Coulee City dispatch. [volume] (Coulee City, Wash.) 19??-19??, 1935-06-06
CHANGES URGED
IN BANKING BILL
Business Men and Bankers Agree
in Directing to Political Con-
troll Over Banks.
AMENDMENTS ARE SUGGESTED
Political Domination of Federal Re
serve Board Declared to Be
Undesirable for Depostors
as Well as Their Banks.

WASHINGTON, D. G. = Business
men and bankers alike who have al
peared before committees of Con
gress to present views regarding tn
Banking Act of 1885 have found com
mon cause for criticism in those pro
visions which they agree would create
the means for undesirable political con
troll over the Federal Reserve System,
and thereby over individual banks
throughout the United States They
have made the point that this undesir
able condition would affect depositors
in banks even more than the banks
themselves.
This view has been stressed in criti'
cisms by the Chamber Of Commerce OF
the United States, and the question OF
partisan control over banking was the
central theme of statement presented
by R. S. Hecht, President of the Amer
| lean Bankers Association. who ap.
peared before the Senate Sub-Commt
| tee on Banking and Currency hearings
here. Mr.. Hecht declared that his or
helpful to Congress Gin enacting effec.
tive and workable banking legislation
| in the interests of all our people" He
said in part:
"If it is finally decided that it is nee
essary to carry this legislation through
at this session, we are strongly of the
opinion that special care should be
taken to keep our credit control and
banking mechanism free from any sort
of political considerations.
''1n making this statement do not
wish to appear to question the pro-
priety of the Governments exerting a
certain amount of control over banking
operations so far as they affect the ma.
TONS currency and general monetary
policy. Nor do we object to broad pow
ers of supervision over the operation OF
our banking institutions because of the
semi-public responsibilities they carry.
But when 1t comes to such matters as
| the granting of credit and the making
OF investments by our banks, these are
questions of business policies that sure
ly should not be under the sole control
of board so constituted as to be de-
pendent upon partisan or political con-
siderations under any administration.
The Basis of Sound Credit
"The real conditions that create the
| necessity for the expansion or contrac.
| ton Of credit arise from the needs Of
agriculture, industry and trade them
selves, wholly Independent of the ad
ministrative policies Of the party which
happens to be in power We feel that
the financial requirements of the ma
TONS business constitute a continuing
economic process that is not related to
political changes. The fundamental
principles Of sound credit do not vary
experience teaches that the quality Of
credit is sound only so long as it Is
based purely on the requirements of
sound business. 1t Is not sound when
any other considerations or motives D
ter into tn composition.
The Banking Act would centralize
in the Federal Reserve Board at Wash
ington means aimed to control the sup
ply Of money In the country. which
term includes the sum total OF currency
In circulation and demand deposits In
the banks which become current
through checks. The powers which it is
proposed to give the Board are intend
ed to enable 1t to influence the quantity
Of this deposit money through open
market operations, the discount rate
and reserve requirements.
The Need for independence
"That ID the reason why we are 80
strongly in favor Of making the Fed
eral Reserve Board body Of such In
dependence and prestige that 1t would
be definitely removed from all politi
cal thought, influence and dictation Its
members should be free to study and to
act in accordance with the needs and
conditions of agriculture. industry and
trade. The policies of the board should
have no reference to the politics or the
changes In politics Of the national ad
ministration.
I'm our studies Of the bank bill, we
have been strongly impressed with the
fact that 1t would set up situation un-
der, which the Federal Reserve Board
and its policies might be subject to con
troll from the political administration
Of the country. In saying this do not
charge that 1t is the intention of the
present administration to bring about
J any undue control over the nations
banking mechanism The noint L. that