The Birmingham age-herald., 1912-01-08
Monetary Commission Plan to Reform Currency Sys-
 tenn Will Be Presented
FEW CHANGES MADE
 IN ALDRICH'S PLAN
Proposed to Incorporate National Reserve Association With Cap ital Equal to 20 Per Cent
 of All Members

Washington, January 1.-The monetary comm ission's long awaited report detail ing a plan to reform the currency sys- tenn, will be laid before Congress to- morrow. It proposes a perfection of Chairman Aldrlch's original plan for national reserve association, which is to be a cooperative union of all the banks in effecting an evolution of the clearing house idea, extended to include central organization. This report includes bill to make effective the plan as 1t now stands, and to repeal all national bank ing laws which would conflict with It's operation.
 Few basic changes have been made in the improved plan which MT. Aldrich submitted to the commission several weeks ago. It is proposed to incorporate the national reserve association with capital equal to 20 per cent of all the banks which become members. Before the association can begin business, s1oo.- GOO in cash capital must be paid in All national banks may become members, as may all state banks and trust companies
 
 reserves and capitalization.
 The reserve association would become the fiscal agent of the government. hold deposits of the government, take over for cash all the present outstanding in- terest bearing public debt. issue circu- lating notes, establish a uniform rate of discount, hold the cash reserves of subscribing banks, with provision for their use for only specific purposes, re- discount commercial bills for the banks and perform all the functions of a great national financial institution.
 Fifteen Financial Districts
 The United States is to te divided into b financial districts Each of these Is to have a branch association, which compose the central organization The district branches will be composed Of local associations of banks Tie local nssoclations elect their representatives in inc district branches and the latter elect l representatives in the central organiza- ton.
 By an elaborate method of eleeting di- rectors in the district branches and in the central organization, the commission believes 1t has made impossible the so- called wal street control' as we'll as control by any set of individuals or com bination of banks. No one district can elect more than three of the 30 directors on the main board
 Under that plan New York, with % per cent of the banking resources of the coun- try would have 8 per cent of .the repre- sentation on the board: New England, with P per cent of the resources. would have per cent the eastern states, with 1 per cent of the resources, would have l5 per cent; the middle west with 2 per cent of the resources, would have 3l per cent; the southern states, within n per cent of the resources. would have 8 per cent and the Pacific states with l2 per cent of the resources would have 23 per cent of the representation.
 The New England. western and middle west states taken together with Y per cent of the resources could elect only 2i of the 46 directors in the National Reserve association and the southern and Pacific states with 23 per cent of the resources might have 46 per cent of the representa- tion. The percentages of representation have been based on the theory that the Nv England eastern and middle western states by reason of their preponderance for each district. In order to effect q of capital would be entitled to elect maximum of three directors for each dis trict Tn order to effect q combination to secure a majority of the directors combination of eight districts would be necessary. No combination could be made which did not include more than s0 per cent of the banking power of the country
 I've think this statement' said the re- port, must Of itself show conclusiyely that there can be no local domination no domination of selfish interests in this organization and that fear of possible Wall street control can have no substan- tia foundation.
 "The commission has been impressed with the necessity of inserting prov Aons that would prevent beyond question the possibility of its control bv any corpora tion or combination of corporations, banks or otherwise. by any individual combina- tion of individuals for selfish or sinister purposes.
 Wall Street Figures
 No provision of the bill to reconstruct our monetary system is of more vital im- portance than this. Today the financial interests of the whole country depend III times of trouble upon what Is popularly known as Wall street. Those who ex- press fears of the future domination of Wall street seem to lose sight of the fact that the domination of New York is an accomplished fact; that we are now stalk ing the safety of all our banking resources
 
 ability of bank managers in New York whose hands are tied in emergencies by the restrictions of decisive system and unwise legislation,
 "rhe responsibilities of continuing this control are too enormous, the risks and failure are too great for this condition to be tolerated longer. In our Judgment the only effective remedy will be found in the national organization suggested and the reserve cities. the reserve agents of the country banks and Individual banks generally depend upon the banks of New York.
 aThis dangerous condition of depeud- ence will continue until we have a thor ough reorganization of our banking sys- 1 tenn Every financial institution in the United States Is in peril whenever con- 1 fdence Is destroyed in the strength of the New York banks or in the wisdom of 1 their management
 Suggestions have been made favoring l banking scheme based separate state or district organization eaCn with independent functions. partaking some what of the character of existing clearing houses or of the branchs which propose to create in the bill.
 "The fatal objection in the opinion of. the commission to any plan of that kind Is found in the lack of utilization or .rn>ynsNurun nN narsr