Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-01-29

guards provided by a Demo-
cratic Congress in 1888 and
would open the doors again for
mushrooming of banks which
was major factor in commu-
nifty wide difficulties of the bank
holiday, it will be argued.
/ To date Ray M. Gidney, Con-
itroller of the Currency. has ad-
Ihered to his opinion that the
present II banks and trust COM
Ipanies and their 40 branches
scattered in all sections of the
District are adequate to meet
community needs. In that regard
he has followed policy set by
every Democrat who preceded
him in Office since 1882.
Memories of the bank holiday
ARE still pretty fresh among both
bankers and businessmen here.
The difficulty then was too many
weak banks. DepoSitors as well
as bankers and stockholders
learned the importance of strong
banks.
Adequate Supervision
Was Needed in 1892
( Under the dual banking sys-
ITEM then in effect, institutions
chartered under State laws were
supposed to be supervised by the
States. but there was little super
vision, If any. The District of
Columbia itself had no adequate
means for supervision.
| 1t seemed clear to the Demo-
cratic Congress of the time that
weak banks had to be put to-
gether into strong banks that
could serve the community. 1t
also was decided that with no
dependable alternative, the Con-
ltroller of the Currency should be
given the responsibility of in
specting the books of all District
banks periodically. whether ma
tional banks, savings banks or
trust companies.
The District still has a dual
banking system, as the Con-
troller regulates the institutions
on the basis Of different statutes
under which they were organ
lied.
In a recent statement reaffirm-
ing his belief that present Dis
ltrict banking facilities are ade-
Iquate. Mr.. Gidney recalled that
so years ago. at the end Of 1925,
the District had a. banks oper-
ating 20 branches and with total
assets of $500 million, an aver
age Of only around 81 million
With available business spread
this thin. the depression days of
the early 30s took a heavy toll
among these institutions, he
pointed out.
District Now Served
By Sc Bank Offices
The great difference rests in
the fact that today II strong
and sound banks are serving the
community with head Offices and
40 branches rather than A banks
with 20 branches engaged in a
struggle for existence which ulti-
mately terminated In absorption
by other banks or outright fail
ures," he said.
While District banks have
shared in substantial community
growth since 1882. the Klein pro-
posal comes at time when
growth has slowed to a walk in
the District itself and is continu-
ing in large part in nearby Mary
land and Virginia where an en-
tirely different regulatory stu
alton exists.
Not long ago leading banker
remarked privately that with de-
posts showing little change for
the last few years. District banks
had reached the point where the
only way they could grow was
to merge.
Mr.. Gidney yesterday issued
his routine summary of the con-
idition of Washington banks and
trust companies at the end of
1855. Assets Of $l.493.17S,000 at
that time were up 81 per cent
from a year earlier, deposits of
81 AL ,494.000 were only 3 per
cent higher but loans of $579.-
$50. 900 we're up is per cent.