The Banking Act of 1935
According to Rexford G. Tugwell, an original member ofFDR's Brain Trust, the objectives for banking reform as they developed within the New Deal were (1) to make deposits safe; (2) to separate deposits from investments so that bankers could not speculate with the depositors' funds; (3) to raise and stabilize the price level; and (4) to strengthen central management so that governmental influence could be brought to bear on business activity (TugweIl1957, 368). As already discussed, the Banking Act of 1933 addressed the first two objectives: deposit safety and separation of deposit and investment banking. The remaining goals were interconnected: centralize control of the monetary policy in Washington and undertake an expansionary policy to raise the price level. As the legislative battle unfolded, the administration found itself between the radicals and the Progressives who wanted complete centralization and government control of money and credit, and Carter Glass, one of the architects of the Federal Reserve Act, who opposed any fundamental changes in the Act.