Show CHANCES URGED IN BANKING BILL business men and bankers agree in objecting to political control over banks amendments ARE SUGGESTED political domination of federal reserve board declared to be undesirable for depositors depositor an a well as a their banks banki washington D C business men and bankers alike who have hare appeared before committees of congress to present views flews regarding the banking act of at 1935 have found common cause for criticism in those provisions which they agree would create the means for undesirable political control over the federal reserve system and ad thereby over individual banks throughout the united states they have made the point that this undesirable condition would affect depositors la in banks even more than the banks themselves this view has been stressed in crita clams cismas by the tha chamber of commerce ut of the united states and the question ot at partisan control over banking was the central theme ot of a statement presented by R S hecht president of the amerlean american bankers association who appeared before the senate sub commit toe tee on banking and currency hearings bearings here mr hecht declared that his bis organization Is actuated by a desire to be ba helpful to congress la in enacting effective and workable banking legislation in the interests of all our people he maid laid in part it it is finally decided that it Is casary to carry this legislation through at this session we are strongly of the opinion that special care should be taken to keep our credit control and banking mechanism tree free from any sort of political considerations in making this statement I 1 do not wish to appear to question the propriety of the governments exerting a certain amount of at control over banking operations so tar far as they affect the nations currency and general monetary policy nor do we object to broad powers ot of supervision over the operation of our banking institutions because of the semipublic semi public responsibilities they carry but when it comes to such matters as the granting of credit and the making of investments by our banks these are questions of business policies that surely should not be ba under the sole control ot of a board so constituted as to be dependent upon partisan or political considerations side rations under any administration the basis basil of sound credit the real conditions that create the necessity tor for the tha expansion or contraction ot of credit arise from the needs of agriculture industry and trade themselves wholly independent of at the administrative policies of the party which happens to be in power we teel feel that the financial requirements of the nations business constitute a continuing economic process that Is not related to political changes the fundamental principles of sound credit do not vary with variations in public thought all experience teaches that the quality of credit Is sound only so long as it Is based purely on the requirements of at sound business it Is not sound when any other considerations or motives enter tato into its it composition the banking act would centralize in the federal reserve board at washington means aimed to control the supply of money in the country which term includes the sum total of currency in circulation and demand deposits in the banks which become current through checks the powers which it Is proposed to give the board are intended to enable it to influence the quantity of this deposit money through open maket operations the discount rate and reserve requirements the need for independence that Is the reason why we are so strongly in favor ot of making the fed eral era reserve board a body of such independence and prestige that it would be definitely removed from all cal thought influence and dictation its members should be tree free to study and to act in accordance with the needs and conditions of agriculture industry and trade the policies of the board should have no reference to the politics or the changes in politics of the national administration in our studies of the bank bill we have been strongly impressed with the tact fact that it would set up a situation under which the federal reserve board and its policies might be subject to control from the political administration of the country in saying this I 1 do not charts charge that it Is I 1 the intention of the present administration to bring about any undue control over the nations banking mechanism the point Is that it the bill passed as now proposed opportunity port unity tor for control would be there for the use of the present or whatever future administration might be in power our criticisms ot of the bill are not aimed therefore at the motives of the present administration but they are wholly impersonal and nonpolitical non political and are aimed entirely at the basic principles involved desirable chuff changes proposed careful study by his organization mr hecht said had bad resulted in a number ot of suggestions tor for constructive rens aone in the bill which he submitted angress on the other hand band he de dared that many of the changes proposed by the act in existing laws are ar of a constructive nature and should have the support of bankers it the method of appointment and the tenure of office of the members of the federal reserve doard board in whose hands it Is planned to concentrate greater creator power than ever before could be so altered as to insure as an tar far as possible the absolute independence ot at the board from born partisan or political considerations he added supreme court of banking since the passage of the federal reserve act over 20 years ago opinion in congress and among bankers has been striving towards the ideal ot of making the federal reserve board ft a body ot at such independence and prestige that it might be described as the supreme court ot of finance and banking we believe there Is greater need now than ever before tor for realizing this ideal a V i I 1 R S HECHT mr hecht emphasized that it Is I 1 the genuine desire of the tha banking anity to be helpful and constructive la in making suggestions la in connection with this pending legislation the changes we are urging are we w believe essential to the continued independence of the federal reserve system we have made it clear that we do not object to a measure ot of public control in the national interest for proper coordination ot at our manifold credit operations he said and we do not believe the sponsors ot of the legislation desire any political domination over these activities through our federal reserve system under such circumstances we feel that our recommendations should be favorably acted upon because they would enable the reconstructed federal reserve board to function freely as a nonpolitical body actuated only by the dictates ot of sound financial and eco co policies conceived in the interest of all of our people the adoption of our suggestions would both place operation of at the federal reserve system wholly and distinctly apart from the th fluctuations and vicissitudes of political conditions and free from undue influence by banking opinion only such a solution would thus have a stabilizing lising and confidence inspiring effect ois oa the entire business situ situation attoa |