Branch Banking and Chain Banking

February 8, 1930

Report Outline
Legal Status of Branch Banking in United States
Present Extent of Branch Banking
Development of Chain Banking
The Group Banking Controversy
Special Focus

President hoover, in his first annual message to Congress, December 3, 1929, suggested the creation of “a joint commission embracing members of Congress and other appropriate federal officials” to investigate recent developments in the field of group banking and recommend appropriate legislation. He said:

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….

The relinquishment of charters of national banks in great commercial centres 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.

ISSUE TRACKER for Related Reports
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Oct. 05, 2012  Euro Crisis
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Jan. 13, 2012  ‘Occupy’ Movement
Oct. 24, 2008  Financial Bailout Updated
Sep. 01, 2000  The Federal Reserve
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Nov. 04, 1988  Behind the S&L Crisis
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Nov. 18, 1983  Bankruptcy's Thriving Business
Aug. 07, 1981  Banking Deregulation
Jul. 19, 1974  Banking Stability
Jul. 17, 1968  Banking Innovations
May 06, 1964  Monetary Policy in Prosperity
May 16, 1940  Revision of the Securities Acts
Feb. 27, 1937  Expansion of Branch Banking
Sep. 03, 1935  The Decline of Commercial Banking
Dec. 11, 1934  Proposals for a Government-Owned Central Bank
Sep. 12, 1934  Bank Reserves and Credit Inflation
Nov. 27, 1933  Bank Credit in Depression and Recovery
Aug. 12, 1933  Closed Banks and Banking Reform
Apr. 04, 1933  Unified Control of Banking
Apr. 09, 1932  The Glass Banking Bill
Mar. 24, 1932  The Guaranty of Bank Deposits
Apr. 17, 1930  The International Bank and the Gold Standard
Feb. 08, 1930  Branch Banking and Chain Banking
Apr. 29, 1929  Mergers of Banking Institutions
Oct. 28, 1927  The Federal Reserve Rate Controversy
May 21, 1927  Labor Banking and Finance Since 1920
Jan. 31, 1924  The Northwestern Bank Failures and the Attack on Treasury Savings Certificates
Dec. 01, 1923  Why State Banks Do Not Join the Federal Reserve System, the Effect on the System and the Issues Involved
Nov. 23, 1923  Branch Bank Controversy
Financial Institutions