Show DUAL BANK SYSTEM FAVORED BY BANKER state slate and national supplement each other in serving Count country rys varied financial needs suggestions that all banks aln RECENT in the tha united states be under fe oral jurisdiction doing away with tho the chartering of banks by the various states recalls tho the opposition to this plan presented at tho the recent convention of tho the american bankers association by it S hecht of 0 N new ow orleans chairman of its economic rolley policy commission mr hecht said there are just as good reasons why thero there should bo be state as well as national banks as that thero there should bo be state as well as a national government I 1 do not think that analogy Is farfetched tho the states should not suri render all political jurisdiction to the file central government and the local business life of tho the states should not be made to surrender all control over financial functions to national financial instrumentalities there are many va riat ions of business conditions from state to state and there are special fiscal requirements of the various states it Is entirely logical therefore that tho the states should retain the right to charter banks so as to mold and direct their affairs in accordance with tho the states governmental and business requirements quire ments and keep ferem adapted to localized sentiment and conditions the argument Is sometimes advanced that the dual system jeopardizes the life ot of the federal reserve system because under it there Is a large group of banks that are free to remain out of or to withdraw from the system facts and figures prove that this is a specious argument it Is true that thero there has been somo some shifting from national to state charters especially in cases of mergers of large national banks with banks operating under state charters however the federal reserve system was not weakened in this process because the merged institutions almost universally retained their membership in the system on a voluntary basis moreover the records show that state bank members are just as good members of tho the system as national banks and the ratio of state bank resources in the federal reserve system la Is constantly growing in 1922 national banks held about 65 per cent of the resources of reserve members and state banks about 35 per cent while in the nationals held only 60 per cent and state banks 40 per cent banking systems help each other reciprocally the state and national banks bank systems have helped each other if the national banking law has served in some respects as something of a model code toward which state banking laws more and more have approached pro ached year by year so have the state codes developed valuable reforms which have suggested improvements tor for the national laws A great many undesirable competitive inequalities have been wiped out by this mutual evolutionary process and further progress along the line of uniformity so far as Is desirable Is anticipated however I 1 do not believe that it Is a disadvantage to have two banking codes that differ in some respects it t is quite probable that the state bank ing code in many instances represents a closer adjustment to local conditions than could be had under the national banking laws and this is a situation that should be retained there should however not be competition between the two banking codes competition should bo be between banks themselves and not between the laws under which they operate the effort to offer too great allure allurements allu rementa ments in one code as against the other could lead only to weak banking laws but I 1 do think that there should be ba the alternative opportunities that now exist which banking institutions and local business interests 11 t rest a may choose so that they can function or conduct their business relationships lation ships under that banking code which best beat meets the conditions of the times a and of the place as they see them bitts hud this has been illustrated in bota boi directions la in states where such unsound measures as 13 the guarantee of d deposits e p it cs were operative state banks dorsh h had a the opportunity to escape the baleful effect of such laws on the other land hand I 1 when a court decision was handed banded down in worcester massachusetts chu which rendered uncertain the position of trust assets acquired by a national bank through a merger with a state bank it was a real advantage for national banks affected to take out and operate under a state charter either on a temporary or a permanent basis as circumstances make expedient in my opinion bankers national as well as state should combat the thought that conceives of depriving us of the vitalizing benefits of our dual system |