Barbour County index., 1908-07-15
THE NEW CURRENCY LAW

them more complete monopoly
of the finances of the country.
This law, among other things,
provides that associations of
national banks of not less than ten
in number and having an aggre-
gate capital of not less than five
million dollars, may be formed,a ,and
when formed, are designated as
national currency associations"
These associations become a
body corporate; in other words a
body Of not less than ten national
bank corporations may incorporate
into bigger and more powerful
corporation.
The national currency associa-
tion provided for in the act, is
granted all powers necessary to
render available cas- a basis for ad-
ditional circulation any securities,
including commercial paper held
by national banking association" |"
T he method by which additional
circulation is obtained is thus set
forth in the bill:
For the purpose of obtaining such
additional circulation any bank
belonging to any national currency
association, having circulation
notes outstanding secured by the
deposit of bonds of the United
States to an amount not less than
10 per cent Of its capital stock ,and
which has its capital unimpaired
and a surplus of not less than 20
per cent, may deposit with and
transfer to the association, in trust
for the United States for the pur-
poses hereinafter provided, such of
the securities above mentioned as
may be satisfactory to the board of
the association. The officers of the
association may thereupon, in be-
half of such ank,make application
to the comptroller of the currency
for an issue of additional circulat-
ing notes to an amount not exceed.
ing IS per cent of the cash value of
the securities or commercial paper
SO deposited.
The comptroller of the currency
shall Immediately transmit such
to the Secretary of the
Treasury with such recommenda-
tions as he thinks proper, and if, in
the judgment Of the Secretary of
the Treasury, business conditions
in the locality demand additional
circulation, and he is satisfied with
the character and value of the Sc
curities proposed and that a lien in
favor of the Unites States on the
securities SO deposited and on the
assets of the banks composing the
association will be amply sufficient
for the protection of the United
States, he may direct an issue of
additi onal circulating notes to the
association, on behalf of such bank,
to an amount in his discretion, not
however, exceeding IS per cent of
the cash value of the securities so
deposited, provided, that upon the
deposit of any of the state, city,
town, county or other municipal
bonds, of a character described in
Section 3 of this act, circulating
notes may be based to the extent of
not exceeding 90 per cent of the
market value of such bonds so de.
posted. And provided further that
no national bank association shall
be authorized in any event to issue
circulating notes based on CONNER
clal paper in excess of 80 per cent
OF its unimpaired capital and sur
plus. The term Commercial pa.
per" shall be held to include only
notes representing actual CONNER
cial transactions, which when &C
cepted by the association shall bear
the names of at least two 1espon-
sible parties and have not exceed.
ing four months to run.
The result of this bill which has
now become law, having been
signed by President Roosevelt, will
be to place much of our circulation
upon foundation entirely different
from that OF the present bank cir.
Imitation and contraction will be
more easily accomplished.
1t is a matter of grave doubt
the new law will com.
mand the cnnf1dencA of fba co,,o+-,,