The Washington times., 1930-02-11
AN USES FEDERAL RESERVE TO AID EUROPE, CHARGE
ENGLAND GE 7 s
S300,000,000
LOAN IN j. s.


Having obtained authority to
investigate chain and branch
banking, the House Banking Com
mittee may begin an inquiry into
the New York Reserve Banks
participation in the Bank of In
ternational Settlements, the world
fiscal agency growing out of the
Young reparations plan, it was
learned today.
Representative McFadden (R.l
Of Pennsylvania proposed to the
House that 1t authorize inveSti-
cation into the "factS and scope
Of intentions of the Federal Re
serve management in regard to
past, present and future plans on
International finance"
Represent WOsad Bank
The New York. Reserve Bank,
McFadden asserts, is planning to
become the fiscal agent of the
world. bank by q false interpreta-
ton of the reserve act under
which it claims authority.
The New York banks policy
Of cooperating with the world
bank is in direct conflict with
the announcement Of Secretary
Of State Stimson that the Fed
eral Reserve System would have
no part in the banks affairs, he
said. j. P. Morgan and Com
pany will direct the American
participation, according to Nc
Fadden.
The entire operations Of the
Federal Reserve System in CO
operating with central banks of
other nations, McFadden asserts,
is tending toward a universal
plan Of banking operations.
Seek To Drop Debt
He charged that the same
forces which have sought to
bring the United States into the
League of Nations and the World
Court are behind American par
ticipation in the world bank
scheme. The ultimate aim, he
declared, Is debt cancellation.
Opposing Federal Reserve loans
to Europe, McFadden said that
the Federal Reserve in co-opera-
tion with j. P. Morgan & Co.,
have put through $500, 200, 900
loan to Great Britain.
The house Of Morgan took $100,.
100000 of the loan and the IL
Federal Reserve banks the re
naming 100000, with the
Morgan company taking $1,000,-
600 for its work in putting over
the deal, McFadden declared.
Officials of the Federal Re-
serve attempted to, justify the
mixing in of the systems re-
sources in this loan and subse-
quent loans by provisions of the
law creating the system, McFad-
den said. He added:
"Of course, neither the au-
thOrS Of the act, nor Congress-,
expected or intended that this
language would permit a trans
action of this character to be
cOnsummated by the Federal
Reserve System.
Real Purpose Recalled
'Let us not deceive ourselves
as to the real motives, the real
purpose behind the creation of
the Bank of International Set
Elements.
"Let us recall the fact that
at two recent elections the
American people have voted
100000 strong against our
meddling in International af-
fairs.
"We have voted down the
League of Nations and now the
same crowd that are behind
the International Bank are be-
hind our joining the World
Court under the sO-called Root
plan.
"And if we don't watch our
step the American people will
be drawn into the international
situation through our joining
the World Court and this pro-
posed International Bank, in
spite Of the same opposition
that was also manifested to
the cancellation Of our interna-
tiOnal debts.
Leagues Finance Part
"'The World Court will be the
judicial part of the League of
Nations. and the International
Bank will be the financial part
Of the League of Nations"
He then told of frequent confer.
enceS between officials of the Fed
eral Reserve and heads of Eu-
ropean central banks.