Evening star., 1926-04-12
BANKING BODY ACTS
ON M'FADDEN BILL
Opposes Senate Rider and
FavorS Hull Amendments
to Measure.

reserve AtI as IGlSSSu ny the itOuSc
without the changes made in 1t as
subsequently reported to the Senate,
it is announced by Thomas Il. Patton,
general counsel of the association.
Serate changes include the addition
of rider providing for indeterminate
charters for the Federal Reserve
Banks and the omission of two pro
visions in the House bill known as
the Hull amendments. aiming to pre-
vent the further spread of branch
banking and also to create equitable
rights between State and national
banks as to branch banking privileges
in places where this type of banking
now exists.
1t is the position of the officers Of
the association, Mr., Patton says, that
the bill as passed by the House repre-
SentS the formally aVoWed' 'policy OF
the organization expressed in general
convention, whereas the Senate
changes are counter to this policy.
His communication to association
members Is, in part, as follows:
The Senate committee added the
rider for the indeterminate charter of
Federal reserve banks. Our associa-
ton is on record in favor of such re-
charter but as an independent propo
sition, not coupled with other amend
ments to the Federal reserve act.
There is fear on the part of many
bankers that the rider will inject into
the discussion controversial questions
which will prove fatal to the bill and
render. fruitless all the tremendous
efforts which have been expended in
its behalf The policy of our associ-
alton, therefore. is to urge upon Sena~
tors that the rider be omitted and not
considered in connection with the Nc
4l.., IN A1~f faS
vision to be urged as an independent
proposition when the McF'adden bill is
out of the way.
Favor Hull Amendments.
1--WE urge retention of the Hull
amendments for two reasons. First,
these amendements, which deny city
branches or any branches whatever
to national banks and State bank
members of the Federal reserve sys-
tenn in States which do not at the
time of the approval of the act permit
branch banking even though branch
banking may hereafter be- permitted
by the State, were the compromise
upon which our members were brought
to support of the bill.
Second, the best opinion obtainable
is that the bill will not be accepted
oy the House without the HUH amend
ments. Therefore, aside from urging
the Hull amendments as matter OF
association policy, they should be
urged upon the Senate to insure the
success of the bill, for if the Senate
rejects them there is danger that the
'entire bill will fail.
"Some Senators reason that these
amendments would give to national
banks in % States the privilege of city
branches, which would be denied to
natinoal banks in 26 States, which
might hereafter adopt branch banking,
but there is as good reason or these
amendments as there is to allow exist
ing members to retain their statewide
branches while denying the privilege
of Statewide branches to all in the
future. They are therefore consistent
with the other provisions of the bill.
The underlying purpose OF the Hull
amendments is to stop branch banking
where it is now and check it's further
growth, and If the Hull amendments
become law, there is little chance that
any present non-branCh banking State
will hereafter adopt branch banking,
because national and State bank
members would necessarily be ar
rayed against it.
Milwaukee as Example.
Furthermore the Senate committee
has inserted a provision, not In the
House bill, that If a national bank
has one or more city branches in a
State which prohibits branches, any
other national bank in the city can
have the same number of branches
The report to the Senate says that
there are one or two cities in which
there Is national bank having one or
more branches originally established
under State law not now in force and
that it is proposed to permit any other
national bank in such a city to as
tablish not more than the maximum
number of branches possessed by such
other national bank.
However, in Milwaukee, one Of
such cities, the practical effect would
be that some twenty odd State banks
without branches could have none, ex-
cepting three whose branches existed
before the law was changed in Wis.,
consin, and the eight national banks
in the city would be privileged to have
q total Of 16 branches. This, of course,
would work discrimination against the
State banks of those cities, and adds
a further complication to the bill,
which should be eliminated.
Again, the bill as reported to the
Senate privides that "a. national bank
may maintain and operate such branch
or branches as it may have in opera
ton at the date of the approval of
this act 1t appears that there is
situation in Minneapolis where GER
tain national banks established
branches or additional Offices at time
when the State law was silent on the
subject of branch banking, following
which the State law prohibited branch
banking.
Amendments Are Complicating.
"There is a question, we understand.
as to the legality of those branches.
but it is feared that the above provi-
sion and also the provision previously
referred to, that where a. national bank
has city branches in a State which
prohibits branches any other national
bank in the city can have the same
number of branches, would permit all
the national sbanks in Minneapolis to
have city branches which would be
denied State banks. The intention,
we are advised from Washington, was
simply to permit this privilege where
| national banks had legal city
branches.
The complications and uncertainties
which would follow these Senate
amendments afford additional reason
why our members should urge upon
their respective Senators that the SEN
ate should reject all these amendments
and enact the branch bank provisions
as contained i'm the House bill. We
are anxious that the McF'adden bill
should pass this Congress In order
that national banks may have needed
relief and the branch bank problem
be settled in accordance with the plan
worked out and agreed upon at the
| Chicago convention