Evening star. [volume] (Washington, D.C.) 1854-1972, 1911-11-11
ALDR|CH FINANCE PLAN
OPPOSED BY NEWLANDS
Nevada Senator Regards Pro-
posed System as Imprac-
ticabIe-HiS Alternative.

Owing to the fact that Senator Francis
G. Newlands of Nevada did not land at
New York from his European trip in time
to reach Chicago today he was unable
to address the Western economic So
rency reform in conjunction with ex-
Senator Aldrich and others. In accord
ance with the request of the society.
however. Senator Newlands forwarded
his views on the subject, which were read
this afternoon in Chicago and will be in
corporated in the record of the meeting.
Senator Newlands expresses the belief
that no strongly centralized system of
banking will meet the approval of the
democratic party and therefore proposes
an alternative plan which, he holds, can
be supported by men of either political
party without violation of political prin-
ciples or traditions. He takes the al
vanced ground that as state banks are
engaged in interstate exchange they are
instrumentalit;es of interstate commerce
and therefore under federal Jurisdiction.
National Reserve Formation.
To exert such control, however. might
arouse opposition, SO he suggests that
state banks be brought in by extending
TO them the privilege of becoming men,
bers of the National Reserve Association
upon complying with the requirements
of the national banking act as to capital
and reserves and examination by the fed
eral officers.
Senator Newlands comes out strongly
against any plan that will concentrate
control or that directly or indirectly con-
templates a central bank. The Aldrici
plan is rejected as utterly impracticable
for the present because of the balance of
political parties. each controlling a part
of the government, and because of the
universal distrust of certain powerful
banking groups. Conditions are SO diff
ferent between the United States and
Europe that the reasoning that we should
have central bank because European
Proposes Alternative.
Az an alternative to the Aldrich plan
he proposes the organization of reserve
association in each state composed OF
the national banks and such state banks
as care TO affiliate. The state reserve
association would be endowed with GER
tain powers Of examination and correc-
ton and could insure the depositorS OF
individual banks To the state associa-
lions would be turned over all note
issuing powers including that Of emer-
gency currency.
As central governing body for these
state associations Senator Newlands pro-
poses a national banking board or COM
mission headed by the Secretary of the
Treasury and controller of the currency,
limiting its powers at the start and re-
quiring II to report to the President and
to Congress.
Present Bank Issue Sufficient.
Senator Newlands holds that the pres
ent issue OF about $6O0OOO.OOO in national
bank notes is sufficient; in fact, it might
be gradually reduced. as the basic bonds
are redeemed as they fall due. He points
out that the country is now firmly es-
tablished on the deposit and check sys-
TEN under which banks are permitted to
give credit to their customers on their
books for more than five times the
amount Of cash actually on hand.
The senator will reach Washington
Monday to take part in the hearings to
be given by the Clapp committee on in
terstate commerce on his bill for an in
terstate trade commission to control cor
porations and other bills bearing on the
same subject.