Mohave County miner and our mineral wealth., 1922-10-27
|DAbSON, stst;.t;c;sn F4mGcs ID on Business Conditions

lneFe Has UtSH iiucii NSSueS'oi iS
 ga-ding branch banks at the annual convention of the/American Bankers
 Association which was held last week
 in New York. Owing to the contro-
 versy which this discussing has de- veloped, Roger w. Babson was today
 interviewed regarding the probable
 outcome.
 "Of course the discussion is the nat
 ural outgrowth of the establishment
 of the Federal Reserve Banks. Be-
 fore the days of the Federal Reserve
 system," says MT. Babson, "a branch
 bank organization practically existed, ! falthough it was an unconscious and invisible organization. For instance
 the small bank in Indiana took orders
 from it's correspondent bank in In
 dianapolis; and the Indianapolis bank
 took it sorders from still bigger bank in New York. The heads of a few of the New York banks would hold conference at the home of the late J. Pierpont Morgan or at the home of MT. Baker of the First Ma
 tional Bank, and decide upon a policy.
 This policy they would pass along to
 the large banks of Boston, Chicago,
 Philadelphia, Indianapolis, St. Louis,
 New Orleans, and other large cities.
 The banks in these large cities would
 in turn pass the same policy on to
 the small banks in their districts.
 There were no contracts or stock con-
 trol existing between the banks, but
 there was an invisible control which
 was very powerful. With the of the
 Federal Reserve Banks, the clearance
 of checks at par, and the legislation against interlocking directorates, this
 control was given tremendous jolt.
 No longer is it, much of an object for a country bank to keep deposit with
 the large city bank. Thus there has
 been a gradual drifting away on the part of the country banks from the city banks. The large cities have be- come more independent of New York; and the country banks have become more independent of the large cities. As long as the money rates were high, this did not worry the city banks, but during the past year, when money rates have been declining, the large city banks have distinctly felt the loss of thei rformer power. Hence, they are looking around for some plan to get their country following back again.
 There is no hope of breaking up ,the Federal Reserve system which is functioning very satisfactorily. The men connected with the Federal Re- serve Banks are active and ambitious. They are building permanent and sub- stantial banking houses and are ac- cumulating great resources. They are issuing reports and other publi- cations which appeal greatly to the country banks. The larger city banks are distinctly worried about this and are looking for some other means for recouping their prestige. They first turned their attention to Foreign Trade organizations. Foreign Trade was the key note at the American Bankers Convention two years ago. The foreign trade business, however, has not banned out as well as the banks had hoped it would, and our recent tariff has given almost death blow to what little new foreign trade we had. Thus, the banks hopes in this regard are not very sanguine at the moment. Another attempt has shown itself in the organization of Investments companies and separate 'Acceptance' companies. These have been organized by many of the ltrger banks and most of them are operating successfully. Banks are finding these Investment companies more profitable at the moment than their foreign trade adventure. The banks are gradually coming to the opinion, however, that they can re- cover their influence with the country districts only with organization of branch banks. Hence, there is drive at present to have the National Bank Laws amended so that city bank can I own system of branch banks in the cities and towns. Wheth- CT or not this is in line with Democ- racy, is a very debatic question; but the drive is on and my guess is that such branch banks are as inevitable as the chain store.
 "All the banking systems of Europe are developed on the branch bank idea. The big banks of England, France, and Germany have their branches in hundreds of cities and towns. One of the finest branch sys- tems in the world exists in Canada, just over the United States line. In Montreal there are several big banks, and each of these have from one hun fred to three hundred branches in iif" ferent Canadian cities and towns. As stated, I doubt seriously whether the branch bank system is 6