The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-04-04

COQIIOl OF IlOLltg d44N bANOA1 an 49,
regulation of its volume and flow.
This he would do by creating a
central bank, to be known as the
Bank of the L. S. A., a single none
tary authority set up here in WASH
ington. which would issue all money
regulate its value. own outright or
control all banks. be the central de-
pository Of all bank reserves, and
be the sole fiscal agent Of the gov
ernment-quite a large order.
Nye Sponsors Bill
A bill for this purpose has been
introduced by Rep. Sweeney ID, o.,
and Senator Nye r.. N. d.. 1t
takes its place with several earlier
bills which have the same general
objective of centralzing monetary
and banking power in the govern
ment. but which do not go quite so
far nor possess some Of the very
novel aspects of this measure.
President Roosevelt opposes them
all and offers instead the bill pre-
pared by Mariner S. Eccles, COVER
nor Of the Federal Reserve Board,
which would revise the existing
Federal Reserve System into a COM
pact Unit that would operate like
a central bank. but still would leave
the banks in private hands under
strict supervision.
It may be safely predicted that
neither Father Coughlin's bill nor
any bill of its general nature will
get anywhere in the present Con-
gress. 1t can not be forecast that
the Eccles bill will get through as
it stands. though it is slated for
enactment in some form. Con-
servatives will join ranks with Ad-
ministration supporters against any,
thing like the Coughlin measure, |
and will seek to temper the Eccles
plan.
Eccles' Views Tempered
Gov. Eccles. it is known, would
have gone much further himself in
his bill, which at one time con-
templated purchase of stock in Fed
eral Reserve Banks, but other Ad-
ministratiOn advisers counSeled a
more gradual approach. They would
save something to meet the Cough
linites in the future. The times,
however, are moving the Admins
tration toward centralized money
and bank control
Father COughlin's bill would set
up a sort of soviet of finance. The
directorate of his proposed central
bank would consist of AZ members, /
one from each state. They would
be elected by popular vote, just like
Senators, to serve for u years after
preliminary staggered terms Of serv-
ice. and would draw the same sal
aries as Supreme Court justices.
$4,000 a year. BY law, they would
have to sit at least nine months of
the year in Washington.
The board of directors would
choose an executive committee of
seven from their number, with
governor and vice governor.
Would Buy Up Banks
The central bank would assume
/ control of the nations bank system,
first. by purchasing the stock Of all
Federal Reserve Banks and taking
/ them over as agents of the central
bank: second. by declaring all banks
/ to be engaged in interstate COM
merce and bringing them under
/ jurisdiction ard control of the gov
/ eminent and the central bank. Tie
! o,,,+-ol haul Ir-O,r1I 10 oy7orNOu-oroJ
\ to set up banks of its own where
there were not adequate banking
/ facilities.
The theory of banking, as it has
/ been known, would be changed en-
/ tirely under the COughlin plan
Banks would become mere deposit
/ tories of currency. The object is 10
! get away from check money and
deal in real money. No one has
explained exactly the mechanics of
/ operation, nor how lending policy
would be regulated.
The central bank is given blanket
/ powers to make all rules and regu-
/ latiOns.
Single Form of Currency
Each bank would be required TO
keep United States bank notes up
to 100 per cent of its demand de-
posts. and 5 per cent upon all time
deposits. which compares with re-
serves Of IS. 10 and per cent
against demand deposits. and per
4 cent against time deposits now re-
CURED of Federal Reserve member
banks.
To create the money required by
the banks. the central bank would
/ purchase bonds from the banks and
pay for them in United States bank
notes. which would be the sole cur
rency under the Coughlin plan.
The major function of the Bank
OF the U. s. A, beyond control Of
/ banking operations. would be to
maintain an equitable price level by
Stabilizing the purchasing power Of
Y money. After fixing an equitable
I price level. il would seek to main
tain this by regulating the amount
and flow of currency. This it would
90 by the progressive purchase of
f United states bonds and creation OF
/ 100 per cent reserves behind demand
/ deposits and. If necessary, by in
creaSing the money in circulation
through paying the extraordinary
and then the ordinary expenses Of
government by currency issue.
The bank would recommend to
! Congress the retirement, through
I taxation, OF SUCH excuses Of cur
rency as would oe necessary 10 keep
the price level from rising too high.
To help the central bank in
stabilizing prices the bill transfers to
it numerous government statistical
+ services.
Eccles Challenges Theory
The central bank also would as
sumo the functions now performed
by the Treasury, partly through its