Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1911-10-20

Washington, Oct. 19.-Former Sen
ator Nelson W. Aldrich of Rhode Is
land, today, submitted to the National
Monetary Commission of which he is
chairman, revision of his plan for
monetary legislation. The commission
may use il as the basis of its recon-
mendations to Congress. The basic
principles of the revised plans are sub
stantially the same as those embodied
in Mr.. Aldrich's first proposal sent to
the commission last January which he
said he expected would serve rs basis
for national discussion. Important
phases which were then unsettled and
those which have since been evolved
are treated in the recommendation
snt to the commission. today Most of
the cues ions are rehearsed with great
detail as the result of discussions and
conferences which have been going on
since the plan was first suggested.
Briefly the plan sill provides fer the
organization of a national reserve as
ISOLATION with a capital of approx
IaateIy $500. 100000 II which the Unit
cd States government and the banks
owning shares in the association shall
be the only d2positors The plan of
dividing the United States at first into
10 financial districts remains uHchang
ed In each district the banks shall
form local associations of their own,
which in turn will be represented in
the branches and finally in the central
organization through a system of cleo
ton of directors, which. it is said will
set of bankers to control the whole.
To provide for the $3.50 100000 Of
per cent. government bonds now owned
by the national banks. and used as the
basis of note circulation which are to
be absorbed by the reserve associa-
ton, the following plan is proposed
Upon the application of the reserve
association, the secretary of the treas
ury shall exchange the , per cent
bonds which the association will buy
from the banks at par and accrued In
terest for a new issue of 8 per cent
securities, payable Sc years after the
date Of issue.
The reserve association will pay to
the government a special franchise tax
of ia per cent. per year on the amount
Of such bonds. As the governments
actual interest charge, on the per
cent. is not actually IL per cent; since
the banks pay back half Of one per
cent. as a tax when the bonds are used
as the basis of note circulation. thi
will reimburse the government for IN
extra interest it viii be called upon Il
pay as a result Of exchanging the -
for 3's.
one effect Of the exchange will be t'
enable the government TO provide per
manentIv fer a large portion of the in
terest bearing public debt at net IN
terest eharee of 11s per cent.
This arrangement proposes a solution
If what many hnaneiers declared the
Greatest obstacle to the plan. 1t dispeses
permanently of the bonds secured cur
rsncv without loss to the government and
without imposing upon the reserve asso-
citation the ownership of the s7S00Oo,oJo
per cent bonds
The association VIII agree to hold the
5 per cents. for 80 years, but the secre-
tary of the treasury after five years Will
have the option of permitting the asso
citation to sell the securities at rat
| not greater than $50000,0W year. IN
government may reserve the right to rt
deem any of the bonds before maturit
to buy any of them at par for the trus
tees of the postal savings system or 9th
erwise.
Provisions for the election of director
have been changed in the revised plai
with the idea of minimizing the possibil
ity of control by any section or group
There will still be 10 directors as In the
original plan. six members ex-otfieio
viz: The governor of the association his
two deputies, the secretary of the treas
ury. the secretary of commerce and la
Dor and the comptroller of the currency
Each of the following financial districts
of the country elect one director, twelve
others will be elected by the shareholders
and these q will elect to the board II adj
ditional members who shall not be ON
GERS of banks. but may be directors in
them, and who shall fairly represent the
industrials, agricultural. commercial and
other interests of the country.
| The completed plan provides that of the
"a directors in the latter groups not more
than three may be elected from eny one