Evening Star Newspaper, April 26, 1932, Page 6

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Guaranteed better than any- thing you ever used or money back. Large package, 35¢ at all druggists. KLING 7 FIRMLY AND COMFORTABLY ONSTIPATED? Take NR—NATURE'S REMEDY —tonight. Your eliminative i st WALCOTT PRAISES GLASS BANK BILL Senator Predicts Improved Conditions as Result in Radio Forum. THE EVENING STAR, WASHINGTON, Lauds Banking Bill Improvement in banking and credit condms, reduction in the number ‘of bank faflures and a tendency toward greater stabilization “in the country's entire economic li were visioned as results to be expected from passage of the Glass bank bill by Senator Walcott, Republican, of Connecticut, speaking last night in the National Radio Forum, arranged by The Star and broadcast over a coast-to-coast network of the National Broadcasting Co. Outlining the provisions of the finan- clal reforms measure developed after two years' study by a Banking Sub- committee of the Senate, headed by Senator Glass, Democrat, of Virginia, Senator Walcott said that three prin- ciples are sought to be effected: First, to improve the actual man- agement of the banks; second, to hen the authority of the Federal Reserve System and, third, to facili- te and expedite payment to depos- itors at banks that are closed or will close in the future. Among the regulatory provisions of the measure, which has been intro- duced into the Senate, is that curbing use of bank funds for speculation. Banking Reform Needed. | Senator Walcott’s address follows: | “Need for banking reform, which may have been of interest to only a small number of people until recently, has been brought | home to the entire country so forcibly SENATOR WALCOTT. D. C, TUESDAY, APRIL 1932. DR, MARVIN SCORES| RULE BY MINORITY Speaks at Bicentennial Ban- quet of Mid-City Citizens’ Association. Striking impartially at violators of the eighteenth amendment, politics, in- stallment buying and the influence of organized minorities upon the will of the majority, Dr. Cloyd Heck Marvin, president of George Washington Uni- versity, drew a vividly contrasting pic- ture of present-day life, as against that advocated and practiced by the Na- tion's first President, at the Bicenten- nial banquet of the Mid-City Citizens'} Association last night. He held forth the ideal of personal character as the panacea that will lead the individual and the Nation out of | the throes of economic depression and away from the threat of “political chicanery,” and urged the rededication of the citizenry to the ideals of George Washington as a fitting tribute to him during the Bicentennial year. Raps Minority Rule. “The Nation today is dedicated to the god of privilege, to the rule of an organized minority that takes account | of nothing save its own selfish inter- ests,” he declared. “We think in terms | of blocs and not in terms of the will of | the majority. - | “To further their own ends, groups | within the labor movement are destroy- and have no charters as banks, have authority under the law to do many | things that the banks themselves are not permitted to do. In some cases | this has worked with no harm to any \ depends very largely on the quality of |ture is torn asunder by similar selfish ing organized labor today and agricul- their management. As a step toward |interests. Our whole social structure is improvement in management, or at |threatened by the brigandage of cit- least toward the elimination of bad, |izens who hold themselves above the dangerous or dishonest management, law, who arrogantly decree that they Wife Asks Divorce, Man Demands Pay For Work on Farm GRAPE MEN REBEL - AGAINST DRY LAW | California Vineyardists See Menace to, $300,000,000 Investments. By the Associated Press. JOPLIN, Mo., April 26.—Tollle ‘Wagner of Walnut Grove, Mo, admits there can be no recon- ciliation with his wife, but asks recognition of a $450 wage claim before agreeing to her suit for divorce. Mrs. Wagner, who lives at Carthage, filed suit for divorce, charging abuse_and non-support, The husband, in an amended answer, said his wife employed him a year as a hired man on By the Assoclated Press. her farm before their marriage | | SAN FRANCISCO, April 26.—The about 12 rln!;nm;iflxc- 4 bt | California Vineyardists' Association to- A $450 labor s at | | day raised the banner of revolt against the time of thelr marriage is al- | | Federal and State probibition enforce- leged to be unpaid. | ment laws, declared by resolution to be INDIAN BILL VETO ONLY $3.50 LOW-FARE meeting yesterday as they W - :mol their leader, Danald D. Conn, for revision of the eighteenth amendment. They then renewed Conn's contraet The immediate objective of port, which. was unanimously is a revision of the prohibition laws to | permit sale of naturally fermented beve erages under a “national liquor plan.” Charge Policy Reversed, Conn's report to the directors charged the Government had reversed its pro- hibition policies, and gave this as the reason for the recommendation the grape growers abandon their 12 years of :\m&ud support of prohibition as it now exists. Dispatches from Washington quoted | Federal officials as denying they "had | ever participated in the grape products program. | | ‘The greatest future for wireless lfes, | not in more or better broadcasting, al- though this may be important, but in the transmission of light and power. NEW YORK OUTINGS FARES SHOWN ARE ROUND TRIP The resolution was adopted by the Hoover Opposes Wording Be- BALTIMORE $1.25 EVERY Tickets good. SATURDAY ond SUNDAY oaly ia cosches on sil regular eims directors of the association in executive cause of Possible U. S. Burden. NEW YORK 33.50 INDAYS, May 15, 29 EY Lv. Washington *12.15, 750 o m *Coaches ready for occupency PHILADELPHIA $3.00 WILMINGTON 52.75 President Hoover vetoed a Senate bill yesterday on the ground that it RS et msfissun [ u'sloo Memonsi Ako Lv. Washington 7.15, 10.00 s. m. might throw unknown burdens of ex- penditure on the Government because of the insertion of the words “or other- $11.50 wé According to Hotel selected ATLANTIC CITY WEEK-EXD ALL-EXPENSE TOWR Lv. Washington 1.00 p. m. SATURDAYS May 7, 14, 21 wise” in the measure. The rejected act was a_comparatively minor one, as was the only other meas- ure vetoed by the Chief Executive dur- ing this session. It conferred jurisdic- NEW YORK IN ROUND.TRIP WEEK.END 45% REDUGTION G A\T pGINTS ON PENNSYLVANIA PALROAD Good going Fridey sitemoon sad Setwday, reterming wntil Mondey PHILADELPHIA in the last two years that no argument | one and has even been advantageous. is required to prove it. It is universally | Byt in many cases these corporations. admitted that it is one of the greatest | winping the confidence of investors by needs of the country. This recognition | the name of the banks with which they has come not only from the fact that | are connected, have been the agencies during the past decade one-third of | for gistributing securities that have not | our banks, or about 10,000, have had t0 | heen good or that have been priced far the bill proposes to give the Federal Reserve Board the power in extreme cases, after due warning and a hear- ing, to remove such officers or directors of banks as have persistently conducted its affairs in an unsafe manner. It is not expected that this provision will be have the ‘right’ to violate the eight- eenth amendment with impunity. “That law is the law, and as such is to be obeyed. No one has the right to | interpret ‘it but the United States Su- preme Court, | " “No nation can be great, no people tion upon the Court of Claims to set- tle the claims of certain Indian tribes living in the State of Oregon. Message Given in Full The President’s veto message follows in full: $9.00 $5.40 EXCURSION FARES midnight ATLANTIC CITY $8.10 $10.00 NEW YORK Tickets trains ing leave New Ye MAY 12 and 13 ;fln'ge- reguler waims leaving Weshington 5.00 p. . May 12, 13, Rewmi $12.00 NEW YORK One way vie Atiantic City aho ol or Atlantic City until midaight Mey 19. Additionsl, incleding ALL EXPENSE A1 ATLANTIC OTY, HOLDS PLATES | suspend payments and have tied up several billions of deposits for many millions of depositors and left many communities without any banking sert ice. It has also arisen from the popu- lar belief, which is certainly based on fact, that the banks have played a part | in fostering the boom and the wild | speculation which engulfed the entire | country and culminated in the crash | in the Autumn of 1929, from the efTects of which we have not yet recovered. “To avoid, in so far as this can be | done through legislative channels, th recurrence of such events a subcom- mittee of the Banking and Currency Committee of the United States Senate, under the chairmanship of Senator Carter Glass of Virginia, a co-author of the Federal Reserve act of 1913 and a former Secretary of the Treasury, has worked for nearly two years, and has finally introduced a bill that, it is hoped, will bring about salutary re- forms in our banking structure. In drafting this bill the committee has been handicapped by the fact that the banks of the country, working as they do in part under Federal law and in part under the laws of 48 States, have engaged for years in a competition in laxity, and that a law applicable only to national banks or to banks that are mempbers of the Federal Reserve system can always be evaded by giving up na- tional charters or membership in the Federal Reserve system. Fundamental banking reforms, therefore, cannot be | accomplished until all the banks in the country that receive deposits are placed under uniform national supervision. But this will take time. In the mean- while much can be accomplished within | the existing conditions greatly to im- prove the management of the banks | and to protect depositors and the coun- try in general from such misfortunes as they have suffered from the banks in the past 30 months. “To do this the committee proposes (1) to improve the actual management of the banks, (2) to strengthen the au- thority of the Federal Reserve system, and (3) to facilitate and expedite pay- ments to depositors at banks that are closed or will close in the future. Liquidating Corperation. “To start with the last point, provi sion is made in the bill for the estal lishment of a Federal liquidating cor- poration, which will make it possible for depositors of closed banks to recelve a part of their deposits much more promptly than is possible at present | under a receiver. The importance of this measure to the general public can- not be overestimated. When your bank closes and you suddenly find that the money on which you have counted for one pus or another suddenly be- comes unavailable, it is a serious matter. The bill establishes a corporation to which the United States Treasury, the Federal Reserve banks and member banks turn over a fund that will enable the corporation to convert into cash at least a part of the closed bank's good assets and to turn the funds over to the depositors. When the assets are finally liquidated by the sale of investments or through the collection of loans, the cor- ration will be reimbursed for its out- | f:y and the remainder will go to the bank's creditors, including its depositors. ‘The corporation’s money is, therefore, a revolving fund, and should be avail- able permanently. It will consist of $125,000,000 from the United States Treasury, about $65,000,000 from the Reserve banks and about the same amount from the member banks. In addition the corporation can issue about $500,000,000 of debentures, so that it will have ample funds to do the im- portant work for which it has been | created. The benefits of this corpora- | | tion apply only to banks that are mem- | bers of the Federal Reserve System. Non-mewber banks, however, can ob- | | all, that all such affiliates be | positors’ money, and can loan its own above their intrinsic value. Further- more, there have been cases where the affiliates have been used, through the medium of loans by the parent banks, for the purpose of investing the de- positors’ money in the kind of assets that the banks were not permitted to acquire. That is an evasion of the law and has caused many failures of banks and losses to,depositors. Reports and Examinations. “The proposed bill provides, first of ubject to reports and to examinations, so that the supervisory authorities may be in- formed as to the relationship between the affiliate and its parent bank, and | may prevent the development of eva- sions and abuses. In the second place, the bill definitely limits (to 10 per cent | of the banks' capital) the amount of | loans that a bank may make to its affiliates, so that it can loan in that W only its own money, not the de- | money only to a limited extent. In so | far as affiliates engaged primurily in | issuing or trading in securities are con- cerned, the bill provides that member banks in the course of three years must separate themselves from such affiliates. | The business of issuing, trading in and | marketing securities is very different | from the business of commercial bank- ing. It requires different types of men. 1t is clearly the part of wisdom to dis solve after a reasonable interval fo: arranging the business without dis. turbance the relationship between mem- ber banks, whase service should be pri- marily to finance current requirements , able speculative developments, the bill the District Playground Department, of trade and industry, from their secur- | contains a section that makes it abso- | and Mrs. E. K. Peeples, director of the ity affiliates, whose business has to do | primarily with the direction of the country’s savings through the sale of | bank just because that bank presents | Swannie Crofton and Ambrose Durkin. | securities into permanent capital in- vestments. 1t is believed that the pro- posed separation will greatly improve | the banking situation. Many banks are | undertaking it voluntarily, and the | others will have to fall in line under the provisions of the proposed law. “The bill deals also with the subject | of group banking, which has grown up | rapidly, owing in part to the strict | limitations imposed by our laws on | branch banking. Group banking means | that a holding company acquires the | controlling interest in a large number | of banks, which it then run more or | less as a system of branches, without the holding company being in any way | subject to supervision. These corpora- tions are created by State law, and are | not directly subject to regulation by | often used, but its very existence will | can survive, without holding true to the “I am returning herewith Senate | have a tendency to make bank man- agement toe the mark. “Related to the problem of specula- | tion is the practice which has grown up | for corporations and individuals to lend their funds, through banks, directly to | the stock market. In 1929 a large part | of the last phases of the speculative | boom was financed by loans not made by banks, but by non-banking lenders | through the banks. | effect of leaving a considerable part of | the credit in the market outside the supervision or regulation of banking authorities. It made the problem of re- | straining speculation much more diffi- cult. This practice is now prohibited by a rule of the New York Clearing | fundamental concept that certain great spiritual forces will finally dominate its destiny.” Dr. Marvin pointed to the meticulous care with which Washington kept his personal accounts, to his personal honesty and integrity, and to his rigid policy of applying those rules to the | conduct of national affairs, The question of representation in Columbia was urged by Harry King, president of the Washington Chamber of Commerce, in a brief speech. “While the Government of the Dis- bill 826, ‘an act conferring jurisdiction upon the Court of Claims to hear and determine claims of certain bands or tribes of Indians residing in the State of Oregon,’ without my approval, “The bill limits the claims which can be presented to those ‘arising under or growing out of any treaty, agree- ment, act of Congress, executive or- der,’ and then throws the door wide This had the bad | Congress for residents of the District of | open by adding ‘or otherwise.’ “I cannot assent to the proposition that the Government should be ob- ligated after 75 years to defend a suit for unknown claims of such trict is all that we can expect it to be,” } origin and for persons long since dead he said, “we must not lose sight of the | not based upon any treaty, agreement, fact that the members of the Senate |act of Congress, or executive order. CONSULT AGENTS $6.00 One Day with Lodging end 3 mesls $10.00 Two Deys with Lodging end 6 mesls ALLSTEEL EQUIPMENT | | PENNSYLVANIA RAILROAD | ancient | House. But this rule may be revoked |and House District Committees have at any time, and this bill proposes to | their own constituents back home to give it legal sanction | think about, and in serving them they | “In regard to the Federal Reserve |cannot give the people of Washington | system, the bill proposes to increase | the full consideration to which, as tax- the independence of the Federal Re- | payers, they are entitled. serve Board by removing the Secretary | of the Treasury from its membership | Other Speakers. and to assure its competence by requir- | “Qur only hope for relief lies in! ing that at least two of its members | having our own representatives in Con- | must have tested banking experlence. | gress, who can speak for us and bring Aside from that, the bill propoces to |to bear the pressure necessary to ob- | clarify the authority of the Federal Re- | tain for the District the consideration serve Board over any operations con- | it should have. It should be the duty cucted by the regional Reserve banksin | of all of us to work to this end and the so-called open market; that is, |to bring about the congressional rep- operations that are not in the nature of | resentation to which residents of the Opposes Unknown Burden. “I want full justice for our Indian wards, and would have no objection to | the presentation of claims arising un- der the treaties named in the bill, both | ratified and unratified treaties. “I am advised, however, that all funds promised to these Indians under the ratified treaties have been appro- prigted and paid, and that lands were set aside for, and occupled by, the In- dians who were parties to the unrati- fied treaties. I am further constrained to this action at a time when the Gov- ernment cannot assume additional d unknown burdens of expenditure. | loans to its member banks, and to in- | vest it with special supervisory powers | over all relations with foreign banks. “In order to strengthen the Federal | | Reserve system in coping, with undesir- | lutely clear that a Reserve bank is not | obliged to lend money to a member | paper that is eligible for discount under | District are entited.” | Brief talks were made by Judge Rob- ert E. Mattingly, George W. Offutt, president of the Washington Board of Trade; Miss Sybil Baker, director of Community Center Department. Entertainment was furnished by Miss | The banquet, which was held at the the law and is acceptable as a credit | Burlington Hotel, will become an an- risk. The Reserve bank may, and under | Aual affair, according to vote of the CHICAGO TRADE BODY | OPPOSES HIGH TARIFF| Asks for More Liberal Application of Principles of Pro- this section is required, to watch the general behavior of member banks, and | in passing on loan applicatigns to take into consideration whether the bank has been conducting a safe business in the service of its community, or whether it has engaged in undue expansion or in speculation in securities, commodi- ties or real estate. And if a bank con- tinuously engages in bad practices the Federal Reserve Board has authority after due notice and after granting the bank an opportunity for a hearing, to suspend the bank from the use of the credit facilities of the Federal Reserve system. In this way the Federal Re- serve banks and the Federal Reserve association. OFFICE STATUS CLEARED | Head of British Board of Trade Is | |Given Right to Place in Commons. 1 LONDON, April 26 (#).—The com- | edy which began last Thursday with | the discovery of Lord Hailsham, war | minister, that presidents of the British | Board of Trade were not technically | entitled to a seat in the House of | Commons, ended last evening when a | bill regulating the position became law. tectionism. | By the Associated Press. CHICAGO, April 26.—The Chicago Association of Commerce regards the existing high tariff as a serious ob- | stacle in the way of greater interna- tional trade and dispatched messages to Washington last night asking a more liberal application of the principles of ‘prmwuonflm |~ The business group, retreating some- what from its traditional advocacy of the high tariff, held the present tariff | pelicy responsible for loss of foreign markets and proposed legislation that facilitate reciprocal concessions on ‘ Star See Tomorrow’s for Details LANSBURGH’S 7th, 8th and E Sts.—NAtional 9800 the Federal Government, but in order | Board will be able to exert a powerful The_bill, introduced hurriedly when |tariff rates with other nations. No Connection With Any Other Washington Store to control their banks they must have | influence against the recurrence of |Lord Hailsham announced his discov- | Telegrams were sent to President the power to vote the stock of these | Sbeculative excesses among its member | ery, has been passed by both the Com- | Hoover, Secretary of Commerce La- banks. The bill proposes to reguire that any holding company before it is | permitted to vote the stock of a mem- ber bank must submit to certain regu- lations about reports and examinations about loans from its constituent banks | and aboyt the character of its own | assets. | “While thus undertaking to regulate group banking, the law proposes to in- crease the opportunities for branch banking by allowing a bank to estab- lish branches anywhere within the State in which the parent bank is located, | and in certain eases where it is clearly in the public interest even in another State, but not more than 50 miles from the head office. While State-wide branch banking is thus authorized, such branches can be established only with | the approval of the Federal Reserve Board. There will be no danger, there- fores of a disorganized scramble for branches. Branches will be authorized only when their establishment will ap- pear to be in the public interest. Good Management Essential. “The Senate committee fully realized that it is impossible by law to provide banks. “I firmly believe that the banking and credit conditions in this country will be greatly improved by the passage mons and House of Lords. | ‘The present president of the Board of Trade is Walter Runciman, who, | with his predecessors in office, would of this bill, the so-called Glass bill; ‘ha'.'c been liable to heavy penalties for that bank failures be reduced, and | occupying a seat in the House of Com- that it will exert an influence toward | mons contrary to an old statute passed greater stability in business and. em- |in the time of Queen Anne. ployment—in fact, in the country’s en- tire economic life.” . a poynd For details. Phone MEt. 0200 West End Laundry Byrd to Address Grange. FAIRFAX, Va, April 26 (Special) — Former Gov, Harry Flood Byrd will be | the guest of honor and chief speaker at the special meeting of Fairfax County Pomona Grange, in the Oakton | School Thursday night. L. Hummel, rural sociologist, also | will speak. The Quarterly business | meeting of the County Pomona Grange | will be held tonight at Oakton ! mont and Illinois Senators and Chi- cago Representatives by George W. Rossetter, president of the association organs will be funetioning prop- erly by morning and your con- stipation will end with a bowe! tain advances from the Reconstruction | 8ood management for all banks, and Finance Corporation, which has $200,- | that in the long run the safety and 000.000 for that purpose. | service of banks to their communities action as frce and easy as na- ture at her best—positively no pain, no griping. Try it. Mild, safe, purely vegetable— at druggists—only 25¢ FEEL LIKE A MILLION, TAKE for sour hearth BREAKING QUT ON CHILD'S ARMS Scratching Caused Eruptions. Healed by Cuticura, *My Jttle girl was troubled with bresking out on her arms. The pimples for the most part were com= posed of a hatd, white ccre, which was very sensitive to touch and left a small pit when removed. A few of them festered and when she scratched it caused eruptions. She wore sleeveless dresses om account | the banks “In order to improve the condition | | of member banks the proposed bill pro- vides certain safeguards about the character and amount of investments can make, limiting the amounts that they can invest if the | obligations of any one company, so that | they may not run the risk of having | all their eggs in one basket or of divert- ing too large a proportion of their funds into enterprises in which directors or other persons influential in the affairs of the bank may be interested. “A great evil that has developed in | been connected with affiliates, particu rlv so-called security affiliates, com panies organized to sell stocks and bonds in competition with private in- vestment banking houses. 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