Omaha daily bee., 1908-06-01
BRIEF OF NEW CURRENCY BILL
what the Measure Passed ny Con-
Eress During Last Days Pro-
vides For.


than twenty per cent and not less than
ten in number, having an aggregate capi-
tai and surplus OF at least S5,OOO,OOO, may
form voluntary associations to be known
as national currency associations.
Such associations shall, through the Off
GERS of the banks, make and file with the
secretary OF the treasury a certificate set
ting forth the members. the place of busi-
ness and the name of the association,
which name shall be subject to the appro-
val of the secretary. Upon accep' ance Of
the certificate the association shall become
body corporate. which may sue and be
sued. There shall not be more than one
such association in any one city and the
several members of such an association
shall be taken from contiguous territory
Any individual bank. upon application
to and approval of the secretary of the
treasury shall be admitted to full MEM
bership in such an association, and no
bank shall belong to more than one such
association. The dissolution of any bank
in such association shall not affect the
corporate existence of the association un-
less there shall remain less than ten
banks, but the reduction Of the member
ship below ten shall not affect the exist
ence of the corporation with respect to
the dsStIllOu VI ali llbuAS DOlll lOi anu
against II.
Such an association shall have and exer-
else any and all the powers necessary to
carry out the purpose OF the act, namely,
to render available. under the direction
and control of the secretary of the
treasury, as a basis for additional circula-
ton any securities including commercial
paper, held by a national banking associa-
ton.
For the purpose of obtaining such circu-
lation any bank belonging TO such an as
sociation, having United States bond-se-
cured notes outstanding to an amount not
less than 40 per cent OF its capital stock
and which has its capital unimpaired and
surplus of not less than 20 per cent,
may deposit and transfer to the assocla-
tion, in trust for the United States, such
Of the securities above mentioned, as may
he satisfactory to the corporation.
On behalf of the bank the officers of the
corporation may thereupon make applica-
tion to the comptroller of the currency for
an issue of additional circulating notes to
an amount not exceeding 20 per cent of
the cash value of the securities deposited.
The controller shall transmit the appll-
cation TO the secretary of the treasury
with his recommendation, and the secre-
tary at his discretion may direct the issue
of such notes in an amount not exceeding
IS per cent of the cash value of
the securities deposited. II. however, state
city, town or municipal bonds of a charac-
ter later described shall be offered as se-
curity they shall be accepted at 80 per
cent of their market value,
! In no case shall any bank be authorized
to issue circulating notes. based on com
mercial paper in xoass of 30 per cent
OF its unimpaired capital Rnd surplus. "The
term commercial papers shall be held to
Include only notes representing actual
commercial transactions which when
accepted by the association, shall bear the
names of at least two responsible parties
and have not exceeding four months to
rum"
The banks and the assets of all the
banks In each association are made jointly
and severally liable for the redemption of
such additional circulation; and to secure
such liability the lien created by section
$3.50 of the revised statutes shall extend to
and cover all the assets of all banks be-
| longing to the association and to the Sc
ourtles deposited by them with the corpor-
ate association, but each bank shall be
liable only in the proportion that it's capt.
tai and surplus bears to the aggregate
capital and surplus of all such banks.
Whenever any bank shall fail to make
good its redemption fund in the treasury
of the United States the treasurer shall
notify the national currency association to
which it belongs to make good, and upon
It's failure so to do the treasurer may, in
his own discretion, apply the redemption
funds Of the other banks belonging to the
corporation to make up the deficiency, and
inB hnV,
notice sell the securities of such bank
which have been deposited with the asso-
citation at public sale and turn the pro.
ceeds into the United States treasury for
purposes OF redemption.
Any individual bank which has a limited
States bond secured circulation not les,
than 10 per cent OF its capital stock and q
surplus of not less than 20 per cent ma,
make application to the comptroller OF the
currency for authority to issue additiona
circulating notes to be secured by the de-
posit OF bonds other than bonds of tn,
United states. When approved the banl
shall deposit with the treasurer or any as
sistant treasurer approved bonds and shal
be entitled to receive circulating ryotes I,
the amount Of 80 per cent of the marke
value of the bonds, but not in excess O
their par value
All circulating notes under this act sbal
be given the same consideration in all re
spects ss is accorded TO the present bon,
secured national bark note, except as mod
flied in this bill. The total amount Of out
standing notes of any bank, including bon,
secured and additional notes, shall not ex
ceed the amount of the unimpaired ca nj
tai and surplus of the bank, and not NOR
than $500, 10000 of such additional circula
ting notes shall be outstanding at any on
time Banks having any additional note
outstanding shall keep on deposit in In
. United States treasury a redemeptiou fun,
of 10 per cent.
: National banking associations having o.
! deposit bonds Of the United States bear
ing interest at per cent per annum, in
cluding Panama boEds, shall pay tn
treasurer Of the United States in Januar
and July tax of one-quarter Of / per cen
each half year upon the average amour
Of notes in circulation based on these bonds
and such associations depositing bord
drawing in excess of per cent shall pa
a tax Of one-half Of per cent each hal
wear,
, Banks having circulating notes secure