The foreign division is an important part of large metropolitan banks, particularly in seaports and financial centers like New York, Philadelphia, and Boston, and in manufacturing and produce centers like Pittsburgh, Chicago, and St. Louis. New York far exceeds other American cities in international banking, and such of its banks as have established foreign corresponde.nts, agencies, and branches, and conduct foreign exchange operations, have very large and highly specialized foreign divisions.
Relatively few banks have developed international banldng, what business of this sort comes to those who have no foreign connections being handled through their metropolitan corre spondents. The volume of their business is too small to warrant the expense of maintaining foreign agencies and the business is peculiarly technical and difficult and requires special training and equipment. But conditions are rapidly changing; many banks are starting international banking on their own account, and no activities of New York banks are growing so fast as those of the foreign division.
Among the many factors causing this growth are the following: 1. The international financial and commercial operations growing out of the late war, whereby New York has almost eclipsed London as the world's financial center.
2. The unprecedented expansion of our foreign trade, par ticularly during the war.
3. The shift, even before the war, in the character of our exports, from food products and raw materials to manu factured products, the marketing and banking problems connected with manufactures being much more com plex and diverse.
4. The spirited and concerted efforts of certain producers, exporters, and bankers to invade the foreign field.
5. The increase in traveling by Americans abroad and in immigration.
6. The greater banking powers conferred upon national banks by the Federal Reserve Act, such as the right to establish foreign branches and agencies, to accept time bills of exchange, and to rediscount bills with the federal reserve banks.
7. The growth of the New York discount market.
The Management—The Comptroller The organization of the foreign division varies widely with different banks and in most of them is undergoing changes to meet the needs of rapid expansion. The volume of business is probably the greatest factor in determining the form of organi zation and the specialization of functions. The work of a foreign
division can best be made clear by describing the organization and departmentalization as of a large New York bank which, it may be assumed, has long engaged in international banking and has developed a voluminous business. Such an organization is shown in the accompanying chart (Figure 36), which is designed to bring out the relations here described and does not purport to be the organization of any particular bank. To see the relations between the management of the foreign and the domestic divi sions this chart should also be compared with the larger chart (Figure ro) given in Volume III, pages 538 and 539.
The foreign division is shown to be under the general admin istration of two executive managers of the bank. These are senior vice-presidents. Immediately subordinate to them are several vice-presidents of the junior rank on the managerial side, and the comptroller or, in case the bank has no comptroller, the foreign chief clerk and the assistant cashier on the executory side.
The comptroller is presumably an expert in organization work, versed in the duties and activities of every department; either he has risen from the ranks and acquired his training by service in the various departments, or else he has been called into the bank because of his organizing abilities as proved in other lines of business. He is the ultimate determiner and adjuster of any question about the internal organization of any or all the depart ments and of the method of handling any item. He delegates this part of his work to the chief clerk, to whom the departments are directly responsible in all matters of detail. The chief clerk has entire charge of the personnel of all departments, and all questions of hire, salary, discharge, and nature of employment are handled by him. The chief clerk is co-ordinate with the assistant cashier and they co-operate closely and together over see the many departments. In banks which do not have a comptroller, the chief clerk is in direct charge of the work.
The Chief Clerk and the Assistant Cashier The work of the office of the chief clerk is divided among the following: r. Test-word clerks, whose duty is to check the test words which authenticate outgoing and incoming cables pertaining to many transfers and payments.