The Washington times., 1924-05-17
BRANCH BANK
MOVEMENT
SPREADS
Survey Shows Seventeen
Leading States Are in Favor
Of System

While the Federal reserve board
- conducting it's critical study of
branch banking in the United
States preliminary survey dis.
closes the spread OF the movement
IN seventeen States. viz, in Arr.
yona, California, Delaware, Georgia.
louisiana; Maine. Maryland, Mas.
eachusetts, Michigan, Mississippi
New York, North Carolina, Ohio.
Rhode Island, South Carolina. Ten.
nessee and Virginia. according to q
survey made by the Alexander
Hamilton Institute.
Detroit Has zoo.
The movement has been carried
% such an extent as to be inter.
preted officially as "a definite
trendp in business and banking
conditions in America. "a
In California SO of the State
banks. according to the survey.
operate about Ats branches. One
pank there operates % branches.
smother IS; another II, functioning
"a % cities; another "a. In Michi-
ian more than 800 branches are
conducted by State banks. OF
these 200 are in Detroit, run by IA
s3anks. The report emphasizes that
70 Detroit only three national
penks are left in operation" In
New York State there are 251
pranch banks. Figures thus far
presented. for the entire field show
mat pit State banking institutions
me United States operate 1.GT5
In some Of the seventeen States.
branches are restricted to- the par
ent city. Others permit branch
banks to be established anywhere in
the State. It is this Statewide
activity that has particularly chal-
lenged the attention Of the Comp
troller OF the Currency who says
that the issue before Congress and
the country at this moment il "a
clean cut one as to whether the
country prefers system of private
" owned branch banks or a reserve
system under Federal control"
In his testimony before the
House Committee on Banking and
Currency. the comptroller said in
regard to the competition between
national and State banking systems:
sThe situation is particularly acute
IN New York city, Los Angeles and
San Francisco, The acute stage
has been passed 1 in. three other
cities as the national banks have al
ready been relegated to secondary
position IN them. refer to- Cleve-
land and Detroit, cities Of over
l,000.000 population, each OF which
has only three national banks, and
to New Orleans, which has only
one. 7.
McFadden Bill UAged.
Analysing this. the Comptroller
contends that the development Of
the American banking system has
been an evolution. not the adoption
forthwith Of some. new or alien
plan, and that under the system
as 1t now stands, there has been
the most rapid and at the same
time the most stable economic de-
velopInent the world has known.
uuly controlled, there is no mate
rial divergence of interests between
State and national banks. There is,
IN fact, a certain analogy between
the Federal system with Its twelve
regional branches, and the branch
banking in the States, although the
Federal system is based upon the
principles which underIie the Amer.
lean Government; 'being founded
upon. a system Of checks and,
balances calculated to preserve To-
cal independence under centralized
and co-ordinating control
from this point of view the Nc.
Eadden bill is championed even nv
the opponents Of unlimited ba IL
branches because the measure wouId
grant some branch banking. con.
lining the branches to the oarent
city and bringing the two systerna
under Government control
1t would be distinctly a stan
backward and a manifest dlnrer.
Gus proceeding to destroy the req.
ulated cooperation Of banking "a.
cilittes," the comptroller saws. the
question which America is NOW
called upon to solve and which II
will solve being, whether the 70.
serve control Of banking should he
accomplished by Federal ,co.ordina.
ticn or private Capitalization.
Branch Banking Abroad.
The United States Government in
us current study of branch banking
abroad Is aided by luminous reports
on the Canadian and other systems.
CITATION OF earlier history of the
United States reminds the invests.
gators that many Of the practices
OF these branch banking svstens
were found excellent in the Tinted
states In the first half of the nine.
teenth century and that but for the
civil war what is now known a.
the Canadian system would he
everywhere known as the American
system. S''-
!. In 1910, when the report nm
''the Canadian banking system" was
prepared under the auspices OF tine
United States (Senate) Monetary
commission, there were between
thirty and thirty.five banks in the
Dominion, with many branches. n
was then pointed out that az the
tendency In Canadian banking. as in
al forms OF business activity. was
Enthusiastically toward still greater
combination, It would not be sur.
Prising II within decade Canada
mad fewer banks, instead of more.
That forecast has been verified.
d. Recent amalgamations have re-.
ouced the number of banks in Can.
eda to fourteen, operating about
1000 branches. The Comptroller 81
currency quotes figures from the
american Institute Of Banking for
1878 showing that England has
twenty large banks with 7,9Oc
branches. Eighty years ago in Eng
land there were upwards of 400
banks. compared with these twenty
\. Five Of the twenty banks in Eng.
iand are said to control the nations