Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-08-25
BANK CHIEFS HAIL
BASIC SOUNDNESS
OF 1885 MEASURE
A. B. A. Committee Pleased
That Extreme Proposals
Were Avoided.
FLEMING is PRAISED
FOR INTENSIVE EFFORTS
Capital Financier Takes Leading
Part in Gaining Revision
of Original Bill.
BY EDWARD C. STONE.

BY EDWARD C. STONE.
In speaking for the special commit
tee of the American Bankers Asso-
citation on the banking act of 1885,
Robert v. Fleming, president of Riggs
National Bank, expressed the opinion
yesterday that ION the whole the new
banking act Is an acceptable piece
Of legislation" The Washington
banker added that although many
extreme measures pertaining to bank
Ing were introduced during the ses-
sion, none threatening serious danger
to sound banking prevailed. Further
rejecting the special committees
views. Mr.. Fleming said:
Title of the bill as enacted af-
fords a practical plan Of operation for
the Federal Deposit Insurance Corp,
and the assessment of one-twelfth of
! per cent is as low as seemed practic-
able at this time. While some of the
provisions Of titles and 3 will not be
entirely satisfactory to various groups
Of our members, it must be borne in
mind that legislation Of this sort Is
inevitably the result of compromises
and adjustments, but We feel that
the new law Is basically sound and
merits confidence on the part Of the
banks.
However, it must be remembered
that in a number OF sections OF the
act provision is made for rules and
regulations to be hereafter formulated
by the Federal Reserve Board, the
controller OF the currency and the
Federal Deposit Insurance Corp OBJ
viously until such regulations are is
sued, the full import Of this law and
It's effect upon bank operations can
not be definitely known. The associa-
ton will follow this phase of the
matter closely"
Fleming Lauded by Bankers.
Mr.. Fleming was being praised yes
terday by his associates for the ex-
ceptional amount of hard work he put
into the committees efforts in oppo-
sition to certain phases Of the original
bill. As resident Of the Capital. he
was called upon to give the matter an
q period Of many months. The other
members Of the committee were Presi-
dent r. s. Hecht Of the A. 3. A.;
Second Vice President Tom K. Smith,
st. Louis; Winthrop w. Aldrich.
chairman of the Chase National
Bank, New York, and Ronald Ran
som, Atlanta, who is chairman Of the
associations Committee on Federal
Legislation.
Gov. Mariner S. Eccles of the Fed
fral Reserve Board, when asked for his
views on the banking bill, said he was
very well satisfied" He got onto the
bandwagon yesterday with Senator
Carter Glass, his bitterest opponent
while the measure was pending in
Congress, and Representative Stea-
gall, chairman Of the House Bank
ing Committee. and highly COM
mended the act as signed by Presi-
dent Roosevelt.
Gov. Eccles declared that the bill
marks an important advance in the
development Of the country's banking
system and the adaptation Of none
tary administration to present-day
conditions and national needs. Con-
sidering the detectives and purposes
Of the legislation as originally pro-
posed and finally enacted, am well
satisfied with the outcome"
New Law You'd Control Credit.
The comprSanlBe measure is vital
to business generally because it aims
to center control over the lifeblood
Of business-credit-in the Federal
Government. Beginning next Febru-
airy control over the Federal Reserve
System will be vested In q board of
governors Of seven members appointed
by the President. The board will
have the power to increase present
reserve requirements to as much as
twice existing levels and also have
control Of rediscount rates of member
banks.
Together with representa- tives of five
Federal Reserve banks the board will
function as committee to regulate
open-market purchases Of Govern
ment securities by the Reserve banks.
These three factors have most impor-
tant bearing In the expansion and
contraction of the Nations credit and
were the most controversial points
while the bill was before Congress.
The measure also provides for the
continuation Of the present tempo
rary insurance Of bank deposits on
= permanent basis at "a of / per
cent rate cost to the banks and
requires Inat ali State banks with
o capitalization Of 81 900 900 or more
join the Federal Reserve System by
July 1, 1912.
National banks are permitted to
make real estate loans running for
i've years up to so per cent of the
appraised value Of the real estate
and loans Of so per cent for 10 years
on mortgages which provide for q 40
Der cent amortization within the same
length Of time. Reserve banks are
given new credit expansion provisions.
To the banking fraternity both in
Washington and elsewhere the bill Is
considered the most important meas
ure passed at this session because Of
its direct bearing on their own bust
ness.