The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-06-07
History Repeating Itself in Outcry
of Bankers Against PROPOSED Bill
In 1913 FinanCierS Charged
Reserve System Would
Be Harmful.
BY THOMAS L. STOKES
Times Special Writer

is repeating ltSe1 To-Day III lie Out-
cry of big banking interests against
the Administration banking bill.
The complaint that the measure
would establish political control"
over the banking system because it
would enlarge the governments
authority is but an echo of the OBJ
jections raised in 1918 against the
bill creating the Federal Reserve
System, which the present bill pro-
poses to strengthen.
No sooner was the GlaSs-Owen bill
creating the Reserve System made
public than a group Of big bankers
constituting the Currency Commits
sion of the American Bankers As
ISOLATION, set up a clamor against
political control"
Bankers all over the country
joined in the cry, taking their cue
from the Eastern f1nanciers just as
they are doing today. But the Will
son Administration went ahead,
aside from slight compromise here
and there, with the measure framed
jointly by Rep. Carter Glass Cd,
Va.), Senator Robert L. Owen 3D.,
Okla.), and Secretary of Treasury
McAdoo, all of whom are partici-
pants in today's battle over banking.
Theories Are Reversed
The rival banking theories cham
pioned by the Administration and
the bankers in 1913 have virtually
been reversed today.
The Democratic party, in its 1912
platform, took a position against a
central bank. 1t proposed, instead,
to set up Reserve Banks all over
the country with the purpose of
wrestling money control from Wall
Street and vesting it in the people.
The object, in essence, was to de-
mocratize banking.
Most Of the big bankers, on the
other hand, advocated some sort of
central bank or reserve, with man
agement largely in private hands
under government supervision, after
the pattern of European central
banks. They followed in broad out
lines the so-called Aldrich plan,
drafted by a congressional commits
sion headed by Senator Nelson w.
Aldrich (R., R. -.
Today big bankers, with sudden
concern for the independence of
the regional banks, are fighting the
Administration attempt to create
real central banking system out of
the Federal Reserve system, and in
the forefront of the campaign
against central banking Is Winthrop
w. Aldrich, head of the Chase Ma
tional Bank and son the late SEN
ator.
Dominated by East
Admittedly, during the Repub-
lican regime from 1921 to 1888, the
Federal Reserve System was DOM
mated by the big New York bankers
thorugh the Federal Reserve Bank
of New York and it is this DONNA
ton which President Roosevelt
would break by giving the govern
ment further power. Big eastern
bankers, such as Mr.. Aldrich, see
the reins slipping from their hands.
In a voluminous answer to ques-
tionnaire, the Currency Commits
sion of the A. B. A. in 1913 said,
among other things:
THE experience of commercial
nations is that results can be bet
ter accomplished by the creation Of
a privately owned central organi-
zation dominated and controlled by
the government, as for instance,
the Imperial Bank OF Germany, or
the Bank of France. 1t serves to
take the matter out of politics. The
great danger is that if borrowers
go direct to the Treasury, politics
would become an all-important and
domineering influence"
Glass Answers Critics
When the then Rep. Glass, now
Senator, heard that big bankers
were Directing to his bill on the
ground it would create dozen indi-
pendent banks, and not central
| UdIlk DIS Qi1QSI IllG A4Nl I'LL P4dl1s lac
said that was exactly the purpose
of the measure.
1--WE have purposely scattered the
regional reserve banks and shall be
intensely disappointed if they do
not exercise very large measure
of independence" he declared.
Mr.. Glass has remained consistent
in seeking to preserve the indepen-
dence of the banks.
Frank A Vanderlip, who opposes
the Administration banking bill on
the ground that it provides for "po-
litical control" advocated a single
reserve" instead OF a dozen regional
banks when he appeared before the
Senate Banking Committee in 1913.
Incide ltally, he told the commit
tee that creation Of a dozen banks
still would leave New York in con-
troll, since its regional bank would
be dominant.
/