Evening bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1895-1912, 1908-07-30
TIE NEW EMERGENCY CURRENCY
LAW

A Washington correspondent Is
authority for the statement that the
city OF Washington, d. c., Is the only
city whose bankers have formed a
National Currency Association au-
thorized under the Vreeland-Aldrich
bill passed at the last session OF Con-
gress, and which went into effect in
June. The purpose of the organiza-
ton is to enable banks to take ad-
vantage of the clause in the new law
which provides for the issue Of emer-
gency currency, secured by CONNER
cial paper--legalized clearinghouse
certificates.
Banks of other cities have taken
up a discussion of such organization
but SO many questions have arisen
that little Roadway has been made.
The bankers of New York. for in
stance. were stalled when they at
tempted to pass bylaw making 1t
possible for any member of the Asso-
citation to withdraw when 1t pleased.
Mr.. Cortelyou maintains that the al
lowance of such bylaw would de-
stroy the vital feature of the whole
law-the right Of scrutiny for all
members. The law Is so shaped that
each member must make 1t q part Of
its business to see what sort Of bank
ing methods are being used by other
members.
1t is claimed that the panic Of last
FAN and the disclosures of doubtful
methods would have been impossible
under such law as this. The
wrong-dolng would have been head
ed on. But the banks are not pleas
cd to open SO freely the acts of their
boards to the scrutiny of others.
Thus the delay-in Wall Street.
Not city, not bank has thus far
indicated feeling that an emergen-
cy is In sight, wherefore, of course,
there have been no applications for
permission to take out emergency
currency. The Treasury has been
ready with the new form of notes
slice June 20. Some of them went
into circulation on that day over the
counters OF new bank in Utah.
The Bureau of Engraving and
Printing is turning out new notes at
the rate Of 100000. worth every
day. 1t takes three weeks to make a
National bank note. The only differ
ence between the old and the new
notes is In the addition Of the words.
"or other securities" to the legend
setting forth the fact that the notes
are secured by bonds of the United
States on deposit with the Treasurer.
Should an emergency arise, the
fact that banks had asked for addi-
tional circulation would probably not
become public property, for, II there
were an extra strain on the supply of
currency, the Treasury would not de-
sire to add to the difficulties of the
banks by advertising the fact that
they were putting out bank notes Sc
cured by the deposit Of commercial
PAPER and other evidence of debts
owing to the banks. The fact. If
made public. would have to come
through the banks themselves.
The Treasury people are inclined
to.view the new currency law as one
OF the best laws ever put on the stat
ute books. They believe 1t produced
the feeling Of confidence that they
assert now pervades the business
world. because the average business
man engaged In commerce or manu-
featuring has been led to believe that
should real emergency arise, 1t
would be possible for the banks to
bundle up his paper and that of his
associates, have National Currency
Association and the banks composing
It tndorse the bundle and deposit It
with the Secretary OF the Treasury
as collateral security for an issue of
Government notes. 4
Well-informed bankers have found
from their correspondence with Sec
rotary Cortelyou that that Official in
tends being strict in the administra-
tion OF the new sections of the ma
ttonal banking law. Even had the
banks of the country organized cur
rency associations SO that the whole
land should now be covered with
them the greatest question of all
would still remain unanswered.
What is an emergency is a far
greater question than any raised In
connection with any of the proposed
bylaws of half-formed associations.
1<ha Gaorat NJ 80 thn r,on,.,.,, l. A. =.