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Show BANK CHARTERING ' - POLICY POLICYREVIEWED POLICYREVIEWEDState REVIEWED REVIEWEDState _ State Official Declares Sound SoundPrinciples SoundPrinciples Principles in Licensing LicensingBanks LicensingBanks Banks Are EssentialPHILADP.LPH1ASound Essential EssentialPHILADELPHIA I IBanks PHILADhLPHIA-Sound PHILADhLPHIA Sound PHILADP.LPH1A-Sound PHILADP.LPH1ASound PHILADP.LPH1A PHILADPLPH1A PHILADELPHIA . - Sound publ1t public publicpd public3illcy ' 1'11'y 111y pd ' icy ( ' in 1n fn chartering banks was dls dis dlscuss discussed discusged cuss cussed d by Carl K Withers , Commis Commissloner Commisstoner Commisaloner sloner stoner of ot Banking and Insurance of ofthe ofthe ofthe the State of ot New Jersey , . before thf thfEastern th thiEastern . Eastern Conference on nankln Banking BankingService Bankin.Service BankinService ? . Service , . held here recently recgntly rec nt1y undel under undelthe underthe undeithe the auspice auspices * of the Am.erican American Am.ericanBankers AmericanBankers AmericanBankers . Bankers Association Ho He declared declaredthat declaredthat declaredthat that "few few "tew tew " questions quest10nft bearing on thefuture thp the thpfuture thpfuture future liability stability a and aqd d ecurity security of ot OUI ow OUIbanking owbanking ouibanking banking systems loom 100m as s more 1m im 1mporlant important 1mportant porlant portant than that of ot a sound pollc policy policyto poltcvto } to be pursued in bank bcink chartering ' . .A A . .Alluding Alluding . , lludln udlng $ to g4mpe compet4lv QmpeU itIv4 lv ? yoll pollcieFof ollcief ollciefof ief ' ' or of both botirslattT&nd botirslattTnd ot1 s state stateand t a & and dnalonal na national [ tonal tonalanki'nk oankrn bankfnfcauthorlUea anki'nk ankink anki'nkautboritiei ! . authorlUel autboritiei autboritieito 4o .to to -to . - charter the most mostbanke mostbanks mosibanks banke banks In tbe.paat tbepaat tbtxpast th . 'past past ' . , , he b said Bald that "thl thl "thiE thiE "thiEcountry "tbiFcountry tbiFcountry " ! ' countr country , was ov over orerbankeJ r banked , and thaI that thaIuide thatt thaihiide t uide side from aoy any other consldera.tlon conslderatlon consideration consldera.tloneconomic considerationeconomic considerationeconomic . economic or ori ) otherwise , . thie thit thl . condl condi condltlon condiLion conditlon tlon Lion was brought about largeb largely largebthrough largelythrough largelythrough through an unwise , unsafe and un unth untbtnking unthinking th tbtnking g .hnrt hnrt . charter .hnrtr r poUcyt poUcytalternating pO policy ! YI YIZill , Zill Zillrn.atJg alternating alternatingbetween aUcrnatingbetween rn.atJg rnatJg rn.atJgbetween . ! between the state state tata and national national eye eyefcros SYI y ycms ! tem fcros cms ! , , which has marked and ham hampored hampared hampored pored pared banking progress in this coun coup country couptry country try since its very Inception " . Political InfluenceHe InfluenceHe Influence InfluenceHe He decried political poUtical considera consideratons considerations conslderatlons tons tions ! In connection with the charter charterine chartering charterInc ine ing ot of banks saying "Political Political "PohUcal PohUcal " In Influence induence influence fluence duence has no more place in bank banking banking bankIng ing thai that it has n the dehberations deliberations deliberations01 deliberationsof 01 of our highest highest tribunal-The tribunal The tribunal - The Su SuIJreme Suiireme Supreme IJreme iireme Court of the United States StatesUnUl StatesUntil StatesUntil UnUl Until this is recognized and broughl brought broughlInto broughtinto broughtinto Into being within both our state and andnaUonal andnational andnational naUonal national systems we may never fee feel feelsafe feelsate ! safe against the shifting shlftmg sands ot of otvolitical ofpolitical ofpolitical volitical political expedience and ( favor avor " As to the "element element " of sometimes sometimesridiculous sometimesridiculous sometimesridiculous ridiculous competition heretofore heretoforeexisUng heretoforeexisting heretoforeexisting exisUng existing between the state and na national national natlonal tional systems " he said that much muchmay muchmay muchmay may be said in 10 favor tavor of the progresQ progress progresQmade progressmade progressmade made in recent years In manystates manystates many manytates tates states there exists a I > practical ractical worh work worhlOb workrn workinn rn lOb lObagreement , agreement between local SUI super supervising supervising > er ervising vising authorities and the federal federalauthorities federalauthorities federalauthorities authorities , . whereby all chaiter charter chal ter ap aprlicaUons aprlications applications rlicaUons rlications are mutually considered consideredo o a basis of community need rathel rather rathelthan ratherthan rathcithan than competitive COl\lpetitlve COl lpetitlve \ advantage as be between between between tween systems In some states this thisarrangement thisarrangement thisarrangement arrangement goes e\ e even een \ en further turther in inthe Inthe Inthe the refusal of the one authority duthorlty to toeven toeven toeven even consider a chal chat chaiter tel ter ' while pend pending pending pendIng ing with wltb witb the other otherAside oth > rAside r rAside Aside from the competitive and andpohhcal andpolitical andpolitical pohhcal political aspects of our future char charfor charfor charfor for policy poUcy , he cont'nued contnued ' , there are aresevera areseveral areseveral severa several ! others more Individual and andIlOCa andlocal andlocal local ! which merit consideration considerationAmong considerationAmong considerationAmong IlOCa Among these he mentioned honestyal honestyai honesty ai : > 1 purpose ( ' community 'ommumty ommumty need , . the thecharacter thecharacter thecharacter character of management and ade adequacy adequacy adequacy quacy of capitalMost capitalMost capital capitalMost Most state la laws v . s make referencetl referencethe reference tl , the "c c "eb eb "character character " rgs r ; tert tertres J ! , res.R resR res responsibility . onsl Qw ility . y andfitness ' . ! and andtness nd ndfitness fitness tness " o othe of 01 the the fncor Incorporators oraors ! of a anew anew new w bank . , he said , conUnulDg"So continuing"So continuing conUnulDg continuing"So "So So " Important do 1 I conceive this thisI thisfactor thisfactor I , factor to be , . that I place ft IT first first firstamong drstamong among those toi consideration , . fOI tor fOIunless torunless forunless unless the moth motive e is sound hones honest honestand honestand I Iand and sincere smcere there if is i & . little HUle likelihood likelihoodthat likelihoodthat likelihoodthat that the resultant Institution in its itsservice itsservice itsservice service to the community will reflect reflectother reflectother reflectother other than the spirit of ot Its founders foundersThe foundersThe The Lessons of the Past ' , Too often in the past have char charters charters charters ters been granted to promoters pure pureand pureand pureand and simple-not simple not simple - not always alv.ays alvays . pure , and andby andby andby by no means simple The Tbe countrj country countrjwas countrywas countrywas was dotted with such The Tbe e experl experlencu experiencu perl perlencu encu has been costly and . , It Is to bf be behoped bfhoped ' boped hoped the lesson v . well ell learned , nOl not nOlontv notonly noionlv ontv only by charter granting authontIes authorities authontIesbut authoritiesbut authoritiesbut but by the general public as weBOther wellOther well weB wellOther Other factors to be considered a aamong aamong aamong among the most important In gran grant grantt graming I II I t ing lug new bank charters , h he said snld , art ari artthe arithe anthe the number of ot Institutions aread\ aread already alreadyserving areadserving alreadyserving ! \ serving thi thl the area . , the record of earn earnIngs earnlugs earnIngs Ings lugs of ot existing e\sting e sting evlsting ' \ { institutions , th/ th thnumber th thnumber < / number of failures since 1920 , . an anthe anrtthe the reasons therefor , public con convenlenee convenience convenlence venlenee venience and advantage , the reason reasonable reasonable reasonable able prospects prospeC'ts ' tor for growth of ot thl the thlcommunity thecommunity th thcommunity < community , expectation of profit profitable profitable profitable able oI operation > eraUon and whether a branch branchot branchof brancho ot of ( an existing Institution could couldservr couldserve couldserve servr serve as well . "Sound Sound " public policy polfey demandft demands demandftthat demandsthat demandsthat that no new banks bo be chartered chafltered chaRered un unlesa unless unless lesa less there is a definite , . neccssltoUf necessitous neccssltoUfand necessitousand necessltouand ? and permanent need , " he declared declared"Sound declared"Sound declared"Sound declaredSound "Sound Sound " mergers , consolidations and andtho andtho nd ndtho tho sensible extension of branch branchbanking branchbanking branchbanking banking are much to bo be preferred preferredto to any general movement toward 8 a 8flood aflood aGood flood of new charfprs chartprs charters But her here hereagain hereagain ( agafn again we vve must guard carefully carefullyagainst cnrefull carefullyagainst ) against monopoly monolJoly or unbrIdled unbridledbianch unbrIdledblanch unbridledbranch blanch branch blanchcompetition branchcompetition competition , either of which whichmight whichmight whichmight might become as dangerous as the theorganization theorganization theorganization organization of D'lW DlW now n- n nw ' - w banks " |