Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-09-22
.CHA|N BANK PLAN
IS GAINING FAVOR
Financial Leaders of Natior
to Consider Idea at Cali
fornia Meeting.
BY JOHN F. SINCLAIR

| AVE-" 4S1bHA1 oCpNcHlDcI zl.-WLSIl
| the American Bankers Association
meets in San Francisco next week, one
| problem expressed in five words vii.
be uppermost in the minds of every
delegate there-"Chain or Branch
Banking-WhichP"
It is probably correct to say tina
every big bank in the United State;
| this year has been asked to merge witt
some other bank, or to sell out to SOM
holding company, Many smaller bank
! have, too. But the work of tieing VI
| the smaller banks with the larger
| groups has not really started yet.
In New York City, Americas financial
mecca, branch banking is out in front
| A few holding companies have been
organized to buy into different ranks
but the big bank stock transfers have
not been in this direction.
A Strategic Move.
When the National City Bank an
| nounced a tie-up with the Corn Elk
chage Bank Trust Co. Friday, it was
| primarily a strategic and not f1nan-
| cial move. Said Charles E. Mitchell
National City Bank chairman, "thi
| merger is not a step in the develop
ment Of size, but an intensive develop
ment of branch banking in New Yorl
City"
The latest statement of the Nationa
City Bank, as of June 20, showed tota
resources Of s2,062, 400220. while tn
| most recent statement Of the Corn Elk
change showed resources of 1929, $685.
181. Merged, the total resources are
| s., 1886, 066. 401.
The National City Bank, before thi
latest move, was strategically weak IL
New York City, with only IS branches
It has, however. q total of SO branchee
in the leading cities Of 26 foreign
countries. IS
But the Corn Exchange Bank IS
strategically strong in New York City.
1t has some OF the finest locations,
ard operates 81 branches now. Two
more are soon to open, with plans COM
pleted for six others. These branches
ideally situated, are scattered in al
of the five boroughs of the city. ST
the National City, with its worldwide
organization, when it desired #
intensity and expand joined hands witt
the Corn Exchange to increase tn
! number of its branches inside the cit.
from IS to 109.
Ten Largest Banks.
With this merger the National Cit
Bank moves up from third largest bar
in the word to the largest. OF the ten
largest banks in the world, five ar,
British and five American.
Here they are:
National City-Corn Exchange, ST.
-, Midland i / {. Bank, Ltd, England. 81
Lloyds Bank, England, $2,oss,-
304.134
Barclays Bank, England, s1,s46,-
264, 050.
Westminster Bank, Ltd, England,
$1.578. $780, 900.
Guaranty Trust Co., New York. ST.
55S.010,960.
Chase National New York, s1,4s7,-
1896.
National Provincial Bank, Ltd, Eng
land, SLABS, 0o3. 500.
Continental Illinois Bank & True
Co., Chicago, S1,087 ,002. 6i2.
Equitable Trust Co., New York, $685.
25G,162.
This, of course, refers to resources.
From the standpoint OF capital, sur
plus and undivided profits the Guaranty
Trust Co., sixth in the list, stands out
as the most important. with capital as
sets of little more than S285, 900 ,00C.
as against $270,00o,000 in the National
City Bank.
OF these 10 banks, only one remains
true to the old American tradition c
mo branches" That is the Continenta.
Illinois Bank & Trust Co. of Chicago.
It has no branches and does all its
business under one roof The others.
both in England and in the United,
States, are branch banks. The Ameri
can banks naturally have smaller
number of branches than the English.
Original Identities Lost.
Should branch banking be permitted
! in the United States on a national
scale, within six months the 10 leading
| banks in the world would be American.
The Midland Bank of England. for ex
ample, has more than 5000 branches
scattered through the British Isles.
while the National City Bank has only
POI branches. Give the National City
Bank a chance to have branches in the
United States outside of New York
City and see what the count would be.
Three years ago, before the merger
era hit the banks, there were SO more
or less important banks in New York
City. Today only II retain their orig
inal identities. But with the speed
with which things are moving now it
should not be more than two years be-
York would be In the hands of half
dozen or less huge hanks with
branches scattered throughout the
Nation.
Other American cities have not been
! slow to see the trend. The process of
merging strong banks in city that
| the larger units might be made more
| effective and might take care of the
| larger volume of trade by extending
larger credits to larger corporations,
has been going on in nearly every i'm
| portant American city. Boston, Phila-
| delphia, San Francisco, Los Angeles,
| Seattle, Portland, Omaha, Minneapolis,
| st. Paul. Detroit, Cleveland, st. Louis
| all have seen the process.
It was A. p. Giannini who started the
| idea Of branch banking in the United
States, in his Bank of Italy. Today
| that bank has 491 branches in Cali
fornia alone. Mr.. Giannini's next
| move was in the formation Of a hold
| ing company to buy either control or
large interest in other banks through
| out the country. Soon he tied up his
Bank of Itatly with the Bank of
America in New York City.
Undoubtedly his aim is to checker
board by the same process a series of
States. California has allowed branch
banking for years. New York State
does not yet allow branch banking, but
1t does allow branches within the city
where the bank has its main Office.
Such a law allows branches in New
York City, but not outside of the city
| limits.
To overcome the objections Of the
State banking laws and the national
banking act, holding companies to
take over the control of banks have been
| formed in scores of cities in recent
| months. The First Bank Stock Co. and
the Northwest Bank Corporation, both
| of Minneapolis, haze led in this field.
They saw the need of stronger bank
ing facilities in the Northwest and they
proceeded to fill the gap. These two
organizations are in keen competition.
Perhaps that is why they have moved
ahead so rapidly.