The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-02-24
SCORES
FOES OF BANK
Law reform
Stock Market and Utility
Exposes Cited by Sena-
tor, Demanding Action.
ANGRY AT HOUSE DELAY
Federal Reserve System Is
Used for Spectators
Benefit, He Says.
BY RAY TUCKER
Times STAFF Writer

WASHINGTON, Feb. 24.-ReVela-
tons of stock market and public
utility operations developed before
senatorial committees in the last
few days were cited today by Sen
ator Carter Glass Dem. Va as
concrete evidence of the need for
reform in the nations banking laws.
Referring to his persistent demand
for revision of the banking sys-
tenn so that it shall serve depositors.
industry and business rather than
the speculative interests, the man
who declined the treasury post in the
Roosevelt administration said:
These disclosures of high finance
before the senate finance and SEN
ate banking and currency commit
tees prove conclusively the truth of
what I said on the senate floor four
years ago-at the height of the
boom, namely, that the federal re-
serve system was being used to aid
the spectators rather than those
for whom it was created.
Reform Necessity Shown
ut also shows the necessity for
reform of the banking system as
provided in my bill passed by the
senate, but held up in the house.
The failure to press this to enact
ment is utterly incomprehensible to
me-"
Although Mr.. Glass mentioned no
names, he obviously referred to
testimony by Charles E. Mitchell,
dominating figure of the National
City bank, and bankers who helped
to finance the insult public utility
empire, including Owen D. Young
and Charles G. Dawes.
The latter two, as we'll as Mitchell,
admitted that they had made seri-
Gus mistakes in financing doubtful
enterprises with bank and company
resources during the boom.
Again and again in testifying
before the senate committee, Mitch
ell conceded that great bank
should not have become involved
in some of the ventures he de-
scribed.
Great Losses to Stock Holders
These included joint operation
for maintaining the price of Ana
conda Copper, unusually large
bonuses to bank officials and, as
one committee member character
lied it, battling out the banks
loans" by taking over doubtful
Cuban sugar properties through
subsidiaries of the National City
Company
Whereas these investments led to
tremendous profits for a few bank
officials, witnesses admitted that
they caused great losses to holders
of stock in the banks and invest
ment companies involved.
1t is Mr.. Glass contention that
banks should not be permitted to
participate in such stock market
operations, and Mitchell admitted
that, in retrospect, it was a bad
thing.
Glass to Demand Action
The Glass banking bill, which
sharply restricts such operations and
brings national banks under greater
control of the reserve system, has
passed the senate, but it still is
before the house banking and cur
rency committee.
The latter groups only action to
reform the banking system has been
to pass the Steagall bill guarantee
ing bank action, now in the senate
banking committee, which opposes
favorable action. 1t has resisted
suggestions by house members that,
in return for approval of the Stea-
gall and Goldborough imitation
measures, the Glass bill will be re-
ported out.
Glass has informed important
members of the Roosevelt admins
tration that he thinks it outrageous
that no action was taken on his
measure by house Democrats, and
he will advance the Mitchell Young
Dawes testimony as evidence of the
need for its passage at the special
session of congress.