Evening star., 1933-06-12
Allegheny.

vigorous and persistent monetary man.
agement," and said these sound de-
cisions Of the administration are hav-
ing beneficial effect
Many In Washington were surprised
at this Roosevelt support from the very
stronghold of conservative finance
when the stanchest Republican spokes-
men In Congress nave been denouncine
gold abandonment as a shameful breach
OF national good faith.
"Nation Of Hired Men"
Leningwell. a former Assistant Sec.
retary Of the Treasury during the VIII
son administration, In discussing ten
dencies Of the time, said the growth of
corporate enterprise was drying up pri-
vate initiative and making "a Nation
Of hired men"
Elaborate charts showing the extent
OF the directorships held in banks and
corporations by Morgan partners were
submitted by Ferdinand Pecora, COM
mittee counsel.
Tracing the corporate relationship
OF ]. p. Morgan g. Co." they Showed
that partners of the firm and its Phila-
delphia affiliate, Drexel & Co.. serve
as directors of SO corporations and
banks which have 537 other directors.
Inese "non-partner directors" serve
on the boards of 2,305 other Companies.
the tables showed
ITO further illustrate and establish
the relationship and control Of the two
companies over the directors of the en-
tire 626 corporations and banks" the
introduction to the charts said, "the
list OF non-partner directors discloses
that 81 appear on the four Selected
lists OF j. P. Morgan 6E Co. and eight
have secured loans from j. p. Morgan
81 Co. or Drexel and Co."
AS the committee made public Lef-
fingwells statement it was shown to
be in part defense Of private bank
ing. Most of 1t, however, was a dis
cussion of economic conditions since
the war and had little to do with the
subject of the inquiry
Tracing the history of the depression.
he said the Summer of 1892 brought
some considerable improvement, but
asserted this was brought to a close
by President Hoovers Des Moines speech
in which he said that We had been
within two weeks Of going of the gold
standard"
The controversy with European gov
ernments about the December Is war
debt payments further disturbed con-
fdence," he added "and the publica-
ton in January, 1888, of the loans by
the Reconstruction Finance Corpora
tion started runs on banks which were
In debt to it,"
Leflngwell said nothing comparable
to the collapse of prices and the defia-
ton OF credit at the time of the bank
holiday 'had occurred in the memory
OF man" and that I'VE had reached q
level so low that the burden of indebt-
edness created during the war and the
post war decade had become intoler-
able"
Under these circumstances, he add
ed, the suspension of gold payments
and the vigorous and persistent none
tary management to expand credit be-
came necessary. Already these sound
decisions Of the administration are
having beneficial effect
IF the Federal Reserve banks combat
the deflation now. they already have
the means to combat an excessive re-
imitation II it should occur.
THE problem of today is to arrest
the disastrous def1ation. If, later on,
the excesses of 1927-1929 should show
any signs of recrudescence, the Federal
Reserve authorities, enlightened by
their own errors Of that period, should
nAA0W AAOW w 0Cdl Will tIlcill.
Fundamentally, the depression must
be attributed to the imitation and the
defiation on the one hand, and to the
failure OF the governments to make
economic peace on the other.
"The plans to which our Government
Is now committed for arresting the de-
dation and bringing about some rise In
prices, and for lowering trade barriers,
are sound and wise and go to the root
Of the matter"
Discussing banking legislation, Lefiing-
well said it would impair the usefulness
Of issuing houses to prevent them from
receiving deposits, as proposed in the
Glass bill.
Private bankers, he added, do not
and should not usee their deposits In
their capital issues business. but the
banking business Is their bread and
butter"
Lennngwell. In describing the activi-