The Montgomery advertiser., 1902-06-13
DAMN IN BIG COMBINE? North American Trust Co.
 PrOmulgateS Plan. SEEKS FOURTH NATIONAL President Berney, However, in
 Ignorance of Deal. Says It Would Greatly Benefit Insti- tuition and Its Patrons-Scheme
 is outgrowth of Branch
 Banking Movement.

A gigantic combination known as the American Bankers Corporation has been quietly organized under the laws of New Jersey which has for its purpose the con trol of one national bank in every finan- cial center and State capital in the Uni ted States Specials sent out from New York names the Fourth National Bank of this citv as member of the combina- tion. Other banks in Alabama named as possible members are the First National of Mobile. the Merchants of Tuscaloosa and the Bank of Tuskegee,
 The combination is being promoted by the North American Trust Company It is capitalized at S. .000. 0o0 with provision for a surplus of s45,00G0O0 The scheme is the outgrowth of the branch banking movement. It is headed by s. D. Scudder a prominent inancier of New York City and Treasurer of the North American Trust Company. A letter outlining the scheme is being sent by the North Amer ican Trust Company to various financiers throughout the countrS, with whom ne-' gotiations are pending.
 As outlined in confidential letter from the trust company to various financiers throughout the country with whom it is negotiating, the plan and arguments ad- vanced in favor of the scheme are:
 Plan of the Promoters.
 The idea of branch banking is not q new one. It 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 permit of expansion in this direction by the es- tablishment of small sized banks. Barr ing the question of taxation. there would
 seem to be little to prevent the organi- zation of an, immense national bank, With this very purpose in view provided 1t were established with large enough sur plus to acquire a sufficient number of | banks throughout the country. There are other serious obstacles to the ownershop of such banks under the same | banking act A safer, and more profitable | plan would be the formation of corpo- ration which could purchase and control i a 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
 l per cent on $5.000,000 capital.
 1 The main office, nominalv in Jersey | City will be only the meeting place for
 stockholders. No deposits will be accept
 ed by the parent institution, which will | confine it's operations to the investment
 of it's capital and surplus: Its first pur-
 National Bank. New York will be the practical headquarters. The officers of the New York bank will also be execu- lives of the corporation.
 New York the Headquarters.
 It will be absolutely necessary to owr
 a national bank in New York City and l other important central points through out the country, because our national
 banking laws compel national banks to
 designate as Repositories only institutions l organized under those laws.
 The special features of the plan will be
 discouragement of the dangerous method
 of paying high interest on deposits. in- | stead will be given larger libsrality to | ia, Af af1f fi l cashing of drafts with bills of lading att
 tached. md avoidance of unnecessary ac- | emulation of balances when they can
 be profitably used in another section. 1 With the exception, perhaps. of the New York Central Bank, onlX- bare con | tr bling interest in other banks will be | sought. The aim will be to own in each State the contrelIinG interest in at least | one good bank, which will have sufficient surplus to permit of purchase of several 1 local organizations. The ownership Of | these institutions vii, be sufficient guar | antee to the depositing public without
 necessitating large and vexatious local | pital and surplus liabilities, the idea
 being that the smaller the capitalization | in proportion to deposits obtainable the
 Investment of Stock.
 The capital stock will be invested in | United States and State bonds. It will | be noted that the central idea is the | proposition to utilize to It's fullest extent l the large credit of such an institution by | means of numerous small capitaliZations throughout the country The fact that | it will not receive deposits at headquar-
 ters or directly transact banking business | would make a run on the parent institu- | ton impossible. Profits will be sufficient 1 to satisfy the most exacting
 Other banks will continue to follow the antiquated system. This network of | banks owned by one corporation would be in position to follow without loss a more profitable method of meeting com