The additional circulating notes issued under the Aldrich-Vreeland Act were of the same nature, tenor, and use as the circulating notes of national banks previously issued and secured by the deposit of United States bonds. The total amount of outstanding notes of any bank, including the additional issues, was not at any time to exceed the bank's unimpaired capital and surplus, and the maximum total issue was limited to $500,000,000. The additional issues were to be distributed by the Secretary of the Treasury among the states on the basis of the proportion which the unimpaired capital and surplus of the national banks in the state bore to the total amount of these items for all national banks of the United States. Any national bank having circulating notes secured otherwise than by bonds of the United States was required to pay for the first month a tax at the rate of 5 per cent per annum upon the average amount of such of its notes as were based upon such securities, and afterwards an additional tax of 1 per cent per annum for each month until a 10 per cent per annum tax was reached, and thereafter a 10 per cent per annum tax. Reports of such note issues were required from the banks monthly. The taxes were paid into the redemption fund. For the retirement of the additional circulation the issuing bank was authorized to deposit lawful money or national bank notes.

The Aldrich-Vreeland Act was to expire, by the terms of the act, on June 30, 1914. Between the crises of 1907 and 1914 there was no unusual demand for currency and therefore no issues of national bank notes on other security than United States bonds. Quite a number of these associations were organized in these five years, and $500,000,000 of the emergency notes were printed and deposited in the sub-treasuries against the day of need.

The Aldrich-Vreeland Act was understood to be only a makeshift and temporary arrangement until the National Monetary

Commission made its report and a new banking plan was established. When the Federal Reserve Act was passed in December, 1913, provision was made to extend to June 30, 1915, the time for the expiration of the Aldrich-Vreeland Act, which was retained as the means of an emergency currency until the federal reserve system was well established. Also at this time the taxes on the circulating notes secured otherwise than by bonds of the United States were reduced to 3 per cent per annum for the first three months, with an additional tax of 1/2 per cent per annum for each month until a tax of 6 per cent per annum was reached; thereafter a tax of 6 per cent per annum was to prevail.