Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-02-13
BANKING BUSINESS
SHOWS GREAT GAIN
Controller Pole Discusses In
crease in Volume and Va
riety of Activities.

The last two decades have witnessed
remarkable development in the vol
ume and variety of the banking busi-
ness, Controller of the Currency John
w. Pole told the Ohio bankers at Co.
lumbus yesterday in discussing PRO
feSsional Bank Management" Demands
for financial services unheard of by the
last generation are now required to be
met by banking institutions. The old
simple form of banking in which the
banker relied almost entirely upon his
personal knowledge of his customers is
no longer adequate to meet the present.
day situation.
Modern banking" said Controller
Pole, lis highly complicated and
technical business, and it is exemplified
primarily by the city banks which have
been compelled to meet the varied
financial demands of commerce and
industry 1t is in these commercial GEN.
tiers that the competition in all lines of
business is so keen as to compel the
utmost economy in operation and the
most efficient management control
Out of the experience of these city
banks there has developed in the
United States fairly definite opinion
IN financial circles as to what consti-
tutes sound banking This standard of
bank Management has not been theo-
retlcally arrived at by any manner of
means. 1t has grown up through hard
knocks until finally the best method
mas been found to meet given situa-
ton.
Features of Modern Banking.
Let us pass briefly in review some
OF the principal features of modern
banking. First let us take the loans
and discounts. The old-fashioned char
acter loans have almost disappeared.
This does not mean that character is
not valuable asset in the transaction.
IL simply means We are no longer in
the pioneer stage of our civilization.
We have reached stable development
where the instrumentalities of credit
are ample. Great emphasis now Is laid
upon adequate credit information and
analysis. Nothing is left to chance,
guesswork or favoritism.
Now let us look at the business of
buying and selling investment securities
by banks. This is largely postwar
development. 1t is we'll known that the
Liberty loan campaigns during the war
served to educate the public at large in
making small investments in sound
securities. The tremendous commercial
expansion In this country following the
war has been financed in increasing
volume through the issuance of invest
ment securities In which the general
public Is invited to invest. 1t is natural
that the banks should participate in
this development, because their custom
ers turn to them for advice. Not only
must they have adequate financial and
statistical information with respect to
each issue but they must be in a posi-
ton to interpret this information and
to apply it to the particular transaction
In hand.
Turning to the f1duciary operations
OF the modern bank we find a similar
growth and development. For every is
sue OF securities for corporate financing,
whether in the form Of stocks, bonds,
debentures or notes, a bank is required
to perform some ministerial or f1duciary
function. The bank has thus become
an essential factor in the procedure OF
corporate finance and must act as trus-
tee OF bond and debenture issues and
OF long-term notes, as fiscal agent, as
registrar, as transfer agent, as a par
ticipant in underwriting syndicates, as
depOSitary under plans of reorganiza-
ton, as assignee and receiver. as Gus
todian or trustee for investment trusts
in fact, in every fiduciary capacity
which may be required by the machin-
cry of corporation finance.
THE future of the trust business of
banks in the United States would seem
to make it one Of the most important