ABA Banking Journal - April 2008 - (Page 14)

briefing Then & Now 100th Anniversary 1908-2008 McFadden: banker and controversial House leader Louis Thomas McFadden N owadays ABA and other banking trade groups work hard to bring bankers to Washington. But Louis Thomas McFadden went most bankers better, not only bringing a bankers viewpoint to Capitol Hill, but bringing it right to the top of the House Banking Committee. Today, McFadden comes to mind for the namesake McFadden Act. But in his day, McFadden and notoriety were close fellows, and if one does an internet search, his name shows up most often on the sites of groups entertaining conspiracy theories about the Federal Reserve. McFadden’s journey from back president to congressional leader to obscurity took him through battles with key regulators and a failed attempt to bring about the impeachment of President Herbert Hoover. In the July 1920 edition, an unusual change of command had been noted in the magazine’s pages, regarding what was then the House Banking and Currency Committee. New York Congressman Edmund Platt, chairman, had resigned his seat, to accept appointment to the Federal Reserve Board. Platt was succeeded by McFadden of Pennsylvania, who had served in Congress for about five years—and who was president of First National Bank of Canton, Pa. That bank, founded in 1881, still exists as the Bank of Canton. Born in 1876, McFadden was the son of a farmer who had fought for the Union in the Civil War. He attended a commercial college, and, at 16, took a job as office boy at First National in 1892. Seven years later he became cashier, and, in 1916 he became president. He held that post until 1925. McFadden, a Republican, was first elected to Congress in 1915, and served until 1934. He served as banking committee chairman for six Congresses, from 1920 to 1931. His was a career marked by controversy—notably a running battle with the Comptroller of the Currency. After much work, McFadden and supporters brought the McFadden Bank Act into law in February 1927, when President Calvin Coolidge signed it. The law recognized national bank powers that had been granted by the Comptroller’s office on a case-by-case basis beforehand, but today is remembered chiefly as a branching statute. It authorized national banks to operate home-city branch offices where state banks had similar privileges, and was intended to obtain parity for national banks. In additional, the law barred interstate branching. In later years the act and the related Douglas Amendment became prime targets of those favoring interstate expansion by banks. In 1932, McFadden introduced a 4,500-word resolution calling for the impeachment of President Herbert Hoover, a fellow Republican, for “high crimes and misdemeanors.” McFadden objected to Hoover’s going against cancellation of war debts from WWI among other things. The resolution was quickly quashed. A month later, McFadden tried again, and failed again. On his third attempt, he was denied permission to speak from the House floor. He lost his seat in 1934, and his attempt to regain it two years later failed. He died suddenly in 1936. Conspiracy theorists like to question if the diagnosis of “coronary thrombosis” wasn’t a coverup for something more sinister. Their reasoning seems to rest on a major address on the House floor made by McFadden against the Federal Reserve, in which he called it “one of the most corrupt institutions the world has ever known” according to one transcript. (A more detailed recounting of banker/congressman McFadden can be seen by clicking the red 100th Anniversary logo on www.ababj.com.) —Steve Cocheo Correction: In March, readers were directed to the wrong web address to view articles from our archives. They should go to www.ababj.com and click on the red 100th Anniversary logo. C-Notes The Federal Reserve System was only eight years old when one commentator wrote in the July 1922 edition, “It is evident … from the nature of arguments presented that the true functions of this system are not yet thoroughly understood…” Sometimes people don’t understand today’s Fed, either. Investment bankers von Polenz & Co., Inc., of New York, advertised availability of German municipal and industrial bonds, issued by the German Republic, during the 1920s. “The security behind these issues remains first-class, regardless of political and International developments,” the ads promised. A full-page ad in the September 1923 edition invited delegates to ABA’s Annual Convention at Atlantic City to visit the new headquarters of Bowery Savings Bank, across the street from NYC’s Grand Central Terminal. Today, the bank is long since merged, and the building, now a landmark, serves as headquarters and venue for a famous restaurant and catering company. 14 APRIL 2008/ABA BANKING JOURNAL Subscribe at www.ababj.com http://www.ababj.com/index.php?option=com_content&task=view&id=263&Itemid=158 http://www.ababj.com/index.php?option=com_content&task=view&id=263&Itemid=158 http://www.ababj.com

Table of Contents Feed for the Digital Edition of ABA Banking Journal - April 2008

ABA Banking Journal - April 2008 Contents Editor's Column You Can't Beat Wal-Mart: Or Can You? Snapshot: Non-Interest Income Shoulders More Weight ABA National Conference for Community Bankers Report 100th Anniversary: Then & Now ABA Resources ABA Chairman's Position Banks Plus Insurance: How to Make It Work Pass the Aspirin 2008: Year of Rich Internet Apps? Tough Time For That IPO Your Audience Needs to Know Who You Are Telepresence: Costly But Very Cool Webnotes Better Websites Mean Tougher Compliance Mailbox Banker's Mart To Advertise/Index of Advertisers The Economy

ABA Banking Journal - April 2008

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