The Birmingham age-herald., 1915-06-16

in his argument that there was no ob- iection 10 the size of any corporation pro- vided it's growth was from inside so to speak. not obtained through the purchase and combination of other organizations. But with the exception of National City hank there is no great banking institution which has not increased strength and re- sources through purchase of other banks ana the absorption of them.
 The Broadway Trust company grew In a night almost. Furthermore it's offices are established not in the financial district hui beyond the outskirts of that district, for they in fact face the city hall of New York city. The institution is in affiliation mot in name but in fact-with one of the great national banks, for to con siderable extent the same interest controls beth.
 The institution since it's organiza- ton has been identified with one Of the great mercantile houses of the country which has gained large re- sources and income of millions by the establishment throughout the country and in other parts of the world of retail shops in which articles costing not more than 10 cents apiece were sold. Now it may be to the special ad vantage of an institution thus affil- lated with very large mercantile house and one. too. whose business reaches all over the United States. to become associated with the federal reserve system. Any banker can see how such membership might be of particular advantage to an institution of this kind. In fact. Frederick K Lee has spoken with enthusiasm of the ad- vantages not only for his own institu- ton. but for other state chartered institutions, which the federal reserve sy stem offers.
 
 at the head of the list of great state banks which become members of the federal reserve system. Anything that he may say is heard or read by other bankers with respect, for he has gained high reputation in his comparatively brief service president of a large bank. President Lee believes that possibly the public and, 1t may be not many of the sate bankers fully realize privilege which is one of the chief features of the federal reserve Is.
 There are bankers from other parts of the country who are officers of state chartered institutions who agree with President Lee. and reports have recently come to this city from Cali fonia that some of the largest Of the state banks upon the Pacific coast are likely speedily to be numbered in the federal reserve membership.
 With MT. Lee is associated as mem Der of the same banking family. Leslie F. Pierson, who. although only 45 years of age gained before he retired some three years ago. from the presidency Of one of the leading national banks of New York, a high reputation T banker. Young as he was, MT. Pierson built up an institution which in its early wears was chiefly occupied with banking business for customers WI ose vacations were in the lower dry goods and commission house district. His hank at one time had the reputation Of carrying a larger line of discount sor these merchants than any othei bank in the country.
 When F. w. Woolworth deemed 1t ex- pedient to become affiliated with impor- tant banking interests he did not wait long before associating himself with MT, Pierson It has always been the presump- ton that it was due to MT Pierson's skill that the considerable combinations which made the oraaniza tion of the Broadway Trust company possible were effected. Great merchants, however are able some times to tempt great bankers from their desks and 1t was one of the great mer- cantile houses of New York whose of ficers had become familiar with MT. Pier sons banking methods and whose house was one of his bank customers which of fered him, according to a common report, a salary equal to that which Charles M. Schwab received when he became presi- dent of the United States Steel corpora tion. Whether the figures are accurate or not, 1t is. however, the common un- derstanding that Mr. Pierson, as pres- dent of this mercantile house, receives larger salary than any other chief ex- ecutive does who is employed in the mer- .oantlle business.
 He retained, however, his interest and Influence in the bank and also in the Broadway Trust company. He is chair man of the finance committee of his bank, and it is assumed that the trust com pany would not have made application for membership to the federal reserve system had not MT. Person strongly ad- vised action of that kind.
 This decision. however, seems nut to have immediately influenced any of the other state chartered institutions. It now seems likely that a long time will have elapsed before state chartered institu- tions come in any considera be numbers into federal reserve membership. notwith- standing the fact that the advantages are recognized.
 It is more likely that the other state institutions will wait until they can form a good Judgment respecting the effect upon the Broadway Trust company of it's membership in the federal reserve sys- tenn. Nevertheless. 1t is an opinion com. monly held here that ultimately, possibly after the federal reserve system has been modified or perfected. majority of the state institutions In all the states will