Jasper County Democrat, Volume 13, Number 80, Rensselaer, Jasper County, 21 January 1911 — ALDRICH’S PLAN TO UNIFY THE BANKS [ARTICLE]

ALDRICH’S PLAN TO UNIFY THE BANKS

Proposes Hoge Organization to Control Money. The Aldrich “plan for revision of national banking legislation,” as he calls it, has been made public. It does not contemplate the establishment of a central bank. In this it proved a surprise. The plan was submitted to the national monetary commission. Senator Aldrich was hundreds of miles away searching for health. “While we have found much that is-admirable in the operation of the various government Ijanks of'Europe, none of them is applicable to our needs here,” says the Aldrich report “The good results which they obtain can, I believe, be reached without the creation of such a central bank.”

Mr. Aldrich proposes the establishment and chartering of the “Reserve Association of American.” with $300,000,000 capital, representing what might be called a federation of local associations formed by national banks. In his letter he says he believes the association could not be “controlled by ambitious monetary interests or dominated by political influence.”

These seem to the the essentials of his plan: At bottom, local organizations of representatives of banks, formed by riot less than ten banks each, bank holding stock in the association in proportion to its capital. Directors elected by these to the board of “branch” associations, one branch for each of fifteen financial districts into which the United States would be divided. Each “branch” board would include certain proportion of men not bankers, but representing industrial, agricultural, commercial or other interests. The “branches” would in turn elect to the reserve association proper for-ty-five directors in all, among whom must also be a proportion of men representing interests other than banks. There would be also six exofficio members of this board, namely, the secretary of the treasury, the secretary of commerce and. labor, the comptroller of currency, and the governor and two deputy governors of the association.«

The governor and deputy governor of the association would be appointed by the president of the United States, and be removable by him for cause. The association would be the principal fiscal agent and depository of the government, would fix from time to time the rate of exchange, or discount, and eventually its notes would replace those of the national banks. Prime commercial paper, passing up from the banks through the local associations and branches, as well as bonds of government, could be used as a basis for currency issue. . The plan contemplates also two new classes of national banks, or departments of banks to receive savings and make loans on real estate, and also to be in effect national trust companies. National banks would be permitted to form branches only in their own immediate communities and they could also be organized for business in foreign countries.