Show DUAL BANK FAVORED BY BARER state and national institutions supplement each other in serving Count rya rys varied financial needs suggestions that all banks banka ria RECENT la the united states ie be under fe eral cral jurisdiction doing away with the tha chartering of banks by the various states recalls the opposition to this athla plan presented at the recent convention of the american bankers association by R S hecht of now new orleans chairman ot of its E economic policy commission mr hecht said there are just as aa good reasons why there should be state na as well as aa national banks as that there should be 10 state as aa well as a a national government I 1 do not think that analogy la Is farfetched the states should not surrender all political jurls jurisdiction diction to tho the central government and the local bustness business life of tho the states should not bo be made to surrender all control over financial functions to national financial instrumentalities there are many variations riat ions lons of business conditions from froid state to state and there are special fiscal requirements of 0 the various states it Is entirely logical therefore that k the states should retain the right to It charter banks so as to mold and direct their affairs in accordance with the tha states governmental and business requirements quire ments and keep them adapted to localized sentiment and conditions the argument Is sometimes advanced that the dual system jeopardizes the life of the tha 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 ill it Is true that there has been some chit ting from national to state charters especially in cases of mergers of 0 lar large g national banks with banks operating under state charters however the federal reserve system was not weakened in this process because beca use the tha 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 tha system as national banks and the ratio of state bank resources in the federal reserve system is constantly growing in 1923 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 systems help each other reciprocally the state and national banks systems have helped each other it if the national banking law has served in some respects as somo something thing of a model code toward which state banking laws more and moro 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 tha line of uniformity sa so far co is desirable is anticipated however I 1 do not believe that it is a disadvantage to have hava two banking c codes aces 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 the nacional nc lonal Ional banking laws and this Is a situation that should be ba retained there should however not be competition between the two banking codes competition should be between banks themselves and not between the laws under which they operate the effort to otter offer too great allurements 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 opportunities that now exist which banking institutions and local business interests may choose so that they can function or conduct their business relationships lation ships under that banking code which best meets tho the conditions of the times and of the place as they see bee them this has been illustrated in both directions in states where such unsound unbound measures as the guarantee of cl deposits were wera operative state banks had the opportunity to escape the halo bale ful effect of such laws on the other hand when a court decision was wag handed down in worcester massachusetts chu which rendered uncertain the tha position llon 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 thel as aa well as state should combat the thought that conceives of depriving us of the tha vitall vitalizing zing benefits of our dual system |