Evening star., 1935-02-09
Glass Silent on Views of
Conservatives After
Plea for "ControI."
LEGISLATION DEEMED
VITAL FOR RECOVERY
Reserve Head, Speaking for New
Deal, Admits Aim to Regu-
late Money.
BY the Associated Press.

The lines for the debate over the
New Deals banking bill were forming
today as Mariner S. Eccles, governor
Of the Federal Reserve Board, went
on record with a declaration that
conscious control of the monetary
mechanism is necessary to business
stability.
The one-time Mormon missionary
and lumberjack. who rose to become
a leading business man and banker Of
the West. thus emerged today as a
chief advocate of the bill.
The measure. which his agency
helped the Treasury to draft, has been
interpreted as increasing Washing
tons control over the Nations credit
and money. Eccles, in a statement
late yesterday, upheld the proposed
legislation as necessary to accelerate
recovery.
From Senator Carter Glass of Vir-
ginia came this comment:
Mr.. Eccles may discuss his bill in
the newspapers as much as he pleases,
but We viii discuss and settle it in
Congress"
Glass Silent on Attitude.
The Virginian, a member Of the
Senate Banking Committee. is looked
to by conservatives to furnish the
leadership for their opposition to the
measure. He has not outlined his
position on the bill as yet. however.
Eccles declared yesterday that the
banking system had not been able
to stand up under the strain OF the
depression or to lend effective sup
port in the fight against it."
On the contrary" he said, "the
banking system has proved to be
an element of weakness in our
economic structure that has aggra-
waited and prolonged the worst phases
Of the depression and it still impedes
the rate Of recovery.
The fact that the banking system
has proved to be inadequate is to be
explained, in large part. by the fact
that our banking structure has
remained essentially unchanged
throughout an epoch of far-reaching
economic changes, both in this coun-
try and in the world at large"
Objectiyes Outlined.
He outlined two immediate OBJ
jectiveS" of the administration s
monetary policies:
Assuring that recovery does not
result in an undesirable imitation and
assuring that recovery is not fol-
lowed by a depression"
He expressed conviction that the
banking bill would serve to remedy
present difficulties wherein the Fed
eral Reserve Board. although re-
sponsible for developing and carry
ing out monetary policies, now lacks
clear-cut authority over them.
EccleS stressed what he considered
the relationship between the volume
of credit and money upon general
spending and, therefore. upon the
general economic condition. Control,
involving adequate support when
needed. he said, was necessary.
Advisory Status Held Weak.
He described the present system of
open market operations, through a
committee Of Reserve Bank governors
which may only recommend, as cum
bersome and unwieldly" 1t had, he
intimated. prevented the proper furlc-
tioning of the Reserve System.
1T is, therefore, obviously neces-
sary," he said, Ito concentrate the
authority and responsibility for OPEN
market operations in a body repre-
senting national point of view. This
is provided for in the proposed legisla-
ton without in any way impairing the
autonomy of the Federal Reserve
banks in matters of local or regional
concern"
The present arrangement for nam
ing Reserve Bank governors he termed
another anomoly," stressing their i'm
portance to the system and the fact
that the original reserve act made no
mention Of them.
1T is therefore proposed to recog-
nize the Office of governor in the law"
he said, ito combine this Office with
that Of chairman of the board and to
make the appointment subject to the
APPROVAL of the Federal Reserve Board" I"