Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-04-08

Public interest in sound finance is
aroused by the attack which has been
made on President Charles. E. Mitchell
of the National City Bank of New
York because of the $4,000, 900 that he
offered in Wall Street with the purpose of
averting stock market crash. Senator
Carter Glass Of Virginia charges that
the banker defied the orders of the
Federal Reserve Board in the matter. of
loans for speculation, and demands that
he resign from the New York board.
Supporters of Mr.. Mitchell contend that
his action was to meet an emergency.
and for that reason was justified. The
suggestion from the Virginisn, who was
formerly Secretary of the Treasury, and
also from Senator King Of Utah that
the power of the Reserve Board be in
creased is made part Of the current
debate.
Mr.: Mitchell acted not in the spirit
of contravention of Federal Reserve adj
mon1tionS, so far as one can see," in the
opinion of the Brooklyn Daily Eagle,
but in the intention of meeting a
fresh emergency. arisen after those adj
monitions had been given. Emergency
action is not necessarily indiscipline.
The Federal Reserve system it
self may conceivably feel grateful to
NlbCAC1 4OI dCblOIl,
rather than resentful. AS to whether
the bankers supporting speculation of
Mr.. Glass. calling for hands off, is right
in the long-range aspect of the situa-
ton the future alone can show. In the
press Of the moment bank support was
the only ready expedient."
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'There is serious question" states the
Kansas City Journal-PoSt, whether
intrusting such power to the Federal
Reserve Board as Senators Glass and
King seem to favor would not bring out
evils in other directions far outweigh
ing any possible benefits. It would es-
tablish real money trust Even If 1t
sought to do everything solely for the
general welfare, yet the comforting of
such power would be substantial linn
itatiOn on the right of exercise Of illdg-
ment to free business"
In support of the bankers position,
the San Francisco Chronicle argues:
mo sooner had the Federal Reserve
Board issued its famous order to mem
Der banks to hold down on loans for
stock market purposes than money all
over the country pricked up its ears.
The order and its stupid proclamation
gave a wonderful advertisement to the
loans for stock market speculation in
New York. Large depositors all over
the country took their money right out
Of the banks and sent 1t to New York
to be loaned on call at those high
rates. In this manner the Federal Re-
serve Board helped to boom stock
speculation"
I'VE do not understand" asserts the
Hartford Courant, that Mr.. Mitchell.
who is a director of the New York
Federal Reserve Bank, is in any sense
In disagreement with the reserve au-
thorities on that point. Stepping in in
not prove that he is. Sena-
tor Glass has already introduced in
Congress a measure of q remedial ma,
ture, and 1t is understood that he will
press his attempt. to curb stock specu-
lation in Congress. Wise legislation
may help situation which certainly
needs help from some quarter. That
1t would have been helped had the
National City and other New York
banks kept aloof the other day is to be
doubted, or rather to be denied"
"Mr. Mitchells bank could have
loaned its $25,000,O00 for emergency
purposes without criticism probably in
any quarter" argues the Springfield Re-
PUBLICAN, II IL 0du uOC gwen publicity
to an off1cial statement that read as
If its president were overriding q
subordinate. The Federal Re-
serve Beard should enjoy such prestige
in the financial world that its expressed
views on the speculative use Of bank
loans should be virtually beyond chal-
lenge." The Republican, nevertheless,
charges lack of independence on the
part of the board, and concludes, ut
is fortunate perhaps that President
Mitchell said what he did II the atten-
ton Of Congress and the country has
been fixed on the defects and aberra-
tions of Federal Reserve Board super
vision In the past decade"
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Taking note Of the fact that the
bankers action has aroused protest,
the Spokane SpokeSman-F2eyiew de-