The Rock Island Argus and daily union. (Rock Island, Ill.) 1920-1923, 1922-09-18
Frederick Haskin' 5 Letter
BRANcHES>FO NATIONAL BANKS

ly aside from the question Of en-.
homie wastage of duplicated oys,-
head expenses. They insist that :
the national banks are permsttsi
to establish branches, the sinai,
Independent banks will be cru,h.t
out Of business, just as it has ~
quently been alleged small hrsL
nesses in other lines have ~.
crushed out Of existence by ersss
trusts
Fear . Banking Trust,
The small banks say that the N.
banks would come to towns vhsrs
local, thriving banks were situAtss
and open branches. The superics
influence Of the branch OF the rre,.
parent bank would ultimately drivs
the little local banks out Of bus
ness. This process would result !,
the great banks gradually gettin,
control Of the whole banking bps'
mess Of the country, creating
money trust which would confirm,
credit. A situation would be Graz.
ted whereby a small group Of bant.
ers could decide whether or M,
credit should be extended to bust.
ness in any part Of the country
The business destinies Of millions
would be in the hands Of the few
powerful financial giants at Tho
head Of the great banks.
This, to be sure, is the sort Of
picture which is extremely repur.
! nant to the American mind and il
is this picture which has prevented
the establishment, of branch banks
The controversy is an old one
It has required in years past. Nov
that Mr.. McFadden's bill Is IN
again, it is to be expected that tia
whole ground will be fought over
again and 1t is not at all unlikeiy
that the issue will be the sams a
it has been in the past: the little
banks will beat the big banks and
the branches will not be author.
| lied.
There is one existing method BY
which, under the law. a national
bank may acquire branches. Stats
chartered 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 branch
es. 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 III.
stitution. In this manner the Chat
ham & Phoenix National Bank Of
New York purchased outright the
entire property of the Century
Trust company. The latter, oper-
ating as 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 es-
tablish branches directly.
Savings banks are state chartsf-
ed institutions. These may have
branches and may be purchased In
the same manner. A recent exam
pie is the purchase by Riggs Ma
tional Bank of Washington Of the
Hamilton Savings bank, an institu.
ton which had branches scattered
about the District of Columbia
These are now branches Of tn
Rippc National hank
In Europe, branch banks are the
rule, rather than the exception
Vast institutions like Barclays
bank, PARIS bank, or the London
Joint City & Midland bank. all In
England; the Credit Lyonnaise in
France; the Deutsche bank in Ger.
many, and others in other coun-
tries have literally hundreds Of
branches, not only in their own
countries but in other countries
American banks of either national
or state charter may. under certain
restrictions, have branches abroad
Not many do so, but there are sone
examples. The most notable is tda,
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 proba-
: BILE that the great banks will be
permitted to extend as the foreign
banks have done. tn is, however
considered possible that national
> bank will be permitted. under cer'
tain restrictions. to establish
:. branches within its Own city.