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"In the financial world, there are daily developments indicative of . . . creation of larger units. Gigantic mergers, capital increases, large new banks, additional branch offices testify that banking is following the lead of Big Business."
Banker Hecht views banking concentration, formation of chain banks, with the utmost alarm. Articulate, he found phrases: "Financial feudalism . . . economis vassalage . . . financial octopus . . . Branch banking is a monster of such frightful mien." He quoted figures: "During the past 25 years, the number of branch banks has practically doubled each five years."* He classified, adroitly: "We still have the nation's financial business carried on by literally 57 varieties of banking institutions (48 different kinds of state banks, national banks, federal joint stock land banks, federal land banks, federal reserve banks, federal intermediate credit banks, postal savings system, mutual savings banks, trust companies, private banks)."
To point his remarks, bankers heard that the investment firm of S. W. Straus & Co. was planning to establish a new chain of banks, using the Straus National Bank & Trust Co. (Chicago) as a nucleus.
Glad Hand. Obviously, the sessions of the bankers were heading to a climax. Last of the important speakers was to be no less a personage than Roy Archibald Young, governor of the entire Federal Reserve system.† As the Federal Reserve had taken the lead in the war on speculation, as the credit situation was the only real issue at Philadelphia, bankers waited with intense interest for what Governor Young might say. In Manhattan, the market was uneasy.
Not all who prophesied a terrific philippic knew Roy A. Young. Famed masters of finance have won reputations for taciturnity, austerity. But Governor Young is friendly, cheerful, talkative. He was twitted", last week, about his nickname, coined by the able financial writer for the New York World John F. Sinclair is a northwesterner, familiar with breezy phrases, breezy people. He called Governor Young, "the glad-hand artist of the Federal Reserve." The nickname stuck.
Glad-hand tactics have carried Roy Young far. At 18 he was a messenger boy in the Marquette (Mich.) bank. At 37 he was head of the Federal Reserve Bank of Minneapolis, the youngest governor in the system. Every U. S. banking tycoon knows and likes his pleasant, florid face, his easy, vigorous anecdotes. He is now 46, a satisfied, successful Scotchman.
Roy Young delivered no philippic, no bomb. If there had been any crisis at Philadelphia, no listener would have guessed it. Gov. Young told the bankers the A. B. C. of banking. He laid down some incontrovertible rules of ethics. Among them: "Responsibility of banks does not end with their depositors and stockholders. Banks also have a responsibility to the community in which they are located. . . . It is my conviction that a healthy banking situation is the best guaranty of a healthy economic development."
About credit, he said only this: "The Federal Reserve can't earmark its credit. But it can help steer the credit ship. People must not expect the impossible."