Evening star., 1945-03-10

OF the general Io"ei n"ehe''
purpose, but the agreement is II
danger nevertheless.
Some of the country's larges
bankers, speaking through thu
American Bankers Association, arr
proposing that the agreement b'
changed in a number of ways. Since
any such changes would have to b'
accepted by all the A countries ans
since each of the governments woulc
be free to follow our example ant
offer further notifications, which il
turn would have to be considered
by all countries and accepted or re-
jected, the process of getting TO-
gether might become endless. There
are those who believe that some o.
the bankers, at least, are not un'
mindful of all this. The same
process was used in the Senate tt
prevent our adherence to the
League of Nations.
Raises Question.
This brings up the question ol
whether Congress should look to the
bankers for wisdom on this subject
It is hard to recall any improve
ment in the American banking sys-
tenn which was not opposed by the
country's important bankers when
first proposed. Even the Fedora.
Reserve System met with vigorous
opposition. Nelson Aldrich, a great
name in financial circles back in
to l1ncpt
business and to produce the evil
results it was projected to cure" H
Barton Hepburn of Chase National
said the bill 'as it stands would
sound the death knell of the ma
tional banks"
An editorial in the American
Banker called the measure 'uncon-
stitutional, socialistic and revolu-
tionary."
Following the banking collapse
of 1888, one of the steps taken by
Congress to strengthen our financial
system was the separation of invest
ment banking from commercial
banking. The effect has been bene-
fetal, but the legislation was op-
posed by men like w c. Potter, head
of the Guaranty Trust Co., who
called the proposal "the most dis
astrous I have ever heard" His
fears were shared by the great j, P
Morgan, who predicted that the
legislation would cripple the under
writing business.
One of the greatest measures ever
enacted by Congress for the benefit
of depositors-and bankers-waS the
Federal Deposit Insurance Act. Yet
here is what Francis H. Sisson, vice
president of the American Bankers
Association, said in a telegram to
members of the association in 1888
"The American Bankers Associa-
ton fights to the last ditch against
the guaranty provision of the Glass
Steagal bill as unseund, unscientifc,
unjust and dangerous"
In a telegram to President Roose-
velt the association declared that
putting into effect the deposit in
surance provisions would involve
genuine and serious danger"
F0ugnt securities ACT.
That same year the Nations big
bankers lined up in the same way
against the Securities Act. The bill
was condemned as a measure which
would hinder legitimate business
without accomplishing any essential
purpose" Leonard P. Ayres, vice
president, Cleveland Trust Co.
blamed the act "as an important
factor in contributing to the STOP
page of the flow of new capital into
enterprise"
The Banking Act of 1885 >increas-
ing the authority of the Fedora
Reserve Board over the policies Of
member banks seems to have work
ed out pretty well, but at the time
of its passage James ]. Warburg, vict
chairman of the Bank of Manhat.
tan, suffered an acute case of jitters
He testified as follows: 'I shall con.
fine myself to a discussion of Title
2 which deals with the proposed
amendments to the Federal Reserve
Act. I shall do this for the same
reason that if some one were to say
to me, I am going to do three
things to you: Buy you a dinner
buy you a drink and cut youl
throat I would not waste much
time choosing my drink or ordering