New-York tribune., 1902-06-10
NOW FOR A BANK TRUST.
PLAN TO FORM 4 CHAIN OF
Ma TTONAL BANKS.
ONE BANK IN EACH CITY, HEADQUAR-
TIERS IN NEW-YORK, INCORPORA-
TION IN NEW-JERSEY.

The North American Trust Company Of New
York which is promoting a combination of
banks to include national bank in every fnan-
ciaI centre and State capital, has just issued a
circular explaining in detail the plan of the
movement and the arguments in favor of it, 1t
is IN general as follows:
The idea of branch banking is not new one
1t has not been tried to any great extent in this
country for various reasons, chief of which is
that each State has different banking laws. The
National Banking act has been amended to per
nit of expansion in this direction by the eStao-
Iishment of small sized banks. Barring the
question of taxation. there would seem to be
little to prevent the organization of an immense
national bank, with every purpose In view, pro-
vded it were established with large enough sur
plus to acquire sufficient number of banks
throughout the country.
There other serious obstacles TO the OWN
ership of such banks under the National Bank
ing act A safer and more profitable plan is 70
control number of national banks. also state
banks and trust companies To this end such
an institution has been chartered under New
Jersey laws. The only taxes payable will be the
annual one-tenth of / per cent on S0,OOO,OOo
capital. The main office nominally Jersey CITY
will be only the meeting place for stockholders
No deposits Will be accepted by the parent IN
stitution, which will confine its operations TO
the investment of its capital and surplus its
first purchase will be a large New-fork Clty
national bank New-York will be the practical
headquarters The officers of the New-fOrk
bank will also be executives of the corporation
1t will be absolutely necessary TO own nd-
tional bank in New-York City and other I'M
portant central points throughout the country,
because our national banking laws compel ma
tionaI banks to designate depositaries only
institutions organized under those laws
The special features of the plan viii be dlscouf-
agement of the dangerous method OF paying
high interest on deposits. Instead Will be gwen
larger liberality to customers in exchange OF
checks and cashng of drafts with bills OF lad1ng
attached; avoidance of unnecessary accumulation
of balances when they can be prohtably used IN
another section. With the exception perhaps OF
the New-York Central Bank only bare con-
trolling interest in out of town banks VIII De
sought The aim will be to own in each state
the controlling interest in at least one Sood
bank which will have sufficient surplus 10 per-
nit of purchase of several local organizations
The ownership of these institutions VIII De sur
hcient guarantee to the depOSftinS puphc WIFI
ont necessitating large and Vexatlous local capl-
tai and surplus liabilities the idea De1g that the
smaller the capitalization in proportion TO De
posfts obtainable the larger the profits The
capital stock will be invested in United states
and State bonds. -,
1t will be noted that the central idea Is the
proposition to utilize to its fullest extent the
large credit of such institution by means or
numerous small capitaliZations throughout the
country The fact that IL VIII not receive de-
nosits at Headquarters nor directly transact a
banking business would make run on the
parent institution impossible. Profits Will be
sufficient to satisfy the most eXacting. Otner
hanks will continue to follow the antiquated
svsten This network of banks owned by one
corporation would be in position to follow with
out loss a more profitable method or meeting
commercial exchange demands Organization
orietIy and unostentatiously Will materially a!d
in launching the Institution and In securing the
various desirable Plants Throughout the country