The midland journal. (Rising Sun, Md.) 1885-1947, 1931-07-31
:
BANKERS SUGGEST
BANKING REFORMS
Economic Policy Commission of
American Bankers Association
Recommends Aids to Prog
ress in Banking Business.

FOLLOWING q nationwide survey
= Of banking conditions and opinion
among bankers, the Economic Policy
Commission of the American Bankers
Association has made the following
recommendations for banking better
ment:
"Under the category Of improved
bank management specific improve
ments we might summarize are:
"(1) Liquidation or consolidation of
banks where changed local economic
conditions render this desirable:
"(2) Wider afiliation among state
banks with the Federal Reserve Sys-
tenn;
"(3) Development Of limited branch
banking where economic conditions
and legal authority make this expedi-
emit;
"(4) A more general practice, espe-
cially lacking among country banks, to
analyze the cost of carrying accounts
and other operating details and the
establishment Of proper service charges
to make all classes Of function profit
able;
"(5) A more general application Of
the theory and practice Of secondary
reserves;
"(s) Avoidance by banks Of undue
borrowing merely to increase their own
profits by relending at higher rates, or
to over-expand credit to local business
in order to increase their own bust
ness;
"(7) Cooperation among bankers In
local communities through city, county
or regional clearinghouse 80 as to
promote mutually beneficial conditions
and practices;
"(S) The insistence upon higher
educational effort and qualifications
among employees, especially those to be
trusted with executive duties.
legislative Measures Proposed
"There are some external measures,
along moderate legislative and super
yisory lines, that we also believe
would help strengthen banking. Among
these are:
"(1) The broadening in the states
Of branch banking laws where condi-
lions warrant an extension Of this
type Of banking service to the public;
"(2) The establishment Of sound
minimum capital funds under which
banks will be allowed to operate, which
should be materially higher than now
prevails in most states; specifically,
we believe that the minimum capital
with which any new bank shall be
chartered, whether state or national,
should be at least $4,000;
"(3) The provision Of funds and
regulations to keep the official stats
Of all supervisory departments up to
q level OF ability and integrity that
will universally inspire confidence
among bankers whose activities they
are empowered to review, and will sup
ply real added defenses to the public
interests they are appointed to protect.
"(4) In connection with the policies
Of bank chartering departments, we
would recommend that, even to
greater extent than is now the prac-
tice, the greatest care and moderation
should be exercised in granting new
charters, so as to guard against over
banking or the launching Of new banks
by unqualified persons, which have
doubtless been serious factors in the
bank failure situation in the past.
"(5) Also, referring to Federal Re
serve practice not requiring legisla-
tion, we believe that the Federal Re-
serve Banks should exercise more free
ly their rights to examine banks and
use their discretionary power to refuse
rediscount facilities to banks INDUCING
in Objectionable banking methods"