Online Library of Liberty: Economics, vol. 2: Modern Economic Problems

effectively with the broad questions which, from an international standpoint, affect the credit and status of the United States as one of the great financial powers of the world. In times of threatened trouble or of actual panic these questions, which involve the course of foreign exchange and the international movements of gold, are even more important to us from a national than from an international standpoint.”

§ 10. The “Aldrich plan.” The report of the National Monetary Commission represented most careful study of the whole subject, and embodied the efforts and aid of many of the best financial experts of this and other lands. The Commission in its work gave an admirable example of the right way to prepare for and undertake important economic legislation. Though it discovered nothing essential that was not known to the small group of expert economic students, it put all material into systematic and convincing form and served during several years to educate public opinion as to the needs and proper means of sound banking policy. The analysis of difficulties as outlined above has not merely a temporary but a lasting interest to the student of financial history, for it implies an ideal for the banking system of the nation.

The Commission submitted with its report a constructive plan which was known by the name of the Commission’s chairman, Senator Aldrich. This plan was embodied in a bill for a National Reserve Association, a bank for banks, which bore some likeness to the great central banks of Europe. In the many details of the plan an effort was made to remedy every one of the difficulties above described and to supply all the needs indicated. The plan was favored pretty generally by bankers, but called forth many adverse opinions. In the year of a presidential election, however, Congress took no action in the matter. All parties were pledged to some kind of banking reform, but particular proposals were not discussed in the campaign.

References.

National Monetary Commission, Report. 1912. In Sen. Doc. 243, 62d Cong., 2d Cess.

Phillips, C. A., ed., Readings in money and banking. N. Y. Macmillan. 1916. Ch. XXX.

United States Comptroller of the Currency, Annual reports.

White, Horace, Money and banking illustrated by American History. Bost. Ginn. 1914. Bk. III, chs. IV, XV, XVII, XX, XXI, and appendices A and B.