The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-05-20
KEEN INTEREST
SHOWN IN PLAN
OF MORGENTHAU
Proposal That u. S. Own
Reserve Bank Stock
Is Considered.
BY THOMAS l.. STOKES
Times special Writer

WASHINGTON. MAY 20.-The
suggestion Of Henry Morzenthau
Jr.. Secretary Of the Treasury, that
the government should own the
stock OF the Federal Reserve banks
created keen interestest here today
As An indication OF how far The Ad-
ministration viii 20 toward a real
central banking system.
II would solve a great many ques-
tons Il tho government did own the
stock. President Roosevelt said when
asked for comment on Mr. MOrgen-
thaus suggestion, made Al Sen
ate Banking Committee hearing on
the Administration banking bill.
The proposal would embody own
eTshlp 81 stock IN the y Regional
Reserve banks. which are the core
Of The reserve system. The stock is
now owned largely by the private
member banks in each area. in pro
portion 10 their size. Purchase ri
stock in the 6442 member banks Of
the Reserve system Is not involved
IN the Morgenthau suggestion.
Board Would Have More Control
II the government owned the
stock of the regional banks. or even
held D. IN trust-suggeste as an al
ternatIve-thcv would be real gov
eminent banks. The Federal Re
serve Board would have more con-
troll than 10 now exercises. as tho
influence Of private bankers would
30 r.
Capitalization step farther than
the pending bill proposes.
In throwing out this idea the
Secretary OF the Treasury was max
ing. whether Intentionally or not.
gesture toward those such As
Father Couglin-who would create
a real central bank At he same
time he was disclosing the real in
tenuons Of the Administration.
The Coughlin plan. as embodied
in bills introduced BY Senator Ger
aid Nve r.. N. d. and Rep Mar
tin Sweeney ID. o.. calls for pur-
chase OF the stock OF all Federal
Reserve member banks So docs
Dill for Senator Elmer Thomas ID.
Okla. which. however. would not
abolish the present Federal Reserve
system. as the other measures pro-
pose. but would make it a complete
~ foderalized system.
Father Coughlin would set up a
new cenaral bank. would absorb all
Federal Reserve banks. and would
bring all other private banks under
control OF the government by de-
claring them agents Of interstate
commerce.
Provision Is Eliminated
Governor Mariner s. EccleS of
the Federal Reserve Board. in the
first draft of the banking bill. pro-
vided for purchase of stock in the
u Federal Reserve banks. but this
provision was eliminated before the
measure was submitted % Con-
gress.
No such authorization was in
Cluded by the House when It passed
the bill. and it Is doubtful If one viii
be inserted by the Senate. But the
ITO hau suggestion indicates the
thought in the Admins
AfI ItdAN StlbiiE Ntllll o.
banSing system al all times under
control of the government. and
forecasts a movement IN this di-
rection in future banking legisla-
ton
His testimony also diSpelled any
suspicion that he was not prepared
to 60 as far as Mr.. Eccles. He went
a step farther than Mr.. Eccles has
gone publicly
When Mr.. Eccles appeared be-
fore the Senate committee he said
Father CouehlinS proposed central
bank was not practicable" In ref
erence to purchase Of stock in re-
serve member banks. he said the
ownership Of stock was not a vital
matter.
1T seems to me that those
charged with management are more
important than those vino own the
stock" he added