Evening star., 1932-04-28
MEYER CONDEMNS
INITIATION TO PAY
TWO-B|LL|ON BONUS
Says Reserve Board Can In
crease Credit for Busi-
ness Demands.
ESTIMATES HOARDED
MONEY AT BILLION
Declares That Banking Structure
Should Be Unified Under
One Chartering.
BY the Associated Press.

BY the Associated Press
Eugene Meyer, governor of the
Federal Reserve Board, told the House
Ways and Means Committee today
that board had sufficient power under
the law to increase the amount of cur
rency and credit to meet business de-
mands.
He voiced strenuous opposition to the
Patman bill to initiate the currency by
$2,0O0,000,000 to pay the remainder
outstanding on the soldiers bonus.
Meyer estimated a billion dollars were
being boarded and said the banking
structure should be unified under one
chartering, regulatory and supervisory
power, eliminating State control.
Mrs. Meyer Present.
AS yesterday, when Mrs Ogden Mills
came to hear her husband, the Secre-
tary of the Treasury, testify against the
bonus, Mrs. Meyer was present today
to hear the head of the Reserve Board
Representative Mccormack. Demo
crat, Massachusetts, asked Meyer about
banking practices.
Il believe our banking structure
should be unified under one charting
and regulatory and supervisory power,
Meyer said.
Would that eliminate State control?"
asked Mccormack.
Yes"
Meyer recalled that in 1923 he told
the House Banking Committee that
nothing could be more disastrous" than
a competition between the State and
national banking system based ''on
competition of laxit="
That is what has happened since"
Meyer said.
II am entirely in favor of maintaining
States rights to the extent that they
can be maintained. But with the growth
in financial and economic conditions.
you need fieXibility of decentralization
This banking function is one of them.
The use of checks today adds to this
argument for liberalization of banks.
Bankers Not Interested.
Speaking frankly, the bankers have
not been much interested. They have
favored maintenance of the dual system
in order to play one against the other"
do you think the country could stand
reasonable imitation of the currency?"
Mccormack asked.
Il think currency Is secondary TO a
credit expansion and that Is now going
on" Meyer said. That is, the basis is
being laid for an expansion of credit"
Meyer said currency "artifcially in
jected would drive gold out of the coun-
try and Offset the paper"
Flood the country with undesirable
currency and you tend to eliminate
gold" he said.
Meyer emphasized that the Federal
Reserve Board is empowered to expand
currency and credit in accordance with
business demands.
Representative Rainey of Illinois, the
Democratic leader, presiding over the
hearing. told Meyer Attorney General
Mitchell had refused to rule on the
conStitutionality of issuing currency
against gold reserves now backing exist
ing currency.
Opinion to Be Submitted.
1T is the only Government depart
ment that has refused to assist this
committee with its experts" Rainey
said. Il don't see why the Economy
committee shouldn't materially curtail
the Justice Department"
Meyer said the boards counsel would
submit an opinion on this question.
Meyer testified that at the present
tlme the worlds gold supply Is larger
IN comparison with the volume of busi-
ness than at any time before in history.
Raising his voice with emphasis,
Meyer said:
The best thing Congress can do 70
restore confidence, which will restore
business, is to indicate clearly that it
Will not tinker with the currency"
Meyer said, in reply to questions, that
the Reserve system has not yet en-
ployed the Glass-Steagall act 20 the ex-
tent OF issuing currency on Government
bonds.
Meyer estimated the amount of
hoarded money at $1,000, 600, 900. Be-
lore the anti-hoarding drive, he said
this figure was 81 500, 600, ,OOO
Inc Federal Reserve system is ca
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