Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-07-17
Emergency Currency Associa-
tons Favored by Macveagh.
WOULD FORM THEM NOW
Financial Reform Still Far Of, He
Hints.
Believes Existence Of Such Organi-
cation Will, suhce to. Pre-
vent Emergencies.

DUBLIN, n H., July ia statement
favoring the formation of currency asso-
Citations by national banks. under the
Aldrich- Vreeland law of May 80, 1903,
was given out tonight by Secretary
Franklin MacVeagh at his summer home
here.
After explaining that the law provides
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 5 per cent for
the first month and I per cent additional
for each succeeding month up to 10; or
by the organization OF ten or more ma
tional banks having a capital Of $5,O0OO 600,
the Secretary said:
Why Banks Did Not Act
1T has been my feeling for some time
back that the first impulse of the ma
tional banks, Immediately after the pass
age Of the Aldrich-Vreeland bill. was the
correct one. That impulse was to form
at once the national currency associa-
tons provided for in the act.
The effect was to interpret the authori-
cations of the Aldrich-Vreeland act as
something that should not await an
emergency. but should be adopted when
the financial atmosphere was perfectly
e'e :Now tn It impulse toward the forma-
ton Of the national currency associations
was general throughout the country. 1t,
however, resulted in the formation OF
only one national currency association, to
wit. the one in Washington, D. c.
The reason why this movement halted
at that time was that the banks en-
counteIed. as they thought, one Or two
serious difficulties in the law. one OF
which was that there would be no pro-
vision for the withdrawal of a bank
after it Joined an association. While the
matter was being considered in the Treas
ury Department and before 1T became evil
dent that the objections found by the
banks could and would be overcome. the
impulse had passed away and the inter-
est turned toward general banking ana
currency reform.
Reform Still Far Off.
1T Is true, of course. that the Aid
rich-Vreeland bill meant to operate, ad
interim, until reform banking and
currency system should be adopted
This reform seemed imminent, and SO
the interest in the national currency
associations was allowed to diminish.
II have felt that this movement should
be revived. While 1 am very hopeful
of an ultimate and not too long de-
ferred reform of our banking and cur
renew systems, that reform is not as
imminent as we hoped it would be at
this time.
Il have thought, therefore, that the
intention of the Aldrich- vreeland bill
ers should be organized for the iu9erval
before the passage Of bill permanent
ly reforming the banking and currency
system. 1 have felt that this lis
Il therefore recommended some time
ago the formation of these associations to
some of the national bankers. including
a committee of the American Bankers
Association who came to Washington to
confer as to other treasury matters.
Now Time to Form Associations.
MY own view Of the national associa-
such a time as this. when ma one con-
templates any financial conditions which
would require the use OF their powers.
Personally 1 do not expect that any
national currency association will ever,
within the life of the law, have to avail
itself of its powers with respect to the
issue of currency. Indeed, think that
the very formation and existence of
these associations would strongly tend,
perhaps effectually and finally tend, 10
prevent the need Of the exercise Of their
powers
Il. therefore, minimize the uses of these
associations in emergencies and magnify
the Importance Of their influence in pre-
venting emergencies. They are associated
in my mind with times of financial peace
and quiet rather than with times of con-
fusion and con ulstnn >,