” Nearly four years elapsed before the Aldrich plan came before Congress in the form given it by the Monetary Commission.
A grander scheme of plutocratic dominion had never been conceived.
It placed the whole Banking Power of the United States in the hands of that financial upper class which, by driving it to the verge of bankruptcy, had already made itself the absolute master of the artieries of commerce and all the great industries.
The Commission’s bill provided for the organization of a ‘National Reserve Association,’ capitalized at $200,000,000 and located at the seat of the national government.’
The membership of this association was not limited to national banks. All the state banks and loan and trust companies could also be admitted, thus practically making one association of all the banks in the country.
Each bank member was to contribute to the capital of the association in proportion to its own capital.
The whole country was divided into fifteen districts, in each of which a city was to be selected for the location of a branch of the association.
The privilege now enjoyed by the national banks to issue bank notes was to be withdrawn from them and transferred to the association, whose notes were not to be fully secured by United States bonds, but half secured by a gold reserve of 50 per cent.
The same percentage of gold reserve was to apply to the balances due by the association to its member banks. The obvious purpose of this provision was to concentrate in the Rational Association all the funds which the banks cannot use in their respective field of operation and are now depositing in the strongest banks of the three ‘Central Reserve’ cities (New York, Chicago and St. Louis) which must keep a lawful money reserve of 25 per cent., or in the forty-seven ‘reserve’ cities, which must also maintain a reserve of 25 per cent. but are permitted to deposit one-half of it (or 12 1/2 per cent.) with approved agents in the three Central Reserve Cities.
It was also provided that the notes issued by the association would be legal tender to the same extent as those of the national government. The object here in view awas the gradual replacement of government notes by bank notes, thus making the paper money system of the Untied States similar to that of the great European countries.
The most significant provision of the bill was reserved for the end of it. It was not, like the preceding clauses, a scheme of plutocratic reform, it was a scheme of capitalistic salvation. Senator Aldrich had fully realized that the Banking Power was fast sinking into the mire under the weight of its undigested securities. A reformed body is no better than an unreformed one when it is dead.
By the final clause of that document provision was made for the organization of American banks with branches abroad that would be the fiscal agents of the national government. Their special function would be to promote the interests of American commerce in foreign countries and, in particular, ‘to buy and sell American securities’; in other words to unload upon foreign capitalists a substantial portion of the enormous mass of watered stocks and bonds which the banks of this country could no longer carry.”- Lucien Sanial