The Detroit times., 1912-01-08
SUBMITS PROPOSITION
FOR NATIONAL RESERVE
Monetary Commission Believes
Wall-St. Cannot Obtain Con-
troll of Association.

WASHINGTON. Jan. S.-The none
tary commissions report, detailing a
plan TO reform the currency system,
viii be laid before congress today.
Ii proposes perfection OF Chair
man Aidrich's original plan for ma
tional reserve association, which Is
10 be a cooperative union OF all the
banks-in effect an evolution OF the
clearing house idea extended 10 IN
clude central organization. The re-
I port includes bin 10 make effective
I the plan as II now stands and TO re-
peal all national banking laws when
would conflict with its operation.
Few basic changes have been made
in the improved plan which Mr.. Aid
! rich submitted TO the commission sew
eral weeks ago IL is proposed TO In
corporate the national reserve asso-
citation with a capital equal 10 20
per cent OF all the banks which be
come members. Before the assocla'
ton can begin business Sl0O000,OOO In
cash capital must be paid in. All ma
tional banks may become members, as
may all state banks and trust com
panies which conform to- certain stand
ards OF reserves and capitalization.
The reserve association would be-
come the fiscal agent OF the govern
ment, hold deposits OF the govern
ment, take over for cash all the pres
ent outstanding Understanding puo-
lie debt. issue circulating notes, es-
| tablish a uniform rate of discount,
hold the cash reserves OF subscribing
banks with provision for their use
for only specific purposes, rediscount
commercial bills for the banks and
perform all the functions OF great
national financial institution.
The United States is 10 be divided
into 10 financial districts. Each or
these is 10 have branch association,
which compose the central organiza-
ton. The district branches will be
composed of local associations OF
banks. The local associations elect
their representation in the district
branches and the latter elect repre-
sentation in the central organization.
BY an elaborate method OF electing
directors in the district branches and
in the central organization, the com
mission believes IL has made impos-
sible the so-called Wall-st. control
as well as control by any set OF indl'
yiduals or combination OF banks. No
one district can elect more than three
OF the thirty-nine directors on the
main board. -
Under that plan New York. with ~
per cent OF the banking resources Oh
the country would have per cent OF
the representation OF the board; New
England with IL per cent or the re-
sources would have s per cent; the
eastern states with Al per cent OF the
resources would have Is per cent; the
middle west with "a per cent OF the
!. resources would have 81 per cent; the
southern states with IL per cent or the
resources would have % per cent; and
J the Pacific states with IL per cent OF
the resources would have % per cent
OF the representation.
The New England, western and
middle west states, taken togetner
with II per cent OF the resources
could elect only 81 Of the as directors
and the southern, western and PACING
states with % per cent OF the re
sources might have as per cent OF the
! representation. The percentages oil
representation have been based on the
theory that the New England. east
ern and mtuttB western stAtes-ey
reason OF their preponderance on cap
lital would be entitled to elect max
imum OF three directors for each dis
trict To effect a combination TO
obtain a majority OF the directors, 9
lcombination OF eight districts would
he necessary. No combination could
he made which did not include more
than 30 per cent OF the banking pow
ar of the country.