| Show DUAL BANK SYSTEM FAVORED BY BANKER state and national institutions supplement each other in serving financial needs ne eda I 1 CENT suggestions that all RECENT RE banks in the united states be under federal jurisdiction doing away with the chartering or of banks by the various states recalls tue opposition to this plan presented at the recent convention of 0 the american bankers association by B R 3 hecht of new orleans chairman of its economic policy commission mr hecht said there are just as good reasons why there should bo be state as well as national banks as that there th ore should be state as well as a national government I 1 do not think that analogy Is farr farfetched far fetched etched the states should not surrender all political jurisdiction to the central government and the local business life of the states should not be made to surrender sl all control over financial functions to national financial instrumentalities there are many variations of business conditions from state to state and there are special fiscal requirements of the various states it is entirely logical therefore that the states should retain the right to charter banks so as to mold and direct their affairs in accordance cor dance with the states governmental and business requirements and keep them adapted to localized sentiment and conditions federal reserve system the argument is sometimes advanced that the tha dual system jeopardizes the life 0 of the federal reserve system because under it there la Is a large group of banks that are tree free to remain out of 0 or to withdraw from the system facts and figures prove that this la Is a specious argument it Is true that there has been some shifting shit ting 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 the system as national banks and the tha ratio of 0 state bank resources in tho the federal reserve system is constantly growing in 1922 national banks held about 65 per cent ot of the resources 0 of reserve members and state banks about 35 per cent while in 1929 the nationals held only 60 pe per r cent and state banks 40 per c cent ent reciprocally the state and national banks systems have helped each other it the national banking law has served in some respects as something ot of a model code toward which state banking laws more and more have approached pro ached year by year mohave so jiahe the state codes developed valuable reforms which have suggested improvements prove ments for the national laws A great many undesirable competitive inequalities have been wiped out by this mutual evolutionary process and further progress along tho the line ot of uniformity so tar far as is desirable is anticipated two systems system desirable f however I 1 do not belleve believe that it is la a disadvantage to have two banking codes that differ in some respects it Is quite probable that the state banking code in many instances represents a closer adjustment to local conditions than could be ba had under tho national banking iamb laws and this Is a situation that should be ba retained there should however not be competition between tween the two banking codes competition should bo ba between banks themselves and not between the laws under which they operate thu tho effort to offer too great allure ments in one code as against the other could lead only to weak banking laws but I 1 do think that there should be the alternative opportune ills that now exist which banking institutions and local business interests may choose so that they can function or conduct their business relationships under that banking code which best meets the conditions of the times and ot of the place ais they see them this has been illustrated in both directions in states where such unsound measures as the guarantee ol of deposits were operative state banks had the opportunity to escape the baleful effect ot of such auch laws on the other hind hand when a court decision was handed down in worcester massachusetts which rendered uncertain the position of 0 trust assets acquired acquire dby by a national bank banh through rough a merger with a state bank it was ascal id advantage vantage for 01 national ban banks effected d to tako take out and operate under a state charter either on a temporary ora or a perma rient basis as make expedient in my opinion bankers national am will well as a state should combat ther thought that conceives conc elvaa ot of do depriving P rl Y tin aa ot of the vitalizing et t ow mr duil dual system gy atom |
