| Show THE DAILY VAS WASHINGTON INGTON Fin Financial I a n cia 1 V Whirligig 11 i r 1 i gig Written for tor Th Tho Telegram By JAMES McMULLIN NEW V YORK YORK YORK-To To date New York opposition to the New Deal has been mostly talk Despite plenty of vehement squawks against unjustifiable unjustifiable unjustifiable pressure no important interests have felt brash enough to de defy y Washington by o overt ert action Of course the New De Deal l program has been many times in both spirit and letter letter but but only surreptitiously Now a group roup of substantial institutions are about to kick Washington wishes squarely in inthe inthe inthe the eye The bold rebels are the New York savings banks With possibly one or two ex exceptions exceptions ex- ex they are planning to secede en masse from the Federal Deposit Insurance corporation corporation corporation corpora corpora- tion and create a comparable insurance setup setup setup set set- up for themselves alone The move has been brewing for some time and will soon be openly announced F D DIe I C officiate official ae not happy about it That's understandable The seceding institutions institutions institutions represent about 26 per cent of all insurable insurable able deposits not deposits not total deposits deposits in in the coun coun- try But official pleas and arguments leave the savings banks as cold as a penguins penguin's feet Never Liked Setup The savings banks never wanted to sign up for F DIe D I C in the first place They thought it grossly unfair to be asked to underwrite the losses of commercial banks But they were bludgeoned into it by Washington pressure as exerted through ai nt o officer of one of the largest largest largest larg larg- est savings institutions He said he would en enroll enroll en- en roll 1011 his bank anyway and the others were afraid not to follow suit because depositors might get funny ideas and start withdrawals in volume This fear has now vanished The banks are confident they can convince their depositors of better protection under the new system and anticipate no trouble whatever The rebels also feel safe from Washington reprisals Membership in F D I C is purely voluntary Moreover they all operate under understate understate understate state charters an and have no responsibility to federal authorities at all If Washington doesn't like it that's just too bad Critics of other New Deal phases are keenly interested in this declaration of independence They figure that if one group can get away with defying the lightning why not others Morga Sitting Tight Portents in different direction show that New York is no longer so deeply in awe o of Washington thunder Morgan plans are arc closely guarded but in informed informed informed in- in in- in formed sources are now willing to bet that the fateful date of June 16 w will ll pass without any announcement from the Morgan firm at all I If the government charges violation of the banking act its it's understood the house will aim sim simply ply reply that it is conducting a deposit banking banking banking bank bank- ing business business is is not dealing in securities securities and and therefore complies with the law The firm is said to feel perfectly safe be because because because be- be cause it can prove i i has done no security business business business busi busi- ness for fox some time The only exception is a certain amount of trading for its own or customers customers' customers customers' customers customers' cus cus- account which account which banks of deposit are allowed to do So all the hullabaloo about forcing the mighty Morgans to make a public public pub pub- lic lie choice of may come to nothing Being noncommittal has its advantages If H the security business stages a grand comeback th the house remains free to do something about it Meanwhile it keep its personnel intact and will avoid the grief of f trying to organize a separate security firm in a 3 a hurry Holding Their Fire Still another sample of the new independence dence is found in the changing attitude 0 of in industry in- in toward codes Companies that h have v signed no code for code for instance the gold mining concerns concerns are are stalling to keep from committing themselves before June 1 Their Washington ton scouts have told them that if they dont don't subscribe subscribe sub sub- scribe to a code by then they probably wont won't have to at all Also there has beel a rapid increase in disregard disregard disregard dis dis- regard of code provisions So many earlier violations violations violations vio vio- lations have gone unpunished the impression is general that the Blue Eagles Eagle's claws are arc a joke Open rebellion against N R A by a number number number num num- ber of companies comes closer every day The informed believe General Johnson put his foot in in the l liveliest hornets hornet's nest yet when he ruled for the reduction of machine hours in inthe the textile industry without allowing for the maintenance of wages The general may wish he is in Mars be before ore that row is settled Its It's true that rampant overproduction had to be checked or the industry would have skidded skidded skid skid- skidded ded over a precipice But its it's equally true that textile labor wasn't exactly satisfied before and the prospect of a 25 per cent reduction in meager weekly income spells nothing but fight with a capital F FA FA A major strike is in sight The employers I will flatly refuse to stay pay hour 40 wages for 30 hours' hours work on the ground that they'll go I broke if they do The workers will insist with I equal firmness tha they must New Yorkers I Iwho who know the situation comment that Solomon might well turn pale if he were asked to solve this riddle 1 1031 Jik I |
