Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-02-04
ABSENTEE CONTROL
| OF BANKS DECR|ED
Financial Leader Sees Harm
to Business in Spread
of Merger Plan.
Special Dispatch to The Star.

. NEW YORK, February 4-The "revo.
luton" in American banking is a trenc
the effect of which is absentee control
and If allowed to spread Throughout
/ the Nation can inf1ict serious harm or
business, according to George w. Davi.
son, resident Of the Central Hanover
Bank & Trust Co., in the current issue
of Printers Ink Monthly.
b Banking is service, and since it is
service OF credit, it is a service of a
kind highly unique" Mr. Dawson states
1T would seem that banks deal in
money, but in his heart every banker
knows that banks deal in character
and character is not merely local. It is
individual. 1t is the character, COM
pos1tely and separately considered, of
every bankers Observation-Disclosures
whom he knows by sight and by name
and by reputation.
Sentiment in Banking.
"I believe that Americas banking sys-
tenn, evolved through the years since it
began, has helped our Nation to it's
place in the economic sun. The history
OF our banking is a story of epic achieve
ment in Industrial cooperation. But
achievement by whom and by what? BY
individual bankers and by individual
banks.
What is the local business man to do
If, when he goes to the bank he must
talk with manager who regards credit
as commodity, who is allowed to exer-
else no discretion of his own and whose
decisions are formulated for him-and
formulated in advance-by a manage
ment that, hundreds of miles away,
must draw its guidance from the cri-
terion of credit ratings, or what is more
likely, from the criterion of collateral
values?
American banking can continue to
serve the American business man lust
as it has served his needs and helped
him in the past, but not by absentee
control, not by superorganization, not
by piling power on power. Virtue in
banking is not a matter of size.
lou: national financial machine is a
q mechanism that, thanks to the Fed
eral Reserve System, is as strong, para
doxical as the statement may sound, as
its strongest link
LAS to the quality of the service, as
to its f1eXibility and it's possibilities for
adaptation to local and individual needs
and national needs as well-there can
be no question that the independent
local banks in the towns and cities are
IN better position to serve their COM
mun1t1es and the country at large than
would be any chain or group whose con-
troll is centralized.
"The concentration of money power,
OF credit power, in any center of our
land or in any group of centers vio-
lates our American creed. Not only is
such concentration un-American, it
Is antl-Social. Because it would serve
TO retard business and hamper business
initiative it Is uneconomic.
i submit that we have in America
today an efficient banking system, a
system structually adapted to encour-
age and foster the highest degree of in
lIlatIVe and individual enterprise on the
part OF business men, but it is system
That, with independence and individ-
uaIlsm as deSideratum, can be devel-
oped and strengthened It can be de-
Neloped and strengthened by strength |
enlng the independent, individual banks. |
Long ago banks throughout the
United States began establishing corre- |
Spondent relationships with banks in !
the principal cities-relationships by
which the smaller banks deposited por- |
tons of their funds in the larger banks |
AND looked upon the larger banks as
consultants in all manner of banking |
problems and as co-partners in solv- |
ing those problems
Correspondent banking involves no |
concentration, no shifting of control. |
The independent bank remains indie |
PCuuSIII. operated Dy lCS own directors |
and officers and owned by its own
stockholders. The smaller banks corre-
spondent banks in the large cities are
correspondents of their own choosing.
Between the smaller bank and its larger |
correspondents there has grown up
through the years a bond of confidence
and cooperation.
Correspondent Banks.
LET the larger banks extend and i'm
prove the service they render to their
smaller correspondents. Let the larger
banks unite in group consideration of |
the many ways in which they can be |
helpful. I know that they will find the |
smaller banks highly receptive. I know
for instance, that they will find a ma
jority of them in favor of correspond
ent-bank conventions-conventi in |
which each of the larger banks can call |
its correspondents together for the study |
of mutual problems"