Republican news item. [volume] (Laport, Pa.) 1896-19??, 1910-01-20
mo CENTRAL BANK
IN ALDRICH PL ANS
Monetary Commission Hopes For
7 Reserve Association.
POLITICS CAN'T CONTROL

Proposes National Bank Combine With
$3o,ooo,oO0 Capital, as Fiscal Agent
Of Government.
Senator Nelson w. Aldrich's long
awaited plan for the revision of the
national bank legislation" as he calls
it. was made public in Washington.
1t does not contemplate the estab-
lishment of central bank. 1t is SO far
from what most people have expected
from Mr.. Aldrich that it may come to
many as a notable surprise.
The plan was submitted to the ma
tional monetary commission, but Sen
| ator Aldrich was not at the meeting.
Far from recommending the Institution
Of central bank, Mr.. Aldrich express
| ly disclaims belief in 1t as calculated
to meet the needs of the situation.
What Mr.. Aldrich does propose is
the establishment of the Reserve AS
scciation of America" representing
what might be called a federation Of
local associations formed by national
banks. The Rhode Island senator de-
clares the belief that the association,
organized as he proposes, cannot be
controlled by ambitious monetary in
terests or dominated by political in
fuence."
Some of the Provisions.
So well-knit is the scheme proposed
| that it is difficult to state briefly the
provisions of the plan; but these seem
| to be the essentials:
| At bottom, local organizations of
representatives of banks, formed by
not less than ten banks, each bank
holding stock in the association in pro-
portion to it's capital.
Directors would be elected by these
to the board of branch" associations,
one branch for each of the fifteen
financial districts into which the Unit.
ed States would be. divided.
Each branch" board would include
a certain proportion of men not bank
ers. but representing industrial, agri-
cultural, commercial and other inter-
| ests.
The branches" in turn would elect
to the reserve association proper direc-
tors, fortyfive in all, among whom
must also be a proportion of men rep
resenting interests other than banks.
There would be also six ex-officio
members of this board, namely, the
secretary of the treasury, the secre-
| tary of commerce and labor the comp
troller Of the currency, and the gov
crnor and two deputy governors of the
association.
The governor and deputy governor
of the association would be appointed
by the president of the United States
and would be removable by him for
cause.
The association would be the princi-
pal fiscal agent and depository Of the
government, would fix from time to
time the rate Of exchange or discount,
and eventually it's notes would replace
those of the national banks.
Prime commercial paper, passing up
from the banks through the local as
bonds Of the government, could be
used as basis for currency issue.
New Scope For Banks.
The plan contemplates also two new
classes of national banks, or depart
ments of banks, to receive savings and
make loans upon real estate and also
to be in effect national trust companies.
The system of mutual support by
which the associations members
would meet currency emergencies is
detailed at length.
| 1t is proposed to charter the Reserve
Association of America with an au-
thorized capital of approximately $780,
100000 The length of the charter shall
be fifty years, and the head office shall
be in Washington.
| A national bank having a minimum
capital of at least $25,000 may sub
scribe to capital stock of the reserve
association equal to 20 per cent of the
stock of the bank and not less, and
each Of such subscribing banks shall
become a member of a local associa-
tion. Fifty per cent of the subscrip-
tions to the capital stock of the re-
serve association shall be called in
cash; the balance of the subscriptions
will remain a liability of the stock
holders, subject to CALL
Share of the capital stock Of the as
sociation will not be transferable, and
under no circumstances may they be
owned by any corporation other than
the subscribing national bank.
| The earnings of the reserve asso.
citation shall be distributed in the fol.
lowing manner:
After the payment of all expenses
and taxes the stockholders shall re-
ceive per cent. Further earnings
shall be divided, one-half to go to the
surplus of the reserve association, un-
It'll that surplus shall amount to 20 per