Evening star., 1932-05-10
GLASS HITS FOES
OF BRANCH BANKS.
Invasion of States Rights by
Provision "UntenabIe Ar
gument," He Says.

Senator Glass, Democrat, Virginia
attacked in the Senate today the con-
tention that a provision of his bank
reform bill which would extend branch
banking would be an invasion of
States rights.
The bill would permit branch bank
ing by national banks even IN States
where State banks are forbidden by
law to have branches.
"One objection" Glass said. 'is that
It would be an invasion of the sovereign
rights Of the States"
"Untenable Argument"
at seems a rather untenable argu-
ment" he continued, Ito insist that
Congress may authorize the establish
ment of a national banking system in
all the States, but that it would be an
invasion of the sovereign rights Of the
States to authorize these banks to estab-
uSh branches.
why, the Congress, sustained by a
decision Of the Supreme Court, COM
pletely swept away the rights Of the
States in matters relating to the bank
ing business when it imposed 10 per
cent tax on State bank circulation,
which was prohibitive.
mo State bank may issue its notes.
Only national banks and Federal Re-
serve banks have the power Of issuance,
except under prohibitive taxation.
Therefore, have come to the con-
clusion that it is no invasion Of the
rights Of the States to permit national
banks to establish branches.
Unless the bill passed today or to-
morrow it faced extended delay, as the
4,lr !, 40 l1fIl
day. and all other legislation must go
by the board until this vital measure is
passed.
Charges Opinion Suppressed.
Senator Glass told the Senate yester-
day that an opinion prepared by solic-
itor general under President Taft holding
bank afiliates illegal was suppressed"
because of the power and blandish-
ment of inordinate wealth"
The result, he asserted, has been
that these institutions, declared by
the solicitor general of the United
States to be engaged in Illicit practices,
were perhaps the greatest contributors
to this riot of credit and initiation.
with the result that the country is
now almost in an irreparable condition" "
Refusing to be drawn into "parti-
san" discussion with Senator Moses,
Republican, New Hampshire, who
promptly questioned him, Senator Glass
said latter attorney general, who was
a Democrat, declined to permit the
opinion to be made public"
Glass described him as another At
torney General, some years afterward
elevated to a place of even higher dis
tinction." George w. Wickersham was
Attorney General when Frederick w
lehman, who, Glass said, prepared the
opinion was solicitor general. Lehman
served from 1910 to 1912.
Banking AffiIiates Denounced.
Denouncing banking affiliates. which
would be sharply restricted by the Glass
bill Glass said his committee has aScer-
tanned that they were zone Of the
greatest contributions to the unprece-
dented disaster which has caused this
almost tncurable depression"
Senator Glass said the controller of
the currency in hearings before a SenS
ate banking subcommittee had stated
his Office was aware Of irregular and
unsound practices in that great bank
OF Louisville that failed and another
large bank in Tennessee for five years.
National banking afiliates. which the
Glass bill would restrict, are agencies
created to perform various functions
not strictly banking, particularly the
marketing Of securities.