Evening star., 1932-12-25

amendment the provision to permit the
crossing Of State lines to a distance OF
so miles from the parent bank is elimi-
mated.
The present McFadden act Of 1927
permits national banks to maintain
branches only within the limits OF their
home cities in such States as allow
State banks to engage in branch bank
Besides dealing with branch bank
ing, the bill restricts chain and group
banking, especially the former. IN
which separate banks are controlled by
one individual Provision is made for
supervision OF holding companies IN
group banking systems.
There are other provisions designed
to strengthen national banks. such as
new requirements respecting capitaliza-
ton and restriction on investments in
bank premises. Inadequate capital OF
banks in the smaller communities has
been one Of the causes of failures and
the bill increases minimum require
ments under . graduated scale based
on population. A section requiring in
creased reserves for time depositors,
which was in the original bill and was
one of the provisions assailed as def1a-
tionary, was dropped from the revised
measure last Spring. A provision for
revaluation Of real estate affected by
loans also was eliminated.
A Federal liquidating corporation,
created under the bill. with capital fur
nished by an appropriation from the
Treasury and assessments against
member banks and surpluses OF Federal
Reserve banks, is given authority to
purchase assets Of closed member
banks, thus speeding up the payment
of depositors.
This is a highly important feature
of the bill. President Hoovers recon-
mendation for some sort of liquidat-
ing agency to facilitate prompt pay
ment Of depositors Of closed banks was
the only part of his economic rehabili-
tation program which was not enacted
into law at last Winters session OF
Congress.
The liquidating corporation pro-
vision, as well as the new capitalization
requirement, form points of contact
with the Steagall bill, passed by the
House last Winter and now pending In
the Senate Banking and Currency Com
mittee. It has been proposed that the
progress of banking legislation can be
greatly expedited if the Senate should
pass the Glass bill as a substitute for
everything after the enacting clause OF
the steagall bill. The Steagal1 bill sets
up a Government agency with large
fund at its disposal for the guaranty
of bank deposits. the structure being
somewhat similar to the liquidating
corporation Of the Glass bill, although
the purpose is different. It also makes
other amendments to banking laws,
such as relate to the minimum capi-
tai of national banks. Senator Glass
is emphatically opposed to the guaranty
of bank deposits, hence his probable
disinclination to associate his measure
with the Steagall bill.
What Is not accomplished by the
pending legislation, but which Senator
Glass and his associates anticipate
must come eventually, IS q unification
of the present dual national and State
banking systems. Already experts OF
the Federal Reserve Board are working
on q plan to surmount constitutional
objections which have made dimcult
the problem of forcing all State banks
into the Federal Reserve system.
The Virginia Senator, whose name
will be attached to two laws separated
by a gap Of nearly two decades and
forming the most important banking
laws of the generation, is likely to fig
ure In the consumatton OF the uniaca'
ton goal