Branch Banking

Los Angeles bankers spent $60,000 last week entertaining 20,000 U. S. bankers and their wives who attended the 52nd annual convention of the American Bankers Association. There were motor rides through Hollywood Boulevard and Wilshire Boulevard, trips over and under hills, visits to the studios, peeks at Evangelist Aimee Semple McPherson's $1,000,000 Angelus Temple, balls. Each guest had a basket of fruit, constantly replenished, in his room.

In the convention meetings the bankers, who represented some 5,000 U. S. financial houses, were at odds over the McFadden Bill and its Hull Amendments, which will again come before Congress in December. The bill and amendments seek to permit national banks (over which Congress has authority) to open branch offices under certain restrictions and to handicap the branching out of state banks (over which Congress has no authority) by exclusion from the Federal Reserve System.

Opposition to national bank branching, and to all branch banking for that matter, came from both national and state bankers who operate "unit" institutions, mostly in the Midlands, the Middle West. They fear the encroachment of branch banks into their business; asserted that eventually, unless prevented, five or six branch institutions will control all U. S. finance and make futile the Federal Reserve System. State bankers running branches also opposed the measures. They do not want competition in their fields.

But an influential number of national bankers, who consider themselves throttled by the state branches, with their far lower operating costs, fought hard for approval of the McFadden Bill in some form.

Finally, after a great deal of speaking, even howling, the American Bankers Association decided, 413 to 268, to recommend to Congress the passage of the McFadden Bill, minus the Hull Amendments. But it is by no means certain that the Senate and House conferees, who have the matter in hand, will be able to agree.

This done, the visiting bankers grew affable, approved the choice of Houston, Tex., for the 1927 convention and the promotion of Vice President Melvin A. Traylor, president of the First National Bank of Chicago, to be association president for the next year.

President Elect Melvin Alvah Traylor, 25 years ago, studied law at night after clerking all day in a Hillsboro, Tex., grocery store. He became assistant county attorney, a bank cashier, vice president, president. In 1914 the Live Stock Exchange National Bank of Chicago chose him president. He has been president of the First National of Chicago since January, 1925. He is just 48 years old.