Evening star., 1932-12-29
UNIFIED BANKING
MOVE EXPEDITED
system Meets Approval Of
! Reserve Board, Senate
Committee Is Told.
BY DAVID LAWRENCE.

The Federal Reserve Board has ad-
yised the Senate Banking and Currency
Committee that its counsel believes II
would be constitutional for Congress to
enact a law bringing about a unified
banking system in America.
On this point most OF the discussion
has heretofore turned, for it has been
assumed that Congress could not bring
about national supervision of State
banks or interfere with the operations
OF State banks.
Since the depression began the sta
tistics show that bank failures are most
numerous among banks that are not
members of the Federal Reserve System
The Senate Banking and Currency
Committee has been urged by various
Witnesses. including Eugene Meyer
O..en D. Young and others, to unity the
American banking system so that in
stead Of 49 different systems there
would be inform supervision.
Liquidation Possible,
It's not believed that Congress would
pass law. especially at this time. which
would be injurious to State banks, but
it is considered probable that some
measure might be adopted looking to-
ward compulsory membership in the
Federal Reserve System.
The competition between the na-
tional banking and 48 State banking
systems has been going on for MANY
years. Just as soon as rigid supervision
is required for national banks some
States have been known to let down the
bars and thus invite membership into
sthe State system. Withdrawals from
the Federal Reserve System have been
frequent, due to reasons wholly local
land competitive 1t is not necessary
lfor bank to have a national bank
,Charter to become a member of the
Federal Reserve System, but it is re-
CURED that Federal Reserve members
meet certain standards of supervision.
Today two-thirds of the banks of the
United States are not members of the
Federal Reserve System and while they
represent but one-third of the resources,
il is nevertheless true that in the non
member group most of the trouble in
recent years has developed.
Taxing Power Suggested.
Banks that are non-members are
able indirectly through correspondent
banks to reap the benefits of member
ship, and it has been suggested that
membership in the Federal Reserve
could be compelled by prohibiting mem
Der banks from allowing their facilities
to be used by non-members. The use
OF the taxing power on checks passing
into interstate commerce has also been
proposed.
The fact that a constitutional method
has been found to bring about unfit
cation does not mean that Congress
would accept the recommendations. For
the influence of the country banker in
Congress is rather dominant Whether,
in view of the large number of bank
failures Congress might be moved by
a stronger public opinion than it has
had heretofore remains to be seen after
the New Year, when agitation for the
unified system of banking will be
revived
1t is question whether such a pro-
vision in the Glass bill would get
through the present session anyway,
no matter how favorable sentiment
might be compared with the reception
similar proposals have had in the past.
But the sponsors of the idea of uni
fed banking system are hopeful that
Il the plan is not now adopted it will
at least be advanced on the legislative
road so as to assume passage in the
extra session.