Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-09-29
BANKERS WILL ACT
| ON CHAIN QUESTION
Convention to Consider Prob
lem of Branches AIso.-0pin-
ion Is Divided.
BY JOHN F. SINCLAIR.
cial Dispatch to The Star.

young, country and city, arrived here
for what promises to be the most
dynamic meeting the American Bankers
! Association has Witnessed in a decade
The two questions foremost in the
minds of every one of them are:
FirSt-What is the next step in bank
ing? Is it to be along chain or branch
banking lines?
Second-How are national banks
going to fare in the new plans?
Seven special trains have already ar
rived. The country banker from
louisiana is here brushing elbows with
his city banker friend from New York
Yet it would be difficult for a stranger
to pick out the one from the other
! Standardization and uniformity seem
| to have been at work in the remotest
parts Of the nation.
The Country Banker.
| But the country banker is here to
! find out some very definite things. He
! wants to know where he's going to land
in this new merger era. Twenty-Five
| thousand country bankers are anxious
to have that question answered to their
satisfaction.
1t was just a little over six months
| ago since the First Bank Stock Cor
| poration and the Northwest BANGOR
poration, both centering in the Twin
Cities. started their expansion program
OF adding other banks in the Northwest
to their holding companies. Hardly a
| week has passed since, when either one
| or the other of these two holding COM
panteS has not announced another big
bank afhliation.
Both groups are powerful and very
strong. The First Bank Corporation has
already $360,000,000 of banking re-
sources in q key cities of Minnesota
North Dakota, South Dakota, Montana
and Upper Michigan.
But the Northwest Incorporation is
| right at its heels with total assets, in
Guiding its recent addition of the Mid
land National Bank g. Trust Co. of
Minneapolis, of $345,000,000. 1t owns
IS banks and trust companies in 80
cities in six Northwestern States. It's
banks reach into Iowa, beyond the
| ninth Federal Reserve district.
Together these two bank holding
corporations have more than $1,000 ,OO0-
600 OF assets already tied up. A nice
start.
Organizes Holding Company.
So active have they been that the
| First Wisconsin National Bank of Mil
weukee has decided to enter the field.
During the past two weeks it has
organized holding company, and has
| taken over important unit banks in
Oshkosh, Eau Claire and Menominee.
So this bank with its IA branches and
II affiliated banks, all in Wisconsin, is
starting with resources already over
$3.50 ,OOO, o00
When asked the reason for this new
move, Frank Pierce, president, said cit
this holding company would probably
| not have come about so soon had it
| not been for the activity of other chain
groups in the vicinity and the rapidity
with which the consolidation idea has
! spread throughout the country"
Doubtless Mr.. Pierce was referring to
the activity of the two Minneapolis
| holding companies which have practi-
caIy led the entire banking world in
| this field during the last year. The
form of organization and the activity
Of these three Northwestern groups will
be given close study at the bankers
convention.
Marine Corporation, headed by George
| F. Rand, president of the Midland Trust
Co. of Buffalo. This corporation is a
holding company organized to acquire
controlling interest in banks and trust
companies throughout the rich State Of
New York and elsewhere. The else
| where movement began last week when
Rand announced the Midland had add
ed 16 North Carolina banks, adding re-
sources of S575 600, 900.
Mr.. Rand has already stated that the
| policy of the new corporation Is not to
impose any outside control on the local
banks but to cooperate with them in
solving their larger problems.
See More Mergers.
1t is we'll to recall that in New York
City recently. Charles e. Mitchell,
president of the National City Bank,
closed a deal with the Corn Exchange
Bank whereby the National City ac-
quires the most strategic bank locations
in the metropolis So New York on the
one side and San Francisco on the
other, both with tremendously power
full branch banking systems, are facing
| these holding companies already control
| ling more than one and one-quarter
| billions of resources in seven States.
And every one agrees that the COM
binationS and mergers In the banking
| field have only begun.
| But another question, almost as far
reaching and significant, is just how the
national banking system Is going to
| maintain its position in the merger era
| just ahead.
! John w. Pole. the controller Of the
currency, who is here to address the
bankers, declared before the Maryland
| Bankers Association at Atlantic City on
May % last, that 1.-The national banking
system was in a critical state"
| He referred to the fact that 79
| national banks with total resources of
almost $4,000 900 900. had given up their
| national bank charters and taken State
| charters, because these banks found 1t
more advantageous to operate under
trust companies charters.
This situation, however, Is one with
which Congress has power to deal. The
national banking act can be amended
to meet the difficult competition that
State Incorporation is now giving. But
will Congress do it?
! One speech bound to create much
| interest is that of Rudolph H. Hecht.
president Of the Hibcrnia Bank {:
Trust Co. of New Orleans, who will
present "a summary of the general
situation Analysing the elements of
group. chain and unit banking"
| Credit Conditions.
It was Mr.. Hecht who Startled the
| convention in Philadelphia last year
when, warning against the growth Of
chain banking, he referred to 1t as
bootleg form of branch banking.
So these two questions seem vastly
! more important to the banker today
than the Federal Reserve rediScount
| rates or the high price of credit.
Basic credit conditions will be dis
cussed thoroughly. So will Federal
Reserve policy.
But the country bankers are here for
something else. They want to know
now where they are going.
| (Copyright, 1929. by North American News
paper Alliance)
|