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THE CHICAGO BANKER
July io, !pop]
CIAFfEl 1E€@1B
(Department of Chicago Banker)
An Open Forum Dedicated to the Associated Chapters A. I. of B. in Which to Advance the Great Movement for Independent Action and Universal Membership
Chicago Team: Negative Ralph R. Sleeper, Continental National Bank R. G. Gadsden, Merchants Loan & Trust Co. John F. Yocum . . Bankers National Bank	Th	e Seattle Debate		Tacoma Team: Affirmative Michael Dowd . . . Tacoma Post Office Ernest C. Johnson, Scandinavian Amer. Bank W. W. Newschwander, Nat’l Bank of Commerce
Through the energy and courtesy of C. F. Spearin of Chicago Chapter, The Chicago Banker has been enabled to present the complete arguments of the Chicago Chapter debaters in the Chicago-Tacoma debate at the Seventh Annual A. I. B. convention at Seat-		Resolved: inat a system ot branch banking would serve the needs of this country better than the present system.” Chicago ־ ־ Negative Tacoma - Affirmative	in the upbuilding and general welfare of his town. But our opponents would make him a mere agent, a figurehead representing the head office; often coming from the city into a locality in which he is totally unfamiliar. The value of the experience of the country banker is of no mean importance as may be seen from	
calling members from the ranks of the country bankers for their official positions. The finances of a country are the sinews of peace as well as of war. The great army of bankers—■ each one having a jealous interest in the development of his own town or city—have supplied the sinews of our unprecedented progress for almost a century. But our opponents would have us throw aside this century of experience and put puppets in place of our financiers. It is not because the local agent is less intelligent, but he seldom is a product of the town in which he is employed; he moves from place to place and does not get thoroughly in touch with the conditions in any particular place, and he is so controlled by a hard-headed board of directors, often hundreds of miles away from the actual place of business, that he is not able to take care of the needs of a community which is growing by leaps and bounds. This type of bankers may satisfy the slow-going, over-conservative methods of old Europe, but in America we want men, alive and active for every opportunity, ready to meet every new condition without asking the permission of a board of monocled wiseacre directors at the head office.
And I ask the advocates of this almost ideal scheme, how much one of these superior beings—one of these directors of a large branch bank sitting in his office in the city, cares whether a certain canning plant, for instance, locates in his branch town of Podunk or Pumpkin Center? I venture to say that he cares not the snap of his finger; and yet our opponents would intrust into the hands of a body of just such men the financial destiny of hundreds of our most progressive towns. It is almost treason to advocate so vicious a plan. Look at the contrast in the development of commercial enterprise in every part of Canada with that in the United States. And yet we are told that a board of directors at the head office can handle local conditions better than men who live in the town and who control the small country bank. If such is the case why do we not get the expected results in two countries so near each other? Why is it that the comparison is so unfavorable to Canada, when the natural conditions are so similar and transportation facilities so equally good?
I might go on for hours picking to pieces this scheme which looks so well on paper, but works so disastrously in a rapidly progressing country like our own. I might show you by figures how disastrous were the failures o' large branch banks in Australia, in Scotland.
itable to loan it in some other locality where the hazards are greater. The branches of Canadian banks in Cuba and Mexico are surely not for the purpose of creating exchange for it would be much cheaper to have only a correspondent in these places and do away with an expensive force of clerks and banking offices. The deposits are very meager. What
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RALPH R. SLEEPER
First Negative
tie. The papers are upon the livest banking question of the day and are exceptional in both argumentative and literary values.
then is it which prompts them to establish these branches unless it is to loan money at profitable rates and take it away from Canada whom we all know ought to have all the capital she can get to develop home industries. Banks are not charitable institutions and it would hardly be wise to give them so free a rein as this.
But let us suppose for the sake of argument that banks were allowed to establish branches. How many of our city-bred bankers could we put in charge of a branch among the farmers of the great corn-belt or in the cotton country of the South, or the mining districts of the West? The country banker develops along very different lines from the city banker. He is a product of the community in which he carries on his business. He generally has business connections in the home town outside of the bank. He therefore has a live interest
First Negative: Ralph R. Sleeper, Continental National, Chicago
We have invariably solved our great national problems by a consideration of the basic principles involved. The secret of the succtss of our greatest leaders is found in their ability to look through the minor considerations and to search out this fundamental principle. Could the emancipation proclamation ever have been issued if Lincoln had listened to the thousands of petty howls that he met on every side? Can we as citizens afford to give our time to petty theories and plans in national finance and in banking and forget the great underlying truth?
We are awaiting with interest the report of the congressional currency commission. Any suggestions they may make in regard to a change in our present banking or currency systems will receive careful consideration. And since there has been for many years a very small minority who have advocated the establishment of branch-banking in the United States, it may be well for us to discuss the merits of such a system. It has, however, been pretty generally admitted, both by the students of banking and by the public generally that the establishment of branch-banking in the LTnited States is an absurd dream of a few fanatical cranks and that any change we may make in the future will never go so far as to affect the individuality and open competition of our present system. Our opponents have pointed to the Canadian system of branch-banking as a type from which we might get many suggestions. We hope to prove to you that this system is working anything but satisfactorily. Furthermore the advocates of branch-banking in the United States must, whenever they find fault with our present system, show conclusively that branchbanking will, in itself, correct these faults which they point out, and that they cannot be corrected under the present system.
The advocates of branch-banking tell us that one of the first functions of a bank is to collect idle money in small quantities and loan it where it is needed. They say that their system carries out this idea to the fullest extent. They fail to see that in allowing a bank to establish branches they are making it possible for the banks to take the money out of certain communities, not because it is not needed there, but because it may be more prof-