The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-03-30
new LAWS TO
MAKE BANKERS
PUBLIC GUARDS
Mere Merchants of Money
to Become Trustees
for OepOSitorS.
Continued From Page One
MARCH 80, 1888

whose disclosures produced this pro-
gram, the nations leading hnanciers
testified almost boastfully that they
regarded themselves simply as
merchants Of money"
Heads Of small, inland banks
testified they bought securities on
the word and guarantee of the
merchants Of money
Regulate Stock Exchange
New York hnanciers, including the
biggest, conceded that their judy
mcnt of stocks and bonds during
boom times was bad, but blamed It
on the natural inability to see into
the heavens
II is this system the Roosevelt
program is designed to end or ale
Viate.
Besides the present bill requir-
ing public reports to the federal
trade commission on all issues, in
Guiding even the underwriting
houses com mission S, President
Roosevelt's advisors are preparing
a measure for regulation OF the sale
and machinery Of distribution that
Will extend to the stock exchange
itself
Another will require that bankers
and issuers of stock comply with
qualifications now demanded Of
"hduciary trustees" Heavy penal
ties for violation also vii be pro-
vided, ranging from $4,000 fine to
five years in Jail.
Seek Permanent Reforms
The programs trainers say it will
not hinder legitimate business, re-
calling also that insult, Kreuger and
Toll. and other defaulted issues
once were listed under that head
ing.
They point out that investment
houses may issue securities for un-
tried, speculative ventures so long
as the advertisement makes clear
its speculative nature.
one provision arouses interest in
that it may induce certain nations
and corporations in default to try to
paw up. Under the bill all future
advertisements must set forth
whether the issuing entity has ever
deIaulted on principal and interest
This would close the American in
vesting market to numerous nations
and corporations which have not
honored their bonds in the last
decade
The permanent bank reform pro-
gram probably will be included in
the later measures.
Supervise Private Banks
one major phase of banking re-
form was revived as subject OF
administration discussion today
through the federal reserve boards
publication of a long opinion by
its general counsel, Walter Wyatt
unfolding constitutionality of fed
eral measures aimed to unity all
commercial banking of the country.
Wyatt suggested this would legally
be accomplished by measure pro-
hibiting the deposit of money IN
checking accounts in other than
federal banks, and prohibiting the
federally- organized banks from do
ing business with other banks.
Other means suggested as legal
were to forbid deposit of United
States funds in other banks, and
exemption of United States banks
from taxes. Such legislation is
possible under the commerce clause
of the Constitution, the opinion
argued.
The measure still being prepared
also would bring the large private
banks under supervision.
Throw light on Merger
These provisions will throw light
on the mergers, stock SplitupS, new
financing, formation of holding,
managing and investment companies
and the structure of interlOcking
directories built up in recent years.
Ill4N lAN TUT Gull 10 lAiNOiiiB ANNN' w
spite the federal trade commissions
public utility inquiry.
Sixteen private New York banks
which include j. p Morgan e. Co.,
Kuhn, Loeb & Co, DillOn-Reed
& Co, and j. and w. Seligman,
have partners holding seventy-one
directorships in The leading COM
mercial banks of New York, with 996
additional directorshipS in the larg-
est public utility insurance. trans
portation and manufacturing COR
porations in the land
All these powerful institutions
would be brought under federal
scrutiny and supervision.