The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1933-11-29
Chase BANK Chief
SUGGESTS REFORMS
FORFINANCIALSILLS
Would Divorce Investment and
Commercial Banking;
Tighten Other Laws

Washington, Nov. 29.-lP)-legis-
lative reforms, ranging from manda-
tory and complete enforcement Of In
yestment and commercial banking to
restrictions forbidding reserve men,
Der bank officers to participate in
stock pools, were recommended Wed.
nesday by Winthrop w. Adrich, presi-
dent Of the Chase National Bank.
Testifying before the senate stock
market committee as it prepared to
end its investigation of his bank, Al
erich conceded that some "indefen-
sible transactions" had marked bank
ing before the depression, but added:
Bankers have enough to atone for
without being held responsible for
orgies Of gambling upon stock or com.
modify exchanges Or for the rapacity
Of individuals who seek to gain In
ordinate financial profits by reckless
speculation"
The committee asked Aldrich for his
suggestions and he had worked for
weeks on his 28-page statement.
Offers Many Changes
Among the changes he proposed in
the 1888 banking act were:
A direct or indirect connection with
Investment banking should disqualify
anyone from acting as an officer or
director Of National or State Federal
Reserve Member Bank, with similar
restrictions applying to citizenship or
connection with two commercial banks
IN the same community.
Executive officers Of reserve men,
Der banks and the directors and ex-
ccutive officers Of reserve banks
should be forbidden to participate
directly or indirectly in syndicates
which are Offering securities to the
public, in trading accounts or pool
operations in securities which are
dealt In publicly"
All executive officers Of reserve
member banks should be required to
report to their directors their borrow
lngs above q nominal sum from any
source (the law requires only reports
IN loans obtained from other banks).
Executive officers should be re-
nuired to tell reserve member bank
directorates about outside financial
interests or incomes.
Member banks should be permitted
ID to continue securities affiliates
long enough to liquidate their assets
rrudently or az to take over the as
sets and hold them until prudent
disposition" could be made.
hare Bonus Payments
Congress. Aldrich said, intended q
complete separation Of commercial
end investment banking, even to
barring interlocking arrangements
and likewise wanted to prevent inter-
locking arrangements between COM
raerctal banks operating In the same
area.
Evidence that promoters Of the
Detroit Canada tunnel received stock
worth IS, 500 for what was de-
scribed as bonus was placed Wed.
nesday before investigators.
Judson Bradway, former president
Of the tunnel company, told the sem
ate banking committee the promoters
were given 1.690,00o shares Of common
stock In the tunnel company for serv.
ICES In acquiring property rights and
for other work.
Broadway said he did not know why
large group received part Of the
Snares, but said he was given 10000
ss promotion stock"
The list Of recipients, placed In the
record by Ferdinand Pecora, COM
n-ittee counsel, included Governor
William A. Comstock. Of Michigan,
former president Of the tunnel COM
oany, 10000 shares: Guardian Detroit
company. 226,O10 shares.
Chase Securities Corporation. u.s.
$50: engineering firm Of Parson,
Knapp. Brickerhoff and Douglas,
10000.