The Birmingham age-herald., 1911-01-18
ALDR|CH'S BANKING
 PLAN SUBMITTED Surprise Is Caused by Omit
 ting Central Bank SAYS IT IS NOT. NEEDED Senator Aldrich Proposes Revision of Monetary System by Forming
 Association of Banking
 Institutions

son W. Aldrich's long awaited plan for the revision of the national banking leg islation," as he himself calls it, was made public today. It does not contemplate the establishment of a central bank. It expected MT. Aldrich to propose that to
 those who have not been in his conf- dence 1t may come a notable surprise. The plan was submitted today to. the national monetary commission at meet ing called for the purpose, but Sen ator Aldrich was not present. He was speeding to the southland on compul- sory search for health. His communica- ton was presented to the commission by land of New York.
 Far from recommending the institution of a central bank. MT. Aidrich expressly disclams belief in 1t as calculated to meet the needs of the situation.
 What MT. Aldrich does propose is the establishment of the Reserve Association of America representing what might be called a federation of local associations formed by national banks Those in con iucilCc Ol AluTlCll uTCW pdftiCuidT d U tention to the pains which he said he
 had taken to provide against control of
 the association by anybody. On this
 point in his letter to the commission he
 says he believes the association organ ized as he proposes, could not be "con- trolled by ambitious monetary interests or dominated by political influence"
 
 So well knit is the scheme that it is diff ficult to state briefly the provisions of the plan, but these seem to be the essen -tials:
 At the bottom is local organizations of representatives of banks formed by. not less than 10 banks, each bank holding stock in the association in proportion to its capital. t7st.
 Directors elected by these to the board of .'branch" associations. one branch for each 15 financial districts into which the United States would be divided. Each
 "branch'' board would include a certain proportion of men not bankers, but rep
 resenting industrial, agricultural. com mercial and other interests. 9sss .5..
 The branches in turn would elect to the reserve association proper directors, 45 in all, among whom must also be a pro- portion of men representing interests other than banks There would also be six ex-officio members of this board namely, the Secretary of the Treasury,
 Secretary of Commerce and Labor. the comptroller of the currency and the gov
 ernor and two deputy governors of the as- sociation. r4H
 Presidential Appointees ss The governor and deputy governor of the association would be appointed by the
 President of the United States, and would be removable by him for cause.
 The association would be the principal fiscal agent and depository of the gov ernment, would fix from time to time the rate of exchange or discount, and event. ually its notes would replace those of the national banks. Prime commercial paper passing up from the banks through the local associations and branches. as well as bonds of the government, could be used as a basis for currency issues. The plan contemplates alsc two new classes of national banks or departments of banks to receive savings and make loans upon real estate, and also to- be, in effect, national trust companies. National l banks would be permitted to form branches only in their own immediate communities, and they could also be or ganized for business in foreign countries. The system of mutual support by which the associations members would meet
 currency emergencies is detailed at length. Only . Tentative Plan
 In a letter to MT. vreeland, read at to- days meeting, Senator Aldrich says he tenders his plan as tentative" and as the subject for discussion and criticism. "I of course do not expect" he says, "the immediate approval of the commits sion or that any formal action will be taken upon 1t. shs
 "The plan submitted is & personal one that fully believe will answer the re- auirements of the changed conditions. It will certainly furnish to the commercial organizations of the country. who are now considering this subject. basis Tor criticism and discussion"
 MT. Aldrch prefaces his plan with an introduction, in the course of which he says 1t has heen his aim ito suggest changes in the national banking act which will make 1t responsive to the demands of modern business. The study which the commission has given to this has, I be- lieye. led irresistably to the conclusion | that our present banking system, which was adopted nearly half century ago and has remained practically unchanged not only; fails completely under stress and in the presence of unusual demands upon its resources. but has been found | inadequate and unresponsive even under the ordinary conditions of business.
 r. Result of Much Study
 ''TheI suggestions submitted herewith 2