New-York tribune., 1910-07-17
TIME FOR BANKS TO ACT
MacVeagh Advises Formation OF
Currency Associations.
FEARS NO STRINGEhCY
But Thinks It Wise to Put Life
Into the Dormant Aldrich-
Vreeland Law.

Dublin y H. July ia statement favor
ing the formation OF currency associations
bv nationa banks under the Aldrich-Vre
land law q May 30. les. vas given out by
Franklin MacEeagh. the Secretary OF the
Treasury. a. his summer home tonight.
He explains that the Law provides for the
issuance Of additional banknctes in time OF
emergency. either by individual banks, on
deposit OF proper security with the govern
ment and payment of interest Of per cent
for the frs. month and per cent additional
for each succeeding month up to ten on
such notes. or by a association OF ten OF
more national banks having united cap
ital Of $4,000
1t mas been my feeling for some time
back" the Secretary says, that the hrst
impulse OF the national banks Immediately
after the passage of the Aldrich-Nreeiand
bill was the correct one. That impulse was
10 form at once the national currency asso-
Citations provided for in the act The effect
was to interpret the authorizations OF the
AIdrich-v -vreeland act as something that
should not await emergency, but should
be adopted when the financial atmosphere
was perfectly clear
Now. that impulse toward the formation
/ Of the national currency associations was
: general throughout the country. II. how
ever resulted in the formation Of only one
national currency association. 10 wit, the
one in Washington The reason why this
movement halted at that time was that the
J banks encountered. as they thought, one or
/ two serious difficulties in the Law, one Of
which was that there would be no pro-
vision for the withdra val Of a bank after
il Joined an associa ton. While the matter
was being Considered IN the Treasury De
partment. and before il became evident that
the objections found by the banks could
and would be overcome, the impulse had
passed away. and the interest turned tow
ard general banking and currency reform.
Awaiting Permanent Currency Reform.
1T is true OF course that the Aldrich-
ETeeland bill was only meant to opera 2
ad interim until a reform banking and cur
rency system should be adopted. This re-
form seemed imminent and so the interest
in the national currency associations was
allowed to diminish. 1 nave felt that this
movement should be revived. While | am
very hopeful Of an ultimate and not too
long deferred reform of our banking and
currency systems that reform is not i'm
minent We hoped it would be at this
/ time I have thought, therefore, that the
intention OF the Aldrfch- -Freeland bill
should be carried out, and that its powers
should be organized for the interval be
fore the passage of a bill permanently re
forming the banking and currency system.
] have felt that this is a favorable time,
Sees No Financial Clouds.
Il therefore recommended some time ago
the formation Of these associations TO some
o. the national bankers, including a COM
mittee of the American Bankers Associa-
ton who came to Washington 10 confer as
to other Treasur matters.
My own view OF the national asSocia-
tions is that they should be formed in such
a time as this when no one contemplates
any financial conditions which would re-
quire the use Of their powers. Personally.
| 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
respect TO the issue OF currency Indeed.
think that the very formation and exist
ence OF these associations would strongly
| tend-perhaps effectually and finally tend
to prevent the need OF the exercise of their
powers. 1 therefore minimize the Cses OF
these associations in emergencies and mag
! Nifty the Importance OF their influence in
preventing emergencies They are assoc-
ated in my mind with times OF financial
peace and quiet. rather than with times Of
ccrfuson and convulsion.'