New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-08-20
BRANCH BANKS ADVOCATED
Mr.. CORNwELL'S PAPER READ BEFORE
THE BANKERS AT DETROIT.
ADVANTAGES OF THE SYSTEM AND THE oBsTRrc
TON TO Ir-MR. HENDRIX CHOSEN PREsI-

DENT OF THE ASSOCIATION.
Detroit. Mich Aug. ls.-Hard work marked the
last session OF the convention or the American
Bankers Association.
The question What Legislation Is needed ii
Respect TO the Currency was discussed In an in
ierestng paper by y. r. Van Slyke, president OF
the First National Bark OF Madison Wis The
speaker thought reforms to be permanent should
be gradual rather than radical and in this direc-
ton he suggested the first important step In cur
rency reform by evouon-the retirement Of the
greenback and Treasury notes. floating debt and
the practical business method Of funding this debt
Into 3 per cent Government bonds in denomination
from fifty TO thousands If dollars each. such 8
cer cent bonds II payable in nifty years" said Mr..
Van Slyke and irredeemahle before. would take
up the present bonds issued. as they mature and
81 b. permitting the banks TO issue their circulating
notes upon the par of such per cent bonds In the
same proportion only the Government circuIat-
ing notes. might he returned. redeemed and then
forever retired il would keep the volume Of all the
currency undsturbed. by the gradual decrease OF
one class and corresponding increase Of the other
until finally doing away with the Governments
banking business and placing 1t with the BANKS
where II legitimately belongs.
Savings Banks the title Of a paper read
by Myron T. Herrick of Cleveland.
Harvey J. HOLSTER president OF the Grand Rap
Sds Clearing House. spoke on organized Capital
Its Privileges and Duties"
Bradford Rhodes. of Mamaroneck. " y. dis
cussed the question Are Clearing Houses for
Country Checks Practical?' He said in part:
Country checks are such important factors IN
efecting the exchanges OF the county, bna' o any ~
eliminate them altogether will not succeed There
ay sae WITH If es hop Of 1
That there is useless expenditure OF al time;
making these collections and a CONSEQUENT loss TO
many Of the banks handling them is "a iaS act wei vel
lection of such checks many of the vexstious de-
devious journeys that some Of these items take
before reaching their sponsors might DE
Mr. Rhodes submitted an exhaustive plan. ac-
Companed by diagrams. showing his proposed
method.
G. Gunby Jordan president of the Third Ma
tona Bank. of Columbus, Ga. gave an address
on the subject, How Would National Banks with
a Capital Less than $4,000 be of Benefit to the
Country
ADVANTAGES OF BRANCH BANKS
would Branch Banks he Beneficial or the Re-
verse;" was discussed in the affirmative by Will
fam G. Cornwe president of the City Bank OF
Buffalo. He said in part:
Branch banking has been in active oPeT nd1oa
years. in some countries TO the exclusion OF almost
Germany. scotland and Canada. where the valna.
BILE qualities of the system have been thoroughiE
bank allowed to issue notes. has branches ~ In
ninety-four towns and cities outside of Paris me
scotland where there are altogether only ten en-
banks in country, they nave altogether 90
branches. Canada has thirty eight banks, With
4S branches. Ireland has nine banks. with SSS
have the branch bank system: in fact it has de-
veloped naturally in nearly every country IN me
here and was in a high state of perfection when
restrictive war legislation blighted it, and cursed
In England we have a unique feature in that
T sse and not G e Of ns n
also that of branches both Of which they ex ,be
region "a" where the head Office is located Incorpo-
rated banks there also have branches mainly IN
their districts. Meantime the Bank OF Eng
land has only nine branches. and large numbers OF
strong banks there have no branches at all. -
which this system has been most highly developed
Special Individual examples are the Royal BahK OF
Scotland. with III branches the nank "nicn III, IL
vented cash credits that have done so much NJ, 10
S SesrTg orsS banche every Of the
Dominion. a bank with twelve millions capital ana
FAX ank R'' in the Thited States and very buwark
during the pioneer development of Canadian in
1t may be said at the start that branch banking
Is quite Improbable without the privilege OF mote
Without deposit Of securities like United States
bonds In other words under the Na, nRng Sod
present little inducement. even # II were mace
sources Of profit from branches is the circulation
by the branches Of the note issues OF the parent
bank. Such note issues must be WITHOUT cos, Of
interest-notes issued the credit OF the bank
wthou, special security TO p make HEN goOG Sc
instead of coin without loss of interest. ana pa!
have TO wait for deposits. but can Immediately be
gin loaning out its notes which iuliy ta f me
where IT locates begins at once, a. least as lar as
tudicous loans can deHeop the parent bank
whereas if il had not the privilege OF issue II would
nav out which cash would be kept al loss Of In
ierest Thus the larger the number oil branches
only banks with large capital can practise branch
banking o.. ,,o r.r,,od States would mean
the centralizing Of banking operations in much
smaller number Of head institutions than now exist
Instead Of there being eight thousand sets Of
t fsnS OF The people in the community in which
they live We would have many agents o, larse
Win the favor of the head office by making as
large profits Is po sd this WIN IN d way Wod be
perfectly legitimate ambition.
Ing on OF enpoymen Of fully 30 per cent Of the
persons At present employed IN banks. Snd Inc
wages would reduce to that extent the cost OF DO
There might Al first he some popular clamor
against the whole system and its concentration OF
power.
WOULD RELEASE GREAT sun.
II II should prove that the branch system of
banking could be carried or in this country with
the same proportion Of capital to deposits that now
prevails in Scotland two-thirds OF the capital now
invested in banking would be released While this
would be a decided advantage TO the stockholders
who were fortunate enough to secure stock in new
banks il might cause loss of some capital when
the change took place II through the competllion
OF the branch banks the Independent banks Wer-
obliged retire from the neld and settle up their
affairs 10 as good advantage as the changed con-
ditions would permit.
Meetings OF the American Bankers Association.
such as here to-day. would be a thing or
the past. and instead Of the representatives or
thousan ds OF banks ass, milling annually fewer
number. the general managers. would get together
and pass with considerable authority upon the
various phases Of the banking business with refer
Cnce TO continued Improvement.
In smaller towns ana ihnlN settled agfl-
cultural communities there is not sufficient capital
TO enable the people 10 establish a bank of their
own-the minimum amount Of caIital required for
a National bank being $1,000 AID in nearly every
State there l. minimum limit put upon the
capital o banks. II has been suggested that this
minimum might be reduced 10 5000. less. but
in any community where there * dfarth of
capital there is LITTLE money TO be deposited and
without deposits the small bank could i'll exist.