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The CHAIRMAN. Well, I had expected that you would discuss the bill in the order of its provisions. The guaranty provisions of the bill come last; but inasmuch as you have discussed that part of the bill first, I think we might finish whatever discussion there should be in that connection. Your remedy, of course, for the evils from which we are suffering, is to inaugurate a nation-wide system of branch banks, if I understand you.

Mr. POLE. I would not say nation-wide, at all; I would say a regional system of branch banks.

The CHAIRMAN. Would you relieve some particular part of the country, and leave the rest in its present unfortunate condition! Mr. POLE. No, Mr. Chairman.

The CHAIRMAN. Would not that follow, if you did not make it nation-wide?

Mr. POLE. The branch bank system would cover the Nation, but it would not be nation-wide, except as to trade areas, the principal towns, reaching out within that regional district and, thereby, covering the whole United States.

The CHAIRMAN. Would not this be true: If you limit the system of branch banks, you would necessarily limit its benefit? Whatever limit might apply to the extension of the system would, of course, apply to its benefit, would it not? In other words, if branch banking is a good thing, we ought to apply it throughout the Nation and make it our banking system.

Mr. POLE. That is right.

The CHAIRMAN. That is what you really stand for?

Mr. POLE. I am advocating regional branch banks, not one branch bank from one center to cover the whole United States, but hundreds of branch banks.

The CHAIRMAN. As I understand, you would not have one central bank?

Mr. POLE. No.

The CHAIRMAN. But you would have branch banks covering the Nation?

Mr. POLE. Yes.

The CHAIRMAN. How many parent banks do you think would be required? What would be your thought as to that?

Mr. POLE. That is a question which is debatable as to how many parent banks there would be, but undoubtedly there would be hundreds of them; because each principal city would, undoubtedly, under my plan, be the center of a small system of branch banks reaching out into the rural communities, and throwing the facilities of these stronger banks to the country banks, which now can not operate successfully.

The CHAIRMAN. What has been the experience of other countries which have relied upon branch banking systems?

Mr. POLE. Our neighbor, Canada, has passed through this depression without a single bank failure.

The CHAIRMAN. I am speaking now of the system, itself, not as to the results. You are not quite accurate, I think, when you say they have had no bank failures.

Mr. POLE. Yes; there has not been a bank failure since 1923 in Canada.

The CHAIRMAN. Was it not 1926!

POLE. 1923.

CHAIRMAN. They did have a bank failure in recent years, in da, though, did they not?

POLE. The Home National Bank.

e CHAIRMAN. Do you know what was involved?

es!

POLE. $15,000,000, I think.

is

CHAIRMAN. You say $15,000,000; you refer to capital or re

POLE. No; I refer to the deposits. That is subject to check, my best information.

e CHAIRMAN. You could correct that, if that is in error. I you are in error, but you are less likely to be in error than I d be. My recollection of that is different. It is my recollechat that bank failure involved considerably more deposits than and that it touched many towns and branches.

POLE. I will put the correct figures in here. I find that the sits, exclusive of Government deposits, were $15,462,569.

CHAIRMAN. And it also, of course, carried down a number of ches.

POLE. Well, of course, it carried down all of its branches.

e CHAIRMAN. Are you familiar with the development in conon with that failure?

POLE. Yes; the Government came to the rescue of the bank, urnishing a certain amount of funds for the repayment of

sits.

e CHAIRMAN. As a matter of fact, the Government stepped in to those deposits?

- POLE. In part.

e CHAIRMAN. They have never completed the payment of the sits!

. POLE. I am not informed on that.

STEVENSON. Did not it supplement the assets?

Le CHAIRMAN. The Government made a direct appropriation for enefit of the depositors in that bank.

STEVENSON. I mean they estimated what was necessary to add

e assets.

e CHAIRMAN. Yes; and did not quite accomplish the result, and is a portion unpaid, unless that has recently been done, accordo my recollection How many banks have they in Canada? POLE. I think they have 11 banks, major banks, now.

e CHAIRMAN. Well, if we adopted the Canadian system and ed it to its finality in this country, it would only be a question me until the number of our independent banks would be quite ed, would it not?

POLE. I do not think so. I am not advocating the adoption e Canadian system of banking here.

.

e CHAIRMAN. I said, if we were to adopt it.

POLE. I do not think so, Mr. Chairman.

BRAND. How many branches were there of those 11 parent POLE. Oh, hundreds.

le CHAIRMAN. And they have only 11 banks in Canada, as I

mber.

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Mr. POLE. Eleven principal banks. There may be some sinall

ones.

The CHAIRMAN. Eleven independent banks?

Mr. POLE. Eleven major banks.

Mr. STEVENSON. Eleven corporations?

The CHAIRMAN. Yes.

Mr. POLE. Mr. Stevenson, I think there are more than 11, but I think they have a small number of independent banks, but the major business is done through those 11 metropolitan banks.

The CHAIRMAN. My information, on the contrary, Mr. Pole, is that they have only 11 banks, and that all of the banking institutions in the Dominion of Canada are branches of those 11 banks. Mr. POLE. In the main, that is correct.

The CHAIRMAN, Now, Mr. Pole, what has been the experience in the United States, with the branch system, so far as we have tried it, or it has been tried out in operation? I refer, of course, as it relates to the safety of deposits.

Mr. POLE. Branch banking in the United States has been eonducted in a very limited way, as far as those banks which have been under Federal control are concerned; I know of no suspensions, and I

The CHAIRMAN. What about the bank in New York, last year? Mr. POLE. Should say it had been successful.

The CHAIRMAN. What about the bank in New York, last year, that failed?

Mr. POLE. The Bank of the United States?

The CHAIRMAN. Yes.

Mr. POLE. That was a State member bank.

The CHAIRMAN. But it was a part of the Federal reserve system, was it not?

Mr. PofE. It had branches within the metropolitan district only; and inasmuch as it was a State bank, I am really not familiar with the conditions involved in its failure.

The CHAIRMAN. You do not mean that you do not understand fairly well what happened, and what was involved in that bank failure, do you!

Mr. POLF. Well, that bank had a number of branches~~~~~~~

The CHAIRMAN. How many?

Mr. POLE. I am not informed.

The CHAIRMAN. But it had quite a number of branches?
Mr. POLE. Quite a number

The CHAIRMAN. It was a pretty bad bank failure?

Mr. POLE. It was a pretty bad bank failure; yes.

The CHAIRMAN. How much involved; how much were the resources of that bank system?

Mr. POLE. I am just not posted on the figures.

The CHAIRMAN. Let your answer show, when you correct your remarks, please, sir.

Mr. POLE. Yes; I will. The Bank of the United States at the time of its suspension December 11, 1930, had 58 branches in the city of New York and total deposits of $161,000,000.

The CHAIRMAN. It is a fact, however, that it was a big bank failure, involving a large amount of deposits, and involving the depositors in considerable losses, did it not?

POLE. My understanding is that the affairs of the bank have en wound up yet; so it would be impossible to know what any, there may be.

CHAIRMAN. It is supposed that is the way it will wind up, t; that is the indication?

POLE. I have no information.

CHAIRMAN. You need not answer that, unless you are inon it. Mr. Pole, do you remember the relative losses in k failures in the State of New York, between the Federal banks and the State banks and nonmember banks? POLE. I would be glad to furnish those figures.

CHAIRMAN. Is not it true that, in the State of New York, the failures were inside of the Federal reserve system?

POLE. The figures will show that, and I will be glad to furose figures to you.

CHAIRMAN. Do you not remember that, offhand?

POLE. Within the Federal reserve system?

CHAIRMAN. Were not the larger failures in New York inside Federal reserve system? In other words, were not the reof the failed banks inside of the Federal reserve system State of New York, greated than the failures of the nonr banks of New York?

POLE. I am just not informed. Are you talking about New State, or New York City?

CHAIRMAN. New York State.

POLE. I am not informed as to the number of State banks have fallen.

CHAIRMAN. Let your answer, when you correct your remarks,. hat.

POLE. I will be glad to include that.

CHAIRMAN. I want to ask you the same question as to the of Pennsylvania. I am not sure that I could put my hand figures, but somewhere I have seen a statement that the -that is, the resources involved in the member bank failures State of New York and in the State of Pennsylvania—were than those involved in the nonmember banks.

POLE. The deposits in all banks suspended from 1921 to 1931bout-I will not try to furnish the correct figures, but will approximation.

CHAIRMAN. You do not need to attempt to find the correct right now, but touch the high spots. I think that will be onvenient for you, and save time. I was speaking, in my of the year 1931, last year.

POLE. We will insert that in the record later.

Banks suspended and reopened in the New York Federal Reserve District, 1921-1981

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