Excerpt From Document Discussing Amendments to Owen-Glass Bill by Senate Committee on Banking and Currency

Excerpt From Document Discussing Amendments to Owen-Glass Bill by Senate Committee on Banking and Currency

Strong, Benjamin, 1872-1928

WWP18887

[c. 1913]

Incomplete.

Benjamin Strong Jr. Papers, New York Federal Reserve Bank

English

The development from day to day of various tentative amendments to the Owen-Glass Bill by the Senate Committee on Banking and Currency throws most interesting light upon the views of the individual members of the Committee that is entrusted with this important legislation. Bankers who have appeared before the Committee seem to be divided into two classes - one, and unfortunately the largest, showing interest principally in the profit and loss accounts of their own institutions; the other and smaller class being composed of those who evidence an honest desire to contribute to sound intelliectual consideration of the subject. This class, small in numbers, seems to be represented largely by New York bankers. These gentlemen have given as keen attention to the attitude of the various members of the Committee, as disclosed by their questions, as have the members of the Committee to the propounding of painstaking interrogations. Now that the Committee is shaping up the result of its labor, a situation is disclosed to those who have followed the proceedings that is making a profound impression. I refer to the attitude which has been assumed by Senators O'Gorman, Hitchcock and Reid. Not only have they evidenced a much wider and more profound knowledge of the subject than has heretofore been appreciated, but what is still better and more encouraging, they seem to be leading their colleagues in the Committee toward the adoption of safe, fundamental principles, notwithstanding that it involves ignoring an outburst of protest which the Committee has been forced to hear.from bankers from all over the country who are inspired by selfish and partisan, rather than by patriotic motives.The fundamentals that is the “bony structure,” are neither as many nor as complicated as they appeared to be before the hearings began. The decision for a reduction in the number of institutions to be organized, disclosed a leaning on the part of these three Senators toward the organization of one instead of a number of banks. This is decidedly in the right direction. The evidence now afforded, largely by the efforts of these three Senators to resist the adioption of a hasty and ill-considered legislative program, has been the means of protecting the country from the consequences of hasty action which might have been serious. The further evidence that they believe that this plan must be put into operation by gradual stages, rather than by instant readjustment of the vast structure of our banking business, indicates the careful consideration which these gentlemen are giving to sound procedure, as well as sound legislation. The eliminaytion of ex-officio members from the Federal Reserve Board and lengthening the terms of service of appointees indicates a desire to safeguard the new system from political or partisan control. Every discussion of popular subscription to the stock of regional banks strengthens the possibility of a central bank organization, which is much to be desired.The country still awaits, and with anxiety, a disclosure of their attitude as to the obligation of the Government upon the currency to be issued,. To the same degree that this great piece of constructive legislation is receiving the earnest attention of thoughtful men all over the country, just to that degree will these Senators, who are reframing the bill, receive judgment upon their fitness or unfitness for the task. Only history, after the legislation is enacted, can make the verdict the final one. Present day opinions will be formed, however, and it is to be hoped that these gentlemen will direct their ability, notwithstanding opposition from many quarters, to safe-

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