The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-12-12
S%7s0,000,00O IN OLD
BANK NOTES RETIRED|
Secretary McAdoo Announces
Plan to Refund With U. s.
Per Cent. Bonds.
CURRENCY TANGLE CLEAR

WARRINGTON. Dec. 1I.--Secretary of
m. Treasury McAdoo announced to-day
,r., no has established the method of
,.,,y,nr the old national bank currency
ard Of r~efunding the l.. s. . per cent
h,,ds as prescribed by the Federal Re-
serve act.
The volume OF currency to he retired
,v ne regulations formulated OF put
tiny the provision OF the reserve act into
onera,,on Is approximately s73o,o0o 900.
ira total national bank circulation out
standing is $77l 900. 900. blu a consider
able par, OF this is secured by State and
municipal bonds instead Of the Govern
men, . per cents. which map be refunded.
The banking sentiment of the country
.or SOM time has been In favor OF the
.a-ly retirement Of as much OF the ma
,onAl circulation as practicable. Bank
ep have pointed out repeatedly that the
s,pp,y Of currency now at hand consists
~ all the old national bank circulation
a. vol, as the considerable volume OF
redsral Reserve notes which have been
Issued sirrcc tho new currency system
was put int operation.
Too Much Currency.
me view has been expressed frequently
that the country is heavily o~versupplied
with currency as the result OF the absence
O, some provision for the retirement
o. ire national bank circulation. In
stsad OF a flexible volume of currency,
enlarging or diminishing in response 10
the seasonal and other needs OF the busi-
ness community. there has existed a non
flexible volume which many bankers re-
garded at certain periods as more than
suniclent for the needs of business.
Here Is a statement issued by Secretary
McAdoo outlining the regulations for the
retirement OF the currency
Secretary Mc.idoo has issued regu-
latlons establishing the method Of retir-
Ing national bank circulation and of re-
funding United States 9 per cent bonds
rs provided by section is of the Federal
Reserve act.
The regulations provided nat on and
after December 81. 1915. when Section
ls becomes effective. any national bank
may submit to the Treasurer OF the
United States application TO sell at pal
and accrued interest any bonds securing
circulation which the bank desires to re-
tire. on March 81. 1916. and quarterly
thereafter. the Treasurer Of the United
States will submit to the Federal Re.
serve Board a list OF all applications tC
retire circulation thai have been received
At least ten days before such date.
Board 70 Act on Pleas.
"rhe board will pass upon such appil
cations and will advise the Treasurer o'
any bonds allotted to the Federal Re
serve banks for purchase thereupon ths
Treasurer will call on the Federal Re
sene banks required to purchase tbs
bonds 10 deposit lawful money therefor
and after receipt OF such deposits the
Treasurer will convert into the Treasury
such sums az may he necessary to re
deem the bonds 10 be retired. will remit
bonds and will transfer title Of the bonds
10 the Federal Reserve hank arouirins
them. Applications TO retire circulation
which are not accepted by the boarC
must be subsequently, renewed.
The regulations further provide tina
Federal reserve banks owning 2 pc
cent. consols Of 1880 or 2 per cent
Panama Canal bonds against which n,
circulation Is outstanding may appl,
Tor the conversion of such bonds INTO on
year 3 per cent. notes or thirty year ;
{ per cent. bonds. Such applications ma!
be submitted at any time. but CONVEX
sions will be nae quarterly only on thu
fwt day of January. April, July ano
October, which are the dividend date.
FOR the Consols OF 1880.
"Npt "a ex,,ed npa-haIf ~ tho bond.