The Washington herald., 1912-01-07


At its meeting yesterday the National
Monetary Commission decided to insert in
the bin which 1t is to recommend to Con-
prevent the control OF one or more banks
BY holding company. The effect Of this
provision, II enacted TITO Law. undoubt-
edly win be more far-reaching than any
other provision framed by the commis-
sion
The Monetary Commissions plan 10
prevent the acquiring OF string of
banks under a single ownership or the
organization OF a money trust" con.
sists in imposing a limitation upon the
voting power in the National Reserve
Association OF plurality OF hank own
ership. The commission proposes that
banks in which any single Individual
company, corporation or cOpartnership
owns a certain percentage OF the stock
shall have only one common vote in
the National Reserve Association and
not vote each, as is provided in the
Monetary Commissions plan for each or
dlnary member OF the National Reserve
Association. The limit which the None
tary Commission has fixed for such stock
ownership Is considerably below 50 per
cent. Any corporation or individual
holding stock In a string Of banks will.
therefore. be able to cast but one vote
In all instances where the stock owner
ship reaches or exceeds this limit.
The question OF a Limitation upon the
voting power in the National Reserve As
sociation has been the most troublesome
that the commission has had TO deal
with. The deliberations OF the commits
sion for a week or more have been given
up almost entirels' to this phase OF the
subject, and II was not until late yester-
day that they decided upon q plan Of
action.
some other Features.
As to the other features Of the bill
which the Monetary Commission viii
submit 90 Congress for its considera-
ton, they follow closely along the lines
of the original plan submitted by SEN
ator Aldrich, which has been generally
known for some time. The bill which
the Monetary Commission will submit,
however. contains several safeguards
beyond those proposed by Senator AID
rich and that decided upon yesterday
against undesirable control. The bill
provides, for instance. that half of the
directors OF the branches are TO repre-
sent the banks as such, and the other
half business. but Of the second group
none shall be officers or directors OF
banks. trust companies. insurance COM
panies. or other financial Institutions.
In the local associations the president,
vice president. or cashier OF the bank Is
specifically made the voting representa-
tive. In the bill to be submitted 20 Con-
gress a majority OF the branches will
clearly control a majority OF the directors
of the national association. thus requIr-
ing ownership or control Of eight OF the
fifteen branches in the system. TO insure
a domination. Under the bill to be intro
duced by the monetary commission a
majority OF the branches OF the system
Will clearly control a majority Of the
directors OF the National Reserve Asso-
citation. Under the plan originally pro-
posed by Senator Aldrich, twelve direc-
tors OF the association were TO be elected
by voting representatives or by the stock
The bill cuts this representation IN the
directorate to nine. Under the revised
plan, therefore, there will be only nine
out OF the forty-hve directors OF the
National Reserve Association elected Ey
the voting representatives. The bill adds
the Secretary of Agriculture TO the list
of ex officio directors OF the association.
Limit to Branches.
The plan as originally proposed by
Senator Aldrich provided that the di-
rectors of the association should de-
termine the location OF the branches.
The bill which is to be introduced to-
morrow provides a further safeguard
against Wall street control by limiting
the branches Of the Ma