| Show 0 national topics interpreted by william bruckart washington although the roosevelt emergency banking program was put forward purely would end as a solution tor for state banks the crisis then upon the nation it has since become apparent that it had bad a permanent phase that surely Is going to carry on far into the future in the shape of a bitter controversy there Is no longer any doubt that the emergency program was based on a plan tor for a unified banking system tor for the country and that of course means ultimate death for or the state stale banking structure we have long had bad a national bank ing system made up of 0 financial institutions that were chartered by and under udder the control of the comptroller of 0 the currency in the treasury we also have had the state institutions that were chartered by and under the control of state authorities and exl existing stIng by virtue of state laws there has been a long continuing effort to get them together but always it has been futile because for the most part the national banking laws were more rigid and the prerequisites higher than the state banking laws required it Is interesting therefore to note how the creation of the federal reserve system back bach in 1914 made some inroads into the state banking field by providing means whereby those banks could join the national banks 1 in n the federal reserve system there remained advantages to the state banks however and one of the means used to offset some of those advantages was the passage of the so called mcfadden act in 1027 1927 this allowed national banks to have branches within the cita alt where their parent bank was located various efforts have been made since that time to enlarge the branch banking privileges of the national banks but to no avati avail there was an enlargement of those dieges lieges in the bill by genitor glass of virginia that wits was passed by the senate in the last congress although it died tile death of a rag doll lu in the house of represent stives now kow alnes the emergency banking law however with pro inions designed to solve the crisis in our count rys financial structure but with some other sections furthering the interests of the national banks the latter sections were completely overshadowed most people paid little attention to them the main object of the legislation was to get tile the banks open the b bill III was put through congress in the record speed of one day aud and the state banking interests hitherto on guard against new encroachments encroach ments were in a position where they could do nothing Atu actually ally the situation resulting from the passage of the emergency law aside from the provisions for making currency available is a tremendously long step on tile the part of the federal goern government ment toward ing out the state stae banks it does docs so by making available marly many more advantages tor for the national banks and state banks that are members of the fed oral reserve system than they ever have had before in other words state banks which were able to meet federal reserve requirements could hardly remain outside of the system several hundreds of the of them have been admitted to the system in a short space of time there are few officials or members of congress who will admit that there is a big drive on to for unified accomplish a great banking system unified banking tern their silence however does not conceal the fact state banking representatives who flocked to washington during the banking holiday in order to protect themselves recognized it it they began fighting but it was too late the law was passed their claim was and still Is that the emergency banking act and the regulations issued under it for the re opening of the banks beginning march 13 resulted in state banks being cast adrift they were ghen mighty little consideration it looks like they will receive less hereafter so its the survival of the fittest for them this does riot not mean that the state bank in your community Is going to die the scheme which washington observers believe they see and which the state bank representatives claim has been worked out operates slowly it Is intended to develop a far hung flung system whereby the small country banks will be absorbed slowly perhaps becoming branches of larger banks banking facilities will be con tinned wherever there la 19 need for them because it if the need exists profit can be made out of a bank wherefore there will be an eventful purchase of hundreds of the smaller banks and conversion of them into branches thus the basis of the controversy comes into view there Is one school of thought in the favor a few country which holds great systems that the solution to I 1 our banking problems I 1 Is establishment ament of a few great systems or at least fewer but stronger banks there Is support for that idea because of the thousands of bunk bock failures that have occurred in the period of the depression S senator glass the author of the bill mentioned above and one of the ablest banking students ot of the time says there are actually thousands of ba banks n ka in operation that ought never have been organized gani zed there was no need for them ne ile referred to some of the real small institutions as pawn shops adding that they were of no service to their communities and that they toppled over at the first sign of a storm but there Is another school of thought those on this side of the question argue against extension of the branch system and the limitation on the number of banks as placing dangerous power over currency and credit in the hands of a small number of individuals instead of distribution of that power among the communities where the banks are located from this viewpoint too it Is said local communities muni ties will be denied accommodations at the bank with which they must do business I 1 have heard it argued at length that a branch of a bank in a distant city will have its hard and fast rules and either the local citizens meet those requirements or tail fall to get a loan it if that be true of course it means destruction of one of the basic rules of credit namely the character and record of the borrower at any rate these are the points set up on each side of the question undoubtedly there Is merit to each argument moreover Hoi cover experience seems to have demonstrated that varying conditions make the two propositions work differently in different communities yet whatever may be the view one holds it cannot be denied that the emergency banking act is an enormous stride in the direction of a unified banking system it if it produces stronger banks everywhere it surely will have beer been a blessing even though it leaves sore spots and heartaches in many communities for or the time being as a result of the harshness of its terms president Roosevel ts bold action respecting spec ting the banking situation resulted in many persons move required overlooking what I 1 courage am inclined to regard as a move that required more courage when considered from the political standpoint he was able to gain quick and decisive and almost unanimous action on the banking legislation because of the perilous situation ile had no such united support when he asked congress to give him dictatorial powers to cut government expenses especially Is this true concerning the right he sought to trim down the payments being made to former soldiers sailors and marines whose compensation wits was being given in cases of physical disability that did not result from actual service in the lighting fighting tines lines no one knows nor can anyone tell how bow much money Is being paid for disability not connected with the service it Is known however that the total payments to veterans exceeds sa ia a vast sum even for our rich country there seems to be no do equivocation about the willingness to pay compensation to veterans who received injuries in tile the fighting lines that is t undoubtedly their due it Is the least a government can do lut iut where th the e compensation is being paid for things that have happened since the war there surely Is room for doubt that Is the type of payment which the president says he Is going to eliminate 0 0 now that congress has put through the legislation permitting the lie manufacture and sale of beer with an alco drys keep up fight on beer holec content some t h n I 1 n g near what beer had before the days of prohibition Ibl much speculation has arisen as to how the matter will be viewed by the supreme court of the united states the question surely will get to the supreme court in rather short order prohibitionists are not going to be licked without that final test in view of these circumstances it may be interesting to recall an argument made privately by former senator john J blaine of wisconsin when he sought to get action on a beer bill lo in the lost last session of congress before his hia term expired senator blaine took the position that it would be unconstitutional for congress to pass I 1 beer legislation that would authorize the manufacture and sal sale e of beer where it contained an alcoholic content in excess of one halt half of I 1 per cent rut but he contended that it if congress enacted legislation declaring there was no nn penalty to be used where the alcoholic content was below a stated fl figure there was nothing which the su prene court could hold to be in other words the alie way he proposed to make beer legitimate was by a negative action since the eighteenth amendment said congress had power to pass enforcement statutes congress had acted in ID accordance with the amendment but it had placed the limit on the punishment there seems every reason to believe that the law as enacted in the extra session will stand the constitutional test 1933 western New pir paPer union |
