Evening star. [volume] (Washington, D.C.) 1854-1972, 1911-11-21
A Union Of BANKS|TAFT LEADERS, Plan
AIdrich Says Currency Plan Is Delegates viii Get Iron
Not Capitalization Bound Instructions.
COOPERATION IS NEEDED START EARLY CAMPAIGN
Provides for Equal Privileges a. B." Ghost Fitting Around
for All Bankx Causes Uneasness
COMMERCIAL PAPER srANDARD GOOD CALIFORNIA
Lengthy Ad Senator Newlands for Government
Ownership Of Steamship
Bank.rr, Through Panam Canal
AIdrich Says Currency Plan Is
Not Capitalization.
COOPERATION IS NEEDED
Scheme Provides for Equal Privileges
for All Banks,
COMMERCIAL PAPER STANDARD
Ex-senator Delivers Lengthy Ad-
dress at Conveution Of Amsric4n
Bankers Assoc1a41on.


Bankers Associa&1en.
NEW ORLEANS, November n-oov.
Sanders Of Louisiana, Mayor Behrmann
of New Orleans and President Walmsley
Of the New Orleans Clearing House A.
socistion today formally welcomed to
New Orleans the delegates TO the thirty
seventh annual convention Of the AmeTa-
can Bankers Association. which VIII con-
tinue In session throughout the week 1t
is expected to prove the most important
meeting In the history OF tho osgani1a-
ton.
At the conclusion Of the opening exer-
cises Nelson w. AIdrlch. president OF the
National monetary commission and for
rner senator from Rhode Island. began
his presentation Of the subject that has
made him famous, the proposed none
tary plan Mr.. Aldrich's address had
been looked forward to by the delegates
a. the most important during the entire
convention.
Mr.. Aidrich spoke in part a. follows:
To the national monetary commission
is assigned the important task OF dev1sin9
plan by which this great country may:
in the interest of all Of its people. OF
every class and every section, secure that
immunity which for half century has
been enjoyed by the people OF every otner
great commercial nation from the disas,
trous results of monetary panics and
acute monetary disturbances
Rights Of Depositors.
IF we can devise for the United States
monetary system which Will protect
the rights and afford security to bank de-
positprs. which will enable the banks at
all times to respond to every legitimate
demand for credit and currency 80 es-
sential for the development Of our Indus
tries-we shall have met the expectations
of the public with reference to two I'M
portant matters and have done much to
create and maintain that feeling OF con-
fidence In the safety and effectiveness OF
banking institutions which Is so es-
sentiaI to our uninterrupted natonai
progress.
There is general agreement Of opinion
among intelligent students Of the subject
that to accomplish these benencent re-
zation of credit, q thorough reconstruc-
ton of banking systems and methods.
''The failure Of our monetary system
can be largely attributed: =.
fective cooperation Of banks which is
necessary to protect the puhltc iptesests
as well as their own In times OF stress
- To the limitations and restrictions
imposed by antiquated or obsolete laws
with reference to the treatment OF re-
serves, and
'3 To a defective. inelastic and unset
entific system of note issue.
Plans Salient Features.
Il propose today to discuss briefly some
of the salient features Of the plan to rem
edy these defects and prevent failures
through the organisation Of q national re-
serve association.
1T is proposed to organize tho banks
Of the country into local associations and
these into district associations. each with
distinctive functions and each with local
self-government. and to organise all dis
trict associations in the National Reserve
Association. The organization proposed
is not a bank. but cooperative union OF
purposes, and with very limited and clear
IL defined functions. 1t IL In effect an
extension or evolution Of the clearing
house idea to meet the needs and re-
eGirements of the entire country.
The plan of organization includes POSI-
tive provisions:
4 To maintain the integrity and in
dependence of existing banks. state and
national The new organization Is out
side of. superimposed upon. the existing
system The proposed association Ia not
bank and is not competitor IN any
IN its ownership and in Its domestic busi-
ness il is confined strictly to banks and
the government.
Equality Of Privilege.
80 II provides clearly for an equality
of privileges and advantages to all banks,
great or small. wherever located.
"3. 1t provides equality In rates Of dis
count or redscount to all banks, and
these rates are to be uniform throughout
the country. This. It is believed. will In
sure steadiness and reasonablenees of
rates everywhere.
II. Its organization is Of . form and
character that will effectually prevent the
control of It's operations by political In
fuences. local or national
rs. Every means has been taken, every
safeguard adopted to prevent beyond
question the possibility Of its control By
any corporation or combination Of corpo.
rations, banks or otherwise. by any IN
dtvidual or combination Of individuals IL
Wall street or elsewhere for selfish OF
sinister purposes.
''6 The dominating principle is CO.
operation and not Capitalization. We
were satisfied that we could not adopt
or adapt to our use an organization like
the central banks of Europe or the second
bank Of the United States.
Some of the Provisions.
Among the provisions Of the plan In.
tended to remedy defects and cure exist
ing evils are:
I. To insure maintenance Of adequate
reserves by the association and its mem
hers. with such provisions for discount.
and note issues as shall enable the or
ranization TO respond promptly at al
times to normal or unusual demands fo
credit or currency, without danger of un
due expansion imitation
-, To provide for concentration of tn,
cash reserve of all the banks to be use<
for the assistance and support of any
under assured Capitalization of control
Scattered reserves have been found use
less in times of pressure. Deposit bal
auces IN the reserve association are to b,
counted a. legal reserve
-. To authorize the association to re
discount through its district branche
unAer local control commercial paper
Of definite character for individual hank
20 be used in replenshing their reserves
~ To give to individual banks the IA
cilities for an increase q their reserve
md loaning power which will enabl
them to adopt the policy which has bes,
univers ally effective In other countries o
aliaying excitement, creating confidenc
and preventing panics. by prompt pay
lnent of all demands and obligations a
presented and at the same time Krantin
liberal line of credit to all deservin
customers in times OF uncertainty an