Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-01-09
BRANCH BANK GAIN
PREDICTED IN u. S.
Growth of System Traced
in Report of Committee
on Social Trends.
BY the Associated Press.

BY the Associated Press.
NEW YORK, January 9.-That Amer
lean banking will move toward
greater Capitalization in the future,
with the likelihood that branch banks
will multiply both in the State and
national systems. is the conclusion pre-
sented in the report of the Presidents
Committee on Recent Social Trends.
The numbers of banks with branches
has grown from 70 to 722 since 1900
the report says, and there are 1888
chain and group systems. The number
of banks merging and consolidating has
grown constantly from 20 in 1900 to
735 in 1890 Meanwhile the total num-
Der of banks has declined from 1920
III 1920 to less than 10000 in 1881.
Special Report.
This consideration of banking is
drawn from the special report on
economic organization by Dr. Edwin F.
Gay, professor of economic history at
Harvard, and DR.. Leo Wolman. profess
sor of economies at Columbia Uni
versity. 1t is one of 90 chapters in the
two-volume, 1.500-page report of the
Committee on Recent Social Trends.
Since the war;" the economics re-
port says, ''the instability of banks in
agricultural areas, the vulnerability of
the small bank to rapid changes in
economic conditions and the contagion
of the combination movement in other
business fields produced great ac-
celeration in the tendency toward
larger banking institutions and toward
the Capitalization of control
Branch banking has received partic-
ular attention in recent years as one
means of providing banking system
which can effect greater equalization
and more efficient utilization of the
credit resources of the country.
1.-THE future trend in banking organ
ization would seem to be in the direc-
ton of the multiplication of branch
banking systems and liberalization of
the laws respecting them.
This conclusion Is supported by the
great rapidity with which branch bank
ing has grown in the past decade. Be-
fore 1921 the movement was confined
principally to State banks, but since
then national banks have expanded in
the same way
Branch banks are directly owned
branches of central banks. as distinct
from chain and group banks which are
constituted from many individual banks
under the control through stock owner
ship of individuals or holding COM
pan1es.
Extent of Control.
These chain and group banks, grow
ing most rapidly in States which re-
strict or prohibit branch banking, con-
troll 2,047 banks with aggregate loans
and investments of $4,000, 000, 900. The
systems control 10 per cent of all banks
and 81 per cent of all loans and in
vestments.
Undertaken for the same reasons as
motivated the promoters of branch and
group banking" the report says, "the
need for mergers has unquestionably
been increased since 1929 by the ex-
pedient of absorbing weak banks. which
are on the verge of failure, into the
stronger institutions of the same COM
munity
Bank consultations, comparatively
rare before the war, rose sharply in
the depression of 1921 and have in
creased constantly ever since. In this
movement, also, all types of banks, ma
tional State, trust companies. stock and
mutual savings and private banks, have
participated"