The midland journal. (Rising Sun, Md.) 1885-1947, 1930-09-05
RADICAL CHANGES
TRANSFORM BANKING
National Commission Sees
Changing Opinion on Branch
Banking lssue-Studies Group
and Chain Banks.

Banking Issue Studies Group
and Chain Banks.
NEW YORK.-Modificatio Of the at
titude of bankers ON the long disputed
branch banking question is forecast in
review and report covering rapid
changes going on in banking issued
here by the Economic Policy Commits
sion of the American Bankers Assoc
citation. The report, however, after
referring to recent proposals that ma
tiona1 banks be given branch banking
powers within the business territory
surrounding their location, declares
that 1--WE do not believe that so-called
'trade-area' branch banking is likely
to gain the support of any large per-
centage Of the banking fraternity"
The commission says that the most
important development that has af-
fected American banking in recent
years involves the rapid growth of
multiple banking organizations in the
form of group, chain and branch bank
ing systems" and adds that "we pre-
sent this report as an unprejudiced
economic study and have no theories
or policies to urge at this time" The
statement says that the commissions
information indicates there are now
269 group or chain bank systems,
which control 1922 banks and $15,285,-
100000 in aggregate resources, and
that there are only six states and the
District of Columbia where it does not
find any group organizations.
The Commissions Investigation
eve have been in touch with the
managers of many important bank
groups" the report says. aside from
the obvious economies Of centralized
operation and control number of
these organization 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 it's advantages or disad-
vantages compared to unit banking.
"The Banking and Currency Com
mittee of the House, which is con-
Quoting an investigation into banking
developments, has called number
of operating heads Of some Of the great
group systems. These men declared
that they found, under certain condi-
lions, definite operating and economic
advantage in both group and branch
banking over Independent unit bank
ing. Some thought group banking was
only transitional stage, that branch
banking was preferable and if it were
permitted on an extensive enough
scale they would change their groups
over to branch systems. Others held
that group banking was preferable.
"Some held that the ideal plan was
a combination of the two with group
bank units for localities strong enough
to support complete banking institu-
tons and with branch offices extend
ing further into the smaller places
requiring banking services but not
large enough to support complete
banks. Several of these who advocated
multiple banking declared that never
theless they believed there would al
ways be room for vigorous indepen-
dent unit bank competitors.
Government Officials Express Views
"The Comptroller of the Currency
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 Comp
troller. He said there were 24,645
banks and 3,547 branches, total Of
2S,192 banking offices; that in this
total, $3.50 offices were either branches
or bank members Of groups, or both,
leaving 21,S39 banking institutions
that might be definitely termed indie
pendent unit banks, having no
branches and in no way connected
with group affiliations. He said all
the banks had total loans and invest
ments of $5S,50O, 100000. of which the
group and branch systems held $780,
000,000,000, or more than half.
HE opposed nationwide branch
banking at present but said that ulti.
mately 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 rel
atively few banks, but he did not be-
lieve this would mean monopoly or
lack of competition. He favored
branch over group banking which,
however, he said represented an eco
nomic development along 'trade-area'
lines and would spread unless some.
thing else were substituted and thought
'trade-area' branch banking would
serve this purpose.
st is the intention Of the Commits
sion to develop its own studies in
these questions, watch carefully every
move that is made and every bit of
information that may develop in this
connection and keep itself prepared
to give an unbiased and accurate
statement of the facts of the case
IS