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X™'40b<5 4 GLANCE AT BRANCH 3AMTNG BY STATES SHOWING NUMBER OF INSTITUTIONS CONDUCTING BRANCHES IN EACH STATE THAT ARE MEMBERS OF THE FEDERAL RESERVE SYSTEM AND THE NUMBER 1HAT ABE OUTSIDE THE RESERVE SYSTEM. The following brief statements with regard to branch banking i n each of the s t a t e s where branch banking i s permitted (omitting the s t a t e s where branch banking i s confined to c i t y l i m i t s ) have been compiled for the purpose of showing that Section 9 of the McFadden b i l l w i l l not accomplish what i s expected o f i t y i s : the prevention of the spread of branch banking by s t a t e banks. The f i g u r e s submitted w i l l shew that there are four times as many nonmember s t a t e banks engaged in operating branches as there are member s t a t e banks, 2)6 non-members and hg members. The member s t a t e banks maintaining branches are, generally speaking, larger than the non-members, many of the l a t t e r being simply country banks extending banking f a c i l i t i e s to smaller neighboring communities by means of branches. In some cases these non-member i n s t i t u t i o n s are groups of country bariko united together under a common management with a. comron board of directors. The development of most of these country branch banking systems has been very gradual and along conservative l i n e s . Seme of them have been i n existence for a considerable term of years - the Bank of Grenada (Mississippi) for example , for thirty years# Only occasionally do they add branches, but those that are outside of the Federal Reserve System will c e r t a i n l y not be induced to join by the prohioition contained i n Section 9- If that s e c t i o n should' become law i t s natural r e s u l t would be to repel these banks and keep them outside vthe System, and to drive some that are now members - and very desirable members - to withdraw. The figures do not include c i t y branch banking i n New York, Massachusetts, Ohio and Michigan, where branch banking i s confined to c i t y l i m i t s , (in Ohio to c i t y l i m i t s and contiguous t e r r i t o r y ) . City branch banking i s c h i e f l y a matter of convenience to customers- Country oranch banking i s a matter of s a f e t y and service to customers. ' I t has been impossible in a l l cases to obtain the c a p i t a l and surplus of the non-member banks operating branches, but t h i s i s given for enough of the s t a t e s to be of some value for purposes of comparison. I SUMMARY OF MEMBER AND NON-MEMBER BANKS MAINTAINING BRANCHES BY STATES. (.Omitting S t a t e s where branches a r e permitted only w i t h i n c i t y l i m i t s . ) Member Ncn-ir. ember I 4 19 69 Delaware 1 4 Florida 0 1 Georgia 8 9 Louisiana 8 25 Maine 3 20 Maryland 3 lb Mississippi l 3 North Carolina 5 33 Rhode Island J 7. 4 South Carolina. 2 5 Tennessee 2 15 Virginia. 2 22 5S 236 Ai 30317)3. California — X — 4 0 b £ > ALABAIVIA Alabama- h a s I member b a n k ( c a p i t a l and and 4 n o n - m e m b e r b a n k s ( c a p i t a l s u r p l u s $63,000) w i t h 1 branch; and s u r p l u s $ 6 4 3 , 0 0 0 ) with IS branches» FLORIDA F l o r i d a , h a s 1 non-member bank w i t h 2 b r a n c h e s GEORGIA G e o r g i a , h a s g member b a n k s ( c a p i t a l and surplus $6,698,000) with l4 b r a n c h e s ; and 9 n o n - m e m b e r b a n k s w i t h 29 b r a n c h e s . LOUISIANA L o u i s i a n a h a s g member b a n k s w i t h 4 l b r a n c h e s , and 2 5 n o n - m e m b e r b a n k s w i t h 43 b r a n c h e s . MISSISSIPPI M i s s i s s i p p i h a s 1 member b a n k ( T h e Bank o f s 5 5 0 , 0 0 0 ) w i t h 12 b r a n c h e s , Grenada, c a p i t a l and s u r p l u s and g n o n - m e m b e r b a n k s w i t h 11 b r a n c h e s * Capital and s u r p l u s o f n o n - m e m b e r s $ 1 , 1 3 5 * 0 0 0 . NORTE CAROLINA N o r t h C a r o l i n a , h a s 5 m e m b e r s w i t h 13 b r a n c h e s and 3 3 n o n - m e m b e r s w i t h 49 b r a n c h e s » T h e s e f i g u r e s a r e a s of J u n e 3 0 , 1 9 2 3 * (Since January 1 > 1924, o n e member b a n k h a s w i t h d r a w n f r o m t h e F e d e r a l R e s e r v e S y s t e m and h a s tablished three branches, w i t h 52 b r a n c h e s . ) es- s o t h a t p r e s e n t f i g u r e s would s h o w 3 ^ n o n - m e m b e r s The 13 m e m b e r s h a v e a c a p i t a l and s u r p l u s o f $ 3 , 6 2 4 , 0 0 0 and t h e 33 n o n - m e m b e r s $ 6 , 1 7 5 , 0 0 0 . TENNESSEE T e n n e s s e e h a s 2 member b a n k s w i t h 5 b r a n c h e s , and l b n o n - m e m b e r s w i t h 4 l branches. MARYLAND M a r y l a n d h a s 3 members w i t h 11 b r a n c h e s n o n - m e m b e r s w i t h 52 b r a n c h e s * $ 6 , 9 0 0 , 0 0 0 , and o f The c a p i t a l (nearly all and s u r p l u s o f t h e l 6 non-members $ 7 , 1 1 2 , 0 0 0 . in Baltimore) and l 6 t h e tj members i s -4- X-406g VIRGINIA V i r g i n i a has 2 member banks with } branches, and 22 non-members with 29 branches, n e a r l y a l l cf then: country banks i n comparatively small towns. The c a p i t a l and surplus cf the 2 members i s £3,400,000, and of the 22 nonmembers $6,292,000. SOUTH CAROLINA South Carolina, has 2 member banks with 3 branches, and 5 non-members with 13 branches. The 2 members have c a p i t a l and surplus of $700,000, and the 5 non-members $ 1,240,000. DELAWARE Delaware has one member bank maintaining one branch, the Wilmington Trust Company, c a p i t a l and surplus <3,110,000, d e p o s i t s $14,221,236, and 4 non-member banks operating 13 branches. One of t h e s e , the Delaware Trust Company of Wilmington, has 11 branches, only one of which i s in Wilmington. The c a p i t a l and surplus of the non-member banks operating branches i s $4,120,000, and t h e i r combined d e p o s i t s $24,000,000. MAINE Maine has 3 member s t a t e banks ( t r u s t companies) m a i n t a i n i n g branches' and 20 non-members. The law permits a t r u s t company to have branches i n i t s own and "an a d j o i n i n g county." 20 non-members 39 branches. The 3 member banks have 8 branches, and the No bank has more than 4 branches a t p r e s e n t . The c a p i t a l and surplus of the 3 members i s $1,250,000 aid t h e i r d e p o s i t s $12,882,178. The c a p i t a l and surplus of the 20 non-members i s $4,272,000 and t h e i r d e p o s i t s $56,924,013- One of the non-members has a c a p i t a l ($25>000) and surplus ($23,000) of only $50,000. $725,000. The others run from $75»000 up to An even h a l f of them have a c a p i t a l l e s s than $100,000. -5- X-4o6s 0T RHODE ISLAND Ehod3 Island has 3 member banks maintaining branches ( s t a t e - w i d e law) and 4 non-members, the members ( a l l i n Providence) being very much l a r g e r banks than the non-members. The 3 members maintain l 4 branches, and one of them (no.v maintaining only 1 branch) has been authorized to open several more. The non-members maintain 5 branches. Three of them a r e i n com- p a r a t i v e l y small towns, Wakefield , Westerly and Woonsocket- The 3 members have c a p i t a l $8,000,000, surplus $11,000,000 and d e p o s i t s $190,478,710. The 4 non-members have c a p i t a l $600,000, s u r p l u s $635,000 and d e p o s i t s £13,806,471. CALIFORNIA In C a l i f o r n i a , where the laws have provided for branch banking since 1909, there are (December 31, 1923) 19 member banks maintaining branches, and 6 9 nonmember banks. Most of the l a t t e r are country banks, but they include several large i n s t i t u t i o n s i n Los Angeles, the 6 9 non-members 202. The 19 member banks have 264 branches and Of the 264 member bank branches 100 are located i n the c i t y of the parent bank and 164 o u t s i d e . Of the 202 non-member branches 102 are located in the c i t y of the parent bank and 100 o u t s i d e . C a l i f o r n i a i s the l e a d i n g branch banking s t a t e , and t h e only one i n which branches have been extended to any considerable d i s t a n c e from t h e parent banks. Branch banking appears to be popular, and to be rendering good s e r v i c e e s p e c i a l l y to the l a r g e a g r i c u l t u r a l i n t e r e s t s and to the cooperative marketing associations. The l a r g e s t branch banking i n s t i t u t i o n , i n number of branches, i s the P a c i f i c Southwest Trust and Savings of Los Angeles, but the l a r g e s t bank i n Los Angeles i n resources i s the Los Angeles Savings and Trust Company, which has only about 12 branches o u t s i d e of the c i t y l i m i t s . The branches of the —6- X— 4Q 6S Bank of I t a l y of San Francisco covers the widest extent of t e r r i t o r y . Branches are obtained by purchase of or c o n s o l i d a t i o n with e x i s t i n g i n s t i t u t i o n s , and n de novo" branches are not permitted outside of the c i t i e s , except r a r e l y and where adequate banking accommodation does not exist* I t does not appear t h a t u n i t banks have i n any case been driven out of e x i s t e n c e , or forced i n t o consolidations by the competition of branches, a s a- r u l e the branches outside the c i t i e s are managed by the same man who managed them b e f o r e they became branches, .and they generally have f u l l d i s c r e t i o n , except f o r l a r g e loans and investments-
@FedFRASER