Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-06-12
CorteIyou Explains New Cur.
rency Act to Bankers.
METHOD OF ORGANIZATION
Financial Institutions in Contiguous
Territory to Form Associations.
NAME TO INDICATE LOCALITY
Application in Two Ways-Treasury
Department Promises Prompt APP
prevail or Disapproval.

Secretary Cortelyou today made public
a Treasury Department circular carrying
into effect the new currency act approved
May 30 last. After quoting the act. the
Secretary calls attention to the fact that
there are two methods of applying for
additional national bank currency under
its provisions.
Banks occupying contiguous territory
may organize currency associations. pro-
viding there are at least ten banks in
each association with minimum aggre-
gate capital and surplus of s. O00.O 0O In
dfvidual banks in such associations must
have an unimpaired capital and surplus
Of not less than 20 per cent. Any men,
Der Of such an association with outstand-
Ing circulating notes of not less than 20
per cent of its capital may obtain addi-
tional circulating notes under section 1
OF the act.
May Assign Banks to Associations.
National banks Of the same standing
as to capital and surplus, but not mem
bers of an associa ton. may obtain addi-
tional circulation under section of the
act. In order that all national banks en-
titled to take out additional circulation
may join currency associations. the Sec
rotary Of the Treasury reserves the right
to add to and include in the territory Of
an association any contiguous territory
containing national banks which would
otherwise be excluded from or incon-
Venfently located as to national cur
The names Of the associations must be
indicative of the locality. An associa-
ton may not style itself First National
Currency Association"
blanks to bank officers. upon which they
can file application for Joining an asso-
citation and otherwise take the necessary
steps to comply with the laws. Prompt
approval or disapproval Is PROMISED oy the
Treasury Department.
Table Shows Standing.
A table is included in the circular show
ing by states the amount of capital ana
s,,rplus of national banks entitled to MEM
bership In the Currency Association ar
ranged by states and sections. Secretary
Cortelyou says 1t will be seen from this
table that the national banks within some
states are not eligible to form by them
selves currency associations for lack OF
aggregate capital and surplus. SO they
must be affiliated with banks In contigu-
Gus states for that purpose.
The Secretary will not at this time allot
any territory for the formation of asso-
Citations other than as Indicated in his
circular. 1t is thought that the banks
may prefer to como together pr their own
voiition. It is preferable that state lines
be observed as far as practicable. and
that banks should not apply for admission
to associations not occupying contiguous
territory. The Secretary may assign to
an association any qualified national bank
which did not take part in its formation
A subsequent circular will define the
method to be followed in obtaining addi-
tional circulation through the national
bank currency associations. today's ctrcu-
lar relating entirely to their organization.
Applications From Associations.
The individual banks of the association.
however. desiring to obtain additional cir
culation must sumbit their applications
to the officers OF the association and not
to the Secretary Of the Treasury. Those
officers will apply to the department.
Applications for additional circulation
under section by individual banks not
members of associations may be addressed
to the controller of the currency. who will
advise them as to the procedure.
One per cent per annum upon the av-
erage monthly amount Of public deposits
held will be paid by depositary banks. to
be computed from June Is. 1908. and to
be payable July 1 the same year. and
thereafter on January 1 and July 1 an
nually. Interest will be paid on the en-
tire amount held by temporary or special
depositaries and on the amount held by
regular deoositaries in excess of the
amount NEEDED for the transaction of
public business. Each bank will be ad-
vised by letter OF the amount Of its ex-
emption.
Finally the Secretary reserves the right.
upon notice. &C increase the rate of inter.
est to be paid by depositaries.