Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-10-03
BRANCH BANK PLAN
IS UP TO CONGRESS
Convention Shows Approval
of Poles Suggestion for New
Financial System.
BY JOHN r. SINCLAIR.

special Dl6patcn 10 Tne star.
SAN FRANCISCO, Calf, October
3.-When John w. Pole, the tall, dis
MISUNDERSTANDING controller of the
currency, came out in favor of wider
branch banking privileges for national
banks visiting bankers expressed their
appreciation by very warm applause.
Had such a statement been made 10
years ago, or even S years ago, 1t would
have been greeted by Kisses or some
thing worse from all over the place
but the controller had a most appre-
ciative and sympathetic audience The
changed their convictions, or at least
their point of view.
Favors Investigation.
Let Congress, after thorough study.
determine the definite economic areas
in which branch banking would be per-
mitted, but safeguard this revolutionary
move in three ways: First, by a closer
and more efficient governmental super
vision of all banks and their branches;
second, insist on adequate capital to
meet the larger responsibility of oper-
ating branches, and, third, put into
the hands of the controller of the cur
rency the absolute power OF determin-
ing when and where branches should
be established.
This. In effect, is what John w. Pole
championed today. It will be the sub
ject Of countless discussions before
numerous bodies during the coming
months. But something must be done
to meet the changing order The bank
ing authorities, those who look at the
inner books of all banks, know that
thousands of banks are not earning a
profit This is reflected in the tact
that from 1921 to 1928, inclusive, more
than 5000 banks closed their doors
and tied up deposits exceeding 81 500, =
100000. OF this number 700 were ma
tional banks and 1900 State.
The controller brought out the fact
that in four States from 40 TO So per
cent Of all banks in existence in 1920
failed; from 20 to 40 per cent In six
States, and from 10 to 20 per cent nj
10 other tSates. 1t is only in two small
Eastern States that the record Is clean
with no bank failures. 1t is significant
too. that so per cent of these failures
occurred in cities with a population less
than 5000. About 10 per cent of these
failed banks were capitalized at $50, 900
or less.
Example Of Iowa.
Still, as Phin Beebe of South Dakota
said, in some States the percentage of
banks having capital of $4,000 or more
which failed were larger in per cent
than those with less. Witness the
State of Iowa, for example. The con-
troller brought out some further facts
When the McFadden act went into
effect there were las national banks
operating a total of $50 branches.
On June 30 TO this year. about
two and a half years later, 1874
national banks were operating 992
branches, an increase Of only 10 banks
and SOB branches. This development
of branch banking was not large con-
sidering the fact that between 1880
and 5000 national banks were in opera
ton during this period.
T o. Hammond of Helena, Mont
brought out the fact that but II States
of the United States now permit branch
banking. SO other States have been
forced to chain or group banking in
stead
Still branch banking has always ex-
listed in the United States. National
banks are now allowed to establish
branches in all foreign countries. Also
within the corporate limits of all large
cities in which the head Office of the
bank is situated where the State law
permits State banks to have branches.
The report of the Economic Policy
Commission for the first time has given