Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-12-18
BY I. A. FLEMING.

year 1927, j. H. Mcintosh gives un
qualified credit for initiating the meas
ures that led to the Introduction of the
so-called McFadden measure, subse
duently enacted into law, to Harry
M. Dawes, who gave the matter his
closest attention soon after assuming
the office of controller of the currency
1t was in the Spring of 1928 that
Controller Dawes fully recognized the
need of an equalization of the charter
rights Of national banks to give them
at least equal privileges with the State
banks and trust companies, to remove
the handicaps that were causing many
banks to surrender their charters and
become state banks and trust com
panies.
Quoting from Controller Mcintosh :
report. I'm the late Summer of 1928
the controller initiated Natlon."ioe
investigation through the chief ma
tjonal bank examiners of each Federal
reserve district, the aim of which was
tn gather and collate expert and tech
meal suggestions for changes In the
rational banking laws. Each CHIEF ma
tional bank examiner was instructed
to confer with the leading bankers III
each district and to make recon-
mendations to the controller for new
legislation based upon the practlcal
needs of the national banks in the re-
spective Federal reserve districts.
Recommendations Received.
"Rv the end of September, 1928
there was before the controller con
siderable number of Recommendations
from the field. In the meantime nc
had called upon experts In the purea
at Washington to make recommends
lions relative to need for specli1c iegis
lation growing out of the adminlslra
tive experience of the once luz
decade or more past. .,,
while these technical lnVeslisa
lions and researches were IN pros ooH
the controller conferred with larse
number of bankers, both State dno
National, and with Federal hear ,:s'
with a view of developing a poilcs
unou which he might make recoiiiil,eli
dations for new Legislation u So''
gress. .ae,ro
with this mass of material pelore
,.,r tha controller Dawes induced sew
nrai ha nlxers of wide financial expert
ance TO sit with him and his counsei az
voluntary committee to select from
tho numerous recommendations loi
new legislation the particular features
which should form the basis Oh ms
recommendation to Congress. In the
course of a month the committee mao
agreed upon what was thought 10 pe
the essential needs of national banks
for changes In the charters. Tnese
data were selected. then cast into the
form OF a draft for bill.
This draft was next referred 10 the
chief national bank examiner with IN
structions to consult again the ieaolns
bankers and to make recommendations
for any changes. Members or the
banking and currency committee were
kent in touch with these proceedings
After numerous conferences on the
draft during which every phase OF the
Commercial /. industrial and agricultural
life of the country was taken unoeI
consideration in their relationship Oh
nationa. banking institutions, the con-
troIler was able to lay before Congress
a final recommendation. The Dill was
introduced by Chairman McFaooen
September IL, 1924
A Wise Official.
Thus it will be seen that Mr.
Dawes, and later Mr.. Mcintosh We're
alert to the needs of the banks under
their control, that they recognized the
handicaps in favor of State instltu'
tions. and went to work to remedy the
evil.
Dawes initiated the movement and
carried it to Congress. McFadden gave
II his name as volstead did to the pro-
hfbition bill law. McFadden pushed
1t through the House. tackled amend
ments on 1t aided by Mr.. McIntosh),
and Harry Fl. Mckee. president OF the
National Capital Bank of this city,
saved itsl ife when there was a doubt
about it passing.
Branch Banking.
The measure thus brought into ac-
tive effect has settled, probably once
and for all, the branch banking issue.
The establishment of Statewide
branches within the Federal Reserve
system was brought to an end by the
act. National banks may establish,
with the controllers consent, branch
banks in their home cities, Ii, in his
opinion, there be need for banking
facilities in the location selection.
The Bank of Italy. that great Califor.
mia State bank, with hundreds of
branch banks, has Joined the Federal
Reserve system and three other large
UdHkS OPCtdtlI6 iiAaAy oAaAShSo1 ssaA'~
have Joined.
Comptroller Mcintosh calls atten-
ton to the fact that there was no
rush ito acquire city branches follow
ing their authorization for their estab-
lishment by national banks, as only
127 new branches have been author
lied since February rs, 1927"
Prior to the passage of the act there
were in the system 1855 branches due
to conversion and consolidation of
State banks into national banks; 202
additional offices were converted into
branches under the terms Of the act
and five branches in the District Of
Columbia under the sMillspaugh act.
Banks in Trust Fields.
Under the McFadden act, which be-
came a law February Is of this year,
national banks were given charters
In perpetuity, thus giving to them
HO W is E