THE ALDRICH BANKING PLAN.

This article suggests remedies for defects in the currency system of the U.S. by Nelson W. Aldrich, senator, U.S. Senator Aldrich contemplates the supply of an emergency circulation of bank notes. In that case his plan is open to the criticism of inadequacy. Unless a Reserve Association or Central bank is so organized as to supply the elastic element now lacking in currency system, many people will not consider it worth having. A much simpler and less expensive scheme could be devised for the supply of an emergency circulation. Furthermore, if one have such an institution, it could without serious difficulty be made to perform this function as well as others. It would not be safe for the Association to tie up any considerable portion of its resources in bonds, because in that case it would find difficulty in liquidizing them on the occasions on which its services as an emergency institution would be needed. Practically then, in ordinary times, the Association would serve as a middleman for the loaning of a part of its capital, the deposits of the government and that fraction of bank reserves left on deposit with it, to the banks at a low rate of interest.