The Manitowoc pilot. [volume] (Manitowoc, Wis.) 1859-1932, 1912-01-11
MONETARY BOARD
ON BANK REFORM
Communication Drafts Bill After
Four Years. Work.
TO PREVENT MONEY PANIC
Measure Follows Closely AldrIeh Plan,
But Several Important Changes
Are Mads-Lons Debate Ex.
pectsd In Congress.

Washington, d. C.-The national
monetary commission. after four
years Of study and labor. have drafted
. bill to revise the currency system
OF the United States designed to pre-
vent recurrence OF such unfortunate
financial conditions as prevailed dur.
ing the money panic of 1907.
The bill consists Of ffty uine Sec
lions and in general follows the lines
OF the socalled Aldrich plan. But the
commissions bill shows some iinpor-
tant changes from the original or even
from the revised draft of Mr.. Aldrich's
plan.
The bill Incorporates the National
Reserve association of the United
states, with an original capital Of
$200,O00,00o instead of the 5000, 000,-
600 as first proposed by Mr.. Aldrich.
Through an elaborate machinery In
volvi1g fifteen branches OF the associ-
alton. each branch being the center of
group of local associations of banks.
the National Reserve association Is au-
thorized to issue notes against prop
erly Endorsed commercial paper. The
bill provides for the admission to the
reserve association of state b1nks
and trust companies that subscribe to
Its conditions as well as of tho nation
al banks already In existence.
The circulating notes c1 the associa-
ton shall be received at par In pay
ment for all dues to the United States
and salaries and debts owned by the
United States, unless gold is specifical-
ly set eorth In the contract, and all
dues or debts to any bank or trust
company shall be payable in the notes.
The notes shall constitute first lea
upon all the assets OF the association
and Nc interest shall be paid by the
association upon !ts deposits.
Besides its duties In the rediscount-
ing OF paper for the providing Of an
elastic currency, the association shall
act as disbursing agent for the United
states government and shall also
transact business abroad. authority be-
Ing given for the establishment of for
eign branches. The assets OF the as
sociation and of local branches and
districts shall be exempt from local
and state taxation except as to real
estate. while federal tax falls auto
matically upon the association for its
failure to maintain the SO per cent re-
serve required by the act.
The bill attempts to prevent the
Capitalization of the control of the
system in any one locality. In the dis
tricttng Of the country for the fifteen
branches. division is made largely by
geographical and not financial stand
ards
Sixty days after the bills passage
books for subscription. to the capital
stock Of the reserve association shall
be opened and an a. owance for ex.
penses by the government is made
though this allowance must after.
ward be repaid from the profits of the
association.
The National Reserve association
created by the bill is to exist under its
terms for fifty years. and have an au-
thorized capital equal to twenty per
cent. of the paid-in and unimpaired
capital of all banks eligible to men,
bership in the association.
The sections which will attract
widest public interest and arouse the
most debate are those relating to the
issuance Of currency by the associa-
ton. The sections follow broadly the
Aldrich plan.