New-York tribune., 1910-08-24
DEPOSIT IS 5 PER CENT
Treasury ReverSes Ruling as to
Emergency Currency Law.
CONCERNS NATIONAL BANKS
Financiers Say, However, That
Extra Money VIII Probably
Not Be Needed.

n & communication received yesterday
r. the New York Stock Exchange firm OF
! 8 Bsche & Co, Of No. = Broadway,
from the Treasury Department at wash
srcror. the 6eDartnleHt reverses Itself on
IN INTERPRETATION Of the AIdrich-FreelaEd
emergency currency law previously MADE
10 the firm
The deDartr1ent holds now that under the
17revisions OF the Law national bank needs
10 maintain q reserve fund Of only per
cent with the Treasury for redemption
purposes Oh account OF additional circula-
-. anc =ze1 10 per cent as was stated in
3 fer1rer communication
I1st Jltv J 6 Rache & Co wrote to
the Treasury Department for an interpre-
-stion Of the law the firms statement in
,,0e Of its weekly market reviews that un-
Ger the emergency currency law banks in
-he National Currency Association must
17eee a reserve fund of 70 per cent with the
Treasury for redemption purposes having
been Challenged by a national bank
IA rezlv 70 its inquiry the firm received
= letter from A PiaTt Andrew, Assistant
Secretary OF the Treasury, UNFOLDING It's
contention that reserve fund OF 10 per
cent was required
Mr. AD5rew explained in the letter that,
,lnder the act Of June %, 1874. 4 national
rsnk must keep eH deposit with the Treas
,-rsr q tbs Tnited States per cent of the
srno,at OF its circulating notes outstand-
;sg and Under Section Of the act Of May
p 1905. when additional circulation issued
,r6er this act is outstanding national
rark is required to deposit an additional
Ter cent thus making q total deposit OF
81 per cent a. q redemption fund
71r,7-E mic q
6rszs saws that a further consideration OF
-be wording of Section {, referred TO above
lad 70 the conclusion that Congress in
-anded cnlv 20 extend TO the additional
eg-eacv under the emergency currency
s1s4be original provisions for 3 per cent
redemption fund hitherto provided for the
,r5i7arv bond secured circulation Mr. An
7~s.r-z te1rer in fun was as follows,
n = letter from this department dated
T-Iz- Pa vesuec-tny Section 8 OF the act OF
Nav 90 1908. relative 10 the reneIll llJl- J
<und &c be held II me lTeaSGI4 u
ui1ed States on account OF adQl1-lIl1- 5i ~
..,-ie-5-.y notes OF national banks tsSGaole
-Erder that act. you were informed 49, - -
me traditional construction 81 tliat $500 -
~ the acc as contained IL Department
circular Ne 20 Of June 20. 199&- lnasnuch
ae no action has ever been taken uf-
der this construction and Il3-isrfelcn a.
Z further consideration o. me "GIu.l-- ,
o. Section E leads TO q u1od3TlcallcIl OF LllaL
construction. YOU are now informed lLlet III
-ha present opinion o. the department sec
-ior7 : OF the act Of June %, 1874. proNl1sS
-ra- national hank must keep on oeposlL
a. - Treasury OF the United States q sum
4a-ssI 70 . per cent OF such cIrculation d
IS provided Tor IN that act and JilaI SCI
->c- & Of the act q Nay 81. 1908. proFloeS
--s- The banks shall keen on Ceposlr IN the
---essr.~v Of the United States an adoltiona!
gr-1 equal TO per cent OF such ald1uoIll-i
circulation Al any time outstanding. ouL
-rs- lie -ederutiOn fund 70 be deposited
~ -aa Treasury on account Of additional
circulation authorized by the act ls not re
or1i~eE 70 exceed Per cent OF Slch a0cl-
-f4-al circulation The language OF lile
e.s--se Is SOM nevylaT ambiguous, but as there
sg 10 occasion for q larger fund n one case
nan 5- the other and As no interests are
or could he served by Increasing TINS Iuro
ne 5epar-rnent believes that congress IN
tended ouIy to extend te the additional cur
-a-rv the original provisions for q . per
err REDEMPTION fund hitherto PROVIDED Iof
.;.s ordinary bond secured circulation
Bankers said Yesterday that II was OF
gtte consequence 70 them whether per
cent Of 70 per cent was required TO be kept
or deposit as q redemption fund, as they
zs-e confident that there would not be any
-esd FOR emergency currency before the
sct expires BY limitation in 19lA