Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-12-27
Special Committee, Headed
by Glass, Is Assembling
Data on Subject.
SCOPE MAY BE EXTENDED
TO STOCK EXCHANGES
Virginian's Federal Reserve Reso-
luton Will Be Used as
Vehicle for Inquiry.

The Glass resolution for investigation
of the Federal Reserve System, passed at
the last session of Congress- will be used
as a vehicle for a general investigation
of the banking situation by special
Senate committee, it became known
today The inquiry will naturally con-
Germ itself to large extent with rea-
sons for bank failures or suspensions.
Headed by Senator Glass, Democrat,
of Virginia, a former Secretary of the
Treasury and co-author of the Federal
Reserve act, the committee already is
assembling data which will not only go
into the banking situation, but which
is likely also to extend its scope to the
stock exchanges.
In an effort to get perfect picture
of the situation for a groundwork, the
committee has sent missionaries to
bankers and financiers over the country,
and plans to circularize even more.
H. Parker Willis, editor of the New
York Journal of Commerce, former
secretary of the Federal Reserve Board
and financial adviser to the House
Banking and Currency Committee at
the time the Federal Reserve act was
being drafted, was retained by the COM
mittee to assist in its work
Ordered After 1929 Crash.
The committee will start to function
about January IS.
Serving on this special Senate sub
committee with Senator Glass will be
Senators Walcott Of Connecticut,
Townsend of Delaware and Norbeck of
South Dakota, Republicans, and Sen
ator Bratton of New Mexico, Dem
ocrat.
The probe was ordered by the Senate
after the stock market crash of 1929,
Federal Reserve System, its policies and
their relationship to the securities mar
kets of the country.
It Is by virtue of the phraSeology of
the resolution which allowed the in
quiry into the Federal Reserve System
and "all related matters" that the scope
is to be broadened.
The first question to be undertaken,
it is understood, viii deal with bank ex-
aminations.
Puts Matter in Open.
In announcing the bank probe, SEN
ator Glass has simply brought out into
the open a question that is known 10
have been agitating Government off,
Gals, but one that they have been loath
to discuss.
So many factors. it has been said,
can enter into the difficulties in which
bank may find itself that it is not
possible to put a finger on any one, or
group, TO be held blameable for the
whole.
However, certain shortcomings in the
national banking system as seen by the
several controllers of the currency in
the past several years, when the num-
Der of bank suspensions have reached
an appreciate figure, have been en-
bodied in the annual reports of these
officials. and remedial action recon-
mended.
A study of the banking situation
covering the World War period I'D to
the present indicates that during the
war years the banks of this country
prospered more than either before or
after, and that during the postwar
period the trend has been decidedly off
Few National Banks.
For the fiscal years ending July /
1914 and 1915, for instance, the total
failures in the country were, respec-
lively, lit and 124. From then
through the end OF the hScal year 1920
failures were at a minimum, with 81
AZ, q, 43 and 40, respectively. BY
far the larger part of these failures
were OF State or private banks, only
% national banks being included.
Starting with the fiscal year end
ing July 1. 1921, however, there was
a marked increase, the total that year
being 358, and for the years since the
failures have totaled, respectively, 397
274, 915, $40, 573, 83l, 484, and for
the fiscal year ending July /, 1929. ssh
over that period the ratio was about
one national bank failure to every six
or seven State and private bank
collapSes.
The report of the controller for 1890
CONTINUED on Page 2, Column g.