The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1910-08-02
CURRENCY ASSOCIATIONS.

|
of date of May 80, 1908, has been
practically dead letter from the time
of its enactment until now. 1t pro-
vided for the organization by the Ma
tioIal banks Of currency associations,
but none were organized except, at
| the solicitation of the Treasury, in
| the District Of Columbia, and that
organization was a negligible quantity.
The provisions in regard TO the organi-
cation OF these associations were that
National banks occupying contiguous
territory might organize them volun"
tarily. There must be at least ten
National banks in each National cur
rency association, and the aggregate
capital and surplus of such National
banks must be at least $5,000,000 No
National bank may Join National
currency association unless it has an un-
impaired capital, and surplus Of not
less than 90 per cent. After the forma
tion Of an association any National
bank belonging thereto, whose outstand-
ing circulating notes actually issued by
United States bonds amount to not
less than 10 per cent Of its capital may
obtain additional circulating notes by
depositing with the association in trust
for the United States any securities,
including commercial paper. But addi-
tional notes will only be issued upon
the recommendation of the Comptroller
of the Currency and the approval of
the Secretary of the Treasury, and then
not exceeding 10 per cent Off public
securities, 90 per cent? of the cash
value of the securities or commercial
paper 80 deposited. There is proviso,
also, that no National bank association
shall l,e authorized in any event to is
sue circulating notes based upon COM
mercisl paper in excess of 30 per cent
of its unmpaired capital and surplus.
Under this law the Treasurer pro-
ceeded to provide for the new circula
tions that the associations might issue
IN case of emergency, not waiting for
the associations to form. Changes were
made in some thirty thousand bank
note plates, and five hundred million
dollars of emergency CURRENCY for circu
lation was printed, for the banks in
the associations, assuming that they
would be formed, winch is held in
stock in the Treasury ready for issue
whenever an emergency may call for it.
But there has been no emergency. There
have been no emergency associations
such ms the law contemplated. The Sec
retary of the Treasury looks ruefully
upon the wasted work done at a
great cost The bank note plates have
been changed, the currency printed, and
all ready to issue at call, but there is
not only no call, but none to make
. calls.
One reason why no association
was formed was that the law provided
that a small bank should have just
as much voice in the association as a
large bank. Second, that while it was
easy for bank 10 get into this asso
citation. there sc med to be no way pro
vded in the law for 1t to get out, The
, Attorney General. being called upon to
say whether bank could withdraw
voluntarily from an association once II
was in IL. held that il could not. Now
and it is held that any bank may with
draw from such association with the
approval OF the Secretary of the
Treasury and the consent of the execu
> tive committee of the board of man
ayers of the association. provided that
!, at the time of such withdrawal ther,
shall be no unredcemed additional OF
emergency circulating notes issued t.
the associat tion for such bank outstand
{ ing Accordingly. there has been ar
Y emergency association formed by the
!. banks of New York city, to be known
!. as 'fThe National Currency Assoca
o tion of the City of New York" 1t j!
understood that other important cities
will also organize associations. and tina
It the law SO long neglected :naJ> Jcom
d into operation. This, however. could no