The issue of circulating notes by national banking associations was first authorized by an act entitled "An act to provide a national currency secured by a pledge of United States stock, and to provide for the circulation and redemption thereof," approved February 25, 1863, which act was repealed by an act entitled "An act to provide a national currency secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof," approved June 3,1864. The act approved June 3,1864, with subsequent amendments thereof, was embodied in the Revised Statutes of the United States in 1873. The law as embodied in the Revised Statutes has been amended from time to time, and is now contained in what is known as the national-bank act, with amendments thereof.

Material amendments have been made to the national-bank act during the past few years. The first, dated March 14, 1900, authorized the formation of national banks with minimum capital of $25,000; the issue of circulation to the par value of bonds deposited, and reduced the tax on circulation secured by 2 per cent bonds to one-fourth of 1 per cent semi-annually.

The act of June 22, 1906, authorized national banks to loan to one interest an amount not in excess of 10 per cent of the paid-in capital stock and surplus, the aggregate, however, not to exceed 30 per cent of the capital, the original limitation being 10 per cent of the capital stock.

On January 26, 1907, an act was approved prohibiting national banks or other corporations organized by authority of any act of Congress from making money contributions in connection with political elections.

At the following session of Congress the banking law was further amended authorizing the organization of national currency associations and the issue to bank members of such associations of additional circulation on securities including commercial paper held by the national banking associations. The act further authorized the deposit with the Treasurer of the United States, in trust, of State, municipal, etc., bonds, as security for circulation, but provided that additional circulation can only be issued to banks having an unimpaired capital, and surplus equal to 20 per cent of the capital, and whose circulation secured by United States bonds amounts to at least 40 per cent of their capital stock. Additional circulation however, can only be issued at such times and under. such conditions as, in the judgment of the Secretary of the Treasury, an increase in national-bank circulation is warranted.