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Show The National Banking System in Peril? FAILURE of congress at the recent re-cent session to pass the McFad-den-Pepper bill revising the national na-tional banking act seriously Jeopardizes the future of the national banking system, according to Representative Repre-sentative McFadden (Rep., Pa.), chairman chair-man of the house committee on banking bank-ing and currency. The . bill, which Is designed to remove re-move some of the handicaps which place national banks at a disadvantage with state banks and trust companies, was approved by the house and senate committees on banking and currency and was scheduled for passage In both houses but unexpected opposition caused the leaders to sidetrack It. Although congress Is likely to pass the bill next winter, the banking situation, situa-tion, according to Mr. McFadden, will be more difficult to deal with then than now. Many leading national banks, it Is declared, have contemplated contem-plated withdrawing from the system unless the pending bill becomes law at an early date. The bill is supported by Controller Henry M. Dawes and the federal reserve re-serve board and has the Indorsement of the American Bankers' association. "The competition of state banks and trust companies has grown up recently," recent-ly," said Representative McFadden. "The branch banking situation Is developing de-veloping so rapidly that the refusal of congress to consider this restrictive measure is simply an Invitation for an extension of branch banking which will be more troublesome to deal with next December. "Tills bill, the most important banking bank-ing bill since the passage of the federal fed-eral reserve act, is necessary to preserve pre-serve and more firmly establish the benefits and advantages of that act. National banks can exercise no powers except those granted by congress, and the purpose of this bill Is to restore as nearly as possible the equilibrium between be-tween the state and national banks within the federal reserve system. The bill will not place any disadvantage upon the state banks, but Is In many respects favorably to them. "Since January 1, 1918, 173 national banks, each with a capital of more than $100,000, gave up their national and took out state charters and carried with them total assets of nearly $2,-000,000,000. $2,-000,000,000. This Is about 10 per cent of the total assets of the entire national nation-al banking system. At this rate it would not be many years before the system itself would be destroyed and the federal reserve system thereby left with only state member banks, which could withdraw at will." |