Evening star., 1911-08-11
.FAvORS MORE COINS
Senator NeWIands Prefers
Them to Paper Money.
OFFERS MONETARY PLAN
Thinks National Banks Should Form
State Reserve Bodies.
CRITICISES ALDRICH SCHEME
Federal Banking Board, Headed by
Secretary of Treasury,
Also Is Advocated.

/ A comprehensive plan of monetary and
banking reform. offered in opposition to
the Aldrich plan presented to the ma
tional monetary commission. was outlined
in the Senate yesterday afternoon by
Senator Newlands. The Nevada senator
found what he considers serious objec-
tions to the Aldrich plan and advanced
his own as more practical.
/ One of the features Of the Newlands
plan provides for more singling coins in
ones pocket and fewer slips of paper
that will get dirty or be lost AS the
senator said. the supply of paper money
should be diminished. Therefore. there
! is much less need now than ever for
paper money, in Mr.. Newlands opinion.
| except to meet emergencies.
Mr. Newlands pointed out that just as
chain is no stronger than its weakest
| link, so the banking system of this coun-
| try measures its strength by the weakest
| bank. The first step II, monetary reform.
| he said. Is TO strengthen the individual
| banks by requiring them to maintain a
certain relation of capital and reserve to
| their obligations.
! Pointing out. too, that Congress regu-
lates railroads that operate entirely
within state on the theory that they
Z,
Senator Newlands contends that Con-
gress can assume some authority over
state banks on the theory that they are
| engaged in interstate exchange. At first,
Mr.. Newlands admits, however, he
would not compel the state banks to
| come under any federal law, but would
hold out advantages for them to come
| into the fold.
| Then he advanced his scheme of bank
| ing reform, advanced in preference to
| the Aldrich plan.
Unionizing of Banks.
"The next STEP" he said, would be
to unionize the banks for preventing
bank panics and the interruption of in
| terstate exchange by enabling them to
summon their reserves to any point of
danger just as the government concen-
trates it's troops at the point of attack.
THE Aldrich plan centralizes these at
Washington by the creation of re-
serve association of America, enibrac-
ing in it's membership as stockholders
all the national banks and dividing the
country, regardless of state lines. into
sixteen subdivisions zones. in the
most prominent commercial city of
which is located branch Of the reserve
association.
There are two objections TO this-one.
that 1t practically creates a central bank.
concerning which there will be a great
difference Of opinion between the two po-
liticai parties, and the other that with the
concentration of the money power of the
country now existing such central bank
would fall under the control of such
power. and that the perversion of the
proper function OF banking from that of
advancing exchange to that of promotion
and speculation would continue. Even il
the Aldrich plan be theoretically and
economically sound, I regard it as ut
terly impracticable at present, because OF
| the balance Of the political parties, each
controlling a part OF the government and
because of the universal distrust Of GER
tain powerful banking groups. to give Ii
the sanction of law. Nor do think that
the reasoning regarding a central bank
which would apply to similar institutions
in England. France and Germany can be
applied to America, union Of forty-six
states, most of which in area and popu-
lation will some time rival those great
countries.