Indeed, our national banking development has been pre dominately urban and commercial to the neglect of rural and agricultural interests. National banks were (until 1913) for bidden to make loans on real estate, and this greatly "re stricted their power to serve farmers and other borrowers. in rural communities." There was in the more agricultural regions, "no effective agency to meet the ordinary or unusual demands for credit or currency necessary for moving crops or for other legitimate purposes." The lack of uniform stand ards of regulation, examination, and publication of reports in the different sections prevented the free extension of credit where most needed. Finally, the methods and agencies for making domestic exchange of funds were, compared with other countries, imperfect and uneconomical even in normal times, and could not "prevent disastrous disruption of all such exchanges in times of serious trouble." § 9. Lack of provision for foreign financial operations. Not without its influence on public opinion was the considera tion that we had "no American banking institutions in for eign countries." Many bankers and business men felt, as did the Commission, that the time had come when the organiza tion of such banks was "necessary for the development of our foreign trade." Foreign banks in South America and the Orient, handling American trade, were believed to favor their own countrymen rather than the interests of American mer chants. In contrast with the European nations with their centralized control of banking, we had "no instrumentality that" could "deal 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 im portant 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 Com mission in its work gave an admirable example of the right way to prepare for and undertake important economic legis lation. 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 analy sis of difficulties as outlined above has not merely a tempo • rary 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 gen erally 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.