The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1910-07-17


vas offered at 9 per cent. The call
rates OF ~ per cent 20 ; per cent as
su1edly give no proper indication OF the
actual conditions prevailing in the
money market Possibly in the quota
tons for time money and commercial
paper one may find the real explanation
Of the apathetlc condition OF the bond
and investment market
washington advices confirm the re-
port widely circulated on Friday, thar
Secretary MacSSagh, Of the treasury
Department, had VI 'ttez leading bank
and clearing house officials IN Eastern
reserve cities. suggesting the formation
Of national currency associations under
the provisions Of the Aldrich-Nreeland
The panic of 1907 This report has served
10 call attention TO a possible means or
relief should monetary srlngencJ
actually develop during the crop-moYinS
period
During the tendency Of the bin in
GOnEreSS- the measure was not lnapuy
compared 10 a IRE escape, which might
be used IN case OF necessity IN erect
Of course, the AIdriCh-Vreeland measure
leSalizes course Of procedure which
banks resorted 10 in cases OF stress
when they combined within various
cities for the issuance OF clearing house
certificates
Emergency Currency.
banks have never been overenthusias-
tic over the emergency currency meas
IRE, as is rather clearly indicated by
the fact that although the AIdrich-
Nrseland bill became a law as far
back as May 80, 1903, but one national
currency association, whose bylaws
met the approval Of the Secretary Of
Jhe Treasury. has ever been formed,
and that III the nOnhnsncial center OF
Washington. The formation OF ma
uoual currency associations among
national banks Of given districts is a
condition precedent 10 taking out
emergency circulation A second con-
dit:On is that prior 20 taking out such
circulation the banks must have out
standing a volume OF circulating
notes. secured ~ United States bonds,
equal 10 40 per cent OF their capital
after meeting these requirements, q
national bank may. IL the conditions
require It and the Treasury officials
approve the application. take out ad-
cir0Eal or emergency notes. secured
by commercial paper and railway and
municipal bonds, 70 the extent OF not
more than IS per cent of the cash
value Of the commercial paper and
miscellaneous securities, and not more
than so Pc cent Of the value of state,
city county, and other muuicipaI
ponds, or when issued against com
meTClal paper alone, the volume OF
the emergency notes must not exceed
90 per cent OF the banks capital and
-lulu paired surplus
National banks from the outset have
insisted that this method Of procedure
y. as cum Dersome- First. because IL
eutailed IN many instances q heavy I
expense TO purchase Government is
sues IN order 60 take out the fun 40
9 tLiations while thereafter the special
Government tax on The ernergau-y-
notes Is 30 high. being AT the rate OF
3 per cent for the first month and
per cent q month Thereafter r7rfif II
reaches maximum OF 10 per cent
-t.1I banks maintain that they cannot
aHoTd 70 take out emergency notes
llit-t acute stTlnSenCy develops. Hold
-LS LnlS lew no currency aSSocfa-
--ons were formed by the banks in
me large -anciaI cities and IN recent (
IL ,- Us oL the monetary situation
--e emergency currency law has
prayed no part as q possible relief
measure until now.
BIZ Of Lading D--4culty.
II f. not improbable that the sre--
gesCon that the Aldrich-VreeIand act I
might be put into operation basi
grown out Of the b!u OF ladinE dfrri-
Guilty referred 20 in this column last
week Ahls Is a far more serfor1s
matter than Wall Street realizes /
Following the information thar tba
banks Of the East and Of Europa bs1,s
declined 10 advance any more u,oDov- 1
or cotton bills OF ladfag, IN coDsa- /
luence Of last seasons frauds r.
4 eNals BANK Association. di1rf-,e
me week. lmportuned GOvfrnor Cam,
DELL OF that state. to recomue-75 =
special law making the railroads AZ
ectiy responsible for the acfs oF
CnleSs some means can be found ,,e
guaranteeing the bills Of IaJf--
drawn against cotton shfpmenTS i
WIZ aSSITeclE be q difficult rnar+e- = 3
move the cotton crop. for. unffI ~ ~
7 eSDonSi 5llity for a hflf of Ia6{rr- -
be placed upon some one. 50 -. -
BANKERS may know 70 a certafntv 49,
-ne cotton EaS been actually sf,5-,-,e-5
eastern and foreign bankers viii -
ADVANCE money against such b5IIs
i MS VIII throw the burden of r7o,-i-,--
the crops almost Entirely uDon 49,
country and 20 q large extent y-5+Fi-
ne territory where the cotton il
As the movement Of a I3.O0o OOa-
oale cotton crop involves. at $50 .
bale, about $4,000 OOO the serio,,e
nature OF the situation becomes
parent It Is to be hoped that som.