The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-01-10
BY RAY TUCKER
Times staff Writer


WASHINGTON, Jan. 10.-A def
nj effort to write into the national
ba king laws remedies designed to
Gu evils disclosed in the nations
fin 1ncial structure before and since
tho 1929 crash is being made by the
sci ate in its study of the Glass
banking bill.
S reforms are understood to have
the approval of President Elect
Franklin D. Roosevelt, vino recently
discussed banking problems with one
of Senator Glass committee col
leagues, Senator Robert J. Buckley
Dem, o..
A dramatic note has been given to
the expected debate by the report
that Senator Garter H. Glass Dem,
Va, may become treasury secretary,
so that if the bill passes its author
would be the first to administer it.
A former treasury secretary and
co-author Of the bill setting up the
federal reserve system, Senator Glass
sponsored this new measure because
he does not think the system has
been administered as congress
meant it to be.
Overhauls Reserve System
He has charged again and again
that the fundamental purpose of
aiding legitimate business and
strengthening the banking structure
has been distorted by federal Off
Gals and the bankers themselves.
The bill, which has been in the
process of framing for two years,
marks the only major overhauling
OF the reserve system since its crea-
ton in the early days of the Wilson
administration.
Just as congress set up the federal
agency after two financiers of that
day-the late j. P. Morgan and the
late George F. Baker-teStif1ed that
they controlled the nations banking
mechanism, so Senator Glass de-
mands revision in order to prevent
recurrence of bank failures like
those of the last decade.
Permit Chain Banking
Underlying the Glass bill pro-
posalS is the general philosophy that
banks should restrict their opera
tiOns to aiding business and industry
instead of furnishing channels
through which deposits flow into
speculative channels.
1t also would strengthen and ex-
pand the reserve systems control of
member banks, permit expansion of
the national banking system, and
bring holding companies and in
vestment trusts of the financial field
within federal supervision.
Eastern banking interests oppose
the provisions which prevent the use
of deposits for speculative purposes,
and those which require eventual
separation Of banks and investment
affiliate companies.
Senators from the northwest and
middle west, fearing that branch
banking may have the same effect
that chain bank failures have
brought in their states, are fighting
for modification of the proposal to
permit national banks to establish
Branches in states which do not for
bid it by law,
Measure Is Far Reaching
Real estate interests oppose the
drastic limitation on banks invest
ment in their field.
Despite its far-reaching nature,
the measure does not go as far as
Glass, Treasury Secretary Mills and
Governor Eugene Meyer of the fed
eral reserve system would like it to-
All believe the day is near when
the country's banks must be enrolled
in single system under federal
regulation. But senate sentiment
is that too great a stride can not be
taken at once. and that the more
extensive reform should be left for
!. the Roosevelt administration.
What Bill Provides
The Glass bill seeks to do the fol-
lowing things:
Prevent the use of commercial
bank funds and of federal reserve
bank credit in speculation in the
stock market.
Separate commercial from invest
ment banking, and particularly from
the influence of affiliates of COM
mercial banks engaged in the sale
and marketing of securities.
Discourage chain and group bank
ing by extension of the national
banking system
Regulate the investment of bank
funds in real eSate loans.
Prevent banks from evading re-
,quirements that reserves against de-
posts be kept at the legal ratio.
Create a liquidating corporation
to hasten payment of depositors of
closed institutions.
Assure the independence of the
federal reserve board from outside
political and financial influence. and
strengthen its control over member