The Bemidji daily pioneer. [volume] (Bemidji, Minn.) 1904-1971, 1914-03-09
STATE BANKS NOW
CAUSING WORRY
Judiciary Committee In Congress
Wondering Whether They Can Be
Governed by Proposed Law
BRAND1Es EXPLAINS POSITION
Says There Are Several Reasons Why
Government Can Assume This Jur- Z
. isdiction-Explains Circle"
From Cong. G.. H. Tavenner

From Cong. c.. H. Tavenner
Washington, March 9.-Are state
banks to be brought within the pro-
visions of the proposed law prohibit
ing interlocking bank directorates?
This is question which is being
deeply studied by the House Judiciary
Committee which will draft the in
terlocking directorate bill. The thing
bothering the committee is how Con-
gress can assume jurisdiction over
state banks. '... -...
A number of witnesses have given
testimony ON this point. Louis D.
Boston, pointed out three methods by
which, in his opinion, Congress could
assume this jurisdiction. One is
based on the ancient precedent set
by Congress when it legislated by
taxation upon the power of state
banks to issue bank bills. Again,
Mr. Brandeis declared that all bank
ing business partakes of an inter-
state commerce character, bringing
it within the jurisdiction of Con-
gress. Finally, he said, the subject
could he attacked through the power
Of Congress to declare what matter
can be carried in the mails. It
could withhold postal privileges from
any state bank wh'i ch refused 20
comply with the law against inter-
locking directors.
Mr.. Graham, of Illinois, Demo-
cratic member of the Committee,
thought that the employment of any
of these methods would he placing a
strain upon the jurisdiction OF, Con-
gress. Brandeis, however, insisted
upon the interstate character of
banking business.
ri doubt" he said, whether there
is any bank, whether it be the small
est local institution, Which IS not
being used as means of conducting
commerce between the States, and
if we can exercise power over the in
strumentalities of commerce, over
the telephone, telegraph, and the
railroads, it certainly is merely a
question of the urgency, the neces-
sity, whether a condition exists
which calls upon the community to
exercise its power in order to pro-
tect itself against evils which are
grievous in their nature.
81 can feel no doubt in my own
mind that the evils which we have
suffered from the concentration of
financial powers would Justify the
exercise of any of these constitu-
tional powers
Mr.. lBrandeis, however, woald linn
it the inclusion of state banks and
trust companies to those of cities of
more than 100000 population, in Or
der. to catch the big banking insti-
national charters, have played so
important a part in the building up
of the money trust. 1t was the Bos-
ton mans opinion that interlocking
directorates in the smaller institu-
lions is not at present a tremendous
evil.
The Boston lawyer graphically
described to the Committee how the
interlocking director has (built UP
the "vicious circle Of money mon.
opoly.
"The bankers control the railroads
and thus have been able to- control
the sale and issue of securities. Be.
ing bankers, they bought those Sc.
curities at a price which they ha6
a part in fixing. They sold those
securities, as bankers, to insurance
companies, in which they were abb,
to exercise some control as direct
ors. They got the money will
which to buy those securities through
their control of the great bankin,
institutions, and then, in their ca
pacity of having control of the rail
roads, they utilized that money t.
purchase from great corporations
like the Steel Corporation, what tn
railroads needed,and so on until w
have the endless cIain.'