The Savannah morning news. (Savannah, Ga.) 1900-current, 1902-06-10
BIG BANK COMBINE.
PROPOSED CONSOLIDATION OF Ma
TIONAL BANKS.

Broadway, n. Y.-PropOses to Have
and Pay Taxes on Only S5,O00,0O0,
but to Have Big Surplus-The
scheme Looks to Be of a Very
Doubtful Character.
Chicago. June "a circular letter.
dated New York, June 5, has been is
sued on the letter heads of the North
American Trust Company and signed
by S. D. Scudder, 1876 Broadway, New
York, giving the details of the plans for
combining national banks in all state
capitals and financial centers under
one ownership. one bank in each center.
At the top of the circular, which is
each banker with whom the company
is negotiating, is the following:
american Bankers Corporation.
Capital $5,000,000, Surplus $45, COO, 900;
Chartered under the Laws of New Jer-
sey, General Corporation Act, $4,000
shares. par value 500. at $1,000 per
share"
The circular dated June says:
Recently the national banking act
has been amended to permit of expan-
sion in this direction by the establish
ment of small banks all over the coun-
try. So that, barring the question Of
taxation, there would seem to be at
first thought little TO prevent the or
ganization of an immense national
bank with this very purpose in view,
provided it were established with
large enough surplus to acquire a suf-
ficient number of banks throughout
the country.
-
taxation, there are no serious obstacles
to the ownership of such banks under
the national banking acts. safer
and more profitable way would be
the formation of a corporation, which
could purchase and control a number
OF national banks. also state banks
and trust companies wherever it
seemed profitable to do so.
To this end such an institution has
been chartered under the General Cor
poration Acts of New Jersey. The only
taxes payable will be the annual one
tenth of one per cent. on its capital
of $4,000 900.
The main Office (nominally Jersey
City, will be only the meeting place
for the stockholders once a year. No
deposits will be accepted by the par
ent organization, which will confine its
operations to the investment of capt.
tai and surplus. Its first purchase will
be large New York city
national bank. In fact. New York
city will be the practical
headquarters, and from there the reg
ulation and transfer of the surplus
balances belonging to the corporations
banks throughout the country will be
carried on. The officers of the New
York City Bank will also be the exec
utiVeS of this CORPORATION"
what the Plan Proposes.
Special Features of the Plan: The
Encouragement of the dangerous meth
cd of paying high interest rates on
demand deposits in it's place a larger
liberality to customers in the exchange
of checks and the cashing of drafts
with bills of lading attached, and other
collection facilities only made possible
by such cooperative branch banking.
Avoidance of unnecessary accumulation
OF balances, when they can be profitably
used in another section. With the ex-
ception, perhaps, of main or center
bank in New York city, only the
bare controlling interest in the out-of-
town banks will be sought, so that the
largest possible number of local stock
holders may share the profits and be
interested in the good will of the va
rious institutions owned by this cor
poration. The aim will be to own in
each state the controlling interest at
least one good bank, which in itself
will have sufficient surplus to enable
the purchase or control of several To-
cal organizations.
THE capital of this corporation, S.
100000, will be entirely invested in
United States and state bonds. Such a
statement verified to the public from
time to time by the parent organiza-
ton, should add to the standing of all
the institutions owned by it.
To Prove General BenefactOr.
1.-THE locations and capitalizatio of
the branch banks will be so arranged
that the various seasons of income
and outgo, depositing seasons and Dor
rowing seasons, East, North, South and
West, will inure to the advantage of
All
1T will be noted that the central
idea is the proposition to utilize to its
fullest extent the large credit of such
an institution, by means of numerous
small capitalizations throughout the
country. The fact that it would not
receive deposits at headquarters, nor
directly or transact banking business,
thus making run on the parent or
ganiZation impossible, would prove OF
great benefit to the various banks own
ed by it. The corporation would simply
stand as the dignified rich owner of
numerous thrifty banks throughout the
United States, ready at all times to
to throw its influence and facilities in
to that section Of the country most
needing them.
Organization quietly and unostenta-
tiously effected will materially aid, not
only in launching such an institution,
but also in securing for it the various
desirable plants throughout the coun-
try.
There is no question these can be
obtained on a sound business basis, to
wit: one that would be of mutual adj
vantage to the old stockholders and the
new investor-this corporation.
(Signed) IS. d. Scudder,
"135 Broadway, New York"