Evening star., 1935-05-20
BUSINESS LEARNS
BANK BILL EVILS.
Recognizes Dangers of Po-
litiCaI Control of Credit
Facilities.
BY DAVID LAWRENCE.

American business has begun to
recognize the dangers of a central
bank to the credit operations of in
dustry.
Not only has the new president of
the Chamber of Commerce, Harper
Sibley, called upon Congress to reject
the pending bank bill, but business
leaders generally are pointing to the
proposed measure as likely to raise
considerable doubts about the pur-
poses of the National Government in
seeking to control the use of deposi-
tors money.
Typical Of these expressions is one
by Edward F. Hutton, chairman of
the board of General Foods Corp,
who says the banking bill concerns
business even more than 1t does the
bankers. He declares:
THE banking bill is not alone
political instrumentality affecting our
bankers, but every individual and
every corporation and every business.
large and small. All depositors' money
will be politically controlled, meaning
that the Government, if this bill be-
comes law, can control all the de-
positS in banks representing the thrift
and savings of the American people
Political Money.
Government, through a central
bank, can use these funds for any DO
litical purpose. In other words. it be-
comes political money, controlled by
the politicians. I believe also that a
politically controlled banking system
means the end of our two-party
system
1T is my judgment that the real
reason why the Government wishes to
exert an autocratic power over the
Federal Reserve System is because the
Government Is afraid it might find
itself in position of asking for
turther cooperation from our banks
in the purchase of Government Sc
curitles The banks already hold
about so per cent of Government OBJ
legations. These bonds represent de-
posltors' money and it may be that
this responsibility should not be fur
ther extended by our banking group.
The creation of central bank, there
1ore' is to dictate to our free institu-
tlons policies on which they should
really exercise an independent judg
ment''
Bankers Testify.
Testimony by leading bankers has
already been given before the Senate
subcommittee on Banking. Winthrop
AIdrlch. chairman of the Chase Ma
uonal Bank, expressed his opposition
last week. Today James H. Perkins.
chairman Of the National City Bank.
has come to testify in opposition to
the famous title of the bill. which
contains drastic changes in our whole
banking system.
The principal criticism is that forced
loans, such as started Germany's CEN
tral bank on the inf1ationary route in
1928 may be a part of the administra-
tion policy. In other words, banks
feel that if the Government is to take
full responsibility for the investment
of depositors' money, especially with
Federal deficits growing larger each
year, the public should not be unaware
of the meaning of the whole move
ment.
,4 The difficulty about the problem is
that the administration insists it will
not use drastic powers unless neces-
Sary, and yet the very existence of
1nf1ationary power or control over
banks makes business men hesitate
to make commitments and bankers
disinclined to make loans to business
In the face of uncertain conditions.
Discounted Idea Previously.
The suggestion Of Secretary Nor
genthau that all the stock of the
Federal Reserve Banks be bought by
the Government has been concurred
in by the President. and, while it Is
possible that the idea was advanced as
q threat to Offset banker opposition to
the pending bill, there are Senators
and Representatives who would like
to see such a provision attached and
will doubtless press for it. This pro-
gram is very much in line with the
argument Of Father CoughHn, who
has been insisting on central bank,
but with directors politically chosen
from 48 States.
Although for many months the ad-
ministration concealed its objective
and denied that any central bank
plans were in the making, the nation
aliZation Of banking and the control
by the Government has at last become
openly an integral part of the New
Deal.
Copyright. 1880