Evening star., 1933-03-26

should also be abolished.
The function of the present Federal
Reserve Board is primarily to supervise
the behavior of the IL regional Federal
Reserve banks, but also in certain par
ticulars to supervise the behavior of the
commercial banks, national or State,
which belong to the Federal Reserve Sys-
tenn. These commercial banks are called
member banks.
THE function Of the present controller
ship Of the currency is to examine
the operations of national commercial
banks and to keep them conformed to
the provisions Of the national banking
law. We have had supervision by one
agency under the Federal Reserve law
and by another agency under the ma
tional banking law.
There has been a diviSieo of author
ity, division Of responsibility, lack
of unity of control Mr. Miller would
enact a unity OF control by putting the
supervision Of Reserve policy and the
supervision of all other banking tech
nique policy simultaneously and CEN
trally into the hands of the new Ma
tional Banking Board-appointed by the
President and confirmed by the Senate.
The members of the board would be
seven in number. The present Federal
Reserve Board includes, ex-oficio, the
Secretary of the Treasury. The new
National Banking Board as designed by
Mr.. Miller would not include him. The
new board would be wholly independent
of any other element in our Federal gov
ernmental life.
It is a proposal audacious and thor
ough. At the same time it retains a
certain distinctive popularity in Ameri-
can central banking method. In every
other important country in the world
the supreme central banking authorities
operate bank-a central bank. In the
United States, our supreme central
banking authorities members Of
our Federal Reserve Board-do not
operate bank at all. They supervise
the policies, but they do not administer
the activities, of the IL regional Federal
Reserve Banks which constitute our
equivalent for a central bank.
authorities-uniquely-are wholly aloof
from all personal landings of the daily
details land individual ambitions and
frictions) of the money market. They
thus may become more theoretical.
They also may thus become more i'm
partial, more comprehensive, more
statesmanlike. In Mr.. Miller's judgment
the latter possibility is the compelling
and decisive one. Mr.. Miller would not
give our new National Banking Board
any bank to operate at Washington. He
would give it simply-but quite sum-
ciently Understandable task Of super
vising and directing the policies and
practices of all our banks throughout
the country, commercial ones in concert
with regional reserve ones.
Then:
Point three. Here begins an item not
only audacious. but often regarded as
revolutionary-and certainly enormously
controversial. We have noted that Mr..
Miller would compel every commercial
bank in the United States to- subscribe
to the stock Of the Federal Reserve Bank
of its district and thus to become full
member Of the Federal Reserve System.
Wemust note now that Mr.. Miller would
proceed to try to compel every CONNER
cial bank $50 far as Reserve Bank credit
is concerned to be genuinely CONNER
cial. We would try to prevent CONNER
cial banks from employing their borrow
ings of Reserve Bank credit for purposes
essentially speculative"
On this point Mr.. Miller has waged a
combat Of dramatic development and Of
an outcome yet to be-through bitter
c0n11ict-d determined