Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1910-07-18
Favors Formation Of Cur
rency Associations
Under the AIdrich. vreeIand Law
Of May 80, 1908.
Explains the Plan in a Able Speech
At Dublin, n. n.

Dublin, N. H., July IA statement
favoring the formation of currency as
sociations by national banks under
the Aldrich- Vreeland law of May 80,
1908, was given out Saturday night by
Sec. of the Treasury Franklin Mac
Weigh at his summer home here.
After explaining that the law pro-
videS for the issuance of additional
bank notes in time of emergency either
by individual banks upon deposit of
-proper security with the government
and payment of interest on such notes
of S Per cent. for the first month and
l per cent additional for each succeed
ing month up to 10; or by the organ
ization of 10 or more national banks
having capital of $1,000 O00 the sec
| rotary said:
1T has been my feeling for some
time back that the first impulse OF the
national banks Immediately after the
passage of the Aldrich- Vreeland bill
was the correct one. That impulse
was to form at once the national cur
rency associations provided for in the
act. The effect was to interpret the
authorizations of the Aldrich- Vreeland
act as something that should not await
an emergency, but should be adopted
when the financial atmosphere was
perfectly clear.
Now that impulse toward the for
| nation of the national currency asso-
Citations was general throughout the
country. 1t. however, resulted in the
formation of only one national cur
rency association, to wit, the one in
Washington.
1.-THE reason why this movement
halted at that time was that the banks
encountered. as they thought one or
two serious difficulties in the law. one
of which was that there would be no
provisions for the withdrawal of a
bank after it joined an association.
while the matter was being consid-
cred in the treasury department and
| before it became evident that the OBJ
jections found by the banks could and
would be overcome, the impulse had
passed away and the interest turned
toward general banking and currenc.
reform.
1T is true. of course. that the Aid
rich Vreeland bill was only meant to
operate ad interim until a reform
banking and currency system should
be adopted. This reform seemed immi
nent. and so the interest in the national
currency association was allowed to
diminish.
81 have felt that this movement
should be revived. While I am very
hopeful of an ultimate and not too
long deferred reform of our banking
and currency systems that reform is
not as imminent as we hoped it would
ho at tIlic time 7 have thOnOhf There
fore that the intention of the Aldrich
Nreeland bill should be carried out,
and that it's powers should be organ
lied for the interval before the pas
sage of a bill permanently reforming
the banking and currency systems.
Il have felt that this is a favorable
time. I therefore recommended some
time ago the formation of these asso-
Citations to some of the national bank
ers. including committee of the
American Bankers Association, who
came to Washington to confer as to
other treasury matters. NV own view
of the national associations is that they
should be formed in such time as
this, when no one contemplates any
financial conditions which would re-
quire the use of their powers.
PERSONALLY l do not expect that any
national currency association will ever
within the life of the law have to
avail itself of it's powers with re-
spect to the issue of currency. In
deed, I think that the very formation
and existence of these associations
would strongly tend. perhaps effec-
tually and finally tend, to prevent the
need of the exercise of their powers.
I therefore minimize the uses of these
associations in emergencies and magni-
fy the importance of their influence
in preventing emergencies.
"They are associated in my mind
with times Of financial peace and quiet
rather than with times of confusion
and convulsior."