Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1912-01-08
SENATOR ALDR|CH'S
MONETARY PLAN.
Bill For Formation of National Re-
serve Association" Exhaustive
Report.
AMERICAN BANKING SYSTEM.
seventeen Reasons Suggested to Show
That il Is Antiquated and Defective
and Should he improved.

! Washington, Jan S.-Former Sem
ator AdIrich's plan for monetary re-
| form. incased in hill for the Tor
nation Of National Reserve AS
sociation" and with an exhaustive re-
/ port. was submitted 10 Congress to-
day by the National Monetary Com
! mission.
! The report leads off with an ac-
count OF the researches made BY the
! commission in European countries
and gives IL reasons TO show thar
the American banking system is anti
quated and defective, with the inabil-
j Try OF the banks 10 protect, their own
and the public interests in times Of
stress and crises.
II is set forth that to place the
monetary system on Il souHd basis. the
S.! National Reserve Association be in
corporatcd and that before it can
! Z. lmence business 500, 100000 OF
capital must he paid in cash.
| All state banks and trust COM
! panies conforming to the provisions of
/ The bill and all national banks are
entitled TO subscribe for stock and to
, become members of the Association.
The country. according TO the bill,
will be divided into Is districts, with
a branch or the National Association
! in such district.
/ The National Association is de-
signed TO have 4G directors, seven 10
I be cX-Officio directors. consisting Of
the, governor of the National Reserve
/ Association. Two deputy governors.
! the secretaries OF the Treasury, Agri-
culture. Commerce and Labor and the
| Comptroller Of the Currency.
! The Governor is 10 bc appointed
/ by the President from list or three
names submitted to him by direc-
tors Of The National Association.
! Discussing the functions Of the as
sociation and the evils ii will remedy
! the report says:
Our present system Of bank note
issues. based upon government bonds.
is defective, and that 4 change in the
manner and character OF issues must
take place at an early date. is ad-
mittcd on every hand.
we propose that the important
privilege of note issue shall be ac-
crded TO the principal financial agent
OF the soyernment-thc National Re-
serve Association--to be exercised
under government control and su-
pervision with restrictions and linz
! i,ations of such character as will in
our Judgment. make imitation i'm
possible. Profits from note issues
will be paid into the L. S. treasury.
1t has been suggested in some quar-
ters that we should provide that all
notes should be redeemed and all
reserves held in gold and gold alone.
We believe no good reason exists for
the adoption of this suggestion. Ev-
cry dollar OF currency which the I'm
tied States has issued. or for which
it is responsible. is today OF equal
value with the gold dollar.
"One of the most difficult problems
with which the commission had to
deal was the question OF what pro-
vision should be made for the out
standing per cent bonds owned by
the banks and held by the treasury
as a basis for their circulating. With
out the circulating privilege, tho
two per cent bonds would have Il
market value Of approximately 10,
and any legislation preventing their
further use as 4 basis for bank circu-
lation would entail enormous losses
upon the banks.
I'VE therefore propose that the
National Reserve Association shall
purchase, at not less than par and
interest. these two per cent bonds
and take over with the purchases the
right 70 Issue notes 10 an equal
amonnt to the bank notes now out
standing. 1t is proposed that the
Secretary OF the Treasury shall. upon
application of the Reserve Associa-
ton. exchange the two per cent bonds
purchased, for three per cent bonds,
payable after fifty years.
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