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The First Inundation 89<br />
$43 million, and there was a deficiency ofover $17 million. Stock market<br />
selling had been mainly for European account, to raise cash, but when<br />
exorbitant insurance rates for the shipping risks made the export ofgold<br />
prohibitive, this liquidation died down. On Monday morning, August 3,<br />
the Secretary of the Treasury announced that it was prepared to issue<br />
$100 million of emergency currency to the New York banks, under the<br />
Aldrich-Vreeland Act, and in the same way to assist banks throughout the<br />
country. The following day, the Congress with remarkable celerity<br />
removed the limitations upon the total emergency currency that could be<br />
issued.<br />
New currency associations were now formed throughout the country,<br />
and during the following two months another twenty-three such associations<br />
were organized, with member banks in nearly every state.<br />
During the critical month ofAugust some $208,810,790 ofemergency<br />
notes were issued under the terms of the act; during September the total<br />
rose to $326,789,380; and during October to $369,558,040, and the issue<br />
reached its maximum of $381,530,000 during November.<br />
The total issue power ofthe banks, under the Emergency Currency Act<br />
and the old National Bank Act, was approximately $2,230 million (125<br />
percent ofcombined capital and surplus). Ofthis, some $740 million had<br />
been used in the issuance of national bank currency. The $386 million<br />
issued under the emergency powers therefore represented about onefourth<br />
the maximum issuable. The aggregate amount of outstanding<br />
national bank circulation reached a maximum in the middle ofNovember,<br />
1914, at $1,126,039,600. 2<br />
Thereafter, the demand for currency fell off, and by the end ofthe year<br />
60 per cent of the emergency note issue had been retired, and by the<br />
following Mayall but $6 million had been redeemed.<br />
In addition to the emergency currency, some twelve clearing house<br />
associations found it necessary during the height of the crisis to issue<br />
clearing house certificates.<br />
The New York Clearing House Association began its issue on August<br />
3, and made various issues until October 15. The total amount issued was<br />
$124,695,000, and the largest amount outstanding at anyone time was<br />
$ 109,185,000.<br />
Cancellations of clearing house certificates began on August 26, and<br />
the last of the entire issue was canceled on November 28.<br />
The collateral put up by member banks to secure certificates issued to<br />
them by the clearing houses is of interest. Some $234,465,000, or 50.7<br />
per cent, consisted ofcommercial paper; $163,873,000, or 35.5 per cent
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