ABSTRACT
The investment trust was pronounced "the vehicle employed by individuals to enhance their personal fortunes in violation of their trusteeship, to the financial detriment of the public. The grilling which these and others received from Ferdinand Pecora, special attorney for the committee, lent force to the President's inaugural anathemas on the money-changers, and put the financial fraternity in no position to object to discipline. The inquiry of the Senate Committee on Banking and Currency had shown, in painful detail, how the banks had been caught up in the speculative mania. The Banking Act of 1933 forbade member banks to make loans as agents for nonbanking corporations. Abuses of affiliation of investment banking companies with commercial banks were rehearsed at length. The administration bill was formulated under the direction of Marriner S. Eccles, chairman of the Federal Reserve Board, who was guided by the principle that "laissez faire in banking and the attainment of business stability are incompatible.
