Evening star., 1933-12-22
DEPOSIT INSURANCE
LAW CHANGE SEEN
Assessment LevieS on Banks
May Be Limited,
Glass Says.
BY the Associated Press.

BY the Associated Press.
A definite limitation of the power OF
the Federal Deposit Insurance Corpo-
ration to levy assessments upon SUP
scribing banks by the adoption OF an
amendment to the Glass-Steagan law
was described as a possibility yesterday
by Senator Glass, Democratic authority
on banking legislation.
Many complaints have been received,
the Virginia Senator said, that the law
as II now stands Is ambiguous and may
be interpreted as allowing unlimited
assessments. In addition, he said, the
provision of the law requiring bank
director to cwn $4,000 worth of the
institutions stock, computed at its par
value. might be modified.
Glass said protests were being re-
ceived from small but strong institu-
tions whose stock has a market value
of several times its par value. He
suggested that the solution might be
to figure the holding of $4,000 at book
value" which would lie somewhere be-
tween the par value and speculative
market quotations.
The insurance provisions of the law,
which were incorporated on the in
sistence of the House, provide an in
Surance fund composed of $l50000, 900
If Government money, and payments
ny I4lC Dd1IhS IOLdl44lS O1lC-L1dI1 Va
per cent of the amount insured. If
additional assessments are needed, the
board of the insurance corporation has
authority to make them in section
which critics of the act regard as
unclear and dangerous.
Confers With Jones.
Glass spent a large part of the after
noon in conference with Chairman
Nf ,Dti
Corporation, at the Senator's hotel
suite. Their discussion was understood
to deal with current proposals that the
power of the R. F. c. be broadened
to include direct loans to industries.
Jones said no decision had been
reached on the project, adding that it
was "a serious question whether such
loans should be made or not" He
said he had not decided himself just
what should be done
The discussion started on Capitol
Hill by disclosure of the fact that di-
rect loans are being considered was
termed a good thing by Jones, who as
serted that the question was public
buSineSs which needed airing and dis
cuSsion.
L don't know" said Jones, whether
I am for direct loans or not. 1t would
be a terrible job to administer.
II cannot speak on the question for
the administration. We are going as
far as we can to help out. The mort
gage loan plan designed to aid signers
of N R. A. codeS) is too slow.
Il think, however, there should be
some buffer between the Government
and the borrower that would keep after
the borrower and see to it that he kept
up his collateral and made his pay
ments."
Community Mortgage Firms.
Asked what would be the best solu-
ton of the question. Jones said he be-
lieved community mortgage companies
organized by experienced persons in
each community would be best.
There should be organized a sub
stantial mortgage company in each
community by people experienced in
lending money who could raise some
kind of capital" said Jones. This is
what is being done in New York. Were
this to be done there would be sub
stantial borrower who could get after
the lame ducks. That's the way it
ought to be done.
Such companies have been organized
in a number of communities by banks
which have organized mortgage COM
panies so they would not have to bor-
row directly from the corporation"