Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-09-15
40 BANKS UNITE
IN HOLDING FIRM
Institutions in Ninth Reserve
District Seek Better
Financial Status.

special DlSpaJcn 10 Inc StaT.
MINNEAPOLIS, September 1.-THE
recent organization of great new bank
the attention of the Nation on the new
CORPORATION, which is welding unit
banks of the Ninth Federal Reserve
district into a unified group, is focusing
the attention of the Nation on the new
financial structure that is being built In
the Northwest.
Forty banks already have associated
with the First Bank Stock Corporation
which acquires control of the Individual
banks either through an exchange OF
stock or through the outright purchase
of a majority of shares of the unit bank.
The af1liation includes the First Ma
tionals of Minneapolis and st. Paul,
their subsidiaries in the Twin Cities,
the three banks in Montana identlhed
with the interests of John ID. Ryan,
chairman of the board OF the Ana
conda Copper Mining Co.. and 20 otner
large banks in the key cities OF Mime
sota. North and South Dakota. Montana
and Upper Michigan.
Lyman Wakefield. president OF the
First National in Minneapolis and wee
president of the First Bank Stock Cor
poration, allays any fears there may be
that the organization Is to become part
OF any national chain. 1t is designed 10
serve the Northwest territory solely
and exclusively. and the distribution OF
its stock in small units all over the
Northwest makes it unlikely that con-
troll could ever pass into outside hands,
he points out.
Better Protection Sought.
1--WE believe" said Mr.. Wakeneld,
"that we have seen this territory re-
tarded in its progress, because OF an
unsettled and unsatisfactory general
hTOllQnJ
through economic conditions and not
through the fault of the bankers them
selves. AS a means of correcting the
difflculties of the past. 1t has seemed
nat il we could bring about an ADVISORY
organization, properly manned ana wltn
suflcient banking experience TO oner
10 all the individual units making up
the chain, expert advice AND assistance
in the management of their local oanks.
that there could be no question as to
the benefits that would accrue 10 tne
territory as a whole.
"Our entire plan of operation has
been formulated with the oennie IN
tention of retaining in the local COM
rnunity the strongest possible local III :
terest in and control over the aHalrs ol
their bank, and the organization OF lne
central Office is being set up with TWO
very definite purposes in view. F1rst,
the association of these banks Will re-
slllt in examination and supervision
and the bringing to bear OF trained
judgement in the operation OF the IN
dividual units, which ought to enable
them to serve their local communities
better than ever before, and ougnt
largely to eliminate the possibilities OF
undue losses and mistakes such as nave
occurred in the past and nave caused
the closing of number OF our North
west banks.
Wider Holding Of Stocks.
SECOND. through the distribution OF
the holding company stock In small
units over the ninth Federal Reserve
district, it offers an opportunity for the
people of the district to become nnan-
cially interested in the banks with
which they are dealing in larger way
than ever before, and the stock Will be
so widely spread, and held by so many
reonle. that it in effect leaves the own
ership and management OF these lnsu-
tIltions primarily in the hands OF the
people who are most vitality concerned
with their management and prosperity.
It is, of course. always true that ofhclals
of a corporation of this kind are per-
mitted to hold their jobs by the stock
holders Just as long as they salts
factorily conduct the business, but the
stockholders always have the power 10
replace them in case of their failure to
conduct affairs satisfactorily.
"One Of the strongest arguments Tor
the grouping of banks over such
widespread and diverse territory as the
ninth Federal Reserve district is the
Increased strength inherent to all
through the greater diversiflcat1on OF,
industry served by the group. Sea-
sonal needs of the many divisions OF
commerce vary greatly, but each d.
vision has a period of peak load in
financing requirements. Agriculture.
for instance, and this Is particularly
true in the small-grain sections. re-
uuires heavy advances during the har-
vesting and shipping season. These
peaks sometimes prove heavy load on
the resources of unit banks in COM
munities of the single industry type.
In the same way that diversif1cation
of crops brings prosperity and year.
round income to the farming territory.
eliminating the hazard Of single
source of income, Investigation OF
banking over such great territory as
the ninth Federal Reserve district will
give a sounder foundation to the en-
tire financial structure"