Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-03-23
Financiers Hold There
Are Too Many Banks
BY HARDEN CoLFAx.

There are too many banks in the
country, according to dnanciers here,
some of whom are closely connected
with the Treasury Department. This
with the announcement last week OF
the merger In New York of the Chase
National Bank, the Equitable Trust Co.
and the Interstate Trust Co,
Statements by the controller Of the
currency. j. w. Pole, and Roy Young
governor Of the Federal Reserve, that
they would approve such q merger and
Mr.. Poles testimony before the bank
ing committee Of the House indicate
that they believe. the country can be
served BY fewer banks
Other flsaRneieFs take the same atti-
tude as result of the reports Of fall
ures Of small country banks In various
sections Of the country. They feel that
the merger Of small banking units into
9 few large ones would reduce bank
failures.
Controller Pole has often and openly
advocated branch banking with an area
limit. On the other hand, other
that they do not favor, any hasty legis-
lation with regard to branch, group or
chain banking, They feel that the sub.
1ect ought to be approached only after
deep study and they point out that
group banking, while possessed of UNI
doubted advantages II 1t Is In the
proper hands, gives an, opportunity for
disastrous misuse Of power If the men
u control are inclined to abuse their
In fact, Controller Pole is the only
Treasury oftlciai who openly and def
nitely has taken . position with regard
to this subject. Others undoubtedly
realize, however, that the progress OF
American life Is such that the old
method Of banking no longer sufices.
It Is pointed out that even here In
Washington there. are twice as many
Of so per cent, it is commended, would
result in exactly as good service 70
the public and still give the remaining
banks an opportunity to make money
It also would reduce the possibility Of
banks getting into dangerous financial
condition.
One point that Is stressed strongly
by advocates Of banking mergers 10 the
the organization Of banks By men not
conversant with or experienced In
sound banking methods. They point
out that the country banker nearly 81.
ways Is q retired farmer or business
man who goes into banking largely
as matter of personal pride. Ere.
quently he Is influenced by old affllia-
tons. acquaintance and friendships.
$4,000 or less, only q few bad loans
or slow loans are needed to put 1t Ia
a serious position.
The need for the small-town country
bank rapidly Is passing. The intro-
auction OF automobiles and buses, with
the Improvement in roads, has made II
possible for the farming population to
do its banking in the larger cities ana
TO take advantage Of the additional
frequently possess. Under the new
system the farmer usually does his
banking where he sells his products.
Advocates of the bank merger system
do not deny that there are opportunities
under the system for misuse of power.
They also agree that the question Is one
Of deep political significance. There
u no doubt that the question Of branch
and corporation banking viii arouse
political activity on both sides.
Branch banking Is not an expert
nnent, except in America, For years
transitional finance, yet, until the
merger of the Chase National Bank,
the Equitable Trust and the Interstate
Trust, England had the biggest bank
In the world. This was because Eng
land had pFacticed branch banking for
centuries, II has worked out In splen-
did fashion in that country, but 1t Is
admitted conditions there do not paraI-
lei those In the United states,
Opponents Of branch banking declare
that it closes the door Of business 20
individual banks and puts too much
power In the hands Of q few big insti-
buttons. The branch bankers answer
this BY declaring that never before have
the individual banks, operated by the
proper methods, offered such severe
competition to the branches OF the
big banks as they are Offering today.
They say that the question is not one
Of power, but Of the personal equation,
and that the contacts which the small
banks have with their customers IN
many cases eQualize the advantages pos
sessed by competitors.
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