Sign Iowa Banking Medical History Computer

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you what we want to do today is pick up the discussion where we did last time if you remember we talked a little bit about history of banking I started off by saying how we had this huge number of banks in the United States how did that come to be and so anyway and we had talked about the first bank of the United States the first bank of the United States you know it was a privately owned bank it was operated for a profit but it in a sense it operated as a central bank and there really was not a clear understanding in those days of what a central bank was but it it was served as a government's bank and it held reserves for other banks and it just performs several functions that nowadays we would say oh that's a central bank you remember in a 1791 this when it was chartered it received its charter from the national government in Washington DC all the other banks in United States were chartered by States at this time okay and it received a 20-year charter so this would be take it to 1811 and the idea would be that after 20 years then that charter would be extended and it would go on into the future the only thing is what happened during this period during this 20-year period is the first bank of the United States some people said played political favorites it would give be easier on giving loans to people and companies that were favored by government and then a little bit more difficult for the other people and companies in terms of not granting loans what it would do is sometimes it would receive currencies that from that were issued by other private banks and then rushed right over there to those private banks and present the currency and say we want gold and put those banks out of business if they couldn't produce the gold right then and so there were a number of complaints about this and there was one level of complaint was just hey this is a bank chartered in Washington it's sort of this huge Bank lots of financial and political influence and we're against that as Americans and so we're just against this so anyway a big movement developed over this and there was opposition and so the first bank of the United States did not have its charter renewed five years later there was another attempt and this is where we were gonna pick up with a second bank of the United States and so a second bank was chartered in 1816 and the idea was we'll give it this 20 year charter it was a real I mean this is not how we would do it nowadays nowadays we pass a law and say there is a second bank of the United States but in those days it was like this is kind of experimental this is kind of shifting a lot of power to Washington let's give it a limited charter and then if we like it we'll renew that charter and so its original Charter took it for 20 years to 1836 with the idea that if this is successful written to the Charter well really for many of the same reasons there was this political turmoil and controversy and so forth and Andrew Jackson came to office as president and I believe in 1828 I could be wrong about the year that's not really the key here and he basically said I'm against this and he had the ability well he was against it the Congress passed a law issue in a second Charter the bank United States he vetoed that and so and then they were not able to pass that over his veto I think in 1832 if I'm not mistaken it's when they passed a law extending the Charter and he vetoed it and that was just the end of the story for the second bank of the United States and there never was then a reissuance of the Charter there was never a third Bank of the United States or anything like that these banks had federal charters and a charter there's a license to operate and they were chartered explicitly by the Congress act of Congress they passed the law at the same time we had state chartered banks by the way let me just go back and say one more thing it is problematic when you have a bank that has shareholders and it's operated to earn a profit and it is the only bank that has a federal Charter and it does receive government deposits and it is making or easier to make loans to friends of government there are some valid complaints to be made there we would not permit that today and so it's not like oh these are just cranks back there you know 200 years ago and they didn't know what they were doing I think they had some valid complaints and had this not these powers not been abused and so forth there's a very good chance this would have been renewed the Congress did bring new the Charter for the second back United States but Andrew Jackson who was from the south and who was you know tended toward this populist point of view he was very suspicious of this concentrated power and this power being used to favor some people over others and so that's where the veto came from and as I say we would never stand for that now here's the thing that we had though yeah a couple of banks with federal charters we've got state chartered banks this each state is issuing charters to banks and so what happens is we're getting lots and lots of small banks in the United States this is consistent with this whole idea of small government local government federalism and so forth is hey if you want to do business as a bank you know if you want to do business you want to have a gas station or you want to have a beauty salon or a grocery store you'll incorporate you go to your state to get a license right and I don't mean to say a license to sell groceries but to get your charter for your corporation that operates that grocery store you go to your state government and all they were saying is let's let banking be handled the same way and then the laws that govern how those banks behave whether they can make loans or can't make loans or whether they're solvent or insolvent and so forth those laws will be made at the local level not local within your city but within your state and so what's happening these states are issuing charters now in theory I guess in some theory it's possible that we'd have state charter banks and still a small number of banks the only thing is if in I don't know let's just say Indiana they issue charters and they're gonna regulate those banks according to their rules it's really not gonna be practical for them to issue a charter and say now you can do business in California because California is gonna say just a second you can't be sending your banks from Indiana into California and you regulating them in Indiana and saying what they can and cannot do they're doing it to our people out here in California or in you name the state North Carolina or whatever and so as soon as you say we're gonna issue the charters at the state level and we're gonna regulate these banks at the state level then what you're really are saying is we are gonna keep these markets these banking markets at the state level or smaller you could and that's what a lot of states did actually is to say you had to operate within a county or a city or a couple of counties but the point is that once we just say we're not gonna have federal charters for banks we're gonna have state charters for banks then what you say is we're gonna have a whole bunch of small banking markets and then as the population grows then there's gonna be more and more banks but they're gonna be constrained within either a state or a county or some metropolitan area and so forth some smaller a unit and so that's where we get the thousands of banks state charters now what happened was this 1863 and this is next on our list we've got a president who's the president in 1863 anybody Abraham Lincoln Lincoln was already president I was elected in 1860 took office in 1861 so he came along in 1863 and proposed it and the Congress passed that a National Bank Act here was what Lincoln observed you know we've got all these thousands of thousands of state chartered banks and we've got some states do a good job of regulating those banks making sure the banks are solvent and so forth and others do a lousy job and so somebody have come up in some states somebody to come over here and they open a bank and they'll accept a bunch of deposits and then close their doors take the cash and take off and there are people losing money and this is so uneven this system of regulation that it's just not working out this was Lincoln's point of view in his administration this is just not working out with the state charter it's just too uneven in its application and there are too many people being defrauded of their money by shady banks bankers so what he did is he said this let's come along here with this idea of creating federally chartered banks where it wouldn't be the first in the second Bank the United States that kind of a deal will have an authority in Washington DC and that authority will issue charters to do business in any state and we'll have a uniform set of regulations and those regulations will basically keep these banks from defrauding people and so there would be a new category of banks created and by the way this law passed call the National Bank it's still a private bank but it would have a national Charter and so today if you see a bank and it's got that word national in its name it's being chartered out of Washington DC if you see the First National Bank of Minneapolis or whatever the Third National Bank or whatever the number is or you know battlefield National Bank whatever they call it but if they put that word Nash in their name then that Bank has a national charter some banks have a national charter and don't use that word national in their name but they'll indicate that with some way or another anyway so what Lincoln said is this let's come up with a charter an agency and the agency well poor spelling the agent agency that would issue these charters was a controller the currency by the way nowadays sometimes you'll see that abbreviated OCC office of the controller of the currency you see how that is spelled sometimes people will pronounce it Comptroller Co NP hard P sometimes people just pronounce that controller as though it were spelled with an N that's not really a big deal for us but anyway there is somebody there an official in Washington that's the control of the currency office of the controller they are the ones that issue these charters and this is within the US Treasury Department Secretary of Treasury sits on the president's cabinet there was a Treasury Department and within the Treasury Department there are several agencies and bureaus and so forth for example the IRS that collects our taxes is within the Treasury Department okay well one of the things within the Treasury Department is this controller and the currency and so we've got an agency and they came up with the rules in order to get a charter you have to do this and this and this and this okay and so those are minimum standards you have to have a certain amount of capital you have to have some officers you have to have you know a certain accounting system you have and so they establish these rules if you want to charter now the goal at the time and the intention was also to force all these state charter banks to Gill and get a national charter or go out of business that was the goal we've got too much sort of fraud and corruption and and so forth with the state chartering let's do away with that the only thing is they didn't have constitutional power to say we're doing away with it they can certainly issue a charter in Washington but at the time the interpretation of the Constitution is they couldn't say to the states you may not do that so what they did is this they said you know these banks are making loans because that's what banks do but a key thing key service that banks offer is currency people would come along with could be foreign currency it could be currency from another bank it could be gold or silver but people would come along and make a deposit in the bank and the bank would give these state charter banks would give that depositor currency now you could just say leave this on my account okay you've got a balance but if you said I want currency so I can go out here and buy groceries or whatever they would give you their own currency each one of these state charter banks thousands could issue its own currency and at the time Lincoln was elected there were more than 10,000 different currencies in the United States Wow and so that was confusing and enough in itself it's like if you would going to the store and now if you were handing over currency from just the bank down the street they know about that but if let's say that you went into the store and you handed over currency from some bank in Paducah Kentucky then you say I just like to say Paducah I have no reason for use now as my example anyway if you hand over a sign here's a twenty dollar bill from some you know like the first Merchants Bank of Paducah Kentucky here's a twenty dollar bill the grocery store owner would get out like a catalogue open that up and start turning the pages looking for Paducah Kentucky and then here are the seven banks on Paducah that have issued currency here's the whatever I said first Merchants Bank of Paducah Kentucky Oh they've got the ones fives and and $50 bills they don't have any 20s hey this is fake or maybe there is but then this is oh this Bank is only redeeming those at 80% of face value but they would have to do a little research and there were catalogs out for that but they would have to do a little bit of research on currencies to find out if they're good because there are thousands of them and this is more than people can keep them in their mind by the way if you'll remember we talked about why does money exist and we talked about the unit of account and what we said is if everything is just trading for everything else there's so much information you can't process it well there were thousands of currencies in and there was so much there that you cannot process them in your head it's not as though we had barter it's as though we had thousands of different currencies and there's just information overload and people would be taken advantage of and they try to deal with it with these catalogs I'm sort of coming back to this story here so Lincoln's idea was we got a lot of fraud here partly with respect to the issue of currencies we've got a lot of fraud and uneven regulation and so forth so what we'll do is this this will come up with these nationally chartered banks we can't do away with state chartered banks but it does say in the Constitution that the Congress shall had the power to issue and regulate money this is in the Constitution so what they said is this Lincoln said and his administration what we'll do is with our powers to issue and regulate money we will regulate that currency out of existence and once we regulate that currency issued by those state charter banks out of existence they'll go out of existence and the only way they can stay in existence is to get a national Charter and then we will have a national currency that they can issue and so part of all this legislation was there's a National Bank note I don't want to overload you here with this but a National Bank Note law came out in 1862 and so if you get a national charter then you can continue issuing currency if you want to keep your state charter we can't prevent you from doing it but we are gonna impose a tax on your currency and that tax is so high you'll stop issuing it and so now this thing that you've got to have to do business with your customers you'll no longer have that you'll go to business are you with me on this it's like how do we enforce the National Bank Act well we put the state charter banks out of business by taking away their best product so what happened the state charter banks said mmm we cannot issue to our currency anymore what are we gonna do are we just going to go get our national Charter and some of them did but then others said hey I got an idea we can't have this currency anymore let's come up with a new product a checking account and so this is when bankers in the United States started issuing checking accounts to their customers give them the checkbook and so forth is when they were no longer able to issue currency and really a checkbook is I mean it's no different rig t like if you've got a currency issued by some bank and you go oh hey I wonder if this is good I get the catalog out well now all the bank said is I'm gonna give you this piece of paper and you can write in the amount but it's still on the same bank and the same amount of research has to be done is that banking existence are they redeeming these pieces of paper and so forth but you just fill in the amount it's not a ten dollar bill it's ten dollars and 27 cents or whatever you want to fill it and then write your name on there so anyway that is the innovation of checking accounts not the first time they were ever done but that's when they became big so the state charter bank stayed in business all of a sudden you've got a few thousand stay nationally chartered banks a few thousand and you've still got thousands of state chartered banks no longer issuing their own currency Minelli's and checking accounts and so the system became even more confusing the idea was we're gonna streamline this we're gonna force a lot of these small bang fraudulently run banks and so forth out of business everybody get a charter at the national level we'll have one national currency that'll be it and so what we got instead was one national currency nationally chartered banks a few thousand of them and thousands of thousands of state charter banks with checking accounts and so this is all referred to nowadays as dual banking and by the way this is still with us this has never changed this is the thing about the United States banking system that is pretty unique we've got dual banking where we have charters issued either by the national government the controller of the currency or by state governments we had that today Indiana Missouri California Texas you name it each one of them has a state banking authority that issues charters and then there are national charters issued in Washington by the control of the currency and so now what we have is 51 bank regulators we've got one at the each state level and we've got the OCC the controller the currency okay so this idea of streamlining that kind of fell by the wayside by the way in this state we've got a state Banking Authority and that is the Commissioner of Finance okay by the way the Commissioner is the one that signals Batman when there's an emergency I'm just saying you know they put that thing up in the clouds you see the bat-signal that's the commissioner so we have got this really big mess it's not a mess in one sense if you like the idea of small and local and so forth but it looks chaotic to the rest of the world and there was an attempt to streamline it to rationalize it and it just didn't work out okay so going forward this is still mainly an agricultural country there certainly we're large cities and so forth but mainly an agricultural country even by the year 1900 I'm gonna say 40 percent of the population lived on farms and today this is just like I don't know three four five percent but so this was at the time Lincoln did this agricultural country okay so we start going forward and there's more and more urbanization it's growing but it still hasn't become dominant by 1900 but what is happening in the latter part well think about the Civil War came along and and what we start getting I mean there was this burst of construction of railroads during the Civil War and companies started getting bigger if you're gonna build all these railroads and I mean if you go look at the numbers I don't have them in front of me but we go from having a few thousand miles of railroads to tens of thousands of miles of railroads and just like a decade partly this is hey we're trying to you know get the military and supplies and so forth across the country but a lot of things are happening there's urbanization taking place but if you start having lots and lots of railroads then one thing you need is a lot of steel production and so then steel companies start getting bigger so you're getting bigger and bigger railroad companies and bigger and bigger steel companies and big companies are coming along and so what's happening in OH 1870 1880 oil industry and I can't tell you the exact year but maybe around 7 1870 or so there was a guy named uncle Billy Smith that found oil in Pennsylvania and boy he had to drill about six inches underground to find it now of course we go down thousands of feet sometimes but anyway so we started getting an oil industry and then it starts small but then it becomes standard oil and so what's happening is in the latter part of the 19th century 1870s 1880s 1890s we're starting to get bigger and bigger companies and so at that point which is not part of our banking store but it kind of leads into so what's happening is there's this reaction that's developing a political reaction and a latter part of the 1800s and it is this populist attitude of we got to regulate these big companies they're bad and what starts to happen is this is some of these banks with the National charter they start saying you know the state chartered banks are limited to what they can do by the state rules they cannot jump over state borders as I said a moment ago Indiana can't say oh we give you the right to do business in I don't know Texas but the national banks start saying you know we are chartered out of Washington and we have rights to open branch offices and so forth and they don't tell us that we've got to be in one state or another state or anything else we've got a right to do business and now that we've got railroads that are you know basically spanning the country and we've got these huge corporations and so forth sometimes we need to have maybe our headquarters will be in Chicago but maybe we need to have an office in Indianapolis and Dayton Ohio in different places like that and so these nationally chartered banks start jumping over state borders into other states and this movement is taking place and then these banks start getting big you know it's like if you are limited to one state then there's just you can only get so big because even as that state gets bigger there will still be other banks competing for business within that state but if you can just jump into any old state you're looking out there and say hey there's a market that's not well served here's another there's another and so you jump into those market that's that are not well served and then what happens is you start getting a big bank so banks are jumping over state borders nationally chartered banks and the latter part of the 19th early part of the 20th century and so then in 1927 and this is like next on our list I'll say 1927 McFadden Act there's this populist reaction political reaction to these big banking companies and so there was a congressman named McFadden and he said here's what I think the law ought to be it was voted on and it passed the president signed it and we get the McFadden act and here's what the McFadden Act says you national banks you have got to obey the branching laws that state chartered banks have to obey wherever your headquarters is so like if you are a Chicago bank with a national charter you have to obey Illinois's branching laws whatever Illinois state chartered banks can do with branches if they can open all they want throughout the state okay if they can only open one office in the state okay something in between okay but nationally chartered banks you cannot you use your national charter to jump over state borders and open up a banking company that operates everywhere and so this McFadden act officially cut our banking markets up into now it would be 50 there were fewer states then but each state is a separate banking market and it's not only for the state charter banks but also nationally chartered banks you can't jump over that state boundary the banks that had already jumped over the state boundary those were grandfathered in you can keep your branches if you've already jumped over and like there were some Missouri banks that jumped over into Illinois prior to the 1927 and so they kept those branches there was a bank and I don't know if it truly was but its name was the first interstate bank out west I don't know where it was a chartered maybe originally California but it had branches in several western states Colorado Utah I think Hawaii could've been Hawaii in 1927 but they had branches in several states and then at 1927 they basically said no more of that no more jumping over the border no more entering new states but if you've got them already you hold on to them anyway the point is in 1927 officially we put a border around the state and you develop your banking market within that state wherever you want your headquarters to be nationally chartered bank you stay in that state if you're a state charter bank you have stay in the state anyway and so this is the prescription we already had it working for us there was an to keep banks at the state market in a state level and to keep them small the National Banking Act was an attempt to basically bypass that and make it or we'd have nationally chartered banks and the McFadden act was a reaction that said no we want you to stay at the state level so we had thousands and thousands of banks and I don't know the number but I think maybe I'll shoot a number out here 25 30 thousand banks at the just at the dawn of the Great Depression like in 1929 I think there are 25 or 30 thousand banks in the United States at about the time most of you were born there around 14,000 banks in the United States okay so thousands of thousands of banks and it's because of like I stay the state charters and in the McFadden act any questions about this this is kind of exciting stuff huh here's a problem with that McFadden a lack of geographic diversification there's this whole expression about don't put all your eggs in one basket well putting all your eggs in one basket the opposite of diversification diversify means to spread your risk and don't like put all your money on black number 14 and you know spin the wheel and hope you win but to diversify your risks or your bets or whatever so if something goes wrong in one area or another you're still in business and so if you owned a banking company and you want to diversify spread your risk - what you do is try to get in different parts of either the state or the country and so if there happened to be really bad economic times in one market you'll suffer losses there and for a bank bad economic times would be hey we loan money to people in Detroit and now the car industry's have in trouble and so not only are the car companies having trouble repaying loans but their suppliers are having trouble repaying loans and the employees of the car companies are having trouble paying loans wow that banks in trouble but if we diversify what we'd say if we own this big banking company okay we'll have some offices in Detroit but also have some offices in California and Florida and and so forth and so even if there's trouble in Detroit we have got other operations they are profitable here's one that's not possible but the rest of the company is profitable so we're gonna pull through this okay and so the McFadden act says we're against that we're trying to keep everybody in all the banks in a small market area and so what happens is if that market area has trouble those banks will fail this is pushing banks toward failure and I mean that's the effect of that the state laws the states already had these laws and then the McFadden act forced the national banks nationally chartered banks and to this but the states had three different kinds of laws unlimited state wide branching some states had that those tended to be the states on the coasts East coast/west code some had limited branching a County a metro area two or three County area something like that and then some states just had unit banking unit banking no branches one office that's it pick a spot put your building right there your operations right there no branches these tended to be in the Midwest it seemed to be like from the unlimited state line branching on the coast and then as you head toward the center of the United States you start getting limited branching and then we get sort of close to the center of the United States that's where there was the this greatest populist movement and there's some greatest suspicion of concentrated financial and political power and that's where they just go one office that's it and I mentioned to the other day I think Texas had or has more banking companies than probably all of Europe hundreds and hundreds of banks well Texas for almost all of its history was it unit banking state so you just open up a bank and that's it no branches and so Texas has it's a big area and they have a huge population what is it like third largest population in the United States is that right third fourth but I'm in big cities Dallas well Dallas Fort Worth Houston San Antone Austin anything else can you hear me out there and so it's got this huge population and until recent times it's like hey no branches and so if you're gonna have a huge market and no branches then they're gonna be lots of banks Kansas was a unit banking state Missouri limited branching what Missouri had and it changed but Missouri had a law that said something like you could have a main office and then what you could have I think if you go back 20 30 years I think they would let you have two other offices two other branches within the same County and that would be for the larger population counties and then if you got out into these small population counties you can open a bank and then jump over to the next county and serve that market which maybe wouldn't even be served at all but there was limited branch in there hey somebody missed Oh somebody came up here in a race that I okay so anyway in some of these cases looking we're gonna had thousands and thousands of banks if we have a unit banking I went to graduate school in Virginia they had unlimited statewide branch and then and so what they would have is like a home office and then you know dozens and dozens of branches around the United States around the United States around the state now here's what would happen in these states and I'm getting a little bit ahead of my story but you go boy we can't open branches this is terrible what are we gonna do and so what they would do is this is they develop something called the bank holding company so they said oh look we've got a bank in one town let's say here's Kansas City and there's another Bank in st. Louis and here's another Bank and I don't know Columbia Missouri and so then we'll create this bank holding company and it'll own them all and so each one of these banks will be a separate bank but then they'll all have a single owner and so these are not branches there are individual banks and by the way each one would have two or three branches but then they all have the same owner and so then we've got this diversification geographic diversification that we weren't achieving otherwise so it's basically and this we've seen throughout history in the financial services market banks are doing something there's some objection from Washington or whatever the state capital is there some objection so a law is passed or a regulation is imposed and that the bank says hmm we have to comply with that rule how do we get around it and so the rule on limited branching they got around it by developing a bank holding company that would own banks and each bank had its own charter and so then the next step is oh now we have to regulate bank holding companies and so this was a matter of just playing this game back and forth it's an important game but they were basically going back and forth in terms of how to react to this well in any case I don't want to go too far here afield but just to say that we've got thousands of banks because of the state chartering of banks and the McFadden act what happened and it goes beyond just this issue of a thousands of banks well what happened was this we get into the Great Depression in the early days of the Great Depression there were lots of bank failures 1929 we're still talking about history here of course 1929 through Oh before I go on another problem of McFadden act and the state charter and the small bank was there was failure to achieve economies of scale well companies frequently like to do not every single company in every single case but this is a general tendency as companies think hey if we can get larger we can become more efficient okay if banks need computers let's say to do business then if we had unit banking every banks gotta have a computer to basically manage its business if we have unlimited branching we'll get one computer and it can manage you know and keep track of data and process that data and so forth for dozens or hundreds of individual branches we want to be able to achieve efficiencies or economies of larger scale well you can't do that if you're confined to these smaller markets so these were the two problems of state charters and McFadden Act and having many many smaller banks back to our 1929 I will pick up the history right here 1929 through 33 we've got lots of bank failures okay about one-third of all banks fail and I've written down one-third that's an approximate number you know that's a lot of banks if you just think about if you were in a city and modest size near 15 banks and five of them go out of business it's gonna be traumatic in a fairly short period of time now here's the thing at this point the economics was not very far developed none of the the the sciences that study finances were very far developed in addition to that the regulations were not very strict in addition to that very little data were being collected so you got all these banks failing since there's not the analysis we don't really know you know have a good explanation for what's happening and since there's not the data collected we don't really have the facts to work with anyway and so in that situation and this is really traumatic for the bank for the economy in a situation where you've got this really traumatic situation like this guess what people do everybody's their own theoretician everybody sits around with a with an explanation here's what's going on well here's what's going on how about this how about this how about this and so in the final analysis it's like yeah probably all those are right and so they just made up a bunch of stories we would be making up stories if we live through that so I'm not saying well let's castigate these people I'm just saying this is a reality as they made up a bunch of stories and some of the stories were things like this you know a lot of those banks failed because the stock market crashed in 1929 and they were speculating in stocks we ought to stop the banks from speculating in stocks or they were making too many loans the people who did speculate in stocks we ought to stop that or they were making a lot of loans to investors that were doing like really stupid things with the money we ought to stop that and there was just this whole series of stories bankers are well you name it they're in businesses they shouldn't be in we ought to stop that so there's this whole series of stories on explanations about what happened and by the way later economists and historians went back and studied the facts and found out that not many of those held water they were mainly just people who were traumatized without data and without the skills to analyze who just came up with their own home-baked by the way most of these people are in Congress but anyway most of their own theories and so what they did in 1933 they passed a law called the glass-steagall Act okay and this is all predicated on the idea that banks are speculating and like wasteful with money and not being careful and not conserving the deposits of people and so forth but this is just banks are run by lousy crooks was kind of an underlying theory of it all and so the glass-steagall Act said this we are going to come up with a whole series of Bank regulations a series of them but the key idea is this banks can only engage in activities closely related to banking I'm gonna put quotes around this so the idea and by the way there was more meat put on those bones but the ideas we're gonna keep banks out of all these risky things we don't want our banks failing like that because when the banks fail the people who put their money in the banks they didn't get their money back and so we got to do something about that we will prevent banks from you know will put out a little line around the banks and here's what banking is and you stay out of every other kind of business the other thing and then we'll close with this is that this created the FDIC the Federal Deposit Insurance Corporation that insures deposits if you put your money in a bank and it has FDIC coverage and that bank closes then you get your money back anyway the government will come along the FDIC will come home and make sure you get paid okay but glass-steagall was to restrict what bankers could do and by the way next time I'm going to tell you what's wrong with that lack of diversification we're saying all you can do is one kind of business not other kinds of businesses they're not diversifying their risk that's what we're closed for the day see you next time so long