Evening star., 1933-12-31
Service Charges
Defended by
Bankers.
ORDER
HALTINC CODE
Criticism by Public
Feared Following
.JOhnsOn's Move.
By The Associated Press.

Alarm among leading bankers
was conveyed to Hugh S. Johnson
yesterday lest the attempt to i'm
pose high service charges on bank
customers, and its last-minute
prevention by the administrator,
might throw their profession open
to renewed public criticism.
The expressions came from
individuals who feared newspaper
accounts of yesterdays events
would lead to public belief that
the move of the banking fra
ternity had not been above board.
This they StrenuOuSly denied.
johnson continued, however, his in
slStence that the schedules by which
bank groups proposed. under their code
to make depositors pay a large share of
banking costs, he suspended until he
had given them full investigation in the
public interest.
johnson Speeds South.
Putting the entire situation aside he
sped South to spend the new year week
end with Bernard Baruch in South
Carolina.
Bank spokesmen argued that the
charges they proposed we're necessary
for the safe operation of banks. that
they correSponded to service charges
which many institutions have operated
successfully for considerable time, and
that responsibility for misleading the
public and the banks with the untrue
claim that Johnson had approved a set
OF standard rules was limited narrowly.
How seriously the situation was
Viewed, however. was shown in disclos-
ure that Eugene Black. governor of the
Federal Reserve Board, when told yes
terday OF JohnSon's intention TO hold I'D
the new charge schedules. had sought
to have johnson change his mind This
the administrator refused to do. Black
had, little earlier. issued a public
statement commencing the project and
the purported approval by the Recovery
Administration.
Existing Charges Unaffected.
Johnson's suspension order applied
to the so-called standard rules" cir
culated by the banking code authority
as bearing his approval and auto
matically to all regional and State
agreements for new scales Though no
official warnings have been issued. in
stitution Of such charges might expose
the banks to antitrust law action or
other prosecution under the industrial
law. No existing service charges are
affected, however, and they are ex-
pected to continue in force.
Furthermore, Johnson passed no
Judgment on whether the proposed
charges were justified. Without con-
demning them. he specifically reserved
all opinion for the full study he has
promised personally for every schedule
submitted by the regional banking
groups between now and February |.
1t was projected by the banking code
approved in october that reasonable
wherever the banks wanted them. but
the Government retained the rlgnt 10
pass on all schedules.
Other new details of the proceedings
in connection with the banking CODE
we're disclosed last night.
Orders" Sent Out.
The clearing house associations OF
the country had already been turnlshed
with standard rules incorrectly repre-
sented to have been approved by John-
son: and an accompanying letter VIZ
tually ordering that they be put INTO
effect. had been sent out. Although 1t
bore the name of Division Admlnlstra-
tor Arthur D. Whiteside, he said he had
not seen the letter.
When this letter was detected by
Johnson, he reached Whlteslde IN New
York by telephone and was told by
Whiteside that he had. on information
that the standard rules were innocuous
suggestions. consented to use his name.
Cary N. Weisiger. jr, the deputy whom
johnson discharged for his part in hav-
ing it represented that johnson had
approved the charges. was not to be
reached today for comment. He was
said, however, to have told his superior
that he understood the power OF ap-
proval had been delegated to him and
insisted he acted in good faith.