The banking act of 1935

The so-called omnibus banking bill, having passed both houses of Congress on August 19, 1935, was approved by the President and became law on August 23. he passage of this important piece of banking legislation aroused surprisingly little comment in the press in view of the wide public interest which had attended the earlier hearings on the bill in both the House and Senate Committees on Banking and Currency. One would have to go back to the days of the Aldrich bill and the original Federal Reserve act to encounter as much controversy over a piece of banking legislation as attended the proposed Banking act of 1935 in its journey through the House and Senate committees. In fact, to appraise properly the provisions of the new banking law, it is necessary to compare them with the terms of the original Administration bill and to undersatnd the political environment which gave rise to the latter measure, In this article, therefore, the political aspects of the banking situation will first be reviewed, to be followed by a summary of the Administration banking bill. With this background, an analysis of the law as finally passed will be in order.