The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1935-05-10
BANKING BILL
FACES FIGHT
IN SENATE
Internatio News Service


The Administrations banking
bill, which puts the vast Federal
Reserve System under Government
control. faced vigorous onslaught
in the Senate today after passing
the House by a vote of 271 to 10.
Foes of the measure looked to
Senator Carter Glass CD of Vir-
ginia, leading critic Of the Ad,
ministration's money policies. to
halt the bill which drastically re.
vises the Federal Reserve law, of
which he is coauthor.
The measure-described by many
as the most important banking
law since passage of the original
Federal Reserve law in the Wilson
administrations said by experts
to take long step toward estab
fishing a central banking system
Test of Strength
The Senate battle may be a
test of strength between youthful
Gov. Mariner Eccles, of the Fed
eral Reserve Board, and elderly
Senator Glass. Mr.. Eccles is the
chief sponsor of the measure.
House opponents of the meas
ure contend that it reverses the
policy adopted when the Federal
Reserve Act was passed. The pol
icy in that act, they say, was de-
centralized, private banking con-
troll.
The Administrations bill puts
virtual control over the nations
credit and banks in the hands of
the Federal Reserve Board of
eight members.
The bill permits the President
to remove the governor of the
Federal Reserve Board at will,
gives the Federal Reserve Board
power over open market opera
tons of the IL reserve banks and
permits it to raise or lower reserve
requirements of member banks by
a majority of a quorum.
Steagall Defends 1t
Thus, say foes, the Federal Re
serve Board can compel the Fed
eral Reserve banks to use all their
resources to buy or sell Govern
ment bonds and other obligations,
can create initiation or deflation,
and, will. other powers can con-
troll the nations financial destiny.
Chairman Steagall CD Of Ala
bama, of the House Banking Com
mittee, however, says the bill sub
stitutes Government control for
banker control.
He predicts the Federal Reserve
Board will become the supreme
court of finance. 1T will be politi-
cal insofar as the Government is
political, he says.
The policy laid down for the re-
serve board in the bill is that it
shall use it's vast powers to pro-
mote business stability and stabil-
ize trade, production, prices and
employment.
Deposit Insurance
The bill also makes permanent
the present $4,000 limit on Fed
eraI deposit insurance. 1t relieves
State banks of the present require
ment in the law that they join
the Federal Reserve System in
order to retain deposit insurance.
Double liability on stocks of
national banks issued before June
16, 1888, is eliminated by July l.,
1887. Authority of the Federal
Reserve Board to limit interest
paid on deposits by member banks
is expanded.
An assessment of one-eighth of
/ per cent on deposits of banks
each year is fixed for the Fed
eral Deposit Insurance Corpora
ton. Banks must pay on all de-
posits, even though the insurance
limit is $4,000.
The House rejected the Colds
borough commodity dolla r"
amendment, which directed the
Federal Reserve Board to use it's
power to reach the average 1921
1929 price level, and then to base
u.