Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-06-06
BANKERS WILL ORGANIZE
CURRENCY ASSOCIATION TO BE
FORMED IN. NEW YORK.
Taking Action in Accordance With
the Provisions Of Aldrich-
Vreeland Act.

NEW YORK, June 6.-Definite steps to-
ward the organization OF a national cur
rency association in this city. under the
terms of the new Aldrich-Ereeland emer-
gency currency law will not be taken I'M
til some ti,ae next week. A meeting OF
the clearing house committee arranged
for Yesterday TO discuss the matter was
called off. Tuesday next. according to
present plans a meeting OF representa-
tives of ten of the more important ma
tional banks in the city will be held to
take up the work of organizing the ma
tional banks in the city that desire to
enter into the arrangement TO take advan-
tage of the provisions of the new law.
Other cities throughout the country. it
is said have been waiting for the New
York banks to take the initial steps In Or
ganizing an association. and 1t Is believed
that all of the larger cities quickly Will
follow suit soon as the local organiza-
ton Is approved by Washington and in
corporated.
Basis for New Circulation.
The new law provides that in large
cities ten or more national banks may
combine together in national currency
association. This association is author
lied TO receive from its members securi-
ties. other than government bonds, upon
which the treasury will issue bank notes
as additional circulation. The currency
associations will hold these securities III
trust for the United States treasury. In
communities where there is no association
national banks are authorized to apply
directly to the department for circula-
ton and Will deposit their securities at
Washington. The additional notes are to
be issued only when the controller of the
currency and the Secretary of the Treas
ury deem that local conditions demand an
emergency measure.
The notes will bear interest at the rate
Of > per cent per annum for the first
month of circulation. and thereafter at
rate of l per cent per annuln for each
additional month until a tax of 10 per
cent per annum is reached. when for
their further life the tax will remain at
10 per cent per annum. The total amount
Of additional circulation is limited to
O0OOO.OCO. As basis for the additional
circulation the law allows the use of any
securities. including commercial paper.
held by national banking association
that may be satisfactory to the general
BOARD OF the currency association.
Printing the New Notes.
The bureau of engraving and printing
at Washington already has been set to
work on the new bank notes, which will
bear the legend Secured by bonds of
the United States or other securities =
Ordinarily they have contained only the
words Secured by bonds of the United
States These notes will be issued at
once for general circulation as we'll as
being reserved for additional emergency
circulation. Although none of the New
York banks contemplates taking out any
Of the additional circulation, they have
agreed to organize an association at this
time in order to enter into the spirit of
the law and to be in a position to act if
at any time an increased supply of cir
culation becomes necessary.
Officials Of the New York clearing house
have decided that it will not be necessary
for them to take action relating to the
clause of the new law, which specifically
states that national banks need not main
tain a reserve against government depos-
it's. It is said. however. that no change
will be made In the form of the weekly
hank statement