The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1924-04-19
DIR. CR|SS|NGER.
URG|iESI.BR|.ANCH
BANKS
Reserve Board Officials Take
Issue With Dawes Before
House Banking Committee.
By HARRY GUSACK.

~ u NlVAAptAOhSL "a, tAC SuLACACy
Dawes in regard to branch banking
was voiced before the House Com
mittee on Banking and, Currency
yesterday by D. R. Crissinger, gov.
ernor of the Federal Reserve board,
and former Comptroller of the Cur.
rency, and Edmund Plat, vice gov.
iernor Of the board.
= They opposed a provision of the
pending .McFadden bill revising the
national bank act which attempts
TO curb branch banking of State as
well as national banks through an
amendment to the Federal Reserve
act. ~
National banks ought to have
the same rights to establish
branches as State banks and trust
companies provided no branches are
established outside q municipality
without the consent of the Comp
troller of the Currency" said Mr..
Crassinger. ssYou may expect many
OF the big national banks to leave
the national banking system unless
something is done to put them on
an equality with the State banks.
have always been more or less
opposed to Statewide branch bank
ing, but it would be very helpful
20 permit national banks to have
city-wide branches"
Takes Issue With Dawes.
y Governor Plat took issue with
the statements of Comptroller of the
Currency Dawes, declaringI that
there is not an economist In the
country who would agree with the
latter's arguments He pointed out
That some 1922 Independent banks
ialied between January / and April
II, OF this year, more than two
tnlrds or them having, a capital Of
less than $4,000, and more than
Seven-elghths having a capital Of
less than. 500, OOO.,
With failures still running at the
rate of nearly 100. a month"; an. I'm.
YreJudtced outsider might be par.
ooned for thinking that unit bank.
ing rather than branch banking is
at present in most need Of defense,
he said.
The Comptroller bases his arsr.
ments on two assumptions, both
oemonStrably erroneous. He as.
Sumes first, that branch banking
In this country is wholly a big city
lroposition--that the banks in the
big cities will establish branches
throughout each, State it, allowed to
do so-and, second, that country
tranche banking that is branch
banking outside of the big cities,
Is 'fostered and protected by the
Federal Reserve system.
'The first of these assumptions
the Comptroller partly discredits
himself in his statement that he has
never yet discovered a big banker
Who wished to extend his institution
beyond city limits. 1 think that is
true of the big bankers in Chicago
and in most of the great cities of the
East. They already do national
business receiving deposits from
and making loans to large CONNER.
cial and manufacturing institutions
throughout the country, without
branches. Furthermore they receive
deposits from, make loans to, and
exercise a certain amount of control
over, thousands, of small banks all
over the country.
as Says Dawes Errs.
1T is doubtful if they would gain
enough more to compensate them
for the added responsibility if they
were to extend their limits. But the
error Of the Comptroller's assump-
ton is fully demonstrated, not by
conjectures or by the statements of
big bankers, but by the facts of the
development of branch banking in
the States which have permitted it.
- Although the laws of California
have provided distinctly for State
wide branch banking since 1909, only
one institution has really spread its
branches throughout the State, one
other has branches covering about
One-third of the State, and two others
cover territory that is hardly more
than suburban of contiguous. The
overwhelming majority of the insti-
tutions engaging in branch banking
in California are country banks, not
located in any of the larger cities.
THE restrictive amendments to
the Federal reserve act are, it seems
to me, unfair, as they overthrow
the guarantees under which the
larger California State banks and
many State banks elsewhere were
persuaded to join the reserve sys-
tenn. We were willing enough to in
vite them in and offer them the
guarantee Of their charter rights
when their funds were sorely
needed, but now that the seas are
smooth we propose to repeal the
guarantees so far as branch bank
ing is concerned. d..
FavOrs Branch Banking.
ut not only seems to me unfair,
but from every point Of view un.
wise. Every economist favors
branch banking as affording the
best and safest means Of extending
banking accommodations to agricul-
tural sections and small com.
munities.
d Most Of the Comptrollers of the
Currency have recommended branch
banking in some form, and nearly
all Of them have recognized its
superiority either as a general
proposition or under certain condi.
tons to unit banking.
I'm conclusion, l wish to say that
the Federal Reserve Board has di-
rected its division of analysis and
research to make complete study
and. survey Of branch banking in
this country, and with some refer.
ence also to conditions in other
countries. The board has also re-
Gently adopted regulations dealing
with branch banking, q copy OF
which I present for the record. I
submit that these regulat'ons Will
take care Of the matter adequately
and make unnecessary the amend.
ments to the Federal reserve act
contained in the bill"