Evening Star Newspaper, May 23, 1926, Page 48

THE SUNDAY STAR, WASHINGTON, D. and contrary to the spirit of our dem- ocratic institutions to pass a law that will give a privilege to a citizen in one location under certain conditions and C., MAY 23, 1926—PART 1. other important features of the pro-|this amendment before an agreement posed legislation. p can be reached and the McFadden bill The fact that while there was no |become a law. record vote in the House on the Hull B who considered whether it should be a motor car or a baby and the vote was In favor of the automobile,” h« adds. BABIES LOSE VOTE. Parents Too Often Prefer Motor the injustice of the Hull amendment, have been, and they are willing now to accept the proposed limitation on McFADDEN BILL COMPROMISE AND PASSAGE TRONGLY URGED Bankers Anxious for Meas;xre to Bécome Law. Would Accept Distasteful Amendments to Gain Other Advantages Embodied in Present Proposal. BY L. A. FLEMING. After a strenuous struggle the much discussed McFadden banking measure has run the gauntled of the House and Senate and will soon pass on to the tender mercies of conferees named t ring about an agreement to com- pose difference: Objects thr lation are v sided. They are: Right of ing of national banks without going around the bush is im- sossible, national banks may take or real estate for a limited time, if nece to protect from loss, but otherwise are limited to requirements of busines Branch banking is another feature of the bill. State banks in many “States were fully authorized to op- erate branches, thus operating against Tair competition on the part of the 5. “Representative 1ull of Tllinois, rep- rosenting @ Chicago district, intro- -ed a number of amendments to the re which the House passed. Senate promptly eliminated them 11 shows determination to keep hem out, while certain important mbers of the lower body are fight- iard to retain them. Deep Disappointment Felt. b will be a deep disappointment to uany banks in the Federal Re- forve System if the Hull amendments are retained in the bill, but so great e the privileges offered to national removing several of the handi- caps under which they have ln‘bored‘ 1hat the fraternity is willing to a:;— "nt the House measure, Hull amend- nts and all. Friends of the want no deadloc! vould kill action af {ungress and make its ultimate pass- aze muc r, while the deep dis- A I ok of nankers might Jor the oral Reserve System teelf. The District of L‘lolun::lofl ?‘:?:’1:5 “ra ity, thal s oinikers, want quick actlon that {hey miy enter the mortgage fleld of in- Uestment in earnest, loan savings® )osits on real estate. PO raneh banking here 18 regulated under the Millspaugh act by the con: troller of the cun’!nc');——-hn being s0 e in the matter. S (e Vears the natlonal banks have been knocking at the doors o mgress asking for relief from thai harrow restrictions of the national bank act, passed more than 60 years sz0, when the population of the coun- 4y was less than one-third of what it is today and before our great in- Austrial and commercial development which has marked our economic progress for the past 50 years had egun. Pef ke’ Sixty-elghth Congress heeded the request of the national banks and last year, during the second session of that Congress the McFadden bill was passed by the House of Repre- <entatives by a large majority with- out a record vote, reported favorably by the Senate banking and currency committee, but failed of passage in the Senate, due to the congestion of legislation in that body during the closing days of Congress, which ex- pived by limitation March 4, 1925. Will Accept Measure. Natlonal banks are satisfled with the bill as it was passed by the House and they are willing to accept the amendments made by the Senate. They hope that when the conference committee meets to adjust the differ. ences between the two branches of Congress caused by the amendments inserted in the bill by the Senate that the two bodies of Congress will ac- cept any compromise suggested by tho conference committee and speedily enact the bill into law. “The McFadden bill has been called erroneously “a branch banking bill, because that feature of the proposed legislation has caused a greater amount of discussion in both branches of Congress than any other part of the bill, and one of the branch bank- ing provisions stands today as the most vital and important difference between the House and the Senate. The bill as it passed the House would permit national banks and State banks that are members of the Fed- eral Reserve System to have branches within the corporate limits of the cities in which they are located, sub- ject, however, to the approval of the controller of the currency. Banks in cities with a population of from 25,000 to 50,000 may have one branch. Banks in cities with a population of from 50,000 to 100,000 may have two branches, and banks in citles with a population of over 100,000 may have an unlimited number of branches, pro- vided, however, that the laws of the States in which the banks that desire to have branches are located, author- ize branch banking at the time of the approval of the McFadden bill. This last limitation, “at the time of the approval af the McFadden bill,” constitutes the greatest differ- enca between the Senate and the House with respect to the subject of branch banking. This language is in the “Hull amendment,” and if the bill 1s enacted into law with that *amendment part of it, national banks and State bank members of the Fed- eral Reserve System located in 22 States that authorize branch banking now would he permitted to have city branches, but national banks and State e McFadden measure k in conference. It t this session of bank members of the Federal Reserve System located in the other 26 States that do not authorize branch banking at this time would not be permitted to have city branches, even though the laws of the States in which they are located are changed so as to permit branch banking to be carried on. . Senate Cuts It Out. The Senate banking and currency committee cut this amendment out of the bill. An effort to restore it when the measure was under discussion in the Senate was defeated by a vote of 80 to 17. Thus the Hull amendment constitutes a vital point of difference between the two branches of Congress which must be reconclled before the McFadden bill can become law. When the American Bankers As- sociation met in convention in Chi. cago, two years ago an effort was made to have the association approve the McFadden bill including the pro- vislon for city branch banking by national banks and State banks of the Federal Reserve System. On two occasions during the past 10 years the American Bankers’ Assccfation has gone on record as being unalterably opposed to branch banking in any form, so that it was evident, when this question was brought to the at- tention of the convention in Chicago, a_compromise would have to be effected by the advocates of city branch banking with the opponents of branch banking in any form be- fore the A. B. A. could be placed on record as’ favoring the McFadden Oppose Branch Banking. The opponents of branch banking, consisting of a very large number of small and medium sized unit banks located principally in the central West, sald that they were willing to have the national banks carry on city branch banking, provided, however, that the practice could be confined to those States that authorize branch banking at the time of the adoption of Federal legislation giving national banks permission to have city branches. The advocates of the McFadden bill were 60 keen to get the approval of the A. B. A. that they accepted this limitation, and at the request of the Illinois Bankers’ Assoclation Morton Hull, a Representative in Congress from Illinols, introduced the amend- ment which bears his name. The acknowledged purpose of this amendment is to close the door for- ever against national banks and State bank members ot the Federal Reserve System, located in States that do not now authorize branch banking, taking advantage of any laws that may be passed by those States hereafter au- thorizing branch banking in any form. The advocates of the Hull amend- ment argue that if national banks and State bank members of the Fed- eral Reserve System find that, even though the law of the State in which they are located is changed to au- thorize branch banking, they cannot take advantage of it, it will discourage them from using their influence with thelr State legislature to have the taws changed so as to authorize branch banking. They hope by that method to check the further exten- sion of city-wide or State-wide branch banking throughout the United States, and to hold it where it is today. Arguments of Opponents. ‘The opponents of the Hull amend- ments argue that banking in itself is a purely local or domestic business and that it assumes a national impor- tance only when banks are used by the Federal Government to establish banking systems or fiscal agencles, such as the National Banking System and the Federal Reserve System, for the benefit of all of the people. There- fore, the question of whether banks should carry on their business through a single office or have branches is one for the people of each State to determine without interference from any sovereign power outside of the State. The McFadden bill in estab- lishing a national policy with respect to branch banking has recognized the right of the people to determine whether they want branch banking or not by restricting the city branches of national banks and State bank members of the Federal Reserve Sys- tem to those States that authorize their domestic corporations to have branches. Those who are opposed to the Hull amendments belleve that if the peo- ple of a State determine one year or two years after the passage of the McFadden bill that branch banking is desirable and pass laws to that effect national banks and State bank mem- bers of the Federal Reserve System should be permitted to have -city branches just as similar banks would be permitted to have branches in those States that authorize branch banking at this time. Federal law that would permit a national bank in the State of Califor- nia to have city branches on the ground that the laws of that State au- thorize branch banking at this time, and denying a similar privilege to a national bank in the State of Penn- sylvania in the future, even though the laws of the State are changed so as to permit branch banking, comes pretty near to being ‘“class” legisia- tion, because Federal laws should bear with equal weight upon all whom they are intended to affect. It is con- sidered unfair, unreasonable, anjust HOW IS BUSINESS? Showing Current Business Activity compared with same week a year ago GENERAL BUSINESS ACTIVITY for the country as & whole, indlcated by bank debits outside New York, compared with the same week of last year. ACTIVITY BY FEDERAL RESERVE DISTRICTS Check transactions compared with the corresponding week of last year: Bosion L New Vork 1 Philadelphia | Cieveland | Richmond 1 Atlwnta e i 1 3 LEADING BAROMETERS Showing trend of important factors. Business in dollars (checks cashed) (Department of Labor) rtment of Labor) .. Retail trade (Federal Reserve Board) Wholesale trade (Federal Reserve Boa St Failures (Dun’s) .. Bond_ prices (Annall Stock prices (Annalist) . Stack mazrliet volume (she It jed wnd copyrighted by % Change from year ago. 5. 0. 3. 1 TSieady : 1 e & Steady Steady 3. Declining 1 Declining Steady S 1. Stcady H Steady 5. Increasing 3. Mixed J++1+1+] | ++++ @ n . Cambridge Buston.) deny the same privilege to a citigen in_another location under ideatical conditions. Some students of the sub- Ject have gone so far as to say such a law is Federal interference with the rights and prerogatives of the States, if it is not unconstitutional. Many bankers, while they recognize $1. 00_ Delivers bargain! Semi-Vanity Cane Seat Chair | Stylish Dresser city branch banking in order to get the other valuable provisions of the McFadden bill enacted into law. In other words, they want the McFadden bill, with or without the Hull amend- ment, as they consider the amendment to be rather trivial and non-essentlal when compared to the T i Hull a Refrigerator $5.00 Allowed for Your 0ld Refrigerator Let us have your old refrigera- tor in exchange on a new one. The above liberal allowance will be made regardless of its condition. All sizes and styles. Bow-Foot Bed 3-Pc. 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