Full text: Referendum on the report of the Special Federal Reserve Committee

national banks with a leadership which would be independent of undue influence from 
other government authority. The Comptroller of the Currency should, in the govern 
mental organization, be the representative and the partisan of the national banks. 
“The suggestion for the abolition of the office of the Comptroller of the Currency, 
or the transfer of the essential functions of that office to the control of the Federal 
Reserve Board, would at one stroke deprive the national banking system of its inde 
pendent representation in the fiscal plan of the government. # # * The operation of 
the national banking system is under the most rigid supervision. When a group of 
individuals subject themselves to this strict supervision and to the laws requiring a 
rigid observance of fixed principles, it is to be presumed that they should receive some 
compensating advantages and that such privileges as they receive should be of a per- 
manent nature and not be taken away from them in a summary manner. The inde 
pendent representation in the government's fiscal scheme by the national banks was 
part of the original contract and while, for the good of the country at large, the com 
pulsory entrance of the national banks into the federal reserve system can be justified 
nothing can justify their reduction from their former independent status to one of 
complete subserviency to an institution which is, in its nature, part privately and part 
governmentally controlled. * * * 
“Assuming that the powers of the Comptroller of the Currency should be trans 
ferred to the Reserve Board, or that the Comptroller or someone acting in a similas 
capacity should be under the direction of the Board, the anomalous condition would 
be immediately created by which a trustee relationship would be entered into in which 
the trustee would have a preferential claim against the trust which was administered. 
With the powers of the Comptroller of the Currency exercised under the direction of 
or by the Federal Reserve Board, we would have a federal reserve system composed 
of one group, the state banks, entirely relieved of supervisory regulation and anothe: 
group, the national banks, subjected to the supervisorv regulation of its principa’ 
creditor. * * * 
“The unadvertised but chief function of the office of the Comptroller of the Cur- 
rency is keeping banks from failing, and not operating receiverships. To accomplish 
this the federal reserve system is the most valuable instrument conceivable, but to use 
this instrument for the protection of the banking situation the Comptroller personally 
and through his examiners frequently approaches the federal reserve banks as an 
applicant for the extension of credit. Can the Comptroller, in this situation, success- 
fully sit on both sides of the counter and represent the needy bank and protect the 
assets of the federal reserve bank from which he is trying to borrow? * * * 
“The office of the Comptroller of the Currency has to be organized for quick 
and summary decisions. A mob of depositors is never complacent enough to await 
the deliberations of a town meeting. If the Federal Reserve Board is composed of 
men of the ability and force of character that have typified this Board in the past, each 
member in self-respect will insist upon expressing himself and impressing his per- 
sonality on any proposed methods for relief, and the fire wagon, if it arrives at all, 
will approach in orderly and dignified fashion after the last wisps of smoke have 
floated away and the ashes cooled. Please understand that this statement would still be 
made if absolute assurance could be given that the ablest men in the world would 
alwavs sit on this Board. ‘Boards is Boards.” ” 
National Banks’ 
Consequences of 
Chief Function

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