Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1911-01-18
Report Expressly DiSclaimS Be-
lief in Central Bank as CAL
cuIated to Meet Needs of Sit
uatiOn,
LOCAL ASSOCIATIONS
OF NATIONAL BANKS
One Organization for Each Of
Fifteen Financial Districts In
to Which It Is Proposed to
Divide United States.
10y Morning Journal Special Leased wirtl

Washington, Feb. 17.-Senator Mel
son w. Aldrieh's long awaited "plar
for the revision of the national bank.
ing legislation as he calls it, was
made public today. He does not con.
template the establishment of a cen.
trail bank. 1t is so far from what
most people have expected Mr.. Aid
rich to propose that it may come as a
surprise.
Far from recommending the insti-
| tuition of central bank, Mr.. Aldrich
expressly disclaims belief in il as
calculated to meet the needs of the
situation.
What Mr.. Aldrich proposes, is the
establishment of the reserve associa-
tion of America, representing what
might be called a federation of local
associations formed by national banks.
lie says in his letter to the commits
sion. that he believes this associa-
ton would not be subject to the
tical or financial group.
These seem to be the essentials of
the plan:
AT bottom. local organizations OF
representatives OF banks, formed by
not less than ten banks each, each
bank holding stock in the association
In proportion to its capital
Directors elected by these to the
board or branch" associations, one
branch for each fifteen financial dis
tricts into which The United States
would be divided. Each branch"
board would include a certain pro-
portion of men not bankers but rep
resenting industrial. agricultural,
commercial and other interests.
The branches" In turn would elect
to the reserve association proper, di-
rectors, forty-five in all, among whom
also must be a proportion of men
representing interests other than
banks. There would be six ex-officio
members of this board, namely the
secretary of the treasury, the secre-
tary Of commerce and labor, the
comptroller of the currency and the
governor and two deputy governors of
the association. The governor and
deputy governors of the association
would be appointed by the president
OF the United States and be remov-
able by him for cause.
The association would be the prin-
clpal agent and depository of the
government, would fix from time to
time the rate of exchange or discount,
ana eventually its notes would re-
pace those of the national banks.
Prime commercial paper, passing up
from the banks through the local as
soclations and branches. as well as
ponds OF the government, could be
used as basis for currency issue
me plan contemplates two new
classes Of national banks or depart
ments of banks. to receive savings
ana make loans upon real estate and
aiso TO be in effect national trust
companies. National banks would be
permitted to form branches only in
'heir own immediate communities and
they also could be organized for busi-
ness IN foreign countries.
The system of mutual support by
"hich the associations members
would meet currency emergencies is
detailed at length.
Mr.. Aidrich prefaces his plan with
an introduction in course of which he
l. l.. tfx.
onahges In the national banking act |
""'ch VIII make it responsive tc the !
demands of modern business. The |
s'uuy which the commission has given |
70 ,his has, | believe, led lri eslstihly |
10 the conclusion that our present |
oahking system, which has been
toui'd Inadequate and unresponsiye
wen under ordinary conditions of
business.
"a the light of our experiment, 1t
is obvious that one of the principal
needs is to find such method for
,ne unification of our present banking
institutions into one comprehensive
system.
ohder our faulty system reserves
arc SO scattered as to be unavailable
- ''me OF trouble either for purposes
'f assistance or defense.
- we can so amend the present
!. 'ahKing act so as to permit the form
'.''n OF an association Of all the
'"nks OF the country to meet these
Donu''ons, we shall have gone a long
~ toward solving the problem
H,'oh Is before us. If. then, in addi-
- we provide a more scientific
,.s,s lor bank note circulation, so
"a' 'he volume Of circulation will be
e'pehslve to the needs Of business,
re - snall' | believe, have met the two
a1'n n1. requirements of satisfactory
-, .aa,ulultlon. II We can aid in Great
fCanst.s- .
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