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List of 152 large national banks which have within the past 12 years given up their national charters for the purpose of operating, under State chartersContinued.

Name and location of bank

State

Capital

Resources

Year ended Oct. 31, 1928

Union National Bank of Philadelphia..
City National Bank of Holyoke..

National Bank of Commerce in Chicago.
National Bank of Commerce in Philadelphia.

Hamilton National Bank of New York..

Bronx National Bank of the City of New York.

First National Bank of Bangor.

Liberty National Bank of Covington.

First National Bank of Columbus.

Massasoit-Pocasset National Bank of Fall River.

United Capitol National Bank & Trust Co. of New York.

Flushing National Bank, Flushing..

National Bank of Rochester..

Broad Street National Bank of Philadelphia.

National Bank of North Philadelphia.

National City Bank of Los Angeles..

Year ended Oct. 31, 1929

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Arcadia National Bank & Trust Co. of Newark
Seaboard National Bank of the City of New York.
Merchants-Laclede National Bank of St. Louis.
State National Bank of St. Louis...
Tenth National Bank of Philadelphia..
Community National Bank of Buffalo.
Fordham National Bank in New York.
Thamet National Bank, Norwich..
Norwood National Bank..

City National Bank of San Antonio..
National City Bank of Akron..

National Bank of Niagara & Trust Co., Niagara Falls.
Citizens National Bank of Raleigh.

Murchison National Bank of Wilmington.

American National Bank & Trust Co. of Greensboro.

City National Bank & Trust Co. of Bridgeport..

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New York.
do.
Virginia..
California.
Pennsylvania.
Maryland..
Texas.
California.
New York.
California.
New Jersey.
Michigan.
New York.
do...
..do.

do..

Maine.
Kentucky.
Michigan.
New York.

do.
Missouri.
.do.
Pennsylvania.
New York.
.do..
Connecticut.

300, 000
400, 000
350,000
500, 000
650,000

5, 000, 000
200,000
1,200, 000
500,000
700,000

1, 000, 000

[blocks in formation]

5, 893, 000 7,717,000 10, 732,000 19, 216, 000 9,986,000 8, 308, 000 5, 676, 000 14,071, 000 6,752, 000

53, 144, 000 5,070, 000

22, 558, 000 12, 293,000 6, 872, 000 10, 898, 000

23,025, 000 14, 524, 000 21, 774, 000 164, 645, 000 10, 256, 000 11, 052, 000 13,950, 000 6,916, 000 684, 456, 000 5, 639, 000 7,457, 000 16,666,000 209, 026, 000

5, 508, 000

5, 002, 000 233, 708, 000 9,750,000 14, 679, 000 26, 780,000 5,666,000 286, 954,000 23, 751, 000 21, 667, 000 10,746, 000 23,596, 000 5,616, 000

5, 218, 000

5, 157, 000

Ohio..

Texas.

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Ohio..

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New York.

1,200,000

13, 492,000

North Carolina.

750,000

8, 679, 000

[blocks in formation]

12, 285, 000

1,000,000

11, 297,000

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....do.

Connecticut

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List of 152 large national banks which have within the past 12 years given up their national charters for the purpose of operating under State charters— Continued.

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Continental National Bank & Trust Co. of Kansas City... Missouri..

Northern National Bank of Toledo.

Long Beach National Bank, Long Beach.

Second National Bank of Toledo..

Corn Exchange National Bank of Chicago..

Year ended Oct. 31, 1925

First National Bank of Oakland...

Fifth National Bank of the City of New York..

Gotham National Bank of New York..

National Union Bank of Boston.....

Year ended Oct. 31, 1926

Manufacturers & Traders National Bank of Buffalo..
Coal & Iron National Bank of the City of New York.
First National Bank of Hammond..
Planters National Bank of Richmond.
Norwood National Bank of Greenville.

National Exchange Bank of Providence..

First National Bank of Jamaica.

City National Bank of Plainfield.

500,000

California..

6, 000, 000

12, 418, 000 93, 806, 000

Maryland.

1,500,000

17, 532, 000

New York.

1, 000, 000

9, 128, 000

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500,000 1,000,000 200, 000

6, 499,000 15, 692, 000 7, 112, 000 16, 477, 000 132, 302, 000

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New Jersey.
New York..
Connecticut..
New York.
New Jersey.
New York.

do...

do..

[blocks in formation]

Pennsylvania...

500,000

South Carolina..

1,000,000

10, 573, 000

[blocks in formation]

19, 580,000

[blocks in formation]

North Ward National Bank of Newark.

National City Bank of St. Louis..

Central National Bank of the City of New York.

Utica National Bank & Trust Co. of Utica.

National Security Bank & Trust Co. of Philadelphia.

New Jersey.

400,000

Missouri.

1,000,000

New York.

2,500,000

Farmers & Merchants National Bank, Baltimore..
Drovers & Mechanics National Bank, Baltimore.
Broadway National Bank & Trust Co. of New York.
Chester National Bank of Chester..

Columbia National Bank of Columbia.

American National Bank & Trust Co. of Mount Vernon.
Peoples National Bank of Elizabeth.

[blocks in formation]

5, 674,000 5,725,000

20, 756,000 14, 404, 000 12,900,000

15, 410, 000

6,706, 000 13,040, 000 8,378,000 8,730,000

8, 171, 000 9, 806,000 20, 410,000

8,411,000 5, 437,000

List of 152 large national banks which have within the past 12 years given up their national charters for the purpose of operating under State chartersContinued.

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Mr. POLE. Yes. Shall I go on?

The CHAIRMAN. These interruptions are only by your permission. Mr. POLE. That is all right, Senator. I am very glad to have you conduct the hearing in any way you want to.

In the matter of the divorce of security affiliates of national banks by making unlawful the indorsement on the national bank certificate and unlawful also the trust agreement conditioning the sale, it seems to me that a distinction should be made between affiliates engaged in the business of buying and selling investment securities and other corporations not primarily concerned at all in the securities business. The attention of the committee is directed to the fact that this provision is a restriction upon the affiliates of national banks alone and has no application to State member banks.

Section 18: This section so far as national banks are concerned is supplementary to section 17 in that it prevents an interlocking of personnel with an affiliate. It is, however, applicable to both national and State member banks. In my opinion, the language, especially of subsection "C" where the term a corporation organized for any purpose whatsoever" appears, is too broad. It would apparently embrace banks and trust companies, which, I feel sure, is not intended by the bill.

Section 19: This section denies the right of a shareholder of a national bank to vote unless he actually owns the stock and has acquired it through bona fide purchase, gift or inheritance. There may be other ways of becoming a bona fide owner of bank stock, such as by exchange or by stock dividends, in which case such a shareholder could not vote under this bill. This section also denies

the right to any owner of more than 10 per cent of any national bank stock to vote the same at all unless he be an individual or complies with the provisions of section 20 of the bill. The committee doubtless has given consideration to the disfranchisement of stockholders of national banks which happen to be corporations, associations, or partnerships, but which have no interest in operating a chain of a group of banks.

Senator GLASS. Why haven't they an interest if they own considerable stock in the bank?

Mr. POLE. Senator, there might be stockholders who are steel and industrial corporations, trust companies, banks, and all manner of corporations which might own more than a 10 per cent interest in a bank.

Senator GLASS. They are interested in the operation of the bank? Mr. POLE. Yes; but they can not vote if they have more than 10 per cent of the stock unless they comply with a number of the provisions which are set out in section 20 of the bill.

Senator GLASS. That is a rare incident in banking business?
Mr. POLE. Not at all, Senator. Not rare; not so rare.

Senator GLASS. You mean the steel corporations and the other corporations are acquiring ownership of banks?

Mr. POLE. And a great many savings banks.
Senator GLASS. All right; go ahead.

Mr. POLE. Attention is particularly directed to the fact that this section is a restriction upon national bank members of the Federal reserve system only and does not apply to State member banks. This is true also of section 20, which places restrictive regulations and reserve requirements upon group bank holding companies which have national banks in their groups. These two sections as they stand would undoubtedly lead to the withdrawal of the great volume of resources now held by national banks in group bank organizations from the national system for the simple reason that any such group organization can escape these burdens by becoming a State bank and still remain within the Federal reserve system.

Senator GLASS. You think that group banking is a wholesome system of banking then, do you?

Mr. POLE. I have never been in favor of it, Senator, except that, as I have said, before it is legislated against, some provision should be made for that large amount of capital which is invested in group banking, and that group banking has been extremely beneficial in a number of sections of this country.

Section 21 contains the branch banking provisions of the bill, but permits national banks to establish branches only in those States. where the State law permits it and only to the extent permitted by such State law except for the proviso for a 50-mile extension beyond State lines in certain cases. In my judgment, this section will accomplish little or nothing in the way of branch banking, since only a few States permit state-wide branch banking. The particular need for branch banking by national banks is in those States which do not permit branch banking to the State banks. There is a crying need for banking facilities which can be given by strong city banks in the rural communities of the United States. I know of no other sound solution of the rural bank question.

I need not dwell upon this matter since I have expressed my views at length both before this committee and before the House Committee on Banking and Currency, but I may add that_subsequent events have only confirmed me in the recommendations I made for wider branch-banking facilities, in my reports to Congress for the years 1929, 1930, and 1931.

I wish to call the attention of the committee to the fact that the provisions in section 25 amending section 5200 of the Revised Statutes restricting loans to securities dealers, and so forth, apply as restrictions only upon national banks and do not restrict State member banks.

With respect to the provisions of section 27 which provides for an examination by the Comptroller of the Currency of affiliates of national banks, attention is directed to the requirement for publication of the portfolio of such affiliate as a penalty for excessive borrowing from any bank but no corresponding requirement for publication is contained in section 9 requiring the report of the affiliates of State member banks to the Federal Reserve Board.

I most heartily approve of section 29, which provides for the removal of bank officers for persistent violation of law or continued unsound banking practices. I think the mere granting of this power to the reserve system and the Comptroller of the Currency will be sufficient to make unnecessary the exercise of it and will have a wholesome effect upon the whole field of governmental supervision over members of the Federal reserve system.

That concludes my statement, Mr. Chairman.

The CHAIRMAN. Thank you, Mr. Pole. Do any members of the committee want to ask any questions?

Senator GLASS. I do not.

Senator BROOKHART. Yes; I do. You mentioned the matter of credit in the agricultural districts. I found in my State and in Illinois and Indiana and several other States, in the agricultural sections, that the national-bank examiners for many years have been cautioning banks against loans to farmers; said to them, "They are not liquid." Was that a general policy of your department?

Mr. POLE. I would say by no means, Senator. We must always remember that a bank has two classes of customers, depositors and borrowers. The depositors, for the most part, put their money in banks on demand, and if that money is loaned out on slow assets, and unusual demands are made it becomes impossible for the banks to liquidate their loans fast enough to meet that demand. Therefore, it is necessary that a bank should confine certain of its investments to more liquid securities than farm loans.

Senator BROOKHART. Then you did caution against the agricultural loans in that way, some of your bank examiners?

Mr. POLE. No. The examiners have that general knowledge that a bank must have a certain ratio of liquidity; no general instructions to that effect.

Senator BROOKHART. Well, there was a general caution against loans to farmers; that is, for production purposes also?

Mr. POLE. I know of nothing like that, Senator. I do not think you can have any concrete evidence of the existence of any such regulation as that.

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