Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-10-25
INSIST ON PUBLIC
BANK OWNERSHIP
Senate Committeeman to Con-
tend for Control by
u. S. Officials.
REGIONAL AS AGAINST
CENTRAL SYSTEM URGED
II. Parker Willis Declares He Thinks
Latter Would Be Unwieldy.
Close Hearings Today.


Public ownership. with government
officials In control, OF the federal re-
serve banking system, whether there
be single central reserve bank with
branches or the regional system be
adopted. probably will be insisted upon
by the Senate banking and currency
The administration bill calls
Tor the subscription OF stock of the
banks entering the new system, and for
representation Of the bank stockhold-
ers In the controlling boards Of the re-
gional system.
A majority of the committee undoubt-
eoiy would prefer to see q central fed
eraI bank. publicly owned and operated
oy government officials. But the Presi-
dent has set his foot down against the
central hank and in favor OF the regional
system Also Il Is believed that the
House would never agree to accept a GEN.
trail bank plan. For this reason, and be-
cause tho committee does not wish to see
currency legislation defeated. 1t is likely
20 report for regional system, with
nve regional hanks, but all publicly
owned and operated by government off,
Gals.
Great Fight Forecast.
Members OF the committee, democrats
and republicans alike, have not minced
words In prociaiming that the Glass-Owen
bill provides for privately owned and
privately controlled regional banks
Should the administration endeavor TO
compel adherence to the Glass-Owen bill
IN respect to the ownership of the regional
banks 1t will have q great fight on its
hands. 1t was predicted today.
Men1hNF0 nf fha 2epatp conirniffaa and
other senator's pointed out today that
they were In favor Of central govern
ment controlled and publicly owned re-
serve bank long before Frank A. Van
Bank Of New York. offered his plan Tor
such g. bank to the committee. They
do not like to have their opinions frowned
down merely because they happen to
coincide In part with the opinions OF Mr..
VandeFiip. who. the administration de-
Of the committee have been working for
such . central bank for some time.
Number Not Fundamental.
H. Parker Willis, the expert who
aided the House banking and currency
committee to draft the currency bill.
Senate committee today. He said in
reply to questions by Senator Nelson
that the number twelve was not a
bank system Of the administration bill,
and that the number might be changed
with value to the system.
He insisted, however, that the regional
system was better than a single central
bank, which he predicted might be too
unwieldy, and which would not permit
OF 30 great local control as would the
regional plan.
Senstor Nelson and Senator Reed urged
that the provision of the bill Which would
compel one regional bank to come to the
assistance OF another regional bank at the
order OF the federal reserve board in
Washington was an admission that the
regional reserve banks might meet with
disaster.
Mr.. Willis declared that this provision
was merely an emergency measure, and
that it was to be used only in times OF
utmost necessity.
Senator Reed asked Mr.. Willis the diff
ference between a central federal bank
with twelve regional branches and the
twelve regional reserve banks controlled
by a federal reserve board provided In
the bin.
The difference" said Mr.. Willis. sis
similar to the difference between a great
centralized empire like Russia and the
government Of the United States. which
permits in large part local self-govern-
ment."
II would go as far as any one in an
effort to bring about local self govern
ment," said Senator Reed. But there
are some things which of their very ma
ture must be considered carefully in this
regard We have single post Office de-
partnent OF course, 1t would be ruinous
to the postal system to have 1t separated
into regions. We must supply the cur
rency for the entire country. and not for
each OF the states and think the matter
il similar to the postal service to a large
extent"
Argue on Public Control.
Senator Nelson pointed out that in the
last analysis the federal reserve board
currency was to be issued by the regional
banks and would also decide upon the
paper which was to be accepted for re-
discount, thereby destroying the social
ed local control
the country will not control this proposed
system, Just as you believe that they con-
troll financial affairs today?" asked Sena-
tor Reed.
II do not believe that they will control
this system" replied Mr.. Willis. 1.-THE
machinery provided for the public con-
troll will prevent this.
The committee voted to close the hear
fnas today after hearing J. A. Starek, ma
tional bank examiner for New York, in
executive session this afternoon. The
--ork Of drafting the bill will be begun
Monday morning, and 1t is the hope of the
committee to complete this work within
ten days.
Pennsylvania Banks Object.
: Edward E. Shields of Westchester. Pa,
secretary of group two Of the Pennsyl-
yania Bankers Association, presented
objections Of banks in his district to
the bill today. He submitted kilograms
from ffty-seven national banks and
eleven trust companies. All but two of
each class objected to the bill In its
present form, their objections centering
about the compulsory features of the
law. the requirement that savings de-
nosits be segregated from commercial
deDosits, the political control that would
be established through the proposed
federal reserve board. and the abolish
ment of the exchange charges on the
collection on Out-Of-town checks.
Teiegrams from thirty wholesale and
business houses Of Omaha criticising
the Glass bill were read to the commit
tee by Senator Hitchcock. The Omaha
merchants declared credits in that city
would be contracted from 20 to 80 per
The system would have q blighting ef-
feet" on all business in the west.
WILL INSPECT STATIONS.