Branch Banking

The vital and much discussed question of branch banking has again been given prominence by the test case brought before the U. S. Supreme Court by the First National Bank of St. Louis, which claims the right to establish more than one place of business in the city where it is authorized to do business. The Court's decision should decide whether branch banking is implied in the national bank act, and whether a State has the power to limit a national bank Federally incorporated. Briefs will be filed by the Attorneys General of ten states.

In Missouri, the state statutes forbid branch banking. In 21 other states, including New York, it is permitted and in consequence national banks have been able to compete vigorously with state banks. In New York City there are 32 national banks with 43 branches, as against 19 state banks with 139 branches, and 20 trust companies with 60 branches.

The Chemical National Bank of New York, after doing business in one location for 75 years, has announced its intention of organizing a chain of 12 sub-offices in the next two years, in order to meet the competition indicated by the above figures.