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Ft>rm-F. R. 5 1 1 Gov.Eccles TO FROM T REMARKS: Herewith a draft of 8 for-the-record letter on holding company legislation. .Vingfield, Cs gle, Carpenter have 5.11 been consulted, but this draft is a result of sifting their suggesxtions, and • am sending it on to * • you, as x understand you wan tea to see it, but without taking the time to get them to initial i t — i f they approve as Jl imagine they would. >f EL CHAIRMAN'S OFFICE ( 1 'jp _. BER.rTA.I-r--r^-?\^I A A somewhat similar bill was introduced in the Senate in 1938 which, in the opinion of the Board, did not offer a satisfactory solution of the matter, and the Board so advised Senator Glass. Both of these bills were drafted without consultation with the Board and the contents thereof were not known to us until we received copies of the bills. We feel that the new bill is not a practical solution of the problem, that it is punitive in that it is directed against a particular holding company as indicated by the statement which Senator G-lass made when the bill was introduced, and that it would be unfair to every holding company which was properly organized under the laws existing at the time of its organization and is now rendering service to the public. The bill would confer upon the Federal Deposit Insurance Corporation supervisory authority with respect to bank holding companies, which the Federal Reserve System has exercised ever since the Banking Act of 1933» thereby increasing the overlapping authority of Federal bank supervisory agencies. Furthermore, the bill would provide for further duplication of supervision of banks which are not members of holding company groups as well as banks which are in such groups. It would confer on the FDIC supervisory authority with respect to bank holding companies which the F R System has exercised ever since the Banking Act of The bill would provide for additional dupliaation of supervision of banks which are not members of groups as well as of groups of banks.
