The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1911-11-21
Chairman of Monetary Com
mission Talks Before the
Bankers Association
Five POSITIVE PROVISIONS
IN PLAN Of ORGANIZATION
Bank Independence, Equality OF the
Banks, Equality of Discounts, Non.
Political Control and Non.C Corpora.
ton Control Are Primary Things.

dress OF Senator Nelson w. Aldrich.
who as chairman Of the national
monetary commission. has prepared
the scheme for revising the banking
and currency laws of the nation.
Senator Aldrich's Speech.
Mr.. Aldick spoke in part as follows:
To the national monetary commits
sion Is assigned the important task
of Lewiston a plan by which this great
country may, in the interest of all Of
Its people of every class and every Sec
ton, secure that immunity which for
half century has been enjoyed by
the people of every other great COM
mercial nation. from the disastrous
results Of monetary panics and acute
monetary disturbances.
III we can devise for the United
States q monetary system which will
protect the rights and afford securi-
ty to bank depositors. which will en-
able the banks at all times to respond
to every legitimate demand for credit
and currency so essential for the de-
velopment of our industries-we shall
have met the expectations of the pub
lie with reference to two important
and maintain that feeling of confid-
ence in the safety and effectiveness OF
banking institutions which is SO es-
sential to our uninterrupted national
progress.
There is general agreement among
intelligent students Of the subject that
to accomplish these beneficial results,
We must provide better reorganiza-
tion of credit. a thorough reconstruc-
tion Of banking systems and methods.
The failures of our monetary sys.
tenn can be largely attributed.
."(1)-to our ability to enforce that
effective cooperation Of banks which
Is necessary to protect the public in
terests as we'll as their own in times
Of stress or crisis;
t"(2)-to the limitations and restric-
tions imposed by aniquated or obso-
lete laws with reference to the treat
ment OF reserves, and, -
"(3)-to defective. inelastic and
unscientific system of note ISSUES.
II propose today to discuss briefly
some Of the salient features of the
plan to remedy these defects and pre-
vent failures through the organization
of a national reserve association.
. 1T is proposed to organize the banks
Of the country into local associations
and these into district association each
with distinctive functions and each
with local self-government and to or
ganize all district associations In the
national reserve association. The or
ganization proposed is not bank, but
a cooperative union of. all the banks
Of the country, for definite purposes
and with very limited and clearly de-
fined functions. 1t is in effect an ex-
tension, or evolution. of the clearing
house idea to meet the needs and re-
quirements of the entire country.
"The plan Of organization includes
positive provisions.
"D-To maintain the integrity and
independence of existing banks. state
and national. The new organization is
outside of. superimposed upon, the ex-
isting system. The proposed associa-
ton is not bank competitor in any
sense for the business OF existing
banks. In its ownership and in its do
mestic business. it is confined strictly
to banks and its government.
"(2)-It provides clearly for an
equality OF privileges and advantages
to all banks. great or small. wherever
located.
"(s)-1t provides equality in rates
Of discount or re-discount to all banks
and these rates are to be uniform
throughout the country. This, it is be-
1ieved will insure steadiness and rea.
sonableness of rates everywhere.
"(4D-1ts organization Is of form
and character that will effectually pre-
vent the control of its operations by
political influences. local or national.
"(5)--Every means has been taken.
every safeguard adopted to prevent
beyond question the possibility of its
control by any corporation or com.
bination Of corpora tions, banks or 9TH
erwise. by any individual or combina-
tion Of individuals in Wall street or
elsewhere for selfish or sinister pur-
poses.
"(s)-The dominating principle is
ffNr1 0nH 0ontro
We are satisfied that We could not
adopt or adapt to our use an organi-
zation like the central banks, Of Nor
way or the second banks of the United
States.
Defects to Be Remedied.
Among the provisions of. the plan
intended to remedy defects and cure
existing evils are:
"G)-To insure the maintenance Of
and it's members. with such provisions
for discounts and note issues as shall
enable the organization to respond
promptly at all times to normal or
unusual demands for credit OF cur
rency without danger of undue ex-
pansion or imitation.
"(2)-To provide for concentrat ton
of the cash reserves of all the banks
to be used for the assistance and sup
cation Of control. Scattered reserves
have been found useless in times Of
pressure. Deposit balances in the re-
serve association are to be counted as
legal reserves.
"(s)-To authorize the association
to re-discount. through its district
branches under local control. COM
mercial paper Of definite charter for
individual banks to be used in rcplcn-
ishing their reserves.
"~-To give to individual banks
the facilities for an increase Of their
reserves and lOuning power which will
enable them to adopt the policy which
has been universally effective in other
countries of allaSing excitement. crea-
ating confidence and preventing
panics. by prompt payment Of all de-