It is desirable that Congress should consider the revision of some portions
of the banking law.
The development of "group" and "chain" banking presents many new problems.
The question naturally arises as to whether if allowed to expand without
restraint these methods would dangerously concentrate control of credit,
and whether they would not in any event seriously threaten one of the
fundamentals of the American credit system--which is that credit which is
based upon banking deposits should be controlled by persons within those
areas which furnish these deposits and thus be subject to the restraints of
local interest and public opinion in those areas. To some degree, however,
this movement of chain or group banking is a groping for stronger support
to the banks and a more secure basis for these institutions.
The growth in size and stability of the metropolitan banks is in marked
contrast to the trend in the country districts, with its many failures and
the losses these failures have imposed upon the agricultural community.
The relinquishment of charters of national banks in great commercial
centers in favor of State charters indicates that some conditions surround
the national banks which render them unable to compete with State banks;
and their withdrawal results in weakening our national banking system.
It has been proposed that permission should be granted to national banks to
engage in branch banking of a nature that would preserve within limited
regions the local responsibility and the control of such credit
institutions.
All these subjects, however, require careful investigation, and it might be
found advantageous to create a joint commission embracing Members of the
Congress and other appropriate Federal officials for subsequent report.