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Show CURRENCY ASSOCIATIONS. The Aldrich Vrccland currency bill of dato of May 30, 1908, has been practically a dead letter from tho time of its enactmont until now. It provided pro-vided for the organization by the National Na-tional banks of currency associations, but none were organized except, at the solicitation of the Treasury, in the District of Columbia, and that organization was a negligible quantity. The provisions in regard to the organization organi-zation of these associations were that National banks occupying contiguous tcrritor3.' might organize them voluntarily. volun-tarily. There must bo at least t'en National banks in each National currency cur-rency association, and the aggregate capital -and surplus of such National banks must bo at least $5,000,000. No National bank may join a National currency as3ociut'iou unless it has an unimpaired un-impaired capital, and surplus of not less than 20 per cent. After tho forma tion of an association any National bank belonging thereto, whose outstanding outstand-ing circulating notes actually issued by United States bonds amount to not less than 40 per cent of its capital may obtain additional circulating notes by depositing with the association in trust for the United States any securities, includiug commercial paper. But addi tional notes will ouy bo issued upon the recommendation of the Comptroller of the Currency and the approval of the Secretary of tho Trcnsuo, and then not exceeding 75 per cent (if public securities, 90 per cent) of the' cash value of the securities or commercial paper fjo deposited. There is a proviso, also, that no National bank association shall be authorized in any event to issue is-sue circulating notes based upon coin-mercis.! coin-mercis.! paper in excess of 30 per cent of its unimpaired capital nnd surplus. Under this law the Treasurer proceeded pro-ceeded to provide for the new circulations circula-tions that the associations might issue in case of emergency, not waiting for tho associations to form. Changes were made in some thirt' thousand bank note plates, and five hundred million dollars of emergency currency for circulation circu-lation was printed, for tho banks in the associations, assuming that they would bo formed, winch is held in stock in the Treasury ready for issue whenever an emergenc' may call for it. But' there has been no emergency. There have been no cmorgoncy associations such as the law contemplated. Tho Secretary Sec-retary of the Treasury looks ruefully upon tho wasted work done at a great cost. The bank note plates have been changed, the currency printed, and all ready to issue at' call, but there is not only no call, but none to make t calls. One reason why no association was formed was that tho law provided that a small Lank should have just as much voice in tho association as a large bank. Second, that while it was casi' for a bank to got into this association, asso-ciation, there scmcd to be no way provided pro-vided in tho law for it to cct out. The Attorney-General, being called upon to say whothor a bank could withdraw voluntarily from an association once it was in it", held that it could not. Now, however, the question has been revived, and it is held that any bank may "withdraw "with-draw from such association with tho approval of the Secretary of tho' Treasury and tho consent of the executive execu-tive committee of the board of managers man-agers of tho association, provided that at the time- of such withdrawal there shall be no unredeemed additional or emergency circulating notes issued to the association for such bank outstanding. outstand-ing. Accordingly, thorn has beon an cmorgency association formed by the banks of New York city, to bo known as "The National Currency Association Associa-tion of the City of New York." It is understood that other important cities will also organize associations, ind that tho law so long neglected miVr-.comc into operation. This, however, could not have been effected under the old ruling thut a bank could not withdraw from the association. It is n remarkable outcome of that legislation that tho currency associa-lions associa-lions provided for in the law aro not organized willingly by the .banks. The.v havo not cared to put the law into operation, and do not care to do so now; but thoy form the associations nt the importunity of the Treasury Department', De-partment', which has been at. large ex penso in preparing for these associations associa-tions while nono of them was yet organized except in tho District of Columbia. It is not a banking movement, move-ment, therefore, that, creates these organizations It is not a public need. It is nothing but a move taken under pressure of officialdom to rescue that officialdom from tho ridiculous position of having gone to large expense to provide pro-vide emergency currency, change bank note plates, and so on, for an emergency emer-gency that has not occurred and for associations that wero not formed. A curious outcome, indeed, for a Jaw which was claimed to be a specific for all emergency troubles of our currency situation. But for tho dilemma of the Treasury Department, which finds itself it-self " in a hole ' ' on this question, having expended largo sums of money for no purpose, thorc would bo no currency associations, asso-ciations, and the law would remain u dead letter. It is official, and not business busi-ness or currency emergency, that brings the law into effect; and tho move, therefore, there-fore, is wholly artificial, speculative, and unsound. |