Evening star., 1933-10-24
CLEVELAND BANK
PROBE TO Be MADE
Senate Committee Also Will
Investigate Situation
in Detroit.
BY the Associated Press.

BY the Associated Press.
The Senate Banking Committee de-
cided today to investigate the closed
bank situations in Cleveland and De-
troit.
In a brief executive session, Senator
Couzens, Republican, of Michigan rec
commended the inquiry.
Chairman Fletcher said the commit
tee intends to ascertain the relations Of
closed banks in those cities with the
Federal Reserve Bank and investment
banking houses.
Committeeman indicated the inquiry
would come as soon as the present Stock
Exchange hearings are out OF the way.
COuZenS communicated to the Sena-
tors a recommendation from Arthur A.
Miller, Ohio attorney. that the COM
mittee go into the Cleveland banking
problem.
Miller, who helped to conduct the
State inquiry in Cleveland, said
THE State inquiry was unable to go
entirely into the national banking sit
uation in Cleveland"
Ferdinand Pecora. committee coun
sci, said later he would detach some
of his staff now working in New York
to send them to Cleveland and Detroit.
He said he did not know how exten-
sive the inquiry would be or whether
it would prolong the general investi-
CATION beyond the first of next year.
The purpose of the Detroit and Cleve-
land inquiries, he said. is to "ascer-
tain whether there are any weaknesses
or abuses in the banking system that
needed congressional correction"
New Capital Available.
Meanwhile millions in new capital to-
day were available to help thousands
of State banks join the Federal deposit
insurance system, which becomes ef-
fective in 1884.
The non-members of the Federal Re-
serve system-numbering more than
8,CO0-were urged by President Roose-
velt to apply for admission to the de-
posit insurance fund.
To aid them In meeting requirements
Mr.. Roosevelt established yesterday
within the Reconstruction Finance Cor
poration a special division for bank
Cooperation in recovery" to make rec
concentrations "for purchase by r. F. c.
of preferred stock" He named Harvey
Couch. r. F. c. director, to head the
division.
we hope" said the President in a
statement sent to the Federal financial
leaders, that all banks will take ad-
vantage of this opportunity to put
themselves in an easy cash position to
| help in the work of recovery.
I'VE need the banks and want them
to have adequate capital. AS a rule
such capital cannot now easily be found
| In the communities. AS recovery con-
tinues such capital will be found.
U. S. Will Supply Capital.
"But In the meanwhile and tempor-
arily but for such length of time as may
be necessary, the Government will sup
ply the necessary capital through the
Reconstruction Finance Corporation in
its purchase of preferred stock. The
Reconstruction Finance Corporation
will thus serve as recovery finance
corporation.
1.-THE banks must feel free to func-
| ton we'll, and the Government will help
them prepare themselves to play their
| important part.
ITO accept the Governments offer to
purchase preferred stock does not mean
that bank is weak, but that 1t is eager
to cooperate in the recovery effort to
the fullest possible extent and thus un-
dertake to put this additional capital
to work. We are not thinking of idle
capital. We are thinking of working
capital-capital working for recovery" ."
| To serve with Couch, the President
named Eugene Black, governor Of the
Federal Reserve Board; Undersecretary
| /Oa0%inuod AZ, Do0o Nol,,,,,y ~