The Omaha guide., 1935-06-08

HIGHLIGHTS
Happenings That Affect the Din
ner Pals, Dividend Checks and
Tax Bills of Every Individual.
National. and. international
Problems Inseparable from 10
cal Welfare.

VI dill ina Is WrltIe0 u SAID
to the contrary. business today is
as much; and perhaps more;
afraid Of initiation than it was
two years ago when the clouds Of
currency manipulation filled the
financial sky. One indication of
business attitude is the fact that
the Administration. has twice
within a late week attempted to
assure industrialists that initiation
is not anticipated, that a sound
currency will be maintained.
Secretary Morgenthaus recent
speech was designed to quell in
ternal fears as to the stability of
the dollar, and to point out that
the Treasury was ready and will
ing to cooperate with other ma
tions in achieving monetary
sterilization. That represents a
rather decisive change from the
Administrations past stand; it
will be remembered that the
President wrecked" the World
Economic Conference by fatty re-
fusing to consider sterilization.
Second event was the Presi-
dents own speech before Con-
gress in vetoing the bonus; it
represented the first time that a
Chief Executive has appeared be-
fore the legislative branch to ex-
plain a veto, ask that it be upheld.
The President covered much larg-
er issues than the bonus in his
talk which was extremely well
received, was praised by con-
sentative newspapers which dis
like most of his speeches; and
pledged the Administration to OPP
pose the promiscuous issuing Of
greenbacks. Keynote of all he
said was monetary stability.
Even so, business is not con-
WINGED; and a good many level
headed observers can still see the
ominous spectre of initiation on
the horizon. Main reason is the
so-called Omnibus Banking bill
which has passed the House, is
now pending In the Senate.
Proponents and opponents of
the bill agree on one thing: If it
passes, the banking set-up of the
nation will be almost entirely
revolutionized. At the present
time, the power to control the
flow of the countrys credit and
currency resis largely in the
hands of the governors and di-
rect of the II Federal Reserve
Banks. The bill provides that
this power shall be taken from
these governors, given to a Fed
eral Reserve Board whose mem
bers shall be appointed by the
President. The issue then, in the
words of News-Week is this:
Should power over the control
ling mechanisms be placed with a
Federal Reserve Board subject to
political domination? Or should
this power 60 to an independent
committee; a Supreme Court OF
Banking?"
That issue is arousing one of
the bitterests verbal battles of
years among experts Admins
tration men, such as Federal Re
serve Governor Eccles, who in
troduced the bill, feel that the
political domination phase Of the
matter is less important than ii
seems, that the creation Of a Fed
eral Reserve Board is highly de-
slrable. Opponents of the bill
bill agree with Winthrop Aldrich,
head of Chase National Bank,
largest commercial institution in
the country, who recently said:
"This is not liberalizing the Fed
eral Reserve. 1t is making it into
an instrument Of despotic author
ity."
Now for the initiation possibili-
ties Of the bill. According to Mr..
Aldrich, it grants the power to
the proposed Federal Reserve
Board to force on the Federal
Reserve System an Indefinite
amount Of any kind of govern
ment securities; to fix rates Of
discount and interest charged by
the Reserve Banks; to lower the
standards fixed in the law de-
Scribing the quality Of paper"
the Reserve Banks may buy or
accept as collateral; to dilute
currency; to force the banks to
engage in any open market Sc
curly operations it deems adj
visable.
Under the last provision the
Board could force the banks to
purchase government obligations
in unlimited amounts directly
from the Treasury.
1t is obvious then that passage
Of the act would give an Admin
controlled Board unquali-
fled power to force credit expan-
sion; which is nothing more or