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COPYRIGHT, 1895, 902, 1908, 1911

BY HORACE WHITE

ALL RIGHTS RESERVED

914.8

The Athenæum Press

GINN AND COMPANY. PRO-
PRIETORS BOSTON. U.S.A.

PREFACE TO THE FIFTH EDITION

THE fourth edition of this work was printed in 1911. It was occasioned by the publication of the plan for currency reform proposed by Senator Aldrich, chairman of the National Currency Commission. That plan was not put in the form of a bill for enactment by Congress. Mr. Aldrich himself soon thereafter ceased to be a member of the Senate; the Republican party, in the elections of 1910, lost control of the House of Representatives; and the plan slumbered. The national election of 1912 gave the Democratic party control of both legislative and executive branches of the government. Congress took up the banking and currency question, and framed and passed the Federal Reserve Act of December 23, 1913. The national banks of the country have accepted the plan, and the process of organizing the new system is now on foot. It will doubtless be in practical operation before the end of the present year.

In the movement of public opinion which has led to this action, three significant steps have been taken. In the AldrichVreeland Act of 1908 asset currency was authorized, although none has actually been issued. In the plan of the National Monetary Commission a central bank system was outlined and indorsed, although not distinguished by that name, and provision was made for the eventual abandonment of bond-secured currency altogether. In the Federal Reserve Act a series of central banks has been provided for and made compulsory, and the same abandonment of bond-secured currency has been formulated. Finally, the government has taken supreme control

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of the Federal reserve system by means of a board at Washington City, appointed by the President of the United States. This does not mean control of the national banks in their separate capacity. Still less does it mean control of the state banks and trust companies, which now constitute about one-half of the banking power of the country.

The full text of the Federal Reserve Act is printed as an appendix to this volume, and an analysis of it is given in Chapter XXII.

MARCH, 1914

H. W.

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