Evening star., 1933-11-02

nership in banks through ownership Of
stock, Is not only not to be feared, but
greatly to be desired, because without
r. F.. C. has provided the funds for
preferred stock In banks, either by
purchasing the stock or lending upon
the stock, public confidence has I'm.
mediately increased.
Seek Bankers Viewpoint.
The directors of the corporation have
endeavored to see the problem from the
point of view of the banker and not TO
make unreasonable requirements OF any
bank. I am sure that every banker in
the United States wants the Govern
ment to have proper protection for the
money that 1t invests in this manner,
and that is all that the directors OF the
r. F.. C. are endeavoring to provide.
Preferred stock or capital notes may
be retired at any time at the pleasure
of the bank, by paying the face amount
desired to be retired, plus interest to the
date of retirement. In the case OF
national banks, it will naturally be
necessary for the controller Of the cur
rency to approve the retirement OF the
preferred stock, and If national bank
wanted to retire preferred stock TO the
point of weakening the banks capital,
the controller would not permit it. nut
in such a situation he would undount-
edly permit-in fact the bank has the
right under the law to convert the pre-
ferred stock into common stock.
It is not the desire of the Govern
ment to 20 further into the banking
business than necessity demands nor to
have public funds invested in private
enterprise a moment longer than the
need exists, but that does not in the
slightest modify the Presidents belief
and wish that all banks should partici-
pate in this program. 1t is his opinion
that every bank In the United States
should participate in order that all may
be regarded as equally patriotic and
equally cooperative in his recovery
program.
In addressing certain publishers In
Washington last April, made the
statement that a billion dollars added
to the bank capital structure OF the
country would be multiplied several
times in providing credit for agriculture,
business and industry. repeat tnat
statement now with emphasis, because
am firmly convinced that an enor-
nous amount of working capital IS
needed throughout the country aud that
banks should provide this capital in CO.
operation with the Government.
Explains New Division.
In order that every bank In the
United States may be served on basis
Of entire equality, we have established
in the r. F. C. a division especially to
look after the recapitalization OF State
banks that are not members OF the Fed
eral Reserve System. This is called the
non-member preferred stock division.
and Is under the immediate direction OF
Mr. Harvey c. Couch, a member of the
board of directors of the R. F. c. The
membership of this committee includes
the governor of the Federal Reserve
Board, the Undersecretary of the Treas
ury. the Director of the Budget. the
chairman of the Federal Deposit Insur-
ance Corporation, the executive secre-
tary of the executive council. the chair
man of the Reconstruction Finance Cor
poration and Mr. Henry Buere.
BY tying in all of the agencies having
to do with banks, both in the non-mem-
Der preferred stock division and in the
Deposit Liquidation Board. greater speed
and better cooperation is obtained
This division was also suggested by
President Roosevelt and the members
named by him.