Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1936-09-03

visor as he did for a quarter OF a
century.
There is a situation in the fed
eral government that threatens to
- be quite nasty. I
FTo0e refer to the row
G-Men that has devel-
oped between the
Department of Justice bureau of
investigation (the G-men) and the
Treasury's secret service corps. It
is all very much under cover, quite
secret, but the row has come to
the surface sufficiently to result in
a demotion of two longtime men,
berS of the secret service.
]. Edgar Hoover has been well
press-agented as chief of the Omen.
Joseph E. Murphy has had almost
no advertising as assistant chief of
the Treasury secret service in
which he has served for more than
a quarter of century. Mr.. Muir
ply and one of his subordinates
have been reduced in rank, their
record stained for life.
The two departments have kept
the facts well covered up. 1t seems
that something was going on among
the Omen that the Treasury secret
service thought they ought to know
about. They conducted their own
inquiry, their own investigation into
the other staff of Investigators. That
is as much as has been made public
except Secretary Morgenthau's an
nouncement of the demotion order.
I have known each of these men
equally twenty years. Each is en-
titled to the utmost respect. But
each operates along an entirely diff
ferent line-Hoover with some will
ingness for publicity; Murphy with
an absolute policy Of never letting
his name get into the papers. It
is unfortunate that Joe Murphy was
the goat.
The board of governors Of the
Federal Reserve system took an ac-
ton recently that
Action probably is quite
Mystifes naystifying to the
average person.
They ordered all of the banks of
the country which are members of
the Federal Reserve system to keep
deposit reserve with the Federal
Reserve banks Is per cent greater
than ever has been required before.
With the technical phases of re-
serve requirements and the me-
chanical operation of this particular
order, I think we need not be very
much concerned. But with the prin-
ciple upon which this action is TAX
en- I think every one with a bank
account, however small, ought to be
vitality interested. They ought to
be interested for the very simple
reason that this action illustrates
better than any words I can write
how far the Capitalization of control
of the banking structure has gone.
This action was taken under the
National Banking act of 1885, a
statute that has been frequently
criticised as a political banking
act"
In the instance I have just re-
ported, the change in the reserve
requirements probably will have no
serious reaction on us as individu-
ais. It probably will not hurt the
banks because few banks in the
country have had calls for loans
in any quantity since business is at
such low level. But the point is
that under this law, the Federal
Reserve board of governors can
alter banking conditions over night.
It can issue new rules and regula-
tons that are wholly impossible of
understanding by the average indi-
vidual, but which are almost riot
GUS in their effect upon the manage
ment of individual banks through
out the country.
To state this proposition in anoth-
er way, may I describe it in the
terms of a private business enter
prise. If a storekeeper in a small
town were subjected to regulation
from Washington and the regulatory
power in the federal government
had such discretionary authority as
the Federal Reserve board of gov
errors, could that storekeeper ever
feel that he was managing his own
business? think not. Then, in the
case of the Federal Reserve board
of governors, it must be added that
the president of the board is Marri-
ner S. Eccles who is known far and
wide for his radical ideas about
banking. 1t can be further said that
Mr.. Eccles has the ear of President
Roosevelt. This has been criticised
many times of course where oppo-
nents of the Roosevelt banking poll
cies have contended that the banks
can be utilized in any way the adj
ninistration desires to use them. AS
an illustration of this, the federal
government has been borrowing bill
lions. Most banks are chock full
of government securities. While !
do not say it has happened, yet be
cause I do not believe it has hap
pened yet, nevertheless there is
a possibility that government bor-
rowings can be forced on the banks
under such conditions. That is the
co,,ree of action that has ruined the