Coulee City dispatch. [volume] (Coulee City, Wash.) 19??-19??, 1936-02-06
WOULD PROTECT
BANKING FIELD
IN RURAL AREAS
American Bankers Association
Announces Purpose TO Corn
bat Return of Excessive
Number Of Banks
CITES LAX CHARTER
POLICIES In THE PAST
Finds Chief Cause of Bank E7ailares
Was Too Many Eanl-s-Existing
Sourd Banlss Serving
Communities Wen

: NEW York. Existing sound
banks, especially tie small banks ii
tho rural districts which are servins
their communities we'll. should be pro
tected from any. return Of the ovel@
banked local conditions caused t,
|. former lax charterlng policies, which
were mainly to blame foi the unfayoi
able failure recordso the past, says thu
Economic Policy Commission of the
American Bankers Association. This IS
brought out In report covering an IN
vestigation 1y the commission of han!
failures and public policies in charter
ing banks.
'The Commissions study gives an
impressive revelation of how great Il
part mistaken public policies in The
chartering OF banks played in creating
the unsound banking structure which
finally collapsed with the Bank Holiday
In March 1888" Robert. v. Fleming,
president of the association, says an a
foreword
"Over- production of banks, literally
by thousands. over many years in the
fac0 Of insistent warnings not only
from bankers and others who recog
nizsd the danger. but even more 50 from
the mounting records of bank failures
themselves, is clearly shown to have
constituted as a whole one Of the great.
est single economic errors in the history
Of tho Nation"
A Recurrence Feared
He refers to fears of a recurrence Of
ovef-bankingH recently expressed Fy
Federal banking authorities. to the
powers given the Federal Deposit In
surance Corporation by the provision of
the Banking Act of 1885 over.the admis-
sion Of banks to membership5iL thein-
surance fund. to strengthened state
laws and to. the policies now being fol
lowed By both national and state super.
vis0ry authorities aimed to safeguard
the nation against overwhelming.
"But sound laws ana conscientious
sufficient safeguard in any field ofFour
complex national life unless they have
the active support of public opinion
hs adds. 1T 10 thetpurpose of the Ameri-
oaa Bankers Association to aid in. mar
shaling public opinion in support, of
both national and state supervisory all
.horities In their efforts to strengthen
ind protectathe banking, structure
The EconOnliassPo Policy Commission
summarizes its findings in part as fol
lows;g tssea,
Tile facts show,a distinct causat re-.
latiohship between the over-chartering
Of banks and the abnormal bank fail
ure coalitions that prevailed frons192o
to the bas.K holiday 1883. lttis desir
able kHat studies be made onethe basis
Of e&perierce to develop standards gov
'erning the number of banks or the vol
ume of bank capital which can be sue
cessfully operated.
Such . study would embrace the.
question neither banking facilitie can
best be supplied to the rural districts BY
small unit banks or by branches fran
banks of substantial capital in laSse |.
centers. Existing sound banks, wfiici1
are serving their communities Naltt
should be protected from any return of,
the over BANKED; local conditions caused
in the past BY lax chartering policies.
Banking Officials Queried
n iynrYi1v a,y,,pp State hank rom.