Bank Uplift

There comes a time when the head of each great financial house summoned before the Senate Committee on Banking & Currency is given his chance to tell not what he did but what he thinks should be done. As J. P. Morgan's turn came last May and Otto Kahn's turn came last June, so last week came the turn of Winthrop Williams Aldrich, chairman of Manhattan's great Chase National Bank.

A lawyer by training, Banker Aldrich got down to legal brass tacks with specific changes which he thought should be made in the Banking Act of 1933. His proposals had not only a strong legal but a strong moral tenor, natural to a brother-in-law of John D. Rockefeller Jr. Important Aldrich suggestions for the uplift of banking:

1) To forbid officers and directors of any commercial bank to officer or control through stock ownership any other commercial bank or investment bank, thereby stopping up holes in the present law which permit such control by indirect means. The Federal Reserve Board would not be allowed to issue any exceptions to this rule.

2) To require all bank officers to report to their boards of directors loans above a specified minimum which they obtain from any source, so that a directorate will know to whom its officers are beholden.

3) To forbid all bank officers to have any financial interest in syndicates distributing securities to the public or in stockmarket pools inasmuch as such syndicates and pools are likely borrowers from banks. Declared Mr. Aldrich, taking an obvious fling at his Chase predecessor Albert Henry Wiggin, "Banking experience has conclusively demonstrated the undesirability of participation by bank-officers in transactions of this kind.''

4) To forbid officers and directors of Federal Reserve banks to participate in the same sort of outside speculative activities.

5) To require all bank officers to report to their directorates all jobs they hold with other companies together with salaries.

Said Banker Aldrich in defense of his vocation: ''Many people are too prone to blame all financial evils upon bankers-- either commercial or investment. Bankers have enough to atone for without being held responsible for orgies of gambling upon stock or commodity exchanges or for the rapacity of individuals who seek to gain inordinate financial profits by reckless speculation. I undertake to condone no improper practices, but do suggest that a proper sense of perspective is necessary."

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