Mr. SAXON. Yes, sir. The CHAIRMAN. And, of course, there are three branches of Government, but the Federal Reserve is not set up as a separate branch of Government. Therefore, it has got to be under one authority, and I think the law is very plain. I will not argue with you about that because we have another session coming up with Federal Reserve officials that we can argue that with. But anyway Mr. SAXON. Yes, sir. The CHAIRMAN. You consider the Comptroller of the Currency the only banking agency within the executive branch? Mr. SAXON. Yes, sir. The CHAIRMAN. Taking the Federal Reserves' word for it that they are independent. Mr. SAXON. Yes, sir. The CHAIRMAN. Now, with reference to all this money collected from the national banks, normally an agency goes before the Congress for appropriations. Congress has a lot of lawful power over the agency because the agency is asking for money and the Members of the Congress have a right to ask questions how it is spent. But in this case the Members of the Congress have no way of making inquiries of you as to how the money is spent in order to make the appropriation because you don't go to the appropriating committees for funds. That is the same situation as with the Federal Reserve. I think it is very important in considering these supervisory agencies, your own, the Federal Reserve and the FDIC, to take a hard look at this. Now, the Federal Reserve became "independent" after they got enough interest-bearing bonds that they had bought with our Government's own money. That is when they became independent. They don't have to come to Congress for any funds. It happened that they never did have to come to Congress for any funds. At one time it looked like they were going to but they didn't have to, and now they have about $38.8 billion of U.S. Government bonds that have been paid for once, but on which the people still pay interest of about a billion and a half dollars a year. The Fed uses that money or any part of it as they see fit. Therefore Congress has no way of knowing about their operations as effectively were they to come before Congress for funds. So I want to go into this question about the Comptroller of the Currency. He is somewhat independent because he doesn't come to Congress for funds. And then there is the Federal Reserve. They claim to be independent because they don't come to Congress for funds. Now, the FDIC, also operates on funds accumulated by assessments from banks, doesn't it? Mr. SAXON. Yes, sir. The CHAIRMAN. So there are the three agencies. However, the FDIC, I think, comes before Congress for its funds to get an appropriation of its funds. Mr. SAXON. No, sir. The CHAIRMAN. Isn't that correct? Mr. SAXON. No, sir. The CHAIRMAN. Then none of these agencies comes before Congress for funds. It looks like we are kind of letting our money business get off in other hands and not under the direct control of the people who are elected by the people. Mr. MULTER. Will the gentleman yield? The CHAIRMAN. Yes. Mr. MULTER. Your statement that these agencies, the three of them, FDIC and Comptroller of the Currency and Federal Reserve, do not come to the Congress for funds, is true. They do not come to the Congress for any appropriated funds. Nevertheless, the Banking and Currency Committees of both Houses and the Government Operations Committee are charged with oversight of all these agencies and do have the right to and do inquire into their activities including their spending of money. Mr. SAXON. That is right. The CHAIRMAN. No dispute about that. The most effective way, though, to see about what an agency is doing is through the Appropriations Committee. I don't think anybody could take issue with that. Mr. MULTER. Mr. Chairman, some of us do take issue with that and think the better procedure would be that the legislative committees not only authorize but appropriate. We are now operating under the dual system in Congress of one legislative committee making an authorization and then sending the agency to the Appropriations Committee to get an appropriation, but these independent agencies, however, who collect their own funds from outside sources and then spend them themselves, are subject however only to review of the Congress through its appropriate committees other than the Appropriations Committee. The CHAIRMAN. Of course, that brings up a question of whether or not it is in the public interest and constitutional to do that, but only a few of them can do it. The CAB couldn't do it, and the FCC couldn't do it, nor the FTC or the FPC. Mr. MULTER. That is because the basic statute, Mr. Chairman, in those cases requires them to come for appropriated funds. The CHAIRMAN. The ICC couldn't do it, I know, but all these should come to the committee for appropriated funds but they don't have to because they have got the funds in other ways. You take, for instance, the Interstate Commerce Commission could levy assessments on the railroads and buses and anyone they are in contact with and that they serve, and they could get out from under the appropriations procedure, too. They could say, we don't need to go to Congress. We don't need to ask for any funds. Mr. MULTER. I would respectfully suggest that someone introduce a bill requiring these independent agencies to operate only on appropriated funds and confront the Congress with the precise issue of changing the basic statutes that brought them into being and require them to get appropriated funds. The basic statutes bringing these agencies into being did not require them to do this. The CHAIRMAN. I am trying to keep our focus on the three bank supervisory agencies, the Comptroller, the Federal Reserve, and the FDIC. We have shown that neither one of the three comes to Congress for funds. Therefore the Congress cannot effectively know much about their activities or as much since they do not come to get funds. Now the question is, Should we have an agency that doesn't come to Congress for funds supervise all banking activities or should we have a separate agency as provided in one of the bills under the Secretary of the Treasury? Of course, the Comptroller is under the Secretary of the Treasury, but I don't think in an effective way. I say that respectfully. There is a flexible or loose connection there, of course, for people to take advantage of, which I do not charge. I think it is entirely different from a setup that the Congress would establish and say that now there should be one agency under the Secretary of the Treasury that shall have everything to do with the examination and auditing for supervisory purposes, of the State banks under the FDIC, the national banks under the Comptroller of the Currency, and the State member banks under the Federal Reserve System. So that is our question here. Mr. MULTER. Mr. Chairman, all I am trying to do is keep this record straight. I have no objection to considering as a part of these bills the question of whether or not these agencies should come to the Congress for appropriated funds before they spend anything. But the issue presented, as I see it, by these bills is not the regulation and control of the agencies themselves but how these agencies should control the banking system. Now, if we want to broaden this and take in how we, the Congress, will control these agencies, that is fine. Let's tender that issue, too. I have no objection to that. But let's not have this record show that the Congress has lost control over these agencies because it has not. The CHAIRMAN. Well, they have lost effective control, I think, without a doubt. I have here a statement that shows the condition of the Comptroller's Office for 10 years from 1953 to 1963. We thank you for your cooperation in making available the information, Mr. Saxon, that makes this statement possible. That gives all the expenditures listed under assets and liabilities and equity and income and expenses from the Comptroller's Office for that period of time. Without objection, we will put that in the record and furnish each member of the committee a copy of this, please. (The document referred to follows:) 47-444 0-65 -19 |