New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-10-20

| ton TO the deficiency reserve. One-hat
tho note issue to be taken over from the
\ national banks is TO be exempted from
the reserve requirement, on the ground
! that IL Is Improbable that more than
half the notes outstanding will ever re
permanently retired
| In the elaborated plan special provi-
sions nave been introduced to minimize
| the possibility of control by local organ
| izations or groups of bankers. Not more
than thrae of the twenty-four directors
| ~ the second and third groups may be
chosen from any one district; ex oihclo
! members may not take par, in the elec-
| tion of those directors TO represent TIC
| Industrial commercial, agricultural ara
| other interests, and of the five eiectco
members of the executive committee oIiy
| che may be chosn from particular us
! trict
| dividual banks. the provision of the New
| York trust company law that reserve
need only be held agains. time deposits
for the thirty days preceding their ma
! turity Is adopted.
| Provision is also made for the estab-
| lshment OF separate savings departments
/ In national banks. a reserve Of only 40
/ DEPOSITS being prescribed for savings
deposits. Another feature which VIII ne
| veIcomed by the banks in AGRICULTURE
regions is the provision that 40 per cent
| Of the savings deposits may be lent upon
| productive real estate.
Basic Principles Unchanged.
The basic principles Of the revised
plan are substantially the same as those
embodied in Mr. Aldrch's first proposal
sent to the commission last January
which h said he expected would serve
| as a basis for national discussion. I'M
portant phases which were then unset
| tied and those which have since been
| evolved are treated in the recommended
| tons sent to the commission to-day.
! Most Of the questions are rehandled WIN
| great detail. as the result Of discussions
and conferences which have been going
| or since the plan was first suggested
Briefly. the plan still provides for the
organization of the National Reserve AS
ISOLATION. with capital Of approximate
| ~ $500, 100000 in which the United
| States government and the banks owning
! shares in the association shall be the
| only depostors. The plaH of dividing
! the United states at first into fifteen
| financial districts remains unchanged.
In each district the banks shall form
! LEGAL associations Of their own when, IN
! turn. will be represented in the branches
and finally in the central organization
through system Of election of directors,
which it is said. will make it impossi-
/ bic for any section or set OF bankers 10
! control the whole.
one effect of the exchange of : per
, cent bonds for 3's will be to enable Tue
| government to provide permanently FOR
large portion Of the interest bearing
public debt at net interest charge OF
| ~ per cent. This arrangement pro-
poses a solution of what many f1nanclers
declared the greatest obstacle TO me
plan. 1t disposes permanently or the
! bond secured currency without loss 10
the government and without imposing
upon the National Reserve Association
the ownership Of $3.50, 100000 , per cent
| bonds.
| The association will agree to hold the
| 3 per cents for fifty years, but the Sec
rotary of the Treasury after five years
will have the option of permitting the
! association to sell the securities at
rate not greater than SJO,0OO,O0O year.
The government may reserve the right
| TO redeem any Of the bonds before ma
/ turity. to buy any Of them a par for The
trustees Of the postal savings system, or
| otherwise.
There will still be forty-fve directors,
as IN the original plan, and six members
OK offlcio namely, the governor Of the o.
ISOLATION, his two deputies. the Secro-
! tary of the Treasury, the Secretary OF
! Commerce and Labor and the Controller
OF the Currency.
Each of the fifteen financial districts
of the country will elect one director;
| twelve Others will be elected by the
shareholders, and these twenty seven
will elect to the board twelve additional
members who shall not he officers Of
banks, but may be directors in them,
and who shall fairly represent the IN
dustrial. agricultural, commercial and
otter interests Of the country.
The completed plan also provides that
OF the twenty-four directors in the latter
groups not more than three may be
! elected from any one district. AS an in
! stance. the effect Of this provision would
be 10 liz IL the State Of New York, which
! has about one-fifth thu. banking capital
of the country and which is the seat Of
the great financial interests. TO four di-
! rectors among the thirty-nine who are
| elected.
| In the organizatio Of the executive
| committee OF nine members, upon which
| * has been said much of the active man
agement Of the association would fall.
| only one Of the Ave elected members
| (the other four being the governor of
| the association, his two deputies and the
| Controller of the Currency ex-officio)
may be chosen from any one district.
| The whole board of directors may re-
serve to itself any authority it desires
| and is not bound to vest the executive
J committee with full control.
| The original plan provided that the
governor OF the association should he
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