The Birmingham age-herald., 1911-06-23

June 22, 1911."
 cash reserves of the entire banking systems in the country in the reserve | system is exercised by 1t, first through | the fact that banks are allowed to de dosit part of their reserves In the as sociation; second, that the central re- serve associa tion is given power 10 sup ply cash CT currency In the form or us | notes in exchange for approved com | mercial paper and is thus enapled lo transfer the cash in that part of the country where In the Judgment of the association, 1t is needed. It should be
 noted that this reserve association is required to fix from tIme to time rate of discount of prime commercial paper, l uniform throughout the United states and that this Is greatly in che interest of the remoter sections Of the coun- try.
 Partial Control
 "The government has a partial controi through the governor the executive ot- | fcer of the bank, whom the President can select from a list submitted to him by the board of directors and the gov 1 ernor appoints the managers of the Vari- ous branch banks. It is very difficult under these carefully drawn provisions to show that the bank is under the control of any agency except one looking to the financial benefit of the whole country. The directors of the bank have no mo- tive In excessive profit to promote un- fairly the earnings of the bank, be- cause all earnings beyond 5 per cent will go into the treasury of the United States. The governor of the bank, who will un- doubtedly be influential in the executive aF hop h.- President but subject to the control of the directors and removable by the President. will give sufficient govern mental voice in the control. but subject. as he is to an executive committee and to the board of directors a whole. he can hardly be brought within any in furious political influence or intrigue.
 ''The bank notes In circulation are not reduced by the plan, but there is no provision for their increase and as the banks which are now responsible for them shall retire then.> they will not DC issued again and the reserve association is given authority to substitute its own notes for the notes of the national banks thus retired It has the right to issue additional circulating notes, paying an nual tax to the government o three per cent on the first hundred millions; of four per cent on the next hundred millions; of five per cent on the next hun dred millions and of six per cent on every thing above S10d ,000 900. These fs- sues are to be secured by the deposit of one-third of gold or other lawlhl money and the remaining portion by bonds of the United States or prime commercial paper.
 Reserve Foreign Con
 "The reserve association Is also given right to hold in it's reserve foreign coin and gold certificates are to be issued by the treasury aganst foreign coin The reserve associatio1 notes are to constitute a first lien lpon all the assets of the reserve association. They are to be immediately reieemable in lawful money on presentation at the head office of the reseryp association or any of its branches. They are to be received at par in pa ment of all i taxes and other dues to the United States and indeed. paymeit of all sal aries of the government except those specifically payable in god. Provision Is also made by which th> new reserve association Is to take over at price not less than par and accrued interest 2 per cent bonds now he'd by National banks and deposited to secure their cir culating notes; this obligation is to last for one year and this i to operate in connection with the retirement of the present bond secured circulation in order to provide a substitution of the notes of the reserve association and the act Is to contain a provision by which ulti- mately the government will redeem these 2 per cent bonds at par.
 'I am not a banker and I do not claim to he a student O. finance or of systems of banking and currency, but after such attention as I have been able to give to the plan and to a discussion of 1t by men who do understand bank ing it seems to me that the general fe. lures of this plar ought to commend themselves to the whole business com munity of the country and by that I mean not only those engaged in bank ing, railroading, merchandising, menu- featuring, general industrial work. but also those interested in mining and az riculture and the whole body of wage earners. While the relation between the individual and this system may be somewhat indirect and remote. no one who has been forced into the considera- ton of economics at all can be blind to the fact, that the wage-earner is quite as much interested in the proper opera tion of a sound currency and banking system as are the bankers themselves, and that any plan which will lead to the adjustment of the cash reserves to
 
 of a threatened panic, will insure chief | lv to the benefit of those interested in | the continuation of our great industries, manufactures and business and especi- ally in the maintenance. use and distri- | button of the large wage funds upon which the working men and their fam | lilies are dependent
 Farmers Interested
 Similarly the farmers have most in tent interest in the plan which shall se- cure for the middle man, at reasonable rate of interest, funds with which to move the crops and with which to pay adequate prices for that which the farm. CT has to sell. The demand for money which arises every season for crop nov ing causes frequent embarrassment and raising of the rates of interest. which such a plan as th.si would avoid. In no other way can the expense of the disposition of the farmers crops, which in times past has beeii 50 heavy, be so materall- reduced. This is as true of the cotton crop in the South as 1t Is of the wheat. crop in the Northwest or the corn crop in the middle west. I sin | cerely hope that those excellent associa. tons that have been organized for the promotion of the adoption of this plan will press home upon the farmers of the South and the West and the North west the fact that there is no legislation T care not what it is-tariff railroad. corporation or of a general political char acter that at all equals ii importance the putting of our banking and currency system on the sound basis proposed in the national monetary. com mission plan. | After addressing the bankers, the Pres