The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1913-10-24
BANKER OFFERS
NEWPL ANFOR A
FEDERAL BANK
Frank c. Vanderlip, Presi-
dent of the New York
National City Bank, Sub
mits Substitute for This
Feature of Currency Bill.
BY ASSOCIATED PRESS.

Washington, Oct. ga complete
substitute plan for government con-
| trolled federal bank was presented to
the senate banking committee today
by Frank A Vanderlip, president of
the National City bank He framed
the plan at the suggestion of senators.
The government would grant fifty
year charter to the federal reserve
bank of the United States with capital
stock of $780, 600, 00O," he said.
Mr.. Vanderlip outlined a plan to
have the proposed bank rediscount for
all member banks commercial paper
up to the amount of the member bank
capital and surplus. The federal bank
also would buy and sell paper bearing
endorsement by member banks in the
open market in order to maintain a
discount rate.
The. federal bank would issue cur
rency dollar for dollar against gold or
against the commercial paper redis-
counted for the federal banks, provided
a so per cent gold reserve was main
tanned against the o-caIled ''unse-
cured" issue, based on commercial pa
per.
NOTES AND BONDS.
The plan would allow the new bank
to take up the 2 per cent bonds upon
which the present bank note currency
Is based and to issue one year notes
at three per cent. These notes would
be renewed at the option of the gov
eminent for twenty years and would
be used by the bank to buy gold
abroad when its reserves fell low, or
to check exports of gold.
The head Office of the federal bank
would be in Washington with twelve
branches and sub branches. wherever
designated by the board of the federal
reserve bank said he.
THE stock of the federal bank might
be subscribed entirely by the governor
or offered for public subscription, but
holding national banks liable for the
purchase of their pro rata proportion
OF any stock not taken by the public.
The stock would have no voting power
and no rights of any kind except to
receive dividends. There would need,
therefore, be no restriction on its pur-
chase or sale of accumulation, either
by banks or individuals.
"The federal bank would be wholly
under the mana cement of a board of
seven directors appointed by the presi-
dent with the advice and consent of
the senate with terms of fourteen
years At least three should be recog-
nized to have had wide financial and
banking experience. The board would
committee Of seven members with
terms of seven years.
THE governments portion of earn
ings would be devoted to the retire
ment of the public debt. The govern
ment would deposit all its general fund
with the bank and constitute the in
stitution its fiscal agent The bank
reserves would be held in the vaults
of the member banks and with the fed
eral reserve bank. The reserve re-
quirement would be the same for all
member banks and ultimately be IL
per cent.
1.-THE reserve to be held by the fed
eral reserve bank would never be less
than so per cent of it's demand iabi1i-
ties including note issue, in gold or
lawful money
State banks and trust companies
would be admitted by conforming to
the same requirements as national
banks. M
The circulating notes of the federal
reserve bank would be a first lien on
all the assets of the bank" Mr.. Van
derlip explained. THE federal bank
would have in turn first lien upon
the assets of member banks
Senators que lioned Mr.. Vanderlip
closely on the details of his plan and
Senators Bristow and Hitchcock en-
dorsed many of the proposals.