The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-06-23
TAFT FOR ALDRICH PLAN
President says Financial Legislation Is
the Most Important.

New York. June 23--Ihere Is no
legislation care not what it is-tar-
if, railroad, corporation or of a gem
eraI political character, that at all
equals to Importance the putting Of
our banking currency system on the
sound basis proposed in the national
monetary commission plan"
So declared President Taft to a. big
gathering of bankers and men of
prominence in the financial and bust
ness world at a banquet of the New
York State Bankers association. which
is in session at Manhattan Beach.
The presidents address was mainly
devoted to a careful and coherent
calculation of the Aldrich plan, which
he warmly commended as providing
for 1.-The establishment of the 1000
national banks of this country on a
representative republican basis" Mr..
Taft declared it "a careful and well
drawn plan devised by a non-partisan
commission to avoid the concentration
of controlling influence either in Wall
street or in Washington" and express
ed his belief that the plan in its gen.
eral features ought to commend itself
to 1.-THE whole business community of
the country the farmers and wage
earners as we'll as the banking, rail-
road, commercial and manufacturing
interests.
I'm all well regulated banking and
currency systems of the old world"
the president said, the power to con-
troll the cash reserves, and the issue of
bank notes to be used as currency, is
placed under the control Of a central
bank, recognized by the government
and given the necessary authority. In
this way the monetary exigencies pre-
scented by domestic and foreign trade
in the rising and falling demand for
currency and in the facilitating of the
exchange and liquidation of CONNER
cial credit are promptly met. The
necessity in any satisfactory system to
be adopted by US, for some agency
like that of a central bank, has gener-
ally been acQuiesced in.
after our last monetary panic in
1907 legislation was adopted, known
as the Aldrich-V reeland bill, which Of
fers an instrument for temporary re-
lief against the actual cash stringency
due to boarding and to panic, but Of
a very clumsy, an6 unsatisfactory
character. 1t was adopted as the best
thing that could be advised under the
circumstances.
The Monetary Commission.
"a monetary commission was ap-
pointed, of which then Senator Aldrich
was made chairman. 1t was a non
partisan commission. I dwell with
great emphasis on the fact that it was
non-partisan, because if we are to
work out this problem scientifically
the hope lies in our securing support
for it from both political parties.
Senator Aldrich, the chairman OF
that "a central bank in this country
would be impossible for political and
economic reasons. The people of the
country would be unwilling to trust
to any private banking organization
such enormous control as must be
eide as to the concentration of cash
reserves and which is to decide upon
and provide for the necessary increase
and decrease of bank note currency
as we'll as to regulate the liquidation
of mmercial paper by fixing uni
form discount throughout the coun-
try.
Il may roughly describe what this
association is to say that it is the es-
adjustment Of a government of the
Z, 200 national banks of this country
on q representative republican basis.
It provides that the National Reserve
asso citation shall have Is different di-
visions or branches distributed geo.
to include the entire
country; that any 10 national banks
within the Is geographical divisions
having an aggregate capital of $5,-
100000 may establish local asso-
citation.
In this way, the banks and the
government exercise q divided con-
troll which cannot under the system
be transferred to ambitious money in
terests Of a particular part of the
country. The board of directors is
quite as certain to represent the whole
business interests of the country as
the house of representatives is to rep
resent the political views of the coun-
try.
Careful WeII-Drawn Plan.
TT is a careful and well-drawn plan
to avoid the concentration of control
ling influence either in Wall street
or in Washington.
1T is true that the National Reserve
association is a central bank, in a
certain sense. Under its plan it will
do, and is empowered to do, kind of
a banking business it is to have the
benefit of all government deposits
without interest; it may re-discount,
under certain conditions, prime and
commercial paper OF such banks; II
may issue it's notes to banks in pay
ment of their balances. It may charge
commission and discount, as other
banks, but it must confine its dealings
to banks and not extend them to in
dividuals except in its foreign ex-
change business where it is permitted
to sell and buy foreign exchange and
gold with a view to the assistance Of
its general fiscal operations.
lit should be noted that this re-
serve association is required to FIX
from time to time rate of discount
Of prime commercial paper, uniform
throughout the United States, and I
that this is greatly in the interest Of
the remoter sections of the country.
The government has a partial control
the governor, the executive
officer of the bank, whom the pres9- |
dent can select from a list submitted
to him by the board of directors, and
the governor appoints the managers
Of the various branch banks.
IT am not a banker, and I do not
claim to be student of finance or
of systems of banking and currency; |
but after such attention as have
been able to give to the plan, and to
a discussion of it by men who do I'M
derstand banking, it seems to me
that the general features of this plan
ought to commend themselves to the
whole business community of the
and by that I mean not only
those engaged in banking, railroad
ing, merchandising, manufacturing
ond e~o-aroT Industrial work la11t al