The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1903-07-29

much as ten and one has twenty-five mil
lion dollars The number of national banks
have decreased from so to as, the smaller
number being due to consultations or
mergers. In 1901 twenty-one national
banks were absorbed with other national
banks. The national banking laws pre-
vent one bank holding stock in another,
but there is nothing to prevent a group of
men from buying a controlling interest in
any number of banks. This method is
exemplified by the groups of institutions
which Mr.. Charles W. Morse has brought
together in several cities 1t has been FOL
lowed, also, by the capitalists who control
the great National City Bank The spheres
OF influence of the Standard Oil interest
the j. Pierpont Morgan interests, the
ownership of bank stock by great life in
surance companies is traced in a manner
to show accurate knowledge 1t is a
history that will be deeply interesting to
all bankers and business men. He says
that the great banks are corporation
banks. We quote:
The largest banks in New York are,
for all practical purposes, corporation
banks. Some of them frankly state that
they do not care for small customers, by
which Is meant depositors whose accounts
average from one to twenty thousand dol
lars; and all of them cultivate principally
the business of the larger corporations and
of ont IF tNxrvY hon he Goo Is
their policy entail certain important re-
suits. 1t is a well-known fact that de-
posits of a small or moderate size are
more stable than millionaire" accounts,
which are likely to be drawn down very
rapidly when money is high. Only short
time ago one of the big banks was mott
fed, an hour before closing for the day
that check for IS 000, 900 had been drawn
against large account. With "a little
skirmishing,' so a reliable financial paper
states, 1.-THE situation was met in a few
minutes" but the incident illustrates the
conditions under which the operations of
such institutions must be conducted The
same tendencies exist also in the case of
the deposits by country banks. At the
approach of anything resembling a panic
these are withdrawn with great rapidity;
so that they have been justly called the
explosive element" of our banking sys
TEN. 1t is evident, therefore, that more
than ordinary conservatism will be re-
quired if the largest banks are to exercise
a steadying influence in times of actual
or impending danger
The further claim III advocacy of con-
centraAion of banks is made that our
larger banking institutions will contribute
to- the stability of financial conditions,
and it is said that "a plan of harmonious
cooperation has been developed which will
materially diminish the injury produced
by the next industrial crisis. In this di-
rection our independent banks, each com
PEELED to seek its own safety in times of
impending danger, have not possessed the
strength which unified banking system
would exhibit" Mr.. Bullock thinks the
merging will do something to mitigate
the severity of future pancs, but his ar
ticle was written before the recent severe
slump in Wall Street. If the larger banks
were able to mitigate the severity" of
bad times in Wall Street they did not do
so. On the contrary there was current talk
that the chief owners of these institutions
were engaged in war one upon the other,
and other reports represented them as
making money by aiding in the downward |
tendency. The temptation to do this with |
giant institutions is very great, ard when |
the desire to make big money quick con- |
trolls them the whole business world is en-
dangered. This cannot be true with many /
smaller and independent banks.
The danger of Money Trust" by con
oentration of banks is considered. The /
writer mInimizes these dangers. He adds:
THE joint control of numerous banks will |
probably lead to what will amount v2r-
tually to the growth of branch banking
And therein lies the chief danger of the
though Mr.. Bullock thinks
it would prove successful. OF course it
would prove successful to the giant in
financial concerns In the country. Would
their success be as great blessing as are
the present Independent banks scattered
all over the country? Several banking as
,ociations In the Northwest, seeing the
tendency toward Capitalization in ma
ional banks, have vigorously protested
against the suggestion that national banks
DE- permitted to establish branches in diff
erent portions of the country. The in
dependent smaller national and State
banks need to heed Prof Bullocks con-
clusion. to-wit: ''the joint control OF
numerous banks will probably lead to
: hat will amount virtually to the growth
Of branch banks" A leading North Caro-
ina banker. of long and successful ex-
Derience, said few days ago: "The New
York banks, with their immense capital,
Will dominate the financial institutions of
all the States if they are permitted to
ISSUE asset currency and establish branch
banks. Ii these two concessions are made,
7 - IN Do iuh