Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1912-01-08
COM
missions Re-
portDue, Today.


rency system will be laid before Con-
gress, tomorrow. 1t proposes an
elaboration of Chairman Aldrichs
original plan for a national reserve
association. which is TO be a co-opera
tive union of all the banks--in effect
an evolution of the Clearing House
| idea extended to include a central or
ganization. The report includes bill
to make effective the plan as it now
stands and TO repeal all national bank
ing laws which would conflict with
its operation.
II Few basic changes have been made
in the improved plan which Mr.. AID
rich submitted to the commission sew
eral weeks age 1t is proposed to in
corporate the National Reserve Assn-
citation with a capital equal to 20 per
cent of all the banks which become
members. Before the association can
begin business $1o0.o00.000 in cash
capital must Ire paid in, All national
banks may become members as may
all state, banks and trust companies
which conform to certain standards
of reserves and capitalization.
/ The reserve association would be-
come the fiscal agent of the govern
ment, hold deposits of the government,
take over for cash all the present out
standing interest bearing public debt,
issue circulating notes, establish a uni
| form rate of discount. hold the cash
reserves of subscribing banks with
provision for their use for only specific
purposes, re- discount commercial bills
for the banks and perform all the
| functions of a great national financial
institution.
The United States is 10 be divided into
Is financial districts. Each of these is
+ to have a branch association which COM
pose the central organization The dis
trict branches will be composed of local
association of banks. The local associa-
lions elect their representation in the
district branches and the latter elect rep
resentation in the central organization
BY an elaborate method of eecting di-
reetors in the district banks and in the
central organization, the commission be-
lieves it has made impossible so-called
wall Street control" as we'll as control
by any set of individuals or combination
! of banks. No district can elect more
than three of the 80 directors on the main
board.
According to this plan, New York with
the country would have per cent. of the
representation on the board. New Eng
land with IL per cent. of the resources
would have s per cent: the Eastern
states with Al per cent. of the resources
would have 10 per cent; the Middle West
with "a per cent. of the resources would
have 81 per cent; the Southern states
with Il per cent of the resources would
he pa off eta
with Il per cent. of the resources would
have % per cent. of the representation.
TIE New England. Western and
Middle West states, taken together.
with Il per cent. of the resources
could elect only q of the 46 directors
in the National Reserve Association
and the Southern, Western and Pa
CHIC Coast states might have 46 per
cent. Of the representation. The per-
eentagess of representation have been
based ON the theory that the New
= England Eastern and Middle Western
states by reason of their preponder-
ance Of capital, would be entitled To
elect maximum OF three directors
( for each district In order TO effect Il
commission to secure majority OF
the directors a combination of eight
y
hination could be made which did not
| include more than so per cent of the
| banking power of the country. The
report says:
The commission has been Impress
ed with the necessity of inserting pro-
| visions that would prevent beyond
| question the possibility of it's control
! by any corporation or combination OF
. ho hx,
any individual or combination of in
dividuals for selfish or sinister pur-
( poses. No provision for the bill TO
reconstruct our monetary system is
/ of more vital Importance than this
Every financial institution in the
| United States is in peril whenever
confidence is destroyed in the strength
| of the New York banks or in the WIS
| dom of their management
There can be no satisfactory re-
form Of ~our monetary system ne
remedy for existing defects, which
does not place upon the banks of the
entire country. acting together
through some responsible agency the
serious duty OF protecting public ana
private rights and interest at times
when they are imperilled. This is
ence with Clearing House organiza
tions. The results we desire cannot
be secured through headless aggre-
cation of independent organizations.
In the construction of an adequate
monetary system for the United
States, the task of the commission
was rendered more difficult from the
fact that there were no precedents
that we could follow. and no system
in existence that to any considerable
extent could be made applicable to
existing or prospective conditions in
the United States.
I'VE were, therefore. obliged TO or
iginate plan which would answer
the exaeting requirements of Ameri-
can conditions, that would meet the
needs of a progressive nation, with It's
hundred million of energetic and en-
terprising people. whose developments
have been impeded by defective and
insufficient money system, scientific
in it's methods and democratic in its
control.