The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1913-02-16
NEW GROVE AVENUE HOMES IN FAR WEST END.

because the bill offered by that body
will be the most conspicuous and the
most seriously considered OF any pre-
scented to Congress.
In order to sound the sentiment of
the country, the Glass subcommittee
bankers and economists, and will ex-
anime more. j am one OF those who
have appeared before II, and from the
questions put TO me and other wit
nessey II is not difficult to detect the
drift OF tho committees deliberations.
Chairman Glass has announced un-
mistakably that the committee pro-
poses TO stand squarely on the Balti-
more platform. and Is unalterably on.
posed TO the National Monetary Com
missions plan, comnJonly known as
the Aldrich bill What plan, then, lies
in the mind of the committee?
1t may be we'll here to point out
that the Monetary Commissions plan.
which began at the top and built down
Trough branches, with the branches
IS the servants Of the National Re
serve Association. had some OF the OBJ
Jectionable paternallstic features OF
the foreign central bank systems 1t
provided, moreover. an unwicidy ma
chincry and might have produced in
lation through the counting OF it's
note issues as reserves and through
a too promiscuous use OF acceptances,
or bankers bills.
Democratic PIun.
MIR. Glass and the other members Of
his committee evidently wish to avoid
these defects. Their plan seems TO be
10 build up from the bottom, instead
OF down from the top-a plan clearly
more in accord with the genius of the
American people. That this is their
plan is shown by Mr.. Glass's frequent
references to regional reserve associs-
tons. with supervisory board OF con-
troll "a Treasury Board" he called II
at tinies) and with the reserves of the
member banks pooled in a limited
number OF regions. zones or districts.
The Treasury Board il seems Is not
to hold tho reserves. If this plan fin
ally wins tho favor OF the committee.
but II Is 10 superintcnd the operations
OF al the regional banks as a trustee
Even this crude sketch arouses in
tcrestIng questions. Will the regional
banks. issue the currency or will tho
supervisory board Issue itc BY what
method NIL the regional banks effect
the!r clearings? Surely not by the
awkward and expensive shipment of
currency. Is any use to be made Of
our valuable clearinghouse expert
eices. VIII tnere De UNIFORM dis
count rate. or discount rate for each
strict? How ar. the government
tonds which are now the basis OF
bank note issue to be retised?
These are superficial problems which
suggest themselves at once to the stu
dent OF monetary reform. did not
Include he question OF how the super
visory board Is to be chosen. because,
to my mind. it is not highly important.
n - ..1,. ~. L.. ,I-ng
apro. nted az the members OF the SUI
preme Court are appointed. or elected
by the regional association.
II seems TO me certain that we can
trust ourselves to select for positions
OF such grave responsibility men who
are patriotic. disinterested and far
sighted. To say that we can't trust
ourselves 10 do that is to declare the
failure of democratic institutions.
The Question of Issue.
1t does not seem to me that it would
be wise to provide that each regional
rcncy. If that were done. we would
have as many different kinds of cur
rency as there were associations. IT
would be, iii a measure, a backward
step toward the conditions which pre-
vailed prior to the Civil War. The
supervisory board should have the con-
troll of issue, in my opinion. and I
will be interested to see what plan the
Glass committee adopts to solve this
problem.
1t Is quite possible to effect system
OF offsetting OF credits between re-
gional associations. Our clearing house
system could BIO applied nationally
among them. This suggests itself to
me as the readiest answer to that
question. And 1t seems to me, in this
connection, that there should be some
provision against the issue of clearing
house certihcates--an expedient which
has always been extra legal. at the
best. With sound banking system
there would he no occasion, / am sat
isfed, for such a step.
The retirement of the government
bonds presents complicated problem
l thought that devised by the National
Monetary Commission very ingenious
The banks must In justice, be pro
tected against loss.
Essentials of Reform.
| / have previously outlined my views
of the fundamental principles, which
must he included in any sound banking
and currency system. as follows:
! l. a discount market where short
| time. commercial paper can be made
liquid by transforming 1t into a de-
mand credit or into currency notes.
| 2. A cooperative control OF large
proportion OF the dead cash reserves
| of banks, SO as to produce the effect
| Of common ownership and prevent
the present struggle between banks
to grab reserves from one another in
| times of stress.
| s. An elastic currency based, not
on government bonds, but on the as
sets Of all the banks cooperating,
which would originate. as far as ex-
pansion L. concerned, from the process
OF discounting IN the discount market,
and would be issued. not by individual
banks. but by common agency.
4. A provision for international
banking. ~
s. The institutions organized for