Hearings, Reports and Prints of the Senate Committee on Banking and Currency

Washington, D. C. The committee met, pursuant to call, in room 318, Senate Office Building, at 9:35 a. m., Senator A. Willis Robertson, acting chairman, presiding.

Present: Senators Robertson, Douglas, and Beall,

Also present: Donald L. Rogers, counsel, Banking and Currency Committee.

Senator ROBERTSON. The committee will please come to order.

We expect to have four other members of our committee here, but they are delayed. Pending their arrival we will take care of several preliminary matters.

First, I want to thank this splendid group of bankers and those interested in credit affairs for their willingness to serve on this advisory committee. We feel that we are particularly fortunate in prevailing on my good friend, Kenton Cravens, to serve as chairman of the Advisory Committee, and I feel highly gratified at the way he has organized the work and broken it down into subcommittees, so that those who are specialists in the various fields can center on proposals that they want the full advisory committee to act on at their next meeting in December.

Last July I was designated by Senator Fulbright to serve as acting chairman of the Senate Banking and Currency Committee for a study of the Federal statutes governing financial institutions and credit. The need for such an inquiry was evidenced by the fact that there had been no major revision of these laws in over 20 years. At the outset, I requested the Federal agencies concerned to review their statutory authority for the purpose of deleting obsolete provisions and adding new authority where needed. Trade associations in the financial field were also contacted and were requested to prepare appropriate recommendations.

In September, a 27-man advisory committee was selected to assist the Banking and Currency Committee. The recommendations of this highly competent group will make an important contribution to the study.

The committee counsel, Donald L. Rogers, was directed to prepare, with the assistance of the Federal supervisory agencies, all the necessary background information. In this connection, a compilation of the Federal statutes relating to banks, savings and loan associations, and credit unions has been prepared and published. In addition, the 176 legislative recommendations of the Federal supervisory agencies have been printed in book form.

The purpose of our hearings today and tomorrow is to receive an oral explanation of the agencies' recommendations. I am happy to have the members of the advisory committee present to participate in these hearings.

It should be kept in mind during the course of this study that the major objective of the committee is to compile and clarify the Federal statutes governing financial institutions and credit. With that purpose in mind, the study will be addressed to a consideration of such matters as the elimination of obsolete provisions and the addition of such new provisions as may seem desirable in order to modernize and streamline the banking laws. These matters, largely of a technical and noncontroversial nature, will relate primarily to the administrative functions of the banking agencies and to operational details of institutions affected.

I may add there, these recommendations, as submitted, were supposed to be largely of a noncontroversial nature. I find they are not quite as noncontroversial as I had been led to believe. I may be in another fight reminiscent of our efforts to get a bank holding company bill through. We tried to make that as fair as possible, but never did succeed in pleasing everyone.

The committee will, of course, stand ready to consider any changes in the laws which may be needed at this time if such changes will enable federally regulated institutions to serve the people of our country more effectively or will aid in the efficient functioning of the Federal supervisory agencies. However, it is not intended to encroach on the field of credit and monetary policies, which were the subject of several congressional committee studies in recent years. Likewise it is not intended to consider fundamental changes in the law with respect to the structure of the supervisory agencies or of other lending and guaranty agencies, or the scope of their authority, or other questions of that character. Fundamental questions of this nature will be deferred until a later date so that the committee may presently proceed expeditiously with consideration of the more immediate needs to which its study is now directed.

I may pause there again and say a distinguished student of finance made a very fine speech at the American Bankers Association meeting in Los Angeles. He proposed some radical overall changes to give the administration the final veto power or control, if you please, over the credit policies of the Federal Reserve Board. I think Mr. Bell has since found that that was a little more controversial than he thought when he presented the issue to the bankers in California.

After the completion of the hearings tomorrow, the members of the Advisory Committee will meet to draw up their recommendations. We hope to receive the Advisory Committee's report by the middle of December. On the basis of this report, together with the recommendations of the agencies, the interested trade associations, and individuals, tentative legislation will be drawn up in the form of a committee-print bill.

I want to emphasize that word "tentative." We have to have a basis for public hearings and in the bill which the chairman with the help of the members of the committee acting on the advice that you gentlemen give us, will present, it does not mean that we are committed to any particular thing in that bill, but that it is a basis for public hear

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