The Waterbury Democrat., 1934-11-21

a hodgepodge of rules, regulations
 and supervision. Every state in thi
 Union has it's own banking law 'ant
 issues charters authorizing the ere
 ation of banks. The federal gov
 ernment, through the comptrollcl
 of the currency, may issue charters
 to engage in the banking business
 in any state.
 The organization of state anc
 national banks has been race oi
 competitive laxity between the fed
 eral banking authorities on the ono side and the respective state bank ing departments on the, other. Lit orally, any group that could raise the minimum capital requirements which for number of years was $25,O00 in the case of nationa! bank and in many states only S10,- 900 in the case of state banks could get charter.
 Confidence in English Banks
 The records show that England in the past has had the same kind of banking troubles that America has experienced. Since 1700 many banks in England, some with branch systems, have come and gone. Losses to depositors have resulted. But England has not seen fit to nationalize her banks. Her policy of hands off banking remains involate; and therein lies the secret of the great success of the English banking system and of it's invaluable assistance in up the trade and com- merce of the empire.
 Probably the most valuable fea- ture of the. English system has been it's ability to retard the effects of poor business conditions. When a depression begins in England, the banks are ma position, by vir- tue of their independence, to cX- ercise reasonable business judS- ment in their relations with cus- toners. If a loan commences to look slow that under normal con- ditions would be good, even in cases that require several years to effect a work -out," the bank of- ten carries on. 1h the event that securing the loan can- not be sold at something near it's intrinsic or normal value, the salo Is not forced; and, as result, the of business concerns and the liquidation of real estate. conn modities, bonds, and other securi- ties held by banks against loans are much smaller during periods of distress in England than in' the United States.
 Our system hastens and aggre- yates depression. The liquidation Is like a rolling snowball; as its increases, the depres- sion becomes bigger and broader md deeper. Bank examiners and departments commence 70 scrutinize loans more closely; md, as the snowball continues to .oll, more and more loans are placed in the "slow and doubtfur' column. Supervision and regulation become rigid, in contrast to the axity that prevailed when condi- ions were good, whereas the op- ,osite policy would unquestion- lbly be the wiser course. :.
 It appears, therefore, that + vouldl profit us to adopt some of he English theories of banking. The probability is that no Ameri- ,an banker would advocate the anne broad freedom of action in banking in this country that Eng and permits. The ideal policy would profit us to adopt some of wo extremes. Probably without every banker would rec ,mmend that our federal reserve ystem be placed entirely beyond he influence of politics.
 If and when reform banking leg station is drawn, the recognized re- ,utable bankers should have 'oice in the principles that are aid down, because they are better lualified by experience and bus. ness background to devise wise and workable laws than are numbers if our law-making bodies, who, in practically every case, have not ,een engaged in this line of bus ness. Some of our ablest and most citizens are bankers, existing prejudices o the contrary; and, unless and 1ntil they and the members or congress join ina spirit of coopera- ion and sincerity to formulate a ;ound monetary and banking pro- gram, thereby restoring public congress join in a spirit of coopera- IS in our banks, a return to good business conditions would seem dif- icult, if not impossible.