New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-12-14
In Light of Munsey Disclos-
ures, Currency Clause
ScareS Bankers.
WOULD MAKE OFFICER
SUBJECT TO TREASURY
President Said to Have Planned
to Appoint Williams to
Reserve Board.
From The Tribune Bureau


rany by the Munsey Trust Company,
including the usurpation of the prerog-
atives and authority Of the office of
Controller of the Currency by John
SHELTON Williams Assistant Secretary
Of the Treasury. and the illegal deposit
Of 81 900 900 of government funds in the
Munsey Trust Company, there are two
clauses in the administration currency
bill as agreed on by the Democratic
caucus of the Senate, which occasioned
serious apprehension to those bankers
who have been studying that measure
and who know The Tribune's revela-
tons 10 be absolutely correct.
a provision in the so-called Owen
bill seeks TO make the Controller of the
Currency a subordinate under the di-
rection of the Secretary of the Treas
ury. This clause reads.
There shall be in the Department Of
the Treasury bureau charged with
the execution of all laws passed by
Congress relating 10 the issue and reg
ulation Of national currency secured by
United States bonds and under the gen.
cral supervision Of the Federal Reserve
Board, of all federal reserve notes, the
chief officer OF which bureau shall be
called the Controller of the Currency
and shall perform his duties under the
general directions Of the Secretary OF
the Treasury"
That this clause strikes vital blow
at the independence of the office OF
Controller of the Currency and consti-
tutes not alone a menace to the entire
banking community but practically an
abrogation of the contractual relations
Of the government with every bank
holding a national charter, is stoutly
maintained by the bankers.
Would Control Fiscal Affairs.
Of Importance second only to the
clause quoted, and as clearly indicative
Of the determination of the political
officials of the administration to main
tain their control over purely fiscal
affairs. is the following clause in the
Gwen bill:
Nothing in this act contained shall !
powers heretofore vested by law in the
Secretary of the Treasury which relate |
to the subdivision, management and
control of the Treasury Department
and bureaus under such department.
and wherever any power vested by
this act in the Federal Reserve Board
or the federal reserve agent appears 10
conflict with the powers of the Secre-
tary Of the Treasury. such powers
shall be exercised subject TO the super
vision and control of the Secretary
While in operation the latter clause
might not work injustice to the inter-
csts Of the banks and their depositors,
il is maintained that it would unques-
tionably furnish the Secretary OF the
Treasury with an undue control and
influence over the Reserve Board which
would be easy Of abuse and might
seriously menace the independence of
the Federal Reserve Board.
1t is the evidence Of the invasion BY
political influence of the office Of the
Controller, which has been brought out
in the United States Trust-Munsey
Trust Company merger, which has 50
seriously alarmed the bankers and
which they regard as Of importance far
paramount TO the mere fact that the !
fayoritism Of the Assistant Secretary
Of the Treasury resulted in the dona- /
ton Of some SG,OOO,OOO Of deposits TO
the Munsey Trust Company without
any compensation therefor, and that IT
is keenly suspected that the unfortu- !
nate stockholders Of the United States
Trust Company have suffered more or
less pecuniary loss as result of that |
Enthusiastically through the nom
acceptance Of the offer Of Nathan 70. |
Scott, president Of the Continental |
Trust Company, to come to the rescue
Of the United States Trust Company |
with 100000 cash raised on his per-
sonal estate.
1t is this phase Of the situation which |
actually alarms the bankers Of Wash
ington, and which II Is believed will |
alarm the national bankers throughout |
the country once they gain an adequate |
appreciation Of what has been going Oh |
In the Treasury Department and the
extent to which the pending legislation |
may facilitate a continuance of the |
same character Of administration.
Office Planned for Williams.
The tribune correspondent learns ON !
mpeachabe authority that President !
Wilson has told certain prominent Re- |
publican members Of Congress that II
was his purpose To appoint John Skel- |
ION Williams Controller Of the Cur
rency II that official was made mem
Der Of the Federal Reserve Board. ana
hese members are convinced that when
me currency bill was amended to omit
me Controller from that board it Ie-
eame the Presidents purpose To APP
point Williams a member Of the board.
II is asserted with the utmost en-
phasis by these members Of Congress,
however. that since The Tribune has !
usclosed the course Of John Skelton'l
Williams in connection with the United
states Trust Munsey Trust merger