The Fairmont West Virginian. (Fairmont, W. Va.) 1904-1914, 1911-10-21
PLAN /.
T:0R MONETARY
LEGISLATION
MONETARY COMMISSION GETS
DETAILS FROM ALoRIcH, GREAT
FlNANclER, ON PROPOSED
LAWS.

FlhANclER, ON PROPOSED
LAWS.
OUTLINES II HIS THEORY
CALLS FOR NATIONAL RESERVE
ASSOCIATION TO CONTROL THE
BANKS.
WASHINGTON, D. c.. Oct. 20. q
Former Senator Nelson W. Aldrlch, OF
Rhode Island. yesterday submitted to
the National Monetary Commission, OF
which he is chairman. a revision OF
his Plan for monetary legislation. The
commission may use It as the basis OF
Its Recommendation to congress.
The basic principles OF the revised
plan are substantially the same us
those embodied In Mr.. AldrIch's first
proposal, sent TO the commission last
January. Important phases which
were then unsettled and those which
have since been evolved are treated
In the recommendation sent TO the
commission to-day.
Briefly, the plan still provides for
the organization Of the National Re.
serve association. with capital OF ap-
proxlmntely 5000. 100000, In which the
United States government and the
banks owning shares in the assocla.
tion shall be the only depositors. The
plan OF dividing the United States, at
first into fifteen financial districts, re-
mains unchanged. In each district
the banks shall form local asocIa-
tions OF their own. which In turn will
be represented in the branches and
finally in the central organization.
through a system Of election OF direc.
tors. which It Is said, will make 1t
impossible for. any section or set of
bankers to control the whole. 3.
To provide for the s730,O00, 900 of 2
per entsgoyernment bonds, now wn.
ed by the National banks, and used as
the basis OF note circulation. which
are to be absorbed by the reserve as.
soc:ation, the following plan is pro.
I'posed:
Upon the application of the reserve
association, the secretary OF the treas.
ury shall exchange the 2 per cent
bonds which The association will buy
from the banks at par and accrued In.
terest. for new Issue OF 3 per cent.
securities, payable fifty years after
the date, Of issue.
Inc reserve association will pay TO
the government n special franchise
tax OF ~ per cent. per year on the
amount of such bonds. As the gov.
ernments actual interest chareg on
the z per cents. Is not actually IL pcr
cent, gince the banks pay back n half
OF per cent. US tax when the bonds
are used as basis OF note circulation
this will reimburse the government
for the extra interest. 1t Will be called
upon to pay, as result OF exchanging
the Is for 3s.
Solution Of Obstacle,
One effect of the exchange will be
TO enable the government to provide
permanently for large portion OF the
interest bearing public debt at a ne.
interest charge OF ~ per cent. This
arrangement proposes solution OF
what many nnancIers declared the
greatest obstacle to the plan. 1t dis.
poses permanently of the bond Sc.
cured currency. without loss to the
government, and without imposing
upon the reserve association the own.
ershlp OF the s73O,OoO,OOO 2 per cent.
bonds. In the organization OF the ex.
ecutive committee OF nine members
upon which It has been said much of
the active management OF the asso.
citation would fall. only one of the five
elected members, 1.-THE other four, be.
Ing the governor Of the association.
his two deputies and the comptroller
OF the currency, ex,ofilcia) may be
chosen from any one district. The
whole board OF directors may reserve
10 itself any authority 1t 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 Uni.
ted States from list of names sub
mitted by the board Of directors and
that the president should also have
power to remove the governor. The
revised plan reserves the right OF re-
movals to two-thirds' vote OF the
board.
One. important change is the admis
/ sion TO membership Of. State banks
and trust companies which conform to
n required standard.
1