Evening star. [volume] (Washington, D.C.) 1854-1972, 1925-04-20
DETAILS OUTLINED
ON BANK STATUTES
Commerce Members May
Urge Change in National
Bank Act of 1863.
By CHAS. p SHAERHrR

- toddy 10 a referendum vote
VI the business organizations making
up the membership of the Chamher of
commerce Of the United States. The
recommendations. formulated by a
SsPSCidI committee of the national
oody, are as follows:
nat national bank should be per-
.' under regulation Of the con-
sroiIer OF the currency, to have
p paahcnes within It's own city If a State
have branches.
mat national banks should be given
tsaueterminate charters, subject to for
ASllure Ior cause and termination at
the will Of Congress.
nat national banks should be au-
siiorlIed TO deal in investment secur-
.u on oasis not inconsistent with
slv eenera4iy recognized principles Of
souno banking practice.
mat national banks should be au-
thorized to make mortgage loans on
CITY real estate for periods not in ex-
cess Of five years.
Inc result of this nationwide refer
ehuurn, which will be concluded in as
days VIII determine the chambers at
lituoe on questions which have had
in Congress.
Think Act Out of Date.
Inc committee making the recon.
Henoatlons points out that ''it Is a
widely held view that the national
oank act or 1863, which provided for
the organization of the national bank
ing system, is in need of revision in
oroer 10 clarity and modernize it, and
70 bring 1t fully into alignment with
the Federal Reserve act"
In this connection, the committee
declares that the national banking
associations of the country in an in
credslng number are being attracted
10 organization and operation under
State charters because of the relative
illoeraltty in a number of important
particulars OF the national banking
laws. This detection from the ma
tlonaI banking system, as we'll as its
decreased attractiveness TO new banks,
Is resulting in lowering of its pres
tlge, retardation of its growth and
by comparison with State banks as
whole, a relative decrease in its
strength. At the same time il is
working an appreciate change in the
structure of the Federal Reserve Sys-
tenn
In recommending that Congress
should enact legislation permitting
national banks to establish and oper-
rate intercity branches in States
where State law allows State banks to
have branches, the committee explains
that in 20 States branches may be
operated by State banks. In some
of them branches are permitted not
only within the city where the parent
bank is located, but throughout the
county or State itself. In those States
particularly, II is stated, national
banks feel the competition which re-
suits from this difference, and there
has been a marked tendency away
from the national system in those
States.
Three Other Proposals.
Another recommendation Of the
committee as set out in the referen-
dunn is that inteterminaIe charters
should be granted to national banks.
Originally national banks We're char
tered for 20-year periods. This term
was changed in 1922 to SO years from
that date or from the date of organiza-
ton, whichever might be later. Be-
cause of their limited charter period,
it is declared, national banks with
trust departments have been debarred
from handling a large number Of So
called perpetual trusts. It is TO meet
this practical situation that the recon-
mendation is made that national banks
should be granted continuing or in
determinate charters, subject as at
present to forfeiture for cause and
termination at the will of Congress.
A third recommendation of the
committee is that national banks
should be empowered to deal in in
vestment securities on a basis not
inconsistent with the generally
recognized principles of sound bank
ing practice" National banks are
now buying and selling investment
securities in the natural course as a
service which has come to be eX-
pected by their customers, and II is
generally recognized as a normal
banking service, the committee saws.
There exists, however, no definite au-
thorization in law for the conduct of
this character of transaction The
committee holds that the investment
business of national banks should be
given a definite legal status
The fourth recommendation deals
with the question of permitting ma
tional banks to make mortgage loans
on city real estate for periods not in
excess of five years. AT the present
time national banks are allowed to
make loans on farm lands for FIVE
years, but on city real estate for a Pc
riod of one year only. Greater lati-
tude, the committee says, should be
given to national banks in conduct of
this class of business.
Bankers Meet Late Today.
The District Bankers Association
will hold a special meeting this after
noon at 4 o'clock at it's headquarters
for the purpose of increasing mem1
bership fees. 1t is expected the pre-
vailing statute fixing a fat yearly
charge of $50 a membership will be
stricken out and a new one assessing
members in proportion to their total
resources, with a minimum levy of
500, adopted.
Under the present inadequate and
unsatisfactory charge every member
is called upon to pay special assess
ment each year to meet current ex-
penses. The new charge, originated
by Corcoran Thorn, will approximate
budget requirements.
Program at Institute.
The Washington Chapter, American
Institute of Banking, will elect 81
delegates on Thursday night to the
annual convention in Kansas City
Also the bylaws of the chapter will
be amended on this night to allow one
member, not affiliated with bonaf1de
banking institution, to sit on the gov
erning board. On Tuesday night a
card party will be held in the chapter
room, the proceeds to be devoted to
chapter requirements.
Tonight r. B. Dickey will lecture
before the negotiable instruments
class on Protest" and on Wednes-
day the same instructor will discourse
on Discharge" The public speaking
and debating class will meet with
Rufus Lusk in the Stock Exchange
rooms, and on Friday F. ]. Donohue
will conduct an examination in the,
standard banking class.