Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1912-02-10
Synopsis of Banking Bill.


Editor Kerinebec journal:
The National Monetary Commission,
after Sl2 years of expert study. has
submitted to Congress bin to reform
our banking system. The fundamental
principles OF this bill have. received
the universal appreciation of bankers
and economists \ National Citizens
League with branches all over the
country has been organized by bust
ness men to conduct campaign of
education in favor of sound banking,
Vet the salient features of this bill are
little known. For this reason the
courtesy of your columns is asked for
brief synopsis of the bill.
The bill provides for a National Re-
serve Association having it's head
quarters in Washington, TO be incor-
porated urder the laws of the United
States with a capital equal to % per
cent Of the paid in capital of all sub
scribing banks, Of which one half is
TO be paid in and the balance remain
a liability subject to call. 500, 000, 900
Of capital must be paid in cash before
the Reserve Association can commence
business. All national banks and all
state hanks and trust companies con-
with reference to capitalization and
reserve are entitled to subscribe for
stock and to become membeys of the
Association. shares in the Association
are non transferable, and can only be
owned by subscribing banks IN the
proportions named
II is proposed 10 group into local
associations all subscribing banks in
contiguous territory. the number OF
such local associations being limited
only by minimum requirements wish
respect TO the number and aggregate
capital of the banks forming local
association.
The local associations are to he o.
ganized into district associations. of
which there are To be fifteen so ar
ranged as To include all the territory
in the United States. In each of the
fifteen districts there will be located
a branch of Fhe National Reserve
Association.
IN order to avoid domination by any
special group of financial interests and
in order to give government represen-
tation without subjecting the manage
ment OF the Reserve Association to the
influence of politics. plan of director
ship has been devised which places
the ultimate control in a majority of
subscribing banks without reference
to their size or importance.
Each local association is to have
Board of Directors, of which major
ity of thrce-fifths are to be elected by
the subscribing banks irrespective of
the amount If their stock holdings in
the Reserve Association, and a minor
ity of two-fifths elected by majority
in stock interest.
Each of the fifteen branches is to
have Board of Directors not less
than twelve in number elected direct
" or indirectly by the local associa-
tons but in such election one-half OF
the Directors are to be chosen by the
local associations acting as units WIFI
out reference to size or Importance ana
only one-third by vote based on
stock ownership. The remaining one
sixth arc to be chosen by the Directors
already elected and are to represent
other than banking interests.
I The Board of Directors of the Ma
tionaI Reserve Association is to DE
| composed of forty-siX members vi
| this number thirty are to he elected
| two by each Of the Boards of Directors
| in the fifteen districts. One OF the
two SO elected must fairly represent
/ the agricultural, commercial ana IN
| dustrial interests in his district. and
| both must be residents of the olstrlct
| from which they are chosen. Nine ui-
rectors are to be elected by represeil-
tatives from the Branch Boards OF
| Directors voting on a basis or Stock
ownership, but of these nine no TWO
| can be residents of the same dlstflct.
| Thus of the 80 elected directors a max
/ imum If three can be residents in the
same district. There are to be seven
| ex-efficio members, namely, the ,'oV-
ernor of the National Reserve Asso-
! citation, appointed by the President OF
| the United states from q list SUD-
| initted, two deputy governors, the
| Secretary Of the Treasury, the Seere-
tary OF Agriculture. the Secretary OF
/ Commerce. and Labor, and the Comp
troller of theN Currency.
The shareholders in the Reserve As
sociation are to receive 4 per cent
! cumulativc dividends. with provision
| for distribution of earnings about 4
/ per cent in fixed proportions between
| a contingent fund. a reserve FUND. the
| limited states Government and the
shareholders bur in no event are the
i Shareholders to receive in excess OF
Il s per cent.
4 The transactions Of the Nanpnal
Reserve Association are 10 be prac-
ideally confined to the United States