Evening star., 1926-12-13
MEN AND MONEY
BY NJ. S. Rukeyser
tCopyrtght. 1026.)

New Yorks giant banks have re-
Gently taken steps to strengthen them
selves to meet the increasing oppor-
tunities which Americas new world
financial leadership gives them.
Following the expansion of it's two
nearest rivals by means of annexa-
tions, the National City Bank of New
York, in adding $25 100000 to its cap
ital, not only stepped further into
leadership among American banks.
but became for the first time the
bank with the largest capital in the
world passing the English institu-
tions.
The recent growth of the bank has
been an effect of great expansion of
the domestic and foreign business of
the country, and yet Wall Street
feels that the large participation of
the bank in the recent prosperity has
been In large measure ascrtbable to
the able Leadership of Charles f..
Mitchell, who has been president for
five years. During this period, the
price of the stock of the bank has
virtually doubled.
Mr.. Mitchell, who had been the
organizer and executive head of the
bond distributing subsidiary of the
bank, succeeded James A. Stillman as
president. Mr.. Stillman, whose ro-
nantic tangles We're so widely eA-
plotted in the press, is still director
and a large stockholder of the bank.
He recently distributed so golf sticks
among employees of the bank. Until
1921 Mr. Mitchell had been primarily
a bond mana super bond salesman.
He brought to his new work an eX-
traordinary enthusiasm and execu-
tive skill, which stood him in good
stead as a banker. Those on the in
side frankly concede that he rapidly
improved the morale inside of the
bank, and paved the way for expan.
sion and development.
With Western Electric.
After graduating from Amherst in
1899, Mr.. Mitchell entered the en-
ploy of the Western Electric Com.
pany, eventually becoming credit man.
ager. His first banking experience
was as assistant to the president Of
the Trust Company Of America in
1907. In 1911, he entered the bond
business on his own. He Joined the
National City Company in 1916.
The cutting of a melon recently by
the National City Bank, following SIM
liar action by the Chemical National
Bank, emphasizes the marked period
of prosperity which the great city
banks have been experiencing. In re-
cent years, the banks have developed
a facility in always keeping their re-
sources fully employed. The facilities
of the Federal Reserve system have
cut down the requirements in respect
to non-earning assets locked up for
reserve purposes.
The heightened prestige of the big
banks has been tied up with the grow
ing Importance of big business. Since
a bank can lend only one-tenth Of it's
capital and surplus to any single bor-
rover. 1t has been necessary for the
banks to grow commensurately with
the expansion of business corpora.
tions.
The recent history of banking in
the United States emphasized the need
of Judging the country by districts.
instead of as a whole. While the
large city banks were enjoying unpre-
cedented prosperity, agricultural banks
in the Central Northwest and in parts
of the Middle West, including Iowa,
were passing through a period of ruth
less readjustment, with many of the
weaker factors passing out of exist
ence. In some places. towns We're left
without banking facilities. The most
recent bank troubles in Georgia, which
were a reflex of speculative operations
in connection with the Florida land
boom, were localized.
Can't Cure All Ills.
The policy of the Federal Reserve
System facilitates the meeting of diff
ficult economic situations by member
banks, but no system can Obviate en-
tirely the fruits of mismanagement or
mistaken policies.
With the supply of credit abundant,
New York banks are competing for
the patronage OF borrowers.
Borrowers of high credit standing
shop from bank to bank, hoping to
save one-fourth of | per cent in the
interest rate Some corporate bor-
rowers get loans by selling promis-
sorry short-term notes - commercial
paper-in the open market, and thus
obviate the need of keeping part Of
the loan on deposit.
The big banks have solicitors in
the field perpetually in search of new
business. The largest banks pass by
all prospective customers except those
whose net worth is 100000 or more,
but will take smaller accounts If they
come in unsolicited. The First Ma
tional Bank, of which George f.
Baker is chairman, however, is frank
ly rich mans bank and is not in
terested in accounts which will not
keep a minimum deposit of $4,000.
Recently, even the neighborhood
banks. which specialize in the 40.