Evening star., 1924-05-11

spending changes in the reserve act.
Speaking recently before an audi
ence of bankers in support and ex-
planation of his bill, Representative
McFadden had this to say:
I'VE have tried to modernize the
act so that members of the banking
fraternity can do things they are not
now permitted to do but are doing
by way of subterfuge.
I'VE have provided for the consoli-
dation directly of state banks and
national banks. Heretofore possible
only in a roundabount way.
Also for indeterminate charter
rights which will permit national
banks to have the right to act in
fiduciary capacity. and for long time
pass a bill giving perpetual rights,
but the ninety nine-year charter
rights still prevail.
I'VE have also provided in this bill
that national banks, the same as
business concerns, have the right to
increase their capital by stock
dividonds. They have had to do this
in a roundabout way.
Then we have clarified section
$500 of the revised statutes as to
loans, etc.
Some Difficulties Overcome.
We have ironed out some of the
difficulties in regard to cotton loans.
We have broadened this to give relief
to the southern banks, if needed
We have solved that which many
banks have been calling for. the
question of certification of checks.
The law provides that all the entries
in mans account must be complete
before you can certify a check. We
provide now that so long as the
money is in the bank the officer has
a perfect right to certify.
we have provided, again in re-
sponse to strong demand. that
banks can own stock to a limited
extent in safety deposit companies.
Get rid of some responsibility and
better organize the safety deposit
business.
Also that where bank examiners
go wrong through violations of the
law, action can be brought against
them in United States courts.
There has been a pretty general
demand cor amendment in the sec
tion relating to real estate loans. The
demand has come particularly from
Ohio and other central states for an
increase in the loan limit to 60 per
cent of the value of the property.
We have left that as il is now in
the law, which permits loans of so
per cent and one-third OF the time
deposits or so per cent of the capital
and surplus as the bank may desire.
But we permit loans on such prop
erty for a period OF five years up to
a so per cent value OF the property.
Problem of Branch Banking.
The vexatious problem of branch
banking has been pending before the
committee for ten years, but no sat
isfa ctory solution has ever been pos
sible up to this time. We feel now
that we have a recommendation on
this subject wherein we arrive at d
proper basis of dealing with it.
we realize that under the particu-
lar authority of the laws of many
states that branch banking has gone
ahead by leps and bounds. Those en-
gagged in il insist that II has been in
response to a public demand and the
necessity of the situation brought
about the development.
In New York this branch banking
started by one. had to be met by all
the other banks if they wanted to
hold their business. The idea of
branch banking started in New York.
vas rapidly followed by others, and
in California they entered into state
wide branch banking. A few states
do permit this.
In the legislation which we have
recommended we have tried to deal
fairly with this situation. The great
majority of the committee is opposed
to branch banking. In this bill, how
ever We have, I think, successfully
distinguished between the branch
oank, which the banks and bankers
ing it to within the limits of the
home city.
Comment on Restrictions.
We recognize that in cities. If con-
fined there. it is not the kind OF
branch banking that the people of
the country are fearful of.
THE kind they are afraid OF is the
possibility of Il Wall street control
with branches throughout the whole
country.
BY the distinction which VIC have
made in the recommendation now
pending, we believe that when a char
ter is given to a bank to do business
in a certain state that that bank has
a right TO do business in that state,
and if because of the growth of busi-
ness, through thrift, etc, that bank
is not able to take care Of all the
business it has right to expect, it
may add additional branches within
the limits of the city where it is To-
Gated.
I'VE have drawn the line distinctly
and confined it to city limits-voted
positively against countrywide or
statewide or nationwide branch
it to contiguous territory.
Il believe that the limits we have
nlaced will meet the situation fairly
We have prevented unlimited bank
ing in cities of 1000, 600 population
or over, recognizing because some
cities were so situated and the bust
ness being scattered that in cities
under 100000 they were entitled to
some consideration.
I'VE provide that in cities of $4,000
to 100000 one bank may have two
branches, and between $4,000 and 50,-
900 one branch only.
"I am Of the opinion that we have
done the banks of California a good
turn in limiting their extension to
the confines of their cities"
Revise District Code.
The banking and currency commit
slider a revision Of the banking code
of the District. In Mr.. McFadden's
opinion there is every reason for
revision that an understandable code
may be provided"
Investigations Injurious to BUsfu e<s-
Members of the executive commit
tee and officers in attendance at the
recent meeting at Augusta, Ga, were
almost unanim ously of the opinion
that the senatorial Investigations had
exerted a harmful effect on general
business.
Only one official-President Head of
RAW SUGAR MARKET QUIET.
NEW YORK, May 10.-No changes
were noted in the local raw sugar
1yaf kD& T,,l TT