Evening star., 1933-06-11
BANK MOVES TOP
CONGRESS RECORD
Three Passed by Session Get
Nation Out of Crisis, Though
Fourth Is Doomed.
BY the Associated Press.


Rushing into its emergency meeting a
hundred days ago with every bank in
the Nation closed, the special session
of Congress stepped up to the adjourn
ment line last night with three major
bank-related moves enacted but with
fourth apparently doomed to gather
dust unapproved.
Much credit for moving out from un-
der the shadow of the crisis has been
attached to the three steps taken, but
the important Glass-Steagall bank Ie-
form bill with its controverted deposit
insurance provision was crowded into
the background, despite reported presi-
Dental approval, as Congress wrestied
with other problems. Last-minute pleas
for the bill were made nevertheless.
Upon the long roster of the special
sessions achievement the three main
bank related moves stood out rs the
emergency banking bill, the handing to
President Roosevelt of power to make
inflationary ove-tures through huge is
sues of Government securities. and last
Iy, abrogation. of the gold clause in past
and future contractual agreements.
Crisis at Peak.
BY dramatic coincidence, the bank
ing crisis reached its peak on the morn
ing of President Roosevelt's assump-
ton of office, with but few banks able
to open their doors on the morning of
March 4.
HIS first official act was to close all
banks in the United States for period
of four days. giving Congress, which
had been called into extra session, op-
portunity to pass legislation to meet the
situation. The emergency banking bill
resulted, being passed by both Houses
of Congress in one day.
The bill approved steps already taken,
and gave him broad powers with respect
to the movement of gold, foreign ex-
change and financial transactions gen.
orally.
It set up machinery for the conserva-
ton Of banking assets, and placed dis
tressed banks in the hands OF con-
servators. 1t broadened the provisions
of the Federal Reserve act with respect
to the issuance of currency. making 1t
possible for Reserve Bank notes to be
printed against security OF notes. drafts,
bills of exchange. or bankers accept
ances as we'll as direct obligations OF
the Government.
Provisions for making loans to men,
bers were materially liberalized. the re-
gional institutions being authorized to
extend loans to individuals, partner
ships and corporations on their promis-
sorry notes, secured by Government Sc
curities. A later amendment empoW-
cred the Reserve banks to make similar
loans to non members during the emer-
gency.
Imitation Plan Passed.
n-.-i5o,fBc ipAofiop r1on UaS
contained in the Thomas amendment
to the farm relief bill, which was passed
after the President had forbidden gold
shipments to support dollar exchange
and called into the Treasury all gold
in the country. The action was in
terpreted as taking the United States
definitely off the gold standard.
The Thomas amendment provided the
President could bring about imitation
through the Treasury making agree
ments with the Federal Reserve sys-
tenn for Federal Reserve banks to pur-
chase and hold for definite periods up
to SO ,00o, 100000 of Government securi-
ties or of securities of Government
owned corporations.
1t provided also that If such agree
ments could not be made the President
could issue up to S3,000000,000 in
United States notes to redeem or pur-
chase Government obligations, the notes
to be retired at the rate of per cent
a year. 1t also gives the Executive
power to reduce the gold content of
the dollar by not more than so per
cent and to accept silver for one year
in amounts up to 100000, 900 in pay
ment of debts of foreign governments
at a price of not more than so cents
an ounce and to issue silver certificates
against 1t UP to the amount for which
it was accepted.
Gold Clause Abrogation.
The abrogation of the gold clause in
contracts was pushed through with
great speed by Congress following
specific request from the President
Republican objections were overridden. |
The measure makes all contracts, gov
ernmental and private, payable in legal
tender instead of gold. This would
cover war debts, all forms of Govern +
ment securities and private contracts
such as mortgages.
The Glass-Steagall bank BILL de-
signed to strengthen the banking laws,
was the center of a bitter fight during
much of the sessions and its provision |
for guarantee of deposits brought about |
sharp conflict.
Senator Bulkley, Democrat, of Ohio, |
after conference yesterday with the |
President, moved to have the Senate |
act upon it, while Representative Stea- |
gall, Democrat, of Alabama, urged in |
the House that members stay in ses-
sion until the measure was enacted. He |
charged big banking interests were try |
ing to kill it.
-