The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1911-10-20

MANY .CHANGES
Rhode Island Senator Places
Revised Commission Ideas
Before Men.
Washington. Oct. o0.-Former Sem
ator Nelson W. Aldrich today sub
mitted to the national commission. Of
wnicn ne IS chairman. a revision OF
The commission may use it as a basis
of its recommendation to congress.
The basic principles of the revised
pan are substantially the same as
those in Aldrich's first proposal. sent
TO the commission last January,
which. he said. would serve as a basis
for national discussion. The impor-
a phases which then we're unset
tied. and those. which have since
been evolved. are treated in the rec
ommendation sent to the commission
today. Most of the questions are re-
handled with great delicacy as a result
of discussions and conferences which
have been going on since the plan
first was suggested. The plan still
provides for the organization of a ma
ttonal reserve association with a cap.
ital approximately of $500. 0O0. 900. in
which the United States government
n banks owning shares in the assoc
citation shall be the only depositors.
The plan Of dividing the United States
at first into fifteen financial districts
remains unchanged. IN each district
n banks shall form a local associa-
ton of their own, which in turn will
be represented in the branches and
finally in the central organizations,
through a system Of elections Of di-
%rectors which. it is said. will make 1t
bankers to control the whole.
To provide for $7s0.ooO 900 of two
per cent government bonds now own
ed by the national banks. and used as
a basis of notes. which are to be alb
sorbed by the reservation, the follow
ing plan is proposed.
Upon application Of the reserve as
ISOLATION. the secretary of the. treas
ury shall exchange the two per cent
bonds which the association will buy
from the banks at par and accrued
interest. payable. SO years after date,
on issue.
The reserve association will pay to
the government a special franchise Of
llR per cent per veal on the amount
OF such ond AS the governments
actual interest charge on two per cent
is not actually IL u per cent. since the
banks pay back half of one per cent
as a tax. when the bonds are used as
a basis OF note circulation, this will
reimburse the government for the ex-
ira interest 1t will be called upon to
pay as a result of the interehanging
two for threes.
One effect of the exchange will be
to enable the government to provide
permanently for a large portion of the
interest bearing public debt at a net
interest charge of. i Y per cent. This
arrangement proposesnto solve the
problem. which many financiers de
ciared III greatest obstacle to the
plan. 1t disposes permanently of the
bond secured currency without a loss
to the government and without i'm.
posing upon the reserve association
the ownership of the $500 0O, 900 in
two per cent bonds.
The association will agree to hold
three per cents for fifty years. but the
secretary of the treasury after five
years will have the option of permit
t,"6 et'S ossoSldlloh toiseIl tne Securl.
ties at a rate not greater than $780,
PROVISIONS sAf for ri the .eiee I'll, of d..
rectors have been CHARGED in the re-
vised plan. with the IDEA Of minimize
ing the possibility Of Control by any
section or group. There still will be
forty-five directors, six members ex-
of1cio, a governor of the association,
his two deputies. the secretary of the
frog SIlrG- tho caNroforxy ne o.-.->
and labor, and the comptroller of the
currency.
Each of the fifteen financial dis
tricts of the country will elect one
director: twelve others will be elected
by shareholders; and these twenty
seven will elect to the board twelve
additional members. who shall no be
officers of banks, but may be direct
ors in them, and who fairly shall rep
resent the industrial, agricultural,
commercial and other interests of h
country.
The completed plan provides that
of the twenty-four directors in the
latter groups, not more than three
may be elected from any one district.
In the organization Of the executive
committee of nine members, upon
active management of the association
wou fall. only n Of the five elected
members, the other four being a gov
ernor Of h association. his two dep
uties and the comptroller. of the cur
rency. ex-of1cio. may he chosen from
any one district. The whole board of
directors may reserve to itself any
authority it desires and is not bound
to vest the executive committee with
full control.
The original plan provided that the
governor of the association should be
appointed by the president Of the
United States from a list of names
submitted by the board Of directors,
and tina the president should also
have power to remove the governor.
The revised plan reserves the right of
removal to a t%wo-thirds vote of the
board.
One important change is the admis-
sion to membership of state banks
and trust companies which conform
to the required standard.
The requirements for reserves to be
held against the deposits are made
the anne for national banks. state
banks and trust companies. but the
present reserve requirements Of ma
tional banks are modified to the extent
Of requiring no reserves against time
deposits, except for 30 days preceding
their maturity. Banks of all classes
will nave full use of time deposits.