The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-04-28
BANKS CALLED
BEARS, FLAYED
BY NORBECK
Financial Institutions Are
Adding to DefIation,
Says Senator.
MAY WIDEN INQUIRY
Refusal to Give Loans Is
Running Property Value,
Committee Told.
BY LYLE c. WILSON,
United Press STAFF Correspondent

WASHIN GTON, April "a
Chairman Peter Norbeck of the
senate banking committee today ac-
cused the banks of being bears"
and threatened to broaden the COM
mittees stock market investigation
TO include them.
Banks, by refusing to grant new
loans or extend well-secured old
ones, are adding to the force of
the defation and destroying the
value of all property" Norbeck
charged
He said the banks had failed to
pass along to the public the benefits
Of the administration financial re-
lief legislation and were not CO.
operating in the federal reserves
credit expansion program.
He cited federal reserve statistics
showing that member banks in lead
ing cities had reduced their loans
on securities by 5000, 900, 900 since
March 2, although an additional
S113,000,O00 of reserve bank credit
had been made available to them.
Banks Are Blamed
These figures prove that part of
the supply Of securities which has
been causing the decline in all the
security markets, has been com
ing from these banks" Norbeck as
serted, land it is apparent that the
action of the commercial banks in
this respect is a major contribu-
ton to the present lack of conf
dence and crippled condition OF
business"
He said that if this condition con-
tniued, he was going to recommend
to the senate committee on. banking
that this matter be gone into fully.
This can be done by bringing to
Washington some of the bankers
who have large cash reserves ana
more available credit and still are
refusing to make new loans, and
even refusing to grant extensions
where the borrower is worthy and
the security is satisfactory"
If liquidation continues, Norbeck
said I'VE must find out what part
the bankers are playing in forcing
down the value Of American prop
erty to Junk prices. The bear raid
ers are bad enough; the bankers
should not help them"
Wall Street Hits Back
Wall Street, meantime, is striking
back at the stock market investiga-
ton, challenging some of the wit
nesses before the senate committee.
They are claiming" said Nor
beck, that Edward Knight was in
dicted and pleaded guilty in 1929 to
some kind of financial charge. We
do not want to apologize. Mr.. Knight
was a volunteer witness. He did
not testify against any one. He
simply told us of general practices
in the stock market. His friends as
snre me that he was framed"
Knight testified last week. He
formerly was brokerage accountant
in New York and now is employed
by the federal government.
Another Is Accused
An indictment figures, also, in
the introduction to the committee
of a potential witness, A. Newton
Plummer. Representative La Guar
Ola (Rep. N. " submitted to the
committee checks allegedly given by
Plummer to newspaper financial
writer's in appreciation of news
stories "ballyhooing" certain stocks
La Guardia told the committee
that, for revealing some of this in
formation, Plummer had been per-
secuted and indicted. But the rep
resentative added that Plummer had
been employed for stock publicity
over a period of fifteen years, and
his employers scarcely could chal-
lenge him under such circumstances.
The investigation board of STRAIT
egg, from which President Hoover's
spokesman, Senator Walcott (Rep.,
Comm has been excluded, was sum-
moned to meet again today to dis
cuss the inquiry with William A.
GRAY committee counsel