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Banks (FEDERAL RESERVE the Federal)

FEDERAL RESERVE, the Federal Reserve system is primarily a result of the currency disturbances of 1907-1908 which were promptly followed by the passage of the Aldrich act providing for an emergency circulation not to exceed $500,000,000. The conditions of this bill were so strict, howeverhaving been framed just after an extreme crisis and suitable only for such an emergency-that no issue was ever undertaken under its provisions. It had stirred up legislative agitation of the subject, however, and in 1910 a commission under Senator Nelson A. Aldrich of Rhode Island, its original promulgator, set seriously to work on the whole question of banking reform. This National Monetary Commission spent three years in expert investigation of banking conditions here and in Europe.

Senator Aldrich meanwhile offered in 1911 a reorganization plan the chief fea ture of which was a National Reserve Association, consisting of a central bank-whose stock should be distributed to other banks through the countrywhich should have the control through the election of a majority of the directors. Associate or local systems