Evening star., 1935-02-05
ROOSEVELT DENIES
BANK BILL HIS AID
Reserve Power Widening
Measure Drawn After
Conferences.
Continued From First Page.)

Continued From First Page.)
further told him that I had had no
idea that the bill would be sent up to
the Capittl so soon. which was before
an opportunity of discussing the mat
ter with him had been afforded"
Plan Sent to Capitol.
AS for the plan. which was sent to
Capitol Hill last night in the form of
tentative draft of the banking act
OF 1885," Glass would only say:
Il do not care to make any comment
on something have not seem"
1t is known that the Virginia Sem
ator. who wrote most of the original
Federal Reserve act as chairman of
the House Banking Committee in 1918,
is opposed to changes in the Federal
Reserve in this session. The Capital
has understood for some time he would
fight to the end any amendments
which would place additional control
In the hands of officials here.
The amendments proposed in the
banking act of 1885 would give Wash
ington practically complete supervi-
sion over credit policies.
Approval Here Required.
Before the IL governors OF Federal
Reserve banks could be elected they
would have to be approved by the Fed
eral Reserve Board here BY scrap
ping the old open Market Policy
Committee" in favor of a new COM
mittee, the Reserve Board would be
given a predominant voice on the
question as to when and to what ex-
tent Reserve banks should support the
Government bond market.
Under the old system, the Policy
Committee is named by the 12 re-
serve banks. The new committee
would be composed of the governor
OF the board. two board members and
two governors of reserve banks elected
annually by the governors themselves.
The reserve systems vast holdings
of Government securities now total
$2,430. 100000. The Policy Committee
can determine when these shall be
sold or when more securities shall be
bought. 1t thus hc,dS a powerful
ing the prices of the securities.
The omnibus banking bill also con-
tains amendments to the Federal De-
post Insurance Corp. act. As long
predicted, the administration proposed
that the maximum insurance protec-
tion for each depositor remain S5,000
The present law, if unchanged, would
increase that maximum July /.
Bankers who had been asking that
their liability for F. D. I. c. assess
ments be limited, attained this goal.
At present the law calls for an OBJ
ligatory stock subscription amounting
to ! per cent of total deposits, with
liability for repeated assessments
thereafter. The proposed law fixes a
maximum assessment of one-twelfth
of l per cent of total deposits.
Some large banks, however, had
complained against assessing total
deposits. instead of insured deposits,
on the ground that such assessments
represented a disproportionate bur-
den on them. The trainers of the law
apparently decided against this plea.
Reserve Agent to Go.
The Federal Reserve amendments
would abolish the post of Federal Re-
serve agent in each of the II dis
tricts, combining it with the COVER
norships. The Reserve board, as a
means of preventing credit expansion
or contraction which it might consider
harmful, would have power to change
reserve requirements.
Reserve Board members would have
to be well qualified by education and
experience to participate in the
formulation of national economic and
monetary policies"
Salaries of Reserve Board members
appointed in the future would be
increased from $4,000 to $4,000 with
compulsory retirement at 70 on $12 900
pension. Present members would be
eligible for retirement at 10.
The proposed legislation would give
the Reserve Board wide authority to
determine the eligibility of paper for
discount, both as to nature and the
Limit of maturity.
National banks would be permitted
to make loans on real estate on an
amortization basis for periods up to
20 years (the limit is now 5 years.
and up to rs per cent of the value
of the property Ohe limit is now so
per cent?.
Another proposal provides that di-
rectors of a reserve bank shall not
hold Office for more than six con-
secutive years, except governors and
vice governors. This was believed to
aim at having new blood" injected
frequently into the boards.
Chairman Steagall of the House
Banking Committee was expected to
introduce the omnibus bill today.
Meanwhile, Capitol Hill heard that
a bill expanding the capital of the
Home Owners Loan Corp. by ST.
250,000,000 has been written and Is
pending before the Presidents Execu-
tive Council. The word on the hill
was that it might be approved by the
council today.
Besides aid to home owners. it was
said, some of the new capital would
be used to help Federal savings and
loan associations.