The Sentinel=record., 1911-10-20
MONETARY
 LEGISLATION
ALDRIcH PLAN WHICH MAY GOV ERIN ALL FINANCIAL AFFAIRS
 IN THE FUTURE.
Recommendation to the National Commission Which Probably Means That It's Detail Will Be En-
 acted Into Law.

l N~NSd tfeO LdWh
 Washington, D. C., Oct. 19-Form- CT Senator Nelson w. Aldrich, os ! Rhode Island, today submitted to the National Monetary Commission, of which he is chairman, revision of his plan for monetary legislation The commission may use 1t as the basis of its recommendation to congress.
 The basic principles of the reyisel plan are substantially the same as those embodied in MT. Aldrichs first proposal, sent to the commission last January, which he said he ex- pected would serve as basis for national discussion.
 Important phases, which were then unsettled and those which have since been evolved. are treated in the re- |commendations to the commission to- day.
 Most of the recommendation are handled with great detail as the re- suit of discussion and conferences. which have been going on since the plan for first suggested.
 Briefly the plan still provides for the organization of the National Re serve Association with capital of ap-
 proximately S2Og000oO0. ih which the government and the banks own ling shares in the association shall be ithe only depostors The plan of dividing the Unitei States first into fifteen. financial districts remain un- changed.
 In each district the banks snan form local ass}ristions Of their own, which in turn will be represented in the branches, and finally in the cen tral organization, through a system of election of directors, which, it is said will make it impossible for any section or set of bankers to control lthe whole.
 To provide for the $730,000.O0O of two per cent government bonds now owned by the national banks and us- ed as the basis of note circulation which are to be absorbed by the Reserve Association the following plan is proposed:
 Upon the application of the Re- serve Asspciation the lecretary of the treasury shall exchange the two per cent bonds which the association Iwil buy from banks at par and ae- erued interest for a new iss1e of three per cent securities. payable 50 years after the date of issua.
 The Reserve Association will pay to the government g special franchise tax of 1 12 per cent year on the amount of such bonds. The govetn- ments actual interest charge on the two Ter cents is not actually ' lper cent, since the banks pay fafk ha,f 1f one per cent as tax when the bonds are used as the blsis oi
 n97s circulation. This will reim- purse the government for the extra interest 1t will be called upon to pay as a result of exchanging the 2s ani 3s.
 One effect of the exchange will be to enable the government to pro vide permanently for a large portion of the interest bearing public debt at net interest charge of 1 1-2 pei cent.
 This arrangement promises a so- lution of what many financiers de. elared the greatest obstacle to tht plan. It dlspenses permanently o the bond secured currency without loss to the government and without Imposing upon the reserve associa Ition the ownership of the $7S0,000.- I0000 two per cent bonds.
 The association will agree to holt the three per cents for 50 years bu the secretary of the treasury afte live years, will have the option o permitting the association to sell tn, Isecurities at a rate not greater thai $50.000,000 year. The governmen may reserve the right to redeem an, of the bonds before maturity. to bu, Iany of them at par for the trustees o the postal savings system, or other lwise.
 l Provisions for the election of iirec ltors have been changed in the revis
 ed plan with the idea of minimizin ithe possibility of control by a sec
 tional or group There will still b