Evening star., 1933-01-22
SENATE SANCTIONS |
FURTHER IMITATION
Vote to Extend Currency Ex-
pansion of GIass.SteagaU
Law for Year.
Nv the Associated Press.

BY the Associated Press.
Extension Of the currency expansion
Of the Glass-Steagau law for another
year was approved by the Senate yester-
day, and prospects Of House sanction
were described as favorable.
Without previous notice and in the
midst Of discussion Of his banking
reform bill, Senator Glass Democrat,
Virginia., co-author Of the currency
measure with Representative Steagall
Democrat, Alabama, called up the
latter and put it through.
The measure continues until March 3,
1884, the authority to expand the free
gold supply by permitting Federal
Reserve banks to pledge Government
securities as collateral for additional
reserve notes.
It is intended to maintain q larger
supply Of gold in the hands of the
reserve banks for whatever purpose the
demand requires. To date, the act has
inflated the currency to the extent of
about $400. 100000.
Meyer Called Tomorrow.
Meanwhile, the House Banking Com
mittee discussed inflationary moves and
heard several Of its members urge cur
rency expansion and an overhauling of
the administration of the Federal Re-
serve Board. Eugene Meyer, governor
Of the Reserve Board, was summoned to
testify tomorrow.
Although the Senate action was ex-
pected to diminish for the time being
efforts among Democratic liberals to
initiate the money supply to huge figures,
Senator Thomas Republican, Okla
homa) served notice he would continue
his efforts to this end.
Thomas did not object to the bills
passage, but recalled when the bill was
up last session he preferred to make it
permanent
Il am going to take advantage Of the
Glass banking reform BILL" he said of
the floor, Ito support my demand for
expansion Of the currency"
Only lukewarm for the proposition,
Glass said: Il stated a year ago that
1t was bad policy, that it was taking us
back to bond-secured currency instead
of credits based on commercial trans
actions"
He added his judgment hasn't
changed since then.
An administration of Federal Reserve
banking that would expand the sys-
TENS currency was urged today by a
number OF House Banking Committee
members.
Their views were expressed around a
committee table in a general discus
sion of the banking situation
mildly Infiationary."
Explaining the measure approved by
the Senate, Chairman Steagall said:
This legislation is mildly inf1ation-
ary, but it depends chiefly upon how it
Is administered"
One Of its principal provisions would
permit the substitution Of Government
bonds for commercial collateral secur-
ing reserve notes, over and above the
laws minimum requirement for a 40
per cent gold backing.
i am advised about a billion dollars
in bonds have been SO used under this
act" remarked Representative Colds
borough, Maryland Democrat.
But they are still using II per cent
OF gold" interrupted Representative
Busby Democrat, MississippD. who has
proposed legislation for a $1,000, 900 900
currency expansion.
Yes" Goldsborough said, but we
need this legislation as basis for real
expansion legislation later on"
Hancock, North Carolina Democrat.
said he wanted to be sure, if the act Is
extended, that they won't come down
here and tell us it makes an expansion
bill unnecessary"
Reilly, Wisconsin Democrat, said ex-
perience had shown that for every dol
lar OF new national bank currency is
sued under the home loan act, an equal
amount Of some other currency had
been withdrawn.
That's because of administrative
reserve system policies" Goldsborough
insisted. ITS the administration that
must be changed"
McFad1en. Pennsylvania Republican,
who twice has sought to impeach Presi-
dent Hoover, said all the banking of
the country was under the domination
of the head Of the Federal Reserve
Board" He added:
Nothing will do any gooi for the
country until you change your Federal
Reserve administration"
Steagall agreed that "a big part of
our problem lies in the administrator
OF the Federal Reserve and Federal
Land Banks"