Questionnaire on Banking Reform

QUESTIONNAIRE
on
BANKING REFORM

Will the President care to go over this now?
1 Questionnaire on Banking Reform Sent to a Number of Economists who have Given Particular Attention to the Scientific Study of Monetary and Banking Problems.
A. Questions Asked . . . . . . . . . . . . pp. 1B.
General Summary of All Replies . . 2C.
Summary of Individual Replies . . . 3--6
APPENDIX The Replies . . . . . . . . . . . . . . . . . . . . . . 1-26A.

QUESTIONS ASKED.
I Do you believe that our banking system should be revised so as to grant to some agency or agencies, with or without further limitations, the more important functions assigned to the National Reserve Association, i. e. (1) to hold reserves of banks so as to mobilize funds where needed; (2) to extend credit to banks by rediscount; (3) to issue an asset currency; (4) to act as a depository of government funds; and (5) to regulate the foreign exchanges?
II Do you believe that the plan of organization and government of the National Reserve Association (including district and local associations) is in the main well adapted to an institution with such functions, and reasonably immune from the danger of selfish exploitation by special interests?III If you are opposed to any fundamental feature of the National Monetary Commission's plan, state your objections and suggest such amendments as would remedy the defects you point out (1) as to functions (2) as to organization and control?

IV Would a plan for the division of the country into districts, and the creating in each district of an independent Reserve Association with functions similar to those assigned to the National Reserve Association meet with your approval?

V Should the capital necessary to make effective the plan outlined under either (I) or (IV) be provided by banks exclusively, by banks and the public, by the public exclusively, or in some other way?

Remarks
:B. GENERAL SUMMARY OF ALL REPLIES.
Question I.
Yes, unanimously.

Question II.
A substantial agreement that a larger measure of non–banking control, secured either by more government representatives or otherwise, is desirable.

Question III
(a)As regards fundamentals there is essential agreement in favor of the functions assigned; as regards important details, however, many believe that the plan can be greatly improved. (b) A substantial agreement in favor of a larger element of non–banking control.

QuestionIV.
Substantial agreement that such a plan would be undesirable if such district associations are to be absolutely independent.QuestionV.
General agreement that matter is not of great importance so long as there is effective government control.

C. SUMMARY OF INDIVIDUAL REPLIES.(The number following eachname refers to the pages ofthis report on which thecomplete reply will be found.)NameQ. IQ. IIQ. IIIQ. IVQ. VAgger, L. E. Columbia U. 1-2Yes. Yes.Central assoc to deal also with public.Yes, with machinery for cooperationMostly by public Barnett, G. E. J. Hopkins U. 3-4Yes. Asset currency should be severely limitedYes. Directors & officers should be appointed by the President.

In substantial agreement
No
Immaterial

Barrett, DC Haverford C. 4a-4bYes
In main well adapted. Not reasonably immune from danger of selfish exploitationFavors plan outlined in Q.
IV.Step in rig
ht direction; not so effective, but centralization can be effected later if desirable. Directors chosen by non-banking interests.
Banks and public.

Breckenridge, RM
Authority on Canadian banking.
No reply
No reply
No reply
No reply
No reply

Clark, WE. College of City of NY.do.do.do.do.do.

Dewey, DRMITdo.do.do.do.do.Droppers,

G. Williams
C. 5-8
Yes. Objects to “asset currency”. Notes should be based on cash & liquid assets
An inferential No, mingled with some Yes.
Plan is cumbersome. Method of appointing Governor bad. Should not be owned by banks.
Not answered. An inferential No.
By public
Fairchild, F. Yale U. 11
Yes
Yes as to functions; no as to selfish exploitationProbablyInclined to think banks Control not given entirely with ownership

Fisher, Willard. Formerly of Wesleyan Univ. 12Yes
In main well adapted, but not free from danger of selfish exploitationA larger measure of non-banking control desirable.
Not if the districts are to be entirely independent.Banks & public Public control

Glasson, W. H. Trinity C., N.C.
13-14
Yes
In main satisfactory. Favors stronger government control.Government to appoint in addition 3 economists. Governor to be removable by President. Directors to be chosen differently.
Yes, as a substitute for the N.R.
A. if latter cannot be secured. By banks.

Goodhue, W. H. Colgate U.
15-17
Yes, without further limitations.
Yes, Kemmerer’s views followed.
Stock voting disapproved, directors in part to be chosen by Government.
No. Makeshift. Must have nation wide cooperation.By banks.

Holdsworth, J.T. Univ. of Pittsburg.
17a
Yes.
Yes.
Not opposed.
Yes, if N.R.
A. cannot be secured. Would help discount market, & cooperation of banks. Might not prevent struggle between districts for reserves.
By banks exclusively.

Hollander, J.H. J. Hopkins U.
18
Yes
Yes. Concessions should be made to existing rights & prejudicesNot answered. Inferentially opposed.Not answered.Johnson,

J.F. NY. Univ.
Yes
In main well adapted, but not free from suspicionNot able to answer. Probably No.
Not vital. By public exclusively.

Kemmerer, E. W. Princeton U.
19
Yes.
No
All non-banking directors, of which there should be a good number, to be appointed by government. One bank one vote, regardless of size. Smaller directorate.
No, unless there is a reasonably strong central body. Otherwise it would mean control, under cover by the N.Y. district.
By banks exclusively, provided there is effective government control.

Kinley, D. Univ. Ill.
Asks to be excused.. . .. . .. . .. . .

Meeker, Royal Princeton U. 22
Yes.
Needlessly clumsy. Not free from suspicion.
A simpler method of chosing directors. A larger governmental control.
Yes, if a central agency be impossible.
By banks.

Laughlin, J. L. Univ. Chicago
19a-20
Replied saying that no satisfactory answers were possible.

McCrea, R. C. Univ. Pa.
21
Yes
Plan of organization should be more democratic.Might succeed. Considerable concentration needed.By banks & public.

Scott, WA Univ. Wisconsin.
23-24
Yes
Plan is cumbersome & can be much improved.
Defective in important provisions. See letter.
Entirely feasible.
By banks. Public would not buy stock limited to 5% dividends.

Sprague, OMW Harvard U.
25
Yes, but credit extension and note issue should be more definitely limited.
Yes. Not approved by people. Plan should be changed so as to give more government influence.
Opposed to certain features. See letter.
No, if strictly independent. Management less efficient. Different discount rates an advantage.
Not important. Any plan satisfactory to public should be adopted.

Taylor, F. M. *Univ. Mich.
Yes
Yes
Not answered
No opinion
By banks

Whittaker, AC Stanford U. 26
Yes
Yes
Legal definition of commercial paper needs more careful statement. Favors direct election of board by banks.
No.
An inferior substitute.
By banks exclusively.
*No letter. Questions were answered on questionnaire form as given.