The news & observer., 1897-12-19
BRANCH BANKS.

journal Of Commerce.

American Bankers Association which
shows that his Knowledge Of modern
banking ranks with that which has
placed him at the head of one OF the
foremost insurance institutions in the
world. Mr.. McCurdy calls attention
to the great diversity of services rem
dered by the banks of Europe and CON
trasts the utility of the transatlantic
systems with the restricted fui4ctlonS
permitted to our National banks. lie APP
pears to have made thorough stuuy
of the branch system of the European
banks and urges the Importance OF M
cooperating that principle into our Ma
tional banking arrangements. lie re-
marks that: I'm every country IN the
world in which banking is highly de-
veloped and renders the full service to
he community of which it is capable, the
system of banking through branches is
universal. In every great financial ma
ton on the continent of Europe, every
city or town of any commercial impor-
tance has branches of the great banks
of the capital. The value of this method
is matter Of daily experience III each
of these countries; but the system is
most perfectly developed in Great
Britain. wnere banking as system has
reached its highest perfection, and
where the financial transactions of the
world have their chief centre" Continu-
ing, Mr.. McCurdy observes:
'.As q typical instance of such bank
ing corporation we may consider the
National Provincial Bank of England,
a bank with a paid-up capital of three
millions of pounds, and a surplus of two
millions of pounds, belonging to more
than twelve thousand eight hundred
stockholders, with headquarters in Lon
don, but with one hundred and sixty
eight branches in England and Wales,
besides about forty agencies in places
Of minor Importance. 1t has deposits
Of more than forty-fve millions of
pounds, and its discounts of twenty-siX
millions of pounds are thus distributed
through al parts of the country. The
farmer, the retail merchants and pro-
fessonal man in the remotest corner Of
England, has no need to so far from his
own door in order to reach the counter
OF this great bank. 1t will there receive
for safe keeping his temporary funds
or his permanent savings, allowing him
a low rate of interest on his deposits;
and if he is able to show that his char
acter and position deserve confidence,
it will make advances of discounts for
him at the ruling rate of interest. If
at any point in the Kingdom there is
for the moment severe pressure for
loans, the resources of the bank natur
ally flow to that point, and it is able
there to relieve the pressure and equal
ize the rate of interest throughout the
area of its transactions. And this is
but one of many. l select a few others
almost at random
Paris bank. paid up capital, E1 100000,
surplus, 100000; deposits, f17,000000;
number of branch banks, 67.
Manchester and Liverpool District
Banking Companies, f1,000,000; sur
plus. Fl ,060,000; deposits, -; number
Of branch banks, rs.
London and county banking COM
panies, E2,000000: surplus, f1,000000;
deposits, f3S,000,000; number of branch
banks, 1877.
"Lloyds bank, f1.oo0,7so; surplus,
E1,000,O00; deposits, E2S, 100000; number
Of branch banks, 124.
"Lloyds bank agencies and sub
branches, TO-"
Comparing the English branch system
with our branchless system, Mr.. Nc
Curly remarks:
Contrast this state OF things with
the common experience of the United
States. Here the great banks of the
Eastern cities are very often con-
gested with immense supplies of idle
capital while the banks of remote cities
and towns in the west and south are
wholly unable to meet the legitimate
demands Of their customers for their
accommodation. 1t has repeatedly been
the case that millions of dollars OF
money lay idle in the banks of New
York because of the impossibility of OBJ
tanning so much as two per cent upon
curren tloans, w --e farmers and mer-
chants in Denver, Kansas City and
Minneapolis Wee ciitinUlin5 III ,ai1 Ter
accommodation on good security at ten
or more per cent per annum. This is
frequently the case also in other great
financial centres. To Illustrate: Ac-
c0rding to the report OF the National
banks under the Comptroller's call,
March 9th, 1897, one western bank,
the First National bank OF Chicago
over which the present Secretary Of
the Treasury formerly presided, had in
deposits $32,000,000, and was carrying
in cash $11,260,000, an excess OF $5,-
OUU,OOO over the required reserve. Ex
uno disco Omnes.
I'm any reorganization of our bank
ing system by Federal law, the removal
of the restriction upon branch bank
ing is one OF the most important re-
forms to be sought for. Under such a
reformed system competition among the
banks would indeed be extremely active,
but it would be competition in the direc-
ton Of safety and not of danger. Each
bank would strive to excel its competi-
tors in the amount OF its capital, in
the number and wise location of the
branches by which it would seek access
to the business community of the coun-
try, in the conservatism of the manage
ment by which it would strive to obtain
universal confidence for its circulation.
The natural result would be. rs it has
been throughout Great Britain, to dis
tribute far more widely than now the
ownership of bank capital.
sFIha h1ukiDv cUGtnTp of CouuJo