Show WOULD PROTECT mm BANKING FIELD IN RIMAL AREAS american bankers association announces Announce 3 purpose to combat return of excessive number of banks CITES LAX CHARTER POLICIES IN THE PAST finds a chi chief f cause of bank failure was wa to too many bank existing sound banks gerving communities well NEW YORK existing sound bound banks banks especially the small annii banks to lo the rural districts which are serving their communities well should be protected from rom any return ot of the local conditions caused by former ax chartering policies which wre were mainly to blamo blame for the unfavorable failure record ut the past says gays the economic policy commission ot of the american bankers association this la is brought out in a report covering an investigation vesti gation by the commission ot of bank failures and public policies in chartering banks the commissions study gives lu in impressive revelation ot of how great a part mistaken public policies in the chartering ot of banks played in creating the tha unsound bankin structure which finally collapsed with the bank holiday in march 1933 robert V fleming president ot of the association says in a foreword overproduction over production of 0 banks literally by thousands over many years in the face ace ot of insistent warnings not only aiom riom bankers and others who lecog nihed the danger but even more so from the mounting records ot of bark bank failures allures themselves Is clearly shown to have constituted as a whole one ot of the greatest single economic errors in the history of 0 the nation A recurrence reared feared he refers to tears fears ot of a recurrence ot of aver banking recently expressed by federal banking authorities to the powers given tle federal deposit in aurance corporation by the provision ot of the banking act of 1935 over the admission ot of banks to membership in the in aurance fund to strengthened state laws and to the policies now being fol lowed by both national and state supervisory authorities aimed to safeguard the nation against over banking but sound laws and conscientious officials are not of themselves always alway sufficient safeguard in any field ot of ou our complex national life unless they have the active support of public opinion he adds it Is the purpose ot of the amerl ameri can bankers to aid in marshaling public opinion in support of both national and state supervisory authorities ties in their efforts to strengthen and protect the banking structure the economic policy commission sum summaries marNes its findings in part as follows the facts show a distinct causal relationship lation latious ship hip between the over chartering of banks and the abnormal bank failure conditions that prevailed from 1920 to the bank holiday in 1933 it is desirable that audies be made on the basis ot of experience to develop standards governing the number of banks or the vol ume of bank which can be ba sue suc cess fully operated such a study would embrace the question whether banking facilities can best be supplied to the rural districts by small unit banks or by branches from banks ot of substantial capital in larger centers Ei existing sting aund banks which are serving their co muni ties well should be protected from any return of the over banked local conditions condl tlona caused la in the past by lax chartering policies banking officials queried an inquiry among state bank commissioners miss loners ners shows a preponderant opinion against increasing materially the number of 0 banks coupled with the fact that present laws give then them sufficient discretion to prevent a repetition of 0 the grave errors of 0 the past under prevailing abnormal condl eions with the federal government ex et ten exer exercising LISIng loaning powers power la in competition with the banks and with industry itself so largely supplied with funds as to render it to a great degree independent of normal bank borrowing tho the banking structure even with its present reduced numbers finds it did cult to support its existing capital in vestment and operating personnel these ire new factors tac tors intensifying the need tor for highly prudent and re astrictive strict lve ive chartering policies we urge the retirement ot of the federal government from the banking bus business inias as rapidly as the return of normal bust ness conditions warrant |