Show BANK chartering POLICY P REVIEWED state official declares correct principles in licensing banks are essential for sound banking conditions philadelphia DELPHIA sound public policy in chartering banks was dis cussed by carl K withers commis aloner of banking and insurance 0 of the state or of new jersey before the eastern conference on banking service held here recently ander the auspices of the american rankers bankers association tie ho de blared that thai few questions bearing on the future stability and security of our banking systems loom as more important than that of a sound policy to be pursued in the chartering or of banks alluding to competitive policies ot ol both state and national banking au an ties to charter charier the most banks in the past tie he said that this country was and that aside from any other consideration economic or other wise this condition was brought about largely through an unwise unsafe and unthinking charter policy alternating between the state slate and national systems which liss has marked and ham bam banking progress in this country since its very inception political p oli influence he decried political considerations to in connection connect i on with the chartering of banks saying political influence has hag no more place in banking than it t has in the deliberations of our highest tribunal the supreme court cou i rt of the united statts states until this Is 13 recognized and brought into being within both our state and national systems we may never feel eel safe against the shifting shit ting sands of political expedience As to the element of sometimes ridiculous competition heretofore existing between the state and national systems he be said that much may be said in favor of the progress made in recent years in many states there exists a practical working agreement ber be tween local supervising authorities and the federal authorities whereby all charter applications are mutually considered on a basis of community need rather than competitive addan tage as between systems in some states this arrangement goes even lurther further in the refusal of the one authority to even consider a charter while pend ing with the other he declared aside from the competitive and political aspects of our future charter policy he be continued there are several others more and local which merit consideration among these he bo mentioned honesty of purpose com coin need the character chai acter of management and adequacy of capital most state laws make reference to the character responsibility and fitness of the incorporators of a new bank he be said continuing so important do I 1 conceive this ibis fac actor to be that I 1 place it first among those for consideration for unless the motive Is sound honest and sincere there Is 13 little likelihood that the resultant institution in its service to the community will reflect other than the spirit of its founders the lessons of the pat too often in the past have charters been granted to promoters pure and simple not always pure and by no means simple the country was dotted with such the experience has been costly and it Is to be hoped the lesson well learned not only by charter grant ing authorities but the public other factors to lo be considered as among tho the must most important in granting new bank charters be said are the number of institutions already serving the area the record of earnings of existing institutions the number of tall all ures since 1920 and the reasons there for public convenience and advantage the reasonable prospects for or growth of the community expectation of prof bitable operation and whether a branch bank could serve as well sound public policy demands that no new banks be chartered unless there Is a definite necessitous and permanent need he declared sound mergers consolidations and the sensible extension exten of branch banking are much to be preferred to any general movement toward a flood of new char but here again we wa must guard carefully against monopoly or un bridled branch competition either of which might become as dangerous as the organization of new banks |