1932 0323 to 0325 - GOV (Senate) - Operation of the National and Reserve Banking Systems - (Part 1), Peter Norbeck (R-SD)

  • 1932 0323 to 0325 – GOV (Senate) – Operation of the National and Reserve Banking Systems – (Part 1) – Peter Norbeck (R-SD)  ---  [BonkNote]
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    • S.4115 - A Bill To Provide For The Safer And More Effective Use Of The Assets Of Federal Reserve Banks And Of National Banking Associations, To Regulate Interbank Control, To Prevent The Undue Diversion Of Funds Into Speculative Operations, And For Other Purposes
  • (p142) - Percy H. Johnston, President Chemical Bank & Trust - It is just as logical to require good industrials, insurance companies, and other lines of business to bail out the failed ones in their respective fields, as it is to ask the member banks to do so.
  • (p162) - Percy H. Johnston, President Chemical Bank & Trust - Many of our customers, for example, many mortgage bond companies, that we have been doing business with many agencies that we have supplied credit during two or three months while they were collecting these loans, the large life insurance companies—all those are going to be classes of securities that are going to be taboo here for us to have.
  • (p320) - John Ottley, president First National Bank, Atlanta, Ga, - I indorse the testimony already given by others on this subject, and would merely add that in my opinion this provision would prevent national banks from making form loans, and would give to the insurance; and loan companies a monopoly of this business.
    • Increased reserves, section 13, beginning on page 27: I have devoted my exclusive attention to banking during my entire business life, and I give it as my deliberate opinion that character of assets and not lack of reserves has been the cause of bank failures...
  • (p384) - Senator James COUZENS (R-MI) Not only that, but the banks are carrying public advertisements now claiming they do not have affiliates in insurance companies.
    • Eugene MEYER, governor Federal Reserve Board, Washington, D. C - Some of them do.
    • Senator COUZENS. So it has got to be a discretionary practice; that when you have institutions merely merchandising securities, they are not to be called banks, are not to do a banking business...
  • (p535) - P.D. Houston, chairman board of the American National Bank, Nashville, Ten - I am familiar with institutions engaged in the mortgage loan business and having correspondent relations with large insurance; companies, giving them an outlet for their loans, but which, for good reasons, have accumulated loans necessitating borrowing from the parent bank in excess of 10 percent of the capital and surplus.
    • In some instances the loans were held to accommodate the parent bank, but when not the case, the excess was for only a short time.
    • Some insurance companies also give commitments in the form of acceptances, but their correspondents agreeing that on a certain date 30 days, 60 days, or 90 days hence that they will purchase a certain specified loan.