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THTERL0C1C
roWVMUMI
ERTHKEli
UcSC
flIP
X offer the foJkwinft UMBdwKl* to *Mti«n 3291
U ) O t p « o IBS, lta* 26, atrUo ant tha wrdi "nora tram
f n;
mm" and aubatitura tha word
(2) On pt|l IS6. iiwuinlufi with line 1,fltrikeout ©wythias
through llna l«
(*) OA f»£» m , una e, aha**,* "(a)" to *{#)••
(4) On pago id*, i&wi 9, *&aaga •(/)• to "(ft)*,
(i) On fn&o ltft, ooMndnoias with lino 101 ttrlko ©et ^vcry
thing through lint i n
Sootlan SE9 anando tho prorloioaa of tha Clayton Antltraot Aot
rtUtias to intarlaakliig dlrnWritM b i t m u book*. It aantalna «
aistir* of good and aril* It « m U il^Hfy tha provialatta of ox latino
low relating to dlraotori of national banka and antand than to aovor aloo
dlrootora of tate ba&ka which ara nasAwwra of tho (odoral Saaovao Syaton,
oteiah to vary ItilfiUt* ftH aomlwlohad In latann thaao daolrablo provial ana ara oortaln oaaapfclana and aaaaptiana vhlah havo nil tha aaraarka
of I t l t boon inaortod In tha bill for tha garpaaa of ^omitting aano of
frs;
tho largo banka in tho finanaial dl at riot of Hon Tork oad othor largo
aitloa to oantlnaa intorloaklnr, rolntiowahtfia ohieh thay now havo oad to
aronta mm onoa* It woald porait than to aroata again interlocking rol*»
tlanahlpa aHlah knot baan outlawed ever alnoo Congrooe yaaeo* tha Clayton
Antltraat &o% in 1914 aa a rooalt of tha
laveetl^nticKu
• f •
The proeent lew forbid a t 4&mt«r of t national bank to b« »
dirootor of any otatr bonk exoept with the peraleeten of the Fnierol
eorve Beard !mI does m i mpply to lo&erloefcing direetoratee between Stoto
banks where no ontioual baafc la involved* &wmn though mmh State banks
nay bo mmmbmr* of tte Fedoral Weeerve yitoi.
The a>uso bill w-*ild entead the low to eevor btato Motor basks
of Che federal l««tm *jaten aa ««H m national bank*, n y w l the
authority of the Jederel Keeerve aeard to 1««m efeeial perwita for interleefcin* diretterates, aad safest It ate o prevision permitting the Beard to
wmkm e*eeptlo&* for oortoln elnsses of lnetitutlene by general regulations*
Hko * euate E1U w u U eirtead tho low to lnfcerleefclng dirootovmtoo
between t'toto nenfeer banks and oosttiai no prewielen authorising tho
Federal Peaerwefceondto nnkn exoeptlensi tot it ineer orates several
eaceeptles* la the law lteelf*
Tho asit important «f thooo la not OHO of the framO? »n—e rated
eseeptien«# but one Incorporated in the prohibition Itself by tho word a
than o a ^ which appear cm pa$t 18S# lino tb.
ao*
These wordo have thin
OffO#t 9
ihoraaa tho ?reeeat law forbids a dirooter of t national bonk to
be a dirooter of a a ether bonk and the £eose £111 woold forbid a dirooter
*r
of a naober ban*. State or national, to bo a dirooter of any other bonk,
the -float* Kill weald nerely forbid o dirooter of a oewber bank to serve aa
dirooter of ''were than one* other bank* Time there ie hidden in the very
heart of the prohibition an esoeptlen whieh weald e^rsait a dirooter of n j
nr
m b i f bonk, Stnte or notioiel, t© oerv© is * aireetor of any other one
towke
T c e would not only per* it o d lroetor of o &tnte wowbor bonk to
fl
o t t s t to bo o direetor of ©ay other beak# but would oloo permit a direootlto
tor of © notion*! book to beanie t direetor of ©ny othor ono bonk — sowo*
thing whloH lo now forbidden oxeopt by spooloi peraiooian of the *ederol
Roe©roo Boord.
fhooo throe little tardi Nwre then ono" wool* permit every dirooter of ony of the lor go benke lo «ell Street to be * direetor of cow
ether lor&e book lo Hell street. Thue, they mild permit the Bentaere
Treet oonpeny* with teenty d 1 reetoref to hove one of Ito dirootere on the
board of eneh one o ' twenty other bunko In l e York* I*ikwwie©* the Smr*
f
iw
onty fruot Cenpeny* with twenty-fire direetore, eould hove one of ito dlreetore on the boord of eooh one of toe«Kty»floo other benke In Hen York City*
Xho iitionel City ^enk, with nineteen director*, eould here one ef ito direetero on the benrd ef eooh one of nineteen other benke In Men Yerk Sltyt
end ee on* *y thio ©none* oil tho big benke In m i street ©©old be ee
olooely Interwoven thnt tl*y would oenetitute o werltoble money trust.
op with the benke In Senten, 'hlledelphi©, Pitteburgh, Clevelend, Chiengo,
end other gvont money center* ontll oil of the greet benke would be ee
olooely linked together by Interlooklag direetor© thnt no present of lorgo
properties* ©oold obtain bonking oeeewaodntlene without flrot ©btolnlng
the oengent end meeting the tevno of n ooa^erntively onoll group of men*
•
4 *
rfci* % o*»otly tho *ind of o l t o o t i o a tbot i u diooloood by tho
m
Pojo in^witipitlflfi unft which lad to tho ipMftflp of wstlcn 9 of tho Cloytoa
Ait*
In tIoo of tho o*tont t o ot-lofc tho ^ o lavootlgotiaa dtooloood
tho roprooontat ion o f
?# Mor^oa oc* CmvxR? on ttao boards of dirootoro
of staofstti < i f f Of out hsaks o a i othor f l s i M l t l 5 .not 11 ut lotto* I hovo tokoo
1
.
tho trouble t o lock op tho aoafeoro of tho* « * » l a iM>or*o ifioglotor of
rootoro.
X fewws thwt* i o u d d l t l o i t o oooorol of tho&i boisig oortisoro Ia
tho f » r l n t »
f i r m of Droa»I ond Company of MdladoipfcSa* «sl moa*
orooo etlaor forolga a«d ^owoitlo f i a o o o l o l loot l t « t lotto * too of tho port*
ooro aro dlrdotoro of tho Oooraaty ? m o t C o f u g r of Koo Torfc* throo of
ttosi wro dirootoro o f tho % » i o r « Tjpoot Coapooy of I t v York, tmd too of
thoa oro 41 rootoro of tho Sow Tort Troot Cos^ony*
oao of tMoi oro dlroo*
tor* of ootioool banks, booouoo tho Clsyton l i l forbids tltoa t o t o dlroo*
toro of national hoako*
I f 00 p o m l t thooo thro* l l t t l o words *aoro ttous
000" t o rooaia l a tho b i l l , Uowooor, tbsy oottld not only oowtlnoo t o t o
dirootoro of t i n Guaranty Troot Ceapmgr* tho ^aofcoro Troot conpaay, a a i
hooka*
l a t h i o oMwor thoy oould oaioml t h o l r loffcaoooo ovor othor floan*
o l a l lnotltwtloao ond orooto again a oltwotloa s l a i l a r t o t h a t
tflooloood
ty tho P0J0 lawootlgatloa and ootlsood by tho Cloytoa Aflft*
Thooo throo liiiiiio—• l l t t l o wordo "i»ro than oao", thoroforo,
would n u l l i f y t o a largo oxtont tho ?orpooo o a i o f foot o f tho cisgrtoa Aot*
They should bo otrloksa froa
i.-ill*
- » •
rara&roph auabored * (peg© 13&,
should also be atriekaa
out. It woald permit bonke loeated in different eitloe to havo interlockla& dirootore without tmy rootrletlona what©cover. It mild pomit oil of
the great benke la Boston, J*oo York, jltiladclpfeia, Pittaburgh, Cleveland,
Chicago end othor groat ftaaaolal ©outer*, to ho oo linked upfeyinterlockia« dirootore ea to eoaotitat© a neney truet of eueh wot poor that it
eeald hav© a strangle hold oa Aaerieen buelnoe© and control the cocnanio
eiaoo the paaang© of the Clayton Aot in 1M4, and wo ahoald not open the
door to lta ©reatloa again.
the paragraph ccneciMVwg an ft|« 18d, lino 10, would aaiwpft
all oxiottag interlockingrelationship©an! p©rait than to eon*fan© watll
Fohronry 1, 19*9, Saoh a portymwmmt would appear to ho reasonable i bat a
ainilar previa ion in tha original Clayton Aot enaoed Congrooe no ond of trow
ble and l*d to a ©ahotantial dininution of the offOoUioneoa of the law*
The effective date of oootion I of the original Clayton Aot wne
postponed for two y«nr©| and, before the aootioa bnoino effective, eo nnoh
proeoaro wao brought upon Oongreo© that it onandod the law oo ao to authorise the Moral linn <e Hoard to grant pemita allowing poroaan to eario
ao dirootore of not nor© thnn throe bank© within the prohibited elaoeoo
if they wore net in aobetaatlal competition. The reomlt io that there are
thonannd© of laterloo king direotoratoe which would have boon outlawed if
th© etotuto had been permitted to go into offoot without delay*
thlo bill would extend the Clayton *ot to eoeer state nmVtr
bonk©| and, if an p©etp©m it© effeotiwa data, the benhere will be baOk hero
•
#
•
to «nko exception* end w p t i a w uhieh will weterielly lapiir« If m t
utterly nullify, the of foot of thio eolutary amendment, I em afraid thet
hletery will repeat Itoolf an* thot coogroeo will yieU to the iapertnaltlea
of tho bottkore* Lot no oottlo tho fueatlen now for all tin* by aakln& thio
eeetlon effeetlwe Immediately*
A porogroph of aentien 8 of tho Claytaa Aat whioh would not bo
rop*olod would permit oil teak dlrootoro to aaree out thoir proaorti terme*
la othor werde, thoy oould oorwo until tho n o n l olootloe of dimeter*
neat January, netadthetendIxi^ thio enendaont* This would
enple tlan to amaye for tho aeaeaeary ohon^po In M r
th* !rn*nf
bonrdo of 4iroo»
ton | but aaald got tho t i l oooo poor with by tho tHIHiii1 of January*
wl
•vith tho aniatiag relationehipe onoo M o a up, tho proaouro on Comgree*
to ^^^^wmww tho OWP would oRirw bo fnoorlr www grant end tho donetr wW n rewwti*
onond
low
not ww n p w v
no ^nf^^ww w t w i w w o w m i K w * of an wwuPWwn»
ww
w
tion of tho niatahe of 1»1« would bo greatly dlalalehed*
