Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-06-14
Washington Ticker

By the Associated Press financial Writer.
Very serious consideration TO the
trend toward banking consolloation
which is now sweeping the country from
New York to the smallest center Is being
given by John w. Pole, controller OF
the currency. under whose authority the
national banking laws are administered.
The Federal policy is now clearly es-
tablished. to encourage such consolida-
tons where the consolidating tnstitu-
tons are sound
Bank consolidation Is considered to
conform with the whole trend IN mod
ern industry toward larger units, which
give the maximum scope for good man
agement and combination of capital, !"
the controller said. we are called upon
to do a good deal of work in connec-
ton with the mergers, but no solvent
institutions whose arrangements project
consolidation have been refused permiS-
sion to proceed"
Particular reasons impel banks to
seek larger size by merger. the con-
troller added in sketching. by request,
some OF the factors that lead TO COM
binations
"One ground for consolidation lies in
the sections Of law which limit q banks
lending capacity to single borrower
In ratio to its capital and surplus" he
explained. There are still some very
large borrowers among industrial enter
prises. Industrial organization in a city
may have put together three or four
sizeable business units, and the new
central management, will seek to con-
solidate its loans into single line of
credit. Local banks may find them
selves unable to meet the need, and see
the largest accounts transferred out of
their city, unless they parallel business
consolidation with banking consolidation
on an equivalent scale"
Another banking development which
interests Controller Pole is the growth
OF what is termed group banking, In
which central holding company ac-
quires control of a number of local
banks, frequently both state and ma
tional institutions. The vast growth of
this form OF semi-branch banking, he
noted.
In view of the growth of eroup
banking. the curtailment of branch
banking by Federal statutes and the
increasing number of bank mergers
unoer trust company charters" he said
N recent speech to a bankers gather
ing. the time appears opportune In re-
examine the basic structure of our en-
TIRE banking system and to formulate
day conditions"
In order to discharge his statutory
responsibility to recommend amend
ments TO the Federal banking laws for
the purpose of strengthening the
national system, 1t Is Mr.. Poles MR.
pose TO invite a group Of American
banking leaders to act in an advisory
capacity In assisting formulation az
ms Recommendation to Congress this
Eau. Chairman McFadden of the
rouse banking committee and a NUM-
per OF members Of both House and
Senate have manifested an interest in
the situation. One point that win
undoubtedly be considered in framing
the recommendations will be the al
visibility OF letting national banks 90
straightforwardly into the establish
ment Of direct branches on a wider
scale than Is at present permitted.
A striking reversal of trade trend
by which American imports for Nav
were found to exceed substantialiv
American exports for the same period.
caused Commerce Department .statis-
ticianS considerable calculation this
week. 1t Is almost the universal state
OF American international trade. even
on monthly basis, to show a favor
able balance to this country, with ex-
ports exceeding imports. Notwith-
standing. the May figures placed ex-
ports at $685., 1000, 900, q rather low
figure, compared to preceding months.
a comparatively high figure.
1t finally appeared that conditions
as to just two out of the many thou