New-York tribune., 1911-01-12
ALDR|CH HAS PLAN
FOR CENTRAL BANK
institution of Great Capital, with
Powers Similar to Those OF
Clearing House Association.
EMBODIES PERSONAL VIEWS
Bill To Be Introduced at Present
Session of Congress-Will Wei
come Suggestions from Bank
ers and Business Men.
fFrom The Tribune Bureau. J

From The Tribune Bureau.
Washington. Jan l1.-Senator Aldrich
will introduce in the Senate bill en-
bodving his personal plan for the reor-
eanization Of the national finances before
the close Of the present session of Con-
gress. This plan provides for modihed
central bank system which is designed TO
make available the business credlt OF
the country as basis for currency out
which will not enter into competition IN
the general banking business of national,
state or private banks. The senator
from Rhode Island has determined on
this step as the best method Of educa'-
ing the business world and acqualntihg
il with the conclusions ne has been led
10 draw from the extensive investiga-
tions Of the National Monetary Com
mission.
Whether or not members Of that COM
mission will subscribe with marked
unanimity 10 the views of the senator
from Rhode Island who is its chairman
remains to be determined. Mr.. Aldrich.
while regarding the proposed measure
rs Of vast Importance 10 the stabillty OF
the nations finances. and while. perhaps,
raeasurably proud Of the system he has
devised. IS wholly open to suggesuon'
and his purpose in presenting the Dill al
this session is the better acquaintance
Of the business world with the conclu-
sions he has reached and the plan ne
has devised. and which is, Of course. at
least in harmony with the deductions
Of 2 majority Of the commission. If
those interested in the subject rs men,
bers Of the commission or as bankers
or business men can suggest improve
raents. Mr. Aldrich will welcome sucn
suggestions most cordially.
Features of Mr.. AIdrich's Plan.
The plan Of a central bank. modelled
after the Bank OF England was found to
possess practically insuperable objec-
tions but Mr.. Aldrich will propose
modification of that plan. bank which
will possess A large capital, which VIII
issue currency in times of emergency
and which will probably, in the course
Of time. replace the existing national
bank notes which will accumulate a
surplus and which will exercise GER
tain supervisory power over the bank
ing and fiscal affairs of the entire coun-
trv similar 10 that which has been ex-
ercised by the clearing house associa-
tions in those cities large enough 10
maintain such institutions.
To facilitate the exercise of that su-
pervision which is regarded as essential
10 the proper utilization Of the credit OF
the commercial institutions, and which
includes a check on frenzied finance and
madCap banking, Mr.. Aldrich proposes
the division OF the country into fifteen
districts. each Of which will choose a
director to sit on the board Of what Mr.
Aldrlch terms "the central banking
mechanism" and this directorate, which
will be augmented by certain Of the fed
eraI fiscal officers. will control the af-
fairs of the central mechanism, as well
as pass on such questions as may be re-
ferred 70 il by the several districts.
Having completed the outline of the
plan hy which he purposes to reorganize
the banking system Of the country, Mr..
Adrich is now engaged in working out
the details Of two Of the most important
provisions Of the measure. One Of these
IS designed TO preclude the possibility
Of the affairs Of the institution becoming
dominated by political influences. The
other will'provide for the gradual retire
ment Of existing national bank notes and
the ultimate refunding Of the national
debt with bonds. which shall no longer
possess an artificial value as security for
circulation.
Panama Canal Bond Issue.
In connection with the last named oo-
ject. the plan Of the Secretary Of the
Treasury to issue Panama Canal bonds
which will not be available as a basis for
circulation meets with the cordial ap-
proval Of the Senator from Rhode Island
because such an issue will establish be-
yond all question the borrowing capacity
of the government on securities which
are available solely as investments or
AT least. will not enjoy the artificial value
Of bonds which may he deposited as Sc
curity for national bank circulation
Such an issue marketed before the time
when Congress viii have 10 take up for
serious consideration the report Of the
Monetary Commission or the Aldrich
bill will he Of the utmost value as a
criterion by which 10 judge not Of the
feasibility Of the AldriCh plan but OF the
practicability Of the details Of the pro.
posed measure.
IL was the purpose Of the Senator from
Rhode Island TO travel somewhat exten-
sively. and by series Of talks" explain
10 bankers. clearing house association,
and business men the system ne had in
mind, and this plan may be still carried
out 70 "A limited extent, but the demands
on the time of the chairman Of the ri
nance Committee at this session and the
TACT that ne feels the necessity of con.
siderable rest on his retirement from The
Senate have led him 20 the conclusion thai
II would be wiser 10 complete a measure
FOR which he will not ask the Monetary
Commission TO accept the responsibility
but which he is certain is in consonanct
With its views, 20 introduce II in the Sen.
ate and thus TO permit ample time fol
its study by all those interested before
congress meets again and the subject Is
taKen up for serious consideration and
action
Credit Basis for Circulation