WIDER SWEEP OF N.R.A. PLAN

Timaru Herald, Volume CXXXVII, Issue 19669, 11 December 1933, Page 7

WIDER SWEEP OF N.R.A. PLAN

STRICTER CONTROL OF BANKING WORKING OUT OF BOLD EXPERIMENT United Press Association—By Electric Telegraph—Copyright (Received December 10, 6.30 p.m.) NEW YORK, December 9. National banks selling preferred stock to the Reconstruction Finance Corporation, such as National City and others have done are potentially subject to considerable Government control, according to a stockbrokers’ memorandum published by the National City Bank to-day, outlining the Government's regulations affecting them. The effect is briefly that as long as the Institutions meet their preferred stock dividend requirements and retirement fund the holders of the stock, namely the Reconstruction Finance Corporation, have a share for share in voting equality with common stockholders. But if such dividend is defaulted, the holders of preferred stock have double voting power, which will give the Government agency sweeping control of the management and policies of such banks, even to framing directors fees, discharging officials, and fixing their compensation. It is pointed out, in financial circles, however, that the banks meeting the Reconstruction Finance Corporation’s requirements, and being still unable to meet their preferred stock obligation, are likely to be suffering from bad management, and the Reconstruction Finance Corporation’s supervision might be very much in the interest of the common shareholders. The Reconstruction Finance Corporation to-day authorised the purchase of 23,000,000 dollars of more preferred stock of 112 banks of the “Northwest Banco Corporation," operating a chain of small banks in the North Western and Mid-Western Sections of the Uniited States. BILLIONS FOR PUBLIC WORKS. HUGE PROGRAMME OUTLINED. United Press Association—By Electric Teiegraph—Copyright NEW YORK, December 8. A Buffalo message states that Senator La Folletto announced his intention of proposing to Congress a ten billion dollar public works programme. He said that he did not think the 3.300,000,000 dollar programme of the Roosevelt Administration sufficient. He urged the Administration to invoke its lull power to crush those seeking to defeat the “only real measure passed to promote recovery.”