Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-05-26

ment Of which that body shall exercise
these powers. I do not wish to be
dogmatic about how this body shall
be constituted. I have recommended
placing responsibility for the exercise
of these powers in the Federal Reserve
Board, which was established by law
to serve the best interests Of the
Nation in banking and monetary mat
tiers. However, there are powerful
groups which are irreconcilably op-
posed to this plan. Certain private
interests, which cannot escape q share
of the responsibility for the banking
collapse, wish to perpetuate the pres
ent unsatisfactory situation in which
these powers cannot be effectively
exercised.
This attitude is by no means char
acteristic of all of the bankers of the
country. In all fairness, wish to
emphasize that In discussing this Is
sue most Of the leaders of the Amer
lean Bankers Association have adopted
a constructive and cooperative atti-
tude. This is in sharp contrast with
the attitude of a few bankers and
business leaders, particularly in New
York. Many Of the bankers have
frankly recognized the need and i'm
portance of the major changes pro-
posed in the banking bill and have
accepted them in principle.
With these bankers the issue over
the banking bill narrows down largely
to a question Of the composition of
the controlling body. Thus, the Amer
lean Bankers Association proposes
that the exercise Of monetary powers
shall be entrusted TO q committee con.
sisting of the Federal Reserve Board.
which shall be reduced to five men,
bers, and committee OF four gov
errors selected by the governors Of
the II Federal Reserve banks. This
plan would give the governors OF the
Federal Reserve banks, who are Sc
lected by directors, two-thirds Of whom
are appointed by private bankers, four
votes as against five votes for mem
bers of the Federal Reserve Board.
Regional Plan Outlined.
There has been considerable sup
port for another proposal which would
entrust the powers OF determining
monetary policy to q committee con-
sisting of the Federal Reserve Board
of eight members, rs now constituted,
together with i've governors of the
Federal Reserve banks. These gov
errors would be selected with refer
ence TO fair representation Of the
different regions Of the country, one
member to represent the Eastern Fed.
eral reserve district; one, the Middle
West; one, the South; one, the Far
West and one to be selected at large
1t is not for me to determine in
whom these powers shall be vested.
My recommendation was that they be
vested in the Federal Reserve Board,
with committee Of five governors
acting in an advisory capacity.
have just mentioned two other pro-
posals. 1t is for the representatives
of the people Of the United States in
Congress to determine whether they
want to give these powers to a po-
litical body, to an independent public
body. to private interests or to q COM
bination OF the three. The one prin-
ciple on which feel there can be no
reasonable ground for disagreement is
that the powers must be vested in .
clearly defined body which will have
adequate authority and full and I'M
escapable responsibility for the use of
these important powers.
AS I have said, the purpose Of the
bill Is not to create new powers, but
to place them In . responsible body
where they may be effectively exer-
cised. Against this proposal the cry
of political control has been raised.
This is not a new cry. It was raised
against the original Federal Reserve
act more than 20 years ago. 1t was
raised by about the same interests
which are now resisting the passage
Of this bill-the same interests that
have repeatedly been against all pro-
gressive social and economic legisla-
ton, such as the income tax, even
when it was proposed to make 1t as
low as 2 per cent; against child labor
legislation, against the Federal Trade
Commission and the Federal Power
Commission, the Securities Exchange