Every evening, Wilmington daily commercial. (Wilmington, Del.) 1878-1928, 1922-09-19


| the establishment Of branches OF ma
tional banks hae been renewed IN
Congress by the introduction by Rep
resentatlye McFa1den, Chairman OF
the House Committee on Banking and
| Currency. Of bill permitting socl
banking expansion. II " % matter OF
popular Interest for two reasons. First
| II represents a curious contest pc
tween local institutional pride ana
the protection Of local profits, and sec
ond. Il represents a struggle BY small
bankers against biz bankers
The principal argument In favor OF
branches for national banks is efiici
ency and service. The principal argn~
ment against such branches is pres
ervation Of local enterprise and i'm.
munlty from the possibility Of money
trust.
What the national banks ask Ia the
legal right TO establish branches IN
any places. Thus, the National CITY
Bank of New York might wish To es-
tablish branch in every city In the
United States and In many small
towns. Under existing law IL cannot
do 80, but II IL could. II would get the
} deposits and the business Of many
more customers than now lt can com
mand. Therefore it's profits would in
crease. Many other large natfona
banks--great financial institutions
known from one end Of the country
10 the othe'--fnight desire TO ezpauy
in the same way. In all probability
they would. II permitted by law TO DE-
go.
They claim That for the law 10 per
, NIT them 10 establish such branches
so that the milk man In Omaha coulC
deal vita a great banking institution
I az readily az John Rockefeller or an
G other New Yorker can. would be ;
E move in the direction Of efficiency
/ Under existing law, a national banl
:. may lend only limited proportion
Of its funds TO one borrower. A maj
n may have big business in a srnal
= town His borrowing requirements ar
l. large. His local bank may not be bi
:. enough to accommodate him. There
n fore, he much do business with a big
- ger bank in a distant city.
3 Increased Loan Facilities.
with local branch Of the big ban
n IN his small town, he could borro'
e just ~ much as though he lived an
~ did business in New York, becaue
r, the business Of the branch would I
m on the same basis as business wit
n the home office. The loan would
1t limited. not TO the capital Of II
m branch but only TO the capital Of Il
Id whole vast system Of parent at
ID branch banks.
"a. l..
re the United States big businesses gel
P. their deposits by messenger long d.
rk tances to other citiee 70 find ban
L. big enough for them to deal with.
en- bank desires TO lend only 70 those vi
ne deposit with f.; therefore, the +
es business in the small city, does n
nd deposit at home but In the pla
b. where there Is a bank big enough
ed handle It's loans.
us The national banks say that the
IN would be a great saving In a bran
bank system because Of a diminish
-, overhead expense. There are 300
q banks Of ali sizes In the United State
-. each with a president. subordinate Q
: ficers and boards of directors. TT
means that each Of the 10000 ban
has an overhead which must be pa
v for by the public. as all profits
any business must, in the final ans
ne ysis. spring from the public. Now,
- there were about 1000 big banks. the
e' would be but 1000 sets OF presider
ne officers and directors and much Of t
as overhead would be saved.
ne There would be perhaps 2s.C
'ed branches so the country would
ne served with the same number
iin banking houses, but these branch
ne merely would have managers and L
lin ers with no expensive overhead.
On the other side of the quests
led the small banks say that It, IS &C
p. trary 10 every tenet of Americana
Ire TO permit any great group TO crt
Led out small competitors, wholly as
ak from the question OF economic waste
OF duplicated overhead expenses. tt
s. insist that II the national banks
EAR permitted TO establish branches.
for small independent banks will be cru
ig- ed out OF business, just as it
are frequently been alleged, small bJ
a nesses in other lines have been cru
the ed out OF existence by great trus
Fear a Banking Trust.
'leE The small banks say that the
X. banks would come 10 towns VIII
hat local, thriving banks were situa
pod and open branches. The superior
lgs duence of the branch of the great .
ood ent bank would ultimately drive
-rm little, local banks out of business. 7
bic. process would result in the q
be banks gradually getting control of
p. whole banking business of the co
ted try, creating money trust WI
low would control credit. A situation VIC
ical be created whereby a small group
and bankers could decide whether or
-ens credit should be extended 10 busir
ne IN any part of the country. The b
ess ness deStinies of millions would
: a in the hands of the few powerful
5o nancial giants at the head of
great banks.
can This. TO be sure. is the sort of pic
,aca which is extremely repugnant TO
Tn American mind and it Is this pic
has which has prevented the establ
NJ ment of branch banks.
80 The controversy is an old one.
has required in years past. Now
Mr.. McFaddens bill brings il
again, it is to be expected that
whole ground will be fought ,
ex,4. -