The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-11-21
Government May Extend
Activity to 10000
Institutions.
SINGLE SYSTEM SOUGHT
Federal Group Is Obtaining
States in Financial
Houses Daily.

closely COntrOHeQ by Jne IeOerdI
government, is the objective Of
some Roosevelt administration lead
ers who would seek its accomplish
ment at the coming session of
congress.
The plan is to extend the pres
ent national banking system to
cover state banks. now numbering
some 10000, the class in which there
were the greatest percentage of
casualties. The government now
has some control over TOO state
banks which are members Of the
federal reserve system.
In several directions the admins
tration is moving-and fairly rapid
ly-toward greater control over the
countrys banks and toward a sin
gle system. Under the guarantee
provisions of the Glass bank act
every bank in the country will be
forced into the federal reserve sys-
tenn within two years-by Jan. l,
1896.
AT the present time, through pur-
chase Of preferred stock and through
loans, the government is acquiring
stake in banks all over the coun-
try.
Government Interest Increased
This direct government interest
is increasing daily as the govern
ment board created for the purpose
Is assisting banks to meet deposit
guarantee requirements through
purchase of capital stock so they
will be ready Jan. l when guarantee
of deposits up to $500 will become
effective.
Whether by design or not, the adj
ministration has prepared the way
for practically any sort of control
it desires to establish. A simple
legislative act could so broaden the
Glass bill as to bring all banks
under the federal reserve system
at once or even under more direct
supervision into one national bank
system. The present national bank
system provides a closer govern
ment control than does the federal
reserve system.
Extension of government control
over banks. and interest in them,
since March has even opened the
way for literal naturalization of
banks by taking them over. There
are some who would go this far, but
this is generally regarded as beyond
the administration intentions.
President Roosevelt is expected to
pursue bank reform farther. He
will not stop with the original Glass
act. He regards bank reforms as
complementary to regulation of the
stock market and control Of security
issues.
Constant Check Needed
His hands have been strengthened
by the revelations of the part some
big bankers played in the stock
market speculative orgy He is de-
termined that the peoples money
no longer be played with loosely.
In his opinion the government can
perform a needed economic and So
cial service by keeping a constant
check on the banks.
The Presidents recommendations
to congress are expected to embody
further bank reform proposals.
Whether he will go so far as to
urge unification of the banks now,
or rest with suggestions for event.
ual strengthening of control
through the federal reserve system
when that becomes all-embracing, is
not known. But some of his advis-
ers would take the next step at the
coming session of congress and are
talking about ways and means.
In the new head of the treasury
department. Acting Secretary Henry
A. Morgenthau Jr, the administra-
ton has man who is sympathetic
to further government control over
banks. His views are shared by
such administration leaders as Agri-
culture Secretary Wallace.
Bank Figures Decrease
On last Dec. 81. there were 1890
banks in the country, a decrease
from 25.941 on June 30, 1928. OF
these. 6,816 were members Of the
federal reserve system including
COIL national banks and 805 state
banks. Non-member banks num-
bered 1854, of which 10.9S0 were
state banks and 594 mutual savings
banks. over the last group the gov
eminent had no supervision what
ever. They were subject to varying
state laws. The banking system
thus Is a hodge podge
Any move directed against the
state banks will meet with certain
opposition in congress, particularly
from the agricultural representa-
tives. Such an attack always re-
wives fight on the issue of CEN
traliZation of financial control. Some
western members argue that such
control may be all right in the
hands of the present administra-
ton, but that another administra-
ton might follow the dictates of the
Wall street flnanciers. and policies
detrimental TO the farm regions
might be adopted.
Large Banks Fail to Act.
This argument, however. finds
less response now since the banking
debacle which struck the agricultu-
raj territory with as much force as
ii did the cities.
Large banks have been partic-
ularly negligent in cooperating
with the administration in the sale
of preferred stock or notes to the
government. The administration
sought to induce the large banks of
strong reputation TO participate in
order to remove any reflection on
smaller banks which sought govern
ment capital.
The government is rather deter
mined In its course. In one case it
sent examiners into one large in
stitution in the effort to force the
bank 10 participate by revealing its
actual financial condition.