The Detroit times., 1912-04-27

the so-calIed money trust The
/ words are not accurately used. but Il
may be defined 10 be fear OF COM
/ bination OF banks or hnanciers TO con-
i troll the credit and loans of the coun-
\ try, SO that certain interests would be
/ favored in obtaining loans. II should
be observed that that Is a thing which
( We have now. Under our present sys-
I tenn. We have men OF financial power
rs directors In numerous institutions,
J railways and the like. We recognize
also that the idle funds OF the banks
| fiow TO reserve cities and mainly to
New York, TO obtain the two per cent
on deposits, making Il necessary for
banks TO lend money at call for stock
exchange operations. Moreover. we
have the tendency 20 concentration
and Capitalization. Large banks are
increasing in number. while banks OF
moderate capital are diminishing. Al
these things are menacing. All pos.
I sibility OF a money trust should be
abolished. All tendency TO central
lzation and feudalism OF credit should
J be abolished.
How can you do It? BY some co.
operative organization like United
Reserve association. This is the very
reason why the business men oil the
country are demanding banking re-
form In the shape OF United Reserve
association. II would accomplish the
following purposes:
II would free any small institu-
ton from feudal dependence upon
large city banks.
Every section of the country
would be treated alike,
Each bank would receive the
same rate of discount.
Deposits now drifting to New
York and used in stock specula-
ton would be diverted into legiti-
mate commerce at home.
The funds OF the United Reserve
association could not possibly be
used in Wallst operations, be-
cause It is provided that these
funds should be used only in the
| discount of short-time commercial
| paper.
| WalLst. Control Barred.
what other provisions in the
measure would make IL impossible
for Wall-st. or any financial interest
to control IL?
THE election of directors is based
on the principle of local self-govern-
| ment. = three-fifths OF the directors OF
each local association being chosen on
| the principle of one bank, one vote.
! The local associations themselves
choose the directors of the branches;
one-half on the principle OF one as
ISOLATION, one> vote: one-sixth should
be business men, not bankers; only
one-third are chosen according TO the
capital of the banks. Finally, OF the
46 members OF the United Reserve as
ISOLATION, which unifies the whole ac-
cording TO the same federal system
| by which the states are united, into
a central government, 10 are elected
on the principle of one branch. one
vote: Is are non-banking persons,
nine only are elected according to the
shares possessed BY the banks. and
seven are ex-oficio officers of the gov
eminent.
The privilege of membership is
open 10 every bank under free bank
ing system. There can be no monop-
oily OF banking under these condi-
lions, and every bank must be treated
alike.
ITO make assurance ,doubly GER
tain, il is made impossible for any in
stitution TO control the shares Of other
banks In eFder TO elect directors. In
case 40 pei centum OF the capital
stock in any subscribing bank Is
owned directly or indirectly by any
other subscribing bank, or In case Az
per centum OF the capital stock IN
| each OF two or more subscribing
banks, being members of the same 10
cal association, 10 owned Directs OF
! indirectly by the same person, per
sons, co-partnership, voluntary asso-
citation, trustee, or corporation, then
and In either OF such cases, ne'ther
of such banks shall be entitled 10
vote separately, as a unit, or upon It's
stock, except that such banks acting
together. as one unit, shall be entitled
to one vote, for the election OF the
board OF directors of such local asso-
citation.
| Another Safeguard.
FINALLY. the provision of greatest
inheritance Is that the rediscounts or
1.-THE United Reserve association must
be confined to short-time commercial
paper. Paper based on stock ex-
iohange collateral Is not permissible.
This is the provision which takes
away the motive for control OF the as
sociation by any money trust, whose
principal purpose would be the con-
jtrol OF banking institutions In order
TO aid in promotions and the distribu-
| ton of securities. II is specially pro-
lvided that the institution could not
loan on the basis of these securities.
The result will be TO make the United
Reserve association an instrument
for furnishing capital. which other