Evening star. [volume] (Washington, D.C.) 1854-1972, 1962-06-11

1ully worked out mergers 10 pr
sound competition and converts
today by Walter L. Green, of
At the closing session of Il
convention at Hot Springs. Va.
sensation by objecting to a
resolution Of the District Bank
ers urging legislation to set up
trade or economic areas around
leading cities of the Nation to
permit downtown. banks to
cross political boundaries and
operate on an area-wide basis.
Despite Mr.. Green's request
to table the resolution pending
further discussion of the pro-
posal by both downtown and
suburban banks, the resolution
was adopted by the District
Bankers.
More than half of the banks
represented at the convention
were suburban banks who are
associate members and could
not vote on the resolution. They
were shocked by its passage
and now are discussing what to
do about it.
Restricted to Mergers
Mr.. Green said his alterna-
tive plan, which would permit
big-city banks to cross political
boundaries into the suburbs
only by merger, would avoid
an unsound mushrooming of
banking facilities that would
be DETRIMENTAL to both the
banks and the public. It also
would free central city banks
from their present shackles,
and. allow them to follow their
customers into the suburbs.
He emphasized that he Of
fered the plan entirely on his
own responsibility and not for
his bank, the Suburban Trust
Co., or any other institution.
In urging adoption of the
District Bankers resolution at
the convention, Robert c..
Baker, president of American
Security g. Trust Co., argued
that area-wide banking should
be instituted as the political
boundaries already had been
crossed by holding companies.
Financial General Corp. owns
District, Maryland and Virginia
banks.
If Mr.. Green's plan for area
wide banking by means of
merger ever becomes a reality
it certainly raises the prospect
Of banks of 81 billion or more.
It would permit Washington
banks to compete directly with
Baltimore banks. of which
three already have entered the
Washington suburbs by the
merger route. Traditionally, the
nearby suburban banks always
have maintained closer ties
with Washington than Balti-
more banks.
There may be a move from a
few of the District bankers to
persuade the majority to rescind
the resolution passed over the
protest Of Mr.. Green and other
suburban bankers. Francis G.
Addison, jr., board chairman of
Security Bank, and Frank
Gunther, president of the same
bank, have indicated such an
effort will be made.
Large Sums Involved
There isn't much doubt that
If the resolution is permitted to
stand that a lot of hard feelings
will result among suburban
banks, and several of the larger
ones may break off long-stand-
ing correspondent relationships |
with downtown Washington |
banks and supplant them with
arrangements for direct clear
ings through the Reserve banks
and other cities. This would
result in the withdrawal of
large sums deposited in Wash
i1gton banks for clearing re-
quirements Of the suburban
banks.
The District bankers have
chafed for a long time at the
political boundaries which have
prevented them from moving
out into the rapidly growing
suburbs where many of their
customers have gone. They
have felt that they were in a
position to offer superior serv-
ices and safety to the suburbs.
In some of his recent re-
views of merger proposals,
James j. Saxon, Controller of
the Currency, has questioned
the wisdom Of permitting po-
litical boundaries in urban
areas to keep big-city banks
from going out into the sub
urbs. His comments were re-
ferred to in the District bank
ers' resolution.
However, Mr.. Saxon told this
reporter at the convention that
his comments had explored
only the possibility and no con-
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