The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-10-20
ALDRICH PLAN IN.
His Monetary Legislation Reform Sub
mitted to Commission

Washington, Oct. 2O.-Former Senaz
tor Nelson W Aldrich Of Rhode 1sIahu
has submitted to the national none
tary commission, of which ne IS ciidil
man. a revision of his plan Tor nloAe-
tarv legislation. The commission nay
use it as the basis OF us TecOlililA ii'--
tions to congress. ..-.d
The basis principles of the reNlseu
plan are substantially the SAM &C.
those embodied in Mr.. Aldrlcn ~ ~
proDosaI sent to the commission l as1
january which he said he expecteu
would serve as a basis for national u -
cussion. Important phases Wni ii
were then unsettled and those y u =:
have since been evolved are lIea -, ~
the recommendation now sent 70 IL
commission. Most of the quesuoLls q :
rebandled with great detail as the re- re-
suit of discussions and CONFER eA 20
which have been going on siH0S ~
plan was first suggested. 49,, eo,.
Briefly. the plan still proVloes ~
the organization of the National re
serve association with caplIal u a. a.,
proximately $3OO,00o,0OO IN Wnl9n t ~
limited States government anu ~
banks owning shares in the assOeie'ei0
shall be the only deposltors. T-,,i+ad
The plan of dividing the = hl ~
states at first into fifteen hnahclal ulS,
fricts remains unchanged IN edclA
district the banks shall form local as
sociations Of their own, Whlcn III tuli
will be represented in the pFaIlc! !.
and finally in the central orSaillNt, eloii
through a system Of electlon q u ~ ~
tors which. 1t is said, will make II I'M
,,orsib1a for any section or set OF BANK
ers to control the whole: $40 am - .
10 nrovide for the $3.50, 100000 OF
ner cent government bonds now owned
BY the national banks ana useq as me ne
basis IF note circulation which are 70
he absorbed by the reserve associauoh'
the following plan is proposed:
Upon the application or the reserve
association the secretary OF the Ireas+
1,rv shall exchange the two per cect
bonds, which the association Will buy
from the banks at par ana accrued IN
terest for a new issue of 3 per cent Sc
curities. payable so years after the
date of issue
The reserve ASSOCIATION wiz pay -
the government a special franchise tax
Of IL per cent per year on the amount
of such bonds
AS the governments actual interest
charge on the 2 per cents IS not
actually IL per cent. since the pahK9
nav back a half of one per cent as
tax when the bonds are used as the
basis of note circulation, this Will re-
i711burse the government for the extra
interest it will be called upon TO pay
as a result of exchanging the twos Tor
threes.
one effect of the exchange win be 10
enable the government to provide per-
manently for a large portion OF the IN
terest charge of per cent This ar
rangement proposes a solution Of what
many financiers declared the greatest
obstacle to the plan 1t dtsposeS per-
nanently Of the government and with
out imposing upon the reserve assoc
ciation the ownership of the 30.000,000
. per cent bonds.
The association will agree to hold
the 9 per cents for so years, but the |
secretary of the treasury after five
years will have the option of per
hitting the association to sell the Sc /
curities at a rate not greater than /
$50. 900 900 a year. The government may /
ressr-e the right to redeem any of the /
bonds before maturity, to buy any of I
them at par for the trustees of the I
postal savings system, or otherwise.