The Kennewick courier-reporter. [volume] (Kennewick, Wash.) 1914-1938, 1938-03-24
ECONOMIC HIGHL1GHTs

U
ECONOMIC HIGHLIGHTS
The current Congress, which has
set a new high in unproductiveness,
Is at last getting around to serious
business. It faces a congested cal
endar. plus the prospect of some Of
the most acrimonious debate in
years. Every major measure now in
prospect has enthusiastic partisans
and inflexible opponents, who are
prepared and eager for the most
rough-and-ready parliamentary bat
Ting.
Primest piece of legislation now
In the limelight is the House tax
bill, known as the Revenue Act Of
1888. In the form approved by the
House, this measure retains the
much-debated undistributed profits
tax in mitigated form, and Gre
ates new tax, called the third bas-
ket" levy, aimed at closely held en-
terprises. There is strong senti-
ment In the Senate for absolute re-
peal of the undistributed profits
tax, and practically no sentiment,
so far as anyone can see now, in ia
vor of third basket" tax. This
illustrates two of the points of the
bill which may be drastically over
hauled by the senate. Furthermore,
the House tax bill is largely predi-
Gated on two assumptions: (1) That
the 1899 deficit will be under ST.
000,0O0,000. and (2) that there will
be no loss In revenues. Those
seemed sound assumptions while
back-but not today. The stagger-
ing drop in business has apparent
ly made it certain that the deficit
will be far in excess Of 81 1000, OO0, 900
and also certain that treasury rev.
enues will be gravely under the es-
Inmates made even short time ago.
Business Week forecasts that the
Senate will get through its revision
Of the bill along in April. The pro-
posal will 60 into a House-Senate
conference. and what will happen
there Is In the laps of the gods.
About two weeks ago another bill
was introduced In congress which,
while It has not made the head
lines yet, is of very great import
ance. This Is the anti hank holding
company measure, which the Presi-
dent mentioned in press confer
ence in January. Oddly enough,
the author Of the bill Is a senator
who has often been one of the adj
ministration's most telling critics
Carter Glass, q leader Of the con-
sentative wing Of the Democratic
party, has long been opposed to
holding companies in the banking
field. And In this field his opin-
ions carry great weight In congress,
inamuch as he was Secretary Of
the Treasury under Wilson, and the
father Of the federal reserve system.
Five major provisions constitute
the Glass bill. AS summed up by
Newsweek, they would: (1) Prohibit
the formation Of any more bank
holding companies; (2) forbid ex-
1sting bank holding companies from
acquiring control Of more banks;
GAY restrain banks controlled by
holding companies from opening
new branches, making loans to af-
filiates, or purchasing securities
from affiliates; (4) subject bank
holding companies and their sub
sitiiaries to periodic investigation by
the Federal Deposit Insurance Cor
poration, with which they would
also have to file reports: (5) auth
ofize the FDIC to revoke govern
ment insurance on any bank violat-
ing any provision of the act.
Senator Glass states that about
so holding companies now control
sd banks possessing more than one
seventh Of all the bank assets Of
the nation, believes that his bill Is
essential if banking is not to be
concentrated in a few tremendously
powerful hands. Chance Of the bills
passage seem fairly good, though it
may be toned down in some partic--
u1ars. Many congressional conserv-
atives who oppose destruction OF
utility holding companies, for in
stance, because in this industry the
holding company system has made
definite contributions to efficiency
and economy of operation, can see
no good reason for a bank holding
company. On the other hand, it is
argued that bank holding COM
panies have at times prevented
bank failures by absorbing into
their big systems, weak individual
banks.
WATCH YOUR CHECKS
It will probably surprise the av-
eraQe KenneWick citizen to learn