HEAD OF LARGE BANK OPPOSES CHAIN SYSTEM
HEAD OF LARGE BANK OPPOSES CHAIN SYSTEM President of New York Institution Points Out System's Dangers CO-OPERATIVE BANK PLAN IS ENDORSED A Folly to Scrap Present Successful System, He Declares...
...It can be developed and strengthened by strengthening the independent, individual banks...
...according to Georgp W. Davison, president of the Central Hanover Bank %p the Printers' Ink Monthly...
...What is the local business man to do if...
...The independent bank remains independent, operated by its own directors and officers, and owned by its own stockholders...
...Long ago banks throughout the United States began establishing correspondent relationships with banks in the principal cities—relationships by which the smaller banks deposited portions of their funds in the larger banks and looked upon the larger banks as consultants in all manner of banking problems and as co-partners In solving those problems...
...I know that they will find the smaller banks highly receptive...
...Correspondent banking involves no concentration, no shifting of control...
...American banking can continue to ¦serve the American business man just as it has served his needs and helped him in the past—but not by absentee control, not by super-organization, not by piling power on power...
...when he goes to the bank, he must talk with a manager who regards credit as a commodity, who is allowed to exercise no discretion of his own...
...Our national financial machine is a mechanism that, thanks to the Federal Reserve System, is as strong, paradoxical as the statement may sound, as its strongest link...
...We have in America today an efficient banking system, a system structurally adapted to encourage and foster the highest degree of initiative and individual enterprises on the part of business men, but it is a system that, ¦with independence and individualism as a desideratum, can be developed and strengthened...
...HEAD OF LARGE BANK OPPOSES CHAIN SYSTEM President of New York Institution Points Out System's Dangers CO-OPERATIVE BANK PLAN IS ENDORSED A Folly to Scrap Present Successful System, He Declares in Strong Article , (Special to The Progressive) NEW YORK — The "revolution" in i American banking Is a trend the effect lot which is absentee control, and if mliowed to spread throughout the nation ran inflict serious harm on bxisi-$jess...
...Not only is such a concentration un-American, it is anti-social...
...By individual bankers and by individual banks...
...But achievement by whom and by what...
...The smaller bank's correspondent banks in the large cities are correspondents of their own choosing...
...The history of our banking is a story cf epic achievement in industrial co-operation...
...I know, for instance, that they will find a majority of them in favor of correspondent-bank conventions — conventions In which each of the larger banks can call Its correspondents together for the study of mutual problems...
...It is the character, compositely and separately considered, of every banker's customers— customers whom he knows by sight and by name and by reputation...
...There is no advantage to the people of New England In a consolidation of any of the New England railroads with other systems except possibly In a New England system, according to the report of the Massachusetts department of public futilities, just Issued...
...NO ADVANTAGE IN RAILWAY MERGER , BOSTON, Mass...
...Our Place in San *"I believe that America's banking system, evolved through the years since it began, has helped our nation to its place in the economic sun...
...Davison states...
...J The experience of the New England P>ads in the last severaJ yrar.i Indi-KatfS that they can b? mr.de self-sustaining, the report tays, and there Js |w CBBMtoB, JWrMMOUflatitTJi...
...and whose decisions are formulated for him—and formulated in advance—by a management that, hundreds of miles away, must draw its guidance from the criterion of credit ratings, or what Is more likely, from the criterion of collateral value...
...Banking is a service, and since it is s service of credit, it is a service of a kind highly unique...
...It is individual...
...Let the largrr banks unite in group consideration of Qu many ways in which they can be helpful...
...Let the larger banks extend and Improve the service they render to their ¦mailer correspondents...
...Concentration Dangerous "The concentration of money power, of credit power, in any center of our land, or in any group of centers, violates our American creed...
...Between the smaller bank and larger correspondents there has grown up, through the years, a bond Of confidence and co-operation...
...It would seem that banks deal In money, but in his heart every hanker knows that banks deal in character, and character is not merely local...
...As to the quality of the service, as to its flexibility and its possibilities for adaptation to local and individual Speeds—and national needs, as well — there can be no question that the independent local banks in the towns and cities are in a better position to serve their communities and the country at large than would be any chain or group whose control is centralized...
...Virtue in banking is not a matter of size...
...Because it would serve to retard business and hamper business Initiative, it is uneconomic...
Vol. 1 • February 1930 • No. 9
