Bankers Evasion

A polite family does not squabble while visitors are in the parlor. But sometimes visitors cannot help but hear squabble-sounds upstairs, downstairs and in the kitchen too.

Anxious to appear polite and united, the American Bankers Association decided to play down branchbanking at its convention in Los Angeles last week. The topic has grown stronger, more bitter, as it has aged. Thus it was that the chief speeches were on such harmonious subjects as the return of confidence (new President Francis

Hinckley Sisson); the good record of banks as a whole in Depression (old President Harry J. Haas); taxation v.

business (Paul Shoup); the U. S. v. deflation (Ogden Livingston Mills).

But squabble-sounds kept being heard, mostly from the officers of small unit banks, on the defensive ever since the Glass Bill with its Section 19 (branching power for national banks) was proposed.

The Division of State Banks went flatly on record with a resolution denouncing Section 19 as "a direct attack on the sovereignty of our States." Many a unit banker gathered in Conference Room No.

2 of the Biltmore Hotel where Charles F.

Zimmerman of the Pennsylvania Bankers Association spoke hotly and furiously against branchbanking. When he heard that cynical fellow members were accusing him of aspiring to be Comptroller of the Currency, he snorted that he would rather be a country banker.* Aware that the squabble-sounds would soon reach the public, that emergence of the subject on the floor of the convention would mean a bitter fight among 3,000 bankers, the A. B. A. acted quickly. A resolution was passed which said that the A. B. A. felt branchbanking was a subject so broad and controversial that A. B. A.

could not commit itself to either side, that members were free to take their own stands on the Glass Bill.

Branchbanking has always been a rankling subject with A. B. A. members. In 1926 after much wrangling, they passed a resolution favoring the McFadden-Bill which gave National banks the same branching powers as State banks. In 1928 they heard President Rudolf Hecht of Hibernia Bank & Trust Co., New Orleans, call branchbanking "financial feudalism . . . economic vassalage." But they in- structed their Economic Policy Commission, under Banker Hecht, to study further the entire topic. In 1929 Comptroller Pole, ostensibly speaking for his chief, Andrew William Mellon, endorsed regional branchbanking and in 1930 Banker Hecht ate his words with the statement, "We cannot stem the tide of economic events." While Banker Hecht's work was unrewarded with a resolution favoring his views last week, he was rewarded by being elected second vice president, thus assured of the presidency in 1935. Astute, influential in his city, German-trained Banker Hecht is the type of banker who in most cases would send a vice president to an A. B. A. meeting.

*Dead last week in Waukesha lay Andrew Jay Frame, 88, chairman of Waukesha National Bank (capital: $300,000) and one of its employes since 1862. Long prominent in A. B. A. affairs. Banker Frame was called "America's greatest country banker." When, early this century, the A. B. A.

advocated "asset currency"--notes to be issued by small banks as a first lien against their assets --his opposition killed the movement. When the Federal Reserve Bill was before Congress in 1913 he was the only "country banker'' to be called to Washington for his opinion. In 1922 at the A. B. A. convention he spoke bitterly against branchbanking, receiving national attention.

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