The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-07-05
TO
BANKING CARS
IRK ROOSEVELT
President Orders Joker in
Senate Measure Be
OeIeted.
BY THOMAS STOKES
Times special Writer

Tunes special Writer
WASHINGTON. July 5.-Admin-
isfration leaders. upon instructions
from the President. vlu seek 70 de-
lete from the Senate banking bill a
Joker which would permit J. p
Morgan * Co. and other big banks
to engage again III the underwrlt-
ing ~ securities.
This provision. one OF several sur
prise iu the Senate measure. has
been the subject Of several confer
ences participated IN by Mr
Roosevelt. Treasury Secretary
Henry MorEeuthau. Governor Mar
riucr EcCies 81 tho Federal Reserve
Board and Chairman Joseph p.
Kennedy of the Securities and TX
change Commission. 10 vas learned
TODAY
r. VIII become a matter Of ContrO-
ver7y when the Dill goes before tho
Senate next week.
Fear Opening Wedge
This concession. the Administra-
ton leaders feel. would be an open
Ing wedge Tor a return 10 conditions
which The 1888 banking act sought
10 meet by dIvorcing investment af-
hiiates from commercial banks. The
act was responsible for Morgan &
Co among numerous others. with
drawing from the investment field
Mr. Roosevelt and Governor &c
Cics are reported TO feel strongly
about the new provision. even
though Do is surrounded by numcr-
Gus restrictions and, as a practical
matter. might be imperative as
written.
IT. 81 provided that a bank could
uudcrwrte no more than 20 per
cent u0r more than 100000. which
ever is the larger amount. OF am
one issue. nor could its underwrir-
ing engagements with respect 10 the
obligations OF any one tSsuer ex-
coed ar any time 10 per cent of its
capital stock and 10 per cent Of its
surplus The total OF underwriting
engagements could not az any one
time exceed 200 per cent OF capital
stock and 200 pr cent OF surplus.
Exemption Is Removed
when the subcommittee headed
bv Senator Carter Glass ID. Va.
which rcWrofe the House DILL. re-
ported i'y draft 70 the fun banking
committee 10 provided exempt ION
from the securities act. This. n was
reported. provoked a quick COM
plants from Chairman Kennedy.
The full committee removed this ex-
empuou.
Without the exemption. n was
suggested today. bankers probably
would not undertake any underWTi.-
inc. since the directors end officers
could be held liable. J. 2. T. OCon-
nor. Controller Of the Currency.
d. IT. was reported has said he would
permit no underwriting by national
banks The bill gives him authority
90 make regulations involving ma
tionaI banks
Though the provision might thus
be- largely nullifed the Administra-
tiCl is reported unwilling TO risk the
chance that the law might be cir
cumycut. or that it would offer A
wedge for further concessions later.
No Frontal Attack Ordered
There was some mystery today
as 20 how the concession 70 big
bankers found It's way into The sub
committee bill. Morgan & Co. was
reported keeulv interested The first
news leak on it was IN New York.
George l.. Harrison. governor 81
the New York Federal Reserve Bank.
was reported IN some quarters mere.
but without confirmation. 10 have
. been instrumental in having u in
serted I'M the subcommittee bill
Beyond the fight over this pro-
vision Do was indicated TODAY that
the Administration. despite its dis
satisfaction with several features OF
the senate bill. would not order a
frontal attack In the Senate. but
would depend upon the later con-
ference between House and Senate
20 restore as much as possible Of
the measure which passed the House.