Show SEEN HEARD SEEN E and HEARD EA around tho the National Capital may l By CARTER FIELDS FIELDS- FIELD Washington Washington Probability Probability tho t h a t congress will enact legislation lore fore forcing ing lag every state bank except mutual savings banks to take out n a federal charter Increased considerably with endorsement of the plan by Representative John W McCormack of McCormack Is a member of or the house bouse ways was and ond means committee which docs does not deal I with banking legislation but tIle the Importance of ot his Tic view on this subject Is due not to his committee connection bat but to his own Influence In the houses plus the fact that lie he heIs lieis hoIs Is very ery obviously carrying the fin flag for tor the tho Treasury department No 10 one In the treasury from Sec Secretary down and In- In Including In Including Comptroller of the Curren Curren- Currency Currency cy J F T OConnor O'Connor Is talking on this subject at all alL aJl It Is not a 0 sub sub- subject subject which len lends Itself to much open talking for to advocate such a 0 change Is to antagonize not only the stockholders officers and directors directors tors of nil all the tile state banking Institutions lions but the 48 state banking of- of of offices The latter see In any move mo to end state banks hanks n a threat at nt their lr jobs And some of them theta are arc quite Important politically Hut But down Iowa underneath the admin administration Is strong for lor a 0 unified bankIng system for much the same reasons as ns voiced by McCormack And If It treasur treasury officials see n a chance to get the desired legIslation enacted they will come out for It strongly They have hae se several Influential uen- uen fial members of the house and sen sea senate ate ote talking their with arguments arguments with without out official authority arid authority arid trying to find out what the chances are arc For In the nature of things the administration would much rather this particular move mote originate In congress than to demand It It And It Is not vital enough h to President ent Roosevelt's program for him to turn the heat on members whose connections hack home would make It politic for them to oppose the chan change e The present depression has shown the weakness of the present banking structure Mr McCormack l told the writer The conflict ot of laws Jaws and of ot supervision Is responsible responsible ble for much of our banking troubles trou trou- troubles troubles bles The Idea of ot having tu 40 49 author author- authorities authorities lUes granting charters to banks Is absurd The Idea of 40 agencies ex- ex examining ex examining banks to see If It they are solvent and are complying with 40 sets of ot banking hanking laws Ins Is ridiculous Require Federal Charter I would force every bank doing o a commercial business to take out outa outa outa a federal charter In fact I 1 would permit no bank save sl mutual savings banks to do what is normally re- re re regarded as ns a n banking business Then nil all the banks that loan money com com- commercially com com- commercially commercially would hn have e similar char char- charters charters granted under the same laws and by the same agency nency of or the gov- gov government gov government and all aU would be exam exam- examined examined ined Inell by the same agency It Is not just n a question of economy That ThatIs Thatis ThatIs Is Important enough but the bene bene- benefits benefits benefits fits of ot the change far lar transcend that I am nm not discussing the central bank Idea nor the authority of ot the Federal Federa Reserve board over o the 12 regional banks hanks I am considering simply the question of grantIng charters and of examining the banks Lanks which loan money to our citi- citi citizens citi clU citizens zens I hI am nm strongly In n favor lavor of our dual system of government nation nation- national national al nJ and state and I would resIst strongly the encroachment of ot the federal government on the rights and prerogatives es of ot the states But times and conditions change It Is no longer the case that what happens to our banks In Boston Is confined In Its effects within the state lines of l Massachusetts Massachusetts Any ten old child knows that It if a group of banks or perhaps only one big bank should close la In ChIcago the reverberations would affect business harmfully from I Maine to California The people ot of I Oregon have hare a right to have theIr national government protect them from harm which may come to them through reckless banking In Florida I meet men who oppose thIs change In defending state rights they ask me If I would have the federal government take over con con- conduct conduct duct of ot the schools also It seems to me that the line of Is 18 very clear Of Ot course I 1 would not want to have hare the federal gov gOY government government take over the conduct ot of the schools Would Affect All AU Suppose anything that might happen In the schools ot of my city of ot n Boston Boston n strike ot of the pupils or the Inclusion of ot some debatable subject In the curriculum or whatnot How could that poS pos possibly sibly affect the people of ot Ken Ken- Kentucky Kentucky tucky Or Texas Tetas But nut It If two or three big banks tn In Boston failed every bank hank In those states and every other state would be affected seriously and at at once And tho those e failures might be due entirely to perfunctory careless care care- less or even en crooked examination ot of those banks by hy the state bank bank- tag ing banking examiners or perhaps by some oversight In drafting the state banking laws vs or any one of ot a n dozen things s about the up set-up with no one outside Massachusetts had any anything thin to do whatever Many oi of as remember the so- so called so-called called panic of ot 1007 It was S started by the collapse of the Knickerbock Knickerbocker er Trust company In New Nev York city J I There was no excuse for lor a n depres depres- depression sion slon at that time It It- was wa simply a 11 mone money panic produced by a very local situation We learned learnell our s Je-s- lea les lesson son n from Irom that As a result we wo had first the Aldrich AldrIch Vreeland emergency cy currency bill and later the fed federal oral eral reserve system Now the time has come to take the next step and make ImpossIble for tile the future wide notion troubles due to preventable pre local disturb disturb- disturbances disturbances ances Banking Is not a n local funs tunc- function tion any more It Is national If not international So It must be con con- controlled con controlled trolled In toto Coto and not Just In part by the strong arm of or the federal go government ln t Extend Authority rot Not only does the want to force nil all commercial banks to become national banks as told In n a recent dispatch dl but It desires to have hn the authority of the Fed Federal oral eral Reserve board over the 12 re- re regional re regional gional banks made a great lIe deal 1 stronger The fact Is the aim of the nil administration ministration Is not very cry different from the purpose of the late Sena Senator tor Nelson W Y Aldrich of Rhode Is- Is Island Is Island land whose central bank studies 8 were Vere actually the basis of the fed federal era oral eral 1 reserve reser system When the Democrats came Into power In 1013 1913 they rewrote the Aldrich bill giving him as little credit as os possible They did not change the lunda fundamental mental features very ery much but In several spectacular lar ar details Important they varied It One ot of the most Important details detail in the minds of the Democratic framers Including Senator Carter Glass then chaIrman of the house banking and currency committee and Senator Hobert L Owen of ot Oklahoma then chairman of the senate committee ot of the same name Mme was that Instead ot of otone one central reserve bank they made 12 12 Carrying their Idea of decentralization decentralization as far as possible they gave re a degree dere of Independence ence to these 12 regional reserve banks which has often Irked the federal board since and for that matter various Presidents who found themselves unable to control the policies of the individual reserve banks as much muchas muchas muchas as they would have liked Bearing In mind that one of the objects of ot the new system was wag to get the financial control of ot tile the coun- coun country coun country try awa away from Ne New York an and down downto downto downto to Washington ton It Is rather curious that the reserve bank which has given Washington the most trouble ever since has been tho the New York bank Headed by strong minded strong gentlemen who knew what they wanted and had hatI firmly fixed notions ot of what was best the New Xe York bank again and n again aln disregarded the pleadings even of ot the federal reS reserve fre authorities Irks Reserve Board Reserve board members still sun reo re- remember re remember member with anger the stubborn stubborn- stubbornness stubbornness ness of the New York bank In the early days of 1 1929 1020 when hen the reserve re- re resene re reserve serve sen-e board was doln doing Its utmost to stop the sensational rise In prices on the stock exchange This effort backed by President Hoover proved futile What hat would have e happened It if the New York bank had been un- un under un on under der the control of ot the reserve board no one Is sure But Dut as good an il- il illustration Il n Illustration as any other Is that the federal board began bean trying to hold down speculation when American Telephone was around Where Where- Whereas Whereas as ns the boom gayly ly continued until thIs stock touched Many 1 contend that anything done nt at that time would have bae been beeD fu In futile tile the so far as ns heading off ofT the crash Is concerned but the present ad- ad administration ad nd administration ministration wants to be able to control the reserve resene banks to banks to be beable beable beable able to give them orders This Is not the same as the cen- cen central cen central bank Idea about which so much has been said and which Secretary u has advocated So far there Is no Indication that President President dent Roosevelt noose has been convinced ot of the th necessity of ot thIs tills On the contrary all nil Indications are that he heIs heis beIs Is not for lor It It Soldier Bonus The very cry top figure on which the I administration Is willing to com com- compromise compromise promise on the soldier bonus Is I So that the n fight bt Is Isto isto Isto to save sare something like more Friends of ot President Roose noose Roosevelt Roosevelt velt say the sky Is pretty nearly the limit to which he Is willing to foIn go goin o oIn In fighting to hold the bonus figure figuro at If It the bill which should pass con congress gross gregg exceeds that amount the Pres Pros PresIdent President ident dent will veto teto It It beyond any doubt The next step Is not much In dis- dis dispute dis dispute among those who have can can- canvassed can canvassed the situation The house will pass the bonus bill In whatever form It may bo be by that time by more than the necessary two thIrds two majorIty to enact a measure over the veto The only doubt Is as ns to the sen- sen senate sen ate Friends s of or the White House Douse are confident that they will be able to prevent pre n a two-thirds two majority for fora fora fora a bonus bill larger than I Any opinion based on the can can- canvasses canvasses Is only an opinion It can can- cannot cannot not be anything else for tor the simple reason that there Is a small number or of senators who do not themselves q nov know at the moment what they will do In such an emergency Col wW Copyright rl h t- t |