mercial paper or any other form of securities except those specifically described in the section in question.

Sections 4, 5, 6, 7, and 8 of the act do not seem to be material to the question under discussion.

By section 9 it is provided that on notes secured by United States bonds a tax shall be levied of one-quarter of 1 per cent for each one-half year, and upon notes secured otherwise than by bonds of the United States a tax for the first month at the rate of 5 per cent per annum and afterwards an additional tax of 1 per cent per annum for each' month until the tax amounts to 10 per cent annually, and thereafter such tax of 10 per cent per annum upon the average amounts of such notes. Taxes received on circulating notes of the second class shall be added to the reserve fund held for the redemption of United States and other notes.

By section 10 it is provided that banking associations desiring to withdraw circulating notes issued on security other than bonds of the United States may make the withdrawal at any time by deposit of lawful money or nationalbank notes in the Treasury, and, on such deposit, withdraw a proportionate share of the securities deposited, and deposits intended to retire such notes are not to be covered into the Treasury as required by section 6 of the act approved July 14, 1890 (26 Stat. 289), but retained for the purpose of redeeming the notes of the bank making such deposit.

Sections 11 and 12 of the act do not appear to be relevant. Section 13 is as follows:

"SEC. 13. That all acts and orders of the Comptroller of the Currency and the Treasurer of the United States authorized by this act shall have the approval of the Secretary of the Treasury, who shall have power, also, to make any such rules and regulations and exercise such control over the organization and management of national currency associations as may be necessary to carry out the purposes of this act."

Sections 14, 15, and 16 appear to be immaterial for the present purpose.

Sections 17, 18, and 19 create a commission to be known as the National Monetary Commission, composed of nine

Members of the Senate and nine Members of the House of Representatives, whose duty it shall be "to inquire into and report to Congress at the earliest date practicable, what changes are necessary or desirable in the monetary system of the United States or in the laws relating to banking and currency;" authorize them to make all necessary inquiries, to sit during the recess of the Congress, to employ such subordinates as may be needful, to administer oaths, summon and compel the attendance of witnesses, and generally exercise the powers appropriate to the duties imposed upon them, and further provide for the payment of the expenses of such commission. The last section of the act is as follows:

"SEC. 20. That this act shall expire by limitation on the thirtieth day of June, nineteen hundred and fourteen."

It is to be observed that, while the national currency associations for which this legislation provides are thereby constituted bodies corporate, their corporate purposes and powers are extremely narrow. They have no authority whatever over the management or business of their constituent banks and no warrant to interfere therein. They exist merely to enable banks belonging to them to obtain additional currency upon the deposit of securities other than those specifically described in section 3 of the act, more particularly upon the deposit of commercial paper. In both cases alike, the approval of the Secretary of the Treasury is necessary to such issue of notes, but if a bank applies as a member of a currency association, and desires to obtain a circulation on classes of securities not enumerated in section 3, the application must be made through the officers of the currency association and, presumptively, with their approval. The securities in this case are deposited with the association in trust for the United States, instead of being deposited with the Treasurer or Assistant Treasurer as provided in section 3, and the association has power to require additional securities or the substitution of more desirable securities from the bank making the application, and, also, to realize, for the benefit of the Treasury, upon the securities thus deposited.

This is all done, however, subject to the superior authority of the Secretary of the Treasury in the premises, and the association is essentially an agency of the Treasury intended to assure it of the sufficiency of the securities offered and to assist it in so dealing with these securities as to insure the due redemption of the additional circulation authorized. While, however, the powers of the currency associations are thus strictly limited, obligations of considerable moment are assumed, each to the other, by the several banks forming parts of one of these associations. These banks and all the assets and property of all of them become responsible to the United States for the redemption of the additional circulation issued to any one. The distribution of such liability, as among the banks themselves, is in proportion to the capital and surplus of each to the aggregate capital and surplus of all. Moreover, the redemption fund of every bank belonging to the association provided under the terms of the act of 1874 becomes responsible for the default of any one of the said banks to maintain its redemption fund, as required under the terms of the said law.

It is further to be observed that the very heavy tax imposed upon additional circulation, issued upon the security of bonds other than those of the United States, will undoubtedly have, as we know that it was intended to have, the effect of restricting applications for such additional circulation to cases of emergency, and assure its retirement. as soon as the emergency ceases; and the restriction of the act's validity to a term of six years, with the provision for an investigation and report on the part of the commission created, shows that the rights and liabilities created by the act were not intended to endure indefinitely, but had a fixed term, which could not be greater than six years and might readily prove to be much less.

With this preliminary statement as to the law, I proceed to answer your question. There are two provisions in the act which might suggest to the mind an intention on the part of the Congress that any bank should be at liberty to withdraw at its own pleasure from a duly organized national currency association. These are the statement that

the qualified banks" may form voluntary associations" and the provision "that the reduction of the number of said banks below the minimum of ten shall not affect the existence of the corporation with respect to the assertion of all rights in favor of or against such association." It appears to me, however, that the word "voluntary" may be construed in this connection with entire propriety as referring only to the original act of joining the association, and does not necessarily imply that the continued membership of the bank in the association shall be voluntary during its entire duration. When we speak of a soldier as a "volunteer," we refer only to his unconstrained act in becoming a soldier; he has no more right to terminate at his own pleasure his connection with the Army than a conscript would have. The clause secondly above noted would be very significant if it stood alone. It follows, however, as a proviso to the following language:

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The dissolution, voluntary or otherwise, of any bank in such association shall not affect the corporate existence of the association unless there shall then remain less than the minimum number of ten banks."

A reasonable construction of the two passages taken together would seem to be that the Congress wished only to guard against the loss of corporate powers by the associations through the dissolution of one or more of the banks belonging to them whereby the number of such banks would be reduced below ten, and, in this view of the language used, the provision tends rather to indicate a purpose not to permit voluntary withdrawals, since no mention is made of the voluntary withdrawal of a bank when the law speaks of its withdrawal through dissolution. On the whole, I think it must be owned that the language of the law is fairly consistent with either construction, and your question must be answered by a consideration of the general nature. of the legal obligations assumed by the individual banks and by the known purposes of the statute.

The banks agree, in substance, that, under certain conditions, all of them and all of their property and assets shall be responsible for the redemption of additional currency

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issued to any one of their number, and also that, under certain conditions, the several redemption funds of all the banks required by the act of 1874 shall be responsible for deficits in the redemption fund of any one of their number. This responsibility is limited by the terms of the law to six years at most, and, while currency associations may be organized at any time within that period, no very obvious or very serious reason appears on the face of the law why they should be formed until the necessity for emergency currency shall be felt. Moreover, while no bank can become a member of such association except through its own voluntary act, the association, once formed, can not refuse to receive additional members, since it is expressly provided "that any national bank in such city or territory, having the qualifications herein prescribed for membership in such national currency association, shall, upon its application to and upon the approval of the Secretary of the Treasury, be admitted to membership in a national currency association for that city or territory, and upon such admission shall be deemed and held a part of the body corporate, and as such entitled to all the rights and privileges and subject to all the liabilities of an original member."

The purpose of this last proviso could apparently be defeated if the banks already in the association could threaten to withdraw in case the newcomer were associated with them. It appears to me, on the whole, that banks joining such associations stand in the position of anyone who makes a contract involving the assumption by himself of specified responsibilities and duties for a period of time determined in advance. In such case the withdrawal of such party involves the rescission of the contract, and all parties interested in the contract must also be parties to the rescission before the date fixed for its termination; in other words, no bank which has once joined such association can withdraw from it without the consent of every other bank admitted to membership in it. With such consent, I see no reason in principle why the contract between the banks may not be rescinded and the corporation made up of them pro tanto dissolved. It follows that the consent of each