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NELSON ALDRICH Monetary COMIlliSSiG4 HECUAKI 11 7(//////K/If,,. // "X•62.. / - oZ5` 112:Qam..44Q &cv.49-cAAA4 Lib *The :none renc;;: Irob)..o718," s utiAM4 t'.0 Cwt.:I0.1'0U or o - 10 4 -- in 7-1 is Last annual ro:mrt, p. 103, °which confront Congre:;:i (rib arras: h adr: ini:;tr lt o. fic ors of the Cr over;-!. lent the b iino. world, and brin,.; a 91 ague upon k'n'ri(n pOLL t rntuit 11 . 1-in tL el,' fin( : ()1lit ion ix: rir ed The L t cOrnil v!1- ri 1,1 but on we' ), n1; in • iri,,rov %nen -1,c. - . , - huch les ol c. i ci.it1 as will :7alce credit everywhere equal- ly available to the extent to which thoso seg_lkin: it are justly entitled. alai 1 i - So, too, mu:;t a point be finiA lly reached won b.-.n.ks MAO a I of e cx.It cua.'r°nay of • es pons ibl e, in:It ea(i of th o courit.ry Ltnc stand ov, .:).-n:7!e3:10.:, for its red anp- t ion in i. ;olci coin whenever Lir:0 in ! WI t over ()Ilan titi es 0 • os on t'.! .1 Oori.)troll Or':; recomendAt ions for :1'cr.p.1(i.ial I ck:ivi t ion re n•tturally con!' "nod t :improver-ten LS of laws and the rotire, lont O States flOteS• cioes not helievo money - notos anx, :sdocie ion i; I t it i 4 'this p.t.or for 7r qenb sok 8 and otho L11:1t, !•.a. t in 1697, Uni Led the (mint int, volume of it,; insufficient. r'dunhiLnt, an,.6 t ional b;1 -• A -7o if• of' the opin- luck of bfLcIliticn t ene,0 lh to R op or't. 1 ency in thos, strin.2- the ;)rincipal case oi' in the srr1.11'3r co'ntry where there is a dearth of )arts ! .able credit. '-e t,R.-•er•Tor, reco.- -onds„, as & ntop money and ban;•t Circe t ion, alentil-len it; to t*'. 1tion%1 harlicin in t17! lat 7fola.(.‘ 0.15thorizo ir.21.-.1Atants, with a c..pital s took of of ler;F; tun au •Thanization of Thtional banks in :11:1cfri a proportiorte 1 emit of -Plite6 States boncir ti) ecul.o te -d' oLretil.ation, tile minim/el cital :Look redenption of t] ,os anc• s no- r, cluired for or •,1,.i.v.izm.ion beinc; 'airors getieral arP.zationts that would. • Lrl •)0() :oesoectilreay. = to ir.siAe noLes for cir allow All iation up to .: the full mnount of 01.9 bonds cif):)osit.-)d ther,Ifor, rrt,•1.1-1, a reduction of the one per cent annual tax now imposed on wnraCe culat ion to one-fottrth of1..71 imburse the rate (1-thich woulv. be ariple to re- : iov ern lent for ai I ey:7 , ns en incurred for print . notes, reciylntion, etc ) A ant: py- irnit the b mks to oitablih , branches whi eh ';‘)L)...V3. enable )arent hki to intro;.ucc loan- able capital into places uhable to sup)ort indo?on('.etit Thereby local ceposits an( capitf..1.1 woul( beeme lonnable caoi. tal. not (03 MA 1:. ho reconle.nda the redeal of the ten cent tax levied unon the i.sue of fq .ite b3.11.1c no t(iS or th011i;11 ht vim, in that all bank c ircu Lai ion should be based entirely. upon bn.nkini; itievr 3et8 and not apon :;•overryient, of' c,ourse, ret?eal orte tax a lo,;ic..1 no- .1tOasity. for entirely l anks," says the C!orv troller, " t!'!er L1aan ion:)., do not issue 1) .in: notes, simply because by doirr; so they must inc-w' loss through the enforcin,..; of the ten per cent tax against th.) notes no issmxl. 'Spon the f.,=e Grounds '.Tationsa banks do not to than in so issue notes Yther1 there in either a direct ing, or a pro:IAA too rrlall to warrant the investment in bonds and i:; pLtyment of tint) rat e of the tax c that 7..4,ional. banks a- e in a onso public.; instittions, in f they are lincle. . (.Lrect 3overn-,enta1 supervi!;.ton, LIi.ç :ire none the 1e:1s ast7ociations of pur2oses OS formed wholly for wiv- iriw:ite . ) In res: ect to i):11er $urrency, the • ational banAs an Unite(. S Le. 08 Vr9 SUI7 ar 0 the o in ti y onred in the busineHs of if)r banking, and very much to t,be distulvarltk;e of the pul)lic. -1 fore comviess has he,m appealed to fro'. time to tile ltr:,r he dif- , ferent )-.1.1ticz t1i. ;):L-ties of the (;olmtry to enact measures of financial "reforms," rriny oi' thPl of the most antagonistic c108 firrIQ ) fre, coLn of silver, sup11.1.n.mted by inited . unlirlito6 iSWac of .):-ver mone;; direct frorl ti , Treasury, as a p ern • ed o an ab 1 ,7; e, I c ; others urn ing , the policy of leavin.,-, the rational h!tnkf.; free volurne of pa ier money necesfAry and -, ,racLIal or i noc1 Late !'et ire e b. :;i.x1C:: t an ;7.ates C, nc determine the emin try, or aLt -Ated . -11 ton :7,:•i• cent tax 1 ,. n71, on the in!Ale of o /..c.)eal of for the , rrery C•escription; still others ankini; .atee riotT.s o!' ( J. loi ;/..al.,c) b oink notes, in order to }.1.3 0001110 of eaoh 93.rt Of the coJntry to ostaluif;h ban's of i5sue without 71 etera1 restraints. Confronted 1.vith :3‘ac1a confliotins- 2olicies the 1al., tor mode of relief Trail look o(2 1.1p011 With SrY,1(3 avor by the 19ading 4.iirrenCy of the last members of the Go71-littel on _ , 1:ous e of Ilepr ,sentati res an a e.o1,)1•o1.ise; but they did not oon- oth an ;het to retire the 51',-(Inbamks ;tr 11/0.re sorie af3:31Zra vote cou.1(, so_oh section of the oountry that ,; obtained. rloro t. as we 1a r.7: , 'Ftorn (i or a '/ink in Troamiry notes, and ivon b: ::entle-(;,1 who :)rofqssed to know :leople of the nentiments or t an iSh 'Is . that Concres;. Coos not -uhleet of 1)it.rtking. :rrobloris, -• r)-Lii-,•‘,,r, 1,11in -d by Con ...r One )1.1:.).1.1c at; I. ho'r I 1[7ir.tate >onness all the power to 1, ) non ,- of tilt) disousnionr; of the t. ir ltheth, in .;- e prenn or 'adc3 Ll)at - hay° for. lawyPirs and bankers incLalina* the or. u thirty y(hIrs, Jn- wholly 1'4! riot to ho iion.(t)red. it to vote for th woul, he 7Vill1fl --relis from the ori , mer41.) orf; o no-ib ,,1, of 1..hat : ansuranees Ihr‘»m- Is unless sat :)urpose s Lcit31' LI1 rit, a bill. for te atc 1 f.V:13 tonu.;resF:, has Atl.U.COS 1- 17`,17‘) Cin:1 power to .'olieve the siL,ation, whereas in fact the/ could in a "or' 1. ;o meu!ture enact laws t' at woulcr, very the ciolution of theve probtells ,id in elievia; that to several 5tates of V.e 'Jnion have as much power as .:onnress to ch.:xter banks of iEsue„ wHm such b .Lks ae Cesired o am: to exenpt them fron aleral taxation anC sloervLsion, 1 now A"esent th.at, remedy or consideration, as on that :in be :maintained upon constitil- tional t:rounds. Tho;.)ower to onict laws proviCking for lonfv an of )a)e:o the reuiRtion o: it s volume acorOin foi• its circulation if; not , ,!st ,Jii r cwolusivi:ly in Coni;ress by the 7ithin well f..:;'theC. limits t.ny may exercise that powiw less of any to the 6 ,riand _oordin:: to ,ate lefLislature own zHiscretiont regard- 'ep6e:.al restrictions, by taxation or et:Jorwise, tiT,t ConL:ross ?)as itlosed 'pon the notes of 't:11,e banks i!,3ue circulation for money. Therefore t::e of any aate who ar ,.7. not ,Iltisfied with the existinp; monetary systum shoul )a.y to ,,h'ar own lei;- islature for 6sir ,:::e rolieLY as B tead of wastin .: theip efforts ia IvAn ap.lef-an to ion!.;res amonthientr3 to 1, f..! 11.ws, or .;n1imity3o . w greonbacks,u anc: other United SL:U.es motes. To ii;suef; of 2-1;11, ux11 such a c:ourso woul(k roliev e the two :Totit political .rLien and oonrrress from endless eincuioas of L'Io ymone:" tia6tion," 7rtkin; 1 .. locJ1.1 if,, :ne in the dis:mtisfier:. Stat.:ea. The ntronth of tho movement in the SAith and ',lest for the free coina,,;o of silver, at its fixed ratio of "13 to 1," is , due not so '.11i C a ,-- esire onth'..3 part of the to sections to oilon ,eople of those znintF-, to that , . netal, as to tho e1ief that the oxfistity: volume of mono is insufficeint, an.0 that the ; . prices of t'neir staple L)I•oducts are cue to that cause. in3 this, it is not yt1'an:y2 th'* strongly resont !iny propo- sition lookirv: to the ,.otirelient of "rr.',en ..acics" and other - United. r;tates notes, an(i..-tro h.r.)r,tilo to L'r:Ii. t .on solutely necessary to iiritti .'‘sel..iev- at ir ab- that currency, am; gol, and sil- ver (. 01.n, at par. , . If these people knew there constit-ltional ricr,hts there would be very little op)osition, on their part, to the speedy rem t irerlent of e'ror Th1 Lo(: t i.t05 pa ier dollar, an the main ton- anc o of the gold standard; bout:v.:se banks of issue, simit.r to the old State n, could. be ...Authorized b:7 the ftate lec;irAa; tures on as sl-tfo basis as the , ational 'anks, r nd the:: woul:i be MAR- riwth h or adapted an t,han the latt fir tc, afford them bankinc; pz*,))1r volume of dirc,lat ion. -And, of r;(qar'se, theLr ',1(;a1.,i want Cleir bank notes to be "as i;ood as olo." .,71eVii.-2r a 24 :to should! o.• should not establish such a „ blnkin - systom, is merely a question of 000nony and polioy for 1e,;_71s1ature to determine undf.:r the Late Constit:;tion. It be .-1:1(•e al :,1.n.(7 s if° as the present one, an,: .'"nr more eco2lorli- onv on i out to tho 1 at ion to a nin eopi o thin one which y..0.1t 7) or cent C ircu- t t on on the )ar value - it- ed States bonds which bear hitt low inte:-est, 7-rh - •. hich - the rerta t b :n ,; t;1-11: in tho3e parts of countrj whore loans cor iand ' hi.r:t rates, (the South and West) g clr.not a ,'ford to inc .e3se such expensive ciroulo.ti ,)n as th s r.g1 on inited St.ites bonds. Thiv; C.s..!'ect in :t tonal 1 -rnit laws, !and th ,3 absurd one of takin;; the averaco (Arculation of the banks, are well ry.ese:?nte0 in teFltateme:it of the Comptroller - of the Currency,'on. 7 fore the .3o!-,riittee on ankirp; an ;;:c31.1 OS ni e be, t'ur.ency of the uouSe of 'flop- resentatives at the Last session of the 54th Conr,ress. e clean: ly demonstrated that the 1.(Jsue of cireulatim; notes is now Triere.• ly a natter of businecs concern to the banks; where intefest ratem are high they can use their capital to better adirantaf7e than investing it in Unitf.xl :Lt;ura1ly 7 rind 7ron-xly . 7 tates bonds for currency issues. . the :)0wer to provide a currency for thl whole country," :-,eritionet - .r. Thlei Jtico frinion in 1,1- e 'Toazie T'Ank c;ase, ;.5 h ! the b ,rlics only to 17 Illase in his 1. :>3, ex I cint of peori table Inv e by 'ix fro7-1 conservv.ive businer point of view, ! , ,IV not ;u;)ublic 4 ;u.t:". • It I onorally, thought that safe banking requires full bond od ecurity to be for ti ultimate r t ion oifl On 1.;;(1 other h-,ne. such soe„rity is, in the o_linion bank note. of t1-10 ra edg rid rior!t sound financiers, not only unnecosYary to well conbanks ano their custormws & )urden on th but (Iuct%1 bankin - -xhic:h to:Ids to incre..se chari;as for lows. sysLem. could be .1:vo1ded in a Undoubtedly in , '1}:..se Crawbks t s tan thi.) es adopting a sound b was desire of the people woul6 be to h;Ive the circ!.latint; notes iitod:ta Les .1..1 re . to 1 , , ,onr:ress retim rood as gold,* anc notes, thereby restorin:7 Ole rerenues oi the United States to in the a coin basis which, when cone, woulti necestril:r -1?.inta : .0 ;:(311-;.- at par with the r•ol(.1. collar,. if' the f:'tates tiow o. the lack of currency .i:Grierally actopted a State con)l Lfltfl ankinL); systri. :Por tht t, rip,'. t or, I do no of: why every State in the .n.ion shoulo not prefer it to the existing banks of nor Co I why tHe Southern anC. VP.entern Fational banks should 0e not )rofer to t e out ch3rters as •aticnal b•tak. law*. t. inue ity- y,d, l!otes is- obj oct woul•: C-1:ifl cort. 72owever there is no inc OMB. under thWI State sys tvsi n.): circulate outside of the to, roulcl be a decided advanta:,e to r the . opli J.f; )1(3 of tate Tanks !ystulp Of hankin,le evt,,,m I . I:. 'I L:r! Et:A.Le. r1c'r progrecsive b .in.kint; clutter's rotes are intended for local bt:siners only. "2'. W. -Jo igifitles a 1saw Y qr 0.. : c feature of 1-: 3.nkin. . in a.fl4 m rt.c! e a forcible pr, .3synti.tion of this end , i lAtr:-enc:r t -at cy:.1. h 'fore to ;ornfli t t ee on 7ank. , ifi to rouse of rtenr;::sentativos on , ••ecember '19, - 1693, rrhon ho wan rgin': tLe repeal of* t.:1.1e ton pf...r (•;nt tax as panacea for our firvAncia I i L Is. 7-0 said the decade endinr: in 1, ;';0, thr: hanks in thn countie!, th±ch -, ow form the State of "irginia n•irril) ,- :r•, three hitridreci., incluclin: branches, . (9. anc: :laintaine( CirelZ U.'.1;i0!": 0 alwa. s It nar in coin. o orl that LITne on 7ir:inia to any ex ton outsi to the b:.in1cf.! at a th tharl that of t;e'rlinr: `.‘ it Or s aid h ; ;.1.a1' notes, :trid they' did not circulate at e. Srlfill 1 incount turnu th ,3 expense of ten million dollars, fl, - k oro i'1!diito1l, returned 63:" to the forei3n hold or, equal to ‘. .!x)cnne not ;Tooter, perhaps, flit. 1), .nk notes to Tm'l-tin,Tton for ro;? ion. Compare this cirelation of 1-).?_rik notes in •firi. inia vrith : total brznk circulation in :he thirteen Southern States on October 31, 1(,9i), as flown. !):,? the Comptroll., r' a r000rt for y ear: With -; 1,,10 00o,000. ta : of : 4 ;74,000,000, the o rc I•%t .on was only . Accordin:: to her anto-b ell‘n exim.)rioncg, orrin of i5nitod States notes were to be retired, j jflj could' easily keep out a Stlike bank circulation of •::1.:.,000,00 . . business, Under such a systen of banking as . its 1,71•kt, I • above clesorilled -10oath ) .4)1 t _ ta L o of Lio of paper carrency tho. n ion '•-;31)1c1 ref!, volurno at o r Late olv es by 1 oav inf; that mat 1, or tfi Lind ev p;n' iteI L;ti1r i roTLut i0118 such as wisdom banks, fiX rY)r 1 once miGht ffer the conse-' o!7; 0;* (313 • arid I enc es, anci not inS1it C 1IO1 upon t1': )00710 of oth e S t at es who s o prud e.ice impel loci than to 7.-y,) -ly to t!,,Ar L.9 t thirt 0_1 the y 0:XS throvi.7,11. In. syst, 7'*.atiOn.Z3.1 rofrain from or I s en tin; ,!anc, 1Z1 o 111 Court in th :u7r, , (lcI ion of the f. the in ! dev el op od by tile t. x 0 erien.c e of; o!' fin anal t princ inks constitiltion:,tlity o1' th ,:; r,tatutc....s that ill.* cent upon not (_.s is avoxi •ios e an internal ronuo 1.3x of t t on b • ossary to 8 ocron the S'ounc". ation of t o „ t croa t s eguard not only ho 1'0V ors oct ; ab 11 ity it will not. no 4 611‘.; a."11‘imed, art(: in t; anc: hrsicirs, it haP i al t alSO II. tto L at 13 i)flkS anc oth or b 1a3. b st "w niT 8" 01"1, tv 1):r.k inn,. but it :eh o GCja of' State banking Which I si()n Co)s not conflict with the ha'ro in view. .17:o i;chrxno can he maintained upon th o higher t c)nsti ti rieroly 138.. now draft an( on 7r1nci i onal ()rolls ieciion SChale of the? t:tulrern.? •'ourt of the (X11 f)t by nirn- iited it ,ould not bo a v ory difl'icult mat tor Li, const it tirmal b Mil for pa..:t3ap;ci by a 't,f:tte. -11. 1: tur(.: tmL woulci on:3.1)1 e I -A utitorizc; Late banks whose I;;;;ae ol' n.ot.qs for sub j c t o i.n t. ern 11 r r.).v enu..) h.ti• ti on EX1 In s ric !.‘2,1;ion wou./.: at ion . pri.))Ltr,x1 anotlior ;:)Jr, isfy eonstItutina1 thi 3ni on I. onr avrj ors t:lat. (Ira 213 , 700.1. can b (i ono in 011'2 :):0011i1) t ion in i oi conr o, Cons Li dons I;i t u. - on o1) • • Intt- rview with , Ltd. or t..1 • ** * * - • 4, • ** 'ill :p.m 3-1ve u.s a brief accou.:t of your institution? The London and Amt:.1noter T3ank-aas established in 7larch, 1834. It was regIstered as a Limitce. compan;; in 71arch, 1!.130. It ori:Anated in Lr)ndon, anc3 is still confined to London a.ld its m.iburbs. • ..7ha', is the par value or your shams, ai C. what dividends do you. pay? A. The par value of our shares is iv 100, of which iv 20 is paid. or the last four years dividends of L. p. amum have boon doclroe!r 7he nrosont nrudket price of the shares is between Ja 50L and iv 51. , Q. TIow A. frpwards of 10,800. Q. .at addition: payments can bo collected from your atockolders for the -.1 aryvniorraent of busnesc, nnJ vilat in case of liquidation? A. As 0. Does the law require you to accumulate a aertain anount of surplus? A. No. • s',octholders have you? 20 per share have boon paid in, the shareholders are loft a liability of iv 80 per sharo 7hich can be collected for the dov:.1opusart or.7 business, or for licuidation. Is thero any limit to the number of si.vsres which may be held by any one porstvi, R-:d is your approval ma-aired before a transfer of your stoc7. cfn be made? A. 7.hero is no limit to the r.urfor of shares which ay individual may hold, lylt the . roval of diroctor3 is recyJired b(foro transfers can be -ado. 0. low often do your shareholders meet? A. 7.7wic( a year. • A. bees ov ry share have a vote at the shareholders' meotins? o. Votes are d1strib. 1.tod as follows: '..'rom 1C to 49 s.iared, 1 vote; . frorl 510 to 99 shares, 2 votes; from 100 to 199 ohares, throo votes; from 200 shares upward, four votes. 0. Describe thc) or,7nniza ion and runem, -Ilt of the ba,a, statinr7 the offto and directors, and t'teir :-eopective functions, and for what purioan or time and by whom are tte7 olected? A. There aro 682 officers and 15 directors, Who are eloctod by shareholders. Three of thole directors ret're annuv 71y. Q,s Is it castorra7 to re-oloc A. Yen. Q. 'Tow frequently do tho directors moot? A. Daily. Q. "oli ma.ry branches have yacr A. Thirty-six. diroctors at the e:Tiratio. 1 of their torus? : Q. in tvr. main, hr)/ the7 b , oroatoj b 'ion, or 7:1:7-4-,! thy boe,. formeci by the absorption or independent ban. A. They have rrinly •' V/ are year branches T.0 A. crentni b7 11.n. Inan:•430c, 71y an a )pointed , who is vlsitea periodically by the mrnerintenJen tmd. Insifloctors of bra:Ichos, occasionally .;:j directors. oints the alnar3 of branches, and, are toy urnualy seloc'T,od from siiborainato officers in the sale ba.ilf? A. 2h0 directors al-)oint the manaors e branches, vfx) are selected fro71 amon,c lbordinate o'ficrs, but not necessarily in tile sno bvmch. •• 7 .tow frecraently aro yo-1. mcrqred by la:v! to 71'31i:il1 11 . .3atanonts of condition? A. ?vice a year. •• Tiow froqnet1i is it y?.lir c Aqton to 7:1blirth them? , A.17onthly. C. In yollr cr)inion, should more 'rocqont ancl fuller bank returns be mblinhod? A. 77e do not consiJer thi Q. ,Hat 10,7a1 or !ne.ral taxes are -)aid by the bank? • ?he nsual parochial and. nocelsary. n ral taxes. MINUTES. 7., /1 -46Li Ct Waehinzton, D. C., Saturday, December 2,1911 The Commission met at 11 o'clock, a. m., purruant to the call of the Chairman. Pre9ent: Messrs. ATYTICH (CEAIREAN), BURROWS, BURTON, WIFFKS, BONYNGE, PADGETT, and BURGESS. In the absence of the Vice-Chairman, and as a quorum did not appear, no formal busines was trans- acted. The Chairman was authorized, however, to appoint a sub-committee to consider the details of the Codification of the National Banking Laws, with Suggested Changes, prepared by the (lomptroller of the Currency, and to report the result of their examination to the Commission. The Chairman appointed on this sub-committee Mr. BURTON (CHAIRMAN), Mr. WEEKS, and Mr. BURGESS. At 12 o'clock meridian, the Commission adjourned until 10 o'clock a. m., Monday, December 4, 1911.• Wasl-ington, D. Monday, December 4, 191). MO ••• .1•• OS I. The Commission met at 10 o'clock, a. m. Present: Messrs. ALRITCH (C9kIRYAN), VRYELAYD (VICE- CIATMAN), BT:LHOWS, M0TY, BUP7ON, WEEK, BONYNGE, PADGETT, and PURGES'S. Mr. Burton moved that seven members of the r7ommission should constitute a quorum for the transaction of business. The motion was seconed by Mr. Burgess and un, tnimcusly adopted. Directors of the National Reserve Assoeition. Mr. Weeks suggested that the rrovisions of the plan in regard to diref•tors of the National Reserve Association be changed as follows: That the Board of Directors shall consist of thirty-seven, to be composed of !1) Seven ex officio members, one ex officio member being added to those already provided for in the plan. This additional ex officio member might be Evi a0ditiona1 Oeputy governor or some member of t'fie Cabinet. (2) Pifteen directors to be elected L,,s provided by parap;raph 15. (3) Fifteen directors, one from each district, to be elected as provided in paragraph 17. Under this su77estion, raracraph 16 would be droppe d. Th1 Fugesticn was discussed at length and laid aside for further consideraticn. The "omission therenron, at 11:30 o'clock, a. m., took a recess until 2:30 o'clock p. m. 3 AFTER PECEr'S es) • The Commission rea3oem11ed at 2:30 p. m. Present: Messrs. ALDRICIT (CHATH7I.AN), VREELAND (VICE- BUPROWS, MONEY, P} CJA USE, BIMTON, WITS, BONYNGE, PADGETT, BU, J.nd PRINCE. At the sugwestion of Mr. Bonynge it was unanimously agreed_ that the Revised Edition of the Suggested P1 n for Monetary Legis1L.tion be made the basis of discussion. The Chairman stated that it was his idea -- if it should meet with the anrironal of the members of the Commission -- that with respect to provisions in +le plan where there was no special objection, immediate steps be taken to Place those provisions in the hands of two experts, oneA from tl'_e office of the Comptroller of the Treasury Department and one from the Department of Justice, in order that the language of the proposed monetar., law might be p roper ly framed. The Chairman further stated that at the morning session it had also IpPen decided that in the absence of a quorum, all decisions reached would be tentative, and that a.1:7 partic,Jar provision might be reconsidered on the request of any member of the Co/mission. Upon motion of Mr. Weeks it was ag,reed that the minutes of the meetincs of the Commissen be made full and complete somethirJr similar to the way the record is kept in the Tournals of the Senp.te and t'in House of Represent•ttives. The Commission thereupon proceeded to further examine and discuss the proposed plan and the following subjects were considered: With respect to the amount of authorized capital of the National Reserve Association which would be paid in under the twenty percent provision.. Dividends to be paid only on paid-in capital. Yr. Aldrich stated the necesity for a provision that dividends shall only be paid by the National Reserve Association upon capital which has been paid in. Length of Charter. A Proposition by Mr. Bonynge that the time of the lengt4 of the charter be made less than fifty years was not accepted. There was considerable discussion to whether any provision sho, ad be made whereby the charter „ -)1 altered, amended, or repealed by Cons .ress, but no conclusion was reached upon this point. Minimum Capital: The subject of minimum capital was next considered, and while no definite conclusion was reached, the opinion was general that some amount -000,000 -- probably $100, should be provided as the minimum with which the NA.tional Reserve Association might commence its operations. Contin:ent Fund for Imoaired Sub36r:t !'-11 y discussed. sion reached. Irolus: No def1 ,11e conclu- Suggestions made that in no event should fund be used for liquidation or otherwise to stockholders, but shoull go to the United States Govelent; that fund should not be a part of the book - Tulle of the stock; that . the fund should .lot be more than f!Alomeif L4 percent nor less than fig. 414t per cent; that the percentage sou]d be less than :In the case of ordinary bank losses. Upon motion of Mr. Padgett it was agreed tnat a provision shoull be placed in the draft of the bill coverin the subject of a contingent fund in the following langllage: "When the surplus reaches twenty (20) per cent, a fund not exceeding $2 1 000,000, or the eqaivalent of one (1) per cent of the capital muy be retained by tl-e bunk is linlivided profits to mec,t unexpected losses; and, upon the .-a7 1 .:;o to the 1 final dl-solltion of the bank:,E.1 Government, and shall not be included in the book value of the stock, or go to stockholders in any contingency." Holding Majority Stock of Banks which are members of the National Reserve Asnoeiation: Subject fully discussed on the basis of a proposition made by Professor Wildman of the Northwestern Unive-sity. Dfcisicn reached to naE3s matter until Commiosion should 1,a-re an oppo, -tunity to examine Professor Wildman's proposition. Bonds: Mr. Padgett (after reading section 75 of the Revis ed Plan) inquired whether it was contemplated to put an excise tax on the bonds provided for in that section they are to be perpetual. it applies tv Mr. Aldrich informed him that bon(8 wheriever they are and the Reserve Association is to pay that all the time independen tly of the ownership of the bonds. 4'ILIProximate Capital: Mr. Weeks suggested whether 44Q-44et the capital should not be stated 4 S400,000,000 insteadof S300,000,000 and was informed by the Chairman that the Revised Plan was only a frame -work or memorandum and that when the law was drafted a change in the amount, in his opinion, should be made; that there is a minimum limitation but nc maximum. Capital of Subscribing Banks: The Chairman stated that on account of criticism he had heard that possibly the provision for a minimum capit al of $25,000 might be too high. Mr. Vreeland st..ted that he had heard no objection to it. Trust Companies: The Chai-man as of the opinion that in view of sug- gestions from the Trust Section of the Ame-ican Banke rs Association, the minimum of to trust companies. $25,000 should be ap lied also Mr. Burton stated that he desired to 7 consider the question of the limitation of the capital of trust companies more fully, but he thought that there should be a minimum. Mr. Padgett stated that there was no limitation in the laws of Tennessee as to the capital trust companies should have. Payment of Balance of 20 pe- cent Subscription. Mr. Vreeland inquired as to the time of t.le payment of the balance of tne 20 per cent subscription provided fcr in section 1. The Chaiyman stated that his understanding was that no demand would be m „de for the balance of the subscription, unless there were large losses as against -ve Ascredit or impairment of the capital of the lese! socition. Mr. Vreeland thought that the subscribing banks were being made liable for more than twice the amount of their stock by this provision. The Chairman stated that as he unde-stood it banks could not call for the additional 10 per cent subscription for the purpose of incr: using capital. The discussion of the investment by banks of their capital in real estate was Participated in by Messrs. Aldrich Burton, NT eks, and Padgett, theconclusion being reached that large investments of this kind on the part of banks should not be made. Transfer of Shares of the National eserve Asociation stock. Mr. Burton in commenting on section 3, rel.ltive to the <1 ;e transferring of the sliares of the capital stock ef tIN tinnal Reserve Asso-i-ition, stated that no law would be constitutional which provided that they could not be transferred under ,articulix conditions. Mr. Padgett called attention to the fact that the provisions of the Revised Plan nerely prescribes the mode of transfer. Mr. Bonynge agreed with Mr. Burton as to the unconstiti2tionality of attempting to provide that no transfer could be made. Paid up Capital Stock. Mr. Padgett made the following suggestion for the amenment of section 4, which was agreed to: words "paid up That the should be inserted before the word "capital" wherever it appears with reference to the payment of dividends. For instance, whe-e it is stated that they shall receive 4 per cent dividends the text should read "4 per cent dividends on paid-up capital stock;" and at the point where the words "after stockholders receive 5 per cent," should be inserted the wards "paid-up capital s4- ock." purpose of this amndment The is that there may be no qmQsticr of construction as to whether dividends are to be received on the subscribed stock or the paid-up stock. .e: (ection 4) Dividends of Stockholders shall be cumulati Mr. Burton inquired as to the meaning of this provision and Mr. Padgett was of the opinion that tie matter shoul be expressed more definitely. The Chairman stated that his understanding wus th,Lt the purpose of the rrovision is to guarantee to subscribing banks 4 per cent on c4 I their investment out of the earnings of any given year; after the 20 rer cent. lc? SUGG7T,TIONS. By Mr. Burton: That, in his opinion, it is not best to place the surplus of the National Reserve Association beyond 20 per cent. By Mr. Aldrich: That some provision should be made for the restoration of the surplus when impaired. Mr. Ir. Burgess: That it would be well in the final draft of the bill to provide a definite limitation to the earnings of the National Reserve Association. By Mr. Bonynge: That some provision ought possibly to be made compelling state banks to furnish a list of the owners of their stock, in order that members of the Reserve Association may be protected. By Mr. Al:lrich: That a provision should be made pro- hibiting that loaning on NLtional R2se-ve Assction stock. By Mr. Al rich: A provision should be incorporated in the final draft of the bill that no bark shall be ,d- mitted to membership in the National Reserve Association that owns stock in any other bank, nor shall it hold stock in any othr!r bank after it becometa member of the Reserve Association. By Mr. Aldrich: Provision should be made whereby state banks shall have not less than S25,000 capital artually paid -in. By Mr. Aldrich: Provision for temporary organization of the National 'ese ,-ve Association should be made by a .Lry of the Commission, consisting, possibly, of the Secrc-- Treasury, tYe Secretary ofommerce an(1 Labor, and the Comptroller of the Cur-ency. .aniThis Co'rnission to decide until a permanent or6 zation is effected, the question or the limitation of the territory of the district and local associ:Aions. The Commission thereupon adjourned at 5 o'clock p. in., until 10'30 o'clock, A. 11., Tuesday, December 5, 1911. 'L Washington, T. C. Tuesday, December The Commission met at 10:30 o'clock, a. m. Present: Messrs. ALICH (CHAIMAN), VRFELAND (VICE- CHAIRMAN), BUTOCS, MON7Y, BnTON, WEEKS, BONYN GE, PADGETT, BURGE7,S, and PRINCE. It was decided that there should be no chan:7e made in the provisions of the Revised Plan that the combined capital and surplus of the members of each local association shall aggregate not less than $5,000,000 . Mr. Aldrich suggested that a preliminary apror tionment of the associations provided for in section 5 shoul d oe made by directors of the Reserve Association after a permenent organization was effected. Mr. Burton was of the opinion, in which all prese nt concurred, that -1-ie provision of section 7, exempting the National Reserve Association frcm state and local taxation should not be changed. Mr. Alrlrich suggested that provision be made that no real estate shoull be held by the Reserve Associatio n, except for banking purposes. Mr. Al'rich also suggested th:,t the amount of real estate held by the assoc iation should be limited. Mr. Padgett suggested that the language be glIalified by inserting the words "for banking purposes." Mr. Weeks stated that the National Banking Law made Lmple Trovision as to real estate holdings by National /.s' bunks, and suggested that a provision along similar lines be drawn to apply to the National P.eserve Association. This was unanimously agreed to. 24. Mr. Padgett suggested that it should be provided that the directors should submit to the President a fair number of names from which to select the governor cf the Reserve Association. After some discussion of this pronosition, it was agreed to add aftel the word "list" in line five the words "not less than three in number." As thus amended, the paragraph was agrPed to. 8. In connection with the election of three-fiftne of the Board of T)irectors of the local associ,tions, Senator BA -ton raised the tuestion whether the vote shol:ld be cumulative or "en bloc. v" There Was some discussion on this point, but the language in the paragraph was not changed. AFTER RECESS. The Commission reassembled at 2:30 p. m. Present: Messrs. ALDRICH (CHAIRILAJf), VRTIPLAND (VICE- CHAT: MAN), BURROWS, MONEY, BURTON, WEEKS, BONYNGF, and , . PADGETT. 9, 10, and 11. It was agreed to provide that the number of directors of branches should be fixed by the by-laws of each branch , but that there should not be less than twelve. One-half of this board shall be elected by the boards of the local as:3ocitionsarid the other half part by the stock and part by represent;,tive vote. 21 and 22. Agreed to without change. 23. Was amended as follows, and as amended, was agreelto. There shall be an audit in committee to be elected by the Roard of Directors from among its number (excluding the members of the Executive Committee) of which the Secretary of the Treasury shall be chairman. This Committee will make a public report at least once a year. It shall have authority, not only to audit the books of the National Reserve Associ;,tion, but of the branches. 14. Mr. 1., 4 X:suggested 4 ; 11'f that the Secretary of A6riculture be added to the ex officio members of the board. No action was taken on this suggestion. 24. Mr. Bonynge suggested that it be provided that the term of the Governor shall be ten years and that he be reeligible for appointment for another term. He also thought that it should be provided that the Deputy Governors should be reeligible for appointment for another term. These suggestions were agreed to. 25. Mr. Bonynge suggested that the manager of the branch should be a resident of the district in whi-)11 the branch is located. This was agreed to, and this paragraph was amended by inserting in the second line after the word "appointed" the words "from the district." 26. Mr. Padgett suggested that after the word "duties" in the first line the following words be inserted "the length of service to be subject to removal." This amendment was Egreed to. 28. Referring to the third paragraph of section 28, Senator Aldrich suggested that the FAcretary of the Treasury, the Secretary of Commerce and Labor, and the Comptroller of the (Airrency be authorized to provide the preliminary organization of the National Reserve AsE;ocir.tion, and to divide the country into fifteen districts. Mr. Padgett surxested that it should be provided that the country shall be divided acco-ding to geographical and commercial conditions and also with regard to existing banking facilities. These suggestions were agreed to. 29, 30, 31, 32, 33, and 34. Agreed to without change. .. The Commission thereupon_wt adjourned until 10:3C o'clock, a. m., Wednes4, December 6, 1911. Washington, D. C., Wednesday, December 6, 1911. The Commission met at 10:30 a. m. Present: Messrs. ALDRICH (CHAVMAN), BURROWS, MONEY, BURTON, BONYNGE, PADGETT, BURGESS, and PRINCE. Purchase of Coin or Bullion: Section 35 was taken up and agreed to down to tho! first period. With respect to the second part, it was the opinion of Mr. Bonynge and Mr. Burgess that the word "gold" should be struck out, in order that either gold or silver might be purchased, their view being that the mention of gold included silver by implication. The Chairman said that his understanding was the provision as it stands would not prevent the buying of silver bullion, but merely provides the manner in which it may be purchased, that is, in the open market. He also stated that it applied only to domestic excht:nges. Mr. Burton thought that if the section were amended it should be by some such expression as the following: "or silver when required in the settlement of exchanges in foreign countries." Mr. Prince was in favor of letting the paragraph stand unamended. Mr. Padgett preferred to have it stand as it was un- /4 less the words "of gold and silver coin" were inserted. Mr. Money was of the opinion that the paragraph should be left as it appears in the Revised Plan, unless the right to buy silver were mentioned specifically. Mr. Bonynge favored the suggested amendment of Mr. Burton. It was fillefly agreed to allow section 35 remain unamen(led. Rate of Exchange between the East and the West: A general discussion Ikas had on this subject and the Ch:Lirman was of the opinion that after the final report of the Commission had been made it might be desirable to consider the subject more fvlly and specifically.: During the session of the Commission Hon. Lawrence O. Murray, Comptroller of the Currency, appeared to complete arrangements for inviting State Bank Supervisors and National BLnk Examiners before the Cormission for the purpose of consultation on the question of bank examinations. The Chairman, with the approval of the Commission, requested Mt. Murray to communicate with Mr. J. L. Mohundro, Chairman of the Association of Supervisors of State Banks, inviting them to appear on Thursday, December 14, 1911, and to make the necessary arrangements for the attendance of the National Bank Examiners. It was also decided to invite two or three of the leading bankers of the country to be present at the same time the State Supervisors and te 1Tational Bank Examiners appeared1 the selecticn to be made by the Chairman. The Commission thereupon took a recess until 2 o'cloc k . M. ••• RECES:71 AFTER The Commission reassembled at 2:30 p. m. Present • Messrs. ALJICfl( (77AIRMAN), VREF,LAI',I; (VICE- CH AI 1-n1 A.N), BUTtiOWS, DIONFY, BLIP T ON WEEKS, BONYNG14.;, . 3 7 A.7.)GET T , BURGESS, and PRINCE. 36. It was agreed to insert after the word "necessary" in the fifth line the words "in the discretion of the Secretary of the Treasury." Burton raised the question "cash balance." Hr. Vreeland and Semktor as to the meaning of the words Does it include trust funds? It was agreed that it was desirable to look into this language and also find out from the Secretary cf.• the Treasury how many t ust funds there are in the :reasury and whether they are kept separate from the general funds of the Treasury. 37 , 38,39, 40. Agreed to without change. 41. There was considerable discussion as to whether the language of this paragraph carried out the intention of Senator Aldrich, namely, to make the rates of discount of the National Rese-ve Asnocition superior to the usury laws of the several states. Mr. Vreeland suggested that the paragraph be amended as follows: "The N; tional Reserve As- socirition shall have authority to fix the rates of discount from time to time, which, when so fixed, shall be published, and shall be uniform throughout the United states." The paragraph as thus amended, was agreed to. 42. This paragraph was amended by striking out in line three the words "to a limited amount;" by inserting a "," after the word 'bank" in line four; and by substituting the word "acceptors" for the words "houses" in the same line, and as amended was agreedtc. 43. L. This paragraph was amended by inserting aA e 0-' after the word "bonds" in line two, and by substituting the word "also" for the word "a." in the same line. As thus amended, the para,7raph was agreed to. 44. Was agreed to. 45. This pararraph was amended by substituting for the word "subscribers" in line two the words "subscribing banks", and by W7riking out in line four the words "in thgland, France, or Germany," and by striking out the word "other" in the same line. graph was agreed to. 46, 47, 48, and 49. Agreed to wit out change. As thus amended, the pi:tra- 23 Whereupon the r7ommissicn adjourned to 10:30 o'clock, a. m., Thursday, December 7, 1911. • / Washington, D. C., Friday, December 8, 1911. , 'the Commission met at 1030 a. m. Present: Messrs. ALDRICH (CI:AMMAN), VRFHLArD (VICE' CHAIRMAN), BITRROWS, MONEY, BURTON, WT2KS, BONYNGE, PADGET?, BURGESS, and PRINCE. 73, 74, and 75. A discussion took place regarding the paraR:r..phs relating to United States bonds, but no changes were made In them. 14, 15, 16, 17, and 18. The Chairman asked Mr. Weeks for his proposition regarding tbe directors of the National Reserve Asuociation. Mr. Weeks stated his proposition verbally and later in writing as follows: Directors: The Secretary of the Treasury, The Secretary of Commerce and Labor, the, Secretary of AgricIllture, the Comptroller of the Currency, liewager and As-s4-847*FA.-14anager.- e Fifteen directors as elected in paragraph 15. Tifteen directors as elected in paragraph 15 from the business interests of the country. The last fifteen elan not be at the same time directors in other banking institutions. Consideration of these proposed changes was postponed until the session of the Commission on 1Jonday. During the session of the Coumission Hon. Lawrence 0. Murray, Comptroller of the Currency, Judge Oldham and )ry nepartmeatn, appeared to pe-lt Mr. Quinn of -,;ne Yreas, (t-Larrant;claents for the drafting of the bill to submit to Congress. These gentlemen agreed to cooprate wth the Cogialission in drafting the bill. At the sag,;estion or Mr. Murray it wus agliod to invite Hon. Hurbert Knox Smith, Commissioner of Corporations to act with them. Messrs. Bonynge Pitdgett were appointed as a com- mittee to render s.ich assistance as mu,,/ be necessary. The Secretary was authorized to procure rooms and all needed clercal and other assistar,ce to work under the direction of the gntlemen in the c}iarge of the preparation of the bill. At twelve o'clock mend an, the CONniSSiGh ,dj»rned until Monday, December li, 191t, at 10:30 a. _a. 24 Washington, D. C., Monday, Dc,ct.: il, 1911. The Co'dclission net • Present: m. Mes1 -s. VREELA7D (VIt!E- CHAIRMAN ), BUR iOWS, MOITH]Y, BIT 1ON, tiriga:S , BO7ME, PADGETT , und BrIRGES. The Chairman stated his view vij+fn rfd to te features whicll would be incuded in the final report of the Commission. He stated thud, it should be applicable to conditions in the United States and be smaething in which the Am2rican people would be intereszed. In a separate report or elsewhere as an appendix, tie -e might be treatment of foreign experiences. There was generui discussion of the features to be the inciAded Lti the :eport anci •o. matter was left mum in hands of the Chairmn. Mr. Padgett sugested that a joint resollAtion be inshcAld troduced in Congress providing that the Commission file its final report by Jnuary 22nd. No action was taken on this sugil'estion. Mr. Burguas raised the q -ueion of adjournillent for the Holidays. Sentiment seemed to be that those who wanted were to be away should have the privilege, while those aho re.riaining in thecity should assist in the preparation or the report. At this point, Dr. Andrew WI° had come from the conference of the committee ln charge of the drafting of the bill, stated that the Committee desired to know with whom thecertificate of organization should be filed. It was agreed by the Commission that such certificute should be filed with the Sedretary of State. 33. Mr. Aldrich raised tlie question as to whether it is necessary to state in this act that the Government funds the Reserve Association depositec; 31alL be held to be money in the Treasury of tho United States. This sug- gestion was referred to the Coxptrolier of the Currency and his Committee, who are drafting thelanguage of the statute. It was agreed to strike out the words "cash balance" in line 2 and to insert in lieu thereof the words "general funds", and also strikeout the following words *except that when necessary the Gcvernment may designate Na- tional banks for that purpose in cities where there is no branch of the National Reserve Association." 2. The question was raised whether banks in the colonial possessions of the UnitedStates could become subscribing banks of the Reserve Asscciation. It was agreed not to touch upon this question in the statute in terms, but the first sentence of section 2 was amended to read as follows: "All national bunks, and all banks and trust companies chartered by a State, Waich comply with the requirea,ents for meiabership hereinafter set forth (Secs. 60-64)3 may subscribe to the capital stock of the National Reserve Association. In the ninth line of this section, it was also agreed to insert the word "paid-in" after the v;:ord "minimum", and to insert the following clause after the words 925,000," "and a trust company having a minimum capital of $100,0001". (1) It was agreed to provide in the first section that before completing the organiztion of the National Reaafve Association at least $100,000,000 of capitLa aast be paid in. 28. The question was raised as to the expenses of the Cowiaission which shall provide the preliminary organization of the National Reserve Association, and it was agreed that the riastadvimna expenses of the Commission shall be advanced by the Government and be re-paid by the National Reserve Association. In this connection, it was also agreed that this Commission in admitting subscribing banks, must see that no banks or trust companies are admitted, who do not comply with the provisions of the act as to minimum paid-in capital. Whereupon the Commission took a recess until 2:30 p. U. 3 AFTER RECESS. The Commission met at 2:30 p. m. Present: Messrs. ALDRICH (CHAIRMAN), VREELAND (VICE- CHAIRMAN), BURROWS, MONEY? BURTON, WEIMS, BONYNGE, PADGETT,und , BURGESS. 49. After a lengthy discussion as to just what pro- visions should be included in the statute as to the incorporation of foreign banks, as for instance, whether the maximum capital, say $1,000,000, should be fixed, whether these banks s)nould mLke reports to the Comptroller cf the Currency and be governed generally by such provisions of the National Banking Act as are found applicable, etc., etc., it wab agreed to refer this matter to a subcommittee, coasisting of Mr. Weeks and Mr. Bonynge, to pre- pare a draft of incorporation and report the same to the C'ammission. 53. This section was taken up and after a full discussion was agreed to without amendment. At the suggestion of Mr. Vreeland, the Colinission proceeded to take up those provisisions of the plan that had previously been considered and passed over. 3/ (1) It was agreed to provide in the first section that the len7th of the charter should be fifty years, but that Congress should reserve the right to alter, revise, and amend the charter at the end of each ten year period. Mr. Vreeland calk d attention to the last sentence of this section, which ruads as follows: "Fifty per cent of the subscriptions to tile capital stock of the Nacional Reserve Association shall be called in cash; the balance of the subscription will remain a liability of the subscribers, subject to call." He said that he thought it desirable that the statute should state the circumstances under which tile additional fifty per cent subscription could be called. No formal language was agreed upon, but it was agreed to instruct Mr. Murray and his colleagues to so draft the statute that this additional subscription could only be called mhen necessary to meet the obligations of the National Reserve Association. 28. Mr. Vreeland suggested that there ought to be some general language of inscruction to guide the Commission which is to provide the preliminary organization for the National Reserve Association. After full" discussion of this suggestion, it was agreed that it should be provided in cne statute that the fl. 'teen branches of the National Reserve Association should be located as follows: 1 in the New Enland Sates; three in the Eastern States; three in the Southern States; four in the Middle Wesern States; anu four in the Western and Pacific Coast States. Thereupon the Cormission adjourned until 10:30 a. m., Tuesday, December 12, 1311. Washin6;ton, D. C., Tuesuay, December 12, 1911. The Commisson met at 11 a. in, Present: -s. AL -flRICH (CHAIAN), VREA-JAND (VICEMe21 CHAIRMAN), BURROWS, /LONEY, BURTON, WEEKS, PADGETT, BONYNGE, L-Lnd BURGESS. Several Olases of the plan were discussed at both tile morninF, and afternoon sessions, but no action was tztken. The Commission djourned L o'clock p. m., until Wed- nesday, Dtcember 13, 1911, at 10::30 a. m. 33 Wash:ton, D. C.) Wednesday, DeoemLer 16, 1911. The Coumission met at 10:30 a. m. Present: Messrs, ALDRICH (CHAIRMAN), 1TRELAND (VICE- CHAIRMAN), BURROWS, MONEY, BURTON, WEEKS, BONYITGE, PADGETT) and BURGESS. 70. Decided to incorporate a paragraph to place an obligation or duty on the Reserve Association to maintain its notes on parity or a standard as prescribed under section ------ of the Act of January 14) 19 . 50. Senator Nelson was called by the Commission to be Whether the National Reserve general lideposits Association should allow banks to loan a part of their heard on the T .airing questions: on real estate or confine their loans to savings deposits, and P if on general deposits, what proportion o. the same; also, what restrictions should be pls,ced upon such loans and upon what percentage of the real value. Senator Nelson stated to the Com- illission that he had investigated this matter thoroughly and his opinion was that they should be permitted to negotiate mortgages on one-third of the cash value of farm lands; also that it was much easier to lean on farm vaper than commercial paper;Aaimmm orier , 710400 1mOmmaiwaimederimelhew ,, ,14414•11114iimaa He stated that they should oe permitted , to loan one -1. - 1 -)f 'ime and interest bearing deposits on real estates whi6h should be improl7ed and occupied property. Whereupon the Commission too': a recess until 2:30 p. m. IFTER RECESS. The Commission reassembled at 2:30 p. in. Present: Messrs. ALDRICH (CHAIRMAN), VREELAND (!CE. ) CHAIRMAN), BURROWS, MONEY WEEKS) BOITYNGE, PADGETT, BURGESS, and PRINCE. At the sugue-tion of the Chairmuo, it Was agreed that each member of the Commission be arnizned a special er.3tion of the plan as set forth in Senator Aldrichts speech at New Orleans on November 21, 1911, and prepare his own ideas, which )will be c,1" )died in the final report. 40. Power of rediscount granted by Sections 3, 39) and 40 shall, be exercised through the branch in the district in which the bank making application for rediscount is located. Whereupon, at 4:30 o'clock p. m., the Commission adjourned antil 10:30 1. in., Thirsda:7, December 14, 1911.. • Washington, D. C., Thursday, December 14,1911. The Commission met, at 10:30 a. m. Present: Messrs. ALDhICH (CHAIPAN), VRE:rLAND (VICE- CHAIRMAN), BURROWS, MONEY, BURTON, WEEKS, BONYNGE, PADGETT, BURGESS, and PRINCE. At the request of the Chairman, Hon. Lawrence O. Murray, Comptroller of the Currency, caused to be present a few of the national bank examiners and state supervisors for the purpose of explaining certain features of the plan and asking their cooperation in assisting in drafting that part.of the bill which relates to examinations to be conducted by the Reserve Association. The following gentlemen spoke on the subject and their remarks are attached hereto: Washington; Mr. E. F. Mr. L. J. Mbhundro, Seattle, Rorebeck, of New York; Mr. Giles L. Wilson, of Spartanburg, South Carolina; Mt. George Van Tuyl, Jr., of Albany, N. Y.; Mr. Arthur B. Chapin, of Boston, Massachusetts; Mt. F. E. Baxter, of Lima, Ohio; and Mr. B. L. Gill, of Austin, Texas. At 1:15 p. m. the Commission took a recess until 2:30 p. in. s6 AFTER RECESS. The Commission reassembled at 2:30 p. m. Present: Messrs. ALDRICH (CHAIRMAN), EELAND (VICE- CHAIMAN), BUPROWS, MONEY, WEEKS, BONY/4GB, and PADGETT. Mr. Perrin addressed the Commission on the subject of permitting the Reserve Association to make such examinations as it deems necessary, and his remarks are attached hereto. At the conclusion of Mr. Perrin's remarks, the Commission adjourned until 10:30 a. m. Friday, December 15, 7.11. 3 Washington, D. r7., Friday, December 15, 1911. The ComIlission met at 10:30 a. in. Present: Messrs. ALDRICh (CHAIRMAN), VIEK,AND (VICE- liblrerW4S, MONEY, 3TT--;nry7; WFFKS, BONYNGE, PALGEZT, and BariGESS. 14. Agreed to strike out the mke144spOr , nmmber of directorsein line 2 and insert the number "46" and also insert at the end of the seoond paragraph as ex officio members "The Secretary of Agriculture" thus making 15 directors as provided in section 15, 15 directors (non bunkers) one from each district represent/ ing commercial and agriculture interests, 9 stock directors, and 7 ex officio members, or a total of 46. It was agreed that all directors of the 'Reserve ::ssociation, while serving as such, shall not be officers pi dirctors in any or other financial institution such as insurance companies, etc. It was also agreed to state in the report that the Commission was considering the question of banks making loans to directors or to institutions of any description in which directors of the bunk are interested, which will be treated in an appendix. 28. The branches shall have by-laws which shall provide for the appointment of executive and other comm17,tees which shall be subject to the approval of the National Reserve Association. Whereupon the Commission took a recess until 2:30 p. m. AFTEP RECESS. The Commission reassembled at 2:30 p. m. Present: Messrs. ALDRICH (CHAIRMAN), VREELAYD (VICE- CHAIRMAN), BURROWS, BURTON, BONYNG.M, PADGETT, BURGESS, and PRINCE. The Comptroller of the Currency and the National Bank Examiners and State Supervisors submitted their recommendations in regard to examinations conducted by the Reserve Association, which is attached hereto. Suggested that standardization of blanks be adopted by the Reserve Association for the national and state examinations of banks. Whereupon the Comuission adjourned until Monday, December 18 1 1911, at 10:30 a. m. BANK EXAMINATIONS, STATE AND NATIONAL. WASHINGTON, D. C., December 15, 1911. To the NATIONAL, MONETARY COMMISSION, Washington, D. C. GENTLEMEN: We have been asked to consider the question of bank examinations, both national and State, in so far as they may relate to the National Reserve Association, and after a careful consideration of the question, we beg to submit our views. In considering the question in a broad way we have had in mind two points which seem to us very essential. First. To avoid the added expense to the banks of building up the machinery for an entirely separate and additional system of examination. Second. To utilize, in so far as possible and practicable, the existing machinery for bank examinations as established to-day for both national and State banks. It was necessary to carefully consider three important points, as follows. First. It is possible that the examinations as they exist to-day, both State and national, might not meet the requirements of the directors of the National Reserve Association. Second. There are a few States where there is no State supervision of any kind of State banks. Third. There are a few States where there is State supervision of State banks, but the executive officer is not privileged by law to disclose information regarding banks under his supervision. 20351-II 2 / We have c sidered each of the above ptSints and, in our opinion, he plan we present obviatei each difficulty and utiliz s, without additional expense to the banks, the preset machinery of bank examinations, / both State and n ional. We therefore mak the following recoritimendations: That the National Reserve Associtition shall for all member banks accept opies of the reports of the nationalbank examiners for rkitional bankt and copies of the reports of State bank examiners:for State banks and trust companies, where the furnishing of such information is not contrary to 1 w; provided, however, that the standard of such examin ions, both national and State, meet the requirements of thei directors of the National Reserve Association. That in all cases where i e standard of examination, either national or State, is ot up to the said requirements, the directors of the. tional Reserve Association shall make or cause to be nlitd ndependent examinations. That the Directors of the Na ional Reserve Association have the right to examipie or use to be examined, at any time, any member sank, b its own representatives. That the national anci State e miners be allowed such additional compensatiqi, to be p d by the National Reserve Association, for inaking exti reports to it, as the directors thereof may/consider justiand equitable. The plan which w . recommend ll in a large measure avoid the additional/expense to the banks of building up for their exam ation ; it will give another organizati to the directors ofl the National Res ve Association, to the branches the of, and to the loc 1 associations the information whic is needed, and it r serves to the National Reserve Asociation the right to nake independent examinations wftienever the directors thrreof desire to do so. The plan As simple, practicable, arid workable from , the start. 2 We have considered each of the above points and, in our opinion, the plan we present obviates each difficulty and utilizes, without additional expense to the banks, the present machinery of bank examinations, both State and national. We therefore make the following recommendations: That the National Reserve Association shall for all member banks accept copies of the reports of the nationalbank examiners for national banks and copies of the reports of State bank examiners for State banks and trust companies, where the furnishing of such information is not contrary to law; provided, however, that the standard of such examinations, both national and State, meet the requirements of the directors of the National Reserve Association. That in all cases where the standard of examination, either national or State, is not up to the said requirements, the directors of the National Reserve Association shall make or cause to be made independent examinations. That the Directors of the National Reserve Association have the right to examine or cause to be examined, at any time, any member bank, by its own representatives. That the national and State examiners be allowed such additional compensation, to be paid by the National Reserve Association, for making extra reports to it, as the directors thereof may consider just and equitable. The plan which we recommend will in a large measure avoid the additional expense to the banks of building up another organization for their examination; it will give to the directors of the National Reserve Association, to the branches thereof, and to the local associations the information which is needed, and it reserves to the National Reserve Association the right to make independent examinations whenever the directors thereof desire to do so. The plan is simple, practicable, and workable from the start. • • BANK NCAMINATIONS, STAIE AND NATIONAL. WASKINGTON, D. C., December 15, 1911. To the NATIONAL MO*TARY COMMISSION, Washington, D. C. GENTLEMEN: We havet been asked to consider the question of bank examinations both iiational and State, in so far as they may relate to thk Natibnal Reserve Association, and after a careful considelitigh of the question, we beg to submit our views. In considering the question Ail a broad way we have had in mind two points which segm\to us very essential. First. To avoid the addid pense to the banks of building up the machinery for ala entirely separate and additional system of exatsination Second. To utilize, ino far as p ible and practicable, the existing machinery for bank e minations as established to-day for both/national and S te banks. It was necessary carefully consicfr three important points, as follows: First. It is possiile that the examinatrons as they exist to-day, both State and national, might nipt meet the requirements of the directors of the NAional Reserve Association. Second. There are a few States where 'there is no State supervision of any kind of State bans. Third. T ere are a few States where therc is State supervisio of State banks, but the execute officer is not prifrileged by law to disclose information regarding banks tider his supervision. 20.351 http://fraser.stlouisfed.org/ 411g. Federal Reserve Bank of St. Louis 3 In addition to this it will have a tendency to standardize on a higher plane all bank examinations. Very respectfully submitted. J. L. MOHUNDRO, State Bank Examiner for the State of Washington. ARTHUR B. CHAPIN, Bank Commissioner for the Commonwealth of Massachusetts. F. E. BAXTER, Superintendent of Banks for the State of Ohio. 0. L. GILL, State Commissioner of Insurance and Banking for the State of Texas. GEO. C. VAN TuvL, Jr., Superintendent of Banks for the State of New York. E. F. ROREBECK, National Bank Examiner for the City of New York. GILES L. WILsoN, National Bank Examiner for South Carolina and Georgia and formerly State Bank Examiner for South Carolina. LAWRENCE 0. MURRAY, Comptroller of the Currency. 0 7., Washington, D. ( londay, December 18, 1911. The Commission met at 10.30 A. — Present: -"essrs. Aldrich (Chairthan), vreeland (Vice-Chair- man), Barcows, Money, Weeks, Ronynge and Padgett. J). The following paragraph was agreed to be inserted at the end of paragraph 55 of the plan: "Provided that no circulating notes shall be issued by the Yational eserve Association whenever and so long as the reserve herein required shall fail below 33 1/3 per cent of such notes outstanding." 70. The following paragraph was agreed to be inserted to the end of paragraph /0: "That it shall be tha duty of the Yational Reserve Association to maintain at all times a parity of value of their circulating notes with the standard established by the first section of the act approved March 14, 1900. Mr. Bonynge theraJpon presented to the Chairman the rough draft of the bill being prepared at the Treasury Department, which was immediately made the subject of discussion. Title. Agreed to insert in the title of the pill a2ter the words "United states" in line 21 "and for other purposes." led to strike Sec. 2, line 1, after the word "13anks", 'Agr, out the word "or" and insert the words "and Sec. 3. Agreed to insert in line 1, after the word "Treasury", the aords "the Secrotary of Agriculture," and in 4,3 line 6, after the words "shall be" insert the words "payable out of the Treasury," and to strike out the words "paid out of any money in the Treasury not otherwise appropriated," In the second paragraph, line 4, after the word "Association," strike out the words "in such places us the sid committee may designate." Sec. 4. Third palagraph, line 1, agl..,:La to atrike out the words "from tine to time, and inseri, shifie phrase in line 2 after the word Wht/eLpon, at 1.00 o'clock P. H., the Commiseion took a recess until 2.30 P. M. AFTERNOON SESSION. Monday, Dece,lber 18, 19]l. The Commission reassambled at 2:30 o'clock p.m. Present: Messrs. Aldrich (Chairman), Vreeland (ViceChairman), Burrows, Burton, Weeks, Bonynge, Padgett, and Prince. 71r. Bonynge su7 -ested that when new banks come into the Association, the, should pay for their stock at its book value at the time of their admission to membership. The suggestion was agreed to. Section 2. The following sugges ion of Mr. Padgett was agreed to: That in paragraph 3, under subdivision "b", after the words "population of", where they first occur, :rovision be made whereby cities having a population of less than 10,000 and not more than 50,000 should be roqu:red to have a paid-in and unimpaired capital of not less than $50,000. Upon the suggestion of the Chairman, it was agreed that no subject headings for differ-nt provisions of the bill be made, that not being the general form followed in the make-up of bills. Section 3. The aendments made at the morning sef- sion of this date are to rmnain unchanged. Secticn 4. Mr. Vreeland thoue7ht that at the end of the first paragraph some provision should be made for indicating clearly that, where States are mentionec., it is not intended to limit the size of the districts by State lines. The Chairman suggested the insertion of the words "having reference to business centers," or "having reference to the accom °dation of the banks in the territor::. If Mr. Padgett suggested that "natural divisions and comercial relations, and trade centers" be used. The Chairman further suggest- ed the words "having relation to themtural commercial diviejone in trade centers;" and T.r. Padgett further suggested the words, "In forming saia districts, State lines need not be followed." After considerable discussion, it was decided to allow the mL, Lter to go over and to have the para. graph queried, to be taken up later. Section 5 passed over. Sectin C. 1:1)bject matter of last. paragraph to be taken up later. Pemainder of this section aereed to. Section 7 was agreed to, with the exception that it was thought that managers for the branches shol;ld also be provided for in the last paragraph. Section P. Agreed to. Yr. Padgett suggested that some r)rovision sho id be made that, in'L.he event the number of districts is increased above 15, there should be for each district two additio-eal directors, to be elected as set forth in paragra-ehs 1 anH 2 of Section 9. t is section. It was the: unanimous opinion that paragraph 24 of the :',evised Plan for Sun' ested - lonetary LegiaLtion should be inserted at the beginning of the section. Section 10. To he changed and modified. Passed over. -3On suYestion of H.r. Padgett, it was agreed to amend this section as follows: After the cy., ..ds "execute and file", in- sert the words nw Lh the E'ecretary of State a certificate setting forth the fact of the payment of one hundred millions of dollars; and they shall further file with the Comptroller of the Currency a certificate showing the banks which have subscribed." Yr. Padgett also suggested that there should be a further provision that, as the banks subscribe after the organization is complete, the Comptroller of the Currency is to be notified of the fact. Sections 11 and 12. Section 13. was agreed to: Strike out. The following suggestion of T -27. 7onynge That after the words "and under no circum- stances shall they be", there be inserted the words "hypothecated or". wa , agreed to: The following suggestion of 1:r. Padgett In line 1 of this section, after the word "ca-ital", insert the word "stock". At the suggestion of the Chairman, it was agreed to strike out the words "acknowledged before a judge of a of record or a notary The following suggestion of 77r. Pad- public and shall be". gett was agreed to: Court In the second paragraph of the section, in next to the last line, before the word "stock", insert the words "paid-in". In the third paragraph of this section, it 'as agreed to strike the words "acknowledc,ed before a judge of a court of record or a notary public and shall be". :;ection 14.. Agreed to. -4- Section 15. Agreed to. Section 16. The following suggestion of the Chairman was agreed to: In line 1, strike out the words "an auditing co'Inittee", and insert the words "a board of examination"; in line 5, strike out the word "committee", and insert the word "board"; in line strike out the words "audit the books", and insert the words "carefully examine the condition and the business"; and in line 7, str:Ke out the word "report", and insert the word "statement". Section 17. Mr. Padgett suggested that it be amended by providing that the powers and duties shall be prescribed by th by-laws of the various branches, subject to the ap- proval of the rational Reserve Association, . Upon the suggestion of the Chairman l it was agreed to strike out the words "and length of service". Section 18. It was agreed to strike out the words "and terms of office". Also, to transfer this section to place it near othe4provisions as to local association officials. Section 19. Agreed to. It was also agreed that some provision must be made for incororating,in a limited way, the rational Reserve Association, in which event the words "articles of association", wherever the, appear, shall be stricken out. It was also agreed that after the preliminary work on the draft of the bill was complete, the provisions should •Or be so rearranged that the various provisions might appear in their proper and logical order. The Conmission adjourned to meet at 10:30 a.m., Tuesday, December 19, 1911. ..............M11111111111111111111111i 11, Wa3: -. ..inc;ton L • r • Tuesday, .JecetYeer 19, 191.i. The Coelic,ission me.c, at 10.30 A Present: Aldrich ((hairman), 7reeland (Vice-Chn), Barrows, 'Ioney, Weeks, 13onynge :,-act Padgett. r. Bonynge suggested that there Le inserted in the first paragraph e.nd words "body corporate." 7. Phe Chainman suggested that in Section second paragraph, and line 15, the words "caulercial and agricultural" be transposed. 8. .Tr. Padgett suggested that in paragraph second of Sec. 8, line 5, to strike out the words "of banks nor" and inser the word"or". 9. Agreed to strike out in the last iine of Section 9, the words "articles of association or the". 2. Agreed u insert in Section 2 line 12 after -che Aord "subscriptions" the words "or any part tnet. eof." The question of the impairmont of the capital of the Reserve Association was brought up ty the officials of the Treasury Department and it was decided that the contingent fund and the privilege of the call of 50 per cent amply covered this point. The qt(estion was also raised as to the right of the Association to own real estate and to erect banking houses, and it was decided . nat it did have this privilege, with no Another question was submitted by the Treasury officials whether tie.c Association will. pay for exteninations of banks, and it was suggested that the plan submitted by the State and National examiners (a copy of whiun was sent to the Department), covered this point. T, was decided to incorporate the foilowing section of . the report of the .,tate and 'Iationai examiners in the '31.11: "That the rational 'eserve Association shv..1) for ail subscribing bLnis:a J.ocept copies of tlie reports of the national oank examiners for national banks and copies of the reports of ',ate bank examiners for 14. tte banks and trust companies, where the filrnishing of such information is not contrary to law; provided, however, that the standard of such examinations, both nationai and State, must meet the Iequirments of the directors of the National Sec. O. eserve Association." Agreed. ,u cnange so as to read as follows: "The earnings of the 7.7iational 7:eserve Association shall oe disposed of in the following Lianner: "Aftel. 6ne payraeni, of a.. expunses and tuxes the share- holders shall be enitled to receive annually four per centum on the paid-in capital, which minimum dividend shall be Further net earnings shall oe paid into a contingent f.„ind Nrich shall be maintained at an amoun equai to one per cerit—calun c,ne paid-in capital, bot not to exceed ir event two million dol ars, und ahiCh shall oe used to meet any possible losseL, and such fund shall upon the final dissolu- tion of the National ?eserve Association go to the ';nited States, and shall not under any circumstances be included in the book value of the stock, or go to the shareholders. After the contingent fund has been established one-half of all additional net earnings shall be paid into the surplus fund of the National Reserve Association until sat d fund shall amount to twenty per centum of the paid-in capital, one-fourth shall •be paid to the United States as a franchise tax, and one-fourth shall be paid to the shareholders, but when the shareholders' dividends shall amount to five per centum per annum on the paid-in capital they shall receive no additional dividends. After the shareholders receive five per centum on the paid-in capital, one-half of the net earnings shall be added to the and surplus fund,/one-half shall be paid to the United States as a franchise tux. After the shareholders receive five percentqm per annum on paid-in capital and 'fie surplus fund of the National Reserve Association amounts to twenty per centum of that capit'il, i excess earnings shall be paid to the United States as a franchise tax." Agreed to change the location of Section 21., and have same follow section 1, with the following change in the first paragraph of same: "Upon (1711y making and filing a certificate by the board of directors of the National Reserve Association to the effect that one hundred million dollars of the capital stock of the Association have been fully paid in, the said Association shall become as and from date of the filingof the said certificate a body corporate and as such and by tho.-t name shalL have power ---" Agreed to strike out in line 1 the words "a Sec. 24. local association may by a vote of two-thirds of its members" and insert the words "The National Reserve Association may." Insert "The National Reserve Associatic,a shall Sec. 27. be the principal fiscal agent of the United States." To follow Section 31. "Foger of rediscwint and dis- count, granted by Sections 29, 30 and 31, to the National Reserve Association shall be exercised through the branch in the district in oank making application for rediscount is located." Sections 29, 30 and 31. Agreed to insert in each of these sentions after the words "N—tional Reserve As3ociation" in line 1, the words "through its branches." Sec. 43. following: Strike out the last oantence and insert the t i "The National Reserve Association shall pacj Tle national and state examiners "or services rendered to it such compensation as the directors thereof may consider just and equitable." Whereupon, at 1.30 P. M., the Commission took a recess until 2.30 P. M. AFTER RECESS. The Commission met at 2.30 P. M. Present: Aldrich (Chairman), Vreeland (Vice-Chairman), Burrows, Money, Weeks, Bonynge, Padgett and Prince. Sec. 53. Insert in line 2, after the word "period" thit word "of", and in line 6, ufter the word"millions" the words "of dollars." Section 5. In line 3, after the word "co:amittee" strike out the words "or the National Reserve Association," and in line6, after the word "provided," strike out the words "that not more than ono such association shall be formed in any city, and". Strike olt all of section 5 after the second paragraph and insert the following: "The banks uniting tc form such local associations shall, by the president or vicepresident, acting under authority from the board of directors, make in duplicate and file with tl -te Comptroller of the Currency and with the rational Reserve Association a certificate setting forth the names of the banks composing the association, the principal place of business of the association, and the name of the association, which name shall be subject to the apnroval of the National Reserve Association. TJpon the filing of such sertificate tl e local association therein named shall become , a body corporate, and by the name so designated and approve d may sue and be sued and exercise the powers of a body corpora te for the purposes alithorized by this act, and not otherwise." Sec. 54. Insert the following: That banking corpora- tions for carrying on the business of banking and in aid of the commerce of the United States ar its citizens with foreign countries and to act as financial agents of the United States may be formed by any number of persons, not less in any case than five, who shall enter into articles of association which shall specify in general terms the object for which the banking corporation is formed and may contain any other provisions not inconsi tent with the provisions of this act which the banking corporation may see fit to adopt for the regulation and conduct of its business and affairs, which said regulations elan be signed, in duplicate, by the persons uniting to form the banking corporation and one copy thereof shall be forwar ded to the Comptroller of the Currency and the other to the Secret ary of State, to be filed and preserved in their offices. Sec. 55. That the persons uniting to form such banking corporation shall under their hands make an organiation certificate which shall specify, first, the name assumed by such banking corpor ation which name shall be subject to approval by the Comptroller; second, the foreign country or countries or the dependencies colonies of foreign countries or of the United States where its operations of discount and deposit are to be carried on; third, the place in the United states where its home office &rindl be located; fourth, the amount of its canital stock and the number of shares into which the same shall be divided; ss rift., tlie names and places of residence of the shareholders and. the number of shares held by each of them; and, sixth, a declaration that said certificate is made to enable sch persons to avail themselves of the adirantaes of this act. Sec. 56. That no banking corporation shall be organized under t'riis act with a less capital than two million dollars. Sec. 57. That eirery banking corporation formed pursuant to the provisions of this act shall from the date of the execution of its or2;aniztion certificate be body corporate, but shall not be ai.;thorized to receive deposits in the United States nor compete with banks in the United States organized either under national or State laws for domestic business not necessarily related to ti-p: business being done in foreign countries or in the dependencies of the United States. Such banking corporations shall not have any power to issue or cireulate notes under any of the provisions of the laws relating to national banks doin United States. F-711 business within the -1 1-wvikinr7 ecenorations shall have full power to ma.ke acceptances of drafts, bills of exchange or other commercial paper and maturing subsequent to the date of acc,ptance. Every such banking corporation shall have power to purchase or seil secrities of the United states or of :Lny ntate in tne 7.;nion or of foreign governments or su-Hcil-risions or monicipalities of foreign countrie s. Each banking corooration organized hereunder shall have power to establish and maintain for the transaction of its business a branch or branches in forein countries, their depeAden eies or the dependencies of the United StL,.tes at such places and under !ludil regulations as the board of directors may deter- mine to be expedient. A. majority of the members of the board of directors of such banking corporation shall be citizens of the United States. Each director shall own in his own right at least one hundred shares of the capital stock of the banking corporation of which he is a director. Sec. 58. The annual meeting of every such banking cor- poration sha I be held at its home office in the United States, and every such banking corporation shall keep at its home office books containing the names of all stockholders of such banking corporation and members of its board of di rectors, together with copies of the reports furnished by it to the Comptroller of the Currency exhibiting in detail and under appronriate heads the resources and liabilities of the banking corporation. Every such banking corporation shall make reports to the comptroller of the currency at the same time as national banks make their reports under existing statutes and shall be subject to exaaination, when deemed necessary by the Comptroller of the Currency, through bank examiners appointed br the Comptroller. Sec. 59. Any bank doing businesc in the United r)tates and being the owner of stock in the National Reserve Association may subscribe to the stock of any banking corporation organized under the provisions of this act, but the aggregate of such stock held by any one bank shall not exceed ten per cent of the capital stock of the subscribing bank. Sec. 60. That the provisions of all laws relating to national banking associations organized -thereunder so far as applicable and not inconsistent with the provisions of this act shall govern ane ontrol banking corporations organized hereunder. Repeal Aldrich-Vreeland bill, etc., etc. Whereupon, at 4.30 the Commission adjourned, to meet Wednesday, December 20, 1911, at 10.30 A. H. fr lhashington, D. C., Wednesday, December 20, 1911. The commission met at 10.30 A. M. Present: Aldrich (Chairman), Vreeland (Vice-Chairman), 71urrows, Money, Burton, Weeks, Bongyge, Padgett. Yr. Arthur !?eynolds, of the Des Moines lational Bank, of Des Moines, Iowa, and Mr. Pierre Jay, of the Bank of Manhattan Company, Yew York City, addressed the Commission on the subject of permitting National banks to establish savings departments under the Plan, and their remarks are attached hereto. The Commission took a recess at 1.00 until 2.30 P. M. AFTER RECESS. The Commission met at 2.30 P. M. Present: Aldrich (Chairman), Vreeland (Vice-Chairman), Burrows, Money, Burton, Weeks, Bonynge and Padgett. The Commission immediately took up a draft of the bill prepared by the Treasury Department officials, and made it the subject of discussion during the entire afternoon session, agreeing to the following changes: Sec. 2, par. Fourth, line 2, strike out the word "and" after the word "law" and insert "or." Par. Fifth, line 2, after the word "manner" strike out the word "hereinbefore" and insert the word "hereinafter." Sec. 3. Line 11, after the word "capital" insert the word "stock." Line 12, after the word "subscriptions" insert the words "or any part thereof." Last line, last paragraph, strike out the word "before." Sec. 5. Last paragraph, last line, after the word "Association" insert the words "whenever, in their opinion, the business of the country so requires." Sec. 6. Second paragraph, line 13, after the word "the" strike out the words "associated banks" and insert the words "local association," and in the last line of same paragraph, after the word "act" insert the words "and not otherwise." Third paragraph, line 2, after the word "be" strike out the word "created" and insert the word "authorized." Sec. 7. Second paragraph, line 1, after the word "when" strike out the words "appointed or". Sec. 8. Second paragraph, line 1, after the word "board" Insert the words "of directors," and in line 6 make the word "Bank" "banks." Same paragraph, lines 15 and 16, chance the arrangement of the words "industrial, commercial, agricultural," so they wil] read "Agricultural, commercial, industrial," and in line 17 1 after the word "officers" strike out the word "or" and insert the word "nor." Third paragraph, line 1, strike out after the word "when" and wuyds "appointed or". Sec. 9. Second paragraph, lines o an 4, change the arrangement of the words "industrial, coiamercial, agricultural" so they will read "agricultural, commercial, industrial." Fifth paragraph, line 3, after the words "nor of any of" strike out the word "the" and insert the word "its." Sec. 10.Last line, strike out the words "articles of association or the". See. 13. Line 7, before the word "branches" strike ott the word "the" and insert the word "its." Sec. 16. Line 5, after the words "time by the" strike out the words "same authority" and insert the words "governor with the approval of the executive committee of the National eserve Association." Sec. 18. Line 6, after the word "shareholders" strike out the words "and creditors" and in line 8, strike out the words "verified by the oath of the governor or deputy governor." Sec. 19. Second paragraph, line 10, after the word "Association" strike out the word "go" and insert the mords "be paid", and in line 12, after the words "stock or" strike out the word "go" and insert the words "be paid. Also in line 20, after the word "capital" strike out the word "but" 6/ . ,nd insert the word "provided" and in . line 21, after the word "year" strike out the word "but" and inse rt a semi-colon, and ir line 26, after the word "shall" strike out the word "go" and insert the words "be paid." Section 23. Last line, after the word "act" insert the word "provided" and then insert the enti re section 22. Sec. 27. Line 5, before the word "notes" strike out the word "only." Sec. 30. Line 2, strike out the words "by sections 27, 28, and 29", and insert in line 3, afte r the word "Association" the words by sections twenty-seven, twen ty-eight and twentynine of this act." IFIke a new section between 31 and 32, and insert the following: "National banks shall be authorized to accept coNmercial paper drawn upon them, havi ng not more than four months to run, properly secured, and arising out of commercial transactions. The amount of such acceptances outstand ing shall not exceed one-half the capital and surplus of the accepting bank, and shall be subject to the restrictions of section fifty two hundred of the Revi sed Statutes." sec. 33. Line 2, after the word "bonds" insert a semi- colon, and in line 3 strike out the words "having not more than one year to run" and inse ,-t the same words in lire 5 after the gord "government." Sec. 35. Line 4, after the word "board" inse rt the tz words "of directors", and inline 6 after the word "must" strike out the words "have arisen" and insert the word "arise." Sec. 36. Line 4, after the word, "purchasing" strike ou- the word "and" and insert a coma, and in line 8, after : the word "exchange" strike out the words "which have arisen" and insert the word "arising." Sec. 37. Line 10, after the words "by the" strike out tile word "directors" and insert the word "manager," and in line 11, after the word "originates" strike out the words "or n executive cordmittee thereof." Sec. 38. Paragraph 2ourth, line 2, before the word "association" strike out the word "the" and insert the word "said." Sec. 39. Strike out the entire paragraph entitled "Third." Sec. 42. Line 1, after the words "of the" insert the words "National Reserve". Sec. 43. Line 5, after the word"Currency" insert the words "by said association." Make a new paragraph between Sections 44 and 45, as follows: "All reports of national bank examiners in regard to the condition of banks shall hereafter be made in duplicate, and one copy shall be filed with the National Reserve Association for the confidential use of its executive officers and branch managers." Sec. 45. Line 8, after the word "requirements" strike out the word "of" and insert the words "prescribed by". Sec. 46. Line 3, after the word "May" strike out the words "if they choose." Sec. 47. Line 1, after the word "association" strike out the word "must" and insert the word "shall," and in line 10 strike the word "fast" and in line 11 strike the first word "as." Sec. 48. Line 3 strike out the words "United States " the second time they are used and insert kit= after the word "bonds" the words "of the qnited States." Sec. 49. Line 4, after the words "lawful money" insert the words "gold bullion or foreign gold coin." Sec. 55. Line 6, after the word "million" insert the word "dollars." Whereupon, at 5.30. P. M., the lommission adjourned to meet Thursday morning, December 21, 1911, at 10.30 A. Y. Washington, D.C., Thursday, Dece- .ber 21, 1911. The Commission met at 10:30 a.m. Present, Mesrs. Aldrich (Chairman), Vreeland (ViceChairman), Burrows, Loney, Burton, Weeks, Bonynge, and Padgett. Section 3. Line 14, after the words "two hundred", strike out the words "and fifty"; line 17, after the words "two hundred",strike out the words "and fifty"; line 18, after the. words "not more than", strike out the word "four" and insert the word "three"; in line 1(.1, after the words "not less than" strike out the word "four" and insert the word "three"; line 21, strike out the word "three"; word "four" and insert the in the same line after tl-e word "inl- abitants", insert the words "and not more than four hundred thousand inhabitants"; line 22, after the words "not less than", s-,rike out the word "five" and insert the word "four"; in the last line, after the word "dollars", insert the words "and if located in a city having a population of more than four hundred th:msand inhabitants shall have a paid-in and unimpaired capital of not less than five hundred thousand dollars." Section 39. A .reed to insert the following paragraph at the close of this section: "National banks may loan not more than thirty per centum of their time deposits, as herein defined, upon improrfed and unencumbered real estate, such loans not to exceed fifty per centum of the actual value of .‘