Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1915-04-05
PLANS TO ADMIT STATE BANK
tJulson G. Wciiiver. In Washington TimcsD

The Federal Reserve Board is com
pleting rs preparations to issue. in the
next few days. statement OF the reg
dlations ana conditions under which
state banks and trust companies mag
become members OF the Federal re-
serve system.
1t would be far from the facts to say
thai the Reserve Board is going TO open
campaign III the effort To bring in
the state banks. Rather, it is con-
cerncd to make perfectly clear that it
Is not campaigning AT all. 1t ~, ho~-
ever determined TO extend TO national
banks as liberal a grant OF powers aud
authority as may be necessary TO in
sure that they shall not be placed at
an actual disadvantage in competit
with State institutions
When the reserve law was pending in
Congress there were many threats that
IL IL passed national banks would re f.
organize under state laws surrender
their charters, and become state insti-
tutions. 1t is noteworthy, therefore,
that not single national bank has
done this for the purpose OF escaping
from the conditions of tho reserve act
There have been 4 few rcorganizations
OF national into state banks. but these
arc always happening: and in no case
has such change been made because
OF objection 10 the reserve act
ON the other hand. a statement given
out only to-day shows that national
banks arc decidedly gaining on The
State institutions. in the first fifteen
months of the reserve acts operation
the comptroIlcrs office has chartered
30 national banks. OF which lo7 were
conversions of State banks or trust
companies.
For NATIONAL Charters.
During the corresponding period. ar
teen months. Immediately preceding the
taking effect OF the reserve act, char
q al h.n a
and only forty-two Of these We're con
versions of State into national institu-
lions. II would appear. therefore. that
the tendency is decidedly for the State
institution to take national bank char
ters, rather than for the national banks
to surrender Federal and rcorEaniLe
under state charters
Much interest is displayed in fnan-
cial circles in the response that State
banks and trust companies will make
when the proposed regulations, for their
conversion, are made public. There is
pretty sharp competition between the
state and national forms or oreaniza-
ton in some States. The States have
been liberal with their institutions,
granting them in some cases very wide
powers. National banks have had a
more restricted field of investment than
the State institutions: could not act as
trustees, executors, administrators reg
istrars, and the like: and were subject
10 the national supervision, eNamina :
ton, and publication of statements.
which are more rigid than In most OF
the states. The national banks in
short have been expected to confne
themselves to the functions OF CONNER
cial institutions. dealing in short-tine
commercial paper.
Restriction of Field.
But State Institutions have for many
years been invading this field; in other
words. they have been entering upon
the special field of the national banks,
while the national institutions could
not retaliate by invading the special
preserves Of the State establishments.
This restriction of the national banks
field has resulted in such Il develop
ment of State banking that, although
State institutions have not, and ma
tional institutions have. the power OF
issue, there are nevertheless about
twice as many State as national insti-
tutions in the country. The average
capital of national institutions is. how
ever. larger than that OF the State
banks.
Not in any wise as a retaliatory
measure. but because it is the obvious