Evening star., 1935-05-17
Believes Government Should
Own All Federal Re-
serve Stocks.
FAVORS PRINCIPLES OF
OMNIBUS BANKING BILL
Refuses to Define Imitation or
Sound Money to Questions Asked
at Senate Hearing.
Nv tha Associated Press.

BY the Associated Press.
Rigid Federal control OF credit and
currency through a strong board pat
termed along the lines OF the supreme
Court was advocated today by Secre-
tary Morgenthau.
In addition, he told the Senate
Banking Subcommittee that ne pc
longed to that school OF thought
which believes the Government should
own all the stock of the Federal Re
serve banks"
Repeated questions were asked as 10
the Secretary's views on money ana
imitation by members of the Senate
subcommittee holding hearings on the
omnibus banking bill, but Morgenthau
either replied that he was mot very
good money theorist" or that the ques-
tions dealt with pending legislation.
"The President put me in as an
administrator, not as money
theorist," he said at one point.
Appearing at the request OF Senator
Glass, Democrat. of Virginia, chair
man of the subcommittee, the Secre-
tary declared he favored the prin-
ciples of" the part of the omnibus
banking bill giving the Federal Re-
serve Board exclusive authority to
conduct open market operations, by
which credit is controlled.
But he went even farther by adding
that he wanted a board divorced en-
tirely from political control.
"I would like to see that authority
concentrated in an independent
agency" the Secretary told the COM
mittee, speaking in such a low voice
that members and reporters as well
had to strain their ears to hear him.
independent of the President,
too?" Senator Bulkley, Democrat, OF
Ohio asked.
"Only that we have the appointive
power" Morgenthau replied:
Like Supreme Court.
Like the Supreme Court?" Glass
interjected.
Right" said the Secretary.
Previously he had testified that he
had gotten along extremely well''
with the Federal Reserve Boards
Open Market Committee, although
there had been times when he thought
1t should have shown "a little more
courage" and invested in longer-term
securities.
Glass asked Morgenthau whether
he had "any substantive reason to
suppose that the proposed Open Mar
ket Committee, composed entirely Of
Federal Reserve Board members.
would operate more efficiently than
the one now established by statute" I"
The present board is selected by gov
ernors of the Reserve districts, with
its action subject to the Reserve
Boards approval.
Morgenthau hedged. commenting
that "these various instruments OF
credit I believe should all be CEN
tered in one place. They should all
be centered in Government author
ity."
After repeated efforts to get the
Secretary to reply, Glass observed:
"You didn't answer my question,
but you answered it sufficiently for
me to conjecture what your real judg-
ment was"
Concentration Urged.
Morgenthau grinned, then laughed,
and members of the committee
laughed with him as they recalled
that Gov. Mariner S. Eccles Of the
Federal Reserve Board had advocated
In the bill the concentration of the
credit control authority in the Re-
serve Board.
Morgenthau refused to define in
hation or sound money for Senator
McAdoo, Democrat, Of California, a
former Secretary of the Treasury.
He said the fact that the bonus bill
was pending before the President pre-
vented him from talking on that sub
ject.
He also pleaded he was not a
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