Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-01-18
GOV. MURRAY SIPS
COFFEE AS He TALKS
BEFORE COMMITTEE
(Continned. From First Page

H . -
and began a. detailed discussion Of
"the Central and Scotch Bank systems
in England" and the Central or Federal
Reserve Banking System In the United
~ About that time, Harry, the colored
/ man, who has been janitor for the Ways
:. and Means Committee for Al years,
!, brought in two pots Of coffee and one
4 cup and placed them before the
.IEovernor. So
,e Without interrupting his discourse,
,nAIurray jerked forward and poured the
ll'ieup full to the brim with black coffee.
~ At the outset he stressed that the
itf Constitution empowers Congress Ito
:. coin money, not to issue money, as
3. many seemed to think" He added
+ that since the coming OF money had
I. been denied the States and that since
81 1.-THE Scotch banking system had been
\. abolished in 1875, the existing central
''pbanking system had drained the agrl-
an,,cultural regions Of money
t,u Putting and frequently lighting Fat
fcigar. Murray said the British central
2, banking system was bolStered by tine
linScotch banking system" and that I'M
Enless the latter were revived in TINS
9,country the agricultural regions Woulo
Nbe drained dry.
,,.I He said that, while England had one
Dduk, Inc OtllOCN SboCCS A"N
'ig,i2. referring to the II Federal Reserve
n,lbanks, He contended that for the
fA-snost part members OF the Reserve
Board are spectators who deal II
stocks and never produce anything,
). Explains scotch System"
!. The Federal Reserve Board should
,eensist of users Of money and not spec
,ulators, he testified, and one-fourth OF
Them should be producers, one-1ourth
manufacturers, one-tourth representa-
sFives of transportation and one-tourth
ssnarketers in the export and import
sbusineSs.
Z Explaining the Scotch system" Muir
.Say said 1t decentraliZed banking ar
ssrangements and that it does not re-
ssCuire prior indebtedness on which 10
sNissue notes. Under 1t State banks IN
1.-The past could issue currency on PROD
srIIcts stored in warehouses or otherwise
t'held as security against the currency
lSinstead of on Obligations as Is USED
.sty the Federal Reserve System.
20 Murray pointed out that under the
hFederal Reserve System currency Is Is
tSued on obligations and that Securltles
sF-Uere favored by the Reserve Banks as
.Iredit instead of on the products OF ag-
sATiculture and industry.
49, DeplOreS situation.
~ Gov Murray said the Reserve System
ss11ad stopped about 10 years ago permit
tG4ing bankers from being the judges oil
.srommercial papers and had declined tC
sGsssue currency on certain classes OF
svpapers. He added the opinion that
sS1this is the cause OF the present DIM
g. He deplored the existing situation
sSand said until the lever Of economic,
KS reversed" relief cannot be expected
- The Governor said it was only sounc
,gpconomics to borrow money for proouc'
ss1ion purposes or TO make proft, but de-
,ScIared the Government certainly coulc
sNrot benefit the public by increasing thu
sSpublic debt or hiking taxes. He aSsalIeS
ySfhe big city banks" and Wall Street
,sueclaring their power and lnnuenc'
iC.are felt at every cross roads under TO-
.~6ay's banking system.
- Assailing spectators, Murray san
sthey caused the breakdown OF Tn
Scotch system following the Civil War
.cvhen they went out West by the car
l-loads TO buy scrip from discharged
sssoldiers at 10 cents on the dollar.
Testifies Almost an Hour.
~ Murray was before the committee tn
.seTeater part OF an hour. After con
'scluding his direct testimony, he wa
,S-not questioned.
az Chairman Collier told him the com
lemitt2e appreciated his appearance AM
,sNdurray replied:
Il am the one who is obligated b
,eyuur permitting me TO appear"
He consented TO pose for photograph
land shook hands with number Q
1.-the committeeman he had known Whe
sshe served in the House years ago,
- AS he left the room. virtually all tn
spectators went with him and for sev
eral minutes outside of the room h
was introduced TO many OF them b
Representative McKeon.