The Birmingham age-herald., 1913-10-24
GOVERNMENT BANK
ENTERS THE ARENA
Vanderlip says Members of Senate
Banking and Currency Committee
Have Expressed Approval


Washington. October ga govern
ment controlled and operated central
bank to dominate the financial system
OF the country, entered the Legislative
arena today as rival of the administra-
ton regional reserve currency plan. Frank
A. Vanderip, president of the National
City bank of New York, explained the
new plan to the Senate. banking and cur
rency committee. He had evolved the
scheme as result OF conferences with
members of the committee who he said
lad expressed approval of such a plan.
Under his proposal the government
through a board of seven members ap-
pointed for terms of Ia years and receive
ing salaries of $4,000 or $17,500 a year,
would establish a huge bank with $780,
000,0oo capital which would control finan-
cial conditions by powers conferred ON it
to issue money, to rediscount CONNER
cial paper for banks and to concentrate
the country's gold reserve.
Mr.. yanderlip suggested that if possi-
Bile the stock of this institution should
be held by the public as an investment
security. The stock would have no voice
or vote in the banks control, which un-
der all circumstances would rest entirely
with the government. Mr.. Vanderlip
pointed out that his bill differs from the
administration in that it absolutely elimi-
mated the banks from participation In the
RECOMMENDATION Oh the system winch would
control the issue of currency.
In the pending bill the banks would own
the stock and elect six of the nine direc-
tors of each of the regional reserve banks,
which would issue currency, make redis-
counts and hold bank reserves under thu,
control of the federal reserve board Tie
Vanderlip plan differed from the so-called
Aldrich plan, proposed by the national
monetary commission in that the latter
aH fnv
banks owned and controlled by the mem
Der banks themselves.
Senators Bristow, Reed, OGorman and
Hitchcock of the committee tonight ex-
pressed themselves as in favor of the
principle embraced in the Vanderlip plan.
This is the plan which Senator Hitch
cock and l have favored since consider
alton Sof currency reform began said
Senator Reed. THE only question is
whether it is not proposed in concrete
form too late to make it advisable to alter
so radically the provisions of the bill
under consideration"
The Vanderlip plan undoubtedly will be
taken up by the committee in connection
with the Presidents concession that the
number of proposed federal reserve banks
could be cut down from 12 to the number
| fixed in the bill without altering the basic
principles of the administration measure.
-Four Favor Principle
Senator Bristow during the examination
of Mr.. Vanderlip said he favored such a
plan because he believed it would operate
to prevent a concentration of credit snd
money.
Mr. Vanderlip said ne had talked over
his plan with a few bankers and that
they favored 1t.
Think Bankers Would Accept
ia
| accept it or would we have another Bos-
ton convention if We adopted it?'' asked
Senator Reed.
| II think bankers generally would be
somewhat shocked at first by the idea ot
! absolute government CONTROL answered
Mr.. Vanderlip, but I think when they
understand the safeguards thrown abou,
the appointment of the controlling board
| and the quality of men who would be
named they would accept it with great
favor. 1t eliminates the provision of the
| administration bill, which would fore,
| banks to supply part of their funds t.
J the national system, eliminates the cbjec-
( tionable provision that would compel mu-
| tual rediscounting among federal reserve
banks and provides for the issue of true
bank notes instead of government fla.
money"
| After Mr.. Vanderlip had presented hi.
plan the committee heard Jacob S. Coxey
! general of the "army of the unem,
/ poved." which descended on the capita
in 1898. He urged that the government
er the entire banking business. is
sue fiat money against bonds for all pub.
! e-+s and generally eliminate
banking operations on which interest i,
\ .s,i SEQ.
Pratt to Testify
I a shin nefnbar A mo-
that Charles G, Pratt, director of the