upon either of the others. The result was a compromise measure which
became the Aldrich-Vreeland Act.

The important provisions of this act are as follows: (1) Ten or more
national banking associations, each with an unimpaired capital and
surplus of not less than twenty per cent and an aggregate capital and
surplus of not less than $5,000,000, may form national currency
associations. These associations are to have power to render available,
for the basis of additional circulation, "any securities, including
commercial paper, held by a national banking association."

(2) To obtain this additional circulation, any bank belonging to a
national currency association having circulating notes outstanding
secured by United States bonds to an amount not less than forty per cent
of its capital stock, and having the required unimpaired capital and
surplus, may deposit approved securities with the currency association
and be empowered by the Secretary of the Treasury to issue additional
circulating notes to an amount not to exceed seventy-five per cent of
the cash value of the securities. If the securities are State or
municipal bonds the issue must not exceed ninety per cent of the market
value of the bonds.

(3) The banks and assets of all banks belonging to the currency
association are liable to the United States for the redemption of this
additional currency, and the association may at any time require that
additional securities be deposited. All banks are held liable to make
good the securities of any bank in the association.

[Illustration: Hundreds of people in the street.]
The panic of 1907, Run on the State Bank,
Grand Street, New York.

(4) The total amount of circulating notes outstanding for any bank shall
not at any time exceed the amount of its unimpaired capital and surplus,
neither shall the amount of such notes in the United States exceed
$500,000,000 at any time. The amount issued in each State shall bear the
same relation to the total amount issued in the United States as the
unimpaired capital and surplus of the banks of that State bear to the
unimpaired capital and surplus of the banks of the United States.

(5) The tax on circulating notes secured by United States bonds bearing
two per cent or less shall be one-half of one per cent; if secured by
United States bonds bearing more than two per cent, the tax shall be one
per cent. If the securities are other than United States bonds, the tax
shall be