Evening star., 1933-05-14
GLASS BANK BILL
PASSAGE IS URGED
BYFRANC|S S|SSON
Head of Association Believes
Measure Should Speedily
Become Law.
SUGGESTS BROADENING
OF U. S. BANKING SYSTEM
Sudden Shifting of Large CONNER
cial Deposits Should Be Linn
tied, He Declares.
BY EDWARD C. STONE.


citation. At the same time he makes
some very vital suggestions concerning
improvements in general banking con-
ditions. While in this city the other
day he asserted that the problems in
volved in our fundamental banking
legislation are about 80 per cent
political rather than economic"
The questions involved and the
comments Mr.. Sisson makes have
direct bearing on the Glass bill which
is again being given special committee
speed up its progress. Fourteen points
are offered for consideration Of the
business and financial communities by
President SiSson. as his own views and
those of the A. B. A., on the best ways
OF improving the banking system In
the United States. He advises:
First, the passage of the revised
Glass bill as soon as possible. but along
with it the creation of q commission
to recommend after mature deliberation
the further changes that should be
made in our banking system, In our
Federal Reserve System and in our
monetary system.
In order that banks generally may
become members of the Federal Re-
serve System, the provision of the
Reserve act should be so broadened
as to allow for admission to member
ship of numerous State chartered
commercial and mutual savings banks
not now within the system. Again,
We want to concentrate power and re-
sponsibility in banks under central
direction.
Opposes Bank Holidays.
Provision should be devised against
any proclamation of banking holidays
by governors of states. That monkey
wrench In the machinery started our
trouble not so long ago, Mr.. S1ssion
says.
Branch banking privileges should be
uniform within states for all banks,
whether holding national charters or
State charters.
Reasonable limitations should be de-
vised to control the sudden shifting OF
large commercial deposits. A good deal
of the trouble in this last banking cri-
sis came not from runs by small saw
ings depositors, but panicky corporation
treasurers who began to shift funds
around the country in most disastrous
and upsetting manner, who were fear1ul
of losing money and quite unwarrant-
edly in many cases.
Restraint on real estate speculation
would probably prove to be a safeguard
to American banking comparable TO
that which would result from restr1c.
ton of speculation in commodities ana
securities. All this talk about holdlng
down Wall Street speculation, too many
OF our legislators have ignored the TACT
that the greater part OF the burden
upon our banking system has been the
frozen loans upon farms and homes
which could not be thawed out to meet
deposit demands, the A. B. A. president
believes.
A Federal commission on banking
legislation should consider regulation OF
interest payments on all classes OF de-
posts and of requirements that deposit
tors should give notification OF mten-
lion to withdraw time deposits.
Scores Loaning to Officers.
Federal legislation should provide for
The careful and rigorous regulatlon OF
the granting of loans by banks to their
own officers and directors, which seems
q simple and fundamental thing. 1t Is
a law of the State of New York ana
should be the law all over the country.
As the general banking system Is
strengthened the Postal Saving System
should be progressively restricted, ana
the Government should be kept out OF
the banking business.
Deposits of public funds in banks
should have the same status as private
deposits and should not be accorded spe-
cial and additional securities, which Is
now required.
A more effective coordination OF the
activities of the Federal Reserve banks
Is greatly needed In the last crisis there
was a considerable breakdown OF our
Federal Reserve system through failure
of various member banks to coordinate
their activities as it had been hoped
they might. The original banking plan
which was submitted by bankers
through the Aldridge Commission and
later by others provided for q strong
central bank in washington with
branches outside. For political reasons,
and not business reasons, that could not
pass We set up this system To-Day Wltn
il independent Reserve banks scattered
about the country and without adequate
AUTHORITY to make them coordinate and
to govern the flow of credit interchange.
ably among them. AS plain matter OF
practical efficiency. as well as economic
theory, that is one of the questions we
should tackle, Mr.. Sisson says.
Would Change Reserve Act.
The present emergency provisions
with respect to member banks borrow
ing 1rOm tIl6 Ccuc1dA AsCoCA'C SnAAAs
should be retained as permanent pro-
visions. ~
Consideration should be given to q
possible modification of the Federal Re
serve act by which the system would be
given power to change the amount OF
member bank reserves required. Inls
mower would afford control over any
threat of dangerous credit imitation.
Consideration should be given to q
change in our Federal Reserve act by
which a minimum required relationship
would be established between our stock
of monetary gold and the combneo
total of our reserve notes and our bank
deposits. This would nullify most o.
the dangers inherent In the hoard1ng Of
currency, President Sisson concludes.
Bank Merger Plan Progresses.
As noted elsewhere in The Sunda!
Star, the proposal to merge number O
the local closed banks Is progresstni
with rapidity. For long time altel
these institutions failed to receive Gov
eminent licenses to reopen. very httl'
news regarding future hopes, plans O.
possibilities was forthcoming.
In the past few days development
have been surprising In their rapidity
It looks now as If at least six local bank
would JOIN the move to form the pro
posed central bank. The directors ant
other officials Of these institutions fee
that one entirely new institution woul'
be much stronger than It would be pos
~iI,la ~ voakA thexe hanks ax init9