Evening star., 1931-12-20
Capper Presents Proposal
Urged by Controller of
Currency.
FOREIGN CORPORATIONS
WOULD BE REGULATED
trust Companies, Building and
Loan Associations and Banks
Included Under Safeguards.

Dill 10 revise and amplify District
laws relating to banking trust co,,.
pahleS and building and loan associ.
atlons was transmitted to Congress veg.
teroay from the Office of the ron.
troLer Of the currency and introduces
III ~ 're R senate by Chairman Capper Of
memorandum sent to ca,o.
SSapper with the bill stated thai ''tbe
pptahklng code Of the District of Co1unoo
&c a,a oy no means complete or clear
anu lhe desire Is to correct this fa,,It >,
~ believed" the memorand,In,
continued, that this legislation viii ILL.,, aid
"a tne regulation of banking in tho NJ
silct ana be for the best Interest NJ W.
oankS and the public. The nrovieio1s
~ ~ CnS oil! have been recommended ~,
one, ere controller Of the currency for sew.
Curbs Foreign Firms
Inc accompanying memorandum, o
piinHleo, among other things thai ~.
ont WouIo DO the following: Probihit
aAy new foreign corpora ton from doin.
q paAkihg business in the District -
SoIumola, would put into effert ~ ~
Sane provisions with respect tn b,iIdo
ias ana loan associations as is noU -,
iecs respecting banks connmencina
BUSINESS IN the District without the ane
rency. oA the cur
tbs explaining planning another section of the bill
memorandum stated that sbsre
holders Of national hanks a,,d ei.dle- @
companies in the District are snhiec, 49, at
present TO double liability reo,,iraO
iient' put that there exists M ~
VISION OF law at the present time oloci,,,,
on shareholders of foreign cornorations
uouls banking business In the Dis-
Silct, OF shareholders of District SAVINGS
DankS such double liability" The hi
provloes for double liability of share-
noloers OF any future bank orpanizad IN
tne District for liability on those he
coming stock shareholders after enact
nent OF the measure, and provides for
oouole liability on shareholders of eY-
Sting corporations for any contracts
oepE and engagements incurred sub,
sequent to passage of the bill.
Control Is Strengthened.
1here also is section relating to
procedure in the liquidation of financial
corporations doing a banking business
in the District.
Ihere are other provisions in the bill
as follows: To prohibit the use of the
word bank" or trust company" by in
StltutionS not under supervision of the
controller OF the Treasury: to provide
Tor the prosecution Of any one spread
ing false rumors against financial in
stitutions: to strengthen the penal pro-
visions OF District law with respect to
banking by applying to banks and of
ncers OF banks in the District certain
nr0N1SlnnS To Wit
to national banks and member banks of
the Federal Reserve System.
Discussing section which would
give the controller authority b. reg
ul1tion to make applicable in the
District provisions OF the national
banking act which in his discretion
may seem necessary. the memorandum
read:
"As stated elsewhere. some of the
foreign corporations doing a banking
business in the District of Columbia
have very broad powers under their
charters and while as a general thing
such corporations keep within reason
able bonds in their business, it is felt
that for the best interests of the pub
lie the controller of currency should
have power to further regulate all such
banking business If he deems 1t nee
esSary."
Urged as Protection.
Referring to building and loan asso-
Citations, the memorandum said that
while the controller must supervise
building and loan associations which
start business in the District OF Co.
Iumola, under present law there is no
way to prohibit any one forming such
an association regardless of financial
STABILITY. business qualifications or the
need for such association"
Inc memorandum further pointed
Sut ILae under present law "a foreign
building and loan association NAV
establish an office in the District Of
columbia and in effect do business in
such District and the controller ~
currency Is powerless to reach the
main corporations located In another
jurisdiction and thus is unable to give
any Kind OF protection to those resi-
dents OF the District of Columbia doing
business with such Office"