In the 1939 film classic "Mr. Smith Goes to Washington," Jimmy Stewart portrayed a naive but honest senator who railed against entrenched political forces in the name of democracy and human values.
The film was on the mind of actor Wayne Rogers the other day when he was talking about his testimony before a House subcommittee in Washington Tuesday.
Rogers is best known for his role as Trapper John in the television series "MASH" and perhaps for his current batch of commercials for IBM. But he also is an astute businessman whose extensive investments include part ownership of a bank in San Jose and another in North Carolina.
Rogers said he does not cast himself as Stewart's passionately articulate do-gooder. But he does complain that the nation's big banks are threatening the soundness of the banking system.
The vehicle for this threat, he said, is legislation that would gut the Glass-Steagall Act, a Depression era law aimed at ensuring the safety of banks by barring them from the securities business.
"Look at this. Just look at it," he insisted, yanking open a newspaper and pointing at a double-page advertisement in which a New York bank used a fictional dialogue to explain why Glass-Steagall is outdated and unnecessary.
"There are no facts here. Just statements. This is not evidence to let them into those other businesses. But there is plenty of evidence to keep them out. Banks have a franchise of confidence, and any attempt by them to get into a business that erodes that confidence is a threat."
Reform of the Glass-Steagall Act is high on the agenda of Congress this year as the Senate and the House consider various pieces of legislation that would allow banks to engage in such activities as underwriting corporate securities through separate subsidiaries. The first vote is possible later this month by a Senate committee.
The banks, and their supporters in Congress, argue that U.S. banks are losing their competitive edge because they cannot offer as many services as their foreign competitors. The banks also say that their profits will continue to decline if they are not allowed into the lucrative securities business.
But Rogers and others, such as economist John Kenneth Galbraith, contend that banks should stick with taking deposits and making loans, leaving the riskier businesses to institutions whose money is not insured by the federal government.
"There are plenty of well-run banks in this country, and they should stick to banking," Rogers said. "The difficulties some banks are having making a profit in banking is not evidence that they should be allowed into another business."
Rogers said the two banks in which he holds an interest are medium-sized institutions that emphasize traditional banking activities and eschew the broader role sought by other banks, particularly big ones in New York and Los Angeles.
He put his sentiments in a letter to Rep. Fernand J. St Germain (D-R.I.), chairman of the House Banking Committee who is holding hearings on Glass-Steagall reform, and got a surprise in return. St Germain called Rogers to testify before his committee.