Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-09-19
The HQskin Letter . s1 pssss1
BRANCHES FOR NATIONAL BANKS

duplicated overhead expenses. They
insist that if the national banks are
permitted to establish branches. the
small, independent banks will be
crushed out of business, just as it has
frequently been alleged, small business
es in other lines have been crushed
out of existence by great trusts.
Fear a Banking Trust
The small banks say that the big
local, thriving banks were situated
and open branches. The superior in
fluence of the branch of the great
parent bank would ultimately drive the
little, local banks out of business. This
process would result in the great
banks gradually getting control of the
whole banking business of the country,
creating a none trust which would
control credit. A situation would be
created whereby a small group of
bankers could decide whether or not
credit should be extended to business
in any part of the country. The bust
ness destinies of millions would be
in the hands of the few powerful fin
ancial giants at the head of the great
banks.
This, to be sure, is the sort of
picture which is extremely repugnant
" II III INoh III oAo II 10 IhIS
picture which has prevented the es-
Enlistment. of branch banks.
The controversy is an old one. 1t
has required in years past. Now that
Mr.. McFadden's bill brings it up again,
it is to be expected that the whole
ground will be fought over again and
it is not at all unlikely that the is
sue will be the same as it has been
in the past; the little banks will beat
the big banks and the branches will
not be authorized.
There is one existing method by
which, under the law, a national bank
may acquire branches. State charter
ed banks may have branches within the
states in which they are located. A
national bank may buy outright a trust
company or state chartered bank
which has branches. 1t may continue
to operate these branches which thus
become. in fact. no longer branches of
the old trust company or state bank,
but branches of the national bank
which has acquired the whole instl-
tuition. In this manner the Chatham
and Phoenix National Bank of New
York purchased outright the entire
property of the Century Turst COM
pany. The latter. operating as a trust
company, had a dozen branches. When
taken over By the big national bank,
the branches had to come along into
the bargain. But no national bank
can set out Independently and establish
branches directly.
Savings banks are state chartered
institutions. These may have branch
es and may be purchased in the same
manner. A recent example is the
purchase by Riggs National Bank of
Washington of the Hamilton Savings
bank, an institution which had branch
es scattered about the District of
Columbia. These now are branches of
the Riggs National bank.
In Europe. branch banks are the
rule, rather than the exception. Vast
institutions like Barclays bank. PARIS
bank. or the London Joint City and
Midland bank. all in England; the
Credit Lyonnaise in France; the Deut-
sche bank of Germany and others in
other countries have literally hundreds
Of branches. not only in their own
countries but in other counties. Ameri-
can banks of either national or state
charter may, under certain %restric-
| tons, have branches abroad. Not
many do so. but there are some ex-
amples. The most notable is that of
the National City bank of New York
which has branches in all parts of the
world.
The branch bank struggle is likely to
be renewed every few years, but it
does not seem probable that the great
banks will e permitted TO extend as
the foreign banks have done. 1t is,
however, considered possible that a
national bank will be permitted, IN
der certain restrictions, to establish
branches within it's own city.