Word: chaining
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Dates: during 1920-1929
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...person doing business with a chain bank does business with that particular bank alone. His deposits are secured by its assets alone. But a person doing business with a branch bank is in effect doing business with all branches, and his deposits are secured by their combined assets...
...bank of a chain can (and on occasion has*) failed without affecting the solvency of the other banks of the chain, but no branch of a branch bank fails unless the whole bank is submerged...
Both these systems have obvious advantages and disadvantages. If you are a small country banker who does not want to be swallowed up by a large bank, you will probably see that a chain bank remains a local bank with the interests of its neighborhood at heart; that branch banking is likely to result in financial monopoly; that incompetence or dishonesty in a few high places can ruin a whole branch banking system. If you are a large city banker wishing to expand, you will very likely see that a branch bank can be of more assistance in time...
...instance is reported in which a chain deliberately concentrated all its poor assets in one of its members and allowed it then to fail, preserving its good assets in the hands of other members...
...five Boston branches besides its main office. First National has $403,000,000 of resources, and besides its main office, twelve branches in Boston, one in Buenos Aires, three in Cuba (at Havana, Santiago, Cienfugos). If the merger is effected it will produce no chain of banks, but one $610,000.000 bank with a head office and 22 branch offices...