Evening star., 1934-12-09
ROOSEVELT SEEKS
NEWBANKAGENCy,
0UST|NC 0'CONNOR
Would Supersede Deposit
Insurance Set-Up and
Controller.
FOUR ALREADY CHOSEN
FOR BOARD, is REPORT
Move Designed to Ease Worry
Over Examinations and to
Loosen Credit.

Copyright. 1894 by the Associated Press
Creation Of a new Federal bank
handling agency in an effort to ease
worry about Federal bank examina-
tions and thus loose millions in credit
was disclosed yesterday to have been
proposed to members Of Congress by
The administration.
The new agency would comprise
five members, who would perform all
functions now handled by the Fed
eral Deposit Insurance Corp. and the
controller of the currency.
An interlocking directorate would
insure cooperation among the new
organization, the Reconstruction
Finance Corp. and the Federal Re-
serve Board.
Board Reported Named.
The plan has advanced far enough
that members Of Congress were told
four Of the five new board members
had been decided upon.
Leo T. Crowley. present F. D. I. C..
chairman, is to be head and the other
members are Jesse Jones. chairman
of the r. F. c. Mariner Eccles, gov
ernor of the Federal Reserve Board,
ard Representative Charles West Of
Ohio, who campaigned on New Deal
platform for the Democratic Sena-
torial nomination in his State but
was defeated in the primaries by Vic
Donahey, the Ohio Senator-elect.
Administration officials had intend
ed to work out the new set-up with
out legislation. But when they
broached such plan on Capitol Hill
the Congressman objected.
In one quarter. also. it was said
the fact that J. F. T. O'Connor, now
controller of the currency, had not
resigned to accept an offered appoint
nent as Federal Reserve representa-
tive on the Pacific Coast had speeded
the decision to abolish his present
job by legislation.
Further Conferences Slated.
Final details of the plan have not
been worked out. President Roose-
welt. Crowley, Jones and Eccles are
to hold further conferences and out
line their proposal to newly-arriving
members Of Congress who handle
banking legislation.
In its broader phases. the program
would put under the new agency
which may be called the Federal
Deposit Insurance Corp.-all the bank
examining activities now performed
by the controller general, the F. D.
I. c., the Bank Reorganization Com
mittee, the R. F. c. and possibly the
Federal Reserve.
In the past, national bank might
have peen subjected to examination
by at least three Federal agencies.
Each agency might direct its exami-
ners to apply different yardstick OF
values. The result, advocates Of the
new proposal say, was that bankers
never could tell which of their loans
might be questioned Consequently
they we're chary Of making loans that
they might class as slow but good.
O'Connor, Crowley in Rows.
The difficulties led Secretary Nor
genthau recently to call a meeting Of
all bank examiners. Upon them he
urged liberality, and also sought CO.
ordination of their activities. The
new plan is an outgrowth Of that
meeting and subsequent developments.
The controller of the currency has
supervision of all national banks.
Conflicts between O'Connor, who now
holds that post, and Crowley over
classification of assets have resulted
O'Connor's men often were too strict
in their requirements to suit Crowley.
The controllers work of reopen
ing the closed banks meanwhile has
continued at full speed Last month,
the Treasury announced today, ma
tional banks with frozen deposits Of
S6,687, 900 were licensed and opened
or absorbed by going banks.
BY The end of November there were
only closed national banks. COM
pared with lat on March Is, 1888,
the first day after the end of last
years general banking holiday.