financial and commercial usages,
customs, and laws which affect the
banking interests of the entire state,
and the protection against loss by
crime. . .
."
The North Carolina Bankers Asso-ciation
is today pulsating with activity
in the fields of service. It is out front
in such areas as banking education,
service to agriculture, publications,
and many other services in addition
to the normal activity of a trade asso-ciation.
THE TARHEEL BANKER,
the Association's official publication,
was 45 years old last July.
Continuing a long tradition of
banking leadership, W. C. Barrett,
executive vice president, The State
Bank, Laurinburg, is president; J.
Paul Ford, executive vice president,
The Bank of Belmont, Belmont, first
vice president; W. H. Stanley, execu-tive
vice president, Peoples Bank and
Trust Company, Rocky Mount, second
vice president; H. W. Safriet, presi-dent,
Bank of Reidsville, Reidsville,
treasurer; Harry Gatton, Raleigh,
executive vice president. The Asso-ciation's
general counsel is J. Ruffin
Bailey of Raleigh.
Sound banking is necessary to the
progress of North Carolina. Banking,
faced today with the continuing chal-lenge
to meet the needs of the grow-ing
economy, looks to the future with
optimism and the opportunity to
serve.
Corporation Aids Tarheel Business
Development With Industrial Loans
Harry Gatton, Executive Vice
President of the North Carolina
Bankers Association and editor of
the "Tarheel Banker," is a Uni-versity
of North Carolina graduate
and former newspaperman and
radio station manager at States-ville.
Elected executive director of the
Bankers Association in 1960, Gat-ton
has served as administrative
assistant to Senator Alton A. Len-non
and executive secretary to
Senator Sam J. Ervin, Jr.
He also serves as vice chairman
of the Executive Board, State De-partment
of Archives and History,
and is a member of the American
Battle Monuments Commission, ap-pointed
by the late President
Kennedy.
Other activities include Presi-dency
of the Wake County Histori-cal
Society, and he is Vice Presi-dent
of the N. C. Society for the
Preservation of Antiquities.
The 19-year-old banking official
was born in Harmony, a rural com-munity
in Iredell County.
By Gary M. Underhill
Executive Vice President, BDCNC
BDCNC stands for The Business
Development Corporation of North
Carolina. It is basically a financial
institution, the only one of its kind
in North Carolina and the first to be
organized in the entire South. It is
privately owned and managed, but
cooperates very closely with the of-fices
of the State Government, par-ticularly
with the Commerce and In-dustry
Division of the Department of
Conservation and Development. Like
State-chartered banks, BDCNC is
subject to examination by the Com-missioner
of Banks and submits an
annual report to the Commissioner,
who in turn makes copies of the re-ports
available to the Commissioner
of Insurance and to the Governor.
BDCNC does not advertise or in-dependently
seek to bring new busi-ness
into North Carolina. This is the
function of the Commerce and In-dustry
Division of the State Depart-ment
of Conservation and Develop-ment,
the many local chambers of
commerce and community business
development corporations, and the in-dustrial
development departments of
the major power companies and rail-roads.
These groups are very active
in this field and BDCNC cooperates
closely when there is a possibility
that the prospect may need financial
assistance in the form of a long-term
loan in order to begin operations in
North Carolina.
Advanced Business Prosperity
The same agencies would look to
BDCNC if an existing North Carolina
industry needed long-term funds in
order to expand its facilities.
BDCNC was incorporated under
the 1955 Session Laws of North
Carolina, during the administration
of Governor Luther H. Hodges, who
was later to become Secretary of
Commerce of the United States and
who, incidentally, is a current mem-ber
of the Board of Directors of
BDCNC. In the Act authorizing its
incorporation, the purposes of BDCNC
were stated to be ". . . to promote,
stimulate, develop and advance the
business prosperity and economic
welfare of the State of North Caro-lina
and its citizens ... to encourage
and assist through loans, investments,
or other business transactions, in the
location of new business and industry
in this State and to rehabilitate and
assist existing business and indus-try.
. . ."
Private citizens and businesses of
all kinds throughout North Carolina
bought $1,000,000 of capital stock
in BDCNC; and it was ready to be-gin
business on April 2, 1956. There
are presently 1733 stockholders.
The enabling Act provided for
"member" financial institutions to
lend money to BDCNC, "financial in-stitutions"
being defined as "any
banking corporation or trust com-pany,
building and loan association,
insurance company or related corpo-ration,
partnership, foundation, or
other institution engaged primarily in
lending or investing funds." Today
there are 66 banks, 51 savings or
building and loan associations, and
12 insurance companies which are
"members" and which are pledged to
lend money to BDCNC. (Some of
these are also stockholders.) As of
June 30, 1967, these members had
outstanding advances to BDCNC
amounting $7,037,550 and were com-mitted
to lend an additional $2,392,-
460 on call. BDCNC may not borrow
from any source more than ten times
its capital funds. With Capital of
$1,000,000 and Surplus of $150,000,
there is a ceiling of $11,500,000 on
borrowings at the present time.
BDCNC does not in any sense of
the word compete with its member
financial institutions in the making
of loans. The enabling Act itself
provides that BDCNC "shall not ap-prove
any applications for a loan un-less
and until the person applying
for said loan shall show that he
has applied for the loan through
ordinary banking channels and that
the loan has been refused by at least
one bank or other financial institu-tion."
May Involve Greater Risks
Probably the majority of BDCNC's
loan applicants are referred to it by
22 ESC QUARTERLY
le of its members. Loans made are
sually of a nature or term not
ndertaken by other financial institu-ons,
and may involve greater risk,
lough frequently a member finan-ial
institution will buy a "partici-ation"
in a particular loan which
; has referred to BDCNC, with the
ondition that the participation so
iurchased will be paid out in a rela-ively
short time, provided the loan
emains current in every respect. Out
f a total loan portfolio of $11,475,000
n June 30, 1967, member financial
istitutions owned participations total-tig
$1,320,000. In some cases, the
lember financial institution makes
,nd services the loan and BDCNC
lurchases a participation, usually
imounting to the greater portion of
he loan. Loans are secured by real
istate, chattel mortgages on machin-
:ry and equipment, assignments of
ife insurance, securities, and other
assets. They are repayable by month-ly
installments over periods of from
Sve to fifteen years.
Interest rates charged on loans
nave ranged from 6% to 7 1/2% per
annum, according to money market
conditions. BDCNC pays its members
financial institutions hi of 1% above
bhe commercial lending "prime" rate.
BDCNC's lending rate therefore
tends to go up or down as the "prime"
rate changes.
Most of the loans made by BDCNC
are for relatively large amounts, as
evidenced by the following breakdown
of loans made since organization
:
Number of Loans
by Size Per Cent
Up to $100,000 33
$100,000 to 199,000 32
200,000 to 299,000 12
300,000 to 399,000 10
400,000 to 499,000 3
500,000 and over . . . 10
The list of types of businesses which
have benefited from BDCNC loans is
almost endless: textiles and sewing,
chemicals, seafood, rugs, fabricating
storm windows and doors, milling
and storage of grains and peanuts,
slaughtering and meat processing,
poultry processing, canning, ham
curing and packaging, berry process-ing
and packing, tobacco processing,
biologicals, soybean oil and meal,
manufacturing of dies, brass pro-ducts
electric soldering irons, TV an-tennas,
lamps and other home acces-sories,
pianos, furniture, electronic
components, submersible pumps, dish-washing
machines, ad irrfinitum.
These loans have been made
throughout the State of North Caro-lina
... if not literally from "Manteo
to Murphy," actually from Engelhard
j
to Murphy, and from Mount Airy at
the Virginia line to Tabor City on
the South Carolina line. There are
few counties in the State which have
not benefited from a BDCNC loan.
Since organization (April 2, 1956)
BDCNC has approved 279 loans, to-taling
$44,259,000. Approximately
two-thirds have been for plant con-struction,
one-fifth for machinery and
equipment, and the remaining small
percentage for working capital and
miscellaneous purposes. A good many
loans are actually made to local de-velopment
corporations to build plants
for leasing to industries. Such loans
usually are secured by both a mort-
Gary M. Underhill was born in
Richmond, Virginia, and is a grad-uate
of the University of Virginia.
He was Assistant Vice President
of The Bank of Virginia in Rich-mond
when he was commissioned
in 1944 as a Lieutenant in the
United States Naval Reserve. He
was attached to the Executive Of-fices
of the Secretary of the Navy
in Washington for the remainder
of the War.
He became Executive Director
of the Consumer Bankers Associa-tion
in Washington in November,
1945, and served in that capacity
until July, 1948, when he moved to
Philadelphia as Executive Vice
President of the Charter Bank. He
became a Vice President of Girard
Trust Company in December, 1949.
Underhill came to North Caro-lina
in 1952 as President of the
First National Bank of Raleigh,
which by merger in 1959 became
the first out-of-town office of the
American Commercial Bank of
Charlotte. When that Bank merged
the following year with the Secur-ity
National Bank of Greensboro
to form North Carolina National
Bank, he was transferred to Char-lotte
to become Senior Vice Presi-dent
in charge of the state-wide
Management Services Division. He
returned to Raleigh in October of
last year to become Executive Vice
President of The Business Devel-opment
Corporation of North
Carolina, succeeding H. Powell
Jenkins, who retired.
gage on the real property and the
assignment of a noncancelable lease
from the lessee.
Helped Create 25,000 Jobs
It is estimated that the 279 loans
approved by BDCNC since its incep-tion
have assisted in creating over
25,000 jobs of all kinds and in main-taining
existing employment of more
than 20,000, with current annual pay-roll
in excess of $200 million; and
that over 16,000 farmers sell a total
annual volume of farm products of
$60 million to one or more of the
enterprises for which such loans have
been approved. If we include farm
people employed in newly created or
expanded plants, as well as farmers
who use processing plants, storage
and other service facilities, the total
number of farm people benefiting
from such enterprises exceeds 35,000.
Member financial institutions elect
14 members of the BDCNC Board of
Directors and the stockholders elect
seven. The present members of the
Board are from every part of the
State:
Thomas M. Belk of Charlotte, Mar-vin
K. Blount of Greenville, Julian
J. Clark of Charlotte, Benjamin Cone
of Greensboro, John C. Erwin of
Charlotte, Percy B. Ferebee of An-drews,
Harold C. Foreman of Eliza-beth
City, Shearon Harris of Raleigh,
William R. Henderson of High Point,
Luther H. Hodges of Chapel Hill,
Lewis R. Holding of Raleigh, Vance
Huggins of Charlotte, George L.
Hundley of Thomasville, Ted H. Lind
of Greensboro, P. D. Midgett, Jr.,
of Engelhard, John J. Ryan of Char-lotte,
John B. Stedman of Charlotte,
James H. Styers of Winston-Salem,
J. L. Suttle, Jr. of Shelby, J. Mel
Thompson of Fayetteville, and J. W.
York of Raleigh. H. Powell Jenkins
of Raleigh, formerly Executive Vice
President, is an honorary member of
the Board of Directors.
The Board of Directors meets quar-terly
in Raleigh. There is an Execu-tive
Committee which meets on call,
comprised of the President and three
other members of the Board of Di-rectors,
one being a Director elected
by the stockholders and two being
Directors elected by the member fi-nancial
institutions. Present members
of the Executive Committee are
Messrs. Blount, Cone, Erwin, and
Lind.
In addition to the office staff, of-ficers
of BDCNC are: Ted H. Lind
of Greensboro, Chairman of the
Board; John C. Erwin of Charlotte,
President; W. B. Pipkin of Reidsville,
First Vice President; Wilson F. Yar-borough
of Fayetteville, Secretary;
C. C. Cameron of Charlotte, Treas-
(See DEVELOPMENT, page 67)
ESC QUARTERLY 23
Consumer Finance . .
.
Or "Small Loans"
n North Carolina Today
By Robert L. Thompson
Executive Director, N. C. Consumer Finance Association
When Editor Ted Davis asked me
to write this article for the ESC
Quarterly he suggested I answer a
series of questions, the last of which
was: "Why the bad reputation of
some loan companies?"
It's a good question and provides
me with a good introduction. But
before answering I want to rephrase
the questions because Ted was over-ly
polite. What he meant was: "Why
the bad reputation of the small loan
or consumer finance industry."
The answer is simply this: Because
until six years ago, when the General
Assembly passed the North Carolina
Consumer Finance Act, the loan com-panies
of this State operated under
a bad, antiquated law which not
only allowed them to sell more credit
accident and health insurance than
was required to protect both lender
and borrower but actually required
them to do so if they were to operate
at a profit.
The real leaders of the industry
knew that reform was overdue; and
it was they who persuaded the Bank-ing
Commission to recommend to the
Legislature a complete revision of
the law. (Later some of our political
friends claimed all the credit, instead
of their just share, but I had a minor
part in this effort and I know and
can prove the facts.)
In the intervening six years no
State-wide business of which I've
ever heard—and I've been around
here in newspaper, radio and politi-cal
circles for "quite a spell"—has
made as much progress upgrading
itself as has the North Carolina con-sumer
finance industry. The State
Banking Department, which regulates
the industry, has done an excellent
job. But as both the Commissioner
and the Consumer Finance Director
recently stated, the people within the
industry have made their regulatory
jobs much easier and more pleasant
by earnest cooperation.
I don't mean to claim that there's
not a "loan shark" left in the indus-try.
There are a few. You can find a
few black sheep in the legal, medical,
ministerial and business ranks, also.
And they've been working at their
"public image" a long time. But none
of them have worked harder or done
more to clean up their own houses, I
believe, than have the members of
the Association which I represent.
And none of them have climbed as
far in six years, either.
But the truth is you can't rebuild
a reputation in just six years, espe-cially
among those of you who've
never done business with a finance
company and have no idea how well
or how poorly it serves the real needs
of its customers.
Let me give you an example. An
eminent Raleigh minister in a speech
made in Washington, D. C, late last
year jumped all over the loan com-panies.
We went to him with facts
and proof. He changed his mind to
the extent that about three months
later he took an active and able part
in a series of television programs in
which this Association was trying to
promote the wise use of credit. More-over,
at a recent "high level" confer-ence
at the University of N. C. in
Greensboro, not only the Ph.D.'s pre-sent
but also the representatives of
the South's largest banks stated the
finance companies were doing more
to promote the "wise use of credit,"
and had created the best educational
material, of any group or profession
or business in the country. Two di-visions
of the State Department of
Public Instruction have adopted our
teachers' kits, films, family credit
counseling kits and other material.
So have the home economics people
(they used to be "home demonstra-tion
agents") operating under the
Extension Division of U. N. C. at
Raleigh. We've put on programs be-fore
hundreds of civic, business and
ministerial associations within the
past few years as well as worked
with the teachers in our public
schools in an effort to train "the
24 ESC QUARTERLY
money managers of tomorrow." But
the more we do, the more we find
there's to be done.
Why are the finance companies who
support the association doing all this?
Have they become "do gooders?" No!
Our reason is simple. If you're in the
cash credit business you want your
customers to use their borrowing
power intelligently. If they don't,
they can't pay. And if they can't pay,
you go broke. Remember that the
profit made by an installment lender
comes with the last one or two pay-ments.
Up until then the customer is
just returning the money the lender
had to begin with.
Now let's take a look at rates. On
quite small loans the finance com-panies
do charge more than banks
considerably more until the money
got tight and the banks started add-ing
service charges, etc. But even
three or four years ago the legal con-sumer
finance rates in North Carolina
on that part of a loan between $300
and $600—the consumer finance ceil-ing
— the loan companies charged
slightly less than banks charge on an
installment loan.
Then why, you may ask, don't your
customers borrow from banks when
they want to make a loan of $300 or
less? Simply because the banks don't
want the business. It's too small for
them. And the loans are not really
secured by collateral, other than earn-ing
power.
All this talk heard during the last
Legislature about North Carolina's
"maximum 6 percent interest rate"
was as unrealistic as the claim of 50
years ago that all a nation or a
state had to do to make people stop
drinking liquor was to pass a prohi-bition
amendment. Except in cases
where a bank wanted to do a favor
to a customer—and lose a little money
in doing it—there haven't been any
six per cent loans, of $600 or less,
in years. It cost more than that to
keep records and keep up collections.
Do you have a "revolving charge
account" at a department store? If
so, you pay one and a half percent a
month, or 18 percent a year on that.
And you can add to that whatever
profit the store made on the merchan-dise.
But that's no reason to blame the
store. Competition will keep it in
line—and right now the "line" is
rather high as compared to years
past. If you must blame someone,
blame those who shut their eyes to
the facts of life and our times and
keep chanting "six per cent."
With a very, very few exceptions
—
such as the case of a man who owns
all the money he loans out and runs
his one office—consumer finance com-panies
borrow from insurance com-panies,
banks and other institutions
on a wholesale basis, and then make
loans on a rental basis. And seldom
if ever do they make their wholesale
loans at six per ce