The Carbon County news. [volume] (Red Lodge, Mont.) 1924-1931, 1930-09-18
RADICAL CHANGES
TRANSFORM BANKING
National Commission Sees
Changing Opinion on Branch
Banking Issue = Studies
Group and Chain Banks.


disputed branch banking question
is forecast in a review and report
covering rapid changes going ON in
banking issued here by the Eco
monte Policy Commission of the
American Bankers Association.
The report, however, after referring
to recent proposals that national
banks be given branch banking
| powers within the business terri
tory surrounding their location, de-
clares that I'VE do not believe that
so-ealled 'trade-area' branch bank
ing Is likely to gain the support of
any large percentage of the bank
ing fraternity
The commission says that the
most important development that
has affected American banking in
recent years involves the rapid
growth of multiple banking organi-
cations in the form of group, chain
and branch banking systems" and
adds that I'VE present this report
as an unprecedented economic study
and have no theories or policies
to urge at this time" The state
ment says that the commission
information indicates there are now
269 group or chain bank systems,
which control 1922 banks and $751;
2S5, 100000 in aggregate resources,
and that there are only six states
and the District of Columbia where
it does not find any group organiza-
tions.
The commissioners Investigation
I'VE have been in touch with the
managers of many important bank
groups" the report says. aside
from the obvious economies of GEN.
tralized operation and control a
number of these organizations
heads very frankly tell us that
they do not feel that the system
has been in operation and tested
long enough to justify them in
making positive or sweeping state
ments as to its advantages or dis
advantages compared to unit bank
ing.
THE Banking and Currency
Committee of the House, which is
conducting an investigation into
banking developments. has called
a number of operating heads of
some of the great group systems.
These men declared that they
found, under certain conditions,
definite operating and economic adj
vantage in both group and branch
banking over independent unit
banking. Some thought group
banking was only a transitional
stage, that branch banking was
preferable and if it were per-
mitted on an extensive enough
scale they would change their
groups over to branch systems.
Others held that group. banking
was preferable. X .eb.eTe8 f
Some held that the ideal plan
was, a combination of the two
with group bank units for localities
strong enough to support complete
banking institutions and with
branch offices extending further into
the smaller places requiring bank
ing services but not large enough to
support complete banks. Several
Of these who advocated multiple
banking declared that nevertheless
they believed there would always
be room for vigorous independent
unit bank competitors.
Government Officials Express
Views
4The Comptroller of the Cur
rency recommended that national
banks be given branch banking
powers within 'trade-areas.' The
Governor of the Federal Reserve
Board appeared to be in general
agreement with the Comptroller.
He said there were 24,645 banks
and 3,547 branches, total of 28,182
banking Offices; that in this total,
$3.50 Offices were either branches
or bank members of groups, or
both, leaving 1889 banking insti-
tutions that might be definitely
termed independent unit banks,
having no branches and in no way
connected with group affiliations.
He said all the banks had total
loans and investments of $5S,500,-
100000, of which the group and
branch systems held S30,000,000,-
900, or more than half.
"He opposed nationwide branch
banking at present but said that
ultimately if bankers became
trained and experienced in the
larger technique of trade-area'
banking he thought it would in
time evolve nationwide branch
banking under control of relatively
few banks, but he did not believe
this would mean monopoly or lack
Of competition. He favored branch
over group banking which, how
ever, he said represented an eco
nomic development along trade
area lines and would spread unless
something else were substituted
and thought 'trade-area' branch
banking would serve this purpose.
ut is the intention Of the Com
mission to develop its own studies
in these questions, watch carefully
every move that is made and every