The Birmingham age-herald., 1916-02-21
Would Allow National Banks to Have Branches
 in Their Own Cities
QUESTION UP AT
 TIME OF PASSAGE
Was Feared That Plan Might Allow Too Much Generalization by Few of the Stronger
 Banks
By HOLLAND

By HOLLAND
 New York, February 2O.-(Special.) ) Among the recommendations made by the federal reserve board to Congress which, if adopted, will amend the federal reserve act, is one which has caused comment among the bankers of this city. The federal reserve board recommends that the act be so amended as to permit na- tional banks to establish branch offices within the city or county in which they are located. Branch offices" is presumed to be synonymous in meaning with branch bank" For many years the feel ing has prevailed among bankers that it would be a good thing if they were per- mitted by law to establish branch insti- tutions. As they were not so permitted, some of the bankers worked out a plan by means of which they were able to secure institutions which were branches in fact if not in name This was done by purchasing controlling interests by the stockholders or executive officers of one bank in one or more other banks. Sometimes the officers or some of the stockholders of national banks in New York in this way secured substantial con- trol of several other banks.
 Presumably, it was one of the purposes of the Clayton law to put an end to such relations between one bank and others as would make possible all the conveniences and advantages of branch bank owner ship.
 Early in January, the directorates of some of the national banks of New York Wpro rOnSi6pra hly 70 "a withdrawal of those who heretofore had been directors in two or more banks and the election of new directors who were free from any other bank associate This was done so that there might be compliance with the Clayton law
 One of the first suggestions made by bankers of this city who read the recom- mendation of the federal reserve board which, if adopted, permits the establish ment of branch banks was this Take the case, it was said, of the National City bank and the Bank of Commorce One of these is the largest of American banks and the seventh largest in the world The other stands near the head in the list of great banks in New York The rela- tions between these two banks has been very intimate. They have been represent ed by directors who served in the boards .of both banks. The Clayton law makes a relation of that kind illegal And yet If Congress accepts the recommendation made by the federal reserve board it could be possible for the City bank to secure control of the Bank of Commerce and after that was done establish it as a branch bank The probability is that this would not be done. But bankers have been asking the question among them selves: Could it be done should Con- gress adopt the recommendation of the federal reserve board?
 FIRST NATIONAL AND CHASE
 The First National bank and the Chase National are numbered among the largest of New York banks. Heretofore their relations have been intimate, and they have many interests in common. They have been represented in their boards of directors by the same men. Would it be possible, bankers ask, if branch banks be permitted by law for the First Ma tional to buy control of the Chase Ma tional, and then subordinate it to the position of branch bank? If that could be done, would not the Clayton law be annulled by this legislature, so far as the provision which prohibits the same men from serving on two or three more banks is concerned?
 Bankers are speaking of a bill which was introduced in Congress at about the time that the federal reserve board made it's recommendations. They say that, so far as they know. this bill was not the proposition of any banker. If they un- derstand the bill it would, if it should become law, permit the same executive officers, managers and clerical force as- sociated with one bank in city of the first class also in like manner to be as- socfated with another bank provided the federal reserve board finds that these two banks are noncompetitive. Should this bill become a law. it would serve also to annul one of the provisions of the Clayton bill.
 Cautiously wonder is expressed whether there is not at this time some effort under way by means of which certain of the banking features of the Clayton law may be annulled.
 The recommendations of the federal re-