The Emmett index. [volume] (Emmett, Idaho) 1893-1925, 1911-11-30
ALDRICH'S CURRENCY
REFORM PLAN
Primary Purpose is to Form
a Great Reserve Center
of Money and Credit

u purpose of the National Reserve A
sCciatiOn, which has been propose
by Nelson w. Aldrich, as chairma
: of the national monetary commits
, sion. For the benefit of those pc
SONS who are not familiar wit
the plan, an explanation OF it i
, presented here in language a
simple as is possible for a subjec
so complex.
1t is proposed to create by Law
a national currency association, tn,
capital for which shall be subscrib
ed by the banks of the country
each TO contribute an amount equa
to one-fifth of it's capital. If all
the banks participate the associa,
tons capital will be about 300
million dollars.
Only banks may own stock, and
no bank may own more than its
proper proportion. No bank may
transfer its stock except to- the
association.
The association will not receive
deposits from or loan money to
any person or corporation except
the banks and the United States gov
eminent.
Its primary purpose is to form
great reserve center of money
and of redit power available for
use on equal terms by all banks.
1t will issue bank currency I'M
der carefully regulations, pro-
-ected by an adequate gold reserve
md secured by notes of bank Gus
.omers, representing actual COM
mercial trlnS3' UCrs. The currency
thus issued will have back of it
he guaranty of all the banks in
the system and the protection of
strict government supervision. No
currency may be issued based on
ponds or stocks as security. (This |
would shut out loans of New York |
banks arising out of operations in
the stock market.)
The National Reserve Associa-
ton is to be the depository of all
the funds of national government
and payments by the government
are to be made by means of checks
Drawn on the association.
Gradual substitution of National
Reserve Association currency for
he existing bond secured national
,ank notes is contemplated, the
bonds now held by
rational banks to be purchased by
he association.
Dividends on the capital stock
f the association are not to ex-
eed per cent per annum. Earn
lgs above . per cent perannum are
D be divided, one-haIf to go to
ne United States government and
ne-half to the associations sur
lus; when this surplus reaches 20
er cent of the associations capital,
Il the earnings above 5 per cent
n the stock, are to go to the
overnment. .
Local associations and branch as J
,ciations are to be organized all 7
yer the country to facilitate the I.
of the system.
For the purpose of preventing the 7
ntrol of the association by !
ealth concentrated in few hands J
of hA Iirantare nF y
cal associations are to be chosen !
one vote from each bank re- J
.rdless of size and two-fifths by 7
ties in proportion to capital. Lo- :
| association elect directors for tn J
teen branches. 7
The national association is to hav ;
rty-five directors. Each of the !
teen branch associations is to 7
sct one; twelve are to be chosen !
a vote in proportion to the a /,
punt of capital held; these TWEEN :
seven directors are to elect twelve :
ditional directors who shall not d.
o ficers of banks. The COVER :
r of the association Ito be ap- :
inted by the President of the .
ited States), the two deputy
the Secretary of Com
rec and Labor and the comptrol- !
of the currency are to be ex- ..
icio directors of the association.
The chief reason for a reform in
currency as proposed in this
n is to make the banking and AS
ney system of the country more in;
ective in times of financial stress. lCt
some such plan as the one here POI
lined is adopted, its advo- pos
es claim that banks could readily aft
ct all legitimate demands for fla
ney in a period like that of qui
4, for example, instead of hav- ma
to force payments of loans and saw
Use to make loans and even stop to
ing cash as they did at that sob