Evening star., 1934-04-16
M'LEOD BANK BILL
EXPECTED TOPASS
Rainey Sees Success i
Measure Is Brought
Before Body.
(Continued From First Page.)

we would not come here and ask for
this extension"
Sisson agreed with the attitudes ex-
pressed by Goldsborough and Busby.
Blocking Stalled.
Mr.. Roosevelt's intervention appar-
emily saved the complete blocking of
the deposit insurance bill. 1t passed
the Senate a month ago. The fears
that had been expressed in the House
committee were that if the tempo
rary provisions we're continued for
another year it might become sort of
a. habit to keep pushing the extern
sions from year to year until finally
the plan would be dropped.
Finally, the President sent word di-
rectly to Chairman Steagall Demo
crat, Alabama,) that it was essential
to continue the temporary plan until
July /, 1885. Mr.. Roosevelt made that
attitude clear again in his discussions
last night with House leaders.
administration disapproval of legis-
lation to release millions of dollars
IN closed banks was officially dis
closed in letter written by Secretary
Morgenthau to Chairman Fletcher,
Democrat. of Florida, of the Senate
Banking Committee
Mentioning specifically the bill by
Senator Thomas. Democrat, of Okla
homa, Morgenthau said that under the
legislation nearly half of the money
to be distributed would be received
by about 4 per centum of the de-
positors"; that it would represent a
guarantee of bank deposits, past, pres
ent and future" and that it would
cost the taxpayers from 81 ,250, ,o0o, 900
to s2,500. 100000"
Morgenthau's views became known
within a few days after the Mcleod
bill had been sidetracked by House
leaders. At the time nearly l45 names
had been obtained on a petition to
force it to vote.
Would Buy Assets.
Morgenthau wrote Fletcher about
the Thomas measure:
THE bill proposes to free deposits
frozen in closed banks by directing the
Reconstruction Finance Corporation
to purchase all the remaining assets
of closed national banks and State
member banks of the Federal Reserve
system. The proceeds are then to be
made Immediately available to the de-
positors, while the R. F. c. is to
liquidate the assets over a period of
years.
There is the gravest doubt whether
recovery could be materially assisted
by the plan proposed. Since very
high percentage of the total amounts
of deposits now frozen stands to the
credit of a small percentage of de-
positors, the expenditure involved could
scarcely be justified as means Of
affording widespread relief.
Z THE administrative and legal diff
fculties which would ensue could only
minimize the gains which the meas
ure is designed to achieve.
Principle Dangerous
Furthermore. the adoption OF the
principle, implicit in the bill, that
the Government should guarantee the
efficiency of those functions and ac-
tivities of its citizens because it may
have to a greater or less extent.
supervised or controlled them, would
be unfortunate.
Finally, the addition Of this bur-
den upon the taxpayers, which ex-
elusive of interest, may be estimated
at from sl.250,00o,0o to S2,500 ,0O0,-
900 would in the opinion of this de-
partment outweigh any benefits that
the legislation could achieve"
A memorandum which accompanied
the letter said that, "if, as is likely,
in this instance. it is found that
adoption of the bill can be had only
by amending it to include State nom
member banks, the ultimate loss will
be increased to an extent far beyond
present computation"