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The author comments on the article "Commercial Banking in the Sixties," by Paul S. Nadler. The article centers on the over-all growth of the commercial banking system in the 1960s as compared with growth in the gross national product (GNP). According to Nadler, that commercial banking deposits will not grow as fast as GNP, which results in the conclusion that other financial institutions will necessarily grow more rapidly than commercial banks. The author explains that he agrees with Nadler's findings.

The purpose of the paper was to provide an objective and systematic appraisal of the capacity of black-owned commercial banks to finance economic development in the black community. This appeared to be a vital task at the time since these institutions were being formed at an accelerated rate with that specific aim in mind. On the basis of the evidence analyzed (virtually all of which was newly generated information available only through Federal bank supervisory agencies), I concluded that black banks were not viable instruments of economic development. However, I also concluded that they could perform some minor services of benefit to their local areas, and they could serve as symbols of black achievement. As an alternative source of financing, I proposed a domestic version of the existing Edge Corporations. These are subsidiaries of U.S. commercial banks formed for the purpose of conducting foreign financial activities. Among the latter, they can have varying amounts of equity investments in non-financial enterprises abroad. It was this feature which I thought offered promise as a means of expanding the availability of risk-bearing funds in black communities. [ABSTRACT FROM AUTHOR]