The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1911-10-20
Basic Prin ciples Are
Same as in First
Proposal
WANTS RESERVE
ASSOCIA ITO N
Capital Would Be s8oo,ooo,ooo,
and United States Government
and Banks Owning Shares
the Only Depositors-For-
mer Unsettled Points
Definitely Treated.

Washington, October 19.-Former
Senator Nelson w. Aldrich. of Rhode
Island. to-day submitted to the Ma
tional Monetary Commission, of which
he is chairman, a revision of his plan
for monetary legislation. The com
mittee MAJ use 1t as the basis of it's
recommendations to Congress-.
The basic principles of the revised
plan are substantially the same as
those embodied in Mr.. Aldrich's first
proposal, sent to the commission last
January, which he said he expected
would serve as n basis for national
discussion. Important phases which
We're then unsettled and those which
have since been evolved are treated
in the recommendations sent to the
committee to-day.
A Reserve Association.
Briefly, the plan still provides for
the organization of the national re-
serve association. with capital of ap-
proximately $500, 100000. in which the
United States government n tho
bilnks owning shares in the associa-
ton 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 associations OF
SIlSii oMH hltu III u VIII De rep
resented in the branches and finally in
the central organizati on through a
system OF election of directors. which,
1t is said, Will make It impossible for
any section or set Of bankers to control
the whole. To provide for the $780,
900. 900 of . per cent government
bonds now owned by the national
banks and used as the basis of note
circulation, which are to be absorbed
la. The acarx. neeanto IT, 49, to-,
ing plan is proposed:
Upon the application of the reserve
association. the Secretary of the Treas
ury shall exchange the . per cent.
bonds. which tho association will buy
from the banks at par and accrued in
tercst. for a new Issue of 2 per cent.
securities. payable fifty years after lie
date of issue.
The reserve association will pay. to
the government a special franchise
tax of l 1-2 per cent. per year on the
amount of such bonds. AS the govern
ments actual interest charge on the
2 per cents. is actually 1 1-2 per cent.
since the banks pay back a half OF I
per cent. as a tax when the bonds are
used as the basis Of note circulation.
this Will reimburse the government for
the extra interest It Will be called up
on to pay as II result of exchanging
the 2ts for 3's,
One efect,of the exchange will be TO
enable the government to provide per-
manently for a large portion OF the
intercst-bearing public debt at n ne.
interest charge of | 1-2 per cent. This
arrangement proposes a solution OF
what many fnanciers declared the
greatest obstacle to the plan. 1t dis
poses permanently OF the bond-secured
currency without a loss to the govern
ntnt and without imposing upon the
reserve association the ownership OF
the s730.000.o0O . per cent. bonds.
Mny Redeem bonds.
The association viii agree to hold
the 3 per cents for nifty years. but the
Secretary OF the Treasury. after five
years, will have the option OF permit
! CONTINUED on Second PaEe.)