Evening star., 1933-08-18
CRIMINAL 0FFENSE
CHARGED TO BANK
Couzens Asks Inquiry Into
Methods of Union Guardian
of Detroit.
Continued From First Page.)

Continued From First Page)
what he said in the Congressional Rec
ord of May, 1888:
For the last II or IA years there
has been no espionage on the weak
national banks, The controller Of the
currency admits that If he enforced
the law, he would have closed half the
national banks of the country
He means" said CouZens, the con-
troller's Office has not done its duty
and had allowed banks to engage in
irregular and Illicit practices. 1t has
endangered the whole banking COM
munity and paralyzed the whole busi-
ness community"
IF the Federal Government was dere-
lict in it's duty, don't you think it should
come to the aid Of Detroit depositors
now?" asked Toy.
You must remember the Federal
Government has no money except the
taxpayers money" said Couzens.
The Senator said in answer to ques-
tions regarding the possibility of loan
to reopen banks now that he would be
"a fine example of pork barrel Sena-
tor If, after criticizing the Treasury"
for 10 years, he now indorsed loan
unless there were assets to secure it.
loo MANY AstWy1S.
MY observation" he digressed to re-
mark, "is that there are too many
lawyers running the country. 1t has
been agitated for years that courts
should be allowed to give advisory opin-
ions and the Government should advise
the public. But they are all surrounded
by lawyers who prevent it."
What should We do?" asked Toy.
RI ma 7
a purely depositors' plan, as they have
a prior Lien over stockholders" said
Couzens. Get rs per cent Of the de-
poeitors to agree to it and then take 1t
to Washington and ask for the S75,-
900 900 to open another new bank. But
II the lawyers go through the new
banking act and find some fly specks
in 1t. l don't know. The lawyers can
defeat almost anything. If were the
controller or Secretary of the Treas
There are rumors you may be-" said
Toy
1--WE heard the rumors, but I
haven't seen the job" said the Sena-
tor. IF I were such an officer I might
approve the request and then there
would be a swarm of lawyers obJecting
to it. I realize lawyers are neces-
sity, but like other good things they
are overdone I've been connected
with them for IL years and they have
told me all the things I can't do. Id
rather 90 ahead and do it and then
go to Jail than be stopped by them
ahead of time"
Senator Couzens declared that while
the depression had much to do with
the bad condition of the two local ma
tional banks, am still ready to admit
that much of it was due to the lack OF
law enforcement by the Federal au-
thorities at Washington"
Hoping for Recovery.
Yesterday you criticized the way
these banks were conducted prior to
the holiday" said Prosecutor Toy.
Should not the bank examiners have
prevented this?"
"All an examiner can do is make hi
report" said the Senator. Washing
ton must act
Why did Washington permit Il
condition in Detroit If it knew OF 1t
asked Toy.
"On the theory that prosperity was
Just around the corner" said Couzens.
Public officials, from the President
down, we're holding out that hope to
the people 1t was in a large part the
depression that affected the assets Of
the banks here" He said much Of the
blame for the banks condition Is on
officials here, but a part was given to
administration officials in Washington
for not enforcing the law.
Criticized Bad Loans.
"If the bankers we're to blame to the
extent you say, Washington must have
known of it and approved Of it, said
Toy.
NO" said Couzens. The letters to
the Detroit banks show that Washing
ton did not approve. But the acts al
ready had been committed. The con-
troller of the currency criticized the
management and the bad loans. but
if the controller had taken action to
eliminate these matters the bank would
have had to close, because its capital
was seriously affected Washington
had to answer this question: Whether
it was better to wait for prosperity to
return or to insist on the letter of
the law and close the banks
This was not an easy question. At
hearings before the Senate Banking
and Currency Committee the controller
himself testified that he had not en-
forced the law because he was waiting,
hoping there would be a recovery"
The Senator repeated his statement
OF yesterday that there had been mil
lions of dollars loaned wholly without
justification" and that the primary
cause of the collapse was the orgy of
high finance, the orgy of consultations
the building of fictitious values and the
creation of one holding company after
another
Toy insisted that the Federal Govern
ment approved the bank and holding
company mergers to the extent of ex-
amining the assets of national banks
involved, and Couzens agreed.
Then the Federal Government, at
least tacitly, had hand in this orgy
OF high finance?" asked Toy.
"Oh, no." said Couzens When the
holding companies tried to collect the
stocks OF these banks, they paid ab-
surdly high and ridiculous prices to ac-
cumulate the ownership. The Govern
ment was not interested in that and
took no part in it. That is the part I
want to point out as the orgy Of high
finance Of which I complain"
Disputes Banker Witnesses.
Couzens pounded away at his con-
tention that the Detroit banks. with
deposits Of more than $500, 900, 900. were
oJocoJ ftor ha ho1jIo,y baao,,.. .