Evening star., 1924-11-09
McFodden Banking Measure
Looms Before Next Congress
Il. B. Il. Far0rs Amendment on Branch
Bank Rule-Fauors Present Offices,
But Opposes Further Expansion.

confined to its present limits. two i'm
portant amendments were proposed to
sections 8 and 9 of the McFadden bill.
These amendments have been accepted
by the author of the original measure
and others in Washington who were
active in creating favorable sentiment
for the bill as introduced.
The exact wording of the amend
ments having been submitted to this
convention, and a clear and concise ex-
planation of their several commend
able features given. il is, therefore,
the sense OF this, the fiftieth, annual
convention of the American Bankers
Association. that the amended McFad-
den bill should be enacted in its pres
ent form at the earliest moment"
In the plainest of English the
amendments mean that where the
laws of State permit banks and
trust companies to operate branches
the national banks are to be given
the same rights-in the city where
the home Office is located
Nothing in the amendments shall
be understood to in any way author
ize the establishment Of branches of
national banks in foreign cities or
insular dependencies Of the United
States
An amendment to the Federal Re-
serve act is also suggested which
would debar the admission to the
system OF any State banking institu-
ton that operated branches outside
or its own home city, without first
divesting itself OF the said branches.
NO national banks in States that
are silent in the matter Of permitting
State banks and trust companies from
operating branches may operate a
branch, and banks may not Join the
Federal Reserve system if operating
branches at the time this act is
pa ssed.
A Limitation of one branch is pro-
vided for in municipalities of $4,000
and not over $4,000 and not more
than two branches where the popu-
lation is less than $4,000 and not
over 100000.
The term branch" is held to in
clude any branch bank. branch office;
branch agency, additional office or
any branch place of business located
in any State or territory or the Dis
trict of Columbia
Reconciles All Gruups.
A. b. A. officials consider that this
action has reconciled all groups on
this perplexing problem.
1t is certainly to be hoped that the
careful consideration given to the
and the solution reached may be ac-
oepted as the best way out of a
problem that admittedly had two
sides.
Out of a perplexing situation
created by the establishment Of
branches by State banks and trust
companies and aided by the automo-
pile crush that makes Offices out
SIDE or the restricted districts de-
sirabla
But it would seem nothing more
than ioelc' simple and plain, to con-
tend that If a State bank can oper-
ate branches in a city, national banks
should be allowed the same privilege
me McFadden bill itself removes
one other restriction from the oper-
alton OF national banks. AS the law
STANDS today, national banks may not
loan money on real estate security
Tor more than one year, hence nom
competition with State banks and
trust companies in the real estate
held. And right now with money
plentlrul and demand light, real
estate would offer banks an excellent
return on investments.
representative McFadden proposes
that national banks may loan on real
estate security for five years
Naturally national banks doing the
commercial business Of the country
to a very large extent, should not tie
up any large amount Of funds in real
estate, hquidity Of assets being urgently
required.
Government bonds, high grade mu-
nicipals and Liberties with other Gov
ernment securities are recognized as
better for national institutions than
realty.
Record of States on Branches.
Judge Patton, counsel of the A. B. A.,
and one of the ablest and most capa-
BILE OF advisers, has completed a sum-
mary of the position Of the 4S States
in the Union on branch banking.
Eight States permit Statewide
branch banking; five restrict as to
locality; In two. branches are per-
mitted without express authority; in