The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-10-30
MOVE TO ABOLISH
US. COMPTROLLER
Action to Strip Secretary Of
Treasury Of DepOsitary
Power Also Planned.
BITTER FIGHT EXPECTED
Another Proposed Change Is
Said to Affect Expansion Of
Reserve System.

WAsIiNGroN. Oct. 80 e-lmportant
amendments to the Federal reserve act
which are certain To provoke bitter con-
troversy will be proposed at the next
session of Congress. Three amendments
are expected to be offered. as follows:
I. A provision to vest in the Federal
Reserve Board, instead Of the Secretary
Of the Treasury, the control Of Govern
ment funds. so far AZ their deposit In
reserve banks or other banks II con-
ccrned.
.. A provision abolishing the office
'of Comptroller of the Currency. on the
ground that with the formation of the
Federal Reserve Board the Comptroller
ship has become supernuous.
3. A provision reducing the liabilities
OF member banks for payment on capital
stock in the reserve banks and pos
sibly leaving the control OF at least
one-third OF the reserve funds subject
to hnal payment by the banks to the
member banlss themselves. as was the
case under the old currency system.
Origin Of the Proposal.
A proposal for IA reduction of the
liabilities OF the banks for capital stock
payments was made by C. n. Bosworth.
reserve agent OF the Federal Reserve
Bank OF Chicago, in a speech before the
Indiana bankers convention a short
time ago.
The suggestion that the control Of at
least one-third OF reserve funds. now
subject to final payment In the reserve
banks, he returned to the control Of
the member banks was adopted at the
recent convention OF the American Bank.
| ere Association in Seattle.
Friends Of the Administration are eN-
pected. however. TO oppose both OF these
suggestions vigorously on the ground
that they would tend to prevent the ex-
pansion OF the new currency system into
the great financial structure that 1t was
| Intended TO be
They regard the proposed step as de-
signed to limit the activities of the re-
serve system practically to the scope of
the work OF the past year. in which the
Federal Reserve Board has been doing
what 1t regarded as merely the prelimi-
nary work OF installing the new system.
Counter Action Expected.
Persons who have faith In the new
currency system are expected 20 make
| counter proposals to those already out
lined. designed not 40 hinder or prevent
but to hasten the development of the
currency system.
George j. Seay, governor OF the Fed
eral Reserve Bank OF Richmond. in a
recent paper which attracted much at
tention In banking circles advocated the
immediate payment of the reserve money
which the Federal reserve act rcuulrrl
shall be paid into the regional banks al
specified times In the future lie had i'm
mind more rapid progress 10y the re-
serve institutions IN the field OF banking
business AMI proposed that these institu-
tions be provided with the funds with
which to conduct this business
! There are reasons for believing tha,
the Federal Reserve Board is now giving
serious consideration to the plan out.
lined by Governor Seay with n view nos.
sibly TO Incorporating II In an amendment
10 the reserve act. Some time ago the
board appointed a subcommittee 10
formulate an amendment Tor submission
to the next session of Congress and II
in understood that this committee has
given favorable consideration TO IN,
Seay plan.
The COmptrOlIc rship.
The proposal to abolish the Office o
| Comptroller OF the Currency Is certain
TO meet with large measure of an
! proval In many quarters interested II
the Federal reserve system. The chic
objection to the continuance of tn,
Comptrollershlp IL that It necessita te.
a divided control over the member banks
1t has heen said frequently that IN,
multiplicity Of bank examinations an,
the divided control have been importan
Zoo In, lnA
the reserve system.
Bankers have been Interested reccnil,
In indications that the reserve boar
itself might not look with disfavor OF
proposal to do away with the Comp
trolership. Members Of the board ar,
known to believe that efficiency OF al
mnistraton could be promoted by al
arrangement whereby the board nigh
get reports from the bank directly, in
stead of having them go through tn
Comptrollers office
Such an arrangement II carried ou
probably would he regarded as n ste;
toward the assumption by the board o
all the prerogatives now vested in tn
Comptrollership.
The submission OF these amendment
will be watched with intense niores
by political leaders as we'll as by bank
ers. Democratic leaders regard the ncy
currency system rs one OF the most sub
stantial monuments 40 the Wilson Ad
minstratlon.
Thus far there has been little division
of opinion among business men and peo
ple generally as TO the credit due III
Administration for the enactment of III
naw law and II has been supposed tina
this would be one of the big achieve
mcnts on which the Administrative
would base its claim TO approval In III
next national election,
, II IL certain that President Wilso
will rally the complete strength of hi
party in Congress to repel any move
|, ment which may be made against tn
, development OF the system.
FRANCE EXPELS SWOBODA.