'"TiSr-'l SENATE {>'-"-r
THE NATIONAL- BANK ACT
AS AMENDED
THE FEDERAL RESERVE ACT
AND
OTHER LAWS RELATING TO
NATIONAL BANKS
Compiled under the direction of the Comptroller of the Currency
FEBRUARY, 1920
t jjJijy J
' '■' '•' y.
WASHINGTON
tJOVERNMENT PRINTING OFFICE
1920
SENATE RESOLUTION 298.
Reported by Mr. Moses.
In the Senate of the United States,
February 6, 1920.
Resolved, That there be printed one thousand five hundred copies
of the national banking act as amended to date for the use of the
Senate document room.
Attest:
George A. Sanderson,
Secretary,
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CONTENTS
Page.
Dates of acts relating to National Banks 5
^ National-bank act and acts amendatory thereof and supplementary thereto
-^ Bureau of Comptroller of the Currency 11
h Organization and powers 19
Obtaining and issuing circulating notes 49
i;n
y' Regulation of banking business 69
Dissolution and receivership 99
' Federal reserve act 117
Acts of a general nature and sections of the Revised Statutes not included
</l in national-bank act affecting national banks ISi
'^ Special acts relating to national banks 207
i^ Opinions of Attorney General on guaranty laws of Oklahoma and Kansas
^ and on the insurance of bank deposits 215
■^ Index to national-bank act and general and special acts 221
"^ Index to Federal reserve act 273
Q Index to sections of Revised Statutes 302
3
;i7r>Hi)4
DATES OF ACTS RELATING TO NATIONAL
BANKS.
THE NATIONAL BANK ACT AND ACTS AMENDATORY THEREOF AND SUPPLEMENTARY
THERETO.
Page.
Feb. 25, 1S63. An act to provide a national currency secured by a pledge
of United States stocks, and to provide for the circula-
tion and redemption thereof 181
June 3, 1864. Act of February 25, 1863, repealed and reenacted with
certain amendments 11-113, 131, 181, 182
Mar. 3, 1865. State banks converted may retain and keep in operation
branches 43
Mar. 3, 1865. Issue of circulating notes. See note under section 5171 59
Feb. 5, 1867. Penalty for imitating bank circulation 66, 178
Mar. 2, 1867. Refunding excess tax 94
Feb. 10, 1868. Taxation of shares of national-bank stock 95
Feb. 19, 1869. Prohibiting loans on United States or national-bank notes,
or withholding such notes from use 85
Mar. 3, 1869. Reports of condition, and earnings and dividends 90, 91, 92
Mar. 3,1869. False certification of checks 86
Apr. 6, 1869. Penalty for embezzlement, abstraction, etc 87
July 8, 1870. Penalty for embezzlement, abstraction, etc 87
July 12, 1870. Issue of circulation redeemable in gold 65, 80
July 14, 1870. Liquidating banks to retire circulation 100
Mar. 1, 1872. Leavenworth struck out as reserve city 1 72
June 8,1872. Certificates of deposit for United States notes (repealed
Mar. 14, 1900) 80
Feb. 19,1873. Reports of State banks 18
Mar. 3, 1873. Examination of plates and dies 62
Mar. 3, 1873. Assessment for impairment of capital 83
Mar. 3, 1873. Use of the word " national " 118
June 20, 1874. Fixing the amount of United States notes, providing for a
redistribution of national-bank currency 20, 61, 77, 102
June 23, 1874. Maceration of United States and national-bank notes 64
June 23, 1874. Stamps on bank checks. Repealed March 3, 1883.
Jan. 14, 1875. Aggregate amount of circulation not limited 63
Jan. 19, 1875. Circulating notes of national gold banks 64
Feb. 18, 1875. Correcting errors and omissions in the Revised Statutes 13,
14, 63, 81, 101, 103
Feb. 19, 1875. Appointment and compensation of bank examiners 112
Mar. 3, 1875. Salary of Comptroller 11
Mar. 3,1875. Distinctive paper for printing notes 61
Mar. 3, 1875. Clerical force for redemption of circulating notes 78
June 30, 1876. Assessment for failure to pay up capital .stock or for im-
pairment of capital ; receivers, appointment of 83, 107-110
Feb. 27, 1877. Examination of plates and dies 62
Feb. 27,1877. Reports to Comptroller 91
Feb. 27, 1877. Destruction of redeemed notes 102
Mar. 1, 1879. Semiannual duty, abatement of 94
Feb. 14, 1880. Conversion of gold banks 65
Feb. 26,1881. Verification of returns of national banks 91
July 12, 1882. Corporate existence, extension of 28-31
July 12.1882. Issue of gold certificates 85
July 12, 1882. Punishment for falsely certifying check 86
July 12,1882. Retirement of circulating notes 55,56
Mar. 3,1883. Capital and deposits, repealing tax on 91,176,178
Mar. 29, 1886. Insolvent banks, protection of assets by use of trust
funds 110. Ill
6 DATES OF ACTS RELATING TO NATIONAL BANKS.
Page.
May 1, 1886. Increase of capital stock, change of name or location— 27, 28, 34
Mar. 3,1887. Courts, jurisdiction of 28
Jlar. 3. 1887. Reserve and central reserve cities, providing for additional.
etc 70-73
Aug. 13, 1888. Courts, jurisdiction of 28
July 14, 1890. Disposition of redemption account 79
July 28, 1892. Stolen or lost national-bank notes, redemption of 79
Aug. 3, 1892. Agent of shareholders of national bank, appointment of ;
amends act of June 30, 1876 108
Jan. 12, 1895. Annual Report of Comptroller of the Currency, printing of_ 15
Mar. 2, 1897. Appointment and qualification of shareholders' agent ;
amends acts June 30, 1876, and August 3, 1892 108
Mar. 14, 1900. Authorizing banks with minimum capital $25,000 ; bonds,
circulation, taxation, etc 32, 60, 92
Mar. 3, 1901. National-bank depositaries 42
Apr. 12, 1902. Authorization of reextension of charter 32
Apr. •28, 1902. Annual Report of Comptroller to contain information re-
garding failed banks, list of employees, etc 14
Mar. 3, 1903. Additional reserve cities ; minimum population, 25,000 72
Feb. 28, 1905. Qualification of directors, banks with capital of $25,000 35
Dec. 21, 1905. Taxation of circulation based on Panama Canal bonds 51
June 22, 1906. Amendment section 5200, loan limitation 81
Jan. 26, 1907. Political contributions prohibited 87
Mar. 4, 1907. Additional copies of Report of Comptroller 15
Mar. 4, 1917. Public depositaries 42
Gold certificates and United States notes, issue of 192
Limitation on withdrawal of circulation ; consent of Comp-
troller of Currency and the Secretary of the Treasury
neces.sary 56
May 22, 1908. Additional Deputy Cmptroller 12
May 30, 1908. Authorizing National Currency Associations, the issue of
additional bank circulation, and creating a National Mon-
etary Commission. Expired June 30, 1915.
Mar. 4, 1909. Codification of criminal laws 66, 179, 182, 185, 186, 187, 188
Mar. 4, 1909. Additional Deputy Comptroller 12
Oct. 15,1914. Interlocking directorates 35-39
May 15, 1916. Amending act of October 15, 1914, relating to interlocking
directorates 36
May 15, 1916. Authorizing the deposit of funds of insolvent banks in any
regular Government depositary 105
Sept. 7, 1916. Amending laws in reference to real estate loans, reserves,
acceptances, and foreign branches, and authorizing bank
to act as insurance agent and as agent in procuring loans
on real estate 21,23,24,25
Apr. 24, 1917. No reserve required to be held against United States de-
posits 77, 190
Oct. 5, 1917. Limit of issue of notes under $5 62
Apr. 5, 1918. Liabilities incurred under war finance act, excepted from
restrictions of section 5202 85
May 22, 1918. Authorizes contributions to Red Cross during period of the
war 198
Sept. 24, 1918. Amend section 5200, Revised Statutes. Limitation of lia-
bilities that may be incurred by any one person 81
Sept.26, 1918. Trust company powers of national hanks. Reserve require-
ments. Amends section 5208, penalty for falsely certify-
ing checks. Amends section 5209, penalty for embezzle-
ment, abstraction, willful misapplication, false entries.
etc. Amends section 22. Federal reserve act 24, 75, 86, 87
Nov. 7, 1918. Consolidation of national banks 100
Mar. 3, 1919. Amends section 5172, printing denomination and forms of
circulating notes 61
Oct. 22,1919. Amending sections .5200 and 5202, U. S. R. S 81.87
Jan. 13,1920. Amending section 5182, U. S. R. S 63
DATES OF ACTS RELATING TO NATIONAL BANKS. 7
THE FEDEBAL RESEB\'E ACT.
Page.
Dec. 23, 1913. Providing for the establishment of Federal reseve banks,
to furnish an elastic currency, to afford means of redis-
counting commercial paper, to establish a more effective
supervision of banking in the United States, and for
other purposes— 11, 21, 22, 23, 25, 34, 41, 42, 43, 50, 56-58, 74-76,
83, 87, 88, 89, 112, 117-177, 189
Aug. 4, 1914. Amending section 27 of the Federal reserve act and section
9 of the act of May 30, 1908, relative to issuance of addi-
tional circulation 175, 176
Aug. 15, 1914. Amending section 19 of the Federal reserve act In reference
to reserve requirements 75, 76, 159, 160
Mar. 3, 1915. Amended paragraphs'3, 4, and 5 of section 13 of Federal re-
serve act superseded by act of September 7, 1916 22, 145
Sept. 7, 1916. Amends sections 11, 13. 14, 16, 24, and 25 of the Federal re-
serve act and section 5202, United States Revised Stat-
utes 21, 22, 23, 25, 143, 144, 145, 146, 147, 149, 165
June 21, 1917. Amends sections 3, 4, 9, 13. 14, 16, 17, 19, and 22 of the Fed-
eral reserve act— 22, 50, 74-76. 87, 88, 89. 90, 123, 128, 132-135,
143, 145. 148, 149, 150, 151, 152, 155, 156. 159, 160
Sept. 26, 1918. Amends section 22, Federal reserve act 24,75,85,86,87.88,
90, 127, 140, 153, 159, 162. 163, 164
Mar. 3, 1919. Amends sections 7, 10, and 11, Federal reserve act— 131, 136, 142
Sept. 17, 1919. Amending section 25, Federal reserve act 25. 165
Dec. 24, 1919. Amending section 25, Federal reserve act 167
ACTS OF A GENEEAI- NATURE AFFECTING NATIONAL BANKS.
Feb. 21,1857. Foreign coins 186
July 7, 1838. Issuing circulation of expired association 194
June 30, 1864. Taxation of State banks 183,184
Mar. 3,186.5. Taxation of State banks 182,184
July 13, 1866. Taxation of State banks 182, 183, 184
Mar. 26. 1867. Taxation of State banks 183
June 6, 1872. Taxation of State banks 183
Dec. 24,1872. Taxation of State banks 183,184
Feb. 8,1875. Taxation of State banks 183
Feb. 18, 1875. Taxation of State banks 184
Mar. 1. 1879. Taxation of State banks 185
Feb. 25, 1862. Taxation of notes and certificates of United States circulat-
ing as currency 185
Mar. 3, 1863. Taxation of national-bank notes and notes and certificates
of United States circulating as currency 185
Mar. 3, 1864. Taxation of national-bank notes and notes and certificates
of United States circulating as currency 185
June 30, 1864. Taxation of national-bank notes and notes and certificates
of United States circulating as currency 185
Jan. 28, 1865. Taxation of national-bank notes and notes and certificates
of United States circulating as currency 185
Mar. 3, 1865. Taxation of national-bank notes and notes and certificates
of United States circulating as currency 185
July 14, 1870. Taxation of national-bank notes and notes and certificates
of United States circulating as currency 185
Aug. 13, 1894. Taxation of national-bank notes and notes and certificates
of United States circulating as currency 185
July 17, 1862. Restriction on notes less than one dollar 185
Feb. 21, 1857. Foreign coins not legal tender ISO
July 17, 1861. Demand Treasury notes legal tender same as United States
notes 187
Feb. 12, 1862. Demand Treasury notes legal tender same as United States
notes 186, 187
Feb. 25, 1862. Demand Treasury notes legal tender same as United States
notes 186, 187
Feb. 25, 1862. United States notes legal tender except for duties on Im-
ports and interest on public debt 187
Mar. 17, 1862. Demand Treasury notes legal tender same as United States
notes 187
8
DATES OF ACTS RELATING TO NATIONAL BANKS.
Page.
July 11, 1862. United States notes legal tender except for duties on im-
ports and interest on public debt 186
Jan. 17, 1863. United States notes legal tender except for duties on im-
ports and interest on public debt 187
Mar. 3, 1863. United States notes legal tender except for duties on im-
ports and interest on public debt 187
Mar. 3. 1863. Interest-bearing notes legal tender to same extent as United
States notes 187
June 30,1864. Interest-bearing notes legal tender to same extent as United
States notes 187
Feb. 12, 1S73. Gold coins of United States legal tender 186
Feb. 12, 1873. Minor coins of United States legal tender to amount of
twenty-five cents 186
Feb. 28. 1878. Standard silver dollar legal tender 186
Feb. 28, 1878. Silver certificates 199
June 9, 1879. Subsidiary silver coins legal tender to amount not exceed-
ing ten dollars 186
Mar. 3. 1887. Silver certificates 199
July 12. 1882. Gold certificates, for what receivable 187
July 1. 1902. Philippine coinage 186
Mar. 2, 1903. Philippine coinage 186
Mar. 14, 1900. Currency act 195-201
Mar. 4, 1907. Amending national-bank act 198. 201
June 14, 1866. Government depositories 188,191
June 8, 1872. Government depositories 188
Mar. 3, 1873. Government depositories 188
Feb. 27, 1877. Government depositories 188
Feb. 3, 1879. Government depositories 191
Mar. 2, 1907. Government depositories 188
May 27, 1908. Government depositories 188
Mar. 4, 1909. Misappropriating postal funds 189
Mar. 4, 1909. Government depositories 191
Feb. 2.5. 1863. Counterfeiting national-bank notes 192
June 3, 1864. Counterfeiting national-bank notes 192
June 30, 1864. Forging or counterfeiting United States securities 192
June 30. 1864. Using plates to print without authority 192
Feb. 5, 1867. Penalty for taking unauthorized impression of tools having
such impression or dealing in counterfeit circulation 194
Mar. 4, 1909. Counterfeiting national-bank notes 192, 193. 194
June 30, 1876. Fraudulent notes to be so marked by United States officers
and officers of national banks 195
Aug. 5, 1909. Panama Canal bonds, issue of, authorized at 3 per cent 201
Mar. 2, 1911. Panama Canal bonds under act of August 5, 1909, not avail-
able as secui'ity for circulation 203
JIar. 2, 1911. Issue of gold certificates on deposit of foreign coin or
bullion 198
Mar. 2, 1911. Certified checks drawn on national and State banks receiv-
able for duties on imports and internal taxes 198, 203
Mar. 3, 1911. Jurisdiction of United States district courts 181
Mar. 3, 1913. Certified checks on national and State banks and trust
companies receivable in payment for duties on imports,
internal taxes, and all public dues 204
June 12, 1916. Issue of gold certificates 198
July 17, 1916. Government deposits in Federal land banks 190
Apr. 24, 1917. Deposit of proceeds arising from sale of bonds. No reserve
required to be held against United States deposits 190
May 22, 1918. National banks authorized to subscribe to American Red
Cross during the war 204
Dec. 24,1919. Gold certificates made legal tender 187
SPECIAT. ACTS RELATING TO NATIONAL BANKS.
Apr. 12, 1900. National banking laws extended to Porto Rico 207
Apr. 30. 1900. National hanking laws extended to Hawaii 207
Feb. 26, 1913. Granting Fifth-Third National Bank of Cincinnati charter
No. 20 208
Fifty-seven acts changing the location or name, or both, of various na-
tional banks 208-211
BUREAU OF THE COMPTROLLER OF THE
CURRENCY.
THE .\ATIONAL-BAXK ACT AKP ACTS AMENDATORY THEREOF
AiND SUPPLEME.NTARY THERETO.
CHAPTER I.
BUREAU OF THE COMPTROLLER OF THE CURRENCY.
100. 324
101.
102.
104.
105.
106.
325,
326
103. 327
107. 330
108. 331,
109. 332
Bureau of the Comptroller of
the Currency.
Comptroller of the Currency.
Qualification of Comptroller
of the Currency. Amount
of bond.
Deputy Comptroller of the
Currency.
Additional Deputy Comptroller of
the Currency.
Clerks.
Interest in national banks
prohibited.
Seal of Comptroller of the
Currency.
Rooms, vaults, and furniture
for Currency Bureau.
Banks other than national in
328.
329.
District of Columbia. (See
sec. 714, Code District of
Columbia.)
110. 333. Report of Comptroller.
111. Act April 28, 1902. Report of
Comptroller to give com-
plete list of all employees
of the office, information
about failed banks, em-
ployees under receivers,
etc.
112. Act January 12, 1895. Number of
copies of report to be
printed.
113. Joint resolution March 4, 1907.
Three thousand additional
copies authorized to be
printed.
BUREAU OF THE COMPTROLLER OF THE CURRENCY.
100. Sec. 324.— There shall be in the Department of the^ A^ct June s.
Treasury a bureau charged with the execution of all la^YSsec. i ; is stat.'
passed by Congress relating to the issue and regulation of ^-j^^f; ^^^ 03
a national currency secured by United States bonds and,i9i3, sec. 'lo-
under the general supervision of the Federal Reserve 200.
Board, of all Federal reserve notes, the chief officer of
wliich bureau shall be called the Comptroller of the Cur-
rency and shall perform his duties under the general
directions of the Secretary of the Treasury.
COMPTROLLER OF THE CURRENCY.
101. Sec. 325.— The Comptroller of the Currency shall ^g^^* ^c""%^'
be ai^pointed by the President, on the recommendation of sec. i; I's stat."
the Secretary of the Treasury, by and with the advice Act' Mar. .3,
and consent of the Senate, and shall hold his office for the lfp:_, . ^g g\^^-
term of five years unless sooner removed by the Presi- l.,'398.
dent, upon reasons to be communicated by him to the
Senate ; and he shall be entitled to a salary of five thou-
sand dollars a 3'ear.
Note. — Section 10 of the Federal reserve act provides that the
Comptroller of the Currency shall be an ex ofiicio member of the
Federal Reserve Board and sh;ill, in addition to his salary as
Comptroller, receive the sum of $7,UUU annually lor his service on
RUid board.
U
12 BUREAU OF THE COMPTROLLER OF THE CURRENCY.
QUALIFICATION OF COMPTROLLER OF THE CURRENCY.
AMOUNT OF BOND.
Act June 3. 102. Scc. 326. — The Comptroller of the Currency shall,
sec. i ; 13 Stat! withiii fifteen clays from the time of notice of his appoint-
L., 99. ment, take and subscribe the oath of office ; and he shall
give to the United States a bond in the penalty of one
hundred thousand dollars, with not less than two respon-
sible sureties, to be approved by the Secretary of the
Treasury, conditioned for the faithful discharge of the
duties of his office.
DEPUTY COMPTROLLER OF THE CURRENCY.
Act Jnne 3, 103. Sec. 327. — There shall be in the Bureau of the
sec^^i ; 13 s\at.' Comptroller of the Currency a Deputy Comptroller of the
^■> 99' Currency, to be appointed by the Secretary, who shall be
entitled to a salary of two thousand five hundred dollars
a year, and who shall possess the power and perform the
duties attached by law to the office of Comptroller dur-
ing a vacancy in the office or during the absence or ina-
bility of the Comptroller. The Deputy Comptroller shall
also take the oath of office prescribed by the Constitution
and laws of the United States, and shall give a like bond
in the penalty of fifty thousand dollars.
NoTE.^The salary of the Deputy Comptroller has been fixed at
various amounts by different appropriation bills, as follows: Act
March 3, 1875 (sundry civil bill), 18 Stat. L., 398, $3,000; act
March 3, 1901, 31 Stat. L., 978, $2,800; act March 18, 1904, 33
Stat. L., 103, $3,000 ; act February 3, 1905, 33 Stat. L., 649, and all
subsequent acts, $3,500.
ADDITIONAL DEPUTY COMPTROLLER OF THE CURRENCY.
1908* ^ay^^22, 104. Deputy Comptroller, $3,500; Deputy Comptroller,
L., 203. $3,000, who shall be appointed by the Secretary of the
1909,*^ 3^5^stat! i'l'^^sury, and shall possess the power and- perform the
L., 867. duties attached by law to the office of Comptroller dur-
ing a vacancy in the office of Comptroller and Deputy
Comptroller or during the absence or inability of the
Comptroller and the Deputy Comptroller, and said assist-
ant Deputy Comptroller shall give a like bond in the pen-
alty of fifty thousand dollars.
Note. — The additional Deputy Comptroller was first provided
for in the act of May 22, 1908.
CLERKS.
Act June 3, 105. Scc. 328. — The Comptroller of the Currency shall
iec.^i ; ^13 s\at; employ, from time to time, the necessary clerks, to be
L., 100. appointed and classified by the Secretary of the Treas-
ury, to discharge such duties as the Comptroller shall
direct.
BUREAU OF THE COMPTROLLER OF THE CURRENCY. 13
INTEREST IN NATIONAL BANKS PROHIBITED.
106. Sec. 329.— It shall not be lawful for the Comptrol- ^^Act Janets,
ler or the Deputy Comptroller of the Currency, either sec. 1 ; i3 stat!
directly or indirectly, to be interested in any association ^' ^^^'
issuing national currency under the laws of the United
States.
Note. — Section 10 of the Federal reserve act provides In part
that no member of the Federal Reserve Board shall be an officer
or director of any bank, banking institution, trust company, or
Federal reserve bank, nor hold stock in any bank, banking institu-
tion, or trust company. As the Comptroller of the Currency is a
member of the board, he is thus prohibited from being connected
as an officer or shareholder with any bank, banking institution,
or trust company, whether State or national. It would appear
that under section 329 a Deputy Comptroller of the Currency
would be prohibited from being interested not only in any national
bank but in any State bank that should become a member bank
and a shareholder in one of the Federal reserve banks.
SEAL OF COMPTROLLER OF THE CURRENCY.
107. Sec. 330 [as amended 1875]. — The seal devised by^^Aa J"np 3,
the Comptroller of the Currency for his office, and ap- sec. ^ ; 13 stat!
proved by the Secretary of the Treasury, shall continue to ^"Act.'^Feb. is,
be the seal of office of the Comptroller, and may be re- isjs. £• ^o\ is
newed when necessary. A description of the seal, with ^ • ••
an impression thereof, and a certificate of approval by the
Secretary of the Treasury, shall be filed in the office of
the Secretary of State.
ROOMS, YAULTS, AND FURNITURE FOR CURRENCY
BUREAU.
108. Sec. 331. — There shall be assigned, from time to Act June 3,
time, to the Comptroller of the Currency, by the Secretary gee. 3 ; 13 stat.
of the Treasury, suitable rooms in the Treasury building ^'' ^^o.
for conducting the business of the Currency Bureau, con-
taining safe and secure fireproof vaults, in which the
Comptroller shall deposit and safely keep all the plates
not necessarily in the possession of engravers or printers,
and other valuable things belonging to his department;
and the Comptroller shall from time to time furnish the
necessary furniture, stationery, fuel, lights, and other
proper conveniences for the transaction of the business of
his office.
109. Sec. 332.—
Refers entirely to banks other than national in the District of
Columbia and is Incorporated In section 714 of the Code of the
District of Columbia and has been repeatedly amended.
REPORT OF COMPTROLLER.
110. Sec. 333 [as amended 1875].— The Comptroller of
the Currency shall make an annual report to Congress, at
the commencement of its session, exhibiting —
First. A summary of the state and condition of every Act .Tnno 3,
*■ 1 ft ft .1 e d^ ft 1 •
association from which reports have been received the 13 'stat.' l.!
preceding year, at the several dates to which sucli reports ^i"^-
14 BL'REAU OF THE COMPTROLLEE OF THE CUEEENC"?.
ic--*' Ffi*" ^^: refer, with an abstract of the whole amount of bankihs:
lo( o, sec. i; . ' ^ 111 PI 11 !• T •
17 Stat. L., capital returned b}' them, or the whole amount oi their
^^Act. Feb. IS, debts and liabilities, the amount of circulating notes out-
stat ' L ^siV^^ standing, and the total amount of means and resources,
specifying the amount of lawful money held by them at
the times of their several returns, and such other informa-
tion in relation to such associations as, in his judgment,
may be useful.
Second. A statement of the associations whose business
has been closed during the year, with the amount of their
circulation redeemed and the amount outstanding.
Third. Any amendment to the laws relative to banking
by which the system may be improved, and the security
of the holders of its notes and other creditors may be
increased.
Fourth. A statement exhibiting under appropriate
heads the resources and liabilities and condition of the
banks, banking companies, and savings banks organized
under the laws of the several States and Territories ; such
information to be obtained by the Comptroller from the
reports made by such banks, banking companies, and
savings banks to the legislatures or officers of the different
States and Territories, and, where such reports can not
be obtained, the deficiency to be supplied from such other
authentic sources as may be available.
Fifth. The names and compensation of the clerk's em-
ployed by him. and the whole amount of the expenses of
the banking department during the j^ear.
COMPTROLLER TO GIYE COMPLETE LIST OF ALL EM-
PLOYEES OF THE OFFICE. INFORMATION ABOUT
FAILED BANKS, EMPLOYEES, UNDER RECEIYERS,
ETC. ACT APRIL 28, 1902.
Act April 28, HI. Provided, That for the fiscal year of nineteen him-
tiye''executtvlidred and two and thereafter, a full and complete list of
p°^o^p1-^fa tkfn ^^1 officers, agents, clerks, and other employees of the
act; 32 Stat. office of the Comptroller of the Currency, including bank
examiners, receivers and attorneys for receivers, and
clerks employed by such examiners and receivers, or any
other person connected with the work of said office in
Washington or elsewhere, whose salary or compensation
is paid from the Treasury of the United States or as-
sessed against or collected from existing or failed banks
under their supervision or control, shall be transmitted to
the Secretary of the Interior in accordance with the pro-
visions of an Act of Congress approved January twelfth,
eighteen hundred and eighty-five, relating to the Official
Eegister : And provided further, That the Comptroller of
the Currency is hereby directed to include in his annual
report to the Speaker of the House of Representatives,
expenses incurred during each year, in liquidation of each
failed national bank separately.
BUREAU OF THE COMPTROLLER OF THE CURRENCY. 15
NUMBER OF COPIES OF REPORT TO BE PRINTED. ACT
OF JANUARY 12, 1895.
112. Sec. 73. — This section provides in part that there ^^^ct -Ta^n ..ij-'.
shall be printed "Of the annual report of the Comp-28 stiat'. L.',6i6!
troller of the Currency, ten thousand copies; one thou-
sand for the Senate, two thousand for the House, and
seven thousand for distribution by the Comptroller of
the Currency."
THREE THOUSAND ADDITIONAL COPIES AUTHORIZED TO
BE PRINTED. PUBLIC RESOLUTION NO. 25, MARCH 4,
1907.
113. That section 73 of an act " Providing for the pub- uf^^^^oi';
lie printing and binding, and the distribution of public 34 stiit. l.)
documents," approved January 12, 1895, be, and the same
is hereby, so amended as to authorize the printing annu-
ally hereafter of ten thousand copies of the annual report
of the Comptroller of the Currency, for distribution by
the Comptroller of the Currency, instead of seven thou-
sand copies as heretofore.
16 BUREAU or THE COMPTROLLEK OF THE CUREENCy.
ORGANIZATION AND POWERS.
164312°— 20 2 17
CHAPTER 11.
ORGANIZATION AND POWERS.
200. Act June 20, 1874. The national-
bank act.
SOI. 5133. Formation of national
banking associations.
202. 5134. Requisites of organization
certificate.
203. 5135. How certificate shall be ac-
knowledged and filed.
204. 5136. Corporate powers of asso-
ciations.
205. Acts December 23, 1913, and Sep-
tember 7, 1916. Loans
on improved real estate.
206. Act December 23, 1913, as amend-
ed. When national bank
as a member of Federal
reserve system may ac-
cept drafts or bills of ex-
change.
207. Act September 7, 1916. Accept-
ance of drafts or bills of
exchange drawn upon na-
tional banks by banks or
bankers in foreign coun-
tries or dependencies of
the United States.
208. Act December 23, 1913, as amend-
ed. Trust company pow-
ers of national banks.
209. Act September 7, 1916. Power of
national bank to act as
Insurance agent or as
broker or agent in making
or procuring loans on real
estate.
210. Act December 23, 1913, as amend-
ed. Foreign branches.
211. Act May 1. 1886. Change of
name and location.
212. Act May 1, 1886. Debts not af-
fected by change.
213. Act May 1, 1886. No release
from liabilities.
214. Act August 13, 1888. National
banks deemed citizens of
State in which located.
215. Act July 12, 1882. Extension of
corporate existence.
216. Act July 12, 1882. Consent of
two-thirds necessary.
217. Act July 12, 1882. Special ex-
amination of bank and
issue of certificate of ap-
proval by Comptroller.
218. Act July 12, 1882. Status not
changed by extension.
Jurisdiction of suits by
or against national banks.
219. Act July 12, 1882. Dissenting
shareholders may with-
draw.
220. Act July 12, 1882. Redemption
of circulating notes is-
sued prior to extension.
221. Act July 12, 1882. Dissolution
of banks not extending
period of succession.
222. Act April 12, 1902. Reextension
of corporate existence.
223. 5137. Power to hold real prop-
erty.
224. 51.38. Requisite amount of capital.
225. 5139. Shares of stock and trans-
fers.
226. 5140. How payment of capital
stock must be made and
certified.
227. 5141. Proceedings if shareholder
fails to pay installments.
228. 5142. National banks may in-
crease capital stock.
229. Act May 1, 1886. Increase of
capital stock.
230. 5143. Reduction of capital stock.
231. 5144. Right of shareholders to
vote. Proxies author-
ized.
232. 5145. Election of directors.
233. 5146. Requisite qualification of
directors.
234. Acts of October 15, 1914, and May
15,_ 1916. Interlocking di-
rectorates—when forbid-
den.
235. Act October 15, 1914. Enforce-
ment of act in reference
to interlocking director-
ates.
236. 5147. Oath required from direc-
tors.
237. 5148. Filling vacancies.
238. 5149. Proceedings where no elec-
tion is held on the proper
day.
239. 5150. Election of president of the
board.
240. 5151. Individual liability of share-
holders.
241. Act December 23, 1913. Indi-
vidual liability of share-
holders. Liability of
shareholders who have
transferred their shares.
242. 5152. Executors, trustees, etc.,
not personally liable.
243. 5153. National banking associa-
tions to be depositaries
of public moneys.
244. Act December 23, 1913. Govern-
ment deposits in Federal
reserve banks.
245. 5154. Conversion of State banks
into national baiiking as-
sociations.
246. 5155. State banks having
branches.
247. 5156. Reservation of rights of
assix-iations organized
under act of 1863.
19
20 OEGAXIZATION AND PO^'ERS.
THE NATIONAL BANK ACT. ACT JUNE 20, 1874.
Act June 20, 200. Sec. 1. — An act entitled "An act to provide a na-
sec 1" ; 18 Stat! tional cuiTencv secured by a pledge of United States
L., 123. bonds, and to provide for the circulation and redemption
thereof," approved June 3, 1864, shall hereafter be known
as " the national-bank act."
FORMATION OF NATIONAL BANKING ASSOCIATIONS.
Act Jnne 3, 201. Scc. 5133. — Associatious for carrying on the busi-
sfc^^s : 13 Stat; ness of banking under this Title may be formed by any
L., 100. number of natural persons, not less in any case than five.
They shall enter into articles of association, vrhich shall
specify in general terms the object for which the associa-
tion is formed, and may contain any other provisions,
not inconsistent with law. which the association may see
fit to adopt for the regulation of its business and the con-
duct of its affairs. These articles shall be signed by the
persons uniting to form the association, and a copy of
them shall be forwarded to the Comptroller of the Cur-
rency, to be filed and preserved in his office.
KEQUISITES OF OEGANIZATION CERTIFICATE.
1864* c"°^i06' ^^^' ^®^- ^^^^- — '^^^ persons uniting to form such an
sec. 6 ; 13 Stat! association shall, under their hands, make an organiza-
^' ^^^' tion certificate, which shall specifically state :
First. The name assumed bv such association: which
name shall be subject to the approval of the Comptroller
of the Currencv.
Second. The place where its operations of discount and
deposit are to be carried on. designating the State, Terri-
tory, or district, and the particular county and city, town,
or village.
Third. The amount of capital stock and the number of
shares into which the same is to be divided.
Fourth. The names and places of residence of the
shareholders and the number of shares held by each of
them.
Fifth. The fact that the certificate is made to enable
such persons to avail themselves of the advantages of
this Title.
Note. — For authority to change names or locations see act May
1, 18S6, post, paragraph 211.
HOW CERTIFICATES SHALL BE ACKNOWLEDGED AND
FILED.
1864* c°°%6' ^^^' ^^^' ^^^^- — "^h® organization certificate shall be
Bee. 6 ; 13 Stat! acknowledged before a judge of some court of record, or
L., 101. notary public; and shall be, together with the acknowl-
edgment thereof, authenticated by the seal of «uch court,
or notary, transmitted to the Comptroller of the Cur-
rency, who shall record and carefully preserve the same
in his office.
ORGANIZATION AND POWERS. 21
CORPORATE POWERS OF ASSOCIATION.
204. Sec. 5136. — Upon duly making and filing articfes Act June s.
of association and an organization certificate, the asso- sec^^s : is stat!
elation shall become, as from the date of the execution'"-' ^^i-
of its organization certificate, a body corporate, and as
such, and in the name designated in the organization
certificate, it shall have power —
First. To adoj)t and use a corporate seal.
Second. To have succession for the period of twenty
years from its organization, unless it is sooner dissolved
according to the provisions of its articles or association,
or by the act of its shareholders owning two-thirds of its
stock, or unless its franchise becomes forfeited by some
violation of law.
Third. To make contracts.
Fourth. To sue and be sued, complain and defend, in
any court of law and equity, -as fully as natural persons.
Fifth. To elect or appoint directors, and by its board
of directors to appoint a president, vice president, cashier,
and other officers, define their duties, require bonds of
them and fix the penalty thereof, dismiss such officers or
any of them at pleasure, and appoint others to fill their
places.
Sixth. To prescribe, by its board of directors, by-laws
not inconsistent with law, regulating the manner in
which its stock shall be transferred, its directors elected
or appointed, its officers appointed, its property trans-
ferred, its general business conducted, and the privileges
granted to it by law exercised and enjoyed.
Seventh. To exercise by its board of directors, or duly
authorized officers or agents, subject to law, all such inci-
dental powers as shall be necessary to carry on the busi-
ness of banking; by discounting and negotiating promis-
sory notes, drafts, bills of exchange, and other evidences
of debt; by receiving deposits; by buying and selling
exchange, coin, and bullion; by loaning money on per-
sonal security ; and by obtaining, issuing, and circulating
notes according to the provisions of this Title.
But no association shall transact any business except
such as is incidental and necessarily preliminary to its
organization, until it has been authorized by the Comp-
troller of the Currency to commence the business of
banking.
Note. — See sections 5169 and 5170, paragraphs 320 and 321, post,
relating to issuing and publishing of certificate authorizing asso-
ciation to begin Ijusiness.
LOANS ON IMPROVED REAL ESTATE.
205. Sec. 24. — Any national banking association not jj^^g^* ^^<=- ^f'.
situated in a central reserve city may make loans secured 3S 'stat.' "l.'.
by improved and unencumbered farm land situated "'Act. Sept. 7,
within its Federal reserve district or within a radius of J^*'!:^^'^^ ^*^'-
22 ORGANIZATION AND POWERS.
one hundred miles of the place in which such bank is
located, irrespective of district lines, and may also make
loans secured by improved and unencumbered real
estate located within one hundred miles of the place in
which such bank is located, irrespective of district lines ;
but no loan made upon the security of such farm land
shall be made for a longer time than five years, and no
loan made upon the security of such real estate as dis-
tinguished from farm land shall be made for a longer
time than one year nor shall the amount of any such loan,
whether upon such farm land or upon such real estate,
exceed fifty per centum of the actual value of the prop-
erty offered as security. Any such bank may make
such loans, whether secured bj" such farm land or such
real estate, in an aggi'egate sum equal to twenty-five
per centum of its capital and surplus or to one-third of
its time deposits and such banks may continue hereafter
as heretofore to receive time deposits and to pay interest
on the same.
The Federal Reserve Board shall have power from time
to time to add to the list of cities in which national banks
shall not be permitted to make loans secured upon real
estate in the manner described in this section.
WHEN NATIONAL BANK AS A MEMBER BANK OF FED-
ERAL RESERVE SYSTEM MAY ACCEPT DRAFTS OR
BILLS OF EXCHANGE.
Act Dec. 23, 206. Any member bank may accept drafts or bills of
38 "'stir L.,' exchange drawn upon it having not more than six
^^i'et Mar 3 months' sight to run, exclusive of days of grace, which
1915 ; 38 Stat! grow out of transactions involving the importation or
Act Sept. 7, exportation of goods ; or which grow out of transactions
1^^762^^ ^*^*" involving the domestic shipment of goods, provided ship-
Act June 21, ping documents conveying or securing title are attached
' ^^^* * at tlie time of acceptance ; or which are secured at the
time of acceptance by a warehouse receipt or other such
document conveying or securing title covering readily
marketable staples. No member bank shall accept,
whether in a foreign or domestic transaction, for any
one person, company, firm, or corporation to an amount
equal at any time in the aggregate to more than ten per
centum of its paid-up and unimpaired capital stock and
surplus, unless the bank is secured either by attached
documents or by some other actual security growing out
of the same transaction as the acceptance; and no Ijank
shall accept such bills to an amount equal at any time in
the aggregate to more than one-half of its paid-up and
unimpaired capital stock and surplus: Provided^ how-
ever^ That the Federal Reserve Board, under such gen-
eral regulations as it may prescribe, which shall apply
to all banks alike regardless of the amount of capital
stock and surplus, may authorize any member bank to
accept such bills to an amount not exceeding at any time
ORGANIZATION AND POWERS. 23
ill the aggregate one hundred per centum of its paid-up
and unimpaired capital stock and surplus: Provided^ fur-
thei\ That the aggregate of acceptances growing out of
domestic transactions shall in no event exceed fifty per
centum of such capital stock and surplus.
207. Acceptance of drafts or bills of exchange drawn upon ^^Act s^ept j,
national banks by banks or bankers in foreign countries or l., 'amending
dependencies of the United States. I^e'a. \lL ^^•
Any member bank may accept drafts or bills of ex-
change drawn upon it having not more than three months'
sight to run, exclusive of days of grace, drawn under
regulations to be prescribed by the Federal Reserve
Board by banks or bankers in foreign countries or de-
pendencies or insular possessions of the United States for
the purpose of furnishing dollar exchange as required by
the usages of trade in the respective countries, dependen-
cies, or insular possessions. Such drafts or bills may be
acquired by Federal reserve banks in such amounts and
subject to such regulations, restrictions, and limitations
as may be prescribed by the Federal Reserve Board:
Provided, however, That no member bank shall accept
such drafts or bills of exchange referred to in this para-
graph for any one bank to an amount exceeding in the
aggregate ten per centum of the paid-up and unimpaired
capital and surplus of the accepting bank unless the draft
or bill of exchange is accompanied by documents convey-
ing or securing title or by some other adequate security :
Provided further, That no member bank shall accept such
drafts or bills in an amount exceeding at any time the
aggregate of one-half of its paid-up and unimpaired
capital and surplus.
TRUST COMPANY POWERS OF NATIONAL BANKS.
208. The Federal Reserve Board is authorized by sec- ■^^^l^c':\iX\
tion 11, paragraph k,of the Federal reserve act "to grant 38St'at.L.,28i:
by special permit to national banks applying therefor,
•when not in contravention of State or local law, the right
to act as trustee, executor, administrator, registrar of
stocks and bonds, guardian of estates, assignee, receiver,
committee of estates of lunatics, or in any other fiduciary
capacity in which State banks, trust companies, or other
corporations which come into competition with national
banks are permitted to act under the laws of the State
in which the national bank is located.
" Whenever the laws of such State authorize or permit
the exercise of any or all of the foregoing powers by
State banks, trust companies, or other corporations which
compete with national banks, the granting to and the
exercise of such powers by national banks shall not be
deemed to be in contravention of State or local law
within the meaning of this act.
" National banks exercising anj' or all of the powers
enumerated in this subsection shall segregate all assets
held in any fiduciary capacity from the general assets of
24 ORGANIZATION AND POWERS.
the bank and shall keep a separate set of books and
records showing in proper detail all transactions en-
gaged in under authority of this subsection. Such books
and records shall be open to inspection by the State
authorities to the same extent as the books and records
of corporations organized under State law which exer-
cise fiduciary powers, but nothing in this act shall be
construed as authorizing the State authorities to ex-
amine the books, records, and assets of the national bank
which are not held in trust under authority of this sub-
section.
1918* ^^^** ^^' " ^° national bank shall receive in its trust depart-
ment deposits of current funds subject to check or the
deposit of checks, drafts, bills of exchange, or other items
for collection or exchange purposes. Funds deposited or
held in trust by the bank awaiting investment shall be
carried in a separate account and shall not be used by the
bank in the conduct of its business unless it shall first
set aside in the trust department United States bonds or
other securities approved by the Federal Reserve Board.
" In the event of the failure of such bank the owners
of the funds held in trust for investment sliall have a
lien on the bonds or other securities so set apart in addi-
tion to their claim against the estate of the bank.
"Whenever the laws of a State require corporations
acting in a fiduciary capacity to deposit securities with
the State authorities for the protection of private or
court trusts, national banks so acting shall be required
to make similar deposits and securities so deposited shall
be held for the protection of private or court trusts, as
provided by the State law.
" National banks in such cases shall not be required to
execute the bond usually required of individuals if State
corporations under similar circumstances are exempt
from this requirement.
"National banks shall have power to execute such
bond when so required by the laws of the State.
"In any case in which the laws of a State require that
a corporation acting as trustee, executor, administrator,
or in any capacity sjDecified in this section, shall take an
oath or make an affidavit, the president, vice president,
cashier, or trust officer of such national bank may take
the necessary oath or execute the necessary affidavit.
_ " It shall be unlawful for any nationaf banking asso-
ciation to lend any officer, director, or employee any
funds held in trust under the powers conferred by this
section. Any officer, director, or employee making such
loan, or to whom such loan is made, may be finec\ not
more than $5,000, or imprisoned not more than five
years, or may be both fined and imprisoned, in the dis-
cretion of the court.
_ " In passing upon applications for permission to exer-
cise the powers enumerated in this subsection, the Fed-
eral Reserve Board may take into consideration the
ORGANIZATION AND POWERS. 25
amount of capital and surplus of the applyino; bank,
•whether or not such capital and surplus is sufficient under
the circumstances of tlie case, the needs of the community
to be served, and any other facts and circumstances that
seem to it proper, and may grant or refuse the applica-
tion accordingly: Provided^ That no permit shall be
issued to any national banking association having a capi-
tal and surplus less than the capital and surplus required
by State law of State banks, trust companies, and cor-
porations exercising such powers."
209. Power of national tank to act as insurance agent or ^^^ g^pt 7
as broker or agent in making or procuring loans on real i^i^ 39 stat.'
° o X- o L (o2, amend-
estate. ing sec. 13 of
That in addition to the powers now vested by law in ^^^- ^^^- '*^^*-
national banking associations organized under the laws
of the United States any such association located and
doing business in any place the population of which does
not exceed five thousand inhabitants, as shown by the
last preceding decennial census, may, under such rules
and regulations as may be prescribed by the Comptroller
of the Currency, act as the agent for any fire, life, or
other insurance company authorized by the authorities
of the State in which said bank is located to do business
in said State, by soliciting and selling insurance and col-
lecting premiums on policies issued by such company;
and may receive for services so rendered such fees or
commissions as may be agreed upon between the said
association and the insurance company for which it may
act as agent; and may also act as the broker or agent
for others in making or procuring loans on real estate
located within one hundred miles of the place in which
said bank may be located, receiving for such services a
reasonable fee or commission: Provided^ however^ That
no such bank shall in any case guarantee either the prin-
cipal or interest of any such loans or assume or guarantee
the payment of any premium on insurance policies issued
through its agency by its principal: And frovided
further, That the bank shall not guarantee the truth of
any statement made by au assured in filing his applica-
tion for insurance.
FOREIGN BRANCHES [as amended 1919].
210. Sec. 25. — Any national banking association pos- ^^t Dec. ^23,
sessing a capital and surplus of $1,000,000 or more may 38 'sfat "l.|
file application with the Federal Reserve Board for per^ '"^xct Sept. 7,
mission to exercise, upon such conditions and under such Jf^^U*^ ^^^•
regulations as may be prescribed by the said board, either Act Sept. 17,
or both of the following powers: ^^'^-
First. To establish branches in foreign countries or
dependencies or insular possessions of the United States
for the furtherance of the foreign commerce of the United
States, and to act if required to do so as fiscal agents of
the United States.
26 ORGANIZATION AND POWERS.
Second. To invest an amount not exceeding in the
aggregate ten per centum of its paid-in capital stock and
surplus in the stock of one or more banks or corporations
chartered or incorporated under the laws of the United
States or of any State thereof, and principally engaged
in international or foreign banking, or banking in a de-
pendency or insular possession of the United States either
directly or through the agency, ownership, or control of
local institutions in foreign countries, or in such depend-
encies or insular possessions. Until January 1, 1921, any
national banking association, without regard to the
amount of its capital and surplus, may file application
with the Federal Reserve Board for permission, upon
such conditions and under such regulations as may be pre-
scribed by said board, to invest an amount not exceeding
in the aggregate 5 per centum of its paid-in capital and sur-
plus in the stock of one or more corporations chartered or
incorporated under the laws of the United States or of
any State thereof and, regardless of its location, princi-
pally engaged in such phases of international or foreign
financial operations as may be necessary to facilitate the
export of goods, wares, or merchandise from the United
States or any of its dependencies or insular possessions
to any foreign country: Provided^ however^ That in no
event shall the total investments authorized by this sec-
tion by any one national bank exceed 10 per centum of its
capital and surplus.
Such application shall specify the name and capital of
the banking association filing it, the powers applied for,
and the place or places where the banking or financial
operations proposed are to be carried on. The Federal
Reserve Board shall have power to approve or to reject
such application in whole or in part if for any reason the
granting of such application is deemed inexpedient, and
shall also have power from time to time to increase or
decrease the number of places where such banking opera-
tions may be carried on.
Every national banking association operating foreign
branches shall be required to furnish information con-
cerning the condition of such branches to the Comptroller
of the Currency upon demand, and every member bank
investing in the capital stock of banks Or corporations
described above shall be required to furnish information
concerning the condition of such banks or corporations
to the Federal Reserve Board upon demand, and the Fed-
eral Reserve Board may order special examinations of
the said branches, banks, or corporations at such time or
times as it may deem best.
Before any national bank shall be permitted to pur-
chase stock in any such corporation the said corporation
shall enter into an agreement or undertaking with the
Federal Reserve Board to restrict its operations or con-
duct its business in such manner or under such limita-
ORGANIZATION AND POWERS. 27
tions and restrictions as the said board may prescribe for
the phico or places Avherein such business is to be con-
ducted. If at anj^ time the Federal Reserve Board shall
ascertain that the regulations prescribed by it are not
being complied with, said board is hereby authorized and
empowered to institute an investigation of the matter and
to send for persons and papers, subpoena witnesses, and
administer oaths in order to satisfy itself as to the actual
nature of the transactions referred to. Should such in-
vestigation result in establishing the failure of the cor-
poration in question, or of the national bank or banks
which may be stockholders therein, to comply with the
regulations laid down by the said Federal Reserve Board,
such national banks may be required to dispose of stock
holdings in the said corporation upon reasonable notice.
Every such national banking association shall conduct
the accounts of each foreign branch inde|3endently of the
accounts of other foreign branches established by it and
of its home office, and shall at the end of each fiscal
period transfer to its general ledger the profit or loss
accrued at each branch as a separate item.
Any director or other officer, agent, or employee of
any member bank may, with the approval of the Federal
Reserve Board, be a director or other officer, agent, or
employee of any such bank or corporation above men-
tioned in the capital stock of which such member bank
shall have invested as hereinbefore provided, without
being subject to the provisions of section eight of the Act
approved October fifteenth, nineteen hundred and four-
teen, entitled "An Act to supplement existing laws
against unlawful restraints and monopolies, and for
other purposes."
CHANGE OF NAME AND LOCATION OF BANK. ACT MAT
1, 1886.
211. Sec. 2. — That any national banking association may ^ct May^ i,
change its name or the place where its operations of dis- sec. 2 ; 24 stat!
count and deposit are to be carried on, to any other place ^' ^^'
within the same State, not more than thirty miles dis-
tant, with the approval of the Comptroller of the Cur-
rency, by the vote of shareholders owning two-thirds of
the stock of such association. A duly authenticated
notice of the vote and of the new name or location se-
lected shall be sent to the office of the Comptroller of the
Currency; but no change of name or location shall be
valid until the Comptroller shall have issued his certifi-
cate of approval of the same.
DEBTS NOT AFFECTED BY CHANGE. ACT MAY 1, 1886.
212. Sec. 3.— That all debts, liabilities, rights, provi- Act May 1.
T ~ ,1 '. . . 1 -V 1 1 1880, c. (3, sec.
sions, and powers of the association under its old name .-^ ; 24 stat. l.,
shall devolve upon and inure to the association under ^^'
its new name.
28 ORGAXIZATION AND POWERS.
NO RELEASE FROM LIABILITIES. ACT MAT ], 1886.
Act May 1, 213. Sec. 4. — That nothing in this act contained shall be
41^24 *^stat ^if' ^^ construed as in any manner to release any national
19. ' banking association under its old name or at its old loca-
tion from any liability, or afiect any action or proceeding
in law in which said association may be or become a
part}^ or interested.
XoTE.- — Section 1 of this act relates to increase of capital stock
and is inserted after Section 5142, United States Revised Statutes.
NATIONAL BANKS DEEMED CITIZENS OF STATES IN
WHICH LOCATED. ACT AUGUST 13, 1888.
188-*' ^^'Y'- 'M ^^^" ^^^' ^" — That all national banking associations es-
stat.' L., 554." tablislicd under the laws of the United States shall, for
1888* *c"°'866; the purposes of all actions by or against them, real, per-
^^'c. 4 : 25 Stat, sonal, or mixed, and all suits in equity, be deemed citizens
of the States in which they are respectively located; and
in such cases the circuit and district courts shall not have
jurisdiction other than such as they would have in cases
between individual citizens of the same State. The pro-
visions of this section shall not be held to affect the
jurisdiction of the courts of the United States in cases
commenced by the United States or by direction of any
officer thereof, or cases for winding up the affairs of any
such bank.
Note.— See act March 3, 1911, section 24, 36 Stat. L., 1092, para-
graph 701, post, as to jurisdiction of United States courts in
national banking cases.
EXTENSION OF CORPORATE EXISTENCE. ACT JULY 12,
1882.
Act July 12. 215. Sec. 1. — That any national banldng association
Bec."i ; 22 s"tat! Organized under the acts of February twenty-fifth, eight-
L., 162. ggj-^ liundred and sixty-three, June third, eighteen hun-
dred and sixty-four, and February fourteenth, eighteen
hundred and eighty, or under sections fifty-one hundred
and thirty-three, fifty-one hundred and thirty-four, fifty-
one hundred and thirty-five, fifty-one hundred and
thirty-six, and fift^'-one hundred and fifty-four of the
Revised Statutes of the United States, may, at any time
within the two years next previous to the date of the ex-
piration of its corporate existence under present law. and
with the approval of the Comptroller of the Currency, to
be granted, as hereinafter provided, extend its period of
succession by amending its articles of association for a
term of not more than twenty years from the expiration
of the period of succession named in said articles of asso-
ciation, and shall have succession for such extended
period, unless sooner dissolved by the act of shareholders
owning two-thirds of its stock, or unless its franchise
becomes forfeited by some violation of law, or unless
hereafter modified or repealed.
Note. — Act of February 14. 1880, relates to the conversion of
gold banlcs into currency banks, and is inserted after Revised
Statutes 5186.
ORGAXIZATION AND PO^VERS. 29
CONSENT OF TWO-THIRDS NECESSARY. ACT JULY 12,
1882.
216. Sec. 2. — That such amendment of said articles of jg^^^^ ''c"'^ i-io'
association shall be authorized by the consent in writing sec. 2 ; 22 s'lat!
T 1 fl2
of shareholders owning not less than two-thirds of the "
capital stock of the association; and the board of direc-
tors shall cause such consent to be certified under the seal
of the association, by its president or cashier, to the
Comptroller of the Currency, accompanied by an appli-
cation made by the president or cashier for the approval
of the amended articles of association hj the Comp-
troller; and such amended articles of association shall
not be valid until the Comptroller shall give to such asso-
ciation a certificate under his hand and seal that the
association has complied with all the provisions required
to be complied witli, and is authorized to have succession
for the extended period named in the amended articles of
association.
SPECIAL EXAMINATION OF BANK AND ISSUE OF CER-
TIFICATE OF APPROVAL BY COMPTROLLER. ACT
JULY 12, 1882.
217. Sec. 3. — That upon the receipt of. the application ^^^ct J^i^iy.,i2,
and certificate of the association provided for in the pre- sec.~;;; 22 s'tat.'
ceding section, the Comptroller of the Currency shall ^■' ^^^•
cause a special examination to be made, at the expense of
the association, to determine its condition; and if after
such examination or otherwise it appears to him that
said association is in a satisfactory condition, he shall
grant his certificate of approval provided for in the pre-
ceding section, or if it appears that the condition of said
association is not satisfactory, he shall withhold such
certificate of ajDproval.
STATUS NOT CHANGED BY EXTENSION. JURISDICTION
OF SUITS BY OR AGAINST NATIONAL BANKS. ACT
JULY 12, 1882.
218. Sec. 4. — That any association so extending the ^^^.f 'c^'^soo'
pei'iod of its succession shall continue to enjoy all thesec. 4 : 22 stat!
rights and privileges and immunities granted and shall " ^ "
continue to be subject to all the duties, liabilities, and re-
strictions imposed by the Revised Statutes of the United
States and other acts having reference to national bank-
ing associations, and it shall continue to be in all respects
the identical association it was before the extension of its
period of succession : Provided, however^ That the juris-
diction for suits hereafter brought by or against any as-
sociation established under any law providing for na-
tional banking associations, except suits between them
and the United States, or its officers and agents, shall be
the same as, and not other than, the jurisdiction for suits
by or against banks not organized under any law of the
United States which do or might do banking business
where such national banking associations may be doing
business when such suits may be begun: And all laws
30 OKGANIZATION AND POWERS.
and parts of laws of the United States inconsistent with
this proviso be, and the same are hereby, repealed.
Note. — See also act of August 13, 1888, relating to citizenship of
national banks and jurisdiction of the circuit and district courts,
paragraph 214, ante, and act of Mar. 3, 1911, sec. 24, 36 Stat. L.,
1092, paragraph 701, post, as to jurisdiction of United States
courts In national banking cases.
DISSENTING SHAREHOLDERS MAY WITHDRAW. ACT
JULY 12, 1882.
188^* 'l"^'^29o' ^^^' ^^^' ^" — That when any national banking associa-
Bec."5 ; 22 Stat! tion has amended its articles of association as provided
L., 163. jjj ^j^jg ^^^^ j^j-^^ ^YiQ Comptroller has granted his certificate
of approval, any shareholder not assenting to such
amendment may give notice in writing to the directors,
within thirty days from the date of the certificate of ap-
proval, of his desire to withdraw from said association,
in which case he shall be entitled to receive from said
banking association the value of the shares so held by
him, to be ascertained by an appraisal made by a com-
mittee of three persons, one to be selected by such share-
holder, one by the directors, and the third by the first
two ; and in case the value so fixed shall not be satisfac-
tory to any such shareholder, he may appeal to the Comp-
troller of the Currency, who shall cause a reappraisal
to be made, which shall be final and binding; and if said
reappraisal shall exceed the value fixed by said commit-
tee, the bank shall pay the expenses of said reappraisal,
and otherwise the appellant shall pay said expenses; and
the value so ascertained and determined shall be deemed
to be a debt due, and be forthwith paid, to said share-
holder from said bank; and the shares so surrendered
and appraised shall, after due notice, be sold at public
sale, withtin thirty days after the final appraisal provided
in this section : Provided, That in the organization of any
banking association intended to replace any existing
banking association, and retaining the name thereof, the
holders of stock in the expiring association shall be enti-
tled to preference in the allotment of the shares of the
new association in proportion to the number of shares
held by them respectively in the expiring association.
REDEMPTION OF CIRCULATING} NOTES ISSUED PRIOR TO
EXTENSION. ACT JULY 12, 1882.
1882.* 'c"^^20o; 22^- ^^^- ^- — That the circulating notes of any associa-
sec. 6^; 22 Stat! tion SO extending the period of its succession which shall
" * have been issued to it prior to such extension shall be re-
deemed at the Treasur}^ of the United States, as provided
in section three of the act of June twentieth, eighteen
hundred and seventy-four, entitled "An act fixing the
amount cf United States notes, providing for redistribu-
tion of national bank currency, and for other purposes,"
and such notes when redeemed shall be forwarded to the
Comptroller of the Currency, and destroyed as now pro-
vided by law; and at the end of three years from the date
ORGANIZATION AND POWERS. 31
of the extension of the corporate existence of each bank
the association so extended shall deposit lawful money
with the Treasurer of the United States sufficient to re-
deem the remainder of the circulation which was out-
standing at the date of its extension, as provided in
sections fifty-two hundred and twenty-two, fifty-two
hundred and twenty-four, and fifty-two hundred and
twenty-five' of the Revised Statutes; and any gain that
may arise from the failure to present such circulating
notes for redemption shall inure to the benefit of the
United States; and from time to time, as such notes are
redeemed or lawful money deposited therefor as provided
herein, new circulating notes shall be issued as provided
by this act, bearing such devices, to be approved by the
Secretary of the Treasury, as shall make them readily
distinguishable from the circulating notes heretofore
issued: Provided^ however^ That each banking associa-
tion which shall obtain the benefit of this act shall reim-
burse to the Treasury the cost of preparing the plate or
plates for such new circulating notes as shall be issued
to it.
Note. — For act of June 20, 1874, section 3, mentioned above,
see paragraph 414, post. The destruction of bank notes by burn-
ing, as provided in sections 5184, 5225, Revised Statutes, is super-
seded by act of June 23. 1874, paragraph 340, post, which requires
bank notes to be macerated.
DISSOLUTION OF BANKS NOT EXTENDING PERIOD Ob'
SUCCESSION. ACT JULY 12, 1882.
221, Sec. 7. — That national banking associations whose |^t "^"'^290'
corporate existence has expired or shall hereafter expire sec.~7 ; 22 statl
and which do not avail themselves of the provisions of ^' ^^**
this act, shall be required to comply with the provisions
of sections fifty-two hundred and twenty-one and fifty-
two hundred and twenty-two of the Eevised Statutes in
same manner as if the shareholders had voted to go
into liquidation, as provided in section fifty-two hundred
and twenty of the Kevised Statutes; and the provisions
of sections fifty-two hundred and twenty-four and fifty-
two hundred and twenty-five of the Revised Statutes
shall also be applicable to such associations, except as
modified by this act; and the franchise of such associa-
tions is hereby extended for the sole purpose of liquidat-
ing their affairs until" such affairs are finally closed.
Note.— other sections of act of July 12, 1882.
Sec. 8. [Relates to bond deposits and circulating notes.] Fol-
lows Revised Statutes, section 5167.
Sec. 9. — [Relates to withdrawal of circulating notes.] Follows
Revised Statutes, section 5167.
Sec. 10. — Repealed sections 5171 and 5176, Revised Statutes,
and was superseded by act of March 14, 1900. (See section 5171,
Revised Statutes.)
Sec. 11. — Authorizes the exchange of three per cent bonds for
outstanding three and one-half per cent bonds.
Sec. 12. — Authorizes the issue of gold certificates upon the de-
posit of gold coin. Inserted after section 5207.
Sec. 13. — [Relates to false certification of checks.] Superseded
by act of Sept. 26, 1918.
32 OEGANIZATION AND POW'ERS.
REEXTENSION OF CORPORATE EXISTENCE. ACT OP
APRIL 12, 1902.
19^2!' "^^^^50^1; ^^^- Tliat the Comptroller of the Currency is hereby
32^"'stat. L.', authorized, in the manner provided by, and under the
conditions and limitations of, the act of July 12, 1882, to
extend for a further period of twenty j-eare the charter
of any national banking association extended under said
act which shall desire to continue its existence after the
expiration of its charter.
POWER TO HOLD REAL PROPERTY.
Act J"°e ^, 223. Sec. 5137. — A national banking association may
sec. ' 28 ; 13 purchase, hold, and convey real estate for the following
Stat. L., 107. purposes, and for no others:
First. Such as shall be necessary for its immediate ac-
commodation in the transaction of its business.
Second. Such as shall be mortgaged to it in good faith
by way of security for debts previously contracted.
Third. Such as shall be conveyed to it in satisfaction of
debts previously contracted in the course of its dealings.
Fourth. Such as it shall purchase at sales under judg-
ments, decrees, or mortgages held by the association, or
shall purchase to secure debts due to it.
But no such association shall hold the possession of any
real estate under mortgage, or the title and possession of
any real estate purchased to secure any debts due to it,
for a longer period than five years.
Note. — For power to loan on real estate see paragraph 205,
ante,
REQUISITE AMOUNT OF CAPITAL.
1864* c"°\o6' 2^^- ^®°- ^^^^ t^^ amended 1900] — No association shall
sec. 7 ; 13 Stat! be organized with a less capital than one hundred thou-
^"Act^ Mar. 14, sand dollars, except that banks with a capital of not less
1900. c. 41. seel ^j^j^j^ flfj-y thousaud dollars may, with the approval of the
10 ; 31 btat, '' p T rr\ 1 •!• 1 1
L., 48. Secretary oi the 1 reasury, be organized m any place the
population of which does not exceed six thousand inhab-
itants, and except that banks with a capital of not less
than twenty-five thousand dollars may, with the sanction
of the Secretary of the Treasury, be organized in any
place the population of which does not exceed three
thousand inhabitants. Xo association shall be organized
in a city the population of which exceeds fifty thousand
persons with a capital of less than two hundred thousand
dollars.
SHARES OF STOCK AND TRANSFERS.
1864,* f""1o(;: 225. Sec. 5139.— The capital stock of each association
si^"t' L^'io-^^^ -hall be divided into shares of one hundred dollars each,
and be deemed personal property, and transferable on the
books of the association in such manner as may be pre-
ORGANIZATION AND POWERS. 33
scribed in the by-laws or articles of association. Every
person becoming a shareholder by such transfer shall, in
proportion to his shares, succeed to all rights and lia-
bilities of the prior holder of such shares ; and no change
shall be made in the articles of association by which the
rights, remedies, or security of the existing creditors of
the association shall be impaired.
Note. — See also section 23, Federal reserve act, following sec-
tion 5151, United States Revised Statutes.
HOW PAYMENT OF THE CAPITAL STOCK MUST BE MADE
AND CERTIFIED.
226. Sec. 5140. — At least fifty per centum of the capital ^^Act J"°e 3.
stock of every association shall be paid in before it shall sec. ' i4; i3
be authorized to commence business ; and the remainder ^^^^- ^' ^^^•
of the capital stock of such association shall be paid in
installments of at least ten per centum each, on the whole
amount of the capital, as frequently as one installment
at the end of each succeeding month from the time it
shall be authorized by the Comptroller of the Currency
to commence business; and the payment of each install-
ment shall be certified to the Comptroller, under oath, by
the president or cashier of the association.
PROCEEDINGS IF SHAREHOLDER FAILS TO PAY INSTALL-
MENTS.
227. Sec. 5141. — Whenever any shareholder, or his as- Act Jui^^ 3.
signee, fails to pay any installment on the stock when the sec. ' i5 ; is
same is required by the preceding section to be paid, the ^*^^ ^- ^^^'
directors of such association may sell the stock of such
delinquent shareholder at public auction, having given
three weeks' previous notice thereof in a newspaper pub-
lished and of general circulation in the city or county
where the association is located, or if no newspaper is
published in said city or countj', then in a newspaper
published nearest thereto, to any person who will paj' the
highest price therefor, to he not less than the amount then
due thereon, with the expenses of advertisement and sale ;
and the excess, if any, shall be paid to the delinquent
shareholder. If no bidder can be found who will pay for
such stock the amount due thereon to the association, and
the cost of advertisement and sale, the amount previously
paid shall be forfeited to the association, and such stock
shall be sold as the directors ma}' order, within six months
from the time of such forfeiture, and if not sold it shall
be canceled and deducted from the capital stock of the
association. If any such cancellation and reduction shall
reduce the capital of the association below the minimum
of capital required by law, the capital stock shall, within
thirty days from the date of such cancellation, be in-
creased to the required amount; in default of which a
receiver may be appointed, according to the provisions
164:512°— 20 3
34 OEGANIZATIOIT AND POW'ERS.
of section fifty-two hundred and thirty-four, to close up
the business of the association.
NATIONAL BANKS MAY INCREASE CAPITAL STOCK.
Act June 3, 228. Sec. 5142. — Any association formed under this title
fie<\^' 13; ^ 1^3 may, by its articles of association, provide for an increase
stilt. L.. 103. Q^ -^g capital from time to time, as may be deemed expe-
dient, subject to the limitations of this title. But the
maximum of such increase to be provided in the articles
of association shall be determined by the Comptroller of
the Currency; and no increase of capital shall be valid
until the whole amount of such increase is paid in. and
notice thereof has been transmitted to the Comptroller
of the Currency, and his certificate obtained specifying
the amount of such increase of capital stock, with his
approval thereof, and that it has been duly paid in as
part of the capital of such association.
INCREASE OF CAPITAL STOCK. ACT MAY 1, 1886.
Act May 1, 229. Sec. 1. — That anv national banking association
if 24%tat.T; may, with the approvalof the Comptroller of the Cur-
1®' rency, by the vote of shareholders owning two-thirds of
the stock of such association, increase its capital stock, in
accordance with existing laws, to any sum approved by
the said Comptroller, notwithstanding the limit fixed in
its original articles of association and determined by said
Comptroller ; and no increase of the capital stock of any
national banking association either within or beyond the
limit fixed in its original articles of association shall be
made except in the manner herein provided.
Note. — For other sections of this act see paragraphs 211, 212,
and 213, ante.
REDUCTION OF CAPITAL STOCK.
Act June 3, 230. Scc. 5143. — Any association formed under this title
Bec^^' 13; ^^1^3 may, by the vote of shareholders owning two-thirds of
Stat. L., 103. jts capital stock, reduce its capital to any sum not below
the amount required by this title to authorize the forma-
tion of associations; but no such reduction shall be allow-
able which will reduce the capital of the association below
Act Dec. 23, the amount required for its outstanding circulation, nor
38^^ si&t' ^l' shall any reduction be made until the amount of the pro-
274. ' " posed reduction has been reported to the Comptroller of
the Currency and such reduction has been approved by
the said Comptroller of the Currency and by the Federal
Reserve Board, or by the organization committee pend-
ing the organization of the Federal Reserve Board.
EIGHT OF SHAREHOLDERS TO TOTE; PROXIES AUTHOR-
IZED.
Act June 3, 231. Sec. 5144. — ^In all elections of directors, and in
sp^c^^' 11; ^Tk deciding all questions at meetings of shareholders, each
Stat. L., 102. shareholder shall be entitled to one vote on each share of
ORGANIZATION AND POWERS. 35
stock held by him. Shareholders may vote by proxies
duly authorized in writing ; but no officer, clerk, teller, or
bookkeeper of such association shall act as proxy; and
no shareholder whose liability is past due and unpaid
shall be allowed to vote.
Note. — The Circuit Court of the United States, in United States
V. Barry (36 F. R., 246). held that the words "liability past due
and unpaid " referred only to unpaid subscriptions for stock.
ELECTION OF DIRECTORS.
232. Sec. 5145.— The affairs of each association shall be Act Juno s,
managed by not less than five directors, who shall besecs.'9,*^io; I'i
elected by the shareholders at a meeting to be held at any ^*^**- ^•' ^^'^■
time before the association is authorized by the Comp-
troller of the Currency to commence the business of bank-
ing ; and afterward at meetings to be held on such day in
January of each year as is specified therefor in the
articles of association. The directors shall hold office for
one year, and until their successors are elected and have
qualified.
REQUISITE QUALIFICATION OF DIRECTORS.
233. Sec. 5146 [amended 1905].— Every director must,, ^ct June .3.
J • u- V, 1 J- £ ■ 1 -J.- J! j_i '1864, c. lOG,
during his whole term of service, be a citizen or the sees, o, io: i:{
United States, and at least three-fourths of the direc- ^^Act^Feb.^iis.
tors must have resided in the State, Territory, or District g^^^^^^t ^^l*''
in which the association is located for at least one year sis. '
immediately preceding their election and must be resi-
dents therein during their continuance in office. Every
director must own in his own right at least ten shares of
the capital stock of the association of which he is a di-
rector, unless the capital of the bank shall not exceed
twenty-five thousand dollars, in which case he must own
in his own right at least five shares of such capital stock.
Any director who ceases to be the owner of the required ■
number of shares of the stock, or who becomes in any
other manner disqualified, shall thereby vacate his place.
INTERLOCKING DIRECTORATES— WHEN FORBIDDEN.
234. Sec. 8. — That from and after two years from the ■^<'t oct. i5.
date of the approval of this act no person shall at the st^a\^'L..' T^oii!^''
same time be a director or other officer or employee of
more than one bank, banking association, or trust com-
pany, organized or operating under the laws of the United
States, either of which has deposits, capital, surplus, and
undivided profits aggregating more tlian $5,000,000; and
no private banker or person who is a director in any bank
or trust company, organized and operating under the laws
of a State, having deposits, capital, surplus, and undi-
vided profits aggregating more than $5,000,000. shall be
eligible to be a director in any bank or banking associa-
36 OKGANIZATION AND POWERS.
tion organized or operating under the laws of the United
States. The eligibility of a director, officer, or employee
under the foregoing provisions shall be determined by
the average amount of deposits, capital, surplus, and un-
divided profits as shown in the official statements of such
bank, banking association, or trust company filed as pro-
vided by law during the fiscal year next preceding the
date set for the annual election of directors, and when a
director, officer, or employee has been elected or selected
in accordance with the provisions of this Act it shall be
lawful for him to continue as such for one year thereafter
under said election or employment.
No bank, banking association, or trust company, or-
ganized or operating under the laws of the United States,
in any city or incorporated town or village of more than
two hundred thousand inhabitants, as shown by the last
preceding decennial census of the United States, shall
have as a director or other officer or employee any private
banker or any director or other officer or employee of
any other bank, banking association, or trust company
located in the same place : Provided^ That nothing in this
section shall apply to mutual savings banks not having a
capital stock represented by shares: Provided further^
That a director or other officer or employee of such bank,
banking association, or trust company may be a director or
other officer or employee of not more than one other bank
or trust company organized under the laws of the United
States or any State where the entire capital stock of one
is owned by stockholders in the other: And 'provided
further^ That nothing contained in this section shall forbid
a director of class A of a Federal reserve bank, as defined
in the Federal reserve act, from being an officer or
director or both an officer and director in one member
15 b^^k* ^^^ 'provided further^ That nothing in this act
1916; 39^^stat! shall prohibit any officer, director, or employee of any
L., 121. member bank or class A director of a Federal reserve
bank, who shall first procure the consent of the Federal
Reserve Board, which board is hereby authorized, at its
discretion, to grant, withhold, or revoke such consent,
from being an officer, director, or employee of not more
than two other banks, banking associations, or trust
companies, whether organized under the laws of the
United States or any State, if such other bank, banking
association, or trust company is not in substantial com-
petition with such member bank.
The consent of the Federal Reserve Board may be
procured before the person applying therefor has been
elected as a class A director of a Federal reserve bank or
as a director of any member bank.
That from and after two years from the date of the
approval of this act no person at the same time shall be a
director in any two or more corporations, any one of
which has capital, surplus, and undivided profits aggre-
ORGANIZATION AND POWERS. 37
gating more than $1,000,000, engaged in whole or in part
in commerce, other than banks, banking associations,
trust companies and common carriers subject to the
act to regulate commerce, approved February fourth,
eighteen hundred and eighty-seven, if such corporations
are or shall have been theretofore, by virtue of their
business and location of operation, competitors, so that
the elimination of competition by agreement between
them would constitute a violation of any of the provisions
of any of the antitrust laws. The eligibility of a director
under the foregoing provision shall be determined by the
aggregate amount of the capital, surplus, and undivided
profits, exclusive of dividends declared but not paid to
stockholders, at the end of the fiscal year of said corpora-
tion next preceding the election of directors, and when a
director has been elected in accordance with the provi-
sions of this act it shall be lawful for him to continue as
such for one year thereafter.
When any person elected or chosen as a director or
oflEicer or selected as an employee of any bank or other
corporation subject to the provisions of this act is eligible
at the time of his election or selection to act for such bank
or other corporation in such capacity his eligibility to act
in such capacity shall not be affected and he shall not
become or be deemed amenable to any of the provisions
hereof by reason of any change in the affairs of such bank
or other corporation from whatsoever cause, whether
specifically excepted by any of the provisions hereof or
not, until the expiration of one year from the date of his
election or employment.
Note. — See Sec. 25, Federal reserve act, page 165, post, in refer-
ence to directors of foreign branches.
ENFORCEMENT OF ACT IN REFERENCE TO INTERLOCK-
ING DIRECTORATES.
235. Sec. 11. — That authority to enforce compliance ^^Act Oct. i5,
with sections two, three, seven and eight of this act by as stat." l.)
the persons respectively subject thereto is hereby vested : '^^*
in the Interstate Commerce Commission where applicable
to common carriers, in the Federal Reserve Board where
applicable to banks, banking associations and trust com-
panies, and in the Federal Trade Commission where ap-
plicable to all other character of commerce, to be exer-
cised as follows:
Whenever the commission or board vested with juris-
diction thereof shall have reason to believe that any
person is violating or has violated any of the provisions
of sections two, three, seven, and eight of this act, it shall
issue and serve upon such person a complaint stating its
charges in that respect, and containing a notice of a
hearing upon a day and at a place therein fixed at least
thirty days after the service of said complaint. The
38 ORGANIZATION AND POWERS.
person so complained of shall have the right to appear
at the place and time so fixed and show cause why an
order should not be entered by the commission or board
requiring such person to cease and desist from the vio-
lation of the law so charged in said complaint. Any
person may make application, and upon good cause shown
may be allowed by the commission or board, to intervene
and appear in said proceeding by counsel or in person.
The testimony in any such proceeding shall be reduced to
writing and filed in the office of the commission or board.
If upon such hearing the commission or board, as the
case may be, shall be of the opinion that any of the pro-
visions of said sections have been or are being violated, it
shall make a report in writing in which it shall state its
findings as to the facts, and shall issue and cause to be
served on such person an order requiring such person to
cease and desist from such violations, and divest itself of
the stock held or rid itself of the directors chosen con-
trary to the provisions of sections seven and eight of this
act, if any there be, in the manner and within the time
fixed by said order. Until a transcript of the record in
such hearing shall have been filed in a circuit court of
appeals of the United States, as hereinafter provided,
the commission or board may at any time, upon such no-
tice and in such manner as it shall deem proper, modify
or set aside, in whole or in part, any report or any order
made or issued by it under this section.
If such person fails or neglects to obey such order of
the commission or board while the same is in effect, the
commission or board may apply to the circuit court of
appeals of the United States, within any circuit where
the violation complained of was or is being committed
or where such person resides or carries on business, for
the enforcement of its order, and shall certify and file
with its application a transcript of the entire record in
the proceeding, including all the testimony taken and the
report and order of the commission or board. Upon such
filing of the application and transcript the court shall
cause notice thereof to be served upon such person and
thereupon shall have jurisdiction of the proceeding and
of the question determined therein, and shall have power
to make and enter upon the pleadings, testimony, and
proceedings set forth in such transcript a decree affirm-
ing, modifj'ing, or setting aside the order of the commis-
sion or board. The findings of the commission or board
as to the facts, if supported by testimony, shall be con-
clusive. If either party shall apply to the court for leave
to adduce additional evidence, and shall show to the satis-
faction of the court that such additional evidence is ma-
terial and that there were reasonable grounds for the
failure to adduce such evidence in the proceeding before
the commission or board, the court may order such addi-
tional evidence to be taken before the commission oi
ORGANIZATION AND POWERS. 39
board and to be adduced upon the hearing in such man-
ner and upon such terms and conditions as to the court
may seem proper. The commission or board may modify
its findings as to the facts, or make new findings, by rea-.
son of the additional evidence so taken, and it shall file
such modified or new findings, which, if supported by
testimon}', shall be conclusive, and its recommendations,
if any, for the modification or setting aside of its original
order, with the return of such additional evidence. The
judgment and decree of the court shall be final, except
that the same shall be subject to review by the Supreme
Court upon certiorari as provided in section two hundred
and forty of the Judicial Code.
Any party required by such order of the commission
or board to cease and desist from a violation charged
may obtain a review of such order in said circuit court of
appeals by filing in the court a written petition praying
that the order of the commission or board be set aside.
A copy of such petition shall be forthwith served upon
the commission or board, and thereupon the commis-
sion or board forthwith shall certify and file in the court
a transcript of the record as hereinbefore provided.
Upon the filing of the transcript the court shall have the
same jurisdiction to afhrm, set aside, or modify the order
of the commission or board as in the case of an applica-
tion by the commission or board for the enforcement of
its order, and the findings of the commission or board as
to the facts, if supported bj- testimony, shall in like man-
ner be conclusive.
The jurisdiction of the circuit court of appeals of the
United States to enforce, set aside, or modify orders of
the commission or board shall be exclusive.
Such proceedings in the circuit court of appeals shall
be given precedence over other cases pending therein,
and shall be in every way expedited. No order of the
commission or board or the judgment of the court to
enforce the same shall in any wise relieve or absolve any
person from any liability under the antitrust acts.
Complaints, orders, and other processes of the commis-
sion or board under this section may be served by any-
one duly authorized by the commission or board, either
(a) by delivering a copy thereof to the person to be served,
or to a member of the partnership to be served, or to the
president, secretary, or other executi\ e officer or a direc-
tor of the corporation to be served; or (b) by leaving a
copy thereof at the principal office or place of business of
such person; or (c) by registering and mailing a copy
thereof addressed to such person at his principal office or
place of business. The verified return by the person so
serving said complaint, order, or other process setting
forth the manner of said service shall be proof of the
same, and the return post-office receipt for said complaint,
order, or other process registered and mailed as aforesaid
Bhall be proof of the service of the same.
40 OEGANIZATTON AND PO^\^JRS.
OATH REQUIRED FROM DIRECTORS.
1864* c"°io6: 226- ^^^' 5147.— Each director, when appointed or
sec. 9 ; 13 Stat! elected, shall take an oath that he will, so far as the duty
devolves on him, diligently and honestly administer the
affairs of such association, and will not knowingly violate,
or willingly permit to be violated, any of the provisions
of this title, and that he is the owner in good faith, and in
his own right, of the number of shares of stock required
by this title, subscribed by him, or standing in his name
on the books of the association, and that the same is not
hypothecated, or in any way pledged, as security for any
loan or debt. Such oath, subscribed by the director mak-
ing it, and certified by the officer before whom it is taken,
shall be immediately transmitted to the Comptroller of
the Currency, and shall be filed and preserved in his Office.
FILLING VACANCIES.
180? c"°%i: 237. Sec. 5148.— Any vacancy in the board shall be
sec. ' 10 ; 13 filled by appointment bj^ the remaining directors, and
any director so appointed shall hold his place until the
next election.
PROCEEDINGS WHERE NO ELECTION IS HELD ON THE
PROPER DAT.
186? c"°i06; ^^^- S^c- 5149. — If, from any cause, an election of di-
|ec.^' 10 ; 13 rectors is not made at the time appointed, the association
shall not for that cause be dissolved, but an election may
be held on any subsequent day, thirty days' notice thereof
in all cases having been given in a newspaper published
in the cit3^ town, or county in which the association is
located; and if no newspaper is published in such city,
town, or county, such notice shall be published in a news-
paper published nearest thereto. If the articles of asso-
ciation do not fix the day on which the election shall be
held, or if no election is held on the day fixed, the day for
the election shall be designated by the board of directors
in their by-laws, or otherwise ; or if the directors fail to
fix the day, shareholders representing two-thirds of the
shares may do so.
ELECTION OF PRESIDENT OF THE BOARD.
180? c"°%o' ^^^- ^^^- ^^^^- — ^^^ ^^ ^^^^ directors, to be chosen by
Bee. ^ ; 13 Stat! the board, shall be the president of the board.
L., 102.
INDIVIDUAL LIABILITY OF SHAREHOLDERS.
18G? c"°'i06' ^^^- ^^^- ^^^^- — "^^^^ shareholders of every national
Bee. ' 12; ^i.j banking association shall be held individually responsi-
stat. L., 102, Yf\Q^ equally and ratably, and not one for another, for all
contracts, debts, and engagements of such association, to
the extent of the amount of their stock therein, at the
par value thereof, in addition to the amount invested in
ORGANIZATION AND POWERS. 41
siicli shares; except that shareholders of any banking
association now existing under State laws, havincr not
less than five millions of dollars of capital actually paid
in. and a surplus of twenty per centum on hand, both to
be determined by the Comptroller of tlie Currency, shall
be liable only to the amount invested in their shares;
and such surplus of twenty per centum shall be kept
undiminished, and be in addition to tl^e surplus provided
for in this title; and if at any time there is a deficiency
in such surplus of twenty per centum, such association
shall not pay any dividends to its shareholders until tho
deficiency is made good; and in case of such deficiency,
the Comptroller of^the Currency may compel the asso-
ciation to close its business and wind up its affairs under
the provisions of chapter four ^ of this title.
Note. — See act of June 30, 1S76, paragraph 521, post, for en-
forcement of liability prescribed by this section in cases of
voluntary liquidation.
INDITIDUAL LIABILITY OF SHAREHOLDERS— LIABILITY
OF SHAREHOLDERS WHO HATE TRANSFERRED THEIR
SHARES.
241. Sec 23. — The stockholders of every national bank- ^^^ff ^^c. ^2^3,
ing association shall be held individually responsible for p 'stat.' l.',
all contracts, debts, and engagements of such association.
each to the amount of his stock therein, at the par value
thereof in addition to the amount invested in such stock.
The stockholders in any national banking association who
shall have transferred their shares or registered the trans-
fer thereof within sixty daj's next before the date of the
failure of such association to meet its obligations, or with
knowledge of such impending failure, shall be liable to
the same extent as if they had made no such transfer, to
the extent that the subsequent transferee fails to meet
such liability; but this provision shall not be construed to
affect in any way an}- recourse which such shareholders
might otherwise have against those in whose names such
shares are registered at the time of such failure.
EXECXTORS, TRUSTEES, ETC.. NOT PERSONALLY LIABLE.
242. Sec. 5152. — Persons holding stock as executors, ad- ,„-5?* •^""^,«i'
mmistrators, guardians, or trustees, shall not be person- spc 63: 13
ally subject to any liabilities as stockholders; but the ^*'**" ^■' ^^^'
estates and funds in their hands shall be liable in like
manner and to the same extent as the testator, intestate,
ward, or person interested in such trust-funds would be,
if living and competent to act and hold the stock in his
own name.
1 Chapter 5 of this compilation.
42 ORGANIZATION AND POWERS.
NATIONAL BANKING ASSOCIATIONS TO BE DEPOSITA
KIES OF PUBLIC MONEYS.
1864* c"°i06' ^^^- ^®^- ^^^^ [^^ amended 1907]. — All national banking
sec. ' 45; 13 associations, designated for that purpose by the Secre-
^ Act.^Mar.^'3, tary of the Treasur}^, shall be depositaries of public
sec*\ • 31 itat ^^^^^^^Ji Under such regulations as may be prescribed by
L.,'i448. 'the Secretary; and they ma}' also be employed as finan-
1907!^" c^Yoit; tial agents of the Government ; and they shall perform
L*^i2bo^ ^^'^*" '^^^ such reasonable duties, as depositaries of public money
and financial agents of the Government, as may be re-
quired of them. The Secretary of the Treasury shall
require the associations thus designated to give satisfac-
tory security, by the deposit of United States bonds and
otherwise, for the safe-keeping and prompt payment of
the public money deposited with them, and for the faith-
ful performance of their duties as financial agents of the
Government : Provided, That the Secretary shall, on or
before the first of Januaiw of each year, make a public
statement of the securities required during that year for
such deposits. And every association so designated as
receiver or depositary of the public money shall take and
receive at par all of the national currency bills, by what-
ever association issued, which have been paid into the
Government for internal revenue, or for loans or stocks :
Provided, That the Secretary of the Treasury shall dis-
tribute the deposits herein provided for, as far as practi-
cable, equitably between the different States and sections.
Note. — For other .provisions relating to duties and liabilities of
depositaries see following sections of the Revised Statutes of the
United States :
Sec. 3640. Transfer of moneys from depositaries to Treasury
authorized.
Sec. 3641. Transfer of postal deposits.
Sec. 3642. Accounts of postal deposits.
Sec. 3643. Entry of each deposit, transfer, and payment.
Sec. 3644. Public moneys in Treasury and depositaries subject
to draft of Treasurer.
Sec. 3645. Regulations for presentment of drafts.
Sec. 3646. Duplicates for lost or stolen checks authorized.
Sec. 3647 and amendments. Duplicate check when officer who
issued is dead.
Sec. 3648 and amendments. Advances of public money pro-
hibited.
Sec. 3649. Examination of depositaries.
See also Government Depositaries, paragraphs 730-738, post.
GOTERNMENT DEPOSITS IN FEDERAL RESERTE BANKS.
Act Dec. 23, 244. Sec. 15. — The moneys held in the general fund of
:^is^^'sta't!' ^L.ithe Treasury, except the five per centum fund for the
2G5. redemption of outstanding national-bank notes and the
funds provided in this act for the redemption of Federal
reserve notes may, upon the direction of the Secretary of
the Treasury, be deposited in Federal reserve banks,
ORGAXIZATIOX AND POWERS. 43
which banks, when required by the Secretary of the
Treasury, shall act as fiscal agents of the United States;
and the revenues of the Government or any part thereof
may be deposited in such banks, and disbursements may
be made by checks drawn against such deposits.
Xo public funds of the Philippine Islands, or of the
postal savings, or any Government funds, shall be de-
posited in the continental United States in any bank not
belonging to the system established by this act: Pro-
vided, however, That nothing in this act shall be con-
strued to deny the right of the Secretary of the Treasury
to use member banks as depositories.
Note. — Section 7 of the act approved April 24, 1917, known as
"An act to autliorize an issue of bonds to meet expenditures for
the national security and defense, and, for the purpose of assist-
ing in the prosecution of the war, to extend credit to foreign gov-
ernments, and for other purposes." authorizes the Secretary to
deposit proceeds of sale of such bonds in uonmember banks un-
der certain circumstances. For full text of section 7 see page
184, post.
CONTERSION OF STATE BANKS INTO NATIONAL BANK-
ING ASSOCIATIONS.
245. Sec. 5154. — Anv bank incorporated by special law -'^ct June 3.
. ,-, f 1 " T-r • , 1 r^ , • 1 1 1od4, C. lOo,
of any State or of the United States or organized under sec. 44; la
the general laws of any State or of the United States and ^*Act^f>e"^23.
having an unimpaired capital sufficient to entitle it to i|i3,g^sec. 8;
become a national banking association under the pro- 258.
visions of the existing laws may, by the vote of the
shareholders owning not less than fifty-one per centum
of the capital stock of such bank or banking association,
with the approval of the Comptroller of the Currency
be converted into a national banking association, with
any name approved by the Comptroller of the Currency :
Provided, however , That said conversion shall not be in
contravention of the State law. In such case the articles
of association and organization certificate may be exe-
cuted by a majority of the directors of the bank or bank-
ing institution, and the certificate shall declare that the
owners of fifty-one per centum of the capital stock have
authorized the directors to make such certificate and to
change or convert the bank or banking institution into a
national association. A majority of tlie directors, after
executing the articles of association and the organization
certificate, sliall have power to execute all other papers
and to do whatever may be required to make its organiza-
tion perfect and complete as a national association. The
shares of any such bank may continue to be for the same
amount each as they were before the conversion, and the
directors may continue to be directors of the association
until others are elected or appointed in accordance with
the provisions of the statutes of the United States. When
the Comptroller has given to such bank or banking asso-
ciation a certificate that the provisions of this Act have
44 ORGANIZATION AND POWERS.
been complied with, such bank or banking association,
and all its stockholders, officers, and employees, shall
have the same powers and privileges, and shall be subject
to the same duties, liabilities, and regulations, in all re-
spects, as shall have been prescribed by the Federal Re-
serve Act and by the national banking Act for associa-
tions originally organized as national banking associa-
tions.
Note. — The act of 1864 authorized any State bank which was a
stockholder in any other bank, by authority of State laws, to con-
tinue to hold its stock, although either bank or both might have
become converted into national banks. This provision was Incor-
porated in section 5154, United States Revised Statutes, but was
stricken out in the revision of this section by the act of December
23, 1913.
STATE BANKS HATING BRANCHES.
i865,*c.^7s?se?: 246. Scc. 5155.— It shall be lawful for any bank or
7 : 13 Stat. L., banking association organized under State laws, and hav-
4S4 ^ . . . . '
ing branches, the capital being ]oint and assigned to and
used by the mother bank and branches in definite propor-
tions, to become a national banlving association in con-
formity with existing laws, and to retain and keep in
operation its branches, or such one or more of them as it
may elect to retain; the amount of the circulation re-
deemable at the mother bank, and each branch, to be
regulated by the amount of capital assigned to and used
by each.
RESERYATION OF RIGHTS OF ASSOCIATIONS ORGANIZED
UNDER ACT OF 1863.
1864* i"°ioi: 247. Sec. 5156.— Nothing in this title shall effect any
Stat l"'ii8^^'^PP*^^^^"^^^^^ made, acts done, or proceedings had or
coimnenced prior to the third day of June, eighteen hun-
dred and sixty-four, in or toward the organization of any
national banking association under the act of Februarv
twenty-five, eighteen hundred and sixty-three; but all
associations which, on the third day uf June, eighteen
hundred and sixty-four, were organized or commenced to
V be organized under that act, shall enjoy all the rights and
privileges granted, and be subject to all the duties, liabili-
ties, and restrictions imposed by this title, notwithstand-
ing all the steps prescribed by this title for the organiza-
tion of associations were not pursued, if such associations
were duly organized under that act-
OEGANIZATION AND POWERS. 45
46 ORGAXiZATiUJS' AND POWEi^,
OBTAINING AND ISSUING CIRCULATING NOTES.
47
CHAPTER III.
OBTAINING AXD ISSUING CIRCULATING NOTES.
300. 5157. What associations are gov-
erned by provisions of
cliapters two, three, and
four.
801. 5158. Registered bonds intended
by the term "United
States bonds."
302. Act December 23, 1913, as amend-
ed. Deposit of bonds not
required before issuance
of certificate authorizing
t li e commencement of
business.
303. Act December 21, 1905. Two per
cent Panama Canal
bonds have all rights and
privileges accorded to
other two per cent bonds
of the United States.
304. 5160. Increase or reduction of
deposit to correspond
with capital.
305. 5161. Exchange of coupon for
registered bonds.
306. 5162. Manner of making trans-
fers of bonds.
307. 5163. Kegistrv of transfers.
308. 5164. Notice of transfer to be
given to association in-
terested.
309. 5165. Examination of registry
and bonds.
310. 5160. Annual examination of
bonds by association.
311. 5167. General provisions respect-
ing bonds.
312. Act June 20, 1874. Withdrawal
of circulating notes on
deposit of lawful money
and withdrawal of bonds.
313. Act July 12, 1882. Amount <.f
bonds required to be on
deposit; reduction of
amount or retirement in
full of circulating notes.
314. Act July 12, 1882, and act March
4, 1907. Limitation on
withdrawal of bonds ;
consent of Comptroller of
Currency and Secretary
of the Treasury neces-
sary.
161312°— 20 4
315. Act December 23, 1913. Refund-
ing of bonds under Fed-
eral reserve act ; i-etire-
ment of circulating notes.
316. Act December 23, 1913. Pur-
chase of United States
bonds by Federal reserve
banks.
317. Act December 23, 1913. Issue of
circulating notes to Fed-
eral reserve banks on se-
curity of United States
bonds : circulating notes
so issued obligations of
Federal reserve bank.
Act December 23, 1913. Issue of
Treasury gold notes of
the United States in ex-
change for certain United
States bonds.
5168. Comptroller to determine
if association can com-
mence business.
5169. Certificate of authority to
commence banking to be
issued.
5170. Publication of certificate.
5171. Repealed by act July 12,
1SS2.
Act March 14, 1900, as amended.
Delivery of circulating
notes.
5172. Printing denominations
and form of the circulat-
ing notes.
325. Act June 20, 1874. Charter num-
ber to be printed on
notes.
326. Act March 3, 1875. Distinctive
paper for printing notes.
327. 5173. Plates and dies to be under
control of the Comptrol-
ler ; expenses of Cur-
rency Bureau to be paid
out of proceeds of taxes,
or duties, assossed and
collected on the circula-
tion of national banking
asociations.
5174. Examination of plates and
dies.
Act October 5, 1917. I.iinit to
issue of notes under live
dollars.
49
318.
319.
320.
321.
322.
323.
324.
82S.
329.
50
OBTAINING AND ISSUING CIRCULATING NOTES.
330. 5176. Repealed by act July 12,
1882.
331. 5177. Repealed by act January
14, 1875.
332. Act of January 14, 1875. Aggre-
gate amount of circulat-
ing notes not limited.
333. 5178. Repealed by act January
14, 1875.
334. 5179. Repealed by act January
14, 1875.
335. 5180. Repealed by act January
14, 1875.
336. 5181. Repealed by act January
14, 1875.
337. 5182. For what demands na-
tional-bank notes may. be
received.
338. 5183. Issue of post notes, etc.,
prohibited.
339. 5184. Destroying and replacing
worn-out and mutilated
notes.
340. Act June 23, 1874. Maceration
of national-bank notes.
341. 5185. Organization of assocla-
tion.s to issue gold notes.
342. 5186. Reserve requirements for
gold banks.
343. Act of February 14, 1880. Con-
version of national gold
banks into currency
banks.
344. 5187. Penalty for issuing circu-
lating notes to unauthor-
ized associations.
345. Act March 4, 1909, section 175,
formerly section 5188,
Revi.sed Statutes. Pen-
alty for imitating bank
circulation. Use of same
for advertising purposes,
346. Act March 4, 1909, section 176,
formerly section 5189,
Revised Statutes. Pen-
alty for mutilating cir-
culation.
WHAT ASSOCIATIONS ARE GOYERNED BY PROYISIONS
OF CHAPTERS TWO, THREE, AND FOUR.
Sec. 5157. R. s. 300. Sec. 5157. — The provisions of chapters two, three,
and four ^ of this title, which are expressed without re-
strictive words, as applying to " national banking associ-
ations," or to " associations," apply to all associations
organized to carry on the business of banking under any
act of Congress.
Note. — Federal reserve banks are not governed by this act, but
by the Federal reserve act.
REGISTERED BONDS INTENDED BY THE TERM " UNITED
STATES BONDS."
isef c°°i06' ^^^- ^^^- 5158.— The term "United States bonds," as
sec. 4 ; 13 Stat,' uscd throughout this chapter, shall be construed to mean
L., 100. registered bonds of the United States.
DEPOSIT OF BONDS NOT REQUIRED BEFORE ISSUANCE
OF CERTIFICATE AUTHORIZING THE COMMENCEMENT
OF BUSINESS.
loi.f ?eT' ii- ^^^' ^®°- ■'•'''• — ^^ niuch of the provisions of section
38 'stat.' L.; fifty-one hundred and fifty-nine of the Revised Statutes
^Vct .Tune 21, of the United States, and section four of the Act of June
1917, sec. 9. twentieth, eighteen hundred and seventy-four, and sec-
tion eight of the Act of July twelfth, eighteen hundred
and eighty-two, and of any other provisions of existing
statutes as require that before any national banking
association shall be authorized to commence banking
business it shall transfer and deliver to the Treasurer of
the United States a stated amount of United States
registered bonds, and so much of those provisions or of
* Chapters three, four, and five of this compilation.
OBTAINING AND ISSUING CIRCULATING NOTES. 51
any other provisions of existing statutes as require any
national banking association now or hereafter organized
to maintain a minimum deposit of such bonds with the
Treasurer is hereby repealed.
ZloTE. — Section 5159 referred to above is as follows : " Every as-
Bociation, after having complied with the provisions of this title,
preliminary to the commencement of the banking business, and
before it shall be authorized to commence banking business under
this title, shall transfer and deliver to the Treasurer of the
United States any United States registered bonds, bearing inter-
est, to an amount not less than thirty thousand dollars and not
less than one-third of the capital stock paid in. Such bonds
shall be received by the Treasurer upon deposit, and shall be
by him safely kept in his office, until they shall be otherwise
disposed of, in pursuance of the provisions of this title." (See
also note under section 5160.)
TWO PER CENT PANAMA CANAL BONDS HATE ALL
RIGHTS AND PRIVILEGES ACCORDED TO OTHER TWO
PER CENT BONDS OF THE UNITED STATES. ACT DE-
CEMBER 21, 1905.
303. Sec. 1. — That the two per cent bonds of the United Act Dec. 21,
States authorized by section eight of the act entitled " An 34^st'at.^ u', 5.'
act to pro^ade for the construction of a canal connecting
the waters of the Atlantic and Pacific oceans," approved
June twenty-eight, nineteen hundred and two, shall have
all the rights and privileges accorded by law to other two
per cent bonds of the United States, and every national
banking association having on deposit, as provided by
law, such bonds issued under the provisions of said sec-
tion eight of said act approved June twenty-eight, nine-
teen hundred and two, to secure its circulating notes, shall
pay to the Treasurer of the United States, in the months
of January and July, a tax of one-fourth of one per cent
each half year upon the average amount of such of its
notes in circulation as are based upon the deposit of said
two per cent bonds; and such taxes shall be in lieu of ex-
isting taxes on its notes in circulation imposed by section
fifty-two hundred and fourteen of the Revised Statues.
Note. — Only bonds available as security for national bank circu-
lation are the consols of 1930 2 per cent Panama Canal bonds, and
4 per cent bonds of 1925.
INCREASE OR REDUCTION OF DEPOSIT TO CORRESPOND
WITH CAPITAL.
304. Sec. 5160. — [The deposit of bonds made hy each as- Act June :i.
sociation shall he increased as its capital may he paid uplfc.^' 1%; ^"13
or increased, so that every associatio^i shall at all time!< stat. l., 104.
have on deposit with the Treasurer registered United
States bonds to the amount of at least one-third of its
capital stock actually paid ?'n]. And any association that
may desire to reduce its capital or close up its business
and dissolve its organization, may take up its bonds
upon returning to the Comptroller its circulating notes
in the proportion hereinafter required, or may take up
52 OBTAINING AND ISSUING CmCULATING NOTES.
any excess of bonds beyond [one-third of its capital
stock], and upon which no circulating notes have been
delivered.
Note. — All provisions of law requiring national banking associa-
tions to maintain a minimum deposit of bonds were repealed by
the act of June 21, 1917. See paragraph 302 ante. Prior to the
passage of that act provisions of sections .5159 and 5160 requiring
national banks organized prior to December 23, 1913, to deposit
bonds to an amount not less than $30,000 and not less than one-
third of the capital stock paid in were held to be modi tied by the
acts of June 20, 1874, and July 12, 1882. Section 4 of the act of
June 20, 1874, which follows section 5167, provided in part that the
amount of bonds on deposit for circulation should not be reduced
below $.50,000. That fixed the amount of bonds required to be de-
posited by national banks organized prior to December 23, 1913,
and having a capital of over $150,000. National banks having a
capital of $150,000 or less were not required to keep on deposit
bonds in excess of one-fourth of their capital stock as security
for their circulating notes by act of July 12, 1882, chapter 290, sec-
tion 8. This act follows section 5167, Revised Statutes. All na-
tional banks having a capital of $150,000 or less and organized
prior to December 23, 1913, were required to keep on deposit bonds
equal to one-fourth of their capital stock, and if any bank of such
capitalization organized since December 23, 1913, desired to take
out circulation it was required to deposit bonds in like amount as
under the old law. Similarly all banks organized prior to Decem-
ber 23, 1913, with capital stock of over $150,000 were required to
keep on deposit bonds equal to $50,000, and any bank of such
capitalization organized since December 23, 1913, if it desired to
take out circulation, was required to deposit bonds in that amount.
Section 18 of the Federal Reserve act provides that after De-
cember 23, 1915, which is 2 years from the passage of that act,
and at any time during a period of 20 years thereafter, any mem-
ber bank desiring to retire the whole or any part of its circulating
notes, may file with the Treasurer of the United States an appli-
cation to sell for its account, at par and accrued intei'est, United
States bonds securing circulation to be retired. This section fur-
ther provides that the Federal Reserve Board, may, in its dis-
cretion, require the Federal reserve banks to purchase such bonds
from the banks whose applications have been tiled with the
Treasurer at least 10 days before the end of any quarterly period
at which the Federal Reserve Board may direct the purchase to
be made : Provided, That Federal reserve banks shall not be
permitted to purchase an amount to exceed $25,000,000 of such
bonds in any one year, and which amount shall include bonds
acquired under section 4 of that act by the Federal reserve bank.
EXCHANGE OF COUPON FOR REGISTERED BONDS.
Act June 3, 305. Scc. 5161. — To facilitate a compliance with the
1864, c. lOfi', two preceding sections, the Secretary of the Treasury is
s4t.' L., 104. authorized to receive from any association, and cancel,
any United States coupon bonds, and to issue in lieu
thereof registered bonds of like amount, bearing a like
rate of interest, and having the same time to run.
MANNER OF MAKING TRANSFERS OF BONDS.
Act June 3. 306. Sec. 5162. — All transfers of United States bonds,
BPc!^' 19; ^Tsiiade by any association under the provisions of this
Stat. L., 'i05. title, shall be made to the Treasurer of the United
States in trust for the association, with a memorandum
written or printed on each bond, and signed by the
OBTAINING AND ISSUING CIRCULATING NOTES. 53
cashier, or some other officer of the association making
the deposit. A receipt shall be given to the association,
by the Comptroller of the Currency, or by a clerk ap-
pointed by him for that purpose, stating that the bond
is held in trust for the association on whose behalf the
transfer is made, and as security for the redemption
and pa3'ment of any circulating notes that have been or
maj' be delivered to such association. No assignment or
transfer of any such bond by the Treasurer shall be
deemed valid unless countersigned by the Comptroller
of the Currency.
REGISTRY OF TRANSFERS.
307. Sec. 5163.— The Comptroller of the Currency shall jgef l^\ol:
keep in his office a book in which he shall cause to be sees. ' 19-20 ; 13
entered, immediately upon countersigning it, every ^^^ ^■' ■^®^"
transfer or assignment by the Treasurer of any bonds
belonging to a national banking association, presented
for his signature. He shall state in such entry the name
of the association from whose accounts the transfer is
made, the name of the party to whom it is made, and
the par value of the bonds transferred.
NOTICE OF TRANSFER TO BE GIVEN TO ASSOCIATION
INTERESTED.
308. Sec. 5164.— The Comptroller of the Currency shall, jgf «* June ^3.
immediately upon countersigning and entering any trans- sec. ' 19 ; li
fer or assignment by the Treasurer, of any bonds belong- ^ • • **•
ing to a national banking association, advise by mail the
association from whose accounts the transfer is made, of
the kind and numerical designation of the bonds, and the
amount thereof so transferred.
EXAMINATION OF REGISTRY AND BONDS.
309. Sec. 5165.— The Comptroller of the Currency shall ^^Act June^jS,
have at all times, during office hours, access to the books sec. ' 20": v.l
of the Treasurer of tbe United States for the purpose of ^^**' ^' •^^^*
ascertaining the correctness of any transfer or assignment
of the bonds deposited by an association, presented to the
Comptroller to countersign; and the Treasurer shall have
the like access to the book mentioned in section fifty-one
hundred and sixty-three, during office hours, to ascertair
the correctness of the entries in the same; and the Comp^
troller shall also at all times have access to the bonds on
deposit with the Treasurer, to ascertain their amount and
condition.
ANNUAL EXAMINATION OF BONDS BY ASSOCIATION.
310. Sec. 5166. — Every association having bonds depos- Act Juno 3,
ited in the office of the Treasurer of the United States ^^^,?^' 25: ^^n
shall, once or oftener in each fiscal year, examine and stat. l., iog.
compare the bonds pledged by the association with the
books of the Comptroller of the Currency and with the
54 OBTAINING AND ISSUING CIRCULATING NOTES.
accounts of the association, and, if they are found correct,
to execute to the Treasurer a certificate setting forth the
different kinds and the amounts thereof, and that the
same are in the possession and custod}^ of the Treasurer
at the date of the certificate. Such examination shall be
made at such time or times, during the ordinary business
hours, as the Treasurer and the Comptroller, respectively,
may select, and may be made by an officer or agent of
such association, duly appointed in writing for that pur-
pose; and his certificate before mentioned shall be of
like force and validity as if executed by the president or
cashier. A duplicate of such certificate, signed by the
Treasurer, shall be retained by the association.
GENERAL PROVISIONS RESPECTING BONDS.
Act June 3, 311. Sec. 5167. — The bonds transferred to and deposited
sec^^' 26: ^^i1^ ^vith the Treasurer of the United States, by any asso-
btat. L., io7. ciution, for the security of its circulating notes, shall be
held exclusively for that purpose, until such notes are
redeemed, except as provided in this title. The Comp-
troller of the Currency shall give to any such association
powers of attorney to receive and appropriate to its own
use the interest on the bonds which it has so transferred
to the Treasurer; but such powers shall become inopera-
tive whenever such association fails to redeem its circu-
lating notes. Whenever the market or cash value of any
bonds thus deposited with the Treasurer is reduced below
the amount of the circulation issued for the same, the
Comptroller may demand and receive the amount of such
depreciation in other United States bonds at cash value,
or in money, from the association, to be deposited with
the Treasurer as long as such depreciation continues.
And the Comptroller, upon the terms prescribed by the
Secretary of the Treasury, may permit an exchange to be
made of any of the bonds deposited with the Treasurer
by any association, for other bonds of the United States
authorized to be received as security for circulating notes,
if he is of opinion that such an exchange can be made
without prejudice to the United States; and he may
direct the return of any bonds to the association which
transferred the same, in sums of not less than one thou-
sand dollars, upon the surrender to him and the cancella-
tion of a proportionate amount of such circulating notes:
Provided, That the remaining bonds which shall have
been transferred by the association offering to surrender
circulating notes are equal to the amount required for the
circulating notes not surrendered bj' such association, and
that the amount of bonds in the hands of the Treasurer is
not diminished below the amount required to be kept on
deposit Avith him, and that there has been no failure by
the association to redeem its circulating notes, nor any
other violation by it of the provisions of this title, and
OBTAINING AND ISSUING CIRCULATING NOTES. 65
that the market or cash value of the remaining bonds is
not below the amount required for the circulation issued
for the same.
Note. — All provisions of law requiring national Danking asso-
ciations to maintain a minimum deposit of bonds were repealed by
the act of June 21, 1917. See paragraph 302, ante.
WITHDRAWAL OF CIRCULATING NOTES ON DEPOSIT OF
LAWFUL MONEY AND WITHDRAWAL OF BONDS. ACT
JUNE 20, 1874.
312. Sec. 4. — That any association organized under this ^ct June 20,
act, or any of the acts of "vvhich this is an amendment, sec. 4 : is stat!
desiring to withdraw its circulating notes, in whole or in ^" ^^^'
part, may, upon the dep£>sit of lawful money with the
Treasurer of the United States in sums of not less than
nine thousand dollars, take up the bonds which said asso-
ciation has on deposit with the Treasurer for the security
of such circulating notes; which bonds shall be assigned
to the bank in the manner specified in the nineteenth sec-
tion of the national-bank act ; and the outstanding notes
of said association, to an amount equal to the legal-tender
notes deposited, shall be redeemed at the Treasury of the
United States, and destroyed as now provided by law:
Provided., That the amount of the bonds on deposit for
circulation shall not be reduced below fifty thousand
dollars.
Note. — Other sections of this act referred to under paragraphs
401 and 402, post. Section 19 of the national-bank act is incor-
porated in Revised Statutes, sections 5162-5164. See also note
■under section 5160, paragraph 304, ante.
AMOUNT OF BONDS REQUIRED TO BE ON DEPOSIT: RE-
DUCTION OF A3I0UNT OR RETIREMENT IN FULL OP
CIRCULATING NOTES. ACT JULY 12, 1882.
313. Sec. 8. — That national banks now organized {or Act July 12.
herafter organized) , having a capital of one hundred l^p^ . ^2 g'ta?
and fifty thousand dollars, or less, shall not be required l., 164."
to keep on deposit or deposit with the Treasurer of the
United States United States bonds in excess of one-
fourth of their capital stock as security for their circu-
lating notes; but such banks sliall keep on deposit or
deposit with the Treasurer of the United States the
amount of bonds as herein required. And such of those
banks having on deposit bonds in excess of that amount
are autliorized to reduce their circulation by the deposit
of lawful money as provided by law ; [provided That the
amount of such circulating notes shall not in any case
exceed ninety per centum of the par value of the bonds
deposited as herein provided:'] Provided furth^r^ That
the national banks which shall hereafter make deposits
of lawful money for the retirement in full of their circu-
lation shall at the time of their deposit be assessed for
the cost of transporting and redeeming their notes then
outstanding, a sum equal to tht; average cost of the re-
56 OBTAINING AND ISSUING CIRCULATING NOTES.
demption of national-bank notes during the preceding
3'ear, and shall thereupon pay such assessment. And
all national banks which have heretofore made or shall
hereafter make deposits of lawful money for the reduc-
tion of their circulation shall be assessed and shall pay
an assessment in the manner specified in section three of
the act approved June 20, 1874, for the cost of transport-
ing and redeeming their notes redeemed from such de-
posits subsequently to June 30, 1881.
Note. — The limitation of the circulation not to exceed ninety
per cent of the bonds deposited is superseded by act March 14,
1900, which follows Revised Statutes 5171. For act .Tune 20, 1874,
section 3, mentioned in this section, see paragraph 414, post.
All provisions of law requiring national banking associations to
maintain a minimum deposit of bonds were repealed by the act of
June 21, 1917, paragraph 302, ante.
LIMITATION ON WITHDRAWAL OF BONDS— CONSENT OP
C03IPTR0LLER OF CURRENCY AND SECRETARY OF THE
TREASURY NECESSARY.
1882* ^c"'^29o' ^^^- ^^°- ^- — That any national banking association
Bee. 9 ; 22 Stat now Organized, or hereafter organized, desiring to with-
'Act Mar. 4, clraw its circulating notes, upon a deposit of lawful
34*^^ ^tat.'^' L'^^oney with the Treasurer of the United States, as pro-
1290. * ■' vided in section four of the act of June twentieth, eigh-
teen hundred and seventy-four, or as provided in this
act, is authorized to deposit lawful money and, with the
consent of the Comptroller of the Currency and the
approval of the Secretary of the Treasury, withdraw a
proportionate amount of the bonds held as security for
its circulating notes in the order of such deposits: Pro-
vided, That not more than nine millions of dollars of
lawful money shall be deposited during any calendar
month for this purpose : A?id provided further, That the
provisions of this section shall not apply to bonds called
for redemption by the Secretary of the Treasury, nor to
withdrawal of circulating notes in consequence thereof.
REFUNDING OF BONDS UNDER THE FEDERAL RESERYE
ACT; RETIREMENT OF CIRCULATING NOTES.
lots*' s^c*^' 1^8^' ^^^* ^^^' ^^" — -^f ter two years from the passage of this
38 Stat.' L.', act, and at any time during a period of twenty years
thereafter, any member bank desiring to retire the whole
or any part of its circulating notes, may file with the
Treasurer of thf» United States an application to sell for
its account, at par and accrued interest. United States
bonds securing circulation to be retired.
PURCHASE OF UNITED STATES BONDS BY FEDERAL
RESERYE BANKS.
j^Act Dec. 23, 316. The Treasurer shall, at the end of each quarterly
38 "'st'at.' L.; period, furnish the Federal Reserve Board with a list of
^^^" such applications, and the Federal Reserve Board may,
in its discretion, require the Federal reserve banks to pur-
chase such bonds from the banks whose applications have
OBTAINING AND ISSUING CIRCULATING NOTES. 57
been filed with the Treasurer at least ten days before the
end of any quarterly period at which the Federal Reserve
Board may direct the purchase to be made: Provided^
That Federal reserve banks shall not be permitted to pur-
chase an amount to exceed $25,000,000 of such bonds in
any one j^ear, and which amovmt shall include bonds ac-
quired under section four of this act by the Federal
reserve bank.
Provided further^ That the Federal Reserve Board
shall allot to each Federal reserve bank such proportion
of such bonds as the capital and surplus of such bank
shall bear to the aggregate capital and surplus of all the
Federal reserve banks.
Upon notice from the Treasurer of the amount of bonds
so sold for its account, each member bank shall duly
assign and transfer, in writing, such bonds to the Federal
reserve bank purchasing the same, and such Federal re-
serve bank shall, thereupon, deposit lawful money with
the Treasurer of the United States for the purchase price
of such bonds, and the Treasurer shall pay to the member
banks selling such bonds any balance due after deducting
a sufficient sum to redeem its outstanding notes secured
by such bonds, which notes shall be canceled and perma-
nently retired when redeemed.
ISSUE OF CIECULATING NOTES TO FEDEKAL KESERYE
BANKS ON SECURITY OF UNITED STATES BONDS;
CIRCULATING NOTES SO ISSUED OBLIGATIONS OF
FEDERAL RESERYE BANK.
317. The Federal reserve banks purchasing such bonds Act Dec. 23.
shall be permitted to take out an amount of circulating 3s 'sut.' L.i
notes equal to the par value of such bonds. ^69.
Upon the deposit with the Treasurer of the United
States of bonds so purchased, or any bonds with the cir-
culating privilege acquired under section four of this act,
any Federal reserve bank making such deposit in the
manner provided by existing law, shall be entitled to
receive from the Comptroller of the Currency circulating
notes in blank, registered and countersigned as provided
by law, equal in amoimt to the par value of the bonds so
deposited. Such notes shall be the obligations of thp
Federal reserve bank procuring the same, and shall be in
form prescribed by the Secretary of the Treasury, and to
the same tenor and effect as national bank notes now pro-
vided by law. They shall be issued and redeemed under
the same terms and conditions as national bank notes,
except that tliey shall not be limited to the amount of the
capital stock of the Federal reserve bank issuing them.
ISSUE OF TREASURY GOLD NOTES OF THE UNITED
STATES IN EXCHANGE FOR CERTAIN UNITED STATES
BONDS.
318. Upon application of any Federal reserve bank, ap- Act Dec. 23,
proved by the Federal Reserve Board, the Secretary ofsl^^suT ^l.!
the Treasury may issue, in exchange for United States ^69.
58 OBTAINING AND ISSUING CIRCULATING NOTES.
two per centum gold bonds bearing the circulation privi-
lege, but against which no circulation is outstanding, one-
year gold notes of the United States without the circula-
tion privilege, to an amount not to exceed one-half of
the two per centum bonds so tendered for exchange, and
thirty-year three per centum gold bonds without the cir-
culation privilege for the remainder of the two per cen-
tum bonds so tendered : Provided, That at the time of
such exchange the Federal reserve bank obtaining such
one-year gold notes shall enter into an obligation with
the Secretary of the Treasury binding itself to purchase
from the United States for gold at the maturity of such
one-year notes, an amount equal to those delivered in ex-
change for such bonds, if so requested by the Secretary,
and at each maturity of one-year notes so purchased by
such Federal reserve bank, to purchase from the United
States such an amount of one-year notes as the Secretary
may tender to such bank, not to exceed the amount issued
to such bank in the first instance, in exchange for the
two per centum United States gold bonds; said obliga-
tion to purchase at maturity such notes shall continue
in force for a period not to exceed thirty years.
For the purpose of making the exchange herein pro-
vided for, the Secretary of the Treasury is authorized
to issue at par Treasury notes in coupon or registered
form as he may prescribe in denominations of one hun-
dred dollars, or any multiple thereof, bearing interest
at the rate of three per centum per annum, payable
quartcrh', such Treasury notes to be payable not more
than one year from the date of their issue in gold coin of
the present standard value, and to be exempt as to prin-
cipal and interest from the payment of all taxes and
duties of the United States except as provided by this
act, as well as from taxes in any form by or under State,
municipal, or local authorities. And for the same pur-
pose, the Secretary is authorized and empowered to issue
United States gold bonds at par, bearing three per centum
interest payable thirty years from date of issue, such
bonds to be of the same general tenor and effect and to be
issued under the same general terms and conditions as
the United States three per centum bonds without the
circulation privilege now issued and outstanding.
Upon application of any Federal reserve bank, ap-
proved by the Federal Reserve Board, the Secretary may
issue at par such three per centum bonds in exchange for
the one-year gold notes herein provided for.
Act Tune .3 COMPTROLLER TO DETERMINE IF ASSOCIATION CAN
1864, c. iog! commence business.
eec. 17 ; 13
Biat. L., 104. gj^g g^^ 5168. — Whenever a certificate is transmitted
to the Comptroller of the Currency, as provided in this
title, and the association transmitting the same notifies
the Comptroller that at least fifty per centum of its capi-
OBTAINING AND ISSUING CIRCULATING NOTES. 59
tal stock has been duly paid in, and that siu-h association
has complied with all the provisions of this title required
to be complied with before an association shall be author-
ized to commence the business of banking, the Comp-
troller shall examine into the condition of such associa-
tion, ascertain especially the amount of money paid in on
account of its capital, the name and place of residence of
each of its directors, and the amount of the capital stock
of which each is the owner in good faith, and generally
whether such association has complied with all the pro-
visions of this title required to entitle it to engage in
the business of banking; and shall cause to be made and
attested by the oaths of a majority of the directors, and
by the president or cashier of the association, a statement
of all the facts necessary to enable the Comptroller to
determine whether the association is lawfully entitled to
commence the business of banking.
CERTIFICATE OF AUTHORITY TO COMMENCE BANKING
TO BE ISSUED.
320. Sec. 5169.— If, upon a careful examination of the Act June 3.
facts so reported, and of any other facts which may come s^^cls^'io^iy 1*^1^^
to the knowledge of the Comptroller, whether by means of ^tat. l., 102,
a special commisison appointed by him for the purpose of
inquiring into the condition of such association, or other-
wise, it appears that such association is lawfully entitled
to commence the business of banking, the Comptroller
shall give to such association a certificate, under his hand
and official seal, that such association has comi^lied with
all the provisions required to be complied with before
commencing the business of banking, and that such asso-
ciation is authorized to commence such business. But the
Comptroller may withhold from an association his cer-
tificate authorizing the commencement of business, when-
ever he has reason to suppose that the shareholders have
formed the same for any other than the legitimate ob-
jects contemplated by this title.
PUBLICATION OF CERTIFICATE.
321. Sec. 5170. — The association shall cause the certifi- Act Jnno .3,
cate issued under the preceding section to be published ingf^^^' i%. '"/^j
some ncAvspaper printed in the city or county where thestat. l., 104.
association is located, for at least sixty days next after
the issuing thereof; or, if no newspaper is published in
such city or county, then in the newspaper published
nearest thereto.
322. Sec. 5171.—
This section was originally section 21 of the act of .Tune 3, 1804. •
It was amended by the act of Marcli 3. ISl!;"). and was later in-
corporated in the Revised Statutes as section 5171. This section
GU OBTAINING AND ISSUING CIRCULATING NOTES.
was repealed by the act of July 12, 1882, and the repealing section
was superseded by section 12 of the act of March 14, 1900, which
follows :
DELIVERY OF CIRCULATING NOTES. ACT OF MARCH 14,
1900. AS AMENDED OCTOBER 5, 1917.
Act Mar. 14, 323. Scc. 12. — That upon the deposit with the Treasurer
i^^^sf 'stat.^i!!', o^ ^^^® United States, by any national banlving association,
1^: act Oct. 5,' of any bonds of the United States in the manner provided
be existing hxw, such association shall be entitled to re-
ceive from the Comptroller of the Currency circulating
notes in blank, registered and countersigned as provided
by law, equal in amount to the par value of the bonds so
deposited; and any national banking associations now
having bonds on deposit for the security of circulating
notes, and upon Avhich an amount of circulating notes has
been issued less than the par value of the bonds, shall be
entitled, upon due application to the Comptroller of the
Currency, to receive additional circulating notes in blank
to an amount which will increase the circulating notes
held by such association to the par value of the bonds
deposited, such additional notes to be held and treated
in the same way as circulating notes of national banking
associations heretofore issued, and subject to all the pro-
visions of law affecting such notes: Provided^ That
nothing herein contained shall be construed to modify or
repeal the provision of section fifty-one hundred and
sixty-seven of the Revised Statutes of the United States,
authorizing the Comptroller of the Carrency to require
additional deposits of bonds or of lawful money in case
the market value of the bonds held to secure the circulat-
ing notes shall fall below the par value of the circulat-
ing notes outstanding for which such bonds may be de-
posited as security : And provided furthei\ That the cir-
culating notes furnished to national banking associations
under the provisions of this act shall be of the denomina-
tions prescribed by law : And provided further^ That the
total amount of such notes issued to any such associa-
tion may equal at any time but shall not exceed the
amount at such time of its capital stock actually paid in :
And provided further^ That under regulations to be
prescribed by the Secretary of the Treasury any national
banking association may substitute the two per centum
bonds issued under the provisions of this act for any of
the bonds deposited with the Treasurer to secure circula-
tion or to secure deposits of public money ; and so much
of an act entitled " An act to enable national banking
associations to extend their corporate existence, and
for other purposes," approved July twelfth, eighteen
hundred and eighty-tw^o, as prohibits any national bank
which makes any deposit of lawful money in order to
withdraw its circulating notes from receiving any in-
crease of its circulation for the period of six months
from the time it made such deposit of lawful money for
OBTAINING AND ISSUING CTKCULATING NOTES. 61
the purpose aforesaid, is hereby repealed, and all other
acts or parts of acts inconsistent with the provisions of
this section are hereby repealed.
PRINTING DENOMINATIONS AND FORM OF THE CIRCU-
LATING NOTES.
324. Sec. 5172. — That in order to furnish suitable notes Act June 3,
for circulation, the Comptroller of the Currency shall, sec. ' 22; ^ li
under the direction of the Secretary of the Treasury, ^*A*ct^Mir^.^'3,
cause plates and dies to be enaraved, in the best manner i^i^-
to guard against counterfeiting and fraudulent altera-
tions, and shall have printed therefrom and numbered
such quantity of circulating notes in blank, or bearing
engraved signatures of officers as herein provided, of the
denominations of $1, $2, $5, $10, $20, $50, $100, $500, and
$1,000, as may be required to supply the associations en-
titled to receive the same. Such notes shall express upon
their face that they are secured by United States bonds
deposited with the Treasurer of the United States, by the
yrritten or engraved signatures of the Treasurer and Reg-
ister, and by the imprint of the seal of the Treasury ; and
shall also express upon their face the promise of the as-
sociation receiving the same to pay on demand, attested
by the written or engraved signatures of the president or
vice president and cashier; and shall bear such devices
and such other statements and shall be in such form as the
Secretary of the Treasury shall, by regulation, direct.
CHARTER NUMBER TO BE PRINTED ON NOTES. ACT
JUNE 20, 1874.
325. Sec. 5. — That the Comptroller of the Currency Act June 20,
shall, under such rules and regulations as the Secretary ISS -. is i&
of the Treasury may prescribe, cause the charter numbers ^^ ^2'*-
of the association to be printed upon all national-bank
notes which may be hereafter issued by him.
Note. — Other sections of this act will be found in note under
paragraphs 401 and 402, post.
DISTINCTITE PAPER FOR PRINTING NOTES. ACT MARCH
3, 1875.
326. Sec. 1. — * * * That the national-bank notes Act Mar. 3,
shall be printed under the direction of the Secretary of Lc.^i : is itft
the Treasury, and upon the distinctive or special paper ^rV lilu'bnr'
which has been, or may hereafter be, adopted by him for
printing United States notes.
PLATES AND DIES TO BE UNDER THE CONTROL OF THE
COMPTROLLER. EXPENSES OF CURRENCY BUREVU
TO BE PAID OUT OF PROCEEDS OF TAXES, OR DUTIES,
ASSESSED AND COLLECTED ON THE CIRCULATION OF
NATIONAL BANKING ASSOCIATIONS.
327. Sec. 5173. — The plates and special dies to be pro- a^"* •^""% ^,'
cured by the Comptroller of the Currency for ihe print- soc ' 4T: d
ing of such circulating notes shall remain under his con- ^^^*- ^" ^^^-
02 OBTAINING AND ISSUING CIKCULATING NOTES.
trol and direction, and the expenses necessarily incurred
in executing the laws respecting the procuring of such
notes, and all other expenses of the Bureau of the Cur-
rency, shall be paid out of the proceeds of the taxes or
duties assessed and collected on the circulation of national
banking associations under this title.
Note. — See act June 20, 1874, paragraph 414, post, and act July
12, 1882, paragraph 220, ante, requiring banks to pay cost of their
plates. On April 30, 1914, at the request of the Comptroller of the
Currency, the Secretary of the Treasury designated the Director
of Bureau of Engraving and Printing as custodian of the dies,
rolls, and plates, etc., used for the printing of circulating notes of
the Federal reserve and national banks.
EXAMINATION OF PLATES AND DIES.
.\ct Mar. 3. 328. Sec. 5174 [as amended 1877]. — The Comptroller of
l^c."\ ; 17 s"ta.l' the Currency shall cause to be examined, each year, the
''■\ct^^E^eb 27 pl^^es, dics, bed pieces, and other material from which the
1 STT, c. 69j 19 national-bank circulation is printed, in whole or in part,
Stat. L., 2o2. ^^^ gj^ ^^ l^^g office annually a correct list of the same.
Such material as shall have been used in the printing of
the notes of associations which are in liquidation, or have
closed business, shall be destroyed, under such regulations
as shall be prescribed by the Comptroller of the Currency
and approved by the Secretary of the Treasury. The ex-
penses of any such examination or destruction shall be
paid out of any appropriation made b}^ Congress for the
special examination of national banks and bank-note
plates.
LIMIT TO ISSUE OF NOTES UNDER FIVE DOLLARS.
.Act Oct. 5, 329. Sec. 3. That from and after the passage of this
'*^^^* Act any national banking association, upon compliance
with the provisions of law applicable thereto, shall be en-
titled to receive from the Comptroller of the Currency,
or to issue or reissue, or place in circulation notes in
denominations of $1, $2, $.5, $10, $20, $50, and $100 in
such proportion as to each of said denominations as the
bank may elect: Provided^ however^ That no bank shall
receive or have in circulation at any one time more than
$25,000 in notes of the denominations of $1 and $2.
Note.— Section 5175, Revised Statutes, providing that not more
than one-sixth part of the notes furnished to any association
should be of a less denomination than .$5 was repealed by section
2 of the act of October 5, 1917. Section 5172, Revised Statutes,
as amended March 3. 1919, authorizes the issuance of notes of the
denomination of $500 and $1,000.
330. Sec. 5176.—
Repealed by act July 12, 1882, which in turn was superseded by
act March 14, 1900. (See section 5171.)
331. Sec. 5177.—
Repealed by act .lanuary 14, 1875.
OBTAINING AND ISSUING CIRCULATING NOTES. 63
AGGREGATE AMOUNT OF CIRCULATING NOTES NOT LIM-
ITED. ACT JANUARY 14, 1875.
332. Sec. 3.— That section 5177 of the Revised Statutes, ^Act^jan.^H.
of the United States, limiting the aggregate amount of ;;: ^8 stat. L.i
circulating notes of national banking associations, be and "
is hereby, repealed ; and each existing banking association
may increase its circulating notes in accordance with ex-
existing law without respect to said aggregate limit; and
new banking associations may be organized in accord-
ance with existing law without respect to said aggregate
limit; and the provisions of law for the withdrawal and
redistribution of national bank currency among the sev-
eral States and Territories are hereby repealed.
333. Sec. 5178.—
Repealed by act January 14, 1875.
334. Sec. 5179.—
Repealed by act January 14, 1875.
335. Sec. 5180.—
Repealed by act January 14, 1875.
336. Sec. 5181.—
Repealed by act January 14, 1875.
FOR WHAT DEMANDS NATIONAL-BANK NOTES MAY BE
RECEIYED.
337. Sec. 5182 [as amended 1919].— Any association re- ^g^^f ^ -^^^ ^^^
ceiving circulating notes under this title may, if its prom-
ise to pay such notes on demand is expressed thereon at-
tested by the written or engraved signatures of the presi-
dent or vice president and the cashier thereof in such
manner as to make them obligatory promissory notes pay-
able on demand at its place of business, issue, and circu-
late the same as money. Such written or engraved signa-
tures of the president or vice president and the cashier of
such association may be attached to such notes either be-
fore or after the receipt of such notes by such association.
And such notes shall be received at par in all parts of the
United States in payment of taxes, excises, public lands,
and all other dues to the United States, except duties on
imports ; and also for all salaries and other debts and de-
mands owing by the United States to individuals, cor-
porations, and associations within the United States, ex-
cept interest on the public debt, and in redemption of the
national currency.
ISSUE OF POST NOTES, ETC., PROHIBITED.
338. Sec. 5183 [as amended 1875].— No national banking jswf J'^'no.!
association shall issue post notes or any other notes to|<|^^j j-^j,,,.^-^
circulate as monev than such as are authorized by the Act 'fcu. 'is
provisions of this" Title. y^^; /;;;T:ji./*'
64 OBTAINING AND ISSUING CIRCULATING NOTES.
DESTROYING AND REPLACING WORN-OUT AND MUTI-
LATED NOTES.
ififtf* *^"°®i J' 339. Sec. 5184.— It shall be the duty of the Comptroller
1864, c. 106. J. ,, ^ , • •', .-1 i 1 •
sec. 24; 13 01 the Currency to receive worn-out or mutilated cir-
stat. L., 106. cuiating notes issued by any banking association, and
also, on due proof of the destruction of any such circulat-
ing notes, to deliver in place thereof to the association
other blank circulating notes to an equal amount. Such
"worn-out or mutilated notes, after a memorandum has
been entered in the proper books, in accordance with such
regulations as may be established by the Comptroller, as
well as all circulating notes which shall have been paid or
surrendered to be canceled [^shall he humed to ashes'] in
presence of four persons, one to be appointed by the Sec-
retary of the Treasury, one by the Comptroller of the
Currency, one by the Treasurer of the United States, and
one by the association, under such regulations as the Sec-
retary of the Treasury may prescribe. A certificate of
l^such burning'] signed by the parties so appointed, shall
be made in the books of the Comptroller, and a duplicate
thei-eof forwarded to the association whose notes are thus
canceled.
Note.— Act June 23, 1874, provides for maceration in place of
burning.
MACERATION OF NATIONAL-BANK NOTES. ACT JUNE
23, 1874.
sund?^d'vu a**^ ^^^' * * * For the maceration of national bank
propriation act notes * * * • an(j that all such issues hereafter de-
c." 455",^sec^^i ; stroyed may be destroyed by maceration instead of burn-
18 Stat. L , 206. j^g to ashcs, as now provided by law; and that so much
of sections twenty-four and forty-three of the national
currency act as requires national bank notes to be burned
to ashes is hereby repealed ; that the pulp from such mac-
erated issue shall be disposed of only under the direction
of the Secretary of the Treasury.
ORGANIZATION OF ASSOCIATIONS TO ISSUE GOLD
NOTES.
1870* '^c"'''282: 341. Sec. 5185 [as amended 1875].— Associations may be
sec.^^ ; 16 Stat! organized in the manner prescribed by this Title for the
"A-ct Jan. 19, purpose of issuing notes payable in gold ; and upon the
18^^'stat. ■^L ! deposit of any United States bonds bearing interest pay-
302. able in gold with the Treasurer of the United States, in
the manner prescribed for other associations, it shall be
lawful for the Comptroller of the Currency to issue to
the association making the deposit circulating notes of
different denominations, but none of thein less than
five dollars, and not exceeding in amount eighty per
centum of the par value of the bonds deposited, which
shall express the promise of the association to pay them,
upon presentation at the ofTicc at which they arc issued, in
gold coin of the United States, and shall be so redeemable.
OBTAINING AND ISSUING CIRCULATING NOTES. 65
[But no such association shall have a circulation of more
than one million of dollars.)
Note. — The limitation of circulation of banking associations is-
suing notes payable in gold was repealed by the act of January
19, 1875.
RESERYE REQUIREMENTS FOR GOLD BANKS.
342. Sec. 5186. — Every a&sociation organized under the^g^^* "^c"'^282'
preceding section shall at all times keep on hand not less sees.' 3-5; le
than twenty-five per centum of its outstanding circula- 253!' ^" ^^^'
tion, in gold or silver coin of the United States; and shall
receive at par in the payment of debts the gold notes of
every other such association which at the time of such
payment is redeeming its circulating notes in gold coin
of the United States, and shall be subject to all the pro-
visions of this Title: Provided., That, in applying the
same to associations organized for issuing gold notes, the
terms " lawful money " and " lawful money of the United
States " shall be construed to mean gold or silver coin of
the United States ; and the circulation of such association
shall not be wathin the limitation of circulation men-
tioned in this Title.
CONVERSION OF NATIONAL GOLD BANKS INTO CUR-
RENCY BANKS. ACT FEBRUARY 14, 1880.
343. That any national gold bank organized under the Act Feb. 14.
provisions of the laws of the United States, may, in the yf|^' ^ -^^ ^^
manner and subject to the provisions prescribed by sec-
tion fifty-one hundred and fifty-four of the Eevised Stat-
utes of the United States, for the conversion of banks in-
corporated under the laws of any State, c^ase to be a gold
bank, and become such an association as is authorized by
section fifty-one hundred and thirty-three, for carrying
on the business of banking, and shall have the same powd-
ers and privileges, and shall be subject to the same duties,
responsibilities, and rules, in all respects, as are bj' law
prescribed for such associations: Provided.^ That all
certificates of organization which shall be issued under
this act shall bear the date of the original organization of
each bank respectively as a gold bank.
PENALTY FOR ISSUING CIRCULATING NOTES TO UNAU-
THORIZED ASSOCIATIONS.
344. Sec. 5187. — No officer acting under the provisions Act June 3,
of this title shall countersign or deliver to any associa- g^^^' 27 ; ^^\i
tion, or to any other company or person, any circulating ^'at- l., 107.
notes contemplated by this title, except in accordance
with the true intent and meaning of its provisions.
Every officer who violates this section shall be deemed
guilty of a high misdemeanor, and shall be fined not more
than double the amount so countersigned and delivered,
and imprisoned not less than one year and not more than
fifteen years.
164312°— 20 5
66 OBTAINING AND ISSUING CIRCULATING NOTES.
PENALTY FOR IMITATING BANK CIRCULATION. USE OF
SAME FOR ADYERTISING PURPOSES.
Act Mar 4, 345, Sec. 5188. — Superseded by section 175 of the act
1909, c. 321, <; Tvr 1 , -1 ann
sec. 175 ; 35 01 March 4, 1909.
^^his^'sectfon SECTION 175. It shall not be lawful to design, engrave,
originally en ])rint, OF in any manner make or execute, or to utter,
acted Feb. o, f Tj.-ii.-ij. u-
1867. issue, distribute, circulate, or use any business or pro-
fessional card, notice, placard, circular, hand-bill, or ad-
vertisement in the likeness or similitude of any circulat-
ing note or other obligation or security of any banking
association organized or acting under the laws of the
United States which has been or may be issued under
any act of Congress, or to write, print, or otherwise
impress upon any such note, obligation, or security, any
business or professional card, notice or advertisement, or
any notice or advertisement of any matter or thing what-
ever. Whoever shall violate any provision of this sec-
tion shall be fined not more than one hundred dollars,
or imprisoned not more than six months, or both.
PENALTY FOR MUTILATING CIRCULATION.
1909* ^'""bi" ^^^- ^^^- 5189.— Superseded by section 176 of the act
Bee. ' 176 ; 3^ of March 4, 1909.
^^Tiii^'sectfo^n Section 176. Whocver shall mutilate, cut, deface, dis-
Tnacte^d'^' juni ^S^^i'^5 or perforate with holes, or unite or cement to-
3, 1864. gether, or do any other thing to any bank bill, draft,
note, or other evidence of debt, issued by any national
banking association, or shall cause or procure, the same
to be done, with intent to render such bank oill, draft,
note, or other evidence of debt unfit to be reissued by
said association, shall be fined not more than one hundred
dollars, or imprisoned not more than six months, or both.
REGULATION OF THE BANKING BUSINESS.
fi7
CHAPTER IV.
REGULATION OF THE BANKING BUSINESS.
400. 5190. Place of business.
401. Central reserve cities. — Explana-
tory note.
402. Reserve cities. — Explanatory note.
403. Act Dec. 23, 1913, as amended.
Demand and time depos-
its defined.
404. Act Dec. 23, 1913, as amended.
Reserve requirements —
when effective.
405. Act Dec. 23, 1913, as amended.
Reserve requirements for
banks not in reserve cities.
406. Act Dec. 23, 1913, as amended.
Reserve requirements for
banks in reserve cities.
407. Act Dec. 23, 1913, as amended.
Reserve requirements for
banks in central reserve
cities.
408. Act Dec. 23, 1913, as amended.
Member bank forbidden to
keep on deposit with non-
member bank a sum in
excess of 10 per cent of its
own capital and surplus
or to secure discounts for
nonmember bank.
409. Act Dec. 23, 1913, as amended.
Withdrawal of reserve by
member bank.
410. Act Dec. 23, 1913, as amended.
Reserve requirements —
how estimated.
411. Act Dec. 23, 1913, as amended.
Reserve requirements for
national banks located in
Alaska or outside the con-
tinental United States.
412. Act December 23, 1913. Redemp-
tion fund not counted as
reserve.
413. No reserve required to be held
again.st United States do
posits.
414. Act June 20, 1874. Provisions for
redeeming circulation.
Five per cent redemption
fund.
415. Act March 3, 1875. Clerical force
for redemption of circu-
lating notes.
416. Act July 14, 1890. Disposition of
redemption account.
417. Act July 28, 1892. Redemption of
lost or stolen notes and of
notes not properly signed.
418. 5193. Repealed by act March 14,
1900.
419. 5194. Superseded by repeal of sec-
tion 5193.
420. 5195. Place for redemption of cir-
culating notes to be desig-
nated.
421. 5196. National banks to take notes
of other national banks
at par.
422. 5197. Limitation upon rate of in-
terest which may be
taken.
423. 5198. Penalty for taking unlawful
interest. Jurisdiction of
suits by or against na-
tional banks.
424. 5199. Dividends.
425. 5200. Limitation of liabilities
which may be incurred by
any one person, company,
etc.
426. 5201. Associations must not loan
on or purcha.se their own
stock.
427.
428.
429.
5202.
5203.
5204.
5206.
5207.
Restriction on bank's in-
debtedness.
Restriction upon use of cir-
culating notes.
Prohibition upon w i t h-
drawal of capital. Un-
earned dividends pro-
hibited.
430. 5205. Assessment for failure to
pay up capital stock or for
impairment of capital.
Prohibition against uncur-
rent notes.
United States notes not to
be held as collateral.
Act July 12, 1882. Issue of gold
certificates.
520S. Penalty for faLsely certify-
ing checks.
Act July 12, 1882. Punishment
for falsely certifying
checks.
Penalty for embezzlement,
abstraction, willful mis-
application, false entries,
etc.
437. Act January 26, 1907. National
banks not permitted to
make contributions in con-
nection with election to
political office.
69
431
432,
433,
434,
435.
430. 5209.
70
REGULATION OF THE BANKIXG BUSINESS.
438a. Member bank can not make loan
or grant a gratuity to any
national bank examiner.
438b. National bank examiner can not
perform any services for
compensation for any
bank or officer. Exam-
iner can not disclose the
names of borrowers or
collateral without first ob-
taining written consent of
Comptroller.
438c. Penalty for officer, director, or
employee of member bank
who receives any commis-
sion or gift in connection
with any loan.
438d. Purchase of securities or prop-
erty from one of its di-
rectors, or sales to a di-
rector by a member bank.
438e. Rate of interest paid directors,
officers, or employees not
to exceed that paid to
other depositors.
PLACE OF BUSINESS.
438f. Penalty for violation of any of
the provisions of section
22 of the Federal reserve
act.
439. .5210. List of shareholders.
440. 5211. Reports to Comptroller of
Currency.
441. Act February 26, ISSl. Verifica-
tion of reports.
442. 5212. Report of dividends.
443. 5213. Penalty for failure to make
reports.
444.^45. 5214 and act March 14. 1900.
Taxes on circulation pay-
able to the United States.
446. 5215. Half-yearly return of circu-
lation.
447. 5216. Penalty for failure to make
return.
448. 5217. Enforcing tax on circula-
tion.
449. 5218. Refunding excess tax.
450. Act March 1. 1879. No tax to be
paid by insolvent banks.
451. 5219. State taxation.
400. Sec. 5190. — The usual business of each
1864* c"°%6'^^^^^^^ association shall be transacted at an
sec. 8 ; 13 Stat! banking house located in the place specified in its organi
L., 101. zation certificate.
national
office
or
Note. — See act May 1, 1886, paragraph 211, ante, in reference
to change in place of business. For authority of national bank to
establish branches in foreign countries or dependencies of the
United States, see section 25, Federal reserve act.
CENTRAL EESERYE CITIES— EXPLANATORY NOTE.
401. [Each association organized in any of the cities
^ojg^P^^"**'^'"^ named in section 5191. United States Revised Statutes,
was authorized by section 5195, United States Revised
Statutes, to select, sub]ect to the approval of the Comp-
troller of the Currency, an association in the citv of
NeAv York where it might keep one-half of its lawful
money reserve. This section originally provided for the
redemption of circuhiting notes at such selected bank in
that city, but all provisions other than that authorizing
the keeping of a portion of the reserve with such bank
were repealed by the act of June 20, 1874. Since the
passage of the act of June 21, 1917, however, a member
bank can not count any l)alances as reserve except those
due from the Federal reserve bank of its district.
Under the provisions of section 2 of the act of March
3, 1887, whenever three-fourths in number of the na-
tional banks located in any city of the United States hav-
ing a population of 200,000 shall have made application
to the Comptroller of the Currency, asking that such
REGULATION OF THE BANKING BUSINESS. 71
city bo made a central reserve city, like the city of New
York, the Comptroller of the Currency, with the ap-
proval of the Secretary of the Treasury, was authorized
to grant such request, and under the provisions of this
section the cities of St. Louis and Chicago were desig-
nated as additional central reserve cities on March 18
and .May 2, 1887, respectively.
The Federal reserve act confers authority upon the
Federal Reserve Board to add to the number of cities
classified as central reserve cities, to reclassify existing
reserve and central reserve cities, or to terminate their
designation as such. (See section 11, paragraph E,
Federal reserve act.)]
Note. — Section 5195 and section 2 of the act of March 3, 1887,
heretofore referred to, are as follows :
" Sec. 5195. Each association organized in any of the cities
named In section fifty-one hundred and ninety-one shall select,
subject to the approval of the Comptroller of the Currency, an
association in the city of New York, at which it will redeem its
circulating notes at par, and may keep one-half of Its lawful
money reserve in cash deposits in the city of New York. But the
foregoing provision shall not apply to associations organized and
located in the city of San Francisco for the purpose of issuing
notes payable in gold. Each association not organized within the
cities named shall select, subject to the approval of the Comp-
troller, an association in either of the cities' named, at which it
will redeem its circulating notes at par. The Comptroller shall
give public notice of the names of the associations selected, at
which I'edemptions are to be made by the respective associations,
and of any change that may be made of the association at which
the notes of any association are redeemed. Whenever any asso-
ciation fails either to make the selection or to redeem its notes
as aforesaid, the Comptroller of the Currency may, upon receiving
satisfactory evidence thereof, appoint a receiver. In the manner
provided for in section fifty-two hundred and thirty-four, to wind
up its affairs. But this section shall not relieve any association
from its liability to redeem its circulating notes at its own counter,
at par, in lawful money on demand."
Section 3 of the act of June 20, 1874, amending section 5195,
Revised Statutes, provides —
"That so much of section thirty-two (section 5195, Revised
Statutes) of said national-bank act requiring or permitting the
redemption of its circulating notes elsewhere than at its own
counter, except as provided for in this section, is hereby repealed,"
Section 2, act of March 3, 18S7, provides :
" That whenever three-fourths in number of the national banks
located in any city of the United States having a population of
two hundred thousand people shall make application to' the Comp-
troller of the Currency, in writing, asking that such city may be a
central reserve city, like the city of New York, in which one-half
of the lawful-money reserve of the national banks located in other
reserve cities may be deposited, as provided in section fifty-one
hundred and ninety-five of the lievised Statutes, the Comptroller
shall have authority, with the approval of the Secretary of the
Treasury, to grant such request, and every bank located in such
city shall at all times thereafter have on hand, in lawful money
of the United States, twenty-five per centum of its deposits, as
provided in section fifty-one hundred and ninety-one of the
Revised Statutes."
72 REGULATION OF THE EANKIISTG BUSINESS.
RESERTE CITIES— EXPLANATORY NOTE.
^^Explanatory 402. [Section 5191, United States Revised Statutes,
names certain cities in which national banks located
therein were required to have on hand in lawful money
an amount equal to at least twenty-five per cent of the
aggregate amount of their deposits, and provided that
every other association should have on hand in lawful
money an amount equal to fifteen per cent of the aggre-
gate amount of its deposits. Section 5191 further provided
that the Comj)troller of the Currency, with the concur-
rence of the Secretary of the Treasury, might appoint a
receiver for any association for failure to make good any
deficiency in its reserve within thirty days after the date
when the Comptroller of the Currency has notified the
association to make good the deficiency. Section 5192,
United States Revised Statutes, provided that three-
fifths of the reserve of fifteen per cent required to be kept
by country banks might consist of balances due to such
associations from associations approved by the Comp-
troller of the Currency in one of the reserve cities men-
tioned in said section. Sinc« the passage of the act of
June 21, 1917, however, a member bank can not count any
balances as reserve except those due from the Federal
Reserve Bank of its district.
The following are the reserve cities designated in sec-
tions 5191 and 5192 :
Albany, Baltimore, Boston, Cincinnati, Chicago, Cleve-
land, Detroit, Louisville, Milwaukee, New Orleans, New
York, Philadelphia, Pittsburgh, St. Louis, San Fran-
cisco, and Washington.
In addition to the cities listed in the preceding para-
graph, the city of Leavenworth, Kansas, was named in
sections 5191 and 5192, but this designation was repealed
by special act of date March 1, 1872. The cities of
Charleston and Richmond were also named as reserve
cities in section 5192, but were not included in the list of
reserve cities enumerated in section 5191. The Comp-
troller of the Currency, therefore, did not approve any
banks in those cities as reserve agents. On April 27,
1914, however, three-fourths of the banks in Richmond
having requested that that city be designated as a reserve
city, it was so designated under authority of the act of
March 3, 1887.
TheCom]itroller of the Currency was authorized under
the act of IVfarch 3, 1887, to designate additional reserve
cities whenever three-fourths in number of national
banks located in any city of the United States having a
population of 50,000 requested that the city in question
be so designated. Tliis limit of ]iopulation was reduced
to 25,000 by the act of Miirch 3, 1903.
The city of New York listed as a reserve city in sections
6191 and 5192 was designated as a central reserve city by
section 5195, and the cities of St. Louis and Chicago
REGULATION OF THE BANKING BUSINESS. 73
named as reserve cities under sections 5191 and 5192 were
designated, on March 18 and May 2, 1887, respectively, as
central reserve cities by the Comptroller of the Currency
with the concurrence of the Secretary of the Treasury,
under the authority granted by the act of March 3, 1887.
In conformity with the provisions of the acts of March
3, 1887, and March 3, 1903, the following cities have been
designated by the Comptroller as additional reserve
cities : Atlanta, Brooklyn, Cedar Rapids, Columbus, Dal-
las, Denver, Des Moines, Dubuque, Fort Worth, Galves-
ton, Houston, Indianapolis, Kansas City (Kans.), Kansas
City (Mo.), Lincoln, Los Angeles, Minneapolis, Musko-
gee, Oklahoma City, Omaha, Portland, Pueblo, Rich-
mond, Salt Lake City, San Antonio, Savannah, Seattle,
Sioux City, South Omaha, Spokane, St. Joseph, St. Paul,
Tacoma, Topeka, Waco, Wichita. On June 26, 1915,
South Omaha was consolidated with Omaha.
TIk' Federal reserve act confers authority upon the
Federal Reserve Board to add to the number of cities
classified as reserve cities, to reclassify existing reserve
and central reserve cities, or to terminate their designa-
tion as such. (See sec. 11, paragraph E, Federal reserve
act.)
Acting under the authority of this section the Federal
Reserve Board has designated the following additional
reserve cities: Birmingham, Ala.; Charleston, S. C:
Chattanooga and Nashville, Tenn. ; Tulsa, Okla.; and
Ogden, Utah.]
Note. — Sections 5191 and 5192 have not been repealed, but the
provisions with respect to specific reserve requirements for banks
in the continental United States are superseded by section 19 of
the Federal reserve act as amended June 21, 1917, these sections,
however, remaining in full force and effect for national banks
located in Alaska or in a dependency or insular possession or any
part of the United States outside the continental United States,
provided said national banks remain nonmember banks. The sec-
tions in question are as follows, the italicized portion being super-
seded, as far as banks in the continental United States are con-
cerned, by later legislation, the remaining portions of these sec-
tions being still in force.
Sec. 5191. Every national hanking association in either of the
folloiving cities: Albany, Baltimore, Boston, Cincinnati, Chicago,
Cleveland, Detroit, Louisville, Milwaukee, New Orleans. New York,
Philadelphia, Pittshurgh, St. Louis, San Francisco, and Washing-
ton, shall at all times hare on hand, in lawful money of the
United States, an amount equal to at least ticcnty-flve per centum
of the aggregate amount of its notes in circulation and its de-
posits; and every other association shall at all times have on hand,
in lawful money of the United States, an amount cquat^to at least
fifteen per centum of the aggregate amount of its notes in circular
tion, and of its deposits.
Whenever the lawful money of any association in any of the
cities named shall be below tlie amount of tioenty-five per centum
of its circulation and deposits and whiMiovcr the lawful money
of any other association shall be (below fifteen per centum of its
circuUition o?!(Z deposits), such associations shall not Increase its
liabilities by making any new loans or discounts otherwise tliau
by dicounting or purchasing bills of exchange payable at sight,
Qor make any dividends of its profits until the required propor-
74 REGULATION OF THE BANKING BUSINESS.
tion, between the aggregate amount of its outstanding notes of
circulation and deposits and its lawful money of the United
States, has been restored. And the Comptroller of the Currency
may notify any association, whose lawful money reserve shall
be below the amount above required to be kept on hand, to make
good such reserve ; and if such association shall fail for thirty
days thereafter so to make good its reserve of lawful money, the
Comptroller may, with the concurrence of the Secretary of the
Treasury, appoint a receiver to wind up the business of the asso-
ciation, as provided in section fifty-two hundred and thirty-four.
Sec. 5192. Three-fifths of the reserve of fifteen per centum re-
quired by the preceding section to be kept, may consist of balances
due to an association, available for the redemption of its circulat-
ing notes, from associations approved by the Comptroller of the
Currency, organized tinder the act of June three, eighteen hun-
dred and sixty-four, or under this title, and doing business in
the cities of Albany, Baltimore, Boston, Charleston, Chicago, Cin-
cinnati, Cleveland, Detroit, Louisville, Milwaukee, New Orleans,
New York, Philadelphia, Pittsburgh, Richmond, St. Louis, San
Francisco, and Washington. Clearing-house certificates, repre-
senting specie or lawful money specially deposited for the purpose,
of any clearing-house association, shall also be deemed to be law-
ful money in the possession of any association belonging to such
clearing house, holding and owning such certificate, within the
preceding section.
The provisions in section 5191 requiring reserve to be held
against circulation were repealed by section 2, act of June 20,
ISl-i, ivJiich provides " that section 31 of the National Bank act
{sections 5191 and 5192 R. S.) be so amended that the several
associations therein provided for shall not hereafter be required
to keep on hand any amount of money ivhatcver, by reason of the
amount of their respective circulations ; but the moneys required
by said section to be kept at all times on hand shall be determined
by the amount of deposits in all respects, as provided for in the
said section.
Additional reserve cities (act of March 3, 1903, amending act of
March 3, 1887). — Sec. 1. That ichcnevcr three-fourths in num-
ber of the national banks located in any city of the United States
having a population of twenty-five thousand people shall make
application to the Comptroller of the Currency, in ivriting, asking
that the name of the city in tohich such banks are located shall
be added to the cities named in sections fifty-one hundred and
ninety-one and fifty-one hundred and ninety-two of the Revised
Statutes, the Comptroller shall have authority to grant such re-
quest, and every bank located in such city shall at all times there-
after have on hand, in lawful money of the United States, an
amount equal to at least twenty- five per centum of its deposits,
as provided in sections fifty-one hundred and ninety-one and fifty-
one hundred and ninety-five of the Revised Statutes.
BANK EESERVES.
DEMAND AND TIME DEPOSITS DEFINED.
Act Dec. 23, 403. Sec. 19. — Demand deposits within the meaning? of
as'^'sut.' ^L.i this act shall comprise all deposits payable within thirty
^^\ct June "i' f^^ys? ^^^ time deposits shall comprise all deposits pay-
ion, sec.^^io". ' able after thirty days, all savings accounts and certificates
of deposit which are subject to not less than thirty days'
notice before payment, and all postal savings deposits.
REGULATION OF THE BANKING BUSINESS. 75
RESERVE REQUIREMENTS. .
404. Every bank, banking association, or trust com- Act Dec 23.
pan}^ which is or which becomes a member of any Federal :^H^"'staT ^V,
reserve bank shall establish and maintain reserve bal- ^"o.^^ ^^^^ ^^'
ances with its Federal reserve bank as follows : 1917, sec. lo. '
RESERVE REQUIREMENTS FOR BANKS NOT IN RESERVE
CITIES.
405. (a) If not in a reserve or central reserve city, as ^ Act Dec. 23,
now or hereafter defined, it shall hold and maintain with ag^^'st^at' \.\
the Federal reserve bank of its district an actual net bal- -"^-^j. j^^^ 21.
ance equal to not less than seven per centum of the i9i7, sec. 10.'
aggregate amount of its demand deposits and three per
centum of its time deposits.
RESERVE REQUIREMENTS FOR BANKS IN RESERVE
CITIES.
406. (5) If in a reserve city, as now or hereafter de- Act Dec. 23.
fined, it shall hold and maintain with the Federal reserve ,^|^^'g4\^- i£;
bank of its district an actual net balance equal to not less 270.
than ten per centum of the aggregate amount of its de- igff* ts^stlt!
mand deposits and three per centum of its time deposits: ^-^^^^juue •>!
Provided, hoicever, That if located in the outlying dis- 1917, sec. 10. '
tricts of a reserve city or in territory added to such a city ^.^^^^ ^^p*' '^^'
by the extension of its corporate charter, it may, upon
the affirmative vote of five members of the Federal Re-
serve Board, hold, and maintain the reserve balances
specified in paragraph (a) hereof.
RESERVE REQUIREMENTS FOR BANKS IN CENTRAL RE-
SERVE CITIES.
407. {c) If in a central reserve city, as now or here- j^-^|t ^^^- ^^\
after defined, it shall hold and maintain with the Federal ^ stat." l.!
reserve bank of its district an actual net balance equal to "'Act Aug. 15.
not less than thirteen per centum of the aggregate amount }^^^^^||^^ ^**'*-
of its demand deposits and three per centum of its time Act .tune 21.
deposits: Provided, however, That if located in the out- ^^.Ic't fept! 26.
13'ing districts of a central reserve city or in territory i^is,
added to such city by the extension of its corporate char-
ter, it may. upon the affirmative vote of five members of
the Federal Reserve Board, hold and maintain the reserve
balances specified in paragraphs {a) or {b) thereof.
MEMBER BANK FORBIDDEN TO KEEP ON DEPOSIT WITH
NONMEMBER BANK A SUM IN EXCESS OF TEN PER
CENT OF ITS OWN CAPITAL AND SURPLUS OR TO
SECURE DISCOUNTS FOR NONMEMBER BANK.
408. Xo member bank shall keep on deposit with any j.,-^.f* ^^e^- ^^i
State bank or trust company which is not a member bank j5s 'stat l,'
a sum in excess of ten per centum of its own paid-up
76 REGULATION OF THE BAN-RING BUSINESS.
1914* 38^stat' Capital and surplus. No member bank shall act as the
L., 691. ' medium or agent of a nonmember bank in applying for or
i9i7%ec°io"^' receiving discounts from a Federal reserve bank under the
provisions of this act, except by permission of the Fed-
eral Reserve Board.
WITHDRAWAL OF EESERTE BY MEMBER BANK.
lots* ^^^' 1^9^' ^^^' "^^^ required balance carried by a member bank
38 Stat' L.', with a Federal reserve bank may, under the regulations
^^ict Aug. 15, and subject to such penalties as may be prescribed by the
if^ejji^^ st^*- Federal Reserve Board, be checked against and with-
"Act June 21. drawn by such member bank for the purpose of meeting
1917, sec. 10. existing liabilities: /^;'oy?V/ec^, however^ That no bank
shall at any time make new loans or shall pay anj^ divi-
dends unless and until the total balance required by law
is fully restored.
RESERYE REQUIREMENTS— HOW ESTIMATED.
1913,* sec?' 1^9^;' ^l^- ^^ estimating the balances required by this act
38 'stat.' L.; the net difference of amounts due to and from other banks
Act Aug. 15, shall be taken as the basis for ascertaining the deposits
if, ^6^2^^ ^*^*' against which required balances with Federal reserve
Act June 21, banks shall be determined.
1917, sec. 10.
RESERYE REQUIREMENTS FOR NATIONAL BANKS LO-
CATED IN ALASKA OR OUTSIDE THE CONTINENTAL
UNITED STATES.
19^3* J^c?' 1^9^;' ^11- National banks, or banks organized under local
38 Stat." L.', laws, locatcd in Alaska or in a dependency or insular pos-
Act Aug. 15, session or any part of the United States outside the con-
^^m^^ ^*'^*- tinental United States may remain nonmember banks,
Act Jun^ 21. and shall in that event maintain reserves and comply with
all the conditions now provided by law regulating them ;
or said banks may, with the consent of the Reserve Board,
become member banks of anv one of the reserve districts,
and shall in that event take stock, maintain reserves, and
be subject to all the other provisions of this act.
REDEMPTION FUND NOT COUNTED AS RESERYE.
Act Dec. 23, 412. Sec. 20. — So much of sections two and three of the
38 'stat.' "l.', act of June twentieth, eighteen hundred and seventy-
^'^^' four, entitled "An act fixing the amount of United States
notes, providing for a redistribution of the national-bank
currency, and for other purposes," as provides that the
fund deposited by any national banking association with
the Treasurer of the United States for the redemption of
its notes shall be counted as a part of its lawful reserve as
provided in the act aforesaid, is hereby repealed. And
from and after the passage of this act such fund of five
per centum shall in no case be counted by any national
banking association as a part of its lawful reserve.
REGULATION OF THE BANKING BUSINESS. 77
NO RESERTE REQUIRED TO BE HELD AGAINST UNITED
STATES UEPOSITS.
413. Sec. 7. — * * * That the provisions of section ^^ Act ^Apr.^ 24.
fifty-one hundred and ninety-one of the Revised Statutes,
as amended by the Federal reserve act and the amend-
ments thereof, with reference to the reserves required to
be kept by national banking associations and other mem-
ber banks' of the Federal Reserve System, shall not apply
to deposits of public moneys by the United States in des-
ignated depositaries.
PROTISIONS FOR REDEEMING CIRCULATION. FITE PER
CENT REDEMPTION FUND. ACT JUNE 20, 1874.
414. Sec. 3. — That every association organized, or to be jgif^* '^c'l^^sls;
organized, under the provisions of the said act, and of sec |: is stat!
the several acts amendatory thereof, shall at all times '
keep and have on deposit in the Treasury of the United
States, in lawful money of the United States, a sum equal
to five per centum of its circulation, to be held and used
for the redemption of such circulation ; [which sum shall
he counted as a part of its lawful reserve, as provided in
section two of this act;] and when the circulating notes
of any such associations, assorted or unassorted, shall be
presented for redemption, in sums of one thousand dol-
lars, or any multiple thereof, to the Treasurer of the
United States, the same shall be redeemed in United
States notes. All notes so redeemed shall be charged
by the Treasurer of the United States to the respec-
tive associations issuing the same, and he shall notify
them severally, on the first day of each month, or oftener,
at his discretion, of the amount of such redemptions ; and
whenever such redemptions for any association shall
amount to the sum of five hundred dollars, such associa-
tion so notified shall forthwith deposit with the Treas-
urer of the United States a sum in United States notes
equal to the amount of its circulating notes so redeemed.
And all notes of national banks worn, defaced, mutilated,
or otherwise unfit for circulation shall, when received by
any assistant treasurer, or at any designated depository
of the United States, be forwarded to the Treasurer
of the United States for redemption as provided herein.
And when such redemptions have been so reimbursed, the
circulating notes so redeemed shall be forwarded to the ,
respective associations by which they were issued ; but if
any of such notes are worn, mutilated, defaced, or ren-
dered otherwise unfit for use, they shall be forwarded to
the Comptroller of the Currency and destroyed and re-
placed as now provided by law : Provided, That each of
said associations shall reimburse to the Treasury the
charges for transportation, and the costs for assorting
Buch notes; and the associations hereafter organized shall
78 KEGULATION OF THE BA:NKING BUSINESS.
also severally reimburse to the Treasury the cost of en-
graving such plates as shall be ordered by each associa-
tion, respectively; and the amount assessed upon each
association shall he in proportion to the circulation re-
deemed, and be charged to the fund on deposit with the
Treasurer: And provided further, That so much of sec-
tion thirty-two of said national-bank act requiring or
permitting the redemption of its circulating notes else-
where than at its own counter except as provided for in.
this section, is hereby repealed.
Note. — Under section 4 of the act of June 20, 1874, chapter 343,
a national banking association, desiring to withdraw its circulat-
ing notes and take up the bonds deposited with the United States
Treasurer as security therefor, may do so by depositing with the
Treasurer the requii'ed amount in lawful money, whether this
consists of coin or of legal-tender notes. The Treasury, while
privileged under sections 3 and 4 of that act to redeem such cir-
culation in United States notes, has also the right to redeem the
same circulation in coin. (Opinion Attorney General, vol. 17,
121.)
Section 32 of national-bank act is section .5195, Revised Statutes.
The provision permitting the redemption fund to be counted as
part of the lawful reserve was repealed by section 20 of the
Federal reserve act.
Other sections of act of June 20, 1874.
Section 1 precedes Revised Statutes, 5133.
Section 2. See note under paragraph 402, ante.
Section 4 follows Revised Statutes, 5167.
' Section 5 follows Revised Statutes, 5172.
Section 6 relates to United States notes only.
Sections 7-9 superseded by act of January 14, 1875, which
follows. Revised Statutes, 5177.
CLERICAL FORCE FOR REDEMPTION OF CIRCULATING
NOTES. ACT MARCH 3, 1875.
1875* LS^stat' ^^^" '^^^^ ^^ Carry into effect the provisions of sec-
L., 399 ; part tiou three of the act entitled "An act fixing the amount
ci yn ^appnf- of United States notes, providing for a redistribution of
priation act. the natioual-bauk' currency, and for other purposes,"
approved June twentieth, eighteen hundred and seventy-
four, the Secretary of the Treasury is authorized to ap-
point the following force, to be employed under his direc-
tion, namely: In the Office of the Treasurer: * * *
In the Office of the Comptroller of the Currency * * *
And at the end of each month, the Secretary of the Treas-
ury shall reimburse the Treasury to the full amount paid
out under the provisions of this section by transfer of
said amount from the deposit of the national banking as-
sociations with the Treasury of the United States ; and at
the end of each fiscal year he shall transfer from said
deposit to the Treasury of the United States such sum
as may have been actually expended under his direction
for stationery, rent, fuel, light, and other necessary inci-
dental expenses which have been incurred in carrying
REGULATION OF THE BANKING BUSINESS. 79
into effect the provisions of the said section of the above-
named act.
Note. — -The appropriation bill for each year fixes th(' number
and compensation of tlie clerks employed in the offices of the
Treasurer of the United States and Comptroller of the Currency
in connection with the redemption of circulating notes.
DISPOSITION OF REDEMPTION ACCOUNT. ACT JULY 14,
1890.
416. Sec. 6.— That upon the passage of this act the ^g^o^* ^^"'y^Jll
balances standing with the Treasurer of the United sec. 6 ; 26 stat!
States to the respective credits of national banks for de- "
posits made to redeem the circulating notes of such
banks, and all deposits thereafter received for like pur-
pose, shall be covered into the Treasury as a miscellane-
ous receipt, and the Treasury of the United States shall
redeem from the general cash in the Treasury the circu-
lating notes of said banks which may come into his pos-
session subject to redemption ; and upon the certificate
of the Comptroller of the Currency that such notes have
been received by him and that they have been destroyed
and that no new notes will be issued in their place, reim-
bursement of their amount shall be made to the Treas-
urer, under such regulations as the Secretary of the
Treasury may prescribe, from an appropriation hereby
created, to be known as " national-bank notes ; Redemp-
tion account," but the provisions of this act shall not
apply to the deposits received under section three of the
act of June twentieth, eighteen hundred and seventy-
four, requiring every national bank to keep in lawful
money with the Treasurer of the United States a sum
equal to five per centum of its circulation, to be held
and used for the redemption of its circulating notes:
and the balance remaining of the deposits so covered
shall, at the close of each month, be reported on the
monthly public debt statement as debt of the United
States bearing no interest.
Note. — The other sections of this act relate to the purchase of
silver bullion and issue of Treasury notes.
REDEMPTION OF LOST OR STOLEN NOTES, AND OF NOTES
NOT PROPERLY SIGNED. ACT JULY 28, 1892.
417. That the provisions of the Eevised Statutes of the Act J"iy 28,
United States, providing for the redemption of national l:, 322.
bank notes, shall apply to all national bank notes that
have been or may be issued to, or received by, any na-
tional bank, notwithstanding such notes may have been
lost by or stolen from the bank and put in circulation
without the signature or upon the forged signature of the
president or vice president and cashier.
80 EEGULATIOlSr OF THE BANKING BUSINESS.
418. Sec. 5193.—
Repealed by act March 14, 1900.
Note. — This section as enacted June 8, 1872 (17 Stat. L., 337),
authorized the Secretary of the Treasui-y to receive on deposit
from national banking associations United States notes in sums
of not less than ten thousand dollars and to issue certificates
therefor payable on demand in denominations of not less than
five thousand dollars. This was repealed by act March 14, 1900,
section 6, paragraph 752, post, which provides for issue of gold
certificates payable to order in denominations of ten thousand
dollars.
419. Sec. 5194.—
Dependent on 5193 and superseded by its repeal.
PLACE FOR REDEMPTION OF CIRCULATING NOTES TO BE
DESIGNATED.
420. Sec. 5195.—
See note under paragraph 401, ante.
NATIONAL BANKS TO TAKE NOTES OF OTHER NATIONAL
BANKS AT PAR.
Act June 3, 421. Sec. 5196. — Every national banking association
8 e^c' 32 ; 13 formed or existing under this Title, shall take and receive
^*Act^juiy^^i2, ^t P^^5 for ^^J ^"^'^t or liability to it, any and all notes or
1870, c. 282; bills issued by any lawfully organized national banking
L.r253/^ *^*' association. But this provision shall not apply to any
association organized for the purpose of issuing notes
payable in gold.
LIMITATION UPON RATE OF INTEREST WHICH MAY BE
TAKEN.
1864* c°°1.06' ^^^' ^®^' ^l^''- — ^^y association may take, receive,
B e c' 30 ; 13 reserve, and charge on any loan or discount made, or upon
Stat. L., 108. ^^^y note, bill of exchange, or other evidences of debt,
interest at the rate allowed by the laws of the State, Ter-
ritory, or District where the bank is located, and no more,
except that where by the laws of any State a different
rate is limited for banks of issue organized under State
laws, the rate so limited shall be allowed for associations
organized or existing in any such State under this Title.
When no rate is fixed by the laws of the State, or Terri-
tory, or District, the bank may take, receive, reserve, or
charge a rate not exceeding seven per centum, and such
interest may be taken in advance, reckoning the days for
which the note, bill, or other evidence of debt has to run.
And the purchase, discount, or sale of a bona fide bill of
exchange, payable at another place than the place of such
purchase, discount, or sale, at not more than the current
rate of exchange for sight drafts in addition to the in-
terest, shall not be considered as taking or receiving a
greater rate of interest.
REGULATION OF THE BANKING BUSINESS. 81
PENALTir FOR TAKING UNLAWFUL INTEREST. JURIS- Act Tune 3,
DICTION OF SUITS BY OR AGAINST NATIONAL BANKS. ^7*- 30 i^
Stat. L 108.
423. Sec. 5198 [as amended 1875].— The taking, receiv- i875.*c. 80:\^8
ing, reserving, or charging a rate of interest greater than ^^^^- ^- 22^-
is allowed by the preceding section, when knowingly done,
shall be deemed a forfeiture of the entire interest which
the note, bill, or other evidence of debt carries with it, or
which has beeii agreed to be paid thereon. In case the
greater rate of interest has been paid, the person by
whom it has been paid, or his legal representative, may
recover back, in an action in the nature of an action of
debt, twice the amount of the interest thus paid from the
association taking or receiving the same; provided such
action is commenced within two years from the time the
usurious transaction occurred. That suits, actions, and
proceedings against any association under this Title may
be had in any circuit, district, or territorial court of the
United States held within the district in which such asso-
ciation'may be established, or in any State, county, or
municipal court in the county or city in which said asso-
ciation is located having jurisdiction in similar cases.
Note. — Additional provisions relating to jurisdiction of actions
by and against national banks are contained in act July 12, 1882,
paragraph 218, ante, and act of August 13, 1888, paragraph 214,
ante. See also section 24, judiciary act passed March 3, 1911,
paragraph 701. post, and section 736, Revised Statutes of the
United States, paragraph 702, post, as to jurisdiction of district
courts to enjoin Comptroller under section 5237, Revised Statutes,
United States.
DIVIDENDS.
424. Sec. 5199. — The directors of any association may Act June 3,
semiannually, declare a dividend of so much of the net l^^^.' is : ^Ts
profits of the association as they shall judge expedient; stat. l., 109.
but each association shall, before the declaration of a
dividend, carry one-tenth part of its net profits of the
preceding half year to its surplus fund until the same
shall amount to twenty per centum of its capital stock.
LIMITATION OF LIABILITIES WHICH MAY BE INCURRED
BY ANY ONE PERSON, COMPANY, ETC.
425. Sec. 5200 fas amended 19191. — The total liabilities Act Oct. 22.
i • J.- J! £ 1919.
to any association 01 any person or 01 any company, cor-
poration, or firm for money borrowed, including in the
liabilities of a company or firm the liabilities of the sev-
164312°— 20 6
82 EEGULATION OF THE BANKING BUSINESS.
eral members thereof, shall at no time exceed 10 per
centum of the amount of the capital stock of such asso-
ciation, actually paid in and unimpaired, and 10 per
centum of its unimpaired surplus fund: Provided^ how-
ever. That (1) the discount of bills of exchange drawn in
good faith against actually existing values, including
drafts and bills of exchange secured by shipping docu-
ments conveying or securing title to goods shipped, and
including demand obligations when secured by docu-
ments covering commodities in actual process of ship-
ment, and also including bankers' acceptances of the kinds
described in section 13 of the Federal reserve act, (2) the
discount of commercial or business paper actually owned
by the person, company, corporation, or firm negotiating
the same, (3) the discount of notes secured by shipping
documents, warehouse receipts, or other such documents
conveying or securing title covering readily marketable
nonperishable staples, including live stock, when the
actual market value of the property securing the- obliga-
tion is not at any time less than 115 per centum of the
face amount of the notes secured by such documents and
when such property is fully covered by insurance, and
(4) the discount of any note or notes secured by not less
than a like face amount of bonds or notes of the United
States issued since April 24, 1917, or certificates of in-
debtedness of the United States, shall not be considered
as money borrowed within the meaning of this section.
The total liabilities to any association, of any person or
of any corporation, or firm, or company, or the several
members thereof upon any note or notes purchased or dis-
counted by such association and secured by bonds, notes,
or certificates of indebtedness as described in (4) hereof
shall not exceed (except to the extent permitted by rules
and regulations prescribed by the Comptroller of the
Currency, with the approval of the Secretary of the
Treasury) 10 per centum of such capital stock and sur-
plus fund of such association and the total liabilities to
an}'' association of any person or of any corporation, or
firm, or company, or the several members thereof for
money borrowed, including the liabilities upon notes
secured in the manner described under (3) hereof, except
transactions (1), (2), and (4), shall not at any time ex-
ceed 25 per centum of the amount of the association's
paid-in and unimpaired capital stock and surplus. The
exception made under (3) hereof shall not apply to the
notes of any one person, corporation or firm or company,
BEGULATION OF THE BANKING BUSINESS. 83
or the several members thereof for more than six months
in any consecutive twelve months.
Note. — See Act March 3, 1919. " Victory Liberty Loan Act,"
section 1, wliich provides tliat the word " bonds," where it ap-
pears in section 5200 of the Revised Statutes, as amended, shall
be deemed to include notes issued under the " Victory Liberty
Loan Act."
ASSOCIATIONS MUST NOT LOAN ON OR PURCHASE THEIR
OWN STOCK.
426. Sec. 5201. — No association shall ciake any loan or Act June s.
discount on the security of the shares of its own capital sic.' 35; 1:5
stock, nor be the purchaser or holder of any such shares, ^*^*' ^•' ^^^■
unless such security or purchase shall be necessary to
prevent loss upon a debt previously contracted in ^ood
faith; and stock so purchased or acquired shall, within
six months from the time of its purchase, be sold or dis-
posed of at public or private sale ; or, in default thereof,
a receiver may be appointed to close up the business of
the association, according to section fifty-two hundred
and thirty -four.
RESTRICTION ON BANK'S INDEBTEDNESS.
427. Sec. 5202 [as amended 1919]. — No national banking ^^Act^ ^m %^'
association shall at any time be indebted, or in any way 36; 'is ' stat. l.;
liable, to an amount exceeding the amount of its capital ^^Act Dec. 23,
stock at such time actually paid in and remaining un- 19^3' ^'^■^^' ^
diminished by losses or otherwise, except on account of Act Apr.' 5,
demands of the nature following: ^^Act oct. 22,
First. Notes of circulation. ^s^^-
Second. Moneys deposited with or collected by the asso-
ciation.
Third. Bills of exchange or drafts drawn against
money actually on deposit to the credit of the association,
or due thereto.
Fourth. Liabilities to the stockholders of the associa-
tion for dividends and reserve profits.
Fifth. Liabilities incurred under the provisions of the
Federal Reserve Act.
Sixth. Liabilities incurred under the provisions of the
War Finance Corporation Act.
Seventh. Liabilities created by the indorsement of ac-
cepted bills of exchange payable abroad actually owned
by the indorsing bank and discounted at home or abroad.
84 RBGUIiATION OF THE BANKING BUSINESS.
RESTRICTION UPON USE OF CIRCULATING NOTES.
Act June 3, 428. Sec. 5203. — No association shall, either directly or
s e c' 37 ; li indirectly, pledge or hypothecate any of its notes or cir-
stat. L., 110. culation, for the purpose of procuring money to be paid
in on its capital stock, or to be used in its banking oper-
ations, or otherwise ; nor shall any association use its cir-
culating notes, or any part thereof, in any manner or
form, to create or increase its capital stock.
PROHIBITION UPON WITHDRAWAL OF CAPITAL. UN-
EARNED DIVIDENDS PROHIBITED.
Act June ?., 429. Scc. 5204.— No association, or any member thereof,
sec' 38; 1^ shall, during the time it shall continue its banking op-
stat. L., 110. erations, withdraw, or permit to be withdrawn, either in
the form of dividends or otherwise, any portion of its
capital. If losses have at any time been sustained by
any such association, equal to or exceeding its undivided
profits then on hand, no dividend shall be made; and no
dividend shall ever be made by any association, while it
continues its banking operations, to an amount greater
than its net profits then on hand, deducting therefrom its
losses and bad debts. All debts due to any association,
on which interest is past due and unpaid for a period of
six months, unless the same are well secured, and in proc-
ess of collection, shall be considered bad debts within
the meaning of this section. But nothing in this section
shall prevent the reduction of the capital stock of the as-
sociation under section fifty-one hundred and forty-
three.
ASSESSMENT FOR FAILURE TO PAT UP CAPITAL ^-TOCK
OR FOR IMPAIRMENT OF CAPITAL.
Act Mar. 3, 430. Scc. 5205 [as amended 18761. — Every association
see. i ; 17 slat! wliich shall have failed to pay up its capital stock, as re-
^"A^c't^june 30 Q^^i^'^d by law, and every association whose capital stock
1876, c. 156! shall have become impaired by losses or otherwise, shall,
L.%4! ^^ ^*^*' within three months after receiving notice thereof from
the Comptroller of the Currency, pay the deficiency in
the capital stock, by assessment upon the shareholders
pro rata for the amount of capital stock held by each;
and the Treasurer of the United States shall withhold
the interest upon all bonds held by him in trust for any
such association, upon notification from the Comptroller
of the Currency, until otherwise notified by him. If any
such association shall fail to pay up its capital stock, and
shall refuse to go into liquidation, as provided by law,
for three months after receiving notice from the Comp-
troller, a receiver may be appointed to close up the busi-
ness of the association, according to the provisions of
section fifty-two hundred and thirty-four: And pro-
vided^ That if any shareholder or shareholders of such
bank shall neglect or refuse, after three months' notice, to
REGULATION OF THE BANKING BUSINESS. 85
pay the assessment, as provided in this section, it shall be
the duty of the board of directors to cause a suflicient '
amount of the capital stock of such shareholder or share-
holders to be sold at public auction (after thirty days'
notice shall be given by posting such notice of sale in the
office of the bank, and by publishing such notice in a news-
paper of the city or town in which the bank is located, or
in a newspaper published nearest thereto), to make good
the deficiency, and the balance, if any, shall be returned
to such delinquent shareholder or shareholders.
PROHIBITION AGAINST UNCURRENT NOTES.
431. Sec. 52O6.--N0 association shall at any time payjg^f c""%6'
out on loans or discounts, or in purchasing drafts or bills sec.' 36; 13
of exchange, or in payment of deposits, or in any other ^***" ^' "^'
mode pay or put in circulation, the notes of any bank or
banking association which are not, at any such time,
receivable, at par, on deposit, and in payment of debts by
the association so paying out or circulating such notes;
nor shall any association knowingly pay out or put in
circulation any notes issued by any bank or banking asso-
ciation which at the time of such paying out or putting in
circulation is not redeeming its circulating notes in law-
ful money of the United States.
UNITED STATES NOTES NOT TO BE HELD AS €OLLAT-
ERAL.
432. Sec. 5207.— No association shall hereafter offer or i8^^*/fo.\^^
receive United States notes or national-bank notes as stat.' l., 270.
security or as collateral security for any loan of money,
or for a consideration agree to withhold the same from
use, or offer or receive the custody or promise of custody
of such notes as security, or as collateral security, or
consideration for any loan of money. Any association
offending against the provisions of this section shall be
deemed guilty of a misdemeanor, and shall be fined not
more than one thousand dollars and a further sum equal
to one-third of the money so loaned. The officer or offi-
cers of any association who shall make any such loan
shall be liable for a further sum equal to one-quarter of
the money loaned ; and any fine or penalty incurred by a
violation of this section shall be recoverable for the bene-
fit of the party bringing such suit.
ISSUE OF GOLD CERTIFICATES. ACT .lULY 12, 1SS2.
433. Sec. 12. — That the Secretary of the Treasury is Act July 12,
authorized and directed to receive deposits of gold coin 22^"'suu.' ^l.'.
* * * and issue certificates therefor * * *. Such ^"^•
certificates * * * when held by any national bank-
ing association, sliall be counted as part of its lawful
reserve; and no national banking association shall be a
86 REGULATION OF THE BANKING BUSINESS.
member of an}^ clearing house in which such certificates
shall not be receivable in the settlement of clearing-house
balances: * * * And the provisions of section fifty-
two hundred and seven of the Eevised Statutes shall be
applicable to the certificates herein authorized and di-
rected to be issued.
Note. — This section given in full, paragraph 729, post. See also
currency act of March 14, 1900, as amended March 4, 1907, March
2, 1911, and June 12, 1916, paragraph 754, post, relating to gold
certificates, and making ten dollars lowest denomination.
PENALTY FOR FALSELY CERTIFYING CHECKS.
i869*c^35';S ^^^^ ^®^- 5208.— It shall be unlawful for any officer,
Stat.' L., 335. dircctor, agent, or employee of any Federal reserve bank,
1918.* ^^^'* ^^' or of any memljer bank as defined in the act of December
twenty-third, nineteen hundred and thirteen, known as
the Federal reserve act, to certify any check drawn upon
such Federal reserve bank or member bank unless the
person, firm, or corporation drawing the check has on
deposit with such Federal reserve bank or member bank,
at the times such check is certified, an amount of money
not less than the amount specified in such check. Any
check so certified by a duly authorized officer, director,
agent, or employee shall be a good and valid obligation
against such Federal reserve bank or member bank ; but
the act of any officer, director, agent, or employee of any
such Federal reserve bank or member bank in violation
of this section shall, in the discretion of the Federal Re-
serve Board, subject such Federal reserve bank to the
penalties imposed by section eleven, subsection (h), of the
Federal reserve act, and shall subject such member bank
if a national bank to the liabilities and proceedings on the
part of the Comptroller of the Currency provided for in
section fifty-two hundred and thirty-four, Revised
Statutes, and shall, in the discretion of the Federal Re-
serve Board, subject any other member bank to the penal-
ties imposed by section nine of said Federal reserve act
for the violation of any of the provisions of said act.
Any officer, director, agent, or employee of any Federal
resarve bank or member bank who shall willfully violate
the provisions of this section, or who shall resort to any
device, or receive any fictitious obligation, directly or
collaterally, in order to evade the provisions thereof, or
who shall certify a check before the amount thereof shall
have been regularly entered to the credit of the drawer
upon the books of the bank, shall be deemed guilty of a
misdemeanor and shall, on conviction thereof in any dis-
trict court of the United States, be fined not more than
$5,000, or shall be imprisoned for not more than five
years, or both, in the discretion of the coui-t.
REGULATION OF THE BANKING BUSINESS. 87
PUNISHMENT FOR FALSELY CERTIFYING CHECKS. ACT
JULY 13, 1882.
435. Sec. 13.—
Superseded by act of Sept. 26, 1918.
PENALTY FOR EMBEZZLEMENT. ABSTRACTION, WILLFUL
MISAPPLICATION, FALSE ENTRIES, ETC.
436. Sec. 5209. — Any officer, director, agent, or em- Act June 3,
ployee of any Federal reserve bank, or of any member l^e^t 55 ; ^^i^3
bank as defined in the act of December twenty-third, ^*\^^^ '^Xpr^^
nineteen hundred and thirteen, known as the Federal re- isso, c iT; le
serve act, who embezzles, abstracts, or willfully misap- ^^Act^ jJiV g,
plies anv of the moneys, funds, or credits of such Federal i«'^^'ei.^v ^^t '
reserve biink or member bank, or who, without authority i95.
from the directors of such Federal reserve bank or mem- 1918* ^^^*" ^^'
ber bank, issues or puts in circulation any of the notes
of such Federal reserve bank or member bank, or who,
without such authority, issues or puts forth any certifi-
cate of deposit, draws any order or bill of exchange,
makes any acceptance, assigns any note, bond, draft, bill
of exchange, mortgage, judgment, or decree, or who
makes any false entry in any book, report, or statement of
such Federal reserve bank or member bank, with intent
in any case to injure or defraud such Federal reserve
bank or member bank, or any other company, body politic
or corporate, or any individual person, or to deceive any
officer of such Federal reserve bank or member bank, or
the Comptroller of the Currency, or any agent or exam-
iner appointed to examine the affairs of such Federal
reserve bank or member bank, or the Federal Reserve
Board ; and every receiver of a national banking associa-
tion who, with like intent to defraud or injure, embezzles,
abstracts, purloins, or willfully misapplies any of the-
moneys, funds, or assets of his trust, and every person'
who, with like intent, aids or abets any officer, director,
agent, employee, or receiver in any violation of this sec-
tion shall be deemed guilty of a misdemeanor, and upon
conviction thereof in any district court of the United
States shall be fined not more than $5,000 or shall be
imprisoned for not more than five years, or both, in the
discretion of the court.
Any Federal reserve agent, or any agent or employee
of such Federal reserve agent, or of the Federal Eeserve
Board, who embezzles, abstracts, or willfully misapplies
any moneys, funds, or securities intrusted to his care, or
without complying with or in violation of the provisions
of the Federal reserve act, issues or put in circulation any
Federal reserve notes shall be guilty of a misdemeanor
and upon conviction in any district court of the United
States shall be fined not more than $5,000 or imprisoned
for not more than five years, or both, in the discretion
of the court.
88 REGULATION OF THE BANKING BUSINESS.
NATIONAL BANKS NOT PEKMITTED TO MAKE CONTRIBIJ.
TIONS IN CONNECTION >VITH ELECTION TO POLITICAL
OFFICE. ACT JANUARY 26, 1907.
Act Jan. 26, 437. That it shall be unlawful for any national bank, or
L?.^8^4f^ ^***' i^ny corporation organized by authority of any laws of
Congress, to make a money contribution in connection
with any election to any political office. It shall also be
unlawful for any corporation whatever to make a money
contribution in connection with any election at which
Presidential and Vice-Presidential electors or a Eepre-
sentative in Congress is to be voted for or any election by
any State legislature of a United States Senator. Every
corporation which shall make any contribution in viola-
tion of the foregoing provisions shall be subject to a fin©
not exceeding five thousand dollars, and every, officer or
director of any corporation who shall consent to any con-
tribution by the corporation in violation of the foregoing
provisions shall upon conviction be punished by a fine of
not exceeding one thousand and not less than two hun-
dred and fifty dollars, or by imprisonment for a term of
not more than one year, or both such fine and imprison-
ment in the discretion of the court.
MEMBER BANK CAN NOT MAKE LOAN OR GRANT A GRA-
TUITY TO ANY NATIONAL BANK EXAMINER.
Act Dec. 23, 438a. No member bank and no officer, director, or em-
38 Stat!' L.jployee thereof shall hereafter make any loan or grant
^'^aW T„r,„ oi anv gratuitv to anv bank examiner. Anv bank officer,
1917, sec. n. director, or employee violating this provision shall be
1918. ^^^' ^^' deemed guilty of a misdemeanor and shall be impris-
oned not exceeding one year or fined not more than
$5,000, or both; and may be fined a further sum equal
to the money so loaned or gratuity given.
Any examiner accepting a loan or gratuity from any
bank examined by him or from an officer, director, or
employee thereof shall be deemed guilty of a misde-
meanor and shall be imprisoned one year or fined not
more than $5,000, or both, and may be fined a further
sum equal to the money so loaned or gratuity given, and
shall forever thereafter be disqualified from holding office
as a national bank examiner.
NATIONAL BANK EXAMINER CAN NOT PERFORM ANT
SERTICE FOR COMPENSATION FOR ANY BANK OR OF-
FICER. EXAMINER CAN NOT DISCLOSE THE NAMES
OF BORROWERS OR COLLATERAL WITHOUT FIRST
OBTAINING WRITTEN CONSENT OF COMPTROLLER.
19^3* ^^^' 2^' ^38b. No national bank examiner shall perform any
38 staV L.] other service for compensation while holding such office
^'^Act June 21, ^^r any bank or officer, director, or employee thereof.
191^'^. sec. 11 ' No examiner, public or private, shall disclose the
1918. ^^ ■ ' names of borrowers or the collateral for loans of a mem-
ber bank to other than the proper officers of such bank
REGULATION OF THE BANKING BUSINESS. 89
■without first havino; obtained the express pennission in
Tvritinfj; from the Comptroller of the Currency, or from
the board of directors of such bank, except when ordered
to do so by a court of competent jurisdiction, or by direc-
tion of the Congress of the United States, or of either
House thereof, or am- committee of Congi-ess, or of either
House duly authorized. Any bank examiner violating the
provisions of this subsection shall be imprisoned not
more than one j'ear or fined not more than $5,000, or
both.
PENALTY FOR OFFICER. DIRECTOR. OR EilPIOTEE OF
MEMBER BANK WHO RECEITES ANY COMMISSION OR.
GIFT IN CONNECTION WITH ANY LOAN.
438c. Except as herein provided, any officer, director, 19^3* ^^- ^h
employee, or attorney of a member bank who stipulates 38^ 'stat.' £.',
for or receives or consents or agrees to receive any fee, 'ict June 21,
commission, gift, or thing of value from any person, ^^^^;. H^j. -^26
firm, or corporation, for procuring or endeavoring to pro- I9i8.
cure for such person, firm, or corporation, or for any
other person, firm, or corporation, an}' loan from or the
purchase or discount of any paper, note, draft, check, or
bill of exchange by such member bank shall be deemed
guilty of a misdemeanor and shall be imprisoned not
more than one year or fined not more than $5,000, or
both.
PURCHASE OF SECURITIES OR PROPERTY FROM ONE OF
ITS DIRECTORS, OR SALES TO A DIRECTOR BY A MEM-
BER BANK.
438d. Any member bank may contract for, or purchase ^g^^* '^^- ^^'.
from, any of its directors or from any firm of which any ss 'stat.' "u,
of its directors is a member, any securities or other prop- ^^ict June 21,
erty, when (and not otherwise) such purchase is made in ^^^^-^ lept^le
the regular course of business upon terms not less favor- I9i8.
able to the bank than those offered to others, or when
such purchase is authorized by a majority of the board
of directors not interested in the sale of such securities
or property, such authority to be evidenced by the af-
firmative vote or written assent of such directors: Pro-
vided, however, That when any director, or firm of
which any director is a member, acting for or on behalf
of others, sells securities or other property to a member
bank, the Federal Reserve Board by regulation may, in
any or all cases, require a full disclosure to be made, on
forms to be prescribed by it, of all commissions or other
considerations received, and whenever such director or
firm, acting in his or its own behalf, sells securities or
other property to the bank the Federal Reserve Board,
by regulation, may require a full disclosure of all profit
realized from sucli sale.
Any member bank may sell securities or other prop-
erty to any of its directoi*s, or to a firm of wliich any of
90 REGULATION OF THE BANKING BUSINESS.
its directors is a member, in the regular course of busi-
ness on terms not more favorable to such director or firm
than those offered to others, or when such sale is author-
ized by a majority of the board of directors of a member
bank to be evidenced by their affirmative vote or written
assent: Provided^ however^ That nothing in this subsec-
tion contained shall be construed as authorizing member
banks to purchase or sell securities or other property
which such banks are not otherwise authorized by law to
purchase or sell.
RATE OF INTEREST PAID DIRECTORS, OFFICERS, OR
EMPLOYEES NOT TO EXCEED THAT PAID TO OTHER
DEPOSITORS.
i9iV* fee' 2^2^' 438e. No member bank shall pay to any director, officer,
38^ Stat." L.| attorney, or employee a greater rate of interest on the
Act June 21, deposits of such director, officer, attorney, or employee
"^^Ac't Sept "^26 *^^^^ ^^^^ P^^^^ ^^ other depositors on similar deposits
1918. ' with such member bank.
PENALTY FOR VIOLATION OF ANY OF THE PROVISIONS
OF SECTION 22 OF THE FEDERAL RESERVE ACT.
1913* sec!^" 2^2^' 4:38f . If the directors or officers of any member bank
Ifo '®***' ^•' shall knowingly violate or permit any of the agents, offi-
Act June 21. cers, or directors of any member bank to violate any of
"^^Act Sept ^26 ^^^ provisions of this section or regulations of the board
1918. ' made under authority thereof, every director and officer
Participating in or assenting to such violation shall be
eld liable in his personal and individual capacity for all
damages which the member bank, its shareholders, or
any other persons shall have sustained in consequence of
such violation.
LIST OF SHAREHOLDERS.
1864*. c!"" 106' 439. Sec. 5210.— The president and cashier of every
Stat' L^^'ii/^ii^tional banking association shall cause to be kept at all
times a full and correct list of the names and residences
of all the shareholders in the association, and the number
of shares held by each, in the office where its business is
transacted. Such list shall be subject to the inspection
of all the shareholders and creditors of the association,
and the officers authorized to assess taxes under State
authority, during business hours of each day in which
business may be legally transacted. A copy of such list,
on the first Monday of July of each year, verified by the
• • oath of such president or cashier, shall be transmitted to
the Comptroller of the Currency.
REPORTS TO COMPTROLLER OF THE CURRENCY.
1864* c"°\o6' ^^^- ^^^- ^^^^ [^^ amended 1877].— Every association
s L' c' 34 ; li shall make to the Comptroller of the Currency not less
Stat. L.. 109. ^Qj^ gyg reports during each year, according to the form
REGULATION OF THE BANKING BUSINESS. 91
which may be prescribed by him, verified by the oath or ^g^^* a^'^iso!
affirmation of the president or cashier of such association, «ec. i ; I's stat!
and attested by the signature of at least three of the Act Feb. 27.
directors. Each such report shall exhibit, in detail and HH' £; ^25'2.'^
under appropriate heads, the resources and liabilities of
the association at the close of business on any past day by
him specified ; and shall be transmitted to the Comptrol-
ler within five days after the receipt of a request or requi-
sition therefor from him, and in the same form in which
it is made to the Comptroller shall be published in a
newspaper published in the place where such association
is established, or if there is no newspaper in the place,
then in the one published nearest thereto in the same
county, at the expense of the association ; and such proof
of publication shall be furnished as may be required by
the Comptroller. The Comptroller shall also have power
to call for special reports from any particular association
whenever in his judgment the same are necessary in
order to a full and complete Imowledge of its condition.
Note. — Section 713 of the Code of Laws of the District of Colum-
bia provides : " That all publications authorized or required by
said section fifty-two hundred and eleven of the Revised Statutes,
and all other publications authorized or required by listing law
to be made in the District of Columbia, shall be printed in two
or more daily newspapers of general circulation, published in the
City of Washington, one of which shall be a morning newspaper."
The Federal Reserve Board is authorized by section 11 of the
Federal reserve act to examine at its discretion the accounts,
books, and affairs of each Federal reserve bank and of each mem-
ber bank and to require such statements and reports as It may
deem necessary.
VERIFICATION OF REPORTS. ACT FEBRUARY 26, 1881.
441. That the oath or affirmation required by section ^8fj*^*^,^|^-.^2^i'
fifty-two hundred and eleven of the Revised Statutes, Btat,' l., 352.
verifying the returns made by national banks to the
Comptroller of the Currency, when taken before a notary
public properly authorized and commissioned by the
State in which such notary resides and the bank is lo-
cated, or any other officer having an official seal, author-
ized in such State to administer oaths, shall be a sufficient
verification as contemplated by said section fifty-two hun-
dred and eleven : Provided, That the officer administering
the oath is not an officer of the bank.
REPORT OF DIVIDENDS.
442. Sec. 5212. — In addition to the reports required by iggg* ^^""i.^o!
the preceding section, each association shall report to the l^'^-|.,v^^ ^*"*'
Comptroller of the Currency, within ten days after de- '
daring any dividend, the amount of such dividend, and
the amount of net earnings in excess of such dividend.
Such reports shall be attested by the oath of the president
or cashier of the association.
92 REGULATION OF THE BANKING BUSINESS.
PENALTY FOR FAILURE TO MAKE REPORTS.
Act Mar. 3, 443. Sec. 5213. — Every association which fails to make
sees.' h'2 : id and transmit any report required under either of the two
Stat. L., 326. preceding sections shall be subject to a penalty of one
hundred dollars for each day after the periods, respec-
tively, therein mentioned, that it delays to make and
transmit its report. Whenever any association delays or
refuses to pay the penalty herein imposed, after it has
been assessed by the Comptroller of the Currency, the
amount thereof may be retained by the Treasurer of the
United States, upon the order of the Comptroller of the
Currency, out of the interest, as it may become due to the
association, on the bonds dejDosited with him to secure
circulation. All sums of money collected for penalties
under this section shall be paid into the Treasury of the
United States.
TAXES PAYABLE TO THE UNITED STATES.
Sec. 5214, u. 444. Scc. 5214. — In lieu of all existino- taxes, every asso-
Act June 3, ciation shall pay to the Treasurer of the United States,
s e^c ' 41 • ^^li ^^ ^^^® mj^nths of January and July, a duty of one-
stat'. L., 111. half of one per centum each half year upon the average
amount of its notes in circulation, [and a duty of one-
quarter of one per centum each half year upon the aver-
age amownt of its deposits, and a duty of one-quarter of
one per centum, each half year on the average amount of
its capital stock, heyond the amount invested in United
States hands'].
1900* ^c'^' it- ^^^' ^^^' ^^' — That every national banking association
31 Stat. L., 49. having on deposit, as provided by law, bonds of the
United States bearing interest at the rate of two per
centum per annum, issued under the provisions of this
Act, to secure its circulating notes, shall pay to the
Treasurer of the United States, in the months of Janu-
ar}^ and July, a tax of one-fourth of one per centum
each half year upon the average amount of such of its
notes in circulation as are based upon the deposit of said
two per centum bonds; and such taxes shall be in lieu
of existing taxes on its notes in circulation imposed by
section fifty-two hundred and fourteen of the Revised
Statutes.
Note. — The provisions of section 5214, covering taxes on the
average amount of deposits and capital, were repealed by the act
of March 3, 1SS3. The 2 per cent Panama Canal bonds were
given all rights and privileges accorded to other 2 per cent bonds
of the United States by the act of December 21, 1905.
On May 30, 1908, section 5214 was reenacted so as to cover
the provisions of the original section as modified by the acts
of March 3, 1883, March 14, 1900, and December 21, 1905. and in
addition thereto there was added provisions for the taxation of
the additional circulation issued under the act. The act of May
30, 1908, however, expired on June 30, 1914, and while it was ex-
tended by section 27 of the act of December 23, 1913, to June
30, 1915, it was expressly provided in the latter act that on the
REGULATION" OF THE BAISTKING BUSINESS. 93
expiration of the act of May 30, 1908, section 5214 should be re-
enacted to read as such section read prior to l\Iay 30, 190S. The acts
of December 23, 1913, and Aufrust 4, 1914. amended the provisions
In this section of the act of May 30, 1908, relative to the taxa-
tion of emergency currency. All the provisions for the emer-
gency currency expired on June 30, 1915.
The following is section 5214 as it stood prior to the expiration
of the Emergency Currency Act on June 30, 1915, with all amend-
ments :
" Sec. 5214. National banking associations having on deposit
bonds of the United States, bearing interest at the rate of two
per centum per annum, including the bonds issued for the con-
struction of the Panama Canal, under the provisions of .section
eight of 'An Act to provide for the construction of a canal con-
necting the waters of the Atlantic and Pacific oceans.' approved
June twenty-eighth, nineteen hundred and two, to secure its
circulating notes, shall pay to the Treasury of the Unitetl States,
in the months of January and July, a tax of one-fourth of one
per centum each half year upon the average amount of such of its
notes in circulation as are based upon the deposit of such bonds;
and such associations having on deposit bonds of the United
States bearing interest at a rate higher than two per centum
per annum shall pay a tax of one-half of one per centum each
half year upon the average amount of such of its notes in circula-
tion as are based upon the deposit of such bonds.
" National banking associations having circulating notes secured
otherwise than by bonds of the United States, shall pay for the
first three months a tax at the rate of three per centum per annum
upon the average amount of such of their notes in circulation as
are based upon the deposit of such securities, and afterwards an
additional tax rate of one-half of one per centum per annum for
each month until a tax of six per centum per annum is reached,
and thereafter such tax of six per centum per annum upon the
average amount of such notes. Every national banking associa-
tion having outstanding circulating notes secured by a deposit of
other securities than United States bonds shall make monthly
returns, under oath of its president or cashier, to the Treasurer
of the United States, in such form as the Treasurer may prescribe,
of the average monthly amount of its notes so secured in circula-
tion ; and it shall be the duty of the Comptroller of the Currency
to cause such reports of notes in circulation to be verified by
examination of the bank's records. The taxes received on circu-
lating notes secured otherwise than by bonds of the United States
shall be paid into the Division of Redemption of the Treasury and
credited and added to the reserve fund held for the redemption of
United States and other notes."
HALF-YEARLY RETURN OF CIRCULATION [deposits and
capital stock].
446. Sec. 5215. — In order to enable the Treasurer to Act J^ne 3,
assess the duties imposed by the preceding section, each sec' 41; is
association shall, within ten days from the first days of ^*^^" ^" ^^^'
January and July of each year, make a return, under the
oath of its president or cashier, to the Treasurer of the
United States, in such form as the Treasurer may pre-
scribe, of the average amount of its notes in circulation,
[aiid of the average ammint of its deposits., and of the
average amount of its capital stock, heyond the amount
invested in United States bonds], for the six months next
preceding the most recent first day of January or July.
Every association which fails so to make such return
shall be liable to a penalty of two hundred dollars, to be
94 REGUL-ATION OF THE BANKIISTG BUSINESS.
collected either out of the interest as it may become due
such association on the bonds deposited with the Treas-
urer, or, at his option, in the manner in which penalties
are to be collected of other corporations under the laws
of the United States.
Note. — The taxes on the average amount of deposits and capital
stock were repealed by the act of March 3, 1883.
PENALTY FOR FAILURE TO MAKE RETURN.
Act June 3, 447. Scc. 5216. — Whenever any association fails to make
ITc.' 4i ; ^^li the half-yearly return required by the preceding section, ,
Stat. L., ill. the duties to be paid by such association shall be assessed
upon the amount of notes delivered to such association
by the Comptroller of the Currency, [and upon the high-
est amount of its deposits and capital stocky to he asceV'
tained in such Tnanner as the Treasurer may deem hest.']
Note. — See note under section 5215 stating that tax on deposits
and capital stock had been repealed.
ENFORCING TAX ON CIRCULATION.
Act .Tune 3, 448. Scc. 5217. — Whenever an association fails to pay
s e^c.' 41 ; ^^1^^ the duties imposed by the three preceding sections, the
Stat. L., 111. sums due may be collected in the manner provided for the
collection of United States taxes from other corpora-
tions ; or the Treasurer may reserve the amount out of the
interest, as it may become due, on the bonds deposited
with him by such defaulting association.
REFUNDING EXCESS TAX.
Resolution 449. Scc. 5218. — In all cases where an association has
No. ' 49; __i^ paid or may pay in excess of what may be or has been
as^ainendpd 'in lound due f rom it, on account of the duty required to be
R. s. 5218. paid to the Treasurer of the United States, the associa-
tion may state an account therefor, which, on being certi-
fied by the Treasurer of the United States, and found
correct by the First Comptroller of the Treasury, shall
be refunded in the ordinary manner by warrant on the
Treasury.
NO TAX TO BE PAID BY INSOLVENT BANKS. ACT MARCH
1, 1879.
nJe *^a""' mIf' ^^^" ^^^' ^^' — ^^^^ whenever and after any bank has
1, i87!>, sec! ceased to do business by reason of insolvency or bank-
22 j^ 20 Stat. L., ruptcy, no tax shall be a.ssessed or collected, or paid into
the Treasury of the United States, on account of such
bank, which shall diminish the assets thereof necessary
for the full payment of all its depositors; and such tax
shall be abated from such national banks as are found by
the Comptroller of the Currency to be insolvent; * * •.
REGtJLATION OF THE BANKING BUSINESS. 95
STATE TAXATION.
451. Sec. 5219.— Nothing herein shall prevent all the ^^^^J J"°io6*
shares in any association from being included in the valu- sec' 4i; li
ation of the personal property of the owner or holder of ' let. iVb. io,
such shares, in assessing taxes imposed by authority of ^f^^; j^;^ ^4 ^^
the State within which the association is located; but the
legishiture of each State may determine and direct the
manner and place of taxing all the shares of national
banking associations located within the State, subject
only to the two restrictions, that the taxation shall not be
at a greater rate than is assessed upon other moneyed
capital in the hands of individual citizens of such State,
and that the shares of any national banking association
owned by nonresidents of any State shall be taxed in the
city or town where the bank is located, and not elsewhere.
Nothing herein shall be construed to exempt the real
property of associations from either State, county, or mii-
nicipal taxes, to the same extent, according to its value,
as other real property is taxed.
DISSOLUTION AND RECEIVERSHIP.
164312°— 20 7 97
CHAPTER V.
DISSOLUTION AND RECEIVERSHIP.
500. 5220. Two-thirds vote required
for liquidation.
501. 5221. Notice of voluntary liqui-
dation.
502. 5222. Deposit of lawful money to
redeem circulation.
503. 5223. No deposit required for
consolidation.
503a. Act November 7, 1918. Consoli-
dation of national banks.
504. 5224. Reassignment of bonds and
redemption of notes of
liquidating banks.
505. Act June 20, 1874. Duty of
Treasurer, Assistant
Treasurer, etc., to return
notes of failed or liquidat-
ing banks to Treasury for
redemption.
506. 5225. Destruction of redeemed
notes.
507. 5226. Protest of bank circulation.
508. 5227. Bonds forfeited if circula-
tion is dishonored. Ex-
amination by special
agent.
509. 5228. Suspension of business
after default.
510. 5229. Notice to present circula-
tion for redemption.
Cancellation of bonds.
511. 5230. Sale of bonds at auction.
First lien for redeeming
circulation.
512. 5231. Bonds may be sold at pri-
vate sale.
513. 5232. Disposal of redeemed
notes. Regulations for
redemption records.
514. 5233. Redeemed notes to be can-
celed.
515. 5234. Appointment and duties of
receivers.
516. 5235. Notice to creditors of in-
solvent banks to present
claims.
517. 5236. Dividends. Distribution of
assets of insolvent banks.
518. 5237. When bank may enjoin fur-
ther proceedings.
519. 5238. Fees and expenses.
520. Act June 30, 1876. When re-
ceiver may be appointed.
521. Act June 30, 1876. Creditor's
bill against shareholders.
522. Act June 30, 1876, as amended
1892. 1897. Appoint-
ment, qualification, and
duties of shareholders'
agent.
523. Act March 29, 1886. Receiver
may purchase property to
protect his tru^t.
524. Act March 29, 1886. Approval of
request.
525. Act March 29, 1886. Payment.
526. 5239. Penalty for violation of
this title. Forfeiture of
charter. Individual lia-
bility of directors.
527. 5240. Appointment of examiners.
Compensation.
528. 5241. Limitation of visitorial
powers.
529. 5242. Transfers, when void. Il-
legal prefei-ence of credi-
tors.
530. 5243. Use of the title "Na-
tional."
TWO-THIRDS VOTE REQUIRED FOR LIQUIDATION.
500. Sec. 5220.— Any association may go into liqnida- ^^^^^ i^°\ol\
tion and be closed by the vote of its shareholders o^^i^g|'iat'L"ii2^^
two-thirds of its stock.
Note. — For enforcement of shareholders' liability when bank is
in liquidation see act of June 30, 1876, following Revised Statutes,
5238.
NOTICE OF VOLUNTARY LIQUIDATION.
501. Sec. 5221. — AVhenever a vote is taken to go into 1 864, c.""%6!
liquidation it shall be the duty of the board of directors 1^^^^ j'^-=„p^
to cause notice of this fact to be certified, under the seal
an
100 DISSOLUTION AND KECEIVEESHIP.
of the association, by its president or cashier, to the
Comptroller of the Currency, and publication thereof to
be made for a period of two months in a newspaper pub-
lished in the city of New York, and also in a newspaper
published in the city or town in which the association is
located, or if no newspaper is there published, then in the
newspaper published nearest thereto, that the association
is closing up its affairs, and notifying the holders of its
notes and other creditors to present the notes and other
claims against the association for payment.
DEPOSIT OF LAWFUL MONET TO REDEEM CIRCULATION.
Act June 3. 502. Sec. 5222. — Within six months from the date of
sec^s*' 42, ■43^1 the vote to go into liquidation, the association shall de-
13^ Stat. L-. posit with the Treasurer of the United States, lawful
Act July 14, money of the United States sufficient to redeem all its
ifi^^'stat. '^L.', outstanding circulation. The Treasurer shall execute
2'^-*- duplicate receipts for money thus desposited and deliver
one to the association and the other to the Comptroller of
the Currency, stating the amount received by him, and the
purpose for which it has been received; and the money
shall be paid into the Treasury of the United States, and
placed to the credit of such association upon redemption
account.
NO DEPOSIT REQUIRED FOR CONSOLIDATION.
1870* c"^^26¥' .^^^' ^^^- 5223.— An association which is in good faith
16 Stat. L.', winding up its business for the purpose of consolidating
^^*" with another association shall not be required to deposit
lawful money for its outstanding circulation; but its as-
sets and liabilities shall be reported by the association
with which it is in process of consolidation.
CONSOLIDATION OF NATIONAL BANKS.
1918.* ^*^ ^' 503a. — That any two or more national banking associa-
tions located within the same county, city, town, or village
may, with the approval of the Comptroller of the Cur-
rency, consolidate into one association under the charter
of either existing banks, on such terms and conditions as
may be lawfully agreed upon by a majority of the board
of directors of each association proposing to consolidate,
and be ratified and confirmed by the affirmative vote of
the shareholders of each such association owning at least
two-thirds of its capital stock outstanding, at a meeting
to be held on the call of the directors after publishing
notice of the time, place, and object of the meeting for
four consecutive weeks in some newspaper published in
the place where the said association is located, and if no
newspaper is published in the place, then in a paper
published nearest thereto, and after sending such notice to
each shareholder of record by registered mail at least ten
days prior to said meeting : Provided, That the capital
stock of such consolidated association shall not be less
DISSOLUnON AND RECEIVERSHIP. 101
than that required under existing law for the organization
of a national bank in the place in which it is located:
And provided further^ That when such consolidation
shall have been effected and approved by the comptroller
any shareholder of either of the associations so consoli-
dated who has not voted for such consolidation may give
notice to the directors of the association in which he is
interested within twenty days from the date of the cer-
tificate of approval of the comptroller that he dissents
from the plan of consolidation as adopted and approved,
whereupon he shall be entitled to receive the value of the
shares so held by him, to be ascertained by an appraisal
made by a committee of three persons, one to be selected
by the shareholder, one by the directors, and the third by
the two so chosen ; and in case the value so fixed shall not
be satisfactory to the shareholder he may within five days
after being notified of the appraisal appeal to the Comp-
troller of the Currency, who shall cause a reappraisal to
be made, which shall be final and binding; and if said
reappraisal shall exceed the value fixed by said committee,
the bank shall pay the expenses of the reappraisal ; other-
wise the appellant shall pay said expenses, and the value
so ascertained and determined shall be deemed to be a
debt due and be forthwith paid to said shareholder from
said bank, and the share so paid shall be surrendered and
after due notice sold at public auction within thirty days
after the final appraisement provided for in this Act.
Sec. 2. That associations consolidating with another
association under the provisions of this Act shall not be
required to deposit lawful money for their outstanding
circulation, but their assets and liabilities shall be re-
ported by the association with which they have consoli-
dated. And all the rights, franchises, and interests of the
said national bank so consolidated in and to every species
of property, personal and mixed, and choses in action
thereto belonging, shall be deemed to be transferred to
and vested in such national bank into which it is con-
solidated without any deed or other transfer, and the
said consolidated national bank shall hold and enjoy the
same and all rights of property, franchises, and interests
in the same manner and to the same extent as was held
and enjoyed by the national bank so consolidated there-
with.
REASSIGNMENT OF BONDS AND REDEMPTION OF NOTES
OF LIQUIDATING BANKS.
504. Sec. 5224 [as amended 1875]. — Whenever a suffi- Act June ^,
cient deposit of lawful money to redeem the outstanding s?c^.' 42; ^Ts
circulation of an association proposing to close its busi- ^*\^(;f ^ivb ^is
ncss has been made, the bonds deposited by the associa- isVs. ' c. so!
tion to secure payment of its notes shall be reassigned to 320. ^*'^'' ^"
it, in the manner prescribed by section fifty-one hundred
and sixty-two. And thereafter the association and its
102 DISSOLUTION AND RECEIVERSHIP.
shareholders shall stand discharged from all liabilities
upon the circulating notes, and those notes shall be re-
deemed at the Treasury of the United States. And if
any such bank shall fail to make the deposit and take up
its bonds for thirty days after the expiration of the time
specified, the Comptroller of the Currency shall have
power to sell the bonds pledged for the circulation of
said bank, at public auction in New York City, and, after
providing for the redemption and cancellation of said
circulation and the necessary expenses of the sale, to
pay over any balance remaining to the bank or its legal
repress] tatives.
DUTY OF TREASURER, ASSISTANT TREASURERS, ETC., TO
RETURN NOTES OF FAILED OR LIQUIDATING BANKS TO
TREASURY FOR REDEMPTION. ACT JUNE 20, 1874.
1874* c"°^343; 505. Sec. 8. — * * * And it shall be the duty of the
L.^' i^2h ^^ ^*^** J^ I'easurer, assistant treasurers, designated depositaries,
and national bank depositaries of the United States
* * * to assort and return to the Treasury for re-
demption the notes of such national banks as have failed,
or gone into voluntary liquidation for the purpose of
winding up their affairs, and of such as shall hereafter so
fail or go into liquidation.
DESTRUCTION OF REDEEMED NOTES.
1864.* ?°'i06: 506. Sec. 5225 [as amended 1877].— Whenever the Treas-
st\t" h.^112.^^^^^ ^^^^ redeemed any of the notes of an association
Act. Feb. 27, which lias conmienced to close its affairs under the five
Stat.' L.. 252. preceding sections, he shall cause the notes to be mu-
tilated and charged to the redemption account of the
association; and all notes so redeemed by the Treasurer
shall, every three months, be certified to and [bmmedl
in the manner prescribed in section fifty-one hundred and
eighty -four.
Note. — See act of June 23, 1874, following Revised Statutes, sec-
tion 5184, directing that bank notes be macerated and not burned.
PROTEST OF BANK CIRCULATION.
507. Sec. 5226. — Whenever any national banking asso-
1864* c"°%6' ciation fails to redeem in the lawful money of the United
8 0 0.' 46; i:^ States any of its circulating notes, upon demand of pay-
stat. L., 113. j^gj^^ j^jjy made during the usual hours of business, at the
office of such association, or at its designated place of re-
demption, the holder may cause the same to be protested,
in one package, by a notary public, unless the president or
cashier of the association whose notes are presented for
payment, [or the president or cashier of the association at
the place at which they are redeemahle'] offers to waive
demand and notice of the protest, and, in pursuance of
DISSOLUTION AND RECEIVERSHIP. 103
such offer, makes, signs, and delivers to the party mak-
ing such demand an admission, in writing, stating the
time of the demand, the amount demanded, and the fact
of the nonpayment thereof. The notary public, on mak-
ing such protest, or upon receiving such admission, shall
forthwith forward such admission or notice of protest to
the Comptroller of the Currency, retaining a copy there-
of. If, however, satisfactory proof is produced to the
notary public that the payment of the notes demanded
is restrained by order of any court of competent juris-
diction, he shall not protest the same. When the holder
of any notes causes more than one note or package to
be protested on the same day, he shall not receive pay
for more than one protest.
Note. — Circulation redeemable only at Treasury or over own
counter. Designated places of redemption have not existed since
act June 20, 1874. (See note under paragraph 401, ante.)
BONDS FORFEITED IF CIRCULATION IS DISHONORED.
EXAMINATION BY SPECIAL AGENT.
508. Sec. 5227. — On receiving notice that any national jg^c* June ^3.
banking association has failed to redeem any of its circu- s e c' 47 ; 1^
lating notes, as specified in the preceding section, the ^*" ' ^ *
Comptroller of the Currency, with the concurrence of the
Secretary of the Treasury, may appoint a special agent,
of whose appointment immediate notice shall be given to
such association, who shall immediately proceed to ascer-
tain whether it has refused to pay its circulating notes in
the lawful money of the United States, when demanded,
and shall report to the Comptroller the fact so ascer-
tained. If, from such protest, and the report so made,
the Comptroller is satisfied that such association has re-
fused to pay its circulating notes and is in default, he
shall, within thirty days after he has received notice of
such failure, declare the bonds deposited by such associa-
tion forfeited to the United States, and they shall there-
upon be so forfeited.
SUSPENSION OF BUSINESS AFTER DEFAULT.
509. Sec. 5228 [as amended 1875].— After a default on jg^ct June^s.
the part of an association to pay any of its circulating |ec.' ^6;^ja
notes has been ascertained by the Comptroller, and notice ac? ' Feb. is,
thereof has been given by him to the association, it shall ^fjf; L.,^32'0^^
not be lawful for the association suffering the same to
pay out any of its notes, discount any notes or bills, or
otherwise prosecute the business of banking, except to
receive and safely keep money belonging to it, and to
deliver special deposits.
104 DISSOLUTION AND RECEIVERSHIP.
NOTICE TO PRESENT CIRCULATION FOR REDEMPTION.
CANCELLATION OF BONDS.
Act June 3, g^Q gg^ 5229. — Immediately upon declaring the bonds
Ift 47 ; 13 of an association forfeited for nonpayment of its notes,
Stat. L.. 114. ^.j^g Comptroller shall give notice, in such manner as the
Secretary of the Treasury shall, by general rules or other-
wise, direct, to the holders of the circulating notes of such
association, to present them for payment at the Treasury
of the United States ; and the same shall be paid as pre-
sented in lawful money of the United States, whereupon
the Comptroller may, in his discretion, cancel an amount
of bonds pledged by such association equal at current
market rates, not exceeding par, to the notes paid.
S\LE OF BONDS AT AUCTION. FIRST LIEN FOR REDEEM-
ING CIRCULATION.
Act June 3, 511. Scc. 5230. — Whenever the Comptroller has become
ISs' 47, \*f: satisfied, by the protest or the waiver and admission
13 ■ Stat. L.; specified in section fifty-two hundred and twenty-six, or
^^*' by the report provided for in section fifty-two hundred
and twenty-seven, that any association has refused to
pay its circulating notes, he may, instead of canceling its
bonds, cause so much of them as may be necessary to
redeem its outstanding notes to be sold at public auction
in the city of New York, after giving thirty days' notice
of such sale to the association. For any deficiency in the
proceeds of all the bonds of an association, when thus
sold, to reimburse to the United States the amount
expended in paying the circulating notes of the associa-
tion, the United States shall have a paramount lien upon
all its assets ; and such deficiency shall be made good out
of such assets in preference to any and all other claims
whatsoever, except the necessary costs and expenses of
administering the same.
BONDS MAY BE SOLD AT PRIYATE SALE.
Act June 3. 512. Sec. 5231. — The Comptroller may, if he deems it
ll^c.' 49 ; ^*\*:i for the interest of the United States, sell at private sale
Stat. L., 114. ^j^y q£ ^YiQ bonds of an association shown to have made
default in paying its notes, and receive therefor either
money or the circulating notes of the association. But
no such bonds shall be sold by private sale for less than
par, nor for less than the market value thereof at the
time of sale; and no sales of any such bonds, either public
or private, shall be complete until the transfer of the
bonds shall have been made with the formalities pre-
scribed by sections fifty-one hundred and sixty-two,
fifty-one hundred and sixty-three, and fifty-one hundred
and sixty -four.
DISSOLUTION AND RECEIVERSHIP. 105
DISPOSAL OF REDEEMED NOTES; REGULATIONS FOR
REDEMPTION RECORDS.
513. Sec. 5232. — The Secretary of the Treasury may, j^Act Janets,
from time to time, make such regulations respecting the s e c' 47 ; 1^
disposition to be made of circulating notes after presen- ^*'**- ^' ^^■*-
tation at the Treasury of the United States for payment,
and respecting the perpetuation of the evidence of the
payment thereof, as may seem to him proper.
REDEEMED NOTES TO BE CANCELED.
514. Sec. 5233. — All notes of national banking associa- ^g^ct J"°e 3.
tions presented at the Treasury of the United States for s e c' 47 ; 1^
payment shall, on being paid, be canceled. ^- ^^■*-
APPOINTMENT AND DUTIES OF RECEIVERS.
515. Sec. 5234. — On becoming satisfied, as specified in ^g-^^t J"°e 3,
sections fiftv-two hundred and twenty-six and fifty-two s e c' 56 ; 13
hundred and twenty-seven, that any association has re-
fused to pay its circulating notes as therein mentioned,
and is in default, the Comptroller of the Currenc}' may
forthwith appoint a receiver, and require of him such
bond and security as he deems proper. Such receiver,
under the direction of the Comptroller, shall take pos-
session of the books, records, and assets of every descrip-
tion of such association, collect all debts, dues, and claims
belonging to it, and, upon the order of a court of record
of competent jurisdiction, may sell or compound all bad
or doubtful debts, and, on a like. order, may sell all the
real and personal property of such association, on such
terms as the court shall direct; and may, if necessarj' to
pay the debts of such association, enforce the individual
liability of the stockholders. Such receiver shall pay
over all money so made to the Treasurer of the United
States, subject to the order of the Comptroller, and also
make report to the Comptroller of all his acts and pro-
ceedings. Provided^ That the Comptroller may, if he Act May 15,
deems proper, deposit any of the mone}' so made in any ]^_]\l '^^ ^^^^
regular Govermnent depositary, or in any State or
national bank either of the city or town in which the
insolvent bank was located, or of a city or town as adja-
cent thereto as practicable; if such deposit is made he
shall require the depositary to deposit United States
bonds or other satisfactory' securities with the Treasurer
of the United States for the safe-keeping and prompt
payment of the money so deposited. Such depositary
shall pay upon such money interest at such rate as the
Comptroller may prescribe, not less, however, than two
per centum per annum upon the average monthly amount
of such deposits.
NoTEL — Other provisions autliorizinjr the appointment of re-
ceivers of national banks and relatini: to powers and duties of
receivers and agents will be found in the act of June 30, 187G, as
•)o
106 DISSOLUTION AND RECER^RSHIP.
amended August 3, 1S92, and March 2, 1S97, and the act of March
29, 1886. Both these acts are set forth following section 5238;
Revised Statutes.
A receiver may also be appointed, under the provisions of sec-
tion 5234 of the Revised Statutes of the United States, for the
following violations of law :
Where the capital stock of a national bank has not been fully
paid in and it is thus reduced below the legal minimum and
remains so for thirtj' days. (Sec. 5141, R. S.)
For failure to make good the lawful money reserve within
thirty days after notice. (Sec. 5191, R. S.)
Where a bank purchases or acquires its own stock to prevent
loss upon a debt previously contracted in good faith, and the same
Is not sold or disposed of within six months from the time of its
purchase. (Sec. 5201, R. S.)
For failure to make good any impairment in its capital stock
and refusing to go into liquidation within three months after
receiving notice. (Sec. 5205, R. S.)
For false certification of checks by any officer, clerk, or agent.
(Sec. 5208, R. S.)
NOTICE TO CKEDITORS OF INSOLTENT BANKS TO PRE-
SENT CLAIMS.
Act June 3, 516. Scc. 5235. — The Comptroller shall, upon appoint-
1864, c. 106,. . J.- J. I • I, 1 1-
B e c. 50 ; 13 iiig a receiver, cause notice to be given, by advertisement
Stat. L., 114. ^^ such newspapers as he may direct, for three consecu-
tive months, calling on all persons who may have claims
against such association to present the same, and to make
legal proof thereof.
DITIDENDS; DISTRIBUTION OF ASSETS OF INSOLTENT
BANKS.
1864^ c"°*i06; 517. Sec. 5236.— From time to time, after full provision
se c.' 50 ; 13 has been first made for refunding to the United States
^ * " ■ any deficiency in redeeming the notes of such association,
the Comptroller shall make a ratable dividend of the
money so paid over to him by such receiver on all such
claims as may have been proved to his satisfaction or ad-
judicated in a court of competent jurisdiction, and, as
the proceeds of the assets of such association are paid
over to him, shall make further dividends on all claims
previously proved or adjudicated; and the remainder of
the proceeds, if any, shall be paid over to the shareholders
of such association or their legal representatives, in pro-
portion to the stock by them respectively held.
>VHEN BANK MAY ENJOIN FURTHER rROCEEIUNGS.
1804* c"°^i06' ^^^' ^®^' 5^^"^- — Whenever an association against wliich
sec' 50; 1.3 proceedings have been instituted, on account of any al-
stat. L., 114. igggd refusal to redeem its circulating notes as aforesaid,
denies having failed to do so, it may, at any time within
ten days after it has been notified of the appointment of
an agent, as provided in section fifty-two hundred and
twenty-seven, apply to the nearest circuit, or district, or
Territorial court of the United States to enjoin further
proceedings in the premises; and sucli court, after citing
DISSOLUTION AND RECEIVERSHIP. 107
the Comptroller of the Currency to show cause why fur-
ther proceedings should not be enjoined, and after the
decision of the court or finding of a jury that such asso-
ciation has not refused to redeem its circulating notes,
wiien legally presented, in the lawful money of the
United States, shall make an order enjoining the Comp-
troller, and any receiver acting under his direction, from
all further proceedings on account of such alleged refusal.
Note. — See also sections 24, judiciary act passed March 31, 1911,
and 73G, Revised Statutes, paragraphs 701 and 702, post.
FEES AND EXPENSES.
519. Sec. 5238.— All fees for protesting the notes issued ^g^ct June^l.
by any national banking association shall be paid by the sec' si; li
person j)rocuring the protest to be made, and such asso- ^^^^- ^' ^^'^^
ciation shall be liable therefor ; but no part of the bonds
deposited by such association shall be applied to the pay-
ment of such fees. All expenses of any preliminary or
other examinations into the condition of any association
shall be paid by such association. All expenses of any
receivership shall be paid out of the assets of such asso-
ciation before distribution of the proceeds thereof.
WHEN RECEIVER MAY BE APPOINTED. ACT JUNE 30,
1876.
520. Section 1. — That whenever any national banking ^g^g* "'c'l^^iel
association shall be dissolved, and its rights, privileges, sec- 1: i9 stat!
and franchises declared forfeited, as prescribed in section ''
fifty-two hundred and thirty-nine of the Revised Statutes
of the United States, or whenever any creditor of any
national banking association shall have obtained a judg-
ment against it in any court of record, and made appli-
cation, accompanied by a certificate from the clerk of the
court stating that such judgment has been rendered and
has remained unpaid for the space of thirty clays, or
whenever the Comptroller shall become satisfied of the
insolvency of a national banking association, he may,
after due examination of its affairs, in either case, appoint
a receiver, who shall proceed to close up such association,
and enforce the personal liability of the shareholders, as
provided in section fifty-tw^o hundred and thirty-four of
said statutes.
CREDITOR'S BILL AGAINST SHAREHOLDERS. ACT JUNE
30, 1876.
521. Sec. 2. — That when any national banking associa- Act June ^o,
tion shall have gone into liquidation under the provisions sec. 2; i"9 stat!
of section five thousand two hundred and tAventy of ^•' ^^•
said statutes, the individual liability of the shareholders
provided for by section fifty-one hundred and fifty-one
of said statutes may be enforced by any creditor of such
association, by bill in equity, in the nature of a creditor's
108 DISSOLUTION AND RECEIVERSHIP.
bill, brought by such creditor on behalf of himself and of
all other creditors of the association, against the share-
holders thereof, in any court of the United States having
original jurisdiction in equity for the district in which
such association may have been located or established.
APP0INT3IENT, QUALIFICATION, AXD DUTIES OF SHARE-
HOU)EES' AGENT. ACT JUNE 30, 1876, AS AMENDED
1892, 1897.
Act June 30, 522. Sec. 3. — That whenever any association shall have
sec.^3 ; 19 stlt! been or shall be placed in the hands of a receiver, as pro-
amended' au-^ '^'^^^^^^ i^ scction fifty-two hundred and thirty-four and
itat^^L^' 34"?°^^^^^ sections of the Revised Statutes of the United
and' Mar/ 2^ States, and when, as provided in section fifty-two hun-
iff 6odi^ ^^^' ^^Gcl and thirty-six thereof, the Comptroller of the Cur-
rency' shall have paid to each and every creditor of such
association, not including shareholders who are creditors
of such association, whose claim or claims as such creditor
shall have been proved or allowed as therein prescribed,
the full amount of such claims, and all expenses of the
receivership and the redemption of the circulating notes
of such association shall have been provided for by de-
positing lawful mone}' of the United States with the
Treasurer of the United States, the Comptroller of the
Currency shall call a meeting of the shareholders of such
association by giving notice thereof for thirty days m a
newspaper published in the town, city, or county where
the business of such association was carried on, or if no
newspaper is there published, in the newspaper published
nearest thereto. At such meeting the shareholders shall
determine whether the receiver ^hall be continued and
shall wind up the affairs of such association, or whether
an agent shall be elected for that purpose, and in so de-
termining the said shareholders shall vote by ballot, in
person or by proxy, each share of stock entitling the
holder to one vote, and the majority of the stock in value
and number of shares shall be necessary to determine
whether the said receiver shall be continued, or whether
an agent shall be elected. In case such majority shall
determine that the said receiver shall be continued, the
said receiver shall thereupon proceed with the execution
of his trust, and shall sell, dispose of. or otherwise collect
the assets of the said association, and shall possess all the
powers and authority, and be subject to all the duties and
liabilities originally conferred or imposed upon him by his
appointment as such receiver, so far as the same remain
applicable. In case the said meeting shall, by the vote
of a majority of the stock in value and number of shares,
determine that an agent shall be elected, the said meeting
shall thereupon proceed to elect an agent, voting by bal-
lot, in person or by proxy, each share of stock entitling
the holder to one vote, and the person who shall receive
votes representing at least a majority of stock in value
DISSOLUTION AND RECEIVERSHIP. 109
and number shall be declared the agent for the purposes
hereinafter provided; and whenever any of the share-
holders of the association shall, after the election of such
agent, have executed and filed a bond to the satisfaction
of the Comptroller of the Currency, conditioned for tlie
payment and discharge in full of each and every claim
that may thereafter be proved and allowed by and before
a competent court, and for the faithful performance of
all and singular the duties of such trust, the Comptroller
and the receiver shall thereupon transfer and deliver to
such agent all the undivided or uncollected or other as-
sets of such association then remaining in the hands or
subject to the order and control of said Comptroller and
said receiver, or either of them ; and for this purpose said
Comptroller and said receiver are hereby severally em-
powered and directed to execute any deed, assignment,
transfer, or other instrument in writing that may be nec-
essary and proper; and upon the execution and delivery
of such instrument to the said agent the said Comptroller
and the said receiver shall by virtue of this act be dis-
charged from any and all liabilities to such association
and to each and all the creditors and shareholders thereof.
Upon receiving such deed, assignment, transfer, or
other instrument the person elected such agent shall hold,
control, and dispose of the assets and property of such
association which he may receive under the terms hereof
for the benefit of the shareholders of such association,
and he may, in his own name, or in the name of such
association, sue and be sued and do all other lawful acts
and things necessary to finally settle and distribute the
assets and property in his hands, and may sell, compro-
mise, or compound the debts due to such association, with
the consent and approval of the circuit or district court
of the United States for the district where the business of
such association was carried on, and shall at the conclu-
sion of his tcust render to such district or circuit court a
full account of all his proceedings, receipts, and expendi-
tures as such agent, which court shall, upon due notice,
settle and adjust such accounts and discharge said agent
and the sureties upon said bond. And in case any such
agent so elected shall refuse to serve, or die, resign, or
be removed, any shareholder may call a meeting of the
shareholders of such association in the town, city, or vil-
lage where the business of the said association was car-
ried on, by giving notice thereof for thirty . days in a
newspaper published in said town, city, or village, or if
no newspaper is there published, in the newspaper pub-
lished nearest thereto, at which meeting the shareholders
shall elect an agent, voting by ballot, in person or by
proxy, each share of stock entitling the holder to one
vote, and when such agent shall have received votes rep-
resenting at least a majority of the stock in value and
number of shares, and shall have executed a bond to the
110 DISSOLUTION AlTD KECErVT^ESHTP.
shareholders conditioned for the faithful performance
of his duties, in the penalty fixed by the shareholders at
said meeting, with two sureties, to be approyed by a
judge of a court of record, and file said bond in the office
of the clerk of a court of record in the county where the
business of said association was carried on, he shall have
all the rights, powers, and duties of the agent first elected
as hereinbefore provided. At any meeting held as here-
inbefore provided administrators or executors of de-
ceased shareholders may act and sign as the decedent
might have done if living, and guardians of minors and
trustees of other persons may so act and sign for their
ward or wards or cestui que trust. The proceeds of the
assets or property of any such association which may be
undistributed at the time of such meeting or may be sub-
sequently received shall be distributed as follows:
First. To pay the expenses of the execution of the
trust to the date of such payment.
Second. To repay any amount or amounts which have
been paid in by any shareholder or shareholders of such
association upon and by reason of any and all assess-
ments made upon the stock of such association by the
order of the Comptroller of the Currency in accordance
with the provisions of the statutes of the United States;
and
Third. The balance ratably among such stockholders,
in proportion to the number of shares held and owned by
each. Such distribution shall be made from time to time
as the proceeds shall be received and as shall be deemed
advisable by the said Comptroller or said agent.
Note. — Other sections of act June 30, 1876:
Section 4 amends Revised Statutes, 5205.
Section 5 relates to counterfeit notes.
Section 6 relates to savings banks and trust companies, organ-
ized under act of Congress.
RECEITER MAY PURCHASE PROPERTY TO PROTECT HIS
TRUST. ACT MARCH 29, 1886.
]886*"c^*"'sec' ^^^' ^^^' ^' — '^^at whenever the receiver of any na-
i; 24 st'at. L.^tional bank duly appointed by the Comptroller of the
*• Currency, and who shall have duly qualified and entered
upon the discharge of his trust, shall find it in his opinion
necessary, in order to fully protect and benefit his said
trust, to the extent of any and all equities that such trust
may have in any property, real or personal, by reason
of any bond, mortgage, assignment, or other proper legal
claim attaching thereto, and which said property is to be
sold under any execution, decree of foreclosure, or proper
order of any court of jurisdiction, he may certify the
facts in the case, together with his opinion as to the value
of the property to be sold, and the value of the equity his
said trust may have in the same, to the Comptroller of
the Currency, together with a request for the right and
DISSOLUTION" AND EECEIVERSHIP. Ill
authority to use and employ so much of the money of
said trust as may be necessary to purchase such property
at such sale.
APPROVAL OF REQUEST. ACT MARCH 29, 1S86.
524. Sec. 2. — That such request, if approved by the Act. Mar 29.
Comptroller of the Currency, shall be, together with the 2? 24*'sS.T;
certificate of facts in the case, and his recommendation as ®'
to the amount of money which, in his judgment, should be •
so used and employed, submitted to the Secretary of the
Treasury, and if the same shall likewise be approved by
him, the request shall be by the Comptroller of the Cur-
rency allowed, and notice thereof, with copies of the re-
quest, certificate of facts, and indorsement of approvals,
shall be filed with the Treasurer of the United States.
PAYMENT. ACT MARCH 29, 1886.
525. Sec. 3. — That whenever any such request shall be^o^^* '^H-^
n 1 1 •!/> -Ill • -1 /-^ n /. looo, C. 28, sec.
allowed as herembefore provided, the said Comptroller of 3 ; 24 stat. l.,
the Currency shall be, and is, empowered to draw upon ^'
and from such funds of any such trust as may be depos-
ited with the Treasurer of the United States for the
benefit of the bank in interest, to the amount as may be
recommended and allowed and for the purpose for which
such allowance was made: Provided, however, That all
payments to be made for or on account of the purchase of
any such property and under any such allowance shall be
made by the Comptroller of the Currency direct, with the
approval of the Secretary of the Treasury, for such pur-
pose only and in such manner as he may determine and
order.
PENALTY FOR VIOLATION OF THIS TITLE; FORFEITURE
OF CHARTER; INDIVIDUAL LIABILITY OF DIRECTORS.
526. Sec. 5239.— If the directors of any national bank- jg^ct June ^3,
ing association shall knowingly violate, or knowingly s e c' 53 ; 13
permit any of the officers, agents, or servants of the asso- ^*^*' ^' ^^^'
ciation to violate any of the provisions of this title, all
the rights, privileges, and franchises of the association
shall be thereby forfeited. Such violation shall, how-
ever,_be determined and adjudged by a proper circuit,
district, or Territorial court of the United State.s, in a
suit brought for that purpose by the Comptroller of the
Currency, in his own name, before the association shall be
declared dissolved. And in cases of such violation, every
director who participated in or assented to the same shall
be held liable in his personal and individual capacity for
all damages which the association, its shareholders, or any
other person, shall have sustained in consequence of such
violation.
112 DISSOLUTION AITD RECEIYERSHIP.
APPOINTMENT OF EXAMINERS, COMPENSATION.
186? c"°%6: 527. Sec. 5240 [as amended 1913].— The Comptroller of
sec. ' 54 ; 13 the Currency, with the approval of the Secretary of the
^* Act ^Feb/ 19, Treasury, shall appoint examiners, who shall examine
stat'L ^3^2^ ■^^ ^^'®^y member bank at least twice in each calendar year
Act Dec. 23, and oftener if considered necessary : Provided, however,
IV' 'stiu L.', That the Federal Reserve Board may authorize exam-
2'^i- ination by the State authorities to be accepted in the
case of State banks and trust companies and may at any
time direct the holding of a special examination of
State banks or trust companies that are stockholders in
any Federal reserve bank. The examiner making the
examination of any national bank, or of any other mem-
ber bank, shall have power to make a thorough exami-
nation of all the affairs of the bank, and in doing so he
shall have power to administer oaths and to examine
any of the officers and agents thereof under oath and
shall make a full and detailed report of the condition of
said bank to the Comptroller of the Currency.
The Federal Reserve Board, upon the recommendation
of the Comptroller of the Currency, shall fix the salaries
of all oank examiners and make report thereof to Con-
gress. The expense of the examinations herein provided
for shall be assessed by the Comptroller of the Currency
upon the banks examined in proportion to assets or re-
sources held by the banks upon the dates of examination
of the various banks.
In addition to the examinations made and conducted
by the Comptroller of the Currency, every Federal reserve
bank may, with the approval of the Federal reserve agent
or the Federal Reserve Board, provide for special exami-
nation of member banks within its district. The expense
of such examinations shall be borne by the bank ex-
amined. Such examinations shall be so conducted as to
inform the Federal reserve bank of the condition of its
member banks and of the lines of credit which are being
extended by them. Every Federal reserve bank shall at
all times furnish to the Federal Reserve Board such in-
formation as may be demanded concerning the condition
of any member bank within the district of the said
Federal reserve bank.
No bank shall be subject to any visitatorial powers
other than such as are authorized by law, or vested in
the courts of justice or such as shall be or shall have
been exercised or directed by Congress, or by either Hou^^^e
thereof or by any committee of Congress or of either
House duly authorized.
The Federal Reserve Board shall, at least once each
year, order an examination of each Federal reserve bank,
and upon joint application of ten member banks the
Federal Reserve Board shall order a special examination
and report of the condition of any Federal reserve bank.
DISSOLUTION AND RECEIVERSHIP. 113
LIMITATION OF TISITORIAL POWERS.
528. Sec. 5241. — No association shall be subject to any j^^^t c"°%6'
visitorial powers other than such as are authorized by sec' 54: i.^
this Title, or are vested in the courts of justice. ^***' ^" ^^®
Note. — See also the fourth paragraph in section 5240, Immedi-
ately preceding.
TRANSFERS. WHEN TOID; ILLEGAL PREFERENCE OP
CREDITORS.
529. Sec. 5242. — All transfers of the notes, bonds, bills ^^Act J"°'^j^3.
of exchange, or other evidences of debt owing to anyseV 52; is
national banking association, or of deposits to its credit ;^^^^- ^" •^^^•
all assignments of mortgages, sureties on real estate, or
of judgments or decrees in its favor; all deposits of
money, bullion, or other valuable thing for its use, or for
the use of any of its shareholders or creditors; and all
payments of money to either, made after the commission
of an act of insolvency, or in contemplation thereof, made
with a view to prevent the application of its assets in the
manner prescribed by this chapter, or with a view to the
preference of one creditor to another, except in payment
of its circulating notes, shall be utterh" null and void;
and no attachment, injunction or execution, shall be is-
sued against such association or its property before final
judgment in any suit, action, or proceeding, in any State,
county, or municipal court.
USE OF THE TITLE " NATIONAL."
530. Sec. 5243. — All banks not organized .and transact- Act Mar. 3,
ing business under the national currency laws, or under gee. ^3 ; 17 s^tal'
this Title, and all persons or corporations doing the busi- ^- ^<^3.
ness of bankers, brokers, or savings institutions, except
savings banks authorized b}^ Congress to use the word
" national " as a part of their corporate name, are pro-
hibited from using the word " national " as a portion of
the name or title of such bank, corporation, firm, or
partnership ; and any violation of this prohibition com-
mitted after the third day of September, eighteen hun-
dred and seventy-three, shall subject the party charge-
able therewith tc a penalty of fifty dollars for each day
during which it is committed or repeated.
164312°— 20 S
]^2.4 DISSOLUTION AUD fiECElVEBSHIP.
FEDERAL RESERVE ACT.
115
CHAPTER VI.
THE FEDERAL RESERVE ACT.
As amended by the acts approved August 4 and August 15, 1914,
March 3, 1915, September 7, 1916, June 21, 1917, and March 3,
1919.
600.
601.
602.
602a.
602b.
602c.
602cl.
602e.
602f.
602g.
60211.
602i.
602j.
602k.
6021.
602m
602n.
603.
604.
604a.
604b.
604c.
604(1.
604e.
604f.
604g.
604b.
Title of act.
Definition of terras.
Federal reserve districts — or-
ganization committee.
Authority of committee.
Acceptance of terms of act.
Subscriptions to capital stock.
Responsibility of shareholders.
Failure of national banks to ac-
cept terms of act — penalty.
Failure of national banks to
become member banks — pen-
alty.
Public subscriptions — when ac-
cepted.
Limit to stock held by any in-
dividual copartnership or cor-
poration other than a mem-
ber bank. Public stock, how
transferable.
Allotment of stock to United
States.
Voting power.
Transfer of stock.
Minimum capital of Federal re-
serve bank.
Reserve cities, status of.
Authority of organization com-
mittee to employ assistants.
Brandies of Federal reserve
banks.
Organization of Federal reserve
banks. Application for stock
by national banks.
certificate.
Federal reserve
Organization
Powers of
banks.
Directors of
banks.
Classification
Federal reserve
of
directors,
class A and class
B
class C direc-
reserve agent,
Election of
directors.
Appointment of
tors. Federal
duties of.
Compensation of directors.
Organization of Federal reserve
banks. Authority of organi-
zation committee.
604i. First meeting of directors. Des-
ignation of terms of office.
605. Increase and decrease of capital
stock.
605a. Stock not transferable.
605b. Increase of capital stock.
605c. Applications for capital stock.
605d. Certificate of increase in stock
of Federal reserve bank.
605e. Reduction of capital stock.
006. Insolvency of member bank.
(JU~. Divisioa of earnings.
607a. Tax es:emptions.
608. Conversion of State banks into
national banks.
609. State banks may subscribe.
609a. Applications for membership.
G09b. Regulations and restrictions.
609c. Member banks required to make
reports to Federal Reserve
Board and subject to exami-
nation by examiners ap-
pointed by the board and such
banks' ofliicers, agents, and em-
ployees subject to penalties of
section 5209.
609d. Failure to comply with regula-
tions— penalty.
609e. Withdrawal from membership
in Federal reserve bank by
State bank or trust company.
609f. Amount of capital required to
enable State bank to become
member bank.
609g. Rights, powers, and liabilities
of State banks which Itoconie
member banks.
610. Appointment, compensation, and
qualification of members of
Federal Reserve Board.
610a. Governor and vice governor;
officers; qualification of mem-
bers.
610b. Provision for expenses.
610c. First meeting of board : Secre-
tary of Treasury chairman of
board.
117
118
THE FEDERAL RESERVE ACT.
610d. Member of Federal Reserve
Board not to be officer, direc-
tor, or stockholder in any
banking institution or trust
company.
610e. Vacancies on board — how filled.
610f. Powers of Secretai-y of Treas-
ury.
610g. Federal Reserve Board to make
annual report to Speaker of
the House of Representatives.
610h. Comptroller of the Currency.
611. Powers of Federal Reserve
Board.
611a. Examination of books of Fed-
eral reserve banks and mem-
ber banks. Board may re-
quire reports.
611b. Rediscounts.
611e. Suspension of reserve require-
ments.
611 d. Issue and retirement of Fed-
eral reserve notes.
611e. Reserve cities.
611f. Suspension or removal of offi-
cer or director of a Federal
reserve bank.
611g. Writing off doubtful or worth-
less assets.
611h. Suspension of operations of
Federal reserve bank.
611i. Requirement of bonds from
Federal reserve agents and
authority to make necessary
regulations under this act.
611j. General supervision.
611k. Permit to national banks to act
as trustee, executor, admin-
istrator, or registrar of stocks
and bonds.
6111. Employment of attorneys,
clerks, etc., and provisions for
payment of salaries.
611m. Discount by Federal reserve
bank of paper secured by
United States bonds issued
since April 24, 1917.
612. Federal ad\isory council.
612a. Powers of Federal advisory
council.
613. Powers of Federal reserve
banks.
613a. Rediscounts — notes, drafts, and
bills of exchange.
613b. Acceptances and limitations
thereof.
613c. Exceptions as to limit of indebt-
edness. Power to act as in-
surance agent, as real-estate
loan broker, and to accept
drafts, etc.
614. Open-market operations.
615. Government deposits.
616. Federal reserve notes author-
ized.
616a. Applications for Federal re.serve
notes. — Collateral security.
616b. Reserve requirements for Fed-
eral reserve banks.
616c. Issue and redemption of Fed-
eral reserve notes. No Fed-
eral reserve bank permitted to
pay out notes issued through
another Federal reserve bank.
616d. Deposits of gold with Treasurer
for redemption of Federal re-
serve notes.
616e. Federal Reserve Board may
grant or reject application of
Federal reserve bank for Fed-
eral reserve notes. Federal
reserve notes first lien on all
the assets of the bank.
616f. Reduction of note issues.
61 6g. Substitution of collateral.
616h. Preparation of Federal reserve
notes. Plates and dies to be
under control of Comptroller
of Currency. Where notes are
to be deposited.
616i. Appropriation for expense of
printing national - bank notes
may be used for printing Fed-
eral reserve notes.
616j. When Federal reserve bank
shall receive checks and drafts
on deposit at par.
616k. Charges for collection and for
sale of exchange.
6161. Federal Reserve Board may ex-
ercise functions of a clearing
house and may require Fed-
eral reserve banks to exercise
such functions.
616m. Secretary of the Treasury to re-
ceive deposits of gold coin or
gold certificates with the
Treasurer or Assistant Treas-
urer of the United States when
tendered by any Federal re-
serve bank or Federal reserve
agent for credit to its or his
account with the Federal Re-
serve Board.
617. National banks not required to
make deposit of United States
bonds prior to commencement
of business.
618. Refunding bonds. Retirement
of circulating notes.
61Sa. Purchase of United States
bonds by Federal reserve
banks.
618b. Issue of circulating notes to
Federal reserve banks on se-
curity of United States bonds.
Circulating notes so issued
obligations of Federal reserve
bank,
618c. Issue of one-year gold notes and
3 per cent bonds of the United
States in exchange for 2 per
cent United States bonds.
THE FEDERAL RESERVE ACT.
119
61 8d. Exchange of 3 per cent bonds
for one-year gold notes.
619. Bank reserves. Demand and
time deposits defined. Reserve
requirements, when effective.
619a. Reserve requirements for banks
not in reserve cities.
619b. Reserve requirements for banks
in reserve cities.
619c. Reserve requirements for banks
in central reserve cities.
619d Member bank forbidden to keep
on deposit with nonmember
bank a sum in excess of 10
per cent of its own capital and
surplus or to secure discounts
for nonmember bank.
619e. Withdrawal of reserve by mem-
ber bank.
619f. Reserve requirement, how esti-
mated.
619g. Reserve requirements for na-
tional banks located in Alaska
or outside the continental
United States.
620. Redemption fund with Treas-
urer not to be counted as re-
serve.
621. Bank examinations. Appoint-
ment and powers of examin-
ers. Acceptance of reports of
examinations by State au-
thority.
621a. Salaries of bank examiners.
621b. Examinations by Federal re-
serve bank.
621c. Examinations of Federal re-
serve banks.
622a. Member bank can not make loan
or grant a gratuity to any
national bank examiner.
622b. National bank examiner can
not perform any service for
compensation for any bank or
622c.
622d.
622e.
622f.
623.
624.
625.
626.
627.
627a.
628.
629.
630.
officer. Examiner can not
disclose the names of bor-
rowers or collateral without
first obtaining written con-
sent of Comptroller.
Penalty for oflicer, director, or
employee of member bank
who receives any commission
or gift in connection with any
loan.
Purchase of securities or prop-
erty from one of its directors,
or sales to a director by a
member bank.
Rate of interest paid directors,
officers, or employees not to
exceed that paid to other de-
positors.
Penalty for violation of any of
the provisions of section 22
oi the Federal i-eserve act.
Liability of stockholders of na-
tional banks.
Loans on real estate.
Foreign branches.
Repeal of provisions of law in-
consistent with the provisions
of the Federal reserve act.
Act of May 30, 1908, extended
to June 30, 1915. Reenact-
ment of certain sections of
Revised Statutes.
Rate of taxation on circulating
notes secured otherwise than
by bonds of the United
States. When Secretary of
Treasury authorized to sus-
pend limitations of act of
May 30, 1908.
Reduction of capital of national
banks.
Invalidation of clause, etc., in
act not to invalidate remain-
der of act.
Reservation of right to amend
or repeal.
TITLE OF ACT.
600. Be it enacted hy the Senate and House of Repre- ^^f ^|^; -^\
sentatives of the United States of America in Congress ^^ 'stat.' L.i
assembled, That the short title of this Act shall be the" "
" Federal Reserve Act."
DEFINITION OF TERMS.
601. Wherever the word "bank" is used in this Act, , Act. Dec. 23,
the word shall be held to include State bank, bankinof.ss 'stat.' l.'.
association, and trust company, except where national '-^^•
banks or P ederal reserve banks are specifically referred to.
120 THE FEDERAL RESERVE ACT.
The terms "national bank" and "national banking
association " used in this Act shall be held to be synony-
mous and interchangeable. The term "member bank"
shall be held to mean any national bank. State bank, or
bank or trust company which has become a member of
one of the reserve banks created by this Act. The term
" board " shall be held to mean Federal Reserve Board ;
the term " district " shall be held to mean Federal reserve
district; the term "reserve bank" shall be held to mean
Federal reserve bank.
FEDERAL RESERYE DISTRICTS— ORG ANIZATIO COM-
MITTEE.
^Act Dec. 23, QQ2, Scc. 2. — As sooH as practicable, the Secretary of
38 ■ stat.'^" L.; the Treasury, the Secretary of Agriculture and the
^*^* Comptroller of the Currency, acting as "The Reserve
Bank Organization Committee," shall designate not less
than eight nor more than twelve cities to be known as
Federal reserve cities, and shall divide the continental
United States, excluding Alaska, into districts, each dis-
trict to contain only one of such Federal reserve cities.
The determination of said organization committee shall
not be subject to review except by the Federal Reserve
Board when organized: Provided, That the districts
shall be apportioned with due regard to the convenience
and customary course of business and shall not neces-
sarily be coterminous with any State or States. The dis-
tricts thus created may be readjusted and new districts
may from time to time be created by the Federal Reserve
Board, not to exceed twelve in all. Such districts shall
be known as Federal reserve districts and may be desig-
nated by number. A majority of the organization com-
mittee shall constitute a quorum with authority to act.
AUTHORITY OF COMMITTEE.
Act Dec. 23, 602a. Said organization committee shall be authorized
sl^^'sut?* L.'.to employ counsel and expert aid. to take testimony, to
252. send for persons and papers, to administer oaths, and to
make such investigation as may be deemed necessary by
the said committee in determining the reserve districts
and in designating the cities within such districts where
such Federal reserve banks shall be severally located.
The said committee shall supervise the organization in
each of the cities designated of a Federal reserve bank,
which shall include in its title the name of the city in
which it is situated, as " Federal Reserve Bunk of
Chicago."
ACCEPTANCE OF TERMS OF ACT.
Act Dec. 2a, 602b. Under regulations to be prescribed by the organi-
38^%tur' L^^'^^^^^^ committee, every national banking association in
252. ' "^ ■ "the TTnited States is hereby required, and every eligible
bank in the United States and e\ery trust company
nrE FEDERAL RESERVE ACT. 121
within the District of Cohimbia, is hereby authorized to
signify in writing, within sixty days after the passage of
this act, its acceptance of the terms and provisions
hereof,
SUBSCRIPTIONS TO CAPITAL STOCK.
602c. When the organization committee shall have,^A^^ct Dec. 23,
designated the cities in which Federal reserve banks are 3.s stat." o..'
to be organized, and fixed the geographical limits of the ^^^'
Federal reserve districts, every national banking asso-
ciation within that district shall be required within
thirty days after notice from the organization commit-
tee, to subscribe to the capital stock of such Federal
reserve bank in a sum equal to six per centum of the
paid-up capital stock and surplus of such bank, one-
sixth of the subscription to be payable on call of the
organization committee or of the Federal Reserve Board,
one-sixth within three months and one-sixth within six
months thereafter, and the remainder of the subscrip-
tion, or any part thereof, shall be subject to call when
deemed necessary by the Federal Reserve Board, said
payments to be in gold or gold certificates.
RESPONSIBILITY OF SHAREHOLDERS.
602d. The shareholders of every Federal reserve bankjgfl^* sip- 'if:
shall be held individually responsible, equally and rata- ^^ stat. L',
bly, and not one for another, for all contracts, debts, and
engagements of such bank to the extent of the amount
of their subscriptions to such stock at the par value
thereof in addition to the amount subscribed, whether
such subscriptions have been paid up in whole or in part,
under the provisions of this Act.
FAILURE OF NATIONAL BANKS TO ACCEPT TERMS OF
ACT— PENALTY.
602e. Any national bank failing to signify its accept- jt)-^|* ^^^- ~h
ance of the terms of this Act within the sixty days afore- ss^ 'stat. * £.!
said, shall cease to act as a reserve agent, upon thirty ~^"'
days' notice, to be given within the discretion of the sail
organization committee or of the Federal Reserve Board.
FAILURE OF NATIONAL BANKS TO BECOME MEMBER
BANKS— PENALTY.
602f. Should ajiy national banking association in the Act Dec. 2s,
United States now organized fail within one year after as^'^'stltT' I',
the passage of this Act to become a member bank or fail -^^•
to comply with any of the provisions of this Act appli-
cable thereto, all of the rights, privileges, and franchises
)f such association granted to it under the nationai-bunk
-let, or under the provisions of this Act, shall be tliereby
122 THE FEDERAL KESER\^ ACT.
forfeited. Any noncompliance with or violation of this
Act shall, however, be determined and adjudged by any
court of the United States of competent jurisdiction in a
suit brought for that purpose in the district or territory
in which such bank is located, under direction of the
Federal Reserve Board, by the Comptroller of the Cur-
rency in his own name before the association shall be
declared dissolved. In cases of such noncompliance or
violation, other than the failure to become a member
bank under the provisions of this Act, every director
who participated in or assented to the same shall be held
liable in his personal or individual capacity for all dam-
ages which said bank, its shareholclers, or any other
person shall have sustained in consequence of such
violation.
Such dissolution shall not take awaj or impair any
remedy against such corporation, its stockholders or
officers, for any liability or penalty which shall have been
].reviously incurred.
PUBLIC SUBSCRIPTIONS— WHEN ACCEPTED.
1913* ?lc' ^'^' 602g. Should the subscriptions by banks to the stock
38 Stat. ' £.; of said Federal reserve banks or any one or more of them
be, in the judgment of the organization committee, in-
sufficient to provide the amount of capital required there-
for, then and in that event the said organization com-
mittee may, under conditions and regulations to be pre-
scribed by it, offer to public subscription at par such
an amount of stock in said Federal reserve banks, or any
one or more of them, as said committee shall determine,
subject to the same conditions as to payment and stock
liability as provided for member banks.
LIMIT TO STOCK HELD BY ANY INDIVIDUAL, COPART-
NERSHIP, OR CORPORATION OTHER THAN A MEMBER
BANK. PUBLIC STOCK, HOW TRANSFERABLE.
Act Dec. 23, 602h. No individual, copartnership, or corporation
38^%tat.'^' L.j other than a member bank of its district shall be per-
2^2- mitted to subscribe for or to hold at any time more than
$25,000 par value of stock in any Federal reserve bank.
Such stock shall be known as public stock and may be
transferred on the books of the Federal reserve bank by
the chairman of the board of directors of such bank.
ALLOTMENT OF STOCK TO UNITED STATES.
Act Dec. 23 6021. Should the total subscriptions by banks and the
lyirf, sec. 2; . , „ •i-r-<ii i i
38 Stat. L.. public to the stock oi said r ederal reserve banks, or any
^^^' one or more of them, be, in the judgment of the organiza-
tion committee, insufficient to provide the amount of
capital required therefor, then and in that event the said
organization committee shall allot to the United States
such an amount of said stock as said committee shall de-
THE FEDERAI. RESERVE ACT. 123
termine. Said United States stock shall be paid for at
par out of any money in the Treasury not otherwise ap-
propriated, and shall be held by the Secretary of the
Treasury and disposed of for the benefit of the United
States in such manner, at such times, and at such price,
not less than par, as the Secretary of the Treasury shall
determine.
VOTING POWER.
Dec. 23,
sec. 2 :
602 j. Stock not held by member banks shall not be en- j^^ct
titled to voting power. 38_^ 'stat. l..
TRANSFER OF STOCK.
602k. The Federal Reserve Board is hereby em- ^^Act Dec. 23,
powered to adopt and promulgate rules and regulations 38 'stlt^ l.;
governing the transfers of said stock. ^^^•
MINIMUM CAPITAL OF FEDERAL RESERTE BANK.
6021. No Federal reserve bank shall commence business jg^l* ^|^- |^:
with a subscribed capital less than $1,000,000. 38^^ stat. • l.;
RESERVE CITIES, STATUS OF.
602m. The organization of reserve districts and Federal 19^3* ^1^: ¥•
reserve cities shall not be construed as changing the ||g^ stat. u,
present status of reserve cities and central reserve cities,
except in so far as this Act changes the amount of
reserves that may be carried with approved reserve
agents located therein.
AUTHORITY OF ORGANIZATION COMMITTEE TO EMPLOY
ASSISTANTS.
602n. The organization committee shall have power to ^g^ct Dec. 2|.
appoint such assistants and incur such expenses in carry- ss 'stat.' l.)
ing out the provisions of this Act as it shall deem neces- " •
sary, and such expenses shall be payable by the Treasurer
of the IJnited States upon voucher approved by the Secre-
tary of the Treasury, and the sum of $100,000, or so
much thereof as may be necessary, is hereby appropri-
ated, out of any moneys in the Treasury not otherwise
appropriated, for the payment of such expenses.
BRANCH OFFICES.
BRANCHES OF FEDERAL RESERVE BANKS.
603. Sec. 3. — The Federal Reserve Board may permit or ^ Act Dec. 2^3.
require any Federal reserve bank to establish branch 38 'stat!^' l.!
banks within the Federal reserve district in which it is -^^-^j j,,^^ 21
located or within the district of any Federal reserve bank i9i7,^^soc. 1 :
which may have been suspended. Such branches, sub- 232. chap. 32."
124 THE FEDERAL RESERVE AC3T.
ject to such rules and regulations as the Federal Reserve
Board may prescribe, shall be operated under the super-
vision of a board of directors to consist of not more than
seven nor less than three directors, of whom a majority
of one shall be appointed by the Federal reserve bank of
the district, and the remaininor directors by the Federal
Reserve Board. Directors of branch banks shall hold
oflBce during the pleasure of the Federal Reserve Board.
FEDERAL RESER\TE BANKS.
ORGANIZATION OF FEDERAL RESERVE BANKS. APPLI-
CATION FOR STOCK BY NATIONAL BANKS.
1913* ?ec' ^4' ^^^' ^^^' .^' — ^^^hen the organization committee shall
38 'stat. ■ L.', have established Federal reserve districts as provided in
^^'*- section two of this Act, a certificate shall be filed with the
Comptroller of the Currency showing the geographical
limits of such districts and the Federal reserve city
designated in each of such districts. The Comptroller of
the Currency shall thereupon cause to be forwarded to
each national bank located in each district, and to such
other banks declared to be eligible by the organization
committee which may apply therefor, an application
blank in form to be approved by the organization com-
mittee, which blank shall contain a resolution to be
adopted by the board of directors of each bank executing
such application, authorizing a subscription to the capital
stock of the Federal reserve bank organizing in that dis-
trict in accordance with the provisions of this Act.
ORGANIZATION CERTIFICATE.
19U* ?ec; ^4- 60^^' When the minimum amount of capital stock pre-
254 ^**'*- i^-'- scribed by this Act for the organization of any Federal
reserve bank shall have been subscribed and allotted, the
organization committee shall designate any five banks
of those whose applications have been received, to
execute a certificate of organization, and thereupon the
banks so designated shall, under their seals, make an
organization certificate which shall specifically state the
name of such Federal reserve bank, the territorial extent
of the district over which the operations of such Federal
reserve bank are to be carried on, the city and State in
which said bank is to be located, the amount of capital
stock and the number of shares into wliich the same is
divided, the name and place of doing business of each
bank executing such certificate, and of all banks which
have subscribed to tlie capital stock of such Federal re-
serve bank and the number of shares subscribed by each,
and the fact that the certificate is made to enable those
banks executing same, and all banks which have sub-
scribed or may thereafter subscribe lo the capital stock
of such Federal reserve bank, to avail themselves of the
advantages of this Act.
THE FEDERAL RESERVE ACT. 125
The said org^anization certificate shall be acknowl-
edged before a judge of some court of record or notary
public; and shall be, together with the acknowledgement
thereof, authenticated by the seal of such court, or no-
tary, transmitted to the Comptroller of the Currency,
who shall file record and carefully preserve the same in
his office.
POWERS OF FEDERAL RESERYE BANKS.
604b. Upon the filing of such certificate with the ,„Act dpc. 23
Comptroller of the Currencj'^ as aforesaid, the said Fed- as 'stat.' u,
eral reserve bank shall become a body corporate, and as ^^*'
such, and in the name designated in such organization
certificate, shall have power —
First. To adopt and use a corporate seal.
Second. To have succession for a period of twenty
years from its organization unless it is sooner dissolved
by an Act of Congress, or unless its franchise becomes
forfeited by some violation of law.
Third. To make contracts.
Fourth. To sue and be sued, complain and defend, in
any court of law or equity.
Fifth. To appoint by its board of directors such offi-
cers and employees as are not otherwise provided for in
this act, to define their duties, require bonds of them and
fix the penalty thereof, and to dismiss at pleasure such
officers or emploj^ees.
Sixth. To prescribe by its board of directors, by-laws,
not inconsistent with law, regulating the manner in
which its general business may be conducted, and the
privileges granted to it by law may be exercised and
enjoyed.
Seventh. To exercise by its board of directors, or duly
authorized officers or agents, all powers specifically
granted by the provisions of this act and such incidental
powers as shall be necessary to carry on the business of
banking within the limitations prescribed by this act.
Eighth,^ Upon deposit with the Treasurer of the
United States of any bonds of the United States in the
manner provided by existing law relating to national
banks, to receive from the Comptroller of the Currency
circulating notes in blank, registered and countersigned
as provided by law, equal in amount to the par value of
the bonds so deposited, such notes to be issued under the
same conditions and provisions of law as relate to the
issue of circulating notes of national banks secured by
bonds of the United States bearing the circulating priv-
ilege, except that the issue of such notes shall not be
limited to the capital stock of such Federal reserve bank.
* See section IS. Also section 5 of act approved Apr. 23. 1918,
authorizing issuance of Federal Reserve Bank notes in any de-
nominations (including .$1 and $2) against security of United
States certificates of indebtedness.
126 THE FEDEKAL, RESERVE ACTT.
But no Federal reserve bank shall transact any business
except such as is incidental and necessarily preliminary
to its organization until it has been authorized by the
Comptroller of the Currency to commence business under
the provisions of this act.
DIRECTORS OF FEDERAL RESERTE BANKS.
lofs,* sec." ^i; 604c. Every Federal reserve bank shall be conducted
255 ^*^*' ^ ' ^^^^r ^he supervision and control of a board of directors.
The board of directors shall perform the duties usually
appertaining to the office of directors of banking associa-
tions and all such duties as are prescribed by law.
Said board shall administer the affairs of said bank
fairly and impartially and without discrimination in
favor of or against any member bank or banks and shall,
subject to the pro\asions of law and the orders of the
Federal Reserve Board, extend to each member bank
such discounts, advancements and accommodations as
may be safely and reasonably made with due regard for
the claims and demands of other member banks.
CLASSIFICATION OF DIRECTORS.
1913! ^ec.' ^4- 604d. Such board of directors shall be selected as here-
255 '^*^** ^" i^^ft^i' specified and shall consist of nine members, hold-
ing office for three years, and divided into three classes,
designated as classes A, B, and C.
Class A shall consist of three members, who shall be
chosen by and be representative of the stock-holding
banks.
Class B shall consist of three members, who at the time
of their election shall be actively engaged in their dis-
trict in commerce, agriculture or some other industrial
pursuit.
Class C shall consist of three members who shall be
designated by the Federal Reserve Board. When the
necessary subscriptions to the capital stock have been
obtained for the organization of any Federal reserve
bank, the Fedei^^l Reserve Board shall appoint the class
C directors and shall designate one of such directors as
chairman of the board to be selected. Pending the desig-
nation of such chairman, the organization committee
shall exercise the powers and duties appertaining to the
office of chairman in the organization of such Federal
reserve bank.
No Senator or Representative in Congress shall be a
member of the Federal Reserve Board or an officer or a
director of a Federal reserve bank.
No director of class B shall be an officer, director, or
employee of any bank.
No director of class C shall be an officer, director,
employee, or stockholder of any bank.
THE FEDERAL RESERVE ACT. 127
ELECTION OF CLASS A AND CLASS B DIRECTORS.
604e. Directors of class A and class B shall be chosen j^^^* ^|^; ^^)
in the following manner : 38^ stat. l.,
The Federal Reserve Board shall classify the member
banks of the district into three general groups or divi-
sions, designating each group by number. Each group
shall consist as nearly as may be of banks of similar
capitalization. Each member bank shall be permitted to ^ct Sept 26,
nominate to the chairman of the board of directors of I9i8-
the Federal reserve bank of the district one candidate for
director of class A and one candidate for director of class
B. The candidates so nominated shall be listed by the
chairman, indicating by whom nominated, and a copy of
said list shall, within fifteen days after its completion, be
furnished by the chairman to each member bank. Each
member bank by a resolution of the board or by an
amendment to its by-laws shall authorize its president,
cashier, or some other officer to cast the vote of the mem-
ber bank in the elections of class A and class B directors.
Within fifteen days after receipt of the list of candi-
dates the duly authorized officer of a member bank shall
certify to the chairman his first, second, and other choices
for director of class A and class B, respectively, upon
a preferential ballot upon a form furnished by the chair-
man of the board of directors of the Federal reserve
bank of the district. Each such officer shall make a
cross opposite the name of the first, second, and other
choices for a director of class A and for a director of
class B, but shall not vote more than one choice for any
one candidate. No officer or director of a member bank
shall be eligible to serve as a class A director unless nomi-
nated and elected by banks which are members of the
same group as the member bank of which he is an officer
or director.
Any person who is an officer or director of more than
one member bank shall not be eligible for nomination as
a class A director except by banks in the same group as
the bank having the largest aggregate resources of any
of those of which such person is an officer or director.
Any candidate having a majority of all votes cast in
the column of first choice shall be declared elected. If
no candidate have a majority of all the votes in the first
column, then there shall be added together the votes
cast by the electors for such candidates in the second col-
umn and the votes cast for the several candidates in the
first column. If any candidate then have a majority of
the electors voting, by adding together the first and
second choices, he shall be declared elected. If no can-
didate have a majority of electors voting when the first
and second choices shall have been added, then the votes
cast in the third column for other choices shall be added
together in like manner, and the candidate then having
128 THE FEDERAL RESERVE ACT.
the highest number of votes shall be declared elected.
An immediate report of election shall be declared.
APP0INT3IENT OF CLASS C DIRECTORS. FEDERAL RE
SERVE AGENTS, DUTIES OF.
19I3! ^tc. f ; 604f. Class C directors shall be appointed by the Fed-
38 Stat. L.', eral Eeserve Board. They shall have been for at least
two years residents of the district for which they are ap-
pointed, one of whom shall be designated by said board
as chairman of the board of directors of the Federal re-
jg-^^*g^^"| 21. serve bank and as 'Federal reserve agent.' Ke shall be a
person of tested banking experience, and in addition to
his duties as chairman of the board of directors of the
Federal reserve bank he shall be required to maintain,
under regulations to be established by the. Federal Re-
serve Board, a local office of said board on the premises
of the Federal reserve bank. He shall make regular re-
ports to the Federal Reserve Board and shall act as its
official representative for the performance of the func-
tions conferred upon it by this act. He shall receive an
annual compensation to be fixed by the Federal Reserve
Board and paid monthly by the Federal reserve bank to
which he is designated. One of the directors of class C
shall be appointed by the Federal Reserve Board as
deputy chairman to exercise the powers of the chairman
of the board when necessary. In case of the absence of
the chairman and deputy chairman, the third-class C
director shall preside at meetings of the board.
Subject to the approval of the Federal Reserve Board,
the Federal reserve agent shall appoint one or more, as-
sistants. Such assistants, who shall be persons of tested
banking experience, shall assist the Federal reserve agent
in the performance of his duties and shall also have
power to act in his name and stead during his absence or
disability. The Federal Reserve Board shall require
such bonds of the assistant Federal reserve agents as it
may deem necessary for the protection of the United
States. Assistants to the Federal reserve agent shall re-
ceive an annual compensation, to be fixed and paid in
the same manner as that of the Federal reserve agent.
COMPENSATION OF DIRECTORS.
257.
191?} ^fic" ^4- ^^^S- Directors of Federal reserve banks shall receive,
38 "'stat,' L.', in addition to any compensation otherwise provided, a
reasonable allowance for necessary expenses in attend-
ing meetings of their respective boards, Avhich amount
shall be paid by the respective Federal reserve banks.
Any compensation that may be provided by boards of
directors of Federal reserve banks for directors, officers
or employees shall be subject to the approval of the Fed-
eral Reserve Board.
THE FEDERAL RESERVE ACT. 129
ORGANIZATION OF FEDERAL RESERTE BANKS. AU-
THORITY OF ORGANIZATION COMMITTEE.
604h. The Reserve Bank Organization Committee may, ^^^^ ^|^- 23.
in organizing Federal reserve banks, call such meetings 38 fetat. ' l.|
of bank directors in the several districts as may be neces- ^^"
sary to carry out the purposes of this Act, and may
exercise the functions herein conferred upon the chair-
man of the board of directors of each Federal reserve
bank pending the complete organization of such bank.
FIRST MEETING OF DIRECTORS. DESIGNATION OF
TERMS OF OFFICE.
6041. At the first meeting of the full board of directors Act Dec. 23,
of each Federal reserve bank, it shall be the duty of the ss stat^' l.)
directors of classes A, B and C. respectively, to designate ^^^"
one of the members of each class whose term of office
shall expire in one jeixr from the first of January nearest
the date of such meeting, one whose term of office shall
expire at the end of two years from said date, and one
whose term of office shall expire at the end of three years
from said date. Thereafter every director of a Federal
reserve bank chosen as hereinbefore provided shall hold
office for a term of three years. Vacancies that may
occur in the several classes of directors of Federal reserve
banks may be filled in the manner provided for the origi-
nal selection of such directors, such appointees to hold
office for the unexpired terms of their predecessors.
STOCK ISSUES ; INCREASE AND DECREASE OF CAPITAL.
INCREASE ANT) DECREASE OF CAPITAL STOCK.
605. Sec. 5.— The capital stock of each Federal reserve jg^^ ^|^- ^f:
bank shall be divided into shares of $100 each. The out- 38^ stat" l.!
standing capital stock shall be increased from time to
time as member banks increase their capital stock and
surplus or as additional banks become members, and may
be decreased as member banks reduce their capital stock
or surplus or cease to be members.
STOCK NOT TRANSFERABLE.
605a. Shares of the capital stock of Federal reserve ^^ Dec. 23.
banks owned by member banks shall not be transferred .^s^^stat*' l.!
or hypothecated. 257.
INCREASE OF CAPITAL STOCK.
605b. When a member bank increases its capital stock j^ct Dec. 23.
or surplus, it shall thereupon subscribe for an additional ;^s stltf' H
amount of capital stock of the Federal reserve bank of ^^'^-
its district equal to six per centum of the said increase,
one-half of said subscription to be paid in the manner
hereinbefore provided for original subscription, and one-
half subject to call of the Federal Reserve Board.
ie43l2°— 20 9
257.
130
THE FEDERAL, EESERVE ACT.
Act Dec.
1913, sec.
38
257.
Stat.
APPLICATIONS FOR CAPITAL STOCK.
2^3, 605c. A bank applying for stoek in a Federal reserve
L,; bank at any time after the organization thereof must sub-
scribe for an amount of the capital stock of the Federal
reserve bank equal to six per centum of the paid-up capi-
tal stock and surplus of said applicant bank, paying
therefor its par value plus one-half of one per centum
a month from the period of the last dividend.
CERTIFICATE OF INCREASE IN STOCK OF FEDERAL RE-
SERVE BANK.
Act Dec. 23,
1913, sec. 5
38
257.
Stat.
Act Dec.
1913. sec.
38
257.
Stat.
605d. When the capital stock of any Federal reserve
£.', bank shall have been increased either on account of the
increase of capital stock of member banks or on account
of the increase in the number of member banks, the board
of directors shall cause to be executed a certificate to the
Comptroller of the Currency showing the increase in
capital stock, the amount paid in, and by whom paid.
REDUCTION OF CAPITAL STOCK.
2^^: 605e. When a member bank reducas its capital stock it
L.) shall surrender a proportionate amount of its holdings
in the capital of said Federal reserve bank, and when a
member bank voluntarily liquidates it shall surrender all
of its holdings of the capital stock of said Federal reserve
bank and be released from its stock subscription not pre-
viously called. In either case the shares surrendered
shall be canceled and the member bank shall receive in
payment therefor, under regulations to be prescribed by
the Federal Reserve Board, a sum equal to its cash-paid
subscriptions on the shares surrendered and one-half of
one per centum a month from the period of the last divi-
dend, not to exceed the book value thereof, less any lia-
bility of such member bank to the Federal reserve bank.
INSOLTENCT OF MEMBER BANK.
Act Dec. 23,
1913, sec. '
38 Stat.
258.
g , 606. Sec. 6. — If any member bank shall be declared in-
L.; solvent and a receiver appointed therefor, the stock held
by it in said Federal reserve bank shall be canceled, with-
out impairment of its liability, and all cash-paid sub-
scriptions on said stock, with one-half of one per centum
per month from the period of last dividend, not to ex-
ceed the book value thereof, shall be first applied to all
debts of the insolvent member bank to the Federal re-
serve bank, and the balance, if any, shall be paid to the
receiver of the insolvent bank. Whenever the capital
stock of a Federal reserve bank is reduced, either on ac-
count of a reduction in capital stock of any member bank
or of the liquidation or insolvency of such bank, the
board of directors shall cause to be executed a certificate
to the Comptroller of the Currency showing such reduc-
tion of capital stock and the amount repaid to such bank.
THE FEDERAL RESERVE AOT. 131
DITISION OF EARNINGS.
607. Sec. 7. — After all necessary expenses of a Federal ^j^^ct Dec. 2^3.
reserve bank have been paid or provided for, the stock- 38 'stat!^' l.',
holders shall be entitled to receive an annual dividend of ^^^'
six per centum on the paid-in capital stock, which divi-
dend shall bo cumulative.
After the aforesaid dividend claims have been fully ^qI^^^ ^"' ^'
met, the net earnings shall be paid to the United States
as a franchise tax except that the whole of such net
earnings, including those for the year ending December
thirty-first, nineteen hundred and eighteen, shall be paid
into a surplus fund until it shall amount to one hundred
per centum of the subscribed capital stock of such bank,
and that thereafter ten per centum of such earnings shall
be paid into the surj^lus.
The net earnings derived by the United States from
Federal reserve banks shall, in the discretion of the Secre-
tary, be used to supplement the gold reserve held against
outstanding United States notes, or shall be applied to
the reduction of the outstanding bonded indebtedness of
the United States under regulations to be prescribed by
the Secretary of the Treasury. Should a Federal reserve
bank be dissolved or go into liquidation, any surplus re-
maining, after the payment of all debts, dividend require-
n.ents as hereinbefore provided, and the par value of the
stock, shall be paid to and become the property of the
United States and shall be similarly applied.
TAX EXEMPTIONS.
607a. Federal reserve banks, including the capital stock j^^^t Dec. 2S,
and surplus therein, and the income derived therefrom 38 'stat. ' l.',
shall be exempt from Federal, State, and local taxation, ^^®*
except taxes upon real estate.
CONVERSION OF STATE BANKS INTO NATIONAL BANKS.
608. Sec. 8.— Section fifty-one hundred and fifty-four, ^g^ct June ^3.
United States Revised Statutes, is hereby amended to sec. ' 44; li
read as follows : \ ^Tct ^Dec.^ls.
Any bank incorporated by special law of any State or 3|^"^'gt^|^* £j
of the United States or organized under the general laws 258.
of any State or of the United States and having an unim-
paired capital sufficient to entitle it to become a national
banking association under the provisions of the existing
laws may, ^ y the vote of the shareholders owning not less
than fifty-one per centum of the capital stock of such
bank or banking association, with the approval of the
Comptroller of the Currency be converted into a national
banking association, with any name approved by the
Comptroller of the Currency: Provided, however, That
132 THE FEDERAL RESERVE ACT.
said conversion shall not be in contravention of the State
law. In such case the articles of association and organi-
zation certificate may be executed by a majority of the
directors of the bank or banking institution, and the cer-
tificate shall declare that the owners of fifty-one per
centum of the capital stock have authorized the directors
to make such certificate and to change or convert the
bank or banking institution into a national association.
A majority of the directors, after executing the articles of
association and the organization certificate, shall have
power to execute all other papers and to do whatever may
be required to make its organization perfect and com-
plete as a national association. The shares of any such
bank may continue to be for the same amount each as they
were before the conversion, and the directors may con-
tinue to be the directors of the association until others are
elected or appointed in accordance with the provisions of
the statutes of the United States. AVhen the Comptroller
has given to such bank or banking association a certificate
that the provisions of this Act have been complied with,
such bank or banking association, and all its stockholders,
officers, and employees, shall have the same powers and
privileges, and shall be subject to the same duties, lia-
bilities, and regulations, in all respects, as shall have
been prescribed by the Federal Reserve Act and by the
national banking Act for associations originally organized
as national banking associations.
STATE RANKS AS MEMBERS.
STATE BANKS MAY SUBSCRIBE.
Act Dec. 23, 609. Sec. 9. — Any bank incorporated by special law of
38^^'stat!^' L.i any State, or organized under the general laws of any
^^Act June 21 State or of the United States, desiring to become a mem-
1917, sec. 3 ; ber of the Federal Reserve System, may make application
232, ^^^^ ^" to the Federal Reserve Board, under such rules and regu-
lations as it may prescribe, for the right to subscribe to
the stock of the Federal reserve bank organized within
the district in which the applying bank is located. Such
application shall be for the same amount of stock that
the applying bank would be required to subscribe to as
a national bank. The Federal Reserve Board, subject
to such conditions as it may prescribe, may permit the
applying bank to become a stockholder of such Federal
reserve bank.
APPLICATIONS FOR MEMBERSHIP.
,^^^^ ^^^A ^^A 609a. In acting upon such applications the Federal
1913, sec. 9; 38 „ -p, 1^11 -i -1 ^ /> • i tj." £
Stat. L., 259. Rcscrve Board sJiall consider the financial condition 01
iftiT,' Beir^a?^' the applying bank, the general character of its manage-
ment, and whether or not the corporate powers exercised
are consistent with the purposes of this act.
THE FEDERAL RESERVE ACT. 133
"WHienever the Federal Reserve Board shall permit
the applying bank to become a stockholder in the Fed-
eral reserve bank of the district its stock subscription
shall be payable on call of the .Federal Reserve Board,
and stock issued to it shall be held subject to the pro-
visions of this act.
REGULATIONS AND EESTRICTIONS.
609b. All banks admitted to membership under '^"thor- ^^Act^Dec^ 23^
ity of this section shall be required to comply, with the stat.' l., 259.
reserve and capital requirements of this act and to con-
form to those provisions of law imposed on national i^f^' g-^^^l -^•
banks which prohibit such banks from lending on or
purchasing their own stock, which relate to the with-
drawal or impairment of their capital stock, and which
relates to the payment of unearned dividends.
MEMBER BANKS REQUIRED TO MAKE REPORTS TO FED-
ERAL RESERVE BOARD AND SUBJECT TO EXAMINA-
TION BY EXAMINERS APPOINTED BY THE BOARD AND
SUCH BANKS' OFFICERS, AGENTS. AND EMPLOYEES
SUBJECT TO PENALTIES OF SECTION 5209.
609c. Such banks and the officers, agents, and employees ^^^^t Dec. 2^3,
thereof shall also be subject to the provisions of and toss 'stat.' l.',
the penalties prescribed by section fifty-two hundred and -'^^•
nine of the Revised Statutes, and shall be required to ^^^ ^^^^ ^^
make reports of condition and of the payment of divi- 1917, sec. 3."
dends to the Federal reserve bank of which they become
a member. Not less than three of such reports shall be
made annually on call of the Federal reserve bank on
dates to be fixed by the Federal Reserve Board. Failure
to make such reports within ten days after the date they
are called for shall subject the offending bank to a penalty
of $100 a day for each day that it fails to transmit such
report; such penalty to be collected by the Federal re-
serve bank by suit or otherwise.
As a condition of membership such banks shall like-
wise be subject to examinations made by direction of the
Federal Reserve Board or of the Federal reserve bank by
examiners selected or approved by the Federal Reserve
Board.
Whenever the directors of the Federal reserve bank
shall approve the examinations made by the State
authorities, such examinations and the reports thereof
may be accepted in lieu of examinations made by exam-
iners selected or approved by the Federal Reserve Board :
Provided^ however^ That when it deems it necessary the
board may order special examinations by examiners of its
own selection and shall in all cases approve the form of the
report. The expenses of all examinations, other than
those made by State authorities, shall be assessed against
and paid by the banks examined.
134 THE FEDERAL RESERVE ACT.
FAILURE TO COMPLY WITH REGULATIONS— PENALTY.
Act Dec. 23, 609d. If at any time it shall appear to the Federal Re-
38^^'stlt' L.; serve Board that a member bank has failed to comply
260. ' -with the provisions of this section or the regulations of
\ct June 21 ^hc Federal Eeserve Board made pursuant thereto, it
1917, sec. 3." ' shall be within the power of the board after hearing to
require such bank to surrender its stock in the Federal
reserve bank and to forfeit all rights and privileges of
membership. The Federal Reserve Board may restore
membership upon due proof of compliance with the con-
ditions unposed by this section.
WITHDRAWAL FROM MEMBERSHIP IN FEDERAL RE-
SERYE BANK BY STATE BANK OR TRUST COMPANY.
Act JuDe^2i, 609e. Any State bank or trust company desiring to
'' ^^^' ■ withdraw from membership in a Federal reserve, bank
may do so, after six months' written notice shall have
been filed with the Federal Reserve Board, upon the sur-
render and cancellation of all of its holdings of capital
stock in the Federal reserve bank: Provided^ however^
That no Federal reserve bank shall, except under express
authority of the Federal Reserve Board, cancel within the
same calendar year more than twenty-five per centum of
its capital stock for the purpose of effecting voluntary
withdrawals during that year. All such applications
shall be dealt with in the order in which they are filed
with the board. Whenever a member bank shall surrender
its stock holdings in a Federal reserve bank, or shall be
ordered to do so by the Federal Reserve Board, under
authority of law, all of its rights and privileges as a
member bank shall thereupon cease and determine, and
after due provision has been made for any indebtedness
due or to become due to the Federal reserve bank it shall
be entitled to a refund of its cash paid subscription with
interest at the rate of one-half of one per centum per
month from date of last dividend, if earned, the amount
refunded in no event to exceed the book value of the stock
at that time, and shall likewise be entitled to repayment
of deposits and of any other balance due from the Fed-
eral reserve bank.
AMOUNT OF CAPITAL REQUIRED TO ENABLE STATE
BANK TO BECOME MEMBER BANK.
Act Dec. 23, 609f. No applying bank shall be admitted to member-
38^^'stlt!^' L.; ship in a Federal reserve bank unless it possesses a paid-
^^Act June 21 "P? Unimpaired capital sufficient to entitle it to become a
1917, sec. 3. ' national banking association in the place where it is situ-
ated under the provisions of the national-bank act.
THE FEDERAL RESERVE ACT. 135
RIGHTS, POWERS, AND LIABILITIES OF STATE BANKS
WHICH BECOME MEMBER BANKS.
609g. Banks becoming members of the Federal Reserve 1917* sic"!.^^
System mider authority of this section shall be subject
to the provisions of this section and to those of this
act which relate specifically to member banks, but shall
not be subject to examination under the provisions of the
first two paragraphs of section fifty-two hundred and
forty of the Revised Statutes as amended by section
twenty-one of this act.^ Subject to the provisions of this
act and to the regulations of the board made pursuant
thereto, any bank becoming a member of the Federal
Reserve System shall retain its full charter and statutory
rights as a State bank or trust company, and may con-
tinue to exercise all corporate powers granted it by the
State in which it was created, and shall be entitled to all
privileges of member banks: Provided., hoioever., That no
Federal reserve bank shall be permitted to discount for
any State bank or trust company notes, drafts, or bills of
exchange of any one borrower who is liable for borrowed
money to such State bank or trust company in an amount
greater than ten per centum of the capital and surplus of
such State bank or trust company, but the discount of
bills of exchange drawn against actually existing value
and the discount of commercial or business paper actually
owned by the person negotiating the same shall not be
considered as borrowed money within the meaning of this
section. The Federal reserve bank, as a condition of the
discount of notes, drafts, and bills of exchange for such
State bank or trust company, shall require a certificate or
guaranty to the effect that the borrower is not liable to
such bank in excess of the amount provided by this sec-
tion, and will not be permitted to become liable in excess
of this amount while such notes, drafts, or bills of ex-
change are under discount with the Federal reserve bank.
It shall be unlawful for any officer, clerk, or agent of
any bank admitted to membership under authority of this
section to certify any check drawn upon such bank unless
the person or company drawing the check has on deposit
therewith at the time such check is certified an amount of
money equal to the amount specified in such check. Any
check so certified by duly authorized officers shall be a
good and valid obligation against such bank, but the act
of any such officer, clerk, or agent in violation of this
section may subject such bank to a forfeiture of its mem-
bership in the Federal Reserve System upon hearing by
the Federal Reserve Board.
* AmeudiutJ sectiou 21 of this act.
136 the federal reserve act.
Federal Eesek\'e Board.
APPOINTMENT, COMPENSATION, AND QUALIFICATION
OF MEMBERS OF FEDERAL RESERTE BOARD.
Act Dec. 23, g^Q. Sec. 10. — A Federal Reserve Board is hereby cre-
ss sutl' L.iated which shall consist of seven members, including
^®*^- the Secretary of the Treasury and the Comptroller of the
Currency, who shall be members ex officio, and live mem-
bers appointed by the President of the United States, by
and with the advice and consent of the Senate. In
selecting the five appointive members of the Federal Re-
serve Board, not more than one of whom shall be selected
from any one Federal reserve district, the President shall
have due regard to a fair representation of the dilierent
commercial, industrial and geographical divisions of the
country. The five members of the Federal Reserve
Board appointed by the President and confirmed as afore-
said shall devote their entire time to the business of the
Federal Reserve Board and shall each receive an annual
salary of $12,000, payable monthly together with actual
necessary traveling expenses, and the Comptroller of the
Currency, as ex officio member of the Federal Reserve
Board, shall, in addition to the salary now paid him as
Comptroller of the Currency, receive the sum of §7,000
annually for his services as a member of said board.
Act Mar. 3. The Secretary of the Treasury and the Comptroller of
^®^^- the Currency shall be ineligible during the time they are
in office and for two years thereafter to hold any office,
position, or employment in any member bank. The ap-
pointive members of the Federal R-eserve Board shall be
ineligible during the time they are in office and for two
years thereafter to hold any office, position, or employ-
ment in any member bank, except that this restriction
shall not apply to a member who has served the full term
for which he was appointed. Of the five members thus
appointed by the President at least two shall be persons
experienced in banking or finance. One shall be desig-
nated by the President to serve for two, one for four, one
for six, one for eight, and one for ten years, and there-
after each member so appointed shall serve for a term
of ten years unless sooner removed for cause by the Presi-
dent.
GOVERNOR AND YICE GOVERNOR; OFFICERS; QUALIFI-
CATION OF MEMBERS.
loia* ?e^*^* ilf- ^^^^' ^^ ^^^ ^^'^ persons thus appointed, one shall be
38 Stat* L.', designated by the President as governor and one as vice
260. governor of the Federal Reserve Board. The governor
of the Federal Reserve Board, subject to its supervision,
shall be the active executive officer. The Secretary of
' See section 5209, Revised Statutes, as aiueiuled by act of Sept.
26, 191S (p. 88 ante), for penalty for false certitication of checks
by officers of Federal reserve banks and national banks.
THE FEDERAL RESERVE ACT. 137
the Treasury may assign offices in the Department of the
Treasury for the use of the Federal Reserve Board. Each
member'^of the Federal Reserve Board shall within fifteen
days after notice of appointment make and subscribe to
the oath of office.
PROYISION FOR EXPENSES.
610b. The Federal Reserve Board shall have power to Act Dec 23.
levy semiannually upon the Federal reserve banks, in pro- sl^^'sut;" ^l.'.
portion to their capital stock and surplus, an assessment 26i.
sufficient to pay its estimated expenses and the salaries
of its members and employees for the half year succeed-
ing the levying of such assessment, together with any
deficit carried forward from the preceding half year.
FIRST MEETING OF BOARD. SECRETARY OF TREASURY
CHAIRMAN OF BOARD.
610c. The fii'st meeting of the Federal Reserve Board Act Dec. 23,
shall be held in Washington, District of Columbia, as soon sl^^'sut.' ^l.*,
as may be after the passage of this act, at a date to be^ei.
fixed by the Reserve Bank Organization Committee. The
Secretary of the Treasury shall be ex officio chairman
of the Federal Reserve Board.
MEMBER OF FEDERAL RESERYE BOARD NOT TO BE
OFFICER, DIRECTOR. OR STOCKHOLDER IN ANY BANK-
ING INSTITUTION OR TRUST COMPANY.
610d. No member of the Federal Reserve Board shall Act Dec. 23,
be an officer or director of any bank, banking institution. 38 'stlt!' u,
trust company, or Federal reserve bank nor hold stock 26I.
in any bank, banking institution, or trust company ; and
before entering upon his duties as a member of the Fed-
eral Reserve Board he shall certify under oath to the
Secretary of the Treasury that he has complied with this
requirement.
TACANCIES ON BOARD— HOW FILLED.
610e. Whenever a vacancy shall occur, other than by Act Dec. 23,
expiration of term, among the five members of the Federal ss 'stat." l.',
Reserve Board appointed by the President, as above pro- 26i-
vided, a successor shall be appointed by the President,
with the advice and consent of the Senate, to fill such
vacancy, and when appointed he shall hold office for the
unexpired term of the member whose place he is selected
to fill.
The President shall have power to fill all vacancies
that may happen on the Federal Reserve Board during
the recess of the Senate, by granting commissions which
shall expire thirty days after the next session of the
Senate convenes.
POWERS OF SECRETARY OF TREASURY.
610f. Nothing in this Act contained shall be construed ^^^?^^ f^ff- {^:
as taking away any powers heretofore vested by law in 38 stat. l..
the Secretary of the Treasury which relate to the super- "
138 THE FEDERAL RESERVE ACT.
vision, management, and control of the Treasury Depart-
ment and bureaus under such department, and wherever
any power vested by this Act in the Federal Reserve
Board or the Federal reserve agent appears to conflict
with the powers of the Secretary of the Treasury, such
powers shall be exercised subject to the supervision and
control of the Secretary.
FEDERAL RESERVE BOARD TO MAKE ANNUAL REPORT
TO SPEAKER OF THE HOUSE OF REPRESENTATIVES.
1913! fee.' K?i 610g. The Federal Reserve Board shall annually make
38^ Stat. L., fi full report of its operations to the Speaker of the House
of Representatives, who shall cause the same to be
printed for the information of the Congress.
COMPTROLLER OF THE CURRENCY.
19*13! ?ec^' H?;' ^^^^' Section three hundred and twenty-four of the
38^ Stat. L.; Revised Statutes of the United States shall be amended
so as to read as follows: There shall be in the Depart-
ment of the Treasury a bureau charged with the execu-
tion of all laws passed by Congress relating to the issue
and regulation of national currency secured by United
States bonds and, under the general supervision of the
Federal Reserve Board, of all Federal reserve notes, the
chief officer of which bureau shall be called the Comp-
troller of the Currency and shall perform his duties under
the general directions of the Secretary of the Treasury.
POWERS OF FEDERAL RESERVE BOARD.
1913, sec." 11; 611. Scc. 11. — The Federal Reserve Board shall be au-
261. ^*^*' ^"thorized and empowered:
EXAMINATION OF BOOKS OF FEDERAL RESERVE BANKS
AND MEMBER BANKS BY FEDERAL RESERVE BOARD.
BOARD MAY REQUIRE REPORTS.
1913! sec^" n^; 611a. (a) To examine at its discretion the accounts,
38 Stat.' L.; books and affairs of each Federal reserve bank and of
each member bank and to require such statements and
reports as it may deem necessary. The said board shall
publish once each week a statement showing the condi-
tion of each Federal reserve bank and a consolidated
statement for all Federal reserve banks. Such state-
ments shall show in detail the assets and liabilities of the
Federal reserve banks, single and combined, and shall
furnish full information regarding the character of the
money held as reserve and the amount, nature and
maturities of the paper and otlier investments owned or
held by Federal reserve banks.
THE FEDERAL RESERVE ACT. 139
REDISCOUNTS.
611b. (b) To permit, or, on the affirmative vote of at ^^f ^^^- 23.
least five members of the Reserve Board to re<iuire:« 'stat.' l.'.
Federal reserve banks to rediscount the discounted paper
of other Federal reserve banks at rates of interest to be
fixed by the Federal Reserve Board.
SUSPENSION OF RESERYE REQUIREMENTS.
611c. (c) To suspend for a period not exceeding thirty jg^^* f^^- ^^:
da vs. and from time to time to renew such suspension for ss 'stat' l.',
periods not exceeding fifteen days, any reserve require-
ment specified in this act : Provided^ That it shall estab-
lish a graduated tax upon the amounts by which the
reserve requirements of this Act may be permitted to fall
below the level hereinafter specified: And provided fur-
ther, That when the gold reserve held against Federal
reserve notes falls below forty per centum, the Federal
Reserve Board shall establish a« graduated tax of not
more than one per centum per annum upon such defi-
ciency until the reserves fall to thirty-two and one-half
per centum, and when said reserve falls below thirty-two
and one-half per centum, a tax at the rate increasingly of
not less than one and one-half per centum per annum
upon each two and one-half per ct-ntum or fraction
thereof that such reserve falls below thirty-two and one-
half per centum. The tax shall be paid by the reserve
bank, but the reserve bank shall add an amount equal to
said tax to the rates of interest and discount fixed by the
Federal Reserve Board.
ISSUE AND RETIREMENT OF FEDERAL RESERYE NOTES.
611(i. {d) To supervise and regulate through the bureau ^ct Dec. 23,
under the charge of the Comptroller of the Currency the ss 'stat.' l.',
issue and retirement of Federal reserve notes, and to pre- -'^^*
scribe rules and regulations under which such notes may
be delivered by the Comptroller to the Federal reserve
agents applying therefor.
RESERYE CITIES.
611e. ie) To add to the number of cities cLissified as ,„4S* ^^'^- ??'
1 1 1 "> SOC 1 1 *
reserve and central reserve cities under existing law in 3S stat.' l.',
which national banking associations are subject to the "^^'
reserve requirements set forth in section twenty of this
act; or to reclassify existing reserve and central reserve
cities or to terminate their designation as such.
SUSPENSION OR REMOYAL OF OFFICER OR DIRECTOR
OF A FEDERAL RESERYE BANK.
611f. (/) To suspend or remove any officer or director Act Dec. 23.
of any Federal reserve bank, the cause of sucli removal sl^^'st^at!' Y.!
to be forthwith communicated in writing by the Federal-*'-*
Reserve Board to the removed officer or director and to
said bank.
140 THE FEDERAL RESERVE ACT.
WKITING OFF DOUBTFUL OR WORTHLESS ASSETS.
19^3* fee' ii\ ^^^^' {9) To require the writing off of doubtful or
38 Stat.' L,', worthless assets upon the books and balance sheets of
^ ■ Federal reserve banks.
SUSPENSION OF OPERATIONS OF FEDERAL RESERVE
BANK.
1913! fee: ih 61 111. {h) To suspend, for the violation of any of the
38 'stat.' L.) provisions of this Act, the operations of any Federal re-
serve bank, to take possession thereof, administer the
same during the period of suspension, and, when deemed
advisable, to liquidate or reorganize such bank.
REQUIREMENT OF BONDS FROM FEDERAL RESERVE
AGENTS AND AUTHORITY TO MAKE NECESSARY REGU-
LATIONS UNDER THIS ACT.
19^3* sec*^" '\\' 6^^^- (*) To require 'bonds of Federal reserve agents,
38^ Stat.' L.l to make regulations for the safeguarding of all collateral,
^"* bonds. Federal reserve notes, money or property of any
kind deposited in the hands of such agents, and said
board shall perform the duties, functions, or services
specified in this Act, and make all rules and regulations
necessary to enable said board effectively to perform the
same.
GENERAL SUPERVISION.
19*13* sec^' n^i 611J- (i) To exercise general supervision over said
38 'stat.' L.; Federal reserve banks.
262.
PERMIT TO NATIONAL BANKS TO ACT AS TRUSTEE, EX-
ECUTOR, ADMINISTRATOR, OR REGISTRAR OF STOCKS
AND BONDS.
1913* fee' i\' 6^^^- (^) To grant by special permit to national banks
38 'stat.' L.' applying therefor, w^ien not in contravention of State or
^^I'ct Sept. 26, lofal law, the right to act as trustee, executor, adminis-
1918. ' trator, registrar of stocks and bonds, guardian of estates,
assignee, receiver, committee of estates of lunatics, or in
any other fiduciary capacity in which State banks, trust
companies, or other corporations which come into com-
petition with national banks are permitted to act under
the laws of the State in which the national bank is
located.
Whenever the laws of such State authorize or permit
the exercise of any or all of the foregoing powers by
State banks, trust companies, or other corporations which
compete with national banks, the granting to and the
exercise of such powers by national banks shall not be
deemed to ba in contravention of State or local law
within the meaning of this Act.
National banks exercising any or all of the powers
enumerated in this subsection shall segregate all assets
THE FEDERAL. RESERVE ACT. 141
held in any fiduciary capacity from the general assets of
the bank and shall keep a separate set of books and rec-
ords showing in proper detail all transactions engaged
in under authority of this subsection. Such books and
records shall be open to inspection by the State authori-
ties to the same extent as the books and records of cor-
porations organized under State law which exercise fidu-
ciary powers, but nothing in this Act shall be construed
as authorizing the State authorities to examine the books,
records, and assets of the national bank which are not
held in trust under authority of this subsection.
No national bank shall receive in its trust department
deposits of current funds subject to check or the deposit
of checks, drafts, bills of exchange, or other items for
collection or exchange purposes. Funds deposited or
held in trust by the bank awaiting investment shall be
carried in a separate account and shall not be used by the
bank in the conduct of its business unless it shall first set
aside in the trust department United States bonds or
other securities approved by the Federal Reserve Board.
In the event of the failure of such bank the owners of
the funds held in trust for investment shaH have a lien
on the bonds or other securities so set apart in addition
to their claim against the estate of the bank.
"Whenever the laws of a State require corporations act-
ing in a fiduciary capacity, to deposit securities with the
State authorities for the protection of private or court
trusts, national banks so acting shall be required to make
similar deposits and securities so deposited shall be held
for the protection of private or court trusts, as provided
by the State law.
National banks in such cases shall not be required to
execute the bond usually required of individuals if State
corporations under similar circumstances are exempt
from this requirement.
National banks shall have power to execute such bond
when so required by the laws of the State.
In any case in which the laws of a State require that a
corporation acting as trustee, executor, administrator, or
in any capacity specified in this section, shall take an
oath or make an affidavit, the president, vice president,
cashier, or trust officer of such national bank may take
the necessary oath or execute the necessary affidavit.
It shall be unlawful for any national banking associa-
tion to lend any officer, director, or employee any funds
held in trust under the powers conferred by this section.
Any officer, director, or employee making such loan, or to
whom such loan is made, may be fined not more than
$5,000, or imprisoned not more than five j^ears. or may
be both fined and imprisoned, in the discretion of the
court.
In passing upon applications for permission to exercise
the powers enumerated in this subsection, the Federal
142 THE FEDERAL RESERVE ACT.
Reserve Board may take into consideration the amount
of capital and surplus of the applying bank, whether or
not such capital and surplus is sufficient under the cir-
cumstances of the case, the needs of the community to be
served, and any other facts and circumstances that seem
to it proper, and may grant or refuse the application
accordingly : Provided^ That no permit shall be issued to
any national banking association having a capital and
surplus less than the capital and surplus required by
State law of State banks, trust companies, and corpora-
tions exercising such powers.
EMPLOYMENT OF ATTORNEYS, CLERKS, ETC., AND PRO-
VISION FOR PAYMENT OF SALARIES.
Act Dec. 23, 611-1. (Z) To employ such attorneys, experts, assistants,
38 'sut L.i clerks, or other employees as may be deemed necessary to
2^2. conduct the business of the board. All salaries and fees
shall be fixed in advance by said board and shall be paid
in the same manner as the salaries of the members of said
board. All such attorneys, experts, assistants, clerks,
and other employees shall be appointed without regard to
the provision^ of the act of January sixteenth, eighteen
hundred and eighty-three (volume twenty -two. United
States Statutes at Large, page four hundred and three),
and amendments thereto, or any rule or regulation made
in pursuance thereof: Provided^ That nothing herein
shall prevent the President from placing said employees
in the classified service.
DISCOUNT BY FEDERAL RESERVE BANK OF PAPER SE-
CURED BY UNITED STATES BONDS ISSUED SINCE
APRIL 24, 1917.
i9iV* ^^^^' ^' Slim, (m) Upon the affirmative vote of not less than
five of its members, the Federal Reserve Board shall have
power to permit Federal reserve banks to discount for any
member bank notes, drafts, or bills, of exchange bearing
the signature or endorsement of any one borrower in excess
of the amount permitted by section nine and section thir-
teen of this act, but in no case to exceed twenty per
centum of the member bank's capital and surplus : Pro-
vided^ however, That all such notes, drafts, or bills of
exchange discounted for any member bank in excess of
the amount permitted under such sections shall be se-
cured by not less than a like face amount of bonds or
notes of the United States issued since April twenty-
fourth, nineteen hundred and seventeen, or certificates of
indebtedness of the United States: Provided further,
That the provisions of this subsection {m) shall not be
operative after December thirty-first, nineteen hundred
and twenty.
THE FEDERAL RESERVE ACT. 143
FEDERAL ADTISORT COUNCIL.
612. Sec. 12.— There is hereby created a Federal Ad- jg^^* P/^^- ^^:
visory Council, which shall consist of as many members 38 sut." l.)
as there are Federal reserve districts. Each Federal re- " *
serve bank by its board of directors shall annually select
from its own Federal reserve district one member of said
council, who shall receive such compensation and allow-
ances as may be fixed by his board of directors subject to
the approval of the Federal Eeserve Board. The meet-
ings of said advisory council shall be held at Washing-
ton, District of Columbia, at least four times each year,
and oftener if called by the Federal Reserve Board. The
council may in addition to the meetings above provided
for hold such other meetings in Washington, District of
Columbia, or elsewhere, as it may deem necessary, may
select its own officers and adopt its own methods of pro-
cedure, and a majority of its members shall constitute a
quorum for the transaction of business. Vacancies in the
council shall be filled by the respective reserve banks, and
members selected to fill vacancies, shall serve for the un-
expired term.
POWERS OF FEDERAL ADVISORY COUNCIL.
612a. The Federal Advisory Council shall have power, ^^Act Dec 23,
by itself or through its officers, (1) to confer directly with ss stat. L',
the Federal Eeserve Board on general business condi- ~^^'
tions; (2) to make oral or written representations con-
cerning matters within the jurisdiction of said board;
(3) to call for information and to make recommendations
in regard to discount rates, rediscount business, note is-
sues, reserve conditions in the various districts, the pur-
chase and sale of gold or securities by reserve banks,
open-market operations by said banks, and the general
affairs of the reserve banking system.
POWERS OF FEDERAL RESERTE BANKS.
613. Sec. 13. — Any Federal reserve bank may receive jg^ct Dec 23,
from any of its member banks, and from the United ss stat." l.',
States.^ deposits of current funds in lawful money, '^Act sept. 7.
national-bank notes, Federal reserve notes, or checks, L^^fgg^^ ^**^*
and drafts, payable upon presentation, and also, for Act June 21,
collection, maturing notes and bills; or, solely for pur- ^^^'' ^^*^- *•
poses of exchange or of collection, may receive from
other Federal reserve banks deposits of current funds in
lawful money, national-bank notes, or checks upon
other Federal reserve banks, and checks and draft.s. pay-
able upon presentation within its district, and maturing
notes and bills payable within its district; or, solely for
* Under authority of war finance act, approved Apr. 5, 1918,
as amended by act of Mar. 3, 1919, may receive deposits from War
Finance Corporation.
144 THE FEDERAL RESERVE ACT.
the purposes of exchange or of collection, may receive
from any nomnember bank or trust company deposits
of current funds in lawful money, national-bank notes,
Federal reserve notes, checks and drafts payable upon
presentation, or maturing notes and bills: Provided^
Such nonmember bank or trust company maintains with
the Federal reserve bank of its district a balance sufficient
to offset the items in transit held for its account by the
Federal reserve bank: Provided^ further^ That nothing
in this or any other section of this act shall be construed
as prohibiting a member or nonmember bank from mak-
ing reasonable charges, to be determined and regulated
by the Federal Reserve Board, but in no case to exceed
10 cents per $100 or fraction thereof, based on the total
of checks and drafts presented at any one time, for col-
lection or payment of checks and drafts and remission
therefor by exchange or otherwise; but no such charges
shall be made against the Federal reserve banks.
REDISCOUNTS — NOTES, DRAFTS, AND BILLS OF EX-
CHANGE.
1913* ^c^* 1^3^: 613a. Upon the indorsement of any of its member
263 ^^^^ ^■' '^^"ks? which shall be deemed a waiver of demand, notice
Act Sept. 7, and protest by such bank as to its own indorsement ex-
U,^7^2f^ ^*^*' clusively, any Federal reserve bank may discount notes,
drafts, and bills of exchange arising out of actual com-
mercial transactions; that is, notes, drafts, and bills of
exchange issued or drawn for agricultural, industrial, or
commercial purposes, or the proceeds of which have been
used, or are to be used, for such purposes, the Federal
Reserve Board to have the right to determine or define
the character of the paper thus eligible for discount,
within the meaning of this Act. Nothing in this Act
contained shall be construed to prohibit such notes,
drafts, and bills of exchange, secured by staple agricul-
tural products, or other goods, wares, or merchandise
from bein^ eligible for such discount ; but such definition
shall not include notes, drafts, or bills covering merely
investments or issued or drawn for the purpose of carry-
ing or trading in stocks, bonds, or other investment
securities, except bonds and notes of the Government of
the United States.^ Notes, drafts, and bills admitted to
discount under the terms of this paragraph must have a
maturity at the time of discount of not more than ninety
days, exclusive of days of grace: Provided^ That notes,
drafts, and bills drawn or issued for agricultural pur-
poses or based on live stock and having a maturity not
exceeding six months, exclusive of days of grace, may be
discounted in an amount to be limited to a percentage
of the assets of the Federal reserve bank, to be ascer-
tained and fixed by the Federal Reserve Board.
' Or bonds of the War Finance Corporation. See act approved
Apr. 5, 1918.
THE FEDERAL, RESERVE ACT. 145
The aggregate of siich notes, drafts, and bills bearing
the signature or indorsement of any one borrower, whether
a person, company, firm, or corporation, rediscounted for
any one bank shall at no time exceed ten per centum of
the unimpaired capital and surplus of said bank ; but this
restriction shall not apply to the discount of bills of ex-
change drawn in good faith against actually existing
values.
ACCEPTANCES AND LIMITATIONS THEREOF.
613b. Any Federal reserve bank may discount accept- Act Dec. 23,
ances of the kinds hereinafter described, which have ail^^'stat "^l.!
maturity at the time of discount of not more than three '^^t Mar 3
months' sight, exclusive of days of grace, and which areisioj 38 stat!
indorsed by at least one member bank. act Sept. 7,
Any member bank may accept drafts or bills of ex- ^^^7^2^^ ^*^*'
change drawn upon it having not more than six months Act .iune 21,
sight to run. exclusive of days of gi'ace, which grow out ^ ^ ' ^^^' ^'
of transactions involving the importation or exporta-
tion of goods ; or which gi*ow out of transactions involv-
ing the domestic shipment of goods provided shipping
documents conveying or securing title are attached at
the time of acceptance; or which are secured at the time
of acceptance by a warehouse receipt or other such
document conveying or securing title covering readily
marketable staples. Xo member bank shall accept,
whether in a foreign or domestic transaction, for any
one person, company, firm, or corporation to an amount
equal at any time in the aggregate to more than ten per
centiun of its paid-up and unimpaired capital stock and
surplus, unless the bank is secured either by attached
documents or by some other actual security growing out
of the same transaction as the acceptance; and no bank
shall accept such bills to an amount equal at any time
in the aggregate to more than one-half of its paid-up
and unimpaired capital stock and surplus: Provided,
however. That the Federal Reserve Board, under such
general regulations as it may prescribe, which shall
apply to all banks alike regardless of the amount of
capital stock and surplus, may authorize any member
bank to accept such bills to an amount not exceeding at
any time in the aggregate one hundred per centum of
its paid-up and unimpaired capital stock and surplus:
Provided further. That the aggregate of acceptances
gi-owing out of domestic transactions shall in no event
exceed fifty per centum of such capital stock and surplus.
Any Federal reserve bank may make advances to its
member banks on their promissory notes foi; a period not
exceeding fifteen days at rates to be established by such
Federal reserve banks, subject to the review and determi-
nation of the Federal Reserve Board, provided such
promissory notes are secured by such notes, drafts, bills
of exchange, or bankers' acceptances as are eligible for
4&4312°— 20 10
146 THE FEDERAL RESERYE ACT.
rediscount or for purchase by Federal reserve banks
under the provisions of this Act, or by the deposit or
pledge of bonds or notes of the United States.^
EXCEPTIONS AS TO LIMIT OF INDEBTEDNESS. POWER
TO ACT AS INSURANCE AGENT, AS REAL ESTATE LOAN
BROKER, AND TO ACCEPT DRAFTS, ETC.
Act Dec. 23, 613c. Section fifty-two hundred and two of the Revised
38 'stiu L.l Statutes of the United States is hereby amended so as to
264. read as follows: No national banking association shall at
any time be indebted, or in any way liable, to an amount
exceeding the amount of its capital stock at such time
actually paid in and remaining undiminished by losses or
otherwise, except on account of demands of the nature
following :
First. Notes of circulation.
Second. Moneys deposited with or collected by the
association.
Third. Bills of exchange or drafts drawn against
money actually on deposit to the credit of the association,
or due thereto.
Fourth. Liabilities to the stockholders of the associa-
tion for dividends and reserve profits.
Fifth. Liabilities incurred under the provisions of the
Federal reserve Act.^
1916* fo^stat! The discount and rediscount and the purchase and sale
L., 753. by any Federal reserve bank of any bills receivable and
of domestic and foreign bills of exchange, and of accept-
ances authorized by this Act, shall be subject to such
restrictions, limitations, and regulations as may be im-
posed by the Federal Reserve Board.
That in addition to the powers now vested by law in
national banking associations organized under the laws
of the United States any such association located and do-
ing business in any place the population of which does
not exceed five thousand inhabitants, as shown by the last
preceding decennial census, may, under such rules and
regulations as may be prescribed by the Comptroller of
the Currency, act as the agent for any fire, life, or other
insurance company authorized by the authorities of the
State in which said bank is located to do business in said
State, by soliciting and selling insurance and collecting
premiums on policies issued by such company; and may
receive for services so rendered such fees or commissions
as may be agreed upon between the said association and
the insurance company for which it may act as agent;
and may also act as the broker or agent for others in
making or pi;ocuring loans on real estate located within
* Or by bonds and notes of War Finance Corporation. See sec-
tion 13, War Finance Corporation Act, approved Apr. 5, 1918.
' Also liabilities incurred under the provisions of the War
Finance Corporation Act. See section 20, War Finance Corpora-
tion Act, approved Apr. 5, 1918.
THE FEDERAL, RESERVE ACT. 147
one hundred miles of the place in which said bank may
be located, receiving for such services a reasonable fee
or commission: Provided, however. That no such bank
shall in any case guarantee either the principal or inter-
est of any such loans or assume or guarantee the payment
of any premium on insurance policies issued through its
agency by its principal: And provided further, That
the bank shall not guarantee the truth of any statement
made by an assured in filing his application for insur-
ance.
Any member bank may accept drafts or bills of ex-
change drawn upon it having not more than three months'
sight to run, exclusive of days of grace, drawn under
regulations to be prescribed by the Federal Reserve Board
by banks or bankers in foreign countries or dependencies
or insular possessions of the United States for the pur-
pose of furnishing dollar exchange as required by the
usages of trade in the respective countries, dependencies,
or insular possessions. Such drafts or bills may be ac-
quired by Federal reserve banks in such amounts and
subject to such regidations, restrictions, and limitations
as may be prescribed by the Federal Reserve Board :
Provided, however. That no member bank shall accept
such drafts or bills of exchange referred to this para-
graph for any one bank to an amount exceeding in the
aggregate ten per centum of the paid-up and unimpaired
capital and surplus of the accepting bank unless the
draft or bill of exchange is accompanied by documents
conveying or securing title or by some other adequate
security: Provided further. That no member bank shall
accept such drafts or bills in an amount exceeding at any
time the aggregate of one-half of its paid-up and unim-
paired capital and surplus.
OPEN MARKET OPERATIONS.
614. Sec. 14. — Any Federal reserve bank may, imder Act Dec. 23,
ndes and regulations prescribed by the Federal Reserve ^^^g^^-gt^at^- ^l!
Board, purchase and sell in the open market, at home or 264.
abroad, either from or to domestic or foreign iDanks, firms, lote* 39^'stat!
corporations, or individuals, cable transfers and bankers' ^•' '^^^•
acceptances and bills of exchange of the kinds and ma-
turities by this Act made eligible for rediscount, with or
without the indorsement of a member bank.
Every Federal reserve bank shall have power:
{a) To deal in gold coin and bullion at home or abroad,
to make loans thereon, exchange Federal reserve notes
for gold, gold coin, or gold certificates, and to contract for
loans of gold coin or bullion, giving therefor, when neces-
sary, acceptable security, including the hypothecation of
United States bonds or other securities which Federal
reserve banks are authorized to hold:
148 THE FEDERAL RESERVE ACT.
(b) To buy and sell, at home or abroad, bonds and notes
of the United States, and bills, notes, revenue bonds, and
warrants with a maturity from date of purchase of not
exceeding six months, issued in anticipation of the col-
lection of taxes or in anticipation of the receipt of assured
revenues by any State, county, district, political subdivi-
sion, or municipality in the continental United States, in-
cluding irrigation, drainage and reclamation districts,
such purchases to be made in accordance with rules and
regulations prescribed by the Federal Reserve Board ;
(c) To purchase from member banks and to sell, with
or without its indorsement, bills of exchange arising out
of commercial transactions, as hereinbefore defined ;
(d) To establish from time to time, subject to review,
and determination of the Federal Eeserve Board, rates
of discount to be charged by the Federal reserve bank for
each class of paper, which shall be fixed with a view of
accommodating commerce and business;
Act June 21, («) To establish accounts with other Federal reserve
)9i7, sec. 6. banks for exchange purposes and, with the consent or
upon the order and direction of the Federal Reserve
Board and under regulations to be prescribed by said
board, to open and maintain accounts in foreign coun-
tries, appoint correspondents, and establish agencies in
such countries wheresoever it may be deemed best for
the purpose of purchasing, selling, and collecting bills of
exchange, and to buy and sell, with or without its indorse-
ment, through such correspondents or agencies, bills of
exchange (or acceptances) arising out of actual commer-
cial transactions which have not more than ninety days
to run, exclusive of days of grace, and which bear the
signature of two or more responsible parties, and, with
the consent of the Federal Reserve Board, to open and
maintain banking accounts for such foreign correspond-
ents or agencies. Whenever any such account has been
opened or agency or correspondent has been appointed
by a Federal reserve bank, with the consent of or under
the order and direction of the Federal Reserve Board,
any other Federal reserve bank may, with the consent
and approval of the Federal Reserve Board, be permitted
to carry on or conduct, through the Federal reserve bank
07 ning such account or appointing such agency or
correspondent, any transaction authorized by this sec-
tion under rules and regulations to be prescribed by the
board
GOVERNMENT DEPOSITS.
19^3* ?ec' li- ^^^' ^^^* ^^' — '^^^ moneys held in the general fund of
38^' 'staV L.', the Treasury, except the five per centum fund for the re-
demption of outstanding national-bank notes and the
funds provided in this act for the redemption of Federal
reserve notes may, upon the direction of the Secretary of
265.
THE FEDERAL RESER^^ ACT. 149
the Treasury, be deposited in Federal reserve banks,
which banks, when required by the Secretary of the
Treasury, shall act as fiscal agents of the United States; ^
and the revenues of the Government or any part thereof
may be deposited in such banks, and disbursements may
be made by checks drawn against such deposits.
No public funds of the Philippine Islands, or. of the
postal savings, or any Government funds, shall be de-
posited in the continental United States in any bank not
belonging to the system established by this act : ^ Pro-
vided^ however^ That nothing in this act shall be con-
strued to deny the right of the Secretary of the Treasury
to use member banks as depositories.
NOTE ISSUES.
FEDERAL EESERTE NOTES AUTHORIZED.
616. Sec. 16. — Federal reserve notes, to be issued at the jg^^g^ ^^^^ ^l\
discretion of the Federal Reserve Board for the purpose 38 'stat. l.|
of making advances to Federal reserve banks through the ~
Federal reserve agents as hereinafter set forth and for no
other purpose, are hereby authorized. The said notes
shall be obligations of the United States and shall be re-
ceivable by all national and member banks and Federal
reserve banks and for all taxes, customs, and other public
dues. They shall be redeemed in gold on demand at the
Treasury Department of the United States, in the city of
Washington, District of Columbia, or in gold or lawful
money at any Federal reserve bank.
CXDLX,ATERAL SECURITY.
APPLICATIONS FOR FEDERAL RESERYE NOTES.
616a. Any Federal reserve bank may make application ^^^ ^^<^- ,23-
1 -i IT-. 11 ,/•! .cji lyio, sec. lb;
to the local Federal reserve agent lor such amount ot the 38 stat. l..
Federal reserve notes hereinbefore provided for as it may "^ Act Sept. 7,
require. Such application shall be accompanied with a L^^^if ^ ^*^*-
tender to the local Federal reserve agent of collateral in Act" June 21.
amount equal to the sum of the Federal reserve notes ^ ^^' ®'^*^' ^'
thus applied for and issued pursuant to such application.
The collateral security thus offered shall be notes, drafts,
bills of exchange, or acceptances acquired under the pro-
visions of section thirteen of this act, or bills of exchange
indorsed by a member bank of any Federal reserve dis-
* Under War Finance Corporation act approved Apr. 5, 191S, as
amended by act of Mar. 3, 1919, Federal reserve banl^s may also
act as fiscal agents of the War Finance Corporation.
* Under section 7 of the act approved Apr. 24, 1917, section S of
the act approved Sept. 24, 1917, and section 8 of the act approved
Apr. 4, 1918, the proceeds of sale of Liberty bonds of the first,
second, and third issues may be deposited in nonmember banks.
The act of May 18, 1916, amending the postal saviujxs act, author-
izes the deposit of postal savings funds in nonmember banks.
150 THE FEDERAL, EESERVE ACT.
trict and purchased under the provisions of section four-
teen of this act, or bankers' acceptances purchased under
the provisions of said section fourteen, or gold or gold
certificates ; but in no event shall such collateral security,
■whether gold, gold certificates, or eligible paper, be less
than the amount of Federal reserve notes applied for.^
The Federal reserve agent shall each clay notify the Fed-
eral Reserve Board of all issues and withdrawals of Fed-
eral reserve notes to and by the Federal reserve bank to
which he is accredited. The said Federal Reserve Board
may at any time call upon a Federal reserve bank for
additional security to protect the Federal reserve notes
issued to it.
RESERVE REQUIREMENTS FOR FEDERAL RESERVE
BANKS.
1913* ^ec' li' ®1^^- Every Federal reserve bank shall maintain re-
38 Stat.' L.) serves in gold or lawful money of not less than thirty-
'^Aet June 21, fi'^'s per ceutum against its deposits and reserves in gold
1917. sec. 7. of uot less than forty per centum against its Federal re-
serve notes in actual circulation: Provided, hoivever,
That when the Federal reserve agent holds gold or gold
certificates as collateral for Federal reserve notes issued
to the bank such gold or gold certificates shall be counted
as part of the gold reserve which such bank is required
to maintain against its Federal reserve notes in actual
circulation.
ISSIE AND REDEMPTION OF FEDERAL RESERVE NOTES.
NO FEDERAL RESERVE BANK PERMITTED TO PAY OUT
NOTES ISSUED THROUGH ANOTHER FEDERAL RESERVE
BANK.
Act Dec. 23, 616c. Notes SO paid out shall bear upon their faces a
si^^'st^a^*!* ^L.; distinctive letter and serial number which shall be as-
~^tct June 21 signed by the Federal Reserve Board to each Federal
1917, sec. 7. ' reserve bank. "Whenever Federal reserve notes issued
through one Federal reserve bank shall be received by
another Federal reserve bank, they shall be promptly re-
turned for credit or redemption to the Federal reserve
bank through which they were originally issued or, upon
direction of such Federal reserve bank, they shall be for-
warded direct to the Treasurer of the United States to be
retired. No Federal reserve bank shall pay out notes
issued through another under penalty of a tax of ten per
centum upon the face value of notes so paid out. Notes
presented for redemption at the Treasury of the United
States shall be paid out of the redemption fund and re-
turned to tlic Federal reserve banks through which they
were originally issued, and thereupon such Federal re-
* Under section 13 of War Finance Corporation act approved
Apr. 5, 1918, notes secured by War Finance Corporation bonds
may be used to same extent as collateral, as notes secured by
United States bonds.
THE FEDERAL RESERVE ACT. 151
serve bank shall, upon demand of the Secretary of the
Treasury, reimburse such redemi^tion fund in lawful
money or, if such Federal reserve notes have been re-
deemed by the Treasurer in gold or gold certificates, then
such funds shall be reimbursed to the extent deemed
necessary by the Secretary of the Treasury in gold or
gold certificates, and such Federal reserve bank shall, so
long as any of its Federal reserve notes remain outstand-
ing, maintain with the Treasurer in gold an amount suffi-
cient in the judgment of the Secretary to provide for all
redemptions to be made by the Treasurer. Federal re-
serve notes received by the Treasurer otherwise than
for redemption may be exchanged for gold out of the re-
demption fund hereinafter provided and returned to the
reserve bank through which they were originally issued,
or they may be returned to such bank for the credit of
the United States. Federal reserve notes unfit for circu-
lation shall be returned by the Federal reserve agents to
the Comptroller of the Currency for cancellation and
destruction.
DEPOSITS OF GOLD ITITH TREASURER FOR REDEMPTION
OF FEDERAL RESERYE NOTES.
616d. The Federal Reserve Board shall require each jgf f f^f- 2^3.
Federal reserve bank to maintain on deposit in the Treas- 38 'stat.' l.',
ury of the United States a sum in gold sufficient in the "^Ict June 21,
judgment of the Secretary of the Treasury for the re- ^^^'^> ^ec 7.
demption of the Federal reserve notes issued to such bank,
but in no event less than five per centum of the total
amount of notes issued less the amount of gold or gold
certificates held by the Federal reserve agent as collateral
security; but such deposit of gold shall be counted and
included as part of the forty per centum reserve herein-
before required.
FEDERAL RESERYE BOARD MAY GRANT OR REJECT AP-
PLICATION OF FEDERAL RESERYE BANK FOR FED-
ERAL RESERYE NOTES. FEDERAL RESERYE NOTES
FIRST LIEN ON ALL THE ASSETS OF THE BANK.
616e. The board shall have the right, acting through ^g^^t Dec 2^3,
the Federal reserve agent, to grant in whole or in part, 38 'stat.' l.',
or to reject entirely the application of any Federal re- "^Ict June 21,
serve bank for Federal reserve notes ; but to the extent ^^^'^' ^^c. 7.
that such application may be granted the Federal Reserve
Board shall, through its local Federal reserve agent, sup-
ply Federal reserve notes to the banks so applying, and
such bank shall be charged with the amount of notes
issued to it and shall pay such rate of interest as may be
established by the Federal Reserve Board on only that
amount of such notes which equals the total amount of
its outstanding Federal reserve notes less the amount of
gold or gold certificates held by the Federal reserve agent
as collateral security. Federal reserve notes issued to any
152 THE FEDEKAL RESERVE ACT.
such bank shall, upon delivery, together with such notes
of such Federal reserve bank as may be issued under sec-
tion eighteen of this act upon security of United States
two per centum Government bonds, become a first and
paramount lien on all the assets of such bank.
REDUCTION OF NOTE ISSUES.
Act Dec. 23, 616f. Any Federal reserve bank may at any time reduce
sl^^'sfaf' ^L * i^ liability for outstanding Federal reserve notes by
267. ^ ' depositing with the Federal reserve agent its Federal re-
1917, sec?\r ' serve notes, gold, gold certificates, or lawful money of the
United States. Federal reserve notes so deposited shall
not be reissued, except upon compliance with the condi-
tions of an original issue.
The Federal reserve agent shall hold such gold, gold
certificates, or lawful money available exclusively for ex-
change for the oustanding Federal reserve notes when
offered by the reserve bank of which he is a director.
Upon the request of the Secretary of the Treasury the
Federal Reserve Board shall require the Federal reserve
agent to transmit to the Treasurer of the United States
so much of the gold held by him as collateral security for
Federal reserve notes as may be required for the exclusive
purpose of the redemption of such Federal reserve notes,
but such gold when deposited with the Treasurer shall be
counted and considered as if collateral security on deposit
with the Federal reserve agent.
SUBSTITUTION OF COLLATERAL. ~ '
Act Dec. 23, 616g. Any Federal reserve bank may at its discretion
1913, sec. 16 ; withdraw collateral deposited with the local Federal re-
267. " " serve agent for the protection of its Federal reserve notes
1917* se"?\f ■^' issued to it and shall at the same time substitute therefor
other collateral of equal amount with the approval of the
Federal reserve agent under regulations to be prescribed
by the Federal Eeserve Board. Any Federal reserve bank
may retire any of its Federal reserve notes by depositing
them with the Federal reserve agent or with the Treasurer
of the United States, and such Federal reserve bank shall
thereupon be entitled to receive back the collateral de-
posited with the Federal reserve agent for the security of
such notes. Federal reserve banks shall not be required
to maintain the reserve or the redemption fund hereto-
fore provided for against Federal reserve notes which
have been retired. Federal reserve notes so deposited
shall not be reissued except upon compliance with the
conditions of an original issue.
All Federal reserve notes and all gold, gold certificates,
and lawful money issued to or deposited with any Fed-
eral reserve agent under the provisions of the Federal re-
serve act shall hereafter be held for such agent, under
THE FEDERAL RESERVE ACT. 153
such rules and regulations as the Federal Reserve Board
may prescribe, in the joint custody of himself and the
Federal reserve bank to which he is accredited. Such
agent and such Federal reserve bank shall be jointly
liable for the safe-keeping of such Federal reserve notes,
gold, gold certificates, and lawful money. Nothing
herein contained, however, shall be construed to prohibit
a Federal reserve agent from depositing gold or gold
certificates with the Federal Eeserve Board, to be held
by such board subject to his order, or with the Treasurer
of the United States for the purposes authorized by law,
PEEPARATION OF FEDERAL RESERYE NOTES. PLATES
AND DIES TO BE UNDER CONTROL OF COMPTROLLER
OF CURRENCY. WHERE NOTES ARE TO BE DEPOSITED.
616h. In order to furnish suitable notes for circulation Act Dec. 23,
as Federal reserve notes, the Comptroller of the Cur- sl^^'st^at^' ^l '
rency shall, under the direction of the Secretary of the 267.
Treasury, cause plates and dies to be engraved in the i9i8rs"ec.''3.^^'
best manner to guard against counterfeits and fraudu-
lent alterations, and shall have printed therefrom and
numbered such quantities of such notes of the denomina-
tions of $5, $10, $20, $50, $100, $500, $1,000, $5,000, $10,000,
as may be required to supply the Federal reserve banks.
Such notes shall be in form and tenor as directed by the
Secretary of the Treasury under the provisions of this
Act and shall bear the distinctive numbers of the several
Federal reserve banks through which they are issued.
When such notes have been prepared, they shall be
deposited in the Treasurj^ or in the subtreasury or mint
of the United States nearest the place of business of each
Federal reserve bank and shall be held for the use of
such bank subject to the order of the Comptroller of the
Currency for their delivery, as provided by this Act.
The plates and dies to be procured by the Comptroller
of the Currency for the printing of such circulating
notes shall remain under his control and direction, and
the expenses necessarily incurred in executing the laws
relating to the procuring of such notes, and all other
expenses incidental to their issue and retirement, shall
be paid by the Federal reserve banks, and the Federal
Reserve Board shall include in its estimate of expenses
levied against the Federal reserve banks a sufficient
amount to cover the expenses herein provided for.
The examination of plates, dies, bed pieces, and so
forth, and regulations relating to such examination of
plates, dies, and so forth, of national-bank notes provided
for in section fifty-one hundred and seventy-four Revised
Statutes, is hereby extended to include notes herein pro-
vided for.
154 THE FEDERAL RESERVE ACT.
APPEOPRIATION FOR EXPENSE OF PRINTING NATIONAL-
BANK NOTES MAY BE USED FOR PRINTING FEDERAL
RESERVE NOTES.
1913? ?ec?' i^6^i 6^6i* -^^J appropriation heretofore made out of the
38^ Stat." L.; general funds of the Treasury for engraving plates and
dies, the purchase of distinctive paper, or to cover any
other expense in connection with the printing of na-
tional-bank notes or notes provided for by the Act of
May thirtieth, nineteenth hundred and eight, and any
distinctive paper that may be on hand at the time of the
passage of this Act may be used in the discretion of the
Secretary for the purposes of this Act, and should the
appropriations heretofore made be insufficient to meet
the requirements of this Act in addition to circulating
notes provided for by existing law, the Secretary is here-
by authorized to use so much of any funds in the Treas-
ury not otherwise appropriated for the purpose of fur-
nishing the notes aforesaid: Provided, however, That
nothing in this section contained shall be construed as
exempting national banks or Federal reserve banks from
their liability to reimburse the United States for any ex-
penses incurred in printing and issuing circulating notes.
WHEN FEDERAL RESERVE BANK SHALL RECEIVE
CHECKS AND DRAFTS ON DEPOSIT AT PAR.
lots! sec!" 1^6^; ^^^J- Every Federal reserve bank shall receive on de-
S8 'stat. L., posit at par from member banks or from Federal reserve
banks checks and drafts drawn upon any of its depos-
itors, and when remitted by a Federal reserve bank,
checks and drafts drawn by any depositor in any other
Federal reserve bank or member bank upon funds to the
credit of said depositor in said reserve bank or member
bank.
CHARGES FOR COLLECTION AND FOR SALE OF EX-
CHANGE.
im^ ^ec' iQ- ^1^^- Nothing herein contained shall be construed as
38 'stat." L.', prohibiting a member bank from charging its actual
^^^' expense incurred in collecting and remitting funds, or
for exchange sold to its patrons. The Federal Reserve
Board shall, by rule, fix the charges to be collected by
the member banks from its patrons whose checks are
cleared through the Federal reserve bank and the charge
which may be imposed for the service of clearing or col-
lection rendered by the Federal reserve bank.
FEDERAL RESERVE BOARD MAT EXERCISE FUNCTIONS
OF A CLEARING HOUSE AND MAY REQUIRE FEDERAL
RESERVE BANKS TO EXERCISE SUCH FUNCTIONS.
6161. The Federal Reserve Board shall make and pro-
mulgate from time to time regulations governing the
transfer of funds and charges therefor among Federal
THE FEDERAL, RESERVE ACT. 155
reserve banl« and their branches, and may at its dis-
cretion exercise the functions of a clearing house for
such Federal reserve banks, or may designate a Federal
reserve bank to exercise such functions, and may also
require each such bank to exercise the functions of a
clearing house for its member banks.
SECRETARY OF THE TREASURY TO RECEIYE DEPOSITS
OF GOLD COIN OR GOLD CERTIFICATES WITH THE
TREASURER OR ASSISTANT TREASURER OF UNITED
STATES WHEN TENDERED BY ANY FEDERAL RESERVE
BANK OR FEDERAL RESERVE AGENT FOR CREDIT TO
ITS OR HIS ACCOUNT WITH THE FEDERAL RESERVE
BOARD.
616m. That the Secretary of the Treasury is hereby igf^^g-J^^I ^L
authorized and directed to receive deposits of gold coin or
of gold certificates with the Treasurer or any assistant
treasurer of the United States when tendered by any
Federal reserve bank or Federal reserve agent for credit
to its or his account with the Federal Reserve Board.
The Secretary shall prescribe by regulation the form of
receipt to be issued by the Treasurer or Assistant Treas-
urer to the Federal reserve bank or Federal reserve agent
making (he deposit, and a duplicate of such receipt shall
be delivered to the Federal Reserve Board by the Treas-
urer at Washington upon proper advices from any as-
sistant treasurer that such deposit has been made. De-
posits so made shall be held subject to the orders of
the Federal Reserve Board and shall be payable in gold
coin or gold certificates on the order of the Federal
Reserve Board to any Federal reserve bank or Federal
reserve agent at the Treasury or at the Subtreasury of
the United States nearest the place of business of such
Federal reserve bank or such Federal reserve agent : Pro-
vided^ however^ That anj^ expense incurred in shipping
gold to or from the Treasury or subtreasuries in order to
make such payments, or as a result of making such pay-
ments, shall be paid by the Federal Reserve Board and
assessed against the Federal reserve banks. The order
used by the Federal Reserve Board in making such pay-
ments shall be signed by the governor or vice governor,
or such other officers or members as the board may by
regulation prescribe. The form of such order shall be
approved by the Secretary of the Treasury.
The expenses necessarily incurred in carrying out these
provisions, including the cost of the certificates or re-
ceipts issued for deposits received, and all expenses inci-
dent to the handling of such deposits shall be paid by
the Federal Reserve Board and included in its assess-
ments against the several Federal reserve banks.
Gold deposits standing to the credit of any Federal
reserve bank with the Federal Reserve Board shall, at
the option of said bank, be counted as part of the lawful
reserve which it is required to maintain against outstand-
156 THE FEDERAL RESERVE ACT.
ing Federal reserve nx>tes, or as part of the reserve it is
required to maintain against deposits.
Nothing in this section shall be construed as amend-
ing section six of the act of March fourteenth, nineteen
hundred, as amended by the acts of March fourth, nine-
teen hundred and seven, March second, nineteen hundred
and eleven, and June twelfth, nineteen hundred and six-
teen, nor shall the provisions of this section be construed
to apply to the deposits made or to the receipts or cer-
tificates issued under those acts.
NATIONAL BANKS NOT REQUIRED TO MAKE DEPOSIT OF
UNITED STATES BONDS PRIOR TO COMMENCEMENT OF
BUSINESS.
1913* ?ec^' u- ^^^' ^^^' ^'^' — ^^ much of the provisions of section
38 Stat." L.| fifty-one hundred and fifty-nine of the Eevised Statutes
"^ict June 21, ^f the United States, and section four of the act of June
1917, sec, 9. ' twentieth, eighteen hundred and seventy-four, and sec-
tion eight of the act of July twelfth, eighteen hundred
and eighty-two, and of any other provisions of existing
statutes as require that before any national banking asso-
ciation shall be authorized to commence banking busi-
ness it shall transfer and deliver to the Treasurer of the
United States a stated amount of United States regis-
tered bonds, and so much of those provisions or of any
other provisix3ns of existing statutes as require any na-
tional banking association now or hereafter organized to
maintain a minimum deposit of such bonds with the
Treasurer is hereby repealed.
REFUNDING BONDS.
RETIREMENT OF CIRCULATING NOTES.
igfs* sec*^' 1^8^' ^^^- ^^^' ^^' — -^fter two years from the passage of this
38 Stat.' L.', Act, and at any time during a period of twenty years
thereafter, any member bank desiring to retire the whole
or any part of its circulating notes, may file with the
Treasurer of the United States an application to sell for
its account, at par and accrued interest, United States
bonds securing circulation to be retired.
PURCHASE OF UNITED STATES BONDS BY FEDERAL RE-
SERVE BANKS.
19^3* ?ec' il^' ^^^^- "^^^^ Treasurer shall, at the end of each quarterly
38 'stat.' L.; period, furnish the Federal Reserve Board with a list of
such applications, and the Federal Reserve Board may,
in its discretion, require the Federal reserve banks to
purchase such bonds from the banks whose applications
have been filed with the Treasurer at least ten days before
the end of any quarterly period at which the Federal
Reserve Board may direct the purchase to be made:
Provided, That Federal reserve banks shall not be per-
mitted to purchase an amount to exceed $25,000,000 of
such bonds in any one year, and wliich amount shall
THE FEDERAL RESERVE ACT. 157
include bonds acquired under section four of this Act by
the Federal reserve bank.
Provided further^ That the Federal Reserve Board
shall allot to each Federal reserve bank such proportion
of such bonds as the capital and surplus of such bank
shall bear to the aggregate capital and surplus of all tho
Federal reserve banks.
Upon notice from the Treasurer of the amount of bonds
so sold for its account, each member bank shall duly
assign and transfer, in writing, such bonds to the Federal
reserve bank purcliasing the same, and such Federal
reserve bank shall, thereupon, deposit lawful money with
the Treasurer of the United States for the purchase price
of such bonds, and the Treasurer shall pay to the member
bank selling such bonds any balance due after deducting
a sufficient sum to redeem its outstanding notes secured
by such bonds, which notes shall be canceled and perma-
nently retired when redeemed.
ISSUE OF CIRCULATING NOTES TO FEDERAL RESERTE
BANKS ON SECURITY OF UNITED STATES BONDS. CIR-
CULATING NOTES SO ISSUED OBLIGATIONS OF FED-
ERAL RESERVE BANK.
618b. The Federal reserve banks purchasing such bonds _4S* ^^^- ?o'
. , , ^ , f • ^ j_- lylo, sec. 1» ;
shall be permitted to take out an amount oi circulating ss stat. l.,
notes equal to the par value of such bonds. ^^^'
Upon the deposit with the Treasurer of the United
States of bonds so purchased, or any bonds with the cir-
culating privilege acquired under section four of this act,
any Federal reserve bank making such deposit in the
manner provided by existing law, shall be entitled to
receive from the Comptroller of the Currency circulating
notes in blank, registered and countersigned as provided
by law, equal in amount to the par value of the bonds so
deposited.^ Such notes shall be the obligations of the
Federal reserve bank procuring the same, and shall be in
form prescribed b}' the Secretary of the Treasury, and to
the same tenor and effect as national-bank notes now
provided b}' law. They shall be issued and redeemed
under the same terms and conditions as national-bank
notes except that they shall not be limited to the amount
of the capital stock of the Federal reserve bank issuing
them.
ISSUE OF ONE-YEAR GOLD NOTES AND THREE PER CENT
BONDS OF THE UNITED STATES IN EXCHANGE FOR
TWO PER CENT UNITED STATES BONDS.
618c. Upon application of any Federal reserve bank, 19^0* ^^^ fi\
approved by the Federal Reserve Board, the Secretary ss stat. l..
of the Treasury may issue, in exchange for United States
* Under act of Apr. 23, 1918, Federal reserve banks may issue
Federal reserve bank notes in any denominations, includin.Er .$1
find .?2. against the security of United States certificates of iU'
debtedness to the extent permitted by that act.
158 THE FEDERAL RESERVE ACT.
two per centum gold bonds bearing the circulation privi-
lege, but against which no circulation is outstanding,
one-year gold notes of the United States without the
circulation privilege, to an amount not to exceed one-
half of the two per centum bonds so tendered for ex-
change, and thirty-year three per centum gold bonds
without the circulation privilege for the remainder of the
two per centum bonds so tendered: Provided, That at
the time of such exchange the Federal reserve bank ob-
taining such one-year gold notes shall enter into an obli-
gation with the Secretary of the Treasury binding itself
to purchase from the United States for gold at the ma-
turity of such one-year notes, an amount equal to those
delivered in exchange for such bonds, if so requested by
the Secretary, and at each maturity of one-year notes so
purchased by such Federal reserve bank, to purchase
from the United States such an amount of one-year notes
as the Secretary may tender to such bank, not to exceed
the amount issued to such bank in the first instance, in
exchange for the two per centum United States gold
bonds; said obligation to purchase at maturity such
notes shall continue in force for a period not to exceed
thirty years.
For the purpose of making the exchange herein pro-
vided for, the Secretary of the Treasury is authorized to
issue at par Treasury notes in coupon or registered form
as he may prescribe in denominations of one hundred
dollars, or any multiple thereof, bearing interest at the
rate of three per centum per annum, payable quarterly,
such Treasury notes to be payable not more than one year
from the date of their issue in gold coin of the present
standard value, and to be exempt as to principal and
interest from the payment of all taxes and duties of the
United States except as provided by this act, as well as
from taxes in any form by or under State, municipal, or
local authorities. And for the same purpose, the Secre-
tary is authorized and empowered to issue United States
gold bonds at par, bearing three per centum interest pay-
able thirty years from date of issue, such bonds to be of
the same general tenor and effect and to be issued under
the same general terms and conditions as the United
States three per centum bonds without the circulation
privilege now issued and outstanding
EXCHANGE OF THREE PER CENT BONDS FOR ONE-YEAR
GOLD NOTES.
618q. Upon application of any Federal reserve bank,
approved by the Federal Reserve Board, the Secretary
may issue at par such three per centum bonds in ex-
change for the one-year gold notes herein provided for.
THE FEDERAL RESERVE ACT* 159
BANK RESERVES.
DEMAND AND TIME DEPOSITS DEFINED— RESERYE RE-
QUIREMENTS—WHEN EFFECTIVE.
619. Sec. 19. — Demand deposits within the meaning of j^^^* ^^*=- ^^^r
this act shall comprise all deposits payable within thirty 38 'stat.' l.',
days, and time deposits shall comprise all deposits pay- Act June 21,
able after thirty days, all savings accounts and cer- ^^i"^' ^^^- i^*
tificates of deposit which are subject to not less than
thirty days' notice before payment, and all postal savings
deposits.^
Every bank, banking asociation, or trust company
which is or which becomes a member of any Federal re-
serve bank shall establish and maintain reserve balances
with its Federal reserve bank as follows:
RESERYE REQUIREMENTS FOR BANKS NOT IN RESERYE
CITIES.
619a. (a) If not in a reserve or central reserve city, Act Dec. 2.3.
as now or hereafter defined, it shall hold and maintain 38 'stat." l.)
with the Federal reserve bank of its district an actual net ^"^^^ june 21
balance equal to not less than seven per centum of the i9i7, sec. 10. '
aggregate amount of its demand deposits and three per
centum of its time deposits.
RESERYE REQUIREMENTS FOR BANKS IN RESERYE
CITIES.
619b. (h) If in a reserve city, as now or hereafter ^^Act Dec. ^2^3.
defined, it shall hold and maintain with the Federal 38 stat.' l.'
reserve bank of its district an actual net balance equal to "'Act Aug. 15.
not less than ten per centum of the aggregate amount of J^^i'^^j^^^^t^*'
its demand deposits and three per centum of its time Act June 21,
deposits: Provided, hoicever, That if located in the outly- ^^ict lept.^26,
ing districts of a reserve city or in territory added to such i^is, sec. 4.
a city by the extension of its corporate charter, it may,
upon the affirmative vote of five members of the Federal
Reserve Board, hold and maintain the reserve balances
specified in paragraph {a) hereof.
KESERYE REQUIREMENTS FOR BANKS IN CENTRAL RE-
SERYE CITIES.
619c. {c) If in a central reserve city, as now or here- Act Dec. 23,
after defined, it shall hold and maintain with the Federal ss^^'staT ^l.!
reserve bank of its district an actual net balance equal -"^^^^^ ^^„ jg'
to not less than thirteen per centum 'of the aggregate i9i4: *38''stat!
amount of its demand deposits and three per centum of ^" Act^June 21.
its time deposits : Provided, however, That if located in ^^^^/^ ^'^f-, ^\-^
the outlying districts of a central reserve city or in tern- lo'is, sec. 4. " '
* Government deposits other than postal savings deposits are
not subject to reserve reciuirenients. See section 7 of First Lib-
erty Bond act, approved Apr. 24 , 1917 ; section 8 of Second Liberty
Bond act, approved Sept. 24, 1917, and section 8 of Third Liberty
Bond act, approved Apr. 4, 1918.
160 THE FEDERAL RESERVE ACT.
tory added to such city by the extension of its corporate
charter, it may, upon the affirmative vote of five members
of the Federal Reserve Board, hold and maintain the
reserve balances specified in paragraphs {a) or (&)
thereof.
MEMBER BANK FORBIDDEN TO KEEP ON DEPOSIT WITH
NONMEMBER BANK A SUM IN EXCESS OF TEN PER
CENT OF ITS OWN CAPITAL AND SURPLUS OR TO SE-
CURE DISCOUNTS FOR NONMEMBER BANK.
1913* s^*^' 1^9 • 619d. No member bank shall keep on deposit with any
S8 'stat.' L.', State bank or trust company which is not a member bank
^^Act Aug. 15, a sum in excess of ten per centum of its own paid-up
L^^l^i^^ ^t^t- capital and surplus. No member bank shall act as the
Act June 21, medium or agent of a nonmember bank in applying for
1917, sec. 10. ^^, receiving discounts from a Federal reserve bank under
the provisions of this Act, except by permission of the
Federal Reserve Board.
WITHDRAWAL OF RESERYE BY MEMBER BANK.
Act Dec. 23, 619e. The required balance carried by a member bank
ss' 'stau L.', with a Federal reserve bank may, under the regulations
^^Act. Aug. 15, and subject to such penalties as may be prescribed by the
1914 ;* 38 "stat! Federal Reserve Board, be checked against and with-
^■'Act^june 21, drawu by such member bank for the purpose of meeting
1917, sec. 10, existing liabilities : Provided, however, That no bank
shall at any time make new loans or shall pay any divi-
dends unless and until the total balance required by law
is fully restored.
RESERYE REQUIREMENT— HOW ESTIMATED.
Act Dec. 23, 619f. In estimating the balances required by this Act,
38^' stat.* L.', the net difference of amounts due to and from other
^Act Aug. 15, banks shall be taken as the basis for ascertaining the
1914; 38 stat! deposits against which required balances with Federal
Act June 21, rescrve banks shall be determined,
1917, sec. 10.
RESERYE REQUIREMENTS FOR NATIONAL BANKS LO-
CATED IN ALASKA OR OUTSIDE THE CONTINENTAL
UNITED STATES.
1913* sec^" 1^9^' 619g. National banks, or banks organized under local
38 stat." L.', laws, located in Alaska or in a dependency or insular
^^Act Aug. 15, possession or any part of the United States outride the
1914^^^38 stat. continental United States may remain nonmember banks.
Act June 21, and shall in that event maintain reserves and comply
1917, sec. 10, ^-^j^ rj^Yi the conditions now provided by law regulating
them ; or said banks may, with the consent of the Reserve
Board, become member banks of any one of the reserve
districts, and shall in that event take stock, maintain
reserves, and be subject to all the other provisions of this
act.
THE FEDERAL RESERVE ACT. 161
REDEMPTION FUND WITH TREASURER NOT TO BE
COUNTED AS RESERVE.
620. Sec. 20. — So much of sections two and three of the .A9.^ P^<^- 23.
Act of June twentieth, eighteen hundred and seventy- 38 stat l.,
four, entitled " An Act fixing the amount of United States ^^^'
notes, providing for a redistribution of the national-bank
currency, and for other purposes," as provides that the
fund deposited by any national banking association with
the Treasurer of the United States for the redemption of
its notes shall be counted as a part of its lawful reserve
as provided in the Act aforesaid, is hereby repealed. And
from and after the passage of this Act such fund of five
per centum shall in no case be counted by any national
banking association as a part of its lawful reserve.
BANK EXAMINATIONS.
APPOINTMENT AND POWERS OF EXAMINERS— ACCEPT-
ANCE OF REPORTS OF EXAMINATIONS BY STATE
AUTHORITY.
621. Sec. 21.— Section fifty-two hundred and forty, jg^ct Dec. 23,
United States Revised Statutes, is amended to read as 38 'stat.' l.)
follows: _ ^'^^'
The Comptroller of the Currency, with the approval of
the Secretary of the Treasury, shall appoint examiners
who shall examine every member bank ^ at least twice in
each calendar year and oftener if considered necessary:
Provided, however, That the Federal Reserve Board may
authorize examination by the State authorities to be
accepted in the case of State banks and trust companies
and may at any time direct the holding of a special ex-
amination of State banks or trust companies that are
stockholders in any Federal reserve bank. The examiner
making the examination of any national bank, or of any
other member bank, shall have power to make a thorough
examination of all the affairs of the bank, and in doing so
he shall have power to administer oaths and to examine
any of the officers and agents thereof under oath and
shall make a full and detailed report of the condition of
said bank to the Comptroller of the Currency.
SALARIES OF BANK EXAMINERS.
621a. The Federal Reserve Board, upon the recom- Act Dec. 23,
mendation of the Comptroller of the Currency, shall fix 38 'stot.' "l.'.
the salaries of all bank examiners and make report thereof ^^^'
to Congress. The expense of the examinations herein
provided for shall be assessed by the Comptroller of the
Currency upon the banks examined in proportion to
assets or resources held by the banks upon the dates of
examination of the various banks.
* Except banks admitted to membership In the system under au-
thority of section 9 of this act. See section 9 of this act U3
amended by act approved June 21, 1917.
Ift4312°— 20 11
162 THE FEDERAL, RESERVE ACT.
EXAMINATIONS BY FEDERAL EESERYE BANK.
1913! sec^' ill ^2 lb. In addition to the examinations made and con-
272 '^^^' ^-'d^^^ted by the Comptroller of the Currency, every Fed-
eral reserve bank may, with the approval of the Federal
reserve agent or the Federal Reserve Board, provide for
special examination of member banks within its district.
The expense of such examinations shall be borne by the
bank examined. Such examinations shall be so con-
ducted as to inform theFederal reserve bank of the con-
dition of its member banks and of the lines of credit
■which are being extended by them. Every Federal re-
serve bank shall at all times furnish to the Federal Re-
serve Board such information as may be demanded con-
cerning the condition of any member bank within the
district of the said Federal reserve bank.
No bank shall be subject to any visitatorial powers
other than such as are authorized by law, or vested in the
courts of justice or such as shall be or shall have been
exercised or directed by Congi-ess, or by either House
thereof or by any cormnittee of Congress or of either
House duly authorized.
EXAMINATIONS OF FEDERAL RESERTE BANKS.
1913* fee' 2^1^' ^^^°' '^^^ Federal Reserve Board shall, at least once
38 Stat." L.', each year, order an examination of each Federal reserve
^^^* bank, and upon joint application of ten member banks
the Federal Reserve Board shall order a special examina-
tion and report of the condition of any Federal reserve
bank.
MEMBER BANK CAN NOT MAKE LOAN OR GRANT A
GRATUITY TO ANY NATIONAL BANK EXAMINER.
,^4S* ^^^- ^^' 622. Sec. 22a. — No member bank and no officer, direc-
38 'stat.' L.', tor, or employee thereof shall hereafter make any loan or
^^\ct se t 26 S^^^^ ^^J gratuity to any bank examiner. Any bank
1918, sec? 5. ' officer, director, or employee violating this provision
shall be deemed guilty of a misdemeanor and shall be
imprisoned not exceeding one year or fined not more than
$5,000, or both ; and may be fined a further sum equal to
the money so loaned or gratuity given. Any examiner
accepting a loan or gratuity from any bank examined by
him or from an officer, director, or employee thereof shall
be deemed guilty of a misdemeanor and shall be im-
prisoned one year or fined not more than $5,000, or both,
and may be fined a further sum equal to the money so
loaned or gratuity given, and shall forever thereafter
be disqualified from holding office as a national-bank
examiner.
THE FEDERAL RESERVE ACT. 163
NATIONAL BANK EXAMINER CAN NOT PERFORM ANT
SERVICE FOR COMPENSATION FOR ANY RANK OR
OFFICER. EXAMINER CAN NOT DISCLOSE THE NAMES
OF BORROWERS, OR COLLATERAL WITHOUT FIRST
OBTAINING WRITTEN CONSENT OF COMPTROLLER.
622b. No national bank examiner shall perform any Act Sept. 26,
other service for compensation while holding such office ' ^**^ "
for any bank or officer, director, or employee thereof.
No examiner, public or private, shall disclose the
names of borrowers or the collateral for loans of a mem-
ber bank to other than the proper officers of such bank
without first having obtained the express permission in
writing from the Comptroller of the Currency, or from
the board of directors of such banl^, except when ordered
to do so by a court of competent jurisdiction, or by
direction of the Congress of the United States, or of
either House thereof, or any committee of Congi'ess, or
of either House duly authorized. Any bank examiner
violating the provisions of this subsection shall be im-
prisoned not more than one year or fined not more than
$5,000, or both.
PENALTY FOR OFFICER, DIRECTOR, OR EMPLOYEE OF
MEMBER BANK WHO RECEIVES ANY COMMISSION OR
GIFT IN CONNECTION WITH ANY LOAN.
622c. Except as herein provided, any officer, director Act Sept. 26,
employee, or attorney of a member bank who stipulates ^^^^' ^^'^' ^'
for or receives or consents or agrees to receive any fee,
commission, gift, or thing of value from any person, firm,
or corporation, for procuring or endeavoring to procure
for such person, firm, or corporation, or for any other
person, firm, or corporation, any loan from or the pur-
chase or discount of any paper, note, draft, check, or
bill of exchange by such member bank shall be deemed
guilty of a misdemeanor and shall be imprisoned not
more than one year or fined not more than $5,000, or
both.
PURCHASE OF SECURITIES OR PROPERTY FROM ONE OP
ITS DIRECTORS, OR SALES TO A DIRECTOR BY A MEM-
BER BANK.
622d. Any member bank may contract for, or purchase Act Sept. 26.
from, any of its directors or from any firm of which any ^^^^' '***^ ^"
of its directors is a member, any securities or other
property, when (and not otherwise) such purchase is
made in the regular course of business upon terms not
less favorable to the bank than those offered to otliers,
or when such purchase is authorized by a majority of the
board of directors not interested in the sale of such
securities or property, such authority to be evidenced
by the affirmative vote or written assent of such directors :
Provided, hmvever, That when any director, or firm of
which any director is a member, acting for or on behalf
164 THE FEDERAL RESERVE kCT. '
of others, sells securities or other property to a member
bank, the Federal Reserve Board by regulation may,
in any or all cases, require a full disclosure to be made,
on forms to be prescribed by it, of all commissions or
other considerations received, and whenever such director
or firm, acting in his or its own behalf, sells securities
or other property to the bank the Federal Reserve Board
by regulation, may require a full disclosure of all profit
realized from such sale.
Any member bank may sell securities or other property
to any of its directors, or to a firm of which any of its
directors is a member, in the regular course of business
on terms not more favorable to such director or firm
than those offered to others, or when such sale is author-
ized by a majority of the board of directors of a member
bank to be evidenced by their affirmative vote or written
assent: Provided, however, That nothing in this subsec-
tion contained shall be construed as authorizing member
banks to purchase or sell securities or other property
■which such banks are not otherwise authorized by law
to purchase or sell.
RATE OF INTEREST PAID DIRECTORS, OFFICERS, OR
EMPLOYEES NOT TO EXCEED THAT PAID TO OTHER
DEPOSITORS.
1918, sec. * 5. ' 622e. No member bank shall pay to any director, officer,
attorney, or employee a greater rate of interest on the
deposits of such director, officer, attorney, or employee
than that paid to other depositors on similar deposits
with such member bank.
PENALTY FOR VIOLATION OF ANY OF THE PROVISIONS
OF SECTION 22 OF THE FEDERAL RESERVE ACT.
19^8*860^5.^^' 622f. If the directors or officers of any member bank
shall knowingly violate or permit any of the agents,
officers, or directors of any member bank to violate any
of the provisions of this section or regulations of the
board made under authority thereof, every director and
officer participating in or assenting to such violation
shall be held liable in his personal and individual ca-
pacity for all damages which the member bank, its share-
holders, or any other persons shall have sustained in con-
sequence of such violation.
LIABILITY OF STOCKHOLDERS OF NATIONAL BANKS.
19^3* 8^cf" 2?: ^23. Sec. 23.— The stockholders of every national bank-
278 '^**** ^■' ^^^ association shall be held individually responsible for
all contracts, debts, and engagements of such association,
each to the amount of his stock therein, at the par value
thereof in addition to the amount invested in such stock.
The stockholders in any national banking association
who shall have transferred their shares or registered the
transfer thereof within sixty days next before the date of
THE FEDERAL RESERVE ACT. 165
the failure of such association to meet its obligations, or
with knowledge of such impending failure, shall be liable
to the same extent as if they had made no such transfer,
to the extent that the subsequent transferee fails to
meet such liability; but this provision shall not be con-
strued to affect in any way any recourse which such
shareholders might otherwise have against those in whose
names such shares are registered at the time of such
failure.
LOANS ON REAL ESTATE.
624. Sec. 24. — Any national banking association not jgff* ^l'^- ^^'.
situated in a central reserve city may make loans secured p 'stat. l.',
by improved and unencumbered farm land situated with- Act Sept. 7.
in its Federal reserve district or within a radius of one 1,^,^754^^ ^^^'
hundred miles of the place in which such bank is located,
irrespective of district lines, and may also make loans se-
cured by improved and unencumbered real estate located
within one hundred miles of the place in which such
bank is located, irrespective of district lines ; but no loan
made upon the security of such farm land shall be made
for a longer time than five years, and no loan made upon
the security of such real estate as distinguished from
farm land shall be made for a longer time than one year
nor shall the amount of any such loan, whether upon such
farm land or upon such real estate, exceed fifty per
centum of the actual value of the property offered as se-
curity. Any such bank may make such loans, whether
secured by such farm land or such real estate, in an ag-
gregate sum equal to twenty-five per centum of its capital
and surplus or to one-third of its time deposits and such
banks may continue hereafter as heretofore to receive
time deposits and to pay interest on the same.
The Federal Reserve Board shall have power from
time to time to add to the list of cities in which national
banks shall not be permitted to make loans secured upon
real estate in the manner described in this section.
FOREIGN BRANCHES.
625. Sec. 25 [as amended 1919]. — Any national banking Act Dec. 23,
association possessing a capital and surplus of $1,000,000 ss st^at*!" "l.!
or more may file application with the Federal Reserve ^^^•
Board for permission to exercise, upon such conditions ^ct. Sept. 7,
and under such regulations as may be prescribed by the Jf ^SwJ^^ ^***'
said board, either or both of the following powers :
First. To establish branches in foreign countries or Act Sept. 17.
dependencies or insular possessions of the United States ^^^^"
for the furtherance of the foreign commerce of the
United States, and to act if required to do so as fiscal
agents of the United States.
Second. To invest an amount not exceeding in the
aggi"egate ten per centum of its paid-in capital stock and
166 THE FEDERAL RESERVE ACT.
surplus in the stock of one or more banks or corporations
chartered or incorporated under the laws of the United
States or of any State thereof, and principally engaged in
international or foreign banking, or banking in a depend-
ency or insular possession of the United States either
directly or through the agency, ownership, or control of
local institutions in foreign countries, or in such depend-
encies or insular possessions. Until January 1, 1921, any
national banking association, without regard to the
amount of its capital and surplus, may file application
with the Federal Reserve Board for permission, upon
such conditions and under such regulations as may be pre-
scribed by said board, to invest an amount not exceeding
in the aggregate 5 per centum of its paid-in capital and
surplus in the stock of one or more corporations chartered
or incorporated under the laws of the United States or of
any State thereof and, regardless of its location, princi-
pally engaged in such phases of international or foreign
financial operations as may be necessary to facilitate the
export of goods, wares, or merchandise from the United
States or any of its dependencies or insular possessions
to any foreign country: Provided^ however^ That in no
event shall the total investments authorized by this
section by any one national bank exceed 10 per centum
of its capital and surplus.
Such application shall specify the name and capital of
the bankmg association filing it, the powers applied for,
and the place or places where the banking or financial
operations proposed are to be carried on. The Federal
Reserve Board shall have power to approve or to reject
such application in whole or in part if for any reason the
granting of such application is deemed inexpedient, and
shall also have power from time to time to increase or
decrease the number of places where such banking opera-
tions may be carried on.
Every national banking association operating foreign
branches shall be required to furnish information con-
cerning the condition of such branches to the Comp-
troller of the Currency upon demand, and every member
bank investing in the capital stock of banks or corpora-
tions described above shall be required to furnish infor-
mation concerning the condition of such banks or cor-
porations to the Federal Reserve Board upon demand,
and the Federal Reserve Board may order special exami-
nations of the said branches, banks, or corporations at
such time or times as it may deem best.
Before any national bank shall be permitted to pur-
chase stock in any such corporation the said corporation
shall enter into an agreement or undertaking with the
Federal Reserve Board to restrict its operations or con-
duct its business in such manner or under such limita-
tions and restrictions as the said board may prescribe for
the place or places wherein such business is to be con-
ducted. If at any time the Federal Reserve Board shall
THE FEDERAL RESERVE ACT. 167
ascertain that the regulations prescribed by it are not
being complied with, said board is hereby authorized and
empowered to institute an investigation of the matter and
to send for persons and papers, subpoena witnesses, and
administer oaths in order to satisfy itself as to the actual
nature of the transactions referred to. Should such in-
vestigation result in establishing the failure of the cor-
poration in question, or of the national bank or banks
which may be stockholders therein, to comply with the
regulations laid down by the said Federal Reserve Board,
such national banks may be required to dispose of stock
holdings in the said corporation upon reasonable notice.
Every such national banking association shall conduct
the accounts of each foreign branch independently of the
accounts of other foreign branches established by it and
of its home office, and shall at the end of each fiscal period
transfer to its general ledger the profit or loss accrued
at each branch as a separate item.
Any director or other officer, agent, or employee of any
member bank may, with the approval of the Federal
Reserve Board, be a director or other officer, agent, or
employee of any such bank or corporation above men-
tioned in the capital stock of which such member bank
shall have invested as hereinbefore provided, without
being subject to the provisions of section eight of the
Act approved October fifteenth, nineteen hundred and
fourteen, entitled "An Act to supplement existing laws
against unlawful restraints and monopolies, and for
other purposes."
BANKING CORPORATIONS AUTHORIZED TO DO FOREIGN
BANKING BUSINESS.
625a. Sec. 25 (a). — Corporations to be organized for the ^^g^ct Dec. 24.
purpose of engaging in international or foreign banking
or other international or foreign financial operations, or
in banking or other financial operations in a dependency
or insular possession of the United States, either di-
rectly or through the agency, ownership, or control of
local institutions in foreign countries, or in such de-
pendencies or insular possessions as provided by this sec-
tion, and to act Avhen required by the Secretary of the
Treasury as fiscal agents of the United States, laay be
formed by anj^ number of natural persons, not less in
any case than five.
Such persons shall enter into articles of association
which shall specify in general terms the objects for
which the association is formed and may contain any
other provisions not inconsistent with law which the
association may see fit to adopt for the regulation of its
business and the conduct of its affairs.
Such articles of association shall be signed by all of
the persons intending to participate in the organization
of the corporation and, thereafter, shall be forwarded to
the Federal Reserve Board and shall be filed and pre-
served in its office. The persons signing the said articles
168 THE FEDERAL RESERVE ACT.
of association shall, under their hands, make an organi-
zation certificate which shall specifically state:
First. The name assumed by such corporation, which
shall be subject to the approval of the Federal Reserve
Board.
Second. The place or places where its operations are
to be carried on.
Third. The place in the United States where its home
office is to be located.
Fourth. The amount of its capital stock and the num-
ber of shares into which the same shall be divided.
Fifth. The names and places of business or residence of
the persons executing the certificate and the number of
shares to which each has subscribed.
Sixth. The fact that the certificate is made to enable
the persons subscribing tlie same, and all other persons,
firms, companies, and corporations, who or which may
thereafter subscribe to or purchase shares of the capital
stock of such corporation, to avail themselves of the ad-
vantages of this section.
The persons signing the organization certificate shall
duly acknowledge the execution thereof before a judge
of some court of record or notary public, who shall
certify thereto under the seal of such court or notary,
and thereafter the certificate shall be forwarded to the
Federal Reserve Board to be filed and preserved in its
office. Upon duly making and filing articles of asso-
ciation and an organization certificate, and after the
Federal Reserve Board has approved the same and issued
a permit to begin business, the association shall become
and be a body corporate, and as such and in the name
designated therein shall have power to adopt and use a
corporate seal, which may be changed at the pleasure
of its board of directors; to have succession for a period
of twenty years unless sooner dissolved by the act of the
shareholders owning two-thirds of the stock or by an
act of Congi'ess or unless its franchises become forfeited
by some violation of law; to make contracts; to sue and
be sued, complain, and defend in any court of law or
equity ; to elect or appoint directors, all of whom shall be
citizens of the United States ; and, by its board of direc-
tors, to appoint such officers and employees as may be
deemed proper, define their authority and duties, require
bonds of them, and fix the penaltj' thereof, dismiss such
officers or employees, or any thereof, at pleasure and ap-
point others to fill their places ; to prescribe, by its board
of directors, by-laws not inconsistent with law or with
the regulations of the Federal Reserve Board regulating
the manner in which its stock shall be transferred, its
directors elected or appointed, its officers and employees
appointed, its property transferred, and the privileges
gi-anted to it by law exercised and enjoyed.
Each corporation so organized shall have power, under
such rules and regulations as the Federal Reserve Board
may prescribe:
THE FEDERAL, RESERVE ACT. 169
(a) To purchase, sell, discount, and negotiate, with or
without its indorsement or guaranty, notes, drafts,
checks, bills of exchange, acceptances, including bank-
ers' acceptances, cable transfers, and othei* evidences of
indebtedness; to purchase and sell, with or without its
indorsement or guaranty, securities, including the obli-
gations of the United States or of any State thereof but
not including shares of stock in any corporation except
as herein provided ; to accept bills or drafts drawn upon
it subject to such limitations and restrictions as the Fed-
eral Reserve Board may impose; to issue letters of
credit; to purchase and sell coin, bullion, and exchange;
to borrow and to lend money ; to issue debentures, bonds,
and promissory notes under such general conditions as to
security and such limitations as the Federal Reserve
Board ma}^ prescribe, but in no event having liabilities
outstanding thereon at any one time exceeding ten times
its capital stock and surplus; to receive deposits outside
of the United States and to receive only such deposits
within the United States as may be incidental to or for
the purpose of carrying out transactions in foreign coun-
tries or dependencies or insular possessions of the United
States; and generally to exercise such powers as are in-
cidental to the poAvers conferred by this act or as may
be usual, in the determination of the Federal Reserve
Board, in connection with the transaction of the business
of banking or other financial operations in the countries,
colonies, dependencies, or possessions in which it shall
transact business and not inconsistent with the powers
specifically granted herein. Nothing contained in this
section shall be construed to prohibit the Federal Reserve
Board, under its power to prescribe rules and regula-
tions, from limiting the aggregate amount of liabilities
of any or all classes incurred by the corporation and
outstanding at any one time. Whenever a corporation
organized under this section receives deposits in the
United States authorized by this section it shall carry
reserves in such amounts as the Federal Reserve Board
mav prescribe, but in no event less than 10 per centum
of its deposits.
(b) To establish and maintain for the transaction of
its business branches or agencies in foreign countries,
their dependencies or colonies, and in the dependencies
or insular possessions of the United States, at such places
as may be approved by the Federal Reserve Board and
under such rules and regulations as it may prescribe, in-
cluding countries or dependencies not specified in the
orimnal organization certificate.
(c) With the consent of the Federal Reserve Board to
purcliase and hold stock or other certificates of owner-
ship in any other corporation organized under the pro-
visions of this section, or under the laws of any foreign
country or a colony or dependency thereof, or under the
laws of any State, dependency, or insular possession of
the United States but not engaged in the general bushiess
170 THE FEDERAL RESERVE ACT.
of buying or selling goods, wares, merchandise or com-
modities in the United States, and not transacting any
business in the United States except such as in the judg-
ment of the Federal Reserve Board mav be incidental to
its international or foreign business : Provided^ however^
That, except with the approval of the Federal Reserve
Board, no corporation organized hei"eimder shall invest
in any one corporation an amount in excess of 10 per
centum of its own capital and surplus, except in a cor-
poration engaged in the business of bankmg, when 15
per centum of its capital and surplus may be so invested :
Pro'vided further^ That no corporation organized here-
under shall purchase, own, or hold stock or certificates
of ownership in any other corporation organized here-
under or under the laws of an}'^ State which is in sub-
stantial competition therewith, or which holds stock or
certificates of ownership in corporations which are in
substantial competition with the purchasing corporation.
Nothing contained herein shall prevent corporations
organized hereunder from purchasing and holding stock
in any corporation where such purchase shall be neces-
sary to prevent a loss upon a debt previously contracted
in good faith; and stock so purchased or acquired in
corporations organized under this section shall within
six months from such purchase be sold or disposed of at
public or private sale unless the time to so dispose of
same is extended by the Federal Reserve Board.
No corporation organized under this section shall carry
on any part of its business in the United States except
such as, in the judgment of the Federal Reserve Board,
shall be incidental to its international or foreign busi-
ness : And provided further^ That except such as is inci-
dental and preliminary to its organization no such cor-
poration shall exercise any of the powers conferred by
this section until it has been duly authorized by the
Federal Reserve Board to commence business as a cor-
poration organized under the provisions of this section.
No corporation organized under this section shall
engage in commerce or trade in commodities except as
specifically provided in this section, nor shall it either
directly or indirectly control or fix or attempt to control
or fix the price of any such commodities. The charter of
any corporation violating this provision shall be sub-
ject to forfeiture in the manner hereinafter provided
in this section. It shall be unlawful for any director,
officer, agent, or employee of any such corporation to use
or to conspire to use the credit, the funds, or the power of
the corporation to fix or control the price of any such
commodities, and any such person violating this provi-
sion shall be liable to a fine of not less than $1,000 and
not exceeding $5,000 or imprisonment not less than one
year and not exceeding five years, or both, in the discre-
tion of the court.
No corporation shall be organized under the provisions
of this section with a capital stock of less than $2,000,000.
THE FEDERAL RESERVE ACT. 171
one-quarter of which must be paid in before the corpora-
tion may be authorized to begin business, and the re-
mainder of the capital stock of such corporation shall
be paid in installments of at least 10 per centum on the
whole amount to which the corporation shall be limited
as frequently as one installment at the end of each suc-
ceeding two months from the time of the commencement
of its business operations until the whole of the capital
stock shall be paid in. The capital stock of any such
corporation may be increased at any time, with the ap-
proval of the Federal Reserve Board, by a vote of two-
thirds of its shareholders or b}^ unanimous consent in
writing of the shareholders without a meeting and with-
out a formal vote, but any such increase of capital shall
be fully paid in within ninety days after such approval ;
and may be reduced in like manner, provided that in no
event shall it be less than $2,000,000. No corporation,
except as herein provided, shall during the time it shall
continue its operations withdraw or permit to be with-
drawn, either in the form of dividends or otherwise,
any portion of its capital. Any national banking asso-
ciation may invest in the stocK of any corporation or-
ganized under the provisions of this section, but the ag-
gi'egate amount of stock held in all corporations engaged
in business of the kind described in this section and in
section 25 of the Federal Reserve Act as amended shall
not exceed 10 per centum of the subscribing bank's capi-
tal and surplus.
A majority of the shares of the capital stock of any
such corporation shall at all times be held and owned by
citizens of the United States, by corporations the con-
trolling interest in which is owned by citizens of the
United States, chartered under the laws of the United
States or of a State of the United States, or by firms or
companies, the controlling interest in which is owned by
citizens of the United States. The provisions of section
8 of the act approved October 15, 1914, entitled 'An act
to supplement existing laws against unlawful restraints
and monopolies, and for other purposes,' as amended by
the acts of May 15, 1916, and September T, 1916, shall be
construed to apply to the directors, other officers, agents,
or employees of corporations organized under the pro-
visions of this section: Provided^ however^ That nothing
herein contained shall (1) prohibit any director or other
officer, ageiit or employee of any member bank, who has
procured the approval of the Federal Reserve Board
from serving at the same time as a director or other offi-
cer, agent or employee of any corporation organized
under the provisions of this section in whose capital
stock such member bank shall have invested: or (2) pro-
hibit any director or other officer, agent, or employee of
any corporation organized under the provisions of this
section, who has procured the approval of the Federal
Reserve Board, fi'om serving at the same time as a direc-
tor or other officer, agent or employee of any other cor-
172 THE FEDERAL RESERVE ACT.
poration in whose capital stock such first-mentioned cor-
poration shall have invested under the provisions of this
section.
Xo member of the Federal Reserve Board shall be an
officer or director of any corporation organized under
the provisions of this section, or of any corporation en-
gaged in similar business organized under the laws of
any State, nor hold stock in any such corporation, and
before entering upon his duties as a member of the Fed-
eral Reserve Board he shall certify under oath to the
Secretary of the Treasury that he has complied with
this requirement.
Shareholders in any corporation organized under the
provisions of this section shall be liable for the amount
of their unpaid stock subscriptions. Xo such corporation
shall become a member of any Federal reserve bank.
Should any corporation organized hereunder violate or
fail to comply with any of the provisions of this section,
all of its rights, privileges, and franchises derived here-
from may thereby be forfeited. Before any such cor-
poration shall be declared dissolved, or its rights, privi-
leges, and franchises forfeited, any noncompliance with,
or violation of such laws shall, however, be determined
and adjudged by a court of the United States of com-
petent jurisdiction, in a suit brought for that purpose in
the district or territory in which the home office of such
corporation is located, which suit shall be brought by the
United States at the instance of the Federal Reserve
Board or the Attorney General. Upon adjudication of
such noncompliance or violation, each director and offi-
cer who participated in, or assented to, the illegal act or
acts, shall be liable in his personal or individual capacity
for all damages which the said corporation shall have
sustained in consequence thereof. Xo dissolution shall
take away or impair any remedy against the corporation,
its stockholders, or officers for any liability or penalty
previously incurred.
Any such corporation may go into voluntary liquida-
tion and be closed by a vote of its shareholders owning
two-thirds of its stock.
Whenever the Federal Reserve Board shall become
satisfied of the insolvency of any such corporation, it
may appoint a receiver who shall take possession of all
of the property and assets of the corporation and exer-
cise the same rights, privileges, powers, and authority
with respect thereto as are now exercised by receivers of
national banks appointed by the Comptroller of the
Currency of the United States: Provided^ however^ That
the assets of the corporation subject to the laws of other
countries or jurisdictions shall be dealt with in accord-
ance with the terms of such laws.
Evei'y corporation organized under the provisions of
this section shall hold a meeting of its stockholders an-
nually upon a date fixed in its by-laws, such meeting to
be held at its home office in the United States. Every
THE FEDERAL RESERVE ACT. 173
such corporation shall keep at its home office books con-
taining the names of all stockholders thereof, and the
names and addresses of the members of its board of di-
rectors, together with copies of all reports made by it to
the Federal Reserve Board. Every such corporation
shall make reports to the Federal Reserve Board at such
times and in such form as it may require; and shall be
subject to examination once a year and at such other
times as may be deemed necessary by the Federal Reserve
Board by examiners appointed by the Federal Reserve
Board, the cost of such examinations, including the com-
pensation of the examiners, to be fixed by the Federal
Reserve Board and to be paid by the corporation
examined.
The directors of any corporation organized under the
provisions of this section may, semiannually, declare a
dividend of so much of the net profits of the corporation
as they shall judge expedient; but each corporation shall,
before the declaration of a dividend, carry one-tenth of
its net profits of the preceding half year to its surplus
fund until the same shall amount to 20 per centum of its
capital stock.
Any corporation organized under the provisions of this
section shall be subject to tax by the State within which
its home office is located in the same manner and to the
same extent as other corporations organized under the
laws of that State which are transacting a similar char-
acter of business. The shares of stock in such corpora-
tion shall also be subject to tax as the personal property
of the owners or holders thereof in the same manner and
to the same extent as the shares of stock in similar State
corporations.
Any corporation organized under the provisions of
this section may at any time within the two years next
previous to the date of the expiration of its corporate
existence, by a vote of the shareholders owning two-
thirds of its stock, apply to the Federal Reserve Board
for its approval to extend the period of its corporate
existence for a term of not more than twenty years, and
upon certified approval of the Federal Reserve Board
such corporation shall have its corporate existence for
such extended period unless sooner dissolved by the act
of the shareholders owning two-thirds of its stock, or by
an Act of Congress or unless its franchise becomes for-
feited by some violation of law.
Any bank or banking institution, principally engaged
in foreign business, incorporated by special law of any
State or of the United States or organized under the
general laws of any State or of the United States and
having an unimpaired capital sufficient to entitle it to
become a corporation under the provisions of this sec-
tion may, by the vote of the shareholders owning not less
than two-thirds of the capital stock of such bank or
banking association, with the approval of the Federal
Reserve Board, be converted into a Federal corporation
174 THE FEDERAL RESERVE ACT.
of the kind authorized by this section with any name
approved by the Federal Resei've Board : Provided^ how-
ever^ That said conversion shall not be in contravention
of the State law. In such case the articles of association
and organization certificate may be executed by a ma-
jority of the directors of the bank or banking institution,
and the certificate shall declare that the owners of at
least two-thirds of the capital stock have authorized the
directors to make such certificate and to change or con-
vert the bank or banking institution into a Federal cor-
poration. A majority of the directors, after executing
the articles of association and the organization certifi-
cate, shall have power to execute all other papers and to
do whatever may be required to make its organization
perfect and complete as a Federal corporation. The
shares of any such corporation may continue to be for
the same amount each as they were before the conver-
sion, and the directors may continue to be directors of
the corporation until others are elected or appointed in
accordance with the provisions of this section. When
the Federal Reserve Board has given to such corpora-
tion a certificate that the provisions of this section have
been complied with, such corporation and all its stock-
holders, officers, and employees, shall have the same pow-
ers and privileges, and shall be subject to the same duties,
liabilities, and regulations, in all respects, as shall have
been prescribed by this section for corporations origi-
nally organized hereunder.
Every officer, director, clerk, employee, or agent of any
corporation organized under this section who embezzles,
abstracts, or willfully misapplies any of the moneys,
funds, credits, securities, evidences of indebtedness or
assets of any character of such corporation; or who,
without authority from the directors, issues or puts forth
any certificate of deposit, draws any order or bill of
exchange, makes any acceptance, assigns any note, bond,
debenture, draft, bill of exchange, mortgage, judgment,
or decree ; or who makes any false entry in any book, re-
port, or statement of such corporation with intent, in
either case, to injure or defraud such corporation or any
other company, body politic or corporate, or any indi-
vidual person, or to deceive any officer of such corpora-
tion, the Federal Reserve Board, or any agent or ex-
aminer appointed to examine the affairs of any such
corporation; and every receiver of any such corporation
and every clerk or employee of such receiver who shall
embezzle, abstract, or willfully misapply or wrongfully
convert to his own use any moneys, funds, credits, or
assets of any character which may come into his posses-
sion or under his control in the execution of his trust or
the performance of the duties of his employment; and
every such receiver or clerk or employee of such receiver
who shall, with intent to injure or defraud any person,
body politic or corporate, or to deceive or mislead the
, Federal Reserve Board, or any agent or examiner ap-
THE FEDERAL RESERVE ACT. 175
pointed to examine the affairs of such receiver, shall
make any false entry in any book, report, or record of
any mati:er connected with the duties of such receiver;
and every person who with like intent aids or abets any
officer, director, clerk, employee, or agent of any corpora-
tion organized under this section, or receiver or clerk or
employee of such receiver as aforesaid in any violation
of this section, shall upon conviction thereof be impris-
oned for not less than two years nor more than ten years,
and may also be fined not more than $5,000, in the dis-
cretion of the court.
Whoever being connected in any capacity with any
corporation organized under this section represents in
any way that the United States is liable for the payment
of any bond or other obligation, or the interest thereon,
issued or incurred by any corporation organized here-
under, or that the United States incurs any liability in
respect of any act or omission of the corporation, shall
be punished by a fine of not more than $10,000 and by im-
prisonment for not more than five years.
REPEAL OF PROVISIONS OF LAW INCONSISTENT WITH
THE PROVISIONS OF THE FEDERAL RESERVE ACT.
626. Sec. 26. — All provisions of law inconsistent with Act Dec. 2S,
or superseded by any of the provisions of this Act are to 38 'stat ^u,
that extent and to that extent only hereby repealed : ^'^^*
Provided, Nothing in this Act contained shall be con-
strued to repeal the parity provision or provisions con-
tained in an Act approved March fourteenth, nineteen
hundred, entitled "An Act to define and fix the standard
of value, to maintain the parity of all forms of money
issued or coined by the United States, to refund the public
debt, and for other purposes," and the Secretary of the
Treasury may, for the purpose of maintaining such parity
and to strengthen the gold reserve, borrow gold on the
security of United States bonds authorized by section two
of the Act last referred to or for one-year gold notes
bearing interest at a rate of not to exceed three per
centum per annum, or sell the same if necessary to obtain
fold. When the funds of the Treasury on hand justify,
e may purchase and retire such outstanding bonds and
notes.
ACT OF MAY 30, 1908, EXTENDED TO JUNE 30, 1915.
REENACTMENT OF CERTAIN SECTIONS OF REVISED
STATUTES.
627. Sec. 27.— The provisions of the Act of May thir- ^^Act Dec. |^3.
tieth, nineteen hundred and eight, authorizing national 88 'stat.' l.',
currency associations, the issue of additional national- ^^ict auk. 4,
bank circulation, and creating a National Monetary Com- jf^l^g^^
mission, which expires by limitation under the terms of '
such Act on the thirtieth day of June, nineteen hundred
and fourteen, are hereby extended to June thirtieth, nine-
teen hundred and fifteen, and sections fifty-one hundred
176 THE FEDERAL RESERVE ACT.
and fifty-three, fifty-one hundred and seventy-two, fifty-
one hundred and ninety-one, and fifty-two hundred and
fourteen of the Eevised Statutes of the United States,
which were amended by the Act of May thirtieth, nine-
teen hundred and eight, are hereby reenacted to read as
such sections read prior to May thirtieth, nineteen hun-
dred and eight, subject to such amendments or modifica-
tions as are prescribed in this Act :
KATE OF TAXATION ON CIRCULATING NOTES SECURED
OTHERWISE THAN BY BONDS OF THE UNITED STATES.
WHEN SECRETARY OF TREASURY AUTHORIZED TO
SUSPEND LIMITATIONS OF ACT OF MAY SO, 1908.
1913* £c?' 2i\ 627a. Provided, hoivever. That section nine of the Act
38 Stat.' L.' first referred to in this section is hereby amended so as to
Act Aug. 4, change the tax rates fixed in said Act by making the por-
if ^e^sf ^ ^*^^' tio^ applicable thereto read as follows :
National banking associations having circulating notes
secured otherwise than by bonds of the United states,
shall pay for the first three months a tax at the rate oi
three per centum per annum upon the average amount
of such of their notes in circulation as are based upon
the deposit of such securities, and afterwards an addi-
tional tax rate of one-half of one per centum per annum
for each month until a tax of six per centum per annum
is reached, and thereafter such tax of six per centum
per annum upon the average amount of such notes : Pro-
vided further, That whenever in his judgment he iflay
deem it desirable, the Secretary of the Treasury shall
have power to suspend the limitations imposed by sec-
tion one and section three of the Act referred to in this
section, which prescribe that such additional circulation
secured otherwise than^by bonds of the United States
shall be issued only to National banks having circulating
notes outstanding secured by the deposit of bonds of the
United States to an amount not less than forty per
centum of the capital stock of such banks, and to suspend
also the conditions and limitations of section five of said
Act except that no bank shall be permitted to issue circu-
lating notes in excess of one hundred and twenty-five per
centum of its unimpaired capital and surplus. He shall
require each bank and currency association to maintain
on deposit in the Treasury of the United States a sum in
gold sufficient in his judgment for the redemption of such
notes, but in no event less than five per centum. He may
permit National banks, during the period for which
such provisions are suspended, to issue additional circula-
tion under the terms and conditions of the Act referred
to as herein amended : Provided further, That the Secre-
tary of the Treasury, in his discretion, is further author-
ized to extend the benefits of this Act to all (jualified
State Imnks and trust companies, which have joined the
Federal reserve system, or which may contract to join
within fifteen days after the passage of this Act,
THE FEDERAL RESERVE ACT. 177
REDUCTION OF CAPITAL OF NATIONAL BANKS.
628. Sec. 28.— Section fifty-one hundred and forty-three j^.f g^^*- ^i:
of the Revised Statutes is hereby amended and reenacted 38 sut." u',
to read as follows: Anj' association formed under this
title may, by the vote of shareholders owning two-thirds
of its capital stock, reduce its capital to any sum not be-
low the amount required by this title to authorize the
formation of associations ; but no such reduction shall be
allowable which will reduce the capital of the association
below the amount required for its outstanding circula-
tion, nor shall any reduction be made until the amount
of the proposed reduction has been reported to the Comp-
troller of the Currency and such reduction has been ap-
proved by the said Comptroller of the Currenc}' and by
the Federal Reserve Board, or by the organization com-
mittee pending the organization of the Federal Reserve
Board.
INYALIDATION OF CLAUSE, ETC., IN ACT NOT TO INVALL
DATE REMAINDER OF ACT.
629. Sec. 29. — If anv clause, sentence, paragraph, or Act Dec. 23,
part of this Act shall for any reason be adjudged by any 38 'stat.* \.',
court of competent jurisdiction to be invalid, such judg-^^^*
ment shall not affect, impair, or invalidate the remainder
of this Act, but shall be confined in its operation to the
clause, sentence, paragraph, or part thereof directly in-
volved in the controversy in which such judgment shall
have been rendered.
RESERTATION OF RIGHT TO AMEND OR REPEAL.
Act Dec. 23,
630. Sec. 30. — The right to amend, alter, or repeal this g^f i^, sec 30 :
Act is hereby expressly reserved. 276.
164312°— 20 12
178
THE FEDERAL RESERVE ACT.
ACTS OF GENERAL NATURE.
179
CHAPTER \^I.
ACTS OF A GENERAL NATURE AND SECTIONS OF THE REVISED STATUTES,
NOT INCLUDED IN THE NATIONAL BANK ACT, AFFECTING NATIONAL
BANKS.
700.
District attorney to conduct suits
when United States is a party.
Jurisdiction of district court to en-
join Comptroller.
Where such proceedings must be
brought.
Sealed certificates of Comptroller
competent evidence.
Certified copy of organization cer-
tificate as evidence.
705-715. Tax on State bank circulation.
716-717. Tax on United States and na-
tional bank notes.
701.
702.
703.
704.
718. Restrictions on notes less than one
dollar.
719-729. Legal tender.
730-738. Government depositaries.
739-748. Offenses against the currency.
749-762. Currency act March 14, 1900.
763-766. Act March 4, 1907.
767-768. Panama Canal bonds.
769-770. Certified checks when receiva-
ble for duties and taxes.
771. Subscriptions to Red Cross.
ALL SUITS UNDER BANKING LAW IN WHICH THE UNITED
STATES OR ANY OF ITS OFFICERS OR AGENTS ARE
PARTIES TO BE CONDUCTED BY DISTRICT ATTOR-
NEYS UDER THE SUPERVISION OF THE SOLICITOR
OF THE TREASURY.
Act Feb. 25,
700. Sec. 380. — All suits and proceedings arising out ,„., „ ,„ _„ „.
.. ,, .^ . iTi- l»o3, c. 58, sec.55;
of the provisions of law governing national banking asso- i2stat. l.,68o.
ciations, in which the United States or any of its officers isoi^'c.ioe^s^eVsei
or agents shall be parties, shall be conducted by the dis- ^^ ^^^^- ^•' ^^°-
trict attorneys of the several districts under the direction
and supervision of the Solicitor of the Treasury.
Note. — The United States Supreme Court decided in the case of
Gibson v. Peters (150 U. S., 342) that a district attorney could not
receive any compensation for services in conducting a suit arising
out of the provisions of the national banking laws in which the United
States or any of its officers or agents are parties.
JURISDICTION OF DISTRICT COURT TO ENJOIN COMP-
TROLLER.
701. Sec. 24
j urisdiction as follows
The district court shall have original jg^^['^|^-3^||'[|^
1092. '
* * *
Sixteenth, Of aU cases commenced by the United
States, or by direction of any officer thereof, against any
national banking association, and cases for winding up
the affairs of any sach bank; and of all suits brought by
any banking association established in the district for
which the court is held, imder the provisions of title
"National Banks," Revised Statutes, to enjoin the
Comptroller of the Currency, or an}- receiver acting under
his direction, as provided ])y said title. And ail national
banking associations established under the hiws of the
United States shall, for tlie purposes of all other actions
by or against them, real, personal, or mixed, and all suits
181
282 ACTS OF GENERAL NATURE.
in equity, be deemed citizens of the States in which they
are respectively located.
Note. — Proceedings to enjoin Comptroller are those authorized by
Bectlon 5237, United States Revised Statutes. Until the passage of the
act of March 3, 1911, the circuit courts had this jurisdiction under sec-
tion 629, United States Revised Statutes.
WHERE SUCH PROCEEDINGS MUST BE BROUGHT.
.o-f* ?;^® ^' 702. Sec. 736. — All proceedinj^s by any national bank-
1864, c. 106, sees. . . . ^ • .1 F( . 11 t ±-u rx.
60. 57; 13 Stat. L., mg association to enjoin the Comptroller oi tne (Jur-
115, 116. rency, under the provisions of any law relating to national
banking associations, shall be had in the district where
such association is located.
SEALED CERTIFICATES OF COMPTROLLER COMPETENT
EVIDENCE.
1864*^0 io6°sec 2 '^^^' ^^^' ^^^' — ^Ivcry Certificate, assignment, and con-
lastat. L.!ioo; ' veyance executed by the Comptroller of the Currency, in
pursuance of law, and sealed with his seal of office, shall
be received in evidence in all places and courts; and all
copies of papers in his office, certified by him and authen-
ticated by the said seal, shall in all cases be evidence
equally with the originals. An impression of such seal
directly on the paper shall be as valid as if made on wax
or wafer.
CERTIFIED COPT OF ORGANIZATION CERTIFICATE AS
EVIDENCE.
isef c loe^sec e- '^^^' ^^^' ^^^' — Copies of the organization certificate of
13 Stat. L.,' 101.' ' any national banking association, duly certified by the
Comptroller of the Currency, and authenticated by his
seal of office, shall be evidence in all courts and places
within the jurisdiction of the United States of the exist-
ence of the association, and of every matter which could
be proved by the production of the original certificate.
TAX ON STATE BANK CIRCULATION.
TAX ON CIRCULATION.
705. Sec. 3408.—
Note. — The tax on circulation waa originally provided for in the act
of June 30, 1864. The taxation provisions were amended by section 6
of the act of March 3, 1865, by section 9 of the act of July 13, 1866, and
by the act of June 6, 1872, section 37. The provisions as thus amended
were incorporated in the Revised Statutes as section 3408. This sec-
tion included three subsections, the first imposing a tax on deposits,
the second on capital, and the third on circulation of banking institu-
tions. The first and second subsections of this section were repealed
by the act of March 3, 1883, and the third subsection was superseded by
the act of February 8, 1875.
CIRCULATION— WHEN EXEMPTED FROM TAX.
Act Mar.3 1865 706. Sbc. 3411. — Whenever the Outstanding circulation
c. 78, sec. 14; 13 , , . . . ^ . °
Stat. L. 486. of any bank, association, corporation, company, or person
i866^c. 184! sec.^gj is rcduccd to an amount not exceeding five per centum of
14 sUi. L.', 146. ^}^Q chartered or declared capital existing at the time the
same was issued, said circulation shall be free from taxa-
ACTS OF GENERAL NATURE. 183
tion; and whenever any bank which has ceased to issue
notes for circulation deposits in the Treasury of the United
States, in lawful money, the amount of its outstanding
circulation, to be redeemed at par, under such regulations
as the Secretary of the Treasury shall prescribe, it shall
be exempt from any tax upon such circulation.
707. Sees. 3412, 3413.—
Superseded by act February 8, 1875.
TAX ON CIRCULATION— ACT FEBRUARY 8, 1875.
708. Sec. 19.-— That every person, firm, association ^ ^^^'^^-^j-g^^^
other than national bank associations, and everv corpora- stat.'i.., 3ii. '
tion, State bank, or State banking association, sliall pay a
tax of ten per centum on the amount of their own notes
ilsed for circulation and paid out by them.
TAX ON NOTES OF STATE BANKS, MUNICIPAL CORPO-
RATIONS, ETC., USED AS CIRCULATION AND PAID
OUT BY BANKS. ACT FEBRUARY 8, 1875.
709. Sec. 20.— That every such person, firm, associa-^. "|^*^*^|J5f|
tion, corporation, wState bank, or State banking associa- stat.'L., sii. '
tion, and also every national banking association, shall
pay a Hke tax of ten per centum on the amount of notes
of any person, firm, association other than a national
banking association, or of any corporation, State bank, or
State banking association, or of any town, city, or munici-
pal corporation, used for circulation and paid out by them.
BANKS' RETURNS; PAYMENT OF TAX PENALTIES. ACT
FEBRUARY 8, 1875.
710. Sec. 21.— That the amount of such circulating ^^^^ctFeb^sa^s,
notes, and of the tax due thereon, shall be returned, and 3u! ' ' '
the tax paid at the same time, and in the same manner,
and with like penalties for failure to return and pay the
same, as provided by law for the return and payment of
taxes on deposits, capital, and circulation, imposed by the
existing provisions of internal-revenue law.
SEMIANNUAL RETURN BY BANKS.
30,
sec.
711. Sec. 3414. — A true and complete return of the jg^^^c ^rfa* :,
monthly amount of circulation, [of deposits, and of capi- iin;'i3'stat'. Tj
taJ], as aforesaid, and of the monthly amount of notes of ^'aci juIv 13,
persons, town, city, or municipal corporations. State }f|j^j i|*'^j*^- ^'
banks, or State banking associations paid out as aforesaid Act ' Mar. as,
for the previous six months, shall be made and rendered in Ifstat.' l.,T* ^'
duplicate on the first day of December and the first day ^^^2^^, ■'3"?* g^-
of June, by each of such banks, associations, corporations, 37- '17'stat. l.)
companies, or persons, with a declaration annexed thereto, ^Act Dec 24,
under the oath of such person, or of the president or \f^i^{ f' ^ ^'•
cashier of such bank, association, corporation, or com-
pany, in such form and manner as may be ]>rescribed by
the Commissioner of Internal Kevenue, that the same
contains a true and faithful statement of the amounts
184 ACTS OF GENERAL NATURE.
subject to tax, as aforesaid; and one copy shall be trans-
mitted to the collector of the district in which any such
bank, association, corporation, or company is situated, or
in which such person has his place of business, and one
copy to the Commissioner of Internal Revenue.
Note. — Italicized words repealed by act March 3, 1883. "That the
taxes herein specified imposed by the law8 now in force be, and the same
are hereby, repealed, as hereinafter provided, namely: On capital and
deposits of banks, bankers, and national banking associations, except
such taxes as are now due and payable."
FAILURE TO MAKE RETURN. COMMISSIONER TO ESTI-
MATE.
,Jf^„ -^V?,® 3 712. Sec. 3415. — In default of the returns provided in
1864, C. 173, sec. ^ .. .. e • ^ • r i •
110; 13 Stat. L., the preceding section, the amount oi circulation, [deposit,
^^Act July 13, capital], and notes of persons, towns, city, and municipal
}!®a;„^; ^T^' ^^?" ^' corporations, State banks, and State banking associations
14 Stat. Jj., 14t). .x; ' • 1 1 11 1 • 1 1 1 /^
Act Dec. 21, paid out, as aforesaid, shall be estimated by the Commis-
ifllat". L.',?o2.^' sioner of Internal Revenue, upon the best information he
can obtain. And for any refusal or neglect to make
return and payment, any such bank, association, corpora-
tion, company, or person so in default shall pay a penalty
of two hundred dollars, besides the additional penalty and
forfeitures provided in other cases.
Note.— See note under preceding section.
STATE BANKS CONVERTED INTO NATIONAL BANKS;
RETURNS, HOW MADE.
c "^s^^lc^'^ilMfa '^^^' ^®^- 3416.— Whenever any State bank or banking
stat.'L., 486. ' associatiou has been converted into a national banking
iseefc. 184^860.^9; association, and such national banking association has
14 Stat. L., 146. assumed the liabilities of such State bank or banking
association, including the redemption of its bills, by any
agreement or understanding whatever with the representa-
tives of such State bank or banking association, such
national banking association shall be held to make the
required return and payment on the circulation outstand-
ing, so long as such circulation shall exceed five per
centum of the capital before such conversion of such State
bank or banking association.
TAX PROVISIONS RESTRICTED.
m4\.'in sec. '^^^' ^^'^- ^^^'^ [^^ amended 1875].— The provisions of
110;' 13 Stat. L.' this chapter relating to the tax on the [deposits, capital,
^Act July 13, and] circulation of banks and to their returns, except as
l^isi&t^' 146' contained in sections thirty-four hundred and ten, thirty-
'Act F«b.'' is; four hundred and eleven, thirty-four hundred and twelve,
L.,ii9. "thirty-four hundred and thirteen, and thirty-four hun-
dred and sixteen, and such parts of sections thirty-four
hundred and fourteen and thirty-four hundred and fif-
teen as relate to the tax of ten per centum on certain notes,
shall not apply to associations which are taxed under and
by virtue of Title "jNational Banks."
Note. — See note under section 3414 stating that taxes on deposits
and capital were repealed by act March 3, 1883.
ACTS OF GENERAL NATURE. 185
TAXES ON INSOLVENT BANKS. ACT MARCH 1, 1879.
716. Sec. 22.— That whenever and after any bank has ^ A 25^^" '22^215
ceased to do business by reason of insolvency or bank- s'tat.L.. 351. '
ruptcy, no tax shall be assessed or collected, or paid into
the Treasury of the United States, on account of such
bank, which shall diminish the assets thereof necessary
for the fuU payment of all its depositors; and such tax
shall be abated from such national banks as are found by
the Comptroller of the Currency to be insolvent; and the
Commissioner of Internal Revenue, when the facts shall
so appear to him, is authorized to remit so much of said
tax against insolvent State and savings banks as shall be
found to affect the claims of their depositors.
Note. — Part of section omitted superseded by act of March 3, 1883.
TAX ON UNITED STATES AND NATIONAL BANK NOTES.
OBLIGATIONS OF UNITED STATES EXEMPT FROM TAXA-
TION.
716. Sec. 3701.— All stocks, bonds. Treasury notes, and jg^^^^ SVE;
other obligations of the United States, shall be exempt 12 stat. t., m
from taxation by or under State or municipal or local ^'^^s^^^' 1^2
authority. f^^S^iKcVv!
sec. 1; 13 Stat. L., 13. Act June 30, 1864, c. 172, sec. 1; 13 Stat. L., 218. Act Jan. 28, 1865,
c. 22, sec. 1; 13 Stat. L., 425. Act Mar. 3, 1865, c. 77, sec. 2; 13 Stat. L., 469. Act July 14,
1870, c. 256, sec. 1; 16 Stat. L., 272.
NATIONAL-BANK NOTES AND NOTES AND CERTIFICATES
OF THE UNITED STATES CIRCULATING AS CURRENCY
SUBJECT TO STATE TAXATION. ACT AUGUST 13, 1894.
717. Sec. 1. — That circulating notes of national bank- is^'^^s^^^i. ^^
ing associations and United States legal-tender notes and stat. l.,z78.'
other notes and certificates of the United States payable
on demand and circulating or intended to circulate as
currency and gold, silver or other coin shaU be subject
to taxation as money on hand or on deposit under the
laws of any State or Territory: Provided, That any such
taxation shall be exercised in the same maimer and at the
same rate that any such State or Territory shall tax money
or currency circulating as money within its jurisdiction.
Sec. 2. That the provisions of this act shall not be ,.-'^/* ,„^"s. is.
deemed or held to change existing laws in respect of the sut. l., 273.
taxation of national banking associations.
RESTRICTIONS ON NOTES LESS THAN ONE DOLLAR.
718. Sec. 3583.—
Superseded by section 178, act March 4, 1909.
Sec. 178. No person shall make, issue, circulate, or ^^^^^ I'S^^ec.":
pay out any note, check, memorandum, token, or otlier '^^'f^^^v'^igoa!
obligation for a less sum than one dollar, intended to c.32i,s««^i5-8; 35
circulate as money or to be received or used in lieu of S''»*- ^■' ^^^a-
law^ul money of the United States; and every ])erson so
offending shall be fined not more than five hundred dol-
lars, or imprisoned not more than six months, or both.
Note. — This restriction is held to apply only to checks issued for
ike purpose of circulating as money and not to checks issued in the
ordinary course of business.
186 ACTS OF GENERAL NATUBE.
LEGAL TENDER.
FOREIGN COINS.
18^7%. Mfsec.^3; "^19- Sec. 3584.— No foreign gold or silver coins shall
a Stat, l!, 163. ' be a legal tender in payment of debts.
Note. — The coinage by the government of Philippine Islands of the
various silver and minor coins for use in the islands is authorized and
the legal-tender quality of such coins as well as of the gold coins of the
United States in the islands is prescribed by the act of July 1, 1902,
c. 1369, sees. 76-83; 32 Stat. L., 710; and the act of March 2, 1903, c.
980, sec. 4; 32 Stat. L., 953.
GOLD COIN OF THE UNITED STATES.
18^3!%. ^m, s^: ''20. Sec. 3585.— The gold coins of the United States
14; 17 Stat. L.; shall be a legal tender in all payments at their nominal
*^ value when not below the standard weight and hmit of
tolerance provided by law for the single piece, and when,
reduced in weight below such standard and tolerance,
shall be a legal tender at valuation in proportion to their
actual weight.
721. Sec. 3586.—
[Superseded by res. July 22, 1876, No. 17, sec. 2; act Feb. 28, 1878,
c. 20, sec. 1; act June 9, 1879, c. 12, sec. 3.]
AUTHORIZING COINAGE OF STANDARD SILVER DOLLARS
AND MAKING THEM LEGAL TENDER. ACT OF FEB-
RUARY 28, 1878.
i878^c M^sec.^; '^^^' ^^^- ^- — "^^^^ there shall be coined, at the several
20 Stat, l'., 25. ' miuts of thc United States, silver dollars of the weight of
412^ grains Troy of standard silver, as provided in the
act of January 18, 1837, on which shall be the devices
and superscriptions provided by said act; which coins
together with all silver dollars heretofore coined by the
United States, of Hke weight and fineness, shall be a
legal tender, at their nominal value, for all debts and
dues public and private, except where otherwise ex-
pressly stipulated in the contract.
SUBSIDIARY SILVER COINS. ACT JUNE 9, 1879.
18^9*^0. i2Tec. 3- '^^^- ^60. 3.— That the present silver coins of the United
21 Stat. L.', 8. ' 'States of smaller denominations than one dollar shall
hereafter be a legal tender in aU sums not exceeding ten
dollars in full payment of all dues pubhc and private.
MINOR COINS.
18^3^*0.^13^; s^: '^^^' ^®°- 3587.— The minor coins of the United States
16; 17 Stat. L., shall be a legal tender, at their nominal value for any
^^ amoimt not exceeding twenty-five cents in any one pay-
ment.
427.
UNITED STATES NOTES.
,Jfn l^\..^'- 725. Sec. 3588.— United States notes shall be lawful
12 Stat. L. 345. money, and a legal tender m payment of all debts, pubhc
m^c. 142, sec.\\ and private, within the United States, except for duties
Res j^ 17' 1863' ^^ iuiports and interest on the pubhc debt.
No. 9, 12'stat. h.', 823. Act Mar. 3, 1863, c. 73, sec. 3; 12 Stat. L., 711.
ACTS OF GENERAL NATURE. 187
DEMAND TREASTRT NOTES.
Act July 17,
726. Sec. 3589. — Demand Treasury notes authorized by \f^^^^^ \ ^^g'
the act of July 17, 1861, chaptei' 5, and the act of Febru- Act Feb. 12,
ary 12, 1862, chapter 20, shall be lawful money and asut^.' \.f°'338.
legal tender in like manner as United States notes. *g^* /f^. ^I^*
1; 12 Stat. L., 345. Act Mar. 17, 1862, c. 45, sec. 2; 12* Stat. L., 37.
INTEREST-BEARING NOTES.
727. Sec. 3590. — Treasury notes issued under the au-
thority of the acts of March 3, 1863, chapter 73, and June
30, 1864, chapter 172, shall be legal tender to the same
extent as United States notes, for their face value, ex- Act Mar. 3.
eluding interest: Provided, That Treasury notes issued o^^ib*^st^at*^L!'
imder the act last named shall not be a legal tender in "io. ' ''
payment or redemption of any notes issued b}^ any bank. i864. c"°^72;
banking association, or banker, calculated and intended ^^'ixh}^ ^^*'
to circulate as money.
FOR WHAT DEMANDS NATIONAL-BANK NOTES MAY BE
RECEIVED.
728. Sec. 5182.—
Note. — See section 5182, national-bank act, paragraph 337, ante.
GOLD CERTIFICATES. ACT JULY 12, 1882.
Act July 12,
729. Sec. 12.— That the Secretary of the Treasury is i8|^^ sec. ^i2_:
authorized and directed to receive deposits of gold coin " • •• •
with the Treasurer or assistant treasurers of the United
States, in sums of not less than twenty dollars, and to
issue certificates therefor in denominations of not less
than twenty dollars each, corresponding with the de-
nominations of United States notes. The coin deposited
for or representing the certificates of deposits shall be
retained in the Treasurj- for the payment of the same on
demand. Said certificates shall be receivable for cus-
toms, taxes, and all public dues, and when so received
may be reissued; and such certificates, as also silver cer-
tificates, when held by any national banking association,
shall be counted as part of its lawful reserve; and no
national banking association shall be a member of any
clearing house in which such certificates shall not be re-
ceivable in the settlement of clearing-house balances:
Provided, That the Secretary of the Treasury shall sus-
pend the issue of such gold certificates whenever the
amount of gold coin and gold bullion in the Treasury
reserved for the redemption of United States notes falls
below one hundred millions of dollars; and the provi-
sions of section fifty-two hundred and seven of the Re-
vised Statutes shall be applicable to the certificates herein
authorized and directed to be issued.
730. Sec. 1.— That gold certificates of the United 191V.* ^"*^- **•
States payable to bearer on demand shall be and are
hereby made legal tender in payment of all debts and
dues, public and private.
188 ACTS OF GENERAL NATURE.
Sec. 2. That all acts or parts of acts which are incon-
sistent with this act are hereby repealed.
Note. — See section 6 of the currency act of March 14, 1900, as
amended March 4, 1907, March 2, 1911, and June 12, 1916, paragraph 754,
post, for additional provisions relating to gold certificates and making
$10 lowest denomination. Gold and silver certificates are not legal
tender, but are receivable for all public dues.
GOVERNMENT DEPOSITARIES.
DUTY OF DISBURSING OFFICERS.
Act June 14, 730. Sec. 3620 [as amended 1877]. — It shall be the duty
see. i ; 14 Stat! of every disbursing officer having any public money in-
^" Act' Feb 27 trusted to him for disbursement, to deposit the same with
1877, c 69*. the Treasurer or some one of the assistant treasurers of
i!^'249. ^ 'the United States, and to draw for the same only as it
may be required for payments to be made by him in pur-
suance of law; and draw for the same only in favor of
the persons to whom payment is made, and all transfers
from the Treasurer of the United States to a disbursing
officer shall be by draft or w^arrant on the Treasury or
an assistant treasurer of the United States. In places,
however, where there is no Treasurer or assistant treas-
urer, the Secretary of the Treasury may, when he deems
it essential to the public interest, specially authorize in
writing the deposit of such public money in any other
public depository, or, in writing, authorize the same to be
kept in any other manner, and under such rules and
regulations as he may deem most safe and effectual to
facilitate the payments to public creditors.
Note.— See also act March 2, 1907, 34 Stat. L., 1166, author-
izing Army officers to keep in their possession restricted amounts
of public funds. See also act December 23, 1913, section 15, para-
graph 734, post.
PROVISIONS FOR DEPOSIT BY CERTAIN POSTMASTERS.
Act Mar. 3, 731. Sec. 3847 fas amended 19081. — Any postmaster,
17 'sta't. L.". having public money belonging to the Government, at an
^^Act May 27 office withiu a city or town where there is no Treasurer or
1908. c. 206 ; Assistant Treasurer of the United States, or designated
415. ^*^*' ^ ' depositary, may deposit the same temporarily, at his own
risk and in his official capacity, in any national or State
bank in the State in which the said postmaster resides,
or in which his office is located, or within a reasonable
radius of his post office in an adjacent State, but no
authority or permission is or shall be given for the pay-
ment to or receipt by a postmaster or any other person,
of interest, directly or indirectly, on any deposit made
as herein described.
MISAPPROPRIATING POSTAL FUNDS OR PROPERTY;
PUNISHMENT FOR; PRIMA FACIE EVIDENCE; DEPOS-
ITS, ETC., PERMITTED.
732. Sec. 4046.— (Originally enacted June 8, 1872.)
Superseded by sec. 225, act of March 4, 1909.
ACTS OF GENERAL NATURE. 189
Sec. 225. — Whoever, being a postmaster or other per- ^^^^^^ f^^- *•
son employed in or connected with any branch of the 225;'35'8tat. l.',
postal service, shall loan, use, pledge, hypothecate, or ''^^'
convert to his own use, or shall deposit in any bank, or
exchange for other funds or property, except as author-
ized by law, any money or property coming into his hands
or under his control in any manner whatever, in the exe-
cution or under color of his office, employment, or service,
whether the same shall be the money or property of the
United States or not ; or shall fail or refuse to remit to or
deposit in the Treasury of the United States or in a desig-
nated depository, or to account for or turn over to the
proper officer or agent, any such money or property,
when required so to do by law or the regulations of the
Post Office Department, or upon demand or order of the
Postmaster General, either directly or through a duly
authorized officer or agent, shall be deemed guilty of
embezzlement; and every such person, as well as every
other person advising or knowingly participating therein,
shall be fined in a sum equal to the amount or value of the
money or property embezzled, or imprisoned not more
than ten years, or both. Any failure to produce or to pay
over any such money or property, when required so to do
as above provided, shall be taken to be prima facie evi-
dence of such embezzlement; and upon the trial of any
indictment against any person for such embezzlement, it
shall be prima facie evidence of a balance against him to
produce a transcript from the account books of the Audi-
tor for the Post Office Department. But nothing herein
shall be construed to prohibit any postmaster depositing,
xmdor the direction of the Postmaster General, in a na-
tional bank designated by the Secretary of the Treasury
for that purpose, to his own credit as postmaster, any
funds in his charge, nor prevent his negotiating drafts or
other evidences of debt through such bank, or through
United States disbursing officers, or otherwise, when in-
structed or required so to do by the Postmaster General,
for the purpose of remitting surplus funds from one post
office to another.
NATIONAL BANKING ASSOCIATIONS TO BE DEPOSITA-
RIES OF PUBLIC MONEYS.
733. Sec. 5163 [as amended 19071.—
Note. — See section 5153 under "National-bank act."
GOVERNMENT DEPOSITS.
734. Sec. 15.— The moneys held in the general fund oi ^J^^^^^^fJ^
the Treasury, except the five per centum fund for the L.,'2ci.'
redemption of outstanding national-bank notes and the
funds provided in this Act for the redemption of Federal
reserve notes may, upon, the direction of the Secretary of
the Treasury, be deposited in Federal reserve banks, which
banks, when required by the Secretary of the Treasury,
shaU act as fiscal' agents of the United States; and the
revenues of the Government or any part thereof may be
190 ACTS OF GENERAL NATURE.
deposited in such banks, and disbursements may be made
by checks drawn against such deposits.
No public funds of the Philippine Islands, or of the
postal savings, or any Government funds, shall be de-
posited in the continental United States in any bank
not belonging to the sj'stem established by this Act:
Provided, however, That nothing in this Act shall be con-
strued to deny the right of the Secretary of the Treasury
to use member banks as depositories.
DEPOSIT OF PROCEEDS ARISING FROM SALE OF BONDS,
NO RESERVE REQUIRED TO BE KEPT AGAINST UNITED
STATES DEPOSITS.
wnfsec^r ^' ''3^- .Sec. 7.— That the Secretary of the Treasury, in hia
discretion, is hereby authorized to deposit in such banks
and trust companies as he may designate the proceeds, or
any part thereof, arising from the sale of the bonds and
certificates of indebtedness authorized by this Act, or the
bonds previously authorized as described in section four
of this Act, and such deposits may bear such rate of in-
terest and be subject to such terms and conditions as the
Secretary of the Treasury may prescribe: Provided, That
the amount so deposited shall not in any case exceed
the amount withdrawn from any such bank or trust com-
pany and invested in such bonds or certificates of indebt-
edness plus the amount so invested by such bank or
trust company, and such deposits shall be secured in the
manner required for other deposits by section fifty-one
hundred and fifty-three. Revised Statutes, and amend-
ments thereto: Provided further, That the provisions of
section fifty-one hundred and ninety-one of the Revised
Statutes, as amended by the Federal Reserve Act and the
amendments thereof, with reference to the reserves re-
quired to be kept by national banking associations and
other member banks of the Federal Reserve System, shall
not apply to deposits of public moneys by the United
Statas m designated depositaries.
GOVERNMENT DEPOSITS IN FEDERAL LAND BANKS.
iQief si;% ^9 "^^e. Sec. 6.— That all Federal land banks and joint stock
Stat. L., 365.' land banks organized under this Act, when designated for
that purpose by the Secretary of the Treasury, shall be
depositaries of pubhc money, except receipts from cus-
toms, under such regulations as may be prescribed by
said Secretary; and they may also be employed as finan-
cial agents of the Government; and they shall perform
all such reasonable duties, as depositaries of public money
and financial agents of the Government, as may be re-
quired of them. And the Secretary of the Treasury shall
require of the Federal land banks and joint stock land
banks thus dasignated satisfactory security, by the deposit
of United Statas bonds or othertvise, for the safekeeping
and prompt payment of the pubhc money deposited with
them, and for the faithful performance- of their duties as
financial agents of the Government. No Government
ACTS OF GENERAL. NATURE. 191
funds deposited under the provisions of this section shall
be invested in mortgage loans or farm loan bonds.
PENALTY FOR UNAUTHORIZED DEPOSIT OF PUBLIC
MONEY.
737. Sec. 5488.—
Originally enacted .Tune 14, 1SG6, see 14 Stat. L. 64. Superseded
by sec. 87 of the act of Ma rch 4, 1909.
Sec. 87. — Whoever, being a disbursing ofl5cer of the i^^^ ^^^ ^JJ'
United States, or a person acting as such, shall in any 2; i^ stat. t., 64.
manner convert to his own use, or loan with or without igogf c. ^2^,' sec!
interest, or deposit in any place or in any manner, except f^^^ ^^^- ^•»
as authorized by law, any pubhc money intrusted to him;
or shall, for any purpose not prescribed by law, withdraw
from the Treasurer or any assistant treasurer, or any au-
thorized depositary, or transfer, or apply, any portion of
the public money intrusted to him, shall be deemed guilty
of an embezzlement of the money so converted, loaned,
deposited, withdrawn, transferred, or applied, and shall be
fined not more than the amount embezzled, or imprisoned
not more than ten years, or both.
Note. — Sections 5489 to 5496 do not refer to national banks.
PENALTY FOR UNAUTHORIZED RECEIPT OR USE OP
PUBLIC MONEY.
738. Sec. C497.—
Originally enacted June 14, 1866 (14 Stat. L. 65), and amended by
act of February 3, 1879 (20 Stat. L. 280). Superseded by sec. 96 of the
act of March 4, 1909.
Sec. 96. — Every banker, broker, or other person not an ig^^*^ sec^'ge- k
authorized depositary of pubUc moneys, who shall know- stat'. l., iioe.'
ingly receive from any disbursing officer, or collector of
internal revenue, or other agent of the United States, any
pubhc money on deposit, or by way of loan or accommo-
dation, with or without interest, or otherwise than in pay-
ment of a debt against the United States, or shall use,
transfer, convert, appropriate, or apply any portion of the
pubhc money for any purpose not prescribea by law; and
every president, cashier, teller, director, or other officer of
any bank or banking association who shall violate any
provision of this section is guilty of embezzlement of the
pubhc money so deposited, loaned, transferred, used, con-
verted, appropriated, or apphed, and shall be fined not
more than the amount embezzled, or imprisoned not more
than ten years, or both.
Note. — For duties and liabilities of depositaries see note under sec.
5153, paragraph 243, ante.
OFFENSES AGAINST THE CURRENCY.
OBLIGATION OR OTHER SECURITY OF THE UNITED
STATES DEFINED.
739. Sec. 147. — The words "obhgation or other security ,q4*^„ ^„^- *>
... Ill n 1-111 11 1 1 lyoa, c. 321, sec.
of the United States shall be held to mean all bonds, cor- H7; 35 stat. l.,
tificates of indebtedness, national-bank currency, cou- li^^^u^^l^s.*'*^
pons. United States notes. Treasury notes, gold certifi- pJ^J^l^ j^J ^
cates, silver certificates, fractional notes, certificates of i864.
192 ACTS OF GENERAL NATURE.
deposit, bills, checks, or drafts for money, drawn by oi
upon authorized officers of the United States, stamps and
other representatives of value, of whatever denomination,
which have been or may be issued under any Act of
Congress.
FORGING OR COUNTERFEITING SECURITIES; PUNISH-
MENT FOR.
10;^''*-, ¥o^- J.' 740. Sec. 148. — Whoever, with intent to defraud, shall
1909, C. 321, sec. «,-, ii< ,(••■ ii iTi'
148; 35 Stat. L., falscly make, forge, counterfeit, or alter any obligation or
sec^sif^"^"!.^^^ other security of the United States shall be fined not more
enactecf JunV 30 ^'^^^ ^^^ thousaud dollars and imprisoned not more than
1864. ' fifteen years.
COUNTERFEITING NATIONAL-BANK NOTES; PUNISH-
MENT FOR.
i909'*c m*^ sec' "^^^^ ^®^* ^^^' — Whoever shall falsely make, forge, or
i49;'35' Stat. L.'. crounterfcit, or cause or procure to be made, forged, or
lec^Mfs?^"!!^*^ counterfeited, or shall willingly aid or assist in falsely
enacted F°b ' 25^ marking, forging, or counterfeiting, any note in imitation
1863. Reenacteci of, or purporting to be in imitation of, the circulating
June 3, 1S64. notes issued by any banking association now or hereafter
authorized and acting under the laws of the United States;
or whoever shall pass, utter, or pubhsh, or attempt to
pass, utter, or publish, any false, forged, or counterfeited
note, purporting to be issued by any such association do-
ing a banking business, knowing the same to be falsely
made, forged, or counterfeited; or whoever shall falsely
alter, or cause or procure to be falsely altered, or shall
wilhngly aid or assist in falsely altering, any such circulat-
ing notes, or shall pass, utter, or publish, or attempt to
pass, utter, or pubhsh as true, any falsely altered or
spurious circulating note issued, or purporting to have
been issued, by any such banking association, knowing
the same to be lalsely altered or spurious, shall be fined not
more than one thousand dollars and imprisoned not more
than fifteen years,
USING PLATES TO PRINT NOTES WITHOUT AUTHORITY,
ETC.; DISTINCTIVE PAPER WITHOUT AUTHORITY;
PUNISHMENT FOR.
1909^% ^2^ sec' '''^^* ^®^' ^^^' — Whoever, having control, custody, or
150; '35' Stat. L.' posscssiou of any plate, stone, or other thing, or any part
sec^;54l)^^!^s.'^^^ thereof, from which has been printed, or which may be
enacted JunV 30 Prepared by direction of the Secretary of the Treasury for
1864. ' the purpose of printing, any obhgation or other security
of the United States, shall use such plate, stone, or other
thing, or any part thereof, or knowingly suffer the same to
be used for the purpose of printing any such or similar ob-
hgation or other security, or any part thereof, except as
may be printed for the use of the United States by order
of the proper officer thereof; or whoever by any way, art,
or means shall make or execute, or cause or procure to be
made or executed, or shaU assist in making or executing
any plate, stone, or other thing in the hkeness of any plate
designated for the printing of such obligation or other se-
curity; or whoever shall sell any such plate, stone, or other
thing, or bring into the United States or any place subject
ACTS OP GENERAL NATURE. 193
to the jurisdiction thereof, from any foreign place, any
such plate, stone, or other thing, except under the direc-
tion of the Secretary of the Treasury or other proper offi-
cer, or with any other intent, in either case, than that such
plate, stone, or other thing be used for the printing of the
obligations or other securities of the United States; or
whoever shall have in his control, custody, or possession
any plate, stone, or other thing in any manner made after
or in the similitude of any plate, stone, or other thing,
from which any such obligation or other security has been
printed, with intent to use such plate, stone, or other
thing, or to suffer the same to be used in forging or coun-
terfeiting any such obhgation or other security, or any
part thereof; or whoever shall have in his possession or
custody, except under authority from' the Secretary of the
Treasury or other proper officer, any obligation or other
security made or executed, in whole or in part, after the
simihtude of any obligation or other security issued under
the authority of the United States, with intent to sell or
otherwise use the same; or whoever shall print, photo«
graph, or in any other manner make or execute, or cause
to be printed, photographed, made, or executed, or shall
aid in printing, photographing, making, or executing any
engraving, photograph, print, or impression in the hke-
ness of any such obligation or other security, or any part
thereof, or shall sell any such engraving, photograph,
print, or impression, except to the United States, or shall
bring into the United States or any place subject to the
jurisdiction thereof, from any foreign place any such en-
graving, photograph, print, or impression, except by direc-
tion of some proper officer of the United States; or who-
ever shall have or retain in his control or possession, after
a distinctive paper has been adopted by the Secretary of
the Treasury for the obligations and other securities of the
United States, any similar paper adapted to the making
of any such obligation or other security, except under the
authority of the Secretary of the Treasury or some other
proper officer of the United States, shall be fined not more
than five thousand dollars, or imprisoned not more than
fifteen years, or both.
UTTERING, ETC., FORGED OBLIGATIONS; PUNISHMENT
FOR.
743. Sec. 151. — Whoever, with intent to defraud, shall ,^^\ "«,•■• ^ *•
pass, utter, publish, or sell, or attempt to pass, utter, pub- isi; 35 stat. l.,
lish, or sell, or shall bring into the United States or any si^l^o^^^ri!**'
place subject to the jurisdiction thereof, with intent to ^ VJjf 'i^^'U'
'■ 1 !• 1 ij 11 1 11 1 • • enacieu June ju,
pass, publish, utter, or sell, or shall keep in possession or ise*.
conceal with like intent, any falsely made, lor^ed, coun-
terfeited, or altered obligation or other security of the
United States, shall be fined not more than five thousand
dollars and iin])risoned not more than fifteen years.
104312°— 20 13
194 ACTS OF GENERAL NATUEE.
TAKING IMPRESSIONS OF TOOLS, IMPLEMENTS, ETC.;
PUNISHMENT FOR.
i909°*c ?2T' sto! ''^- ^®°" ^^^- — Whoever, without authority from the
i52;'35'stat. L." United States, shall take, procure, or make, upon lead,
soc^543l"?i!^s'.^^ foil, wax, plaster, paper, or any other substance or mate-
enacted 'peb^ ^'^ ^^^^> ^^ impression, stamp, or imprint of, from, or by the
1867, ' ' use of any bedplate, bedpiece, die, roll, plate, seal, type, or
other tool, implement, instrument, or thing used or fitted
or intended to be used in printing, stamping, or impress-
ing, or in making other tools, implements, instruments, or
things to be used or fitted or intended to be used in print-
ing, stamping, or impressing any kind or description of
obligation or other security of the United States now
authorized or hereafter to be authorized by the United
States, or circulating note or evidence of debt of any bank-
ing association under the laws thereof, shall be fined not
more than five thousand dollars, or imprisoned not more
than ten years, or both.
HAVING UNLAWFUL POSSESSION OF IMPRESSIONS;
PUNISHMENT FOR.
i9M°*c S' se^! '^^^- ^^^' 153.— Whoever, with intent to defraud, shall
153; '35' Stat. L.' have in his possession, keeping, custody, or control, with-
sec^Msl^^il^s!^'^ out authority from the United States, any imprint, stamp,
enactecf 'peb' '5^ ^^ impression, taken or made upon any substance or mate-
1867. ' ' rial whatsoever, of any tool, unplement, instrument, or
thing, used, or fitted or intended to be used, for any of the
purposes mentioned in the preceding section ; or whoever,
with intent to defraud, shall sell, give, or deliver any such
imprint, stamp, or impression to any other person, shall
be fined not more than five thousand dollars, or impris-
oned not more than ten years, or both.
DEALING IN COUNTERFEIT SECURITIES; PUNISHMENT
FOR.
i9^°*c ^2T*seo' '^^^* ^^^' ^^^' — Whoever shall buy, sell, exchange,
i54;'35'sta^. L.*, transfer, receive, or deliver any false, forged, counter-
secJ543^4"^!^^s!^" f eited, or altered obligation or other security of the United
enactid ^Fsb' V States, or circulating note of any banking association or-
1867. ' ' ganized or acting under the laws thereof, which has been
or may hereafter be issued by virtue of any Act of Con-
gress, with the intent that the same be passed, published,
or used as true and genuine, shall be fined not more than
five thousand dollars, or imprisoned not more than ten
years, or both.
CIRCULATING BILLS OF EXPIRED BANKS; PUNISHMENT
FOR; CIRCULATION PERMITTED.
1909* c mY' sec' '''*''• Sec. 174. — Inallcases where the charter of any cor-
174; '35" sta^. L.", poratiou which has been or may be created by Act of Con-
fiia S43^7"?i"s!^*^ gress has expired or may hereafter expire, if any director,
•nacti^'jufy '/ officer, or agent of the corporation, or any trustee thereof,
1838. ' or any agent of such trustee, or any person having in his
possession or under his control the property of the corpo-
ACTS OF GENERAL NATURE.
195
ration for the purpose of paying or redeeming its notes
and obligations, shall knowingly issue, reissue, or utter ag
money, or in any other way knowingly put in circulation
any bill, note, check, draft, or other security purporting
to have been made by any such corporation whose charter
has expired, or by any officer thereof, or purporting to
have been made under authority derived therefrom, or if
any person shall knowingly aid in any such act, he shall be
fined not more than ten thousand dollars, or imprisoned
not more than five years, or both. But nothing herein
shall be construed to make it-unlawful for any person, not
being such director, officer, or agent of the corporation,
or any trustee thereof, or any agent of such trustee, or any
person having in his possession or under his control the
property of the corporation for the purpose hereinbefore
set forth, who has received or may hereafter receive such
bill, note, check, draft, or other security, bona fide and in
the ordinary transactions of business, to utter as money or
otherwise circulate the same.
FRAUDULENT NOTES TO BE SO MARKED BY UNITED
STATES OFFICERS AND OFFICERS OF NATIONAL
BANES. ACT JUNE 30, 1876.
748. Sec. 5.— That all United States officers charged ^^^^ Jji°«. 3o,
with the receipt or disbursement of public moneys, and stat'. l., m.' '
all officers of national banks, shall stamp or write in plain
letters the word "counterfeit" "altereci" or "worthless,"
upon all fraudulent notes issued in the form of, and in-
tended to circulate as money, which shall be presented at
their places of business; and if such officer shall wrong-
fully stamp any genuine note of the United States, or of
the national banks, they shall, upon presentation, redeem
such notes at the face value thereof.
CURRENCY ACT, APPROVED MARCH 14, 1900.
749. Section 1. Gold dollar declared to be
standard unit of value.
750. Sec. 2. Secretary of Treasury to set
apart and maintain a gold reserve
of one hundred and fifty million
dollars in gold coin and bullion
for the redemption of United
States notes and notes issued
under the act of July 14, 1890.
May sell bonds to replenish re-
serve.
751. Sec. 3. Silver dollar to remain legal
tender.
752. Sec. 4. Divisions of issue and e-
demption established.
753. Sec. 5. When silver dollars are
coined from bullion purchased
under act of July 14, 1890, an
equal amount of Treasury notes
to be canceled and silver certifi-
cates issued.
754
7.55.
756.
757.
758.
759.
760.
761.
762.
Sec. 6. Issue of gold certificates.
Issue of gold certificates payable
to order.
Sec. 7. Issue of silver certificates.
Sec. 8. Subsidiary silver coinage.
Sec. 9. Recoinage of uncurrent sub-
sidiary silver coin.
Sec. 10. Amends section 5138, Re-
vised Statutes. (See said sec-
tion under national-bank act.)
Sec. 11. Refunding of United Statea
bonds.
Sec. 13. This section is inserted in
national-bank act following sec-
tion 5171. which it supersedes.
Sec. 13. See sec. 5214, Revised Stat-
utes, under national-bank act.
Sec. 14. International bimetallism.
An Act To define and fix the standard of value, to maintain the parity
of all forms of money issued or coined by the United States, to refund
the public debt, and for other purposes.
196 ACTS OF GENERAL NATURE.
GOLD DOLLAR DECLARED TO BE STANDARD UNIT OF
YALUE.
19TO * s^^^i- "i ''^^- -^^ '^^ enacted hy the Senate and House of Repre-
Stat'. L., 45. ' sentatives of the United States of America in Congress
assembled, That the dollar consisting of twenty-five and
eight-tenths grains of gold nine-tenths fine, as established
by section thirty-five hundred and eleven of the Revised
Statutes of the United States, shall be the standard unit
of value, and all forms of money issued or coined by the
United States shall be maintained at a parity of value
with this standard, and it shall be the duty of the Secre-
tary of the Treasury to maintain such parity.
SECRETARY OF TREASURY TO SET APART AND MAIN-
TAIN A GOLD RESERVE OF ONE HUNDRED AND FIFTY
MILLION DOLLARS IN GOLD COIN AND BULLION FOR
THE REDEMPTION OF UNITED STATES NOTES AND
NOTES ISSUED UNDER ACT OF JULY 14, 1890. MAT
SELL BONDS TO REPLENISH RESERVE.
jg^rt s^^2- "' '^^^- ^®°- 2.— That United States notes, and Treasury
Stat. L., 45. ' notes issued under the Act of July fourteenth, eighteen
hundred and ninety, when presented to the Treasury for
redemption, shall be redeemed in gold coin of the stand-
ard fixed in the first section of this Act, and in order to
secure the prompt and certain redemption of such notes
as herein provided it shall be the duty of the Secretary of
the Treasury to set apart in the Treasury a reserve fund
of one hundred and fifty million dollars in gold coin and
bullion, which fund shall be used for such redemption
purposes only, and whenever and as often as any oi said
notes shall be redeemed from said fund it shall be the
duty of the Secretary of the Treasiu-y to use said notes so
redeemed to restore and maintain such reserve fund in
the manner foUo\s'ing, to wit: First, by exchanging the
notes so redeemed for any gold coin in the general fund of
the Treasury; second, by accepting deposits of gold coin
at the Treasury or at any subtreasury in exchange for the
United States notes so redeemed ; third, by procuring gold
coin by the use of said notes, in accordance with the pro-
visions of section thirty-seven hundred of the Revised
Statutes of the United States. If the Secretary of the
Treasury is unable to restore and maintain the gold coin
in the reserve fund by the foregoing methods, and the
amount of such gold coin and bullion in said fund shall at
any time fall below one hundred million dollars, then it
shall be his duty to restore the same to the maximum sum
of one hundred and fifty million dollars by borrowing
money on the credit of the United States, and for the
debt thus incurred to issue and sell coupon or registered
bonds of the United States, in such form as he may pre-
scribe, in denominations of fifty dollars or any multiple
thereof, bearing interest at the rate of not exceeding three
Ear centum per annum, payable quarterly, such bonds to
e payable at the pleasure of the United States after one
year from the date of their issue, and to be payable, prin-
ACTS OF GENERAL NATURE. J 97
cipal and interest, in gold coin of the present standard
value, and to be exempt from the payment of all taxes or
duties of the United otates, as well as from taxation in
any form by or under State, municipal, or local author-
ity; and the gold coin received from the sale of said bonds
shall first be covered into the general fund of the Treas-
ury and then exchanged, in the manner hereinbefore pro-
vided, for an equal amount of the notes redeemed and
held for exchange, and the Secretary of the Treasury
may, in his discretion, use said notes in exchange for
gol(i, or to purchase or redeem any bonds of the United
States, or for any other lawful purpose the pubHc in-
terests may recjuire, except that tliey shall not be used to
meet deficiencies in the current revenues. That United
States notes when redeemed in accordance \nth the pro-
visions of this section shall be reissued, but shall be held
in the reserve fmid until exchanged for gold, as herein
f>rovided; and the gold coin and bullion in the reserve
und, together with the redeemed notes held for use as
provided in this section, shall at no time exceed the
maximum siun of one hundred and fifty million dollars.
Note. — Section 7 of the Federal reserve act provides that the net
eamingrs derived by the United States from Federal reserve banks shall,
in the discretion of the Secretary, be used to supplement the gold reserve
held against outstanding United States notes, or shall be applied to the
reduction of the outstanding bonded indebtedness of the United States
under regulations to be prescribed by the Secretary of the Treasury.
SILVER DOLLAR TO REMAIN LEGAL TENDER.
751. Sec. 3. — That nothing contained in this Act shall jg^ct Mar u,
be construed to effect the legal-tender quality as now pro- stat. i^,'i6.' ^^
vided by law of the silver dollar, or of any other money
coined or issued by the United States.
DIVISIONS OF ISSUE AND REDEMPTION ESTABLISHED.
762. Sec. 4. — That there be established in the Treasury ^^^ Mar. u.
Department, as a part of the office of the Treasurer of the stat' l^46. '
United States, divisions to be designated and known as
the division of issue and the division of redemption, to
which shall be assigned, respectively, under sucn regula-
tions as the Secretary of the Treasury may approve, all
records and accounts relating to the issue and redemption
of United States notes, gold certificates, silver certificates,
and currency certificates. There shall be transferred
from the accounts of the general fund of the Treasury of
the United States, and taken up on the books of said di-
visions, respectively, accounts relating to the reserve fund
for the redemption of United States notes and Treasury
notes, the gold coin held against outstanding gold certifi-
cates, the United States notes held against outstanding
currency certificates, and the silver dollars held against
outstanding silver certificates, and each of the funds rep-
resented by these accounts shall be used for the redemp-
tion of the notes and certificates for which they are
respectively pledged, and shall be used for no other pur-
pose, the same being held as trust funds.
198 ACTS OF GENERAL NATURE.
WHEN SILVER DOLLARS ARE COINED FROM BULLION
• PURCHASED UNDER ACT OF JULY 14, 1890, AN EQUAL
AMOUNT OF TREASURY NOTES TO BE CANCELED AND
SILVER CERTIFICATES ISSUED.
lew* s^% ^k '^^^' ^^^- 5.— That it shall be the duty of the Secretary
Stat. L., 47. ' of the Treasury, as fast as standard silver dollars are
coined under the provisions of the Acts of July four-
teenth, eighteen hundred and ninety, and June thirteenth,
dighteen hundred and ninety-eight, from buUion pur-
chased under the Act of July fourteenth, eighteen hun-
dred and ninety, to retire and cancel an equal amount of
Treasury notes whenever received into the Treasury,
either by exchange in accordance with the provisions of
this Act or in the ordinary course of business, and upon
the cancellation of Treasury notes silver certificates shall
be issued against the silver dollars so coined.
ISSUE OF GOLD CERTIFICATES. ISSUE OF GOLD CER-
TIFICATES PAYABLE TO ORDER.
jgAct ^Mar. 14^ 754. Sec. 6 [as amended by acts of March 4, 1907, March 2,
Stat. L., 47. ' 1911, and June 12, 1916]. — That the Secretary of the Treas-
sec^f: 34*stat;^L!; ury is hereby authorized and directed to receive deposits of
^^Act Mar 2 S^ld coin with the Treasurer, or any assistant treasurer of
1911; 36 Stat. L.; the United States, in sums of not less than twenty dollars,
^ct June 12, a-nd to issuc gold certificates therefor in denominations
1916; 39 Stat. L., of not less than ten dollars, and the coin so deposited shall
be retained in the Treasury and held for the payment of
such certificates on demand, and used for no other pur-
pose. Such certificates shall be receivable for customs,
taxes, and all pubhc dues, and when so received may be
reissued, and when held by any national banking asso-
ciation may be counted as a part of its la%vful reserve:
Provided, That whenever and so long as the gold coin
and bullion held in the reserve fund in the Treasury for
the redemption of United States notes and Treasury
notes shall fall and remain below one hundred million
dollars the authority to issue certificates as herein pro-
vided shall be suspended: And provided further, Thsit
whenever and so long as the aggregate amount of United
States notes and silver certificates in the general fund of
the Treasury shall exceed sixty million dollars the Secre-
tary of the Treasury may, in his discretion, suspend the
issue of the certificates herein provided for: And pro-
vided further, That of the amount of such outstanding
certificates one-fourth at least shall be in denominations
of fifty dollars or less : And provided further, That the
Secretary of the Treasury may, in his discretion, issue
such certificates in denominations of ten thousand dollars,
payable to order: And provided further. That the Secre-
tary of the Treasury may, in his discretion, receive, with
the assistant treasurer in New York and the assistant
treasurer in San Francisco, deposits of foreign gold coin
at their bullion value in amounts of not less than one
thousand dollars in value and issue gold certificates there-
ACTS OF GENERAL NATURE. 199
for of the description herein authorized: And provided
further, That the Secretary of the Treasury may, in his
discretion, receive, with the Treasurer or any assistant
treasurer of the United States, deposits of gold buUion
bearing the stamp of the coinage mints of the United
States, or the assay office in New York, certifying their
weight, fineness, and value, in amounts of not less than
one thousand dollars in value, and issue gold certificates
therefor of the description herein authorized. But the
amount of gold buUion and foreign coin so held shall not
at any time exceed two thirds of the total amount of gold
certificates at such time outstanding. And section fifty-
one hundred and ninety-three of the Revised Statutes of
the United States is hereby repealed.
ISSUE OF SILVER CERTIFICATES.
755. Sec. 7. — That hereafter silver certificates shall be ,Jt^^ ^'4 H
issued only of denominations of ten dollars and under, stat. l., 47. '
except that not exceeding in the aggregate ten per centum
of the total volume of said certificates, in the discretion
of the Secretary of the Treasur}^, may be issued in denom-
inations of twenty dollars, fifty dollars, and one hundred
dollars; and silver certificates of higher denomination
than ten dollars, except as herein provided, shall, when-
ever received at the Treasury or redeemed, be retired and
canceled, and certificates of denominations of ten dollars
or less shall be substituted therefor, and after such sub-
stitution, in whole or in part, a Uke volume of United
States notes of less denomination than ten dollars shall
from time to time be retired and canceled, and notes of
denominations of ten dollars and upward shall be reis-
sued in substitution therefor, with like quahties and re-
strictions as those retired and canceled.
Note. — The act of February 28, 1878, authorized the issue of silver
certificates in sums of not less than ten dollars. The act of March 3,
1887, authorized the issue of one, two, and five dollar certificates.
This section supersedes these acts as to all new issues.
SUBSIDIARY SILVER COINAGE.
766, Sec. 8.— That the • Secretary of the Treasury is .^''t 5^'': [*:
hereby authorized to use, at his discretion, any silver stat. l., 47.
bullion in the Treasury of the United States purchased
under the Act of July fourteenth, eighteen hundred and
ninety, for coinage into such denominations of subsidiary
silver coin as may be necessary to meet the public require-
ments for such coin: Provided, That the amount of sub-
sidiary silver coin outstanding sliall not at any time ex-
ceed in the aggregate one hundred millions of dollars.
Whenever an}^ silver bullion purchased under tlie Act of
July fourteenth, eighteen hundred and ninety, shall bo
used in the coinage of subsidiar}^ silver coin, an amount
of Treasury notes issued under said Act equal to the cost
of the bullion contained in such coin shall be canceled
and not reissued.
200 ACTS OF GENERAL NATURE.
EECOINAGE OF UNCURRENT SUBSIDIARY SILVER COIN.
i9oo:*sec% 31 '^^'^' Sec. 9.--That the Secretary of the Treasury is
Stat'. L,, 48. ' hereby authorized and directed to cause all worn and un-
cmrent subsidiary silver coin of the United States now
in the Treasury, and hereafter received, to be recoined,
and to reimburse the Treasurer of the United States for
the difference between the nominal or face value of such
coin and the amount the same will produce in new coin
from any moneys in the Treasury not otherwise appro-
priated.
758. Sec. 10.—
Amends section 5138, Re\Tsed Statutes. (See said section under
National-bank act.)
REFUNDING OF UNITED STATES BONDS.
i9oo\t^h; ^zi "^^^^ S®^' 11-— That the Secretary of the Treasury is
Stat. L.,k ' hereby authorized to receive at the Treasury any of the
outstanding bonds of the United States bearing interest
at five per centum per annum, paj-able February first,
nineteen hundred and four, and any bonds of the United
States bearing interest at four per centum per annimi,
payable July first, nineteen hundred and seven, and any
bonds of the United States bearing interest at three per
centum per annum, payable August first, nineteen hun-
dred and eight, and to issue in exchange therefor an equal
amount of coupon or registered bonds of the United
States in such form as he may prescribe, in denomina-
tions of fifty dollars or any multiple thereof, bearing
interest at the rate of two per centum per annum, payable
quarterly, such bonds to be payable at the pleasure of
the United States after thirty years from the date of
their issue, and said bonds to be payable, principal and
interest, in gold coin of the present standard value, and
to be exempt from the payment of all taxes or duties
of the United States, as well as from taxation in any
form by or under State, municipal, or local authority:
Provided, That such outstanding bonds may be received
in exchange at a valuation not greater than their present
worth to yield an income of two and one-quarter per
centum per annum ; and in consideration of the reduction
of interest effected, the Secretary of the Treasury is au-
thorized to pay to the holders of the outstanding bonds
surrendered for exchange, out of any money in the Treas-
ury not otherwise appropriated, a sum not greater than
the difference between their present worth, computed as
aforesaid, and their par value, and the payments to be
made hereunder shall be lield to be payments on account
of the sinking fund created by section thirty-six hundred
and ninety-four of the Revised Statutes: And jJf'ovided
further, That the two per centum bonds to be issued un-
der the provisions of this Act shall be issued at not less
than par, and they shall be numbered consecutively in
the order of their issue, and when payment is made the
ACTS OF GENERAL NATURE. 201
last numbers issued shall be first paid, and this order shall
be followed until all the bonds are paid, and whenever
any of the outstanding bonds are called for payment in-
terest thereon shall cease tliree months after such call;
and there is hereby appropriated out of any money in
the Treasury not otherwise appropriated, to effect' the
exchanges of bonds provided for in this Act, a sum not
exceeding one-fifteenth of one per centum of the face
value of said bonds, to pay the expense of preparing and
issuing the same and other expenses incident thereto.
760. Sec. 12.—
This section is inserted in the national-bank act following sectioQ
5171 wh"ch it supersedes.
761. Sec. 13.—
See paragraph 445.
INTERNATIONAL BIMETALLISM.
762. Sec. 14.— That the provisions of this Act are not 19^"* se?"i4- si
intended to preclude the accomplishment of inter- stat, u%9. '
national bimetallism whenever conditions shall make it
expedient and practicable to secure the same by concur-
rent action of the leading commercial nations of the
world and at a ratio which shall insure permanence of
relative value between gold and silver.
ACT MARCH 4, 1907.
763. Sec. 1. Amends section 6 of act of
March 14. 1900.
764. Sec. 2. Issue of Treasury notes.
765. Sec. 3. Amends section 5153 of the
Revised Statutes.
763. Sec. 1, Act March 4, 1907.
Amends section 6 of act of March 14, 1900. This amended section
is incorporated in said act, paragraph 754, ante.
ISSUE OF TREASURY NOTES. ACT MARCH 4, 1907.
764. Sec. 2.— That whenever and so long as the out- ^^S* ^ec^%'- h
standing silver certificates of the denominations of one >"tat'. l, Liiii.
dollar, two dollars, and five dollars, issued under the
provisions of section seven of an Act entitled "An Act
to define and fix the standard of value, to maintam the
parity of all forms of money issued or coined by the
United States, to refund the public debt, and for other
])urposes," approved March fourteenth, nineteen hun-
dred, shall be, in the opinion of the Secretary of the
Treasury, insufficient to meet the public demand there-
for, he is hereby authorized to issue United States notes
of the denominations of one dollar, two dollars, and five
dollars, and upon the issue of United States notes of such
denominations an equal amount of United States notes of
higher denominations shall be retired and canceled: Pro-
vQed, however, That the aggregate amount of United
States notes at any time outstanding shall remain as at
766. Sec. 4. Amends section 9 of act of
July 12. 1882. The amended
section follows section 5167 of
the Revised Statutes.
202 ACTS OF GENERAL NATURE.
present fixed by law: And provided further, That nothing
in this Act shall be construed as affecting the right of any
national bank to issue one-third in amount of its circu-
lating notes of the denomination of five dollars, as now
provided by law.
765. Sec. 3.—
Amends section 5153, Revised Statutes, paragraph 243, ante.
766. Sec. 4.—
Amends section 9 of act of July 12, 1882, as amended by act of March
14, 1900. See paragraph 314, ante.
PANAMA CANAL BONDS.
PANAMA CANAL BONDS— ADDITIONAL ISSUE AUTHOR-
IZED AT RATE OF INTEREST NOT TO EXCEED 3 PER
CENT PER ANNUM.
iwfsJ'l^- h '^^'^' ^®°- 39.— That the Secretary of the Treasury is
Stat. L., 117.' hereby authorized to borrow on the credit of the United
States, from time to time, as the proceeds may be required
to defray expenditures on account of the Panama Canal
and to reimburse the Treasury for such expenditures
already made and not covered by previous issues of bonds,
the sum of two hundred and ninety miUion five hundred
and sixty-nine thousand dollars (which sum together
with the eighty-four million six hundred and thirty-one
thousand nine hundred dollars abeady borrowed upon
issues of two per cent bonds under section eight of the
Act of June twenty-eight, nineteen hundred and two,
equals the estimate of the Isthmian Canal Commission
to cover the entire cost of the Canal from its inception to
its completion), and to prepare and issue therefor coupon
or registered bonds of the United States in such form as
he may prescribe, and in denominations of one hundred
doUars, five hundred dollars, and one thousand dollars,
payable fifty years from the date of issue, and bearing
interest payable quarterly in gold coin at a rate not ex-
ceeding three per centum per annum; and the bonds
herein authorized shall be exempt from aU taxes or duties
of the United States, as weU as from taxation in any form
by or under State, mimicipal, or local authority: Pro-
vided, That said bonds may be disposed of by the Secre-
tary of the Treasury at not less than par, under such
regulations as he may prescribe, giving to all citizens of
the United States an equal opportunity to subscribe
therefor, but no commissions shall be allowed or paid
thereon; and a sum not exceeding one-tenth of one per
centum of the amount of the bonds herein authorized is
hereby appropriated, out of any money in the Treasury
not otherwise appropriated, to pay the expenses of pre-
paring, advertising, and issuing the same; and the au-
thority contained in section eight of the Act of June
twenty-eight, nineteen hundred and two, for the issue of
bonds bearing interest at two per centum per annum, is
hereby repealed.
ACTS OF GENERAL NATURE. 203
PANAMA CANAL BONDS ISSUED UNDER ACT OF AUGUST
5, 1909, NOT RECEIVABLE AS SECURITY FOR THE
ISSUE OF CIRCULATING NOTES TO NATIONAL BANKS.
768. Be it enacted hy the Senate and House of Repre- Act Mar. 2^
sentatives of the United States of America in Congress stat'. l!,' 1013.'
assembled, That the Secretary of the Treasury be, and he
is hereby, authorized to insert in the bonds to be issued
by him under section thirty-nine of an Act entitled "An
Act to provide revenue, equahze duties, and encourage
the industries of the United States, and for other pur-
poses," approved August fifth, nineteen hundred and
nine, a provision that such bonds shall not be receivable
by the Treasurer of the United States as security for
the issue of circulating notes to national banks; and the
bonds containing such provision shall not be receivable
for that purpose.
CERTIFIED CHECKS WHEN RECEIVABLE FOR DUTIES AND
TAXES.
CERTIFIED CHECKS DRAWN ON NATIONAL AND STATE
BANKS RECEIVABLE FOR DUTIES ON IMPORTS AND
INTERNAL TAXES. ACT MARCH 2, 1911.
769. Be it enacted hy the Senate and House of Repre-
sentatives of the United States of America in Congress
assembled, That it shall be law'ful for collectors of cus- Act Mar. i.
toms and of internal revenue to receive for duties on im- stat'. l!,' 965!'
ports and internal taxes certified checks drawn on na-
tional and State banks, and trust companies during such
time and under such regulations as the Secretary of the
Treasury may prescribe. No person, however, who may
be indebted to the United States on account of duties on
imports or internal taxes who shall have tendered a cer-
tified check or checks as provisional pa}Tnent for such
duties or taxes, in accordance with the terms of this Act,
shall be released from the obligation to make ultimate
payment thereof until such certified check so received has
been duly paid; and if any such check so received is not
duly paid by the bank on which it is dra\\-n and so certi-
fying, the United States shall, in addition to its right to
exact payment from the party originally indebted there-
for, have a lien for the amount of such check upon all the
assets of suc];^ bank; and such amount shall be paid out of
its assets in preference to any or all other claims whatso-
ever against said bank, except the necessary costs and ex-
penses of administration and the reimbursement of the
United States for the amount expended in the redemption
of the circulating notes of such bank.
Sec. 2. That this Act shall be effective on and after
June first, nineteen hundred and eleven.
CERTIFIED CHECKS— WHEN RECEIVABLE FOR DUTIES
AND TAXES. ACT MARCH 3, 1913.
770. Be it enacted by the Senate and House of Repre-
sentatives of th4 United States of America in Congress
204 ACTS OF GENEBAL NATURE.
igfsf c.^m ij o^semhled, That it shall be lawful for coUecting ofRcers
Stat, l'., 733.' to receivG certified checks drawn on national and State
banks and trust companies, during such time and under
such regulations as the Secretary of the Treasury may
prescribe, in payment for duties on imports, internal taxes,
and all public dues, including special customs deposits;
and the Act of March second, nineteen hundred and
eleven, entitled "An Act to authorize the receipt of certi-
fied checks for duties on imports and internal taxes," is
hereby amended accordingly.
AMERICAN NATIONAL RED CROSS.
NATIONAL BANKS AUTHORIZED TO SUBSCRIBE TO
AMERICAN NATIONAL RED CROSS DURING THE WAR.
,qAP* ^^y ^' 771. Be it enacted hy the Senate and House of Repre-
sentatives oj the United States oj America in Congress
assembled, Tliat during the continuance of the state of
war now existing it shaU be lawful for any national bank-
ing association to contribute to the American National
Red Cross, out of any net profits otherwise available
under the law for the declaration of dividends, such sum
or sums as the directors of said association shall deem
expedient. Each association shall report to the Comp-
troller of the Currency within ten days after the making
of any such contribution, the amount of such contribu-
tion, and the amount of net earnings in excess of such
contribution. Such report shall be attested by the presi-
dent or cashier of the association in hke manner as the
report of the declaration of any dividend.
Sec 2. That all sums so contributed shall be utilized
by the American National Red Cross in furnishing vol-
unteer aid to the sick and wounded of the combatant
armies, the voluntarv relief of the Army and Navy of the
United States, and the relief and mitigation of the suffer-
ing caused by the war to the people of the United States
and their aUied nations.
SPECIAL ACTS.
205
CHAPTER VIII.
SPECIAL ACTS RELATING TO NATIONAL BANKS.
1900. National bank-
applicable to Porto
800. Act April 12,
ing laws
Rico.
801. Act April 30, 1900. National bank-
ing laws applicable to Hawaii.
802. Granting Fifth-Third National Bank
of Cincinnati, Ohio, the right to
use original charter No. 20.
803. Special acts authorizing change of
name or location of national
banks.
NATIONAL BANKING LAWS APPLICABLE TO PORTO RICO.
ACT APRIL 12, 1900.
800. Sec. 14.— That the statutory laws of the United , .*?*.^,?V?'}T'
~ ,,. . 1-11 I'll" ^^^ 14; 31 btat.L.,
btates not locally inapplicable, except as hereinbefore or sa
hereinafter otherwise provided, shall have the same force
and effect in Porto Rico as in the United States, except
the internal-revenue laws, which, in view of the pro-
%asions of section 3, shaU not have force and effect in
Porto Rico.
Note. — The Attorney General of the United States in an opinion
rendered June 2, 1900, held "There seems to be in the structure of the
national banking laws no general provisions which can not be carried
into force and effect in Porto Rico equally with all of the various States
and Territories to which the laws were originally applied. I can find
no reason to hold that the statutes relative to the organization and pow-
ers of national banks have not, by section 14 of the Porto Rican act,
above referred to, been extended to that island. The language of that
section is broad enough, and in my opinion does authorize the organ-
ization and carrying on of national banks in Porto Rico."
NATIONAL BANKING LAWS APPLICABLE TO HAWAII.
ACT APRIL 30, 1900.
as
801. Sec. 5. — That the Constitution, and except
herein otherwise provided, all the laws of the
States which are not locally inapplicable, shall have the
same force and effect within the said Territory as else-
where in the United States: Provided, That sections
eighteen hundred and fifty and eighteen himdrcd and
ninety of the Revised Statutes of the United States shall
not apply to the Territory of Hawaii.
Note. — The Attorney General of the United States in an opinion
rendered June 23, 1900, held "That the act of April 30, 1900, * * ♦
extended the national banking acta to the Territory of Hawaii, and
would authorize the Comptroller to grant permission for the organiza-
tion of national banks therein. (See my opinion of June 2, 1900, rela-
tive to the same question as applied to Porto Rico.) But I do not think
that the provisions of section 5154 apply to banks existing in Hawaii
prior to the passage of the act of April 30, 1900. Sections 5154 and 5155
seem, by their especial terms, to refer only to banking institutions organ-
ized under special or general laws of a State, and do not seem to apply at
all to banks organized under the laws of any Territory. I tliink the
object of these two sections was to enable the banks that wore previously
stnctly State institutions to become national corporations, and the
operation of the act in that respect is to be so restricted."
Act
1900
United stat l., wi
Apr,
sec. 5
80.
31
207
208 SPECIAL ACTS.
GRANTING FIFTH-THIRD NATIONAL BANK, OF CINCIN-
NATI, OHIO, THE RIGHT TO USE ORIGINAL CHARTER
NUMBER TWENTY.
802. Be it eiuicted hy the Senate and House of Repre-
sentatives of the United States of America in Congress
i9w°*37 Stat if' ^semhled, That the Comptroller of the Currency be, and
13781 "' he is hereby, authorized and directed to issue to the Fifth-
Third National Bank, of Cincinnati, Ohio, charter num-
bered twenty in lieu of their present charter numbered
twenty-seven hundred and ninety-eight, said charter
numbered twenty being the original charter number of
the Third National Bank, of Cincinnati, Ohio, which bank,
was merged and consolidated with the Fifth National
Bank, of Cincinnati, Ohio, in the year nineteen hundred
and eight, under the name of the Fifth-Third National
Bank, of Cincinnati, Ohio, said consolidated bank having
succeeded to all the assets, good will, rights, privileges,
and emoluments of the said Third National Bank, of
Cincinnati, Ohio.
SPECIAL ACTS AUTHORIZING CHANGE OF NAME OR
LOCATION. ACT JUNE 7, 1872.
isra^'S/n \7 803- Sec. 1.— That the First National Bank of An-
stat. L.,281.' napolis, now located in the city of Annapolis and State
of Maryland, is hereby authorized to change its location
to the city of Baltimore, in said State. Whenever the
stockholders representing three-fourths of the capital
of said bank, at a meeting called for that purpose, deter-
mine to make such change, the president and cashier shall
execute a certificate, under the corporate seal of the bank,
specifying such determination, and shall cause the same
to be recorded in the office of the Comptroller of the Cur-
rency, and thereupon such change of location shall be
effected, and the operations of discount and deposit of
said bank shall be carried on in the city of Baltimore.
Sec. 2. That nothing in this act contained shall be so
construed as in any manner to release the said bank from
any liability or affect any action or proceeding in law in
which the said bank may be a party or interested. And
when such change shall have been determined upon, as
aforesaid, notice thereof and of such change shall be
pubhshed in two weekly papers in the city of Annapolis
not less than four weeks.
im^sec^l h ^^^' ^- That whenever the location of said bank shall
Stat. L., 282. ' havc bccu changed from the city of Annapolis to the city
of Baltimore, in accordance with the first section of this
act, its name shall be changed to The Traders' National
Bank of Baltimore, if the board of directors of said bank
shall accept the new name by resolution of the board,
and cause a copy of such resolution, duly authenticated,
to be filed with the comptroller of the currency.
i872°*sec'^4* \i ^^^- ^- That all the debts, demands, liabilities, rights,
Stat. L., 282. privileges, and powers of the First National Bank of
Annapolis shall devolve upon the Traders' National
Act June
7,
1872, sec. 2;
17
Stat. L., 282.
SPECIAL ACTS. 209
Bank of Baltimore whenever such change of name is
effected.
Sec. 5. That this act shall take effect and be in force ig^^^seJl^s; \i
from and after its passage. ptat. l.tsz'
Note. — Acta of a similar nature to the one preceding have been
enacted by Congress for the following purposes:
Authorizing The Manufacturers' Isational Bank of New York to
change its location from the city of New York to the city of Brooklyn.
(Approved July 27, 1868.)
Authorizing The City National Bank of New Orleans, Louisiana, to
change its name to The Germania National Bank of New Orleans
(Approved March 1, 1869.)
Authorizing The Second National Bank of Plattsburgh, New York,
to change its name to The Vilas National Bank of Plattsburgh.
(Approved March 1, 1869.)
Authorizing The First National Bank of Delhi, New York, to change
its location and name to The First National Bank of Port Jervis, New
York. (Approved May 5, 1870.)
Authorizing The First National Bank of Fort Smith, Arkansas, to
change its location and name to the First National Bank of Camden,
Arkansas. (Approved July 1, 1870.)
Authorizing the Jersey Shore National Bank, Pennsjivania, to
change its location and name to The Williamsport National Bank,
Pennsylvania. (Approved December 22, 1870.)
Authorizing the Worcester County National Bank of Blackstone,
Massachusetts, to change its location and name to The Franklin
National Bank, Massachusetts. (Approved February- 9, 1871.)
Authorizing The Farmers' National Bank of Fort Edward, New York,
to change its location and name to The North Granville National Bank,
New York. (Approved February- 18. 1871.)
Authorizing The Worthington" National Bank of Cooperstown, New
York, to change its location and name to The First National Bank of
Oneonta, New York. (Approved February 27, 1871.)
Authorizing The Warren National Bank of South Danvers, Massa-
chusetts, to change its name to The Warren National Bank of Peabody,
Massachusetts. (Approved March 12, 1872.)
Authorizing The First National Bank of Seneca. Illinois, to change its
location and name to The First National Bank of Morris, Illinois.
(Tw^o acta, approved April 5, 1872, and June 18, 1874.)
Authorizing The Railroad National Bank of Lowell. Massachusetts,
to change its location and name to The Railroad National Bank of
Boston, Massachusetts. (Approved May 31, 1872.)
Authorizing The National Bank of Lyons, Michigan, to change its
location and name to The Second National Bank of Ionia, Michigan.
(Approved December 24, 1872.)
Authorizing The East Chester National Bank of Mount Vernon, New
York, to change its location and name to The German National Bank
of Evans%'ille, Indiana. (Approved January 11, 1873.)
Authorizing The First National Bank of Newnan, Georgia, to change
ita location and name to The National Bank of Commerce, Atlanta,
Georgia. (Approved January- 23, 1873.)
Authorizing The First National Bank of Watkins, New York, to
change its location and name to The First National Bank of Penn Van,
New York. (Approved February 19, 1873.)
Authorizing The National Bank of Springfield, Missouri, to change
itfl name to The First National Bank of Springfield Missouri. (Ap-
proved March 3, 1873.)
Authorizing The Kansas Valley National Bank of Topeka, Kansas,
to change ita name to The First National Bank of Topeka, Kansas.
(Approved March 3, 1873.)
Authorizing The First National Bank of Saint Anthony, Minnesota,
to change its location and name to The Merchants' National Bank oi
MinncapoUe, Minnesota. (Approved January S, 1874.)
Authorizing The Second National Bank of Havana, Xew York, to
change its name to The Havana National Bank of Havana, New York.
(Approved January 9, 1874.)
164312"— 20 14
210 SPECIAL ACTS.
Authorizing The Passaic CouBty National Bank of Patereon, New
Jersey, to change ita name to The Second National Bank of Patereon,
New Jereey. (Approved April 15, 1874.)
Authorizing The Citizens' National Bank of Hagerstown, Maryland,
to change its location and name to The Citizens' National Bank of
Washington City, District of Columbia. (Approved May 1, 1874.)
Authorizing The Irasburg National Bank of Orleans, at Irasburg,
Vermont, to change its location and name to The Barton National Bank,
Vermont. (Approved June 3, 1874.)
Authorizing The Farmers' National Bank of Greensburg, Pennsyl-
vania, to change its location and name to The Fifth National Bank of
Pittsburg, Pennsylvania. (Approved June 23, 1874.)
Authorizing The Citizens' National Bank of Sanbomton, New Hamp-
shire, to change its name to The Citizens' National Bank of Tilton, New
Hampshire. (Approved February 19, 1875.)
Authorizing the Second National Bank of Jamestown, New York, to
change its name to The City National Bank of Jamestown, New York.
(Approved March 3, 1875.)
Authorizing The Second National Bank of Watkins, New York, to
change its name to The Watkins National Bank, New York. (Ap-
proved March 3, 1875.)
Authorizing The Slater National Bank of North Providence, Rhode
Island, to change its name to The Slater National Bank of Pawtucket,
Rhode Island. (Approved March 3, 1875.)
Authorizing The Auburn City National Bank of Auburn, New York,
to be consolidated with The First National Bank of Aubiun, New York.
(Approved March 3, 1875.)
Authorizing The Miners' National Bank of Braidwood, lUinois, to
change its location and name to The Commercial National Bank of Wil-
mington, Illinois. (Approved January 31, 1878.)
Authorizing The Windham National Bank, Windham, Connecticut,
to change its location to the village of WiUimantic, Connecticut.
(Approved February 10, 1879.)
Authorizing the National Bank of Commerce of Cincinnati, Ohio, to
change its name to The National Lafayette and Bank of Commerce.
(Approved April 29, 1879.)
Authorizing the City National Bank of Manchester, New Hampshire,
to change its name to The Merchants' National Bank of Manchester.
(Approved June 11, 1880.)
Authorizing The Blue Hill National Bank of Dorchester, Massachu-
eetts, to change its location and name to the Blue Hill National Bank of
Milton, Massachusetts. (Approved January 13, 1881.)
Authorizing The First National Bank of Meriden, West Meriden,
Connecticut, to change its name to The First National Bank of Meriden,
Connecticut. (Approved March 1, 1881.)
Authorizing The National Mechanics' Banking Association of New
York, New York, to change its name to Wail Street National Bank.
(Approved February 14, 1882.)
Authorizing The Lancaster National Bank of Lancaster, Massachu-
setts, to change its location and name to The Lancaster National Bank
of Clinton, Massachusetts. (Approved February 25, 1882.)
Authorizing the National Bank of Kutztown, Pennsylvania, to
change its location and name to The Keystone National Bank of
Reading, Pennsylvania. (Approved June 27, 1882.)
Joint resolution authorizing The National Bank of Winterset, Iowa,
to change its name to The First National Bank of Winterset, Iowa.
(Approved January 18, 1883.)
Authorizing The Second National Bank of Xenia, Ohio, to increase
its capital stock. (Approved February 17, 1883.)
Authorizing The First National Bank of West Greenville, Pennsyl-
vania, to change its name to The First National Bank of Greenville,
Pennsylvania. (Approved February 26, 1883.)
Authorizing The West Waterville National Bank of Oakland, Maine,
to change its title to The Messalonskee National Bank of Oakland,
Maine. (Approved April 15, 1884.)
Authorizing the Hillsborough National Bank, of Hillsboro, Ohio, to
change its name to The First National Bank of Hillsborough, Ohio.
(Approved December 18, 1884.)
SPECIAL ACTS. 211
Authorizing The Slater National Bank of North Providence, Rhode
Island, to change ita name. (Approved January 8, 1885.)
Authorizing tne First National Bank of Omaha, Nebraska, to increase
its capital stock. (Approved January 10, 1885.)
Authorizing The National Bank of Bloomington, Illinois, to change
its name to the First National Bank of Bloomington, Illinois. (Ap-
proved January 27, 1885.)
Authorizing The Manufacturers' National Bank of New York to
change its name to The Manufacturers' National Bank of Brooklyn,
New York. (Approved February 20, 1885.)
Authorizing The Commercial National Bank of Chicago, Illinois, to
increase its capital stock. (Approved February 28, 1885.)
Authorizing The First National Bank of Lamed, Kansas, to increase
ita capital stock. (Approved March 3, 1885.)
Authorizing The First National Bank of Fort Benton, Montana, to
change its location and name. (Approved December 18, 1890.)
Authorizing the National Safe Deposit Company of Washington to
change its title to The National Safe Deposit, Savings and Triwt Com-
pany of the District of Columbia. (Approved February 18, 1892.)
Authorizing a national bank of Clucago, Illinois, to establish a
branch office upon the grounds of the World's Columbian Exposition.
(Approved May 12, 1892.)
Authorizing The First National Bank of Sprague, Washington, to
change Its location and name. (Approved March 20, 1896.)
Authorizing the Interstate National Bank of Kansas City, Kansas, to
change its location. (Approved March 2, 1897.)
Authorizing any bank or trust company located in the State of Mis-
souri to conduct a banking office on the Louisiana Exposition grounds
at St. Louis, Mo. (Approved March 3, 1901.)
Authorizing The American National Bank of Graham, Virginia, to
change its location and name. (Approved February 15, 1906.)
Authorizing the National Safe Deposit Savings and Trust Company
of the District of Columbia to change its title to National Savings and
Trust Company, (Approved January 31, 1907.)
212 SPECIAL ACTS.
OPINIONS OF THE ATTORNEY GENERAL.
213
CHAPTER IX.
OPINIONS OF THE ATTORNEY GENERAL ON GUARANTY LAWS OF OKLA-
HOMA AND KANSAS, AND ON THE INSURANCE OF BANK DEPOSIfS.
903. Opinion of Attorney General of
United States on power of a
national bank to make a con-
tract with an insurance com-
pany by which the company
insures and guarantees each
depositor in the bank the full
payment of his deposit therein.
900. Opinion of Attorney General of
United States on Oklahoma
deposit guaranty law.
901. Opinion of Attorney General of
United States on Kansas de-
posit guaranty law.
902. Opinion of Attorney General of
the United States on power of
a national bank to enter into a
contract with an insurance com-
pany guaranteeing the solvency
of the bank.
THE OKLAHOMA DEPOSIT GUARANTY LAW.
900. The Attorney General of the United States, in an
opinion rendered July 28, 1908, said:
The business of insuring deposits is a wholly separate business from
that of banking * * *. A national bank has no power to guarantee
the obligations of a third party, unless in connection with the sale or
transfer of its own property and as an incident to the business of the
bank * * *.
But a contract guaranteeing the payment by another corporation or
individual of obligations in nowise connected with the business of the
bank is entirely ultra \dres. I hold * * * that it is illegal for the
officers of a national bank to enter into any such agreement as that con-
templated by section 4 of the Oklahoma statutes, and any willful action
to this effect on the part of any national bank is sufficient cause for the
forfeiture of charter.
THE KANSAS DEPOSIT GUARANTY LAW.
901. The Attorney General of the United States, in an
opinion rendered April 6, 1909, said:
The question of the power of a national bank to avail of the invita-
tion extended to it by this act involves primarily a consideration of
the nature of the agreement contemplated by it. Attorney General
Bonaparte, in an opinion rendered to the Secretary of the Treasury,
under date of July 28, 1908, considering an act of the Legislature of
the State of Oklahoma (27 Op. A. G., p. 38), determined that a national
bank could not lawfully enter into the plan or scheme contemplated
by that act, because it involved essentially a guaranty to the depositors
of all State banks in Oklahoma, and other national banks in that State
which might accept the terms of the law, that their respective depos-
itors should be paid in full; a contract which he deemed to be clearly
ultra vires.
The act now under consideration attempts to avoid this objection
by limiting the amount for which any bank may become liable, but
within such limitation the same principle is involved, for to the extent
of the contribution and liability required by the statute each bank
becomes liable to creditors of the other banks which are parties to the
plan. But even if a proper construction of the act would, as contended,
make it a guaranty by each bank of payments to its own depositors, and
not a general guaranty within the limits of contribution prescribed by
the act, of all deposits in all the banks which are parties to the scheine,
nevertheless I am strongly of the opinion that a national bank is %vith-
out corporate power to expend its moneys for the purpose of providing
insurance that its depositors shall be paid in full. It may, of courste,
insure its own property against loss or destruction; it mav insure itself
against loss of property through theft or other dishonesty, but the appli-
215
216 OPINIONS OF THE ATTORNEY GENERAL.
cation of its funds for the purpose of securing a collateral guaranty by
third parties that it will pay in full its debts to its depositors is, it
appears to me, beyond its corporate power.
Such contract would fall within the principles asserted in Commer-
cial National Bank v. Pine (82 Fed., 799), Bowen v. Needles National
Bank (94 Fed., 925), for if, as is well established, a national bank has no
power to guarantee the obligation of another, it certainly has no power
to employ another to guarantee its own obligation to a third person.
POWER OP NATIONAL BANK TO ENTER INTO A CONTRACT
WITH AN INSURANCE COMPANY GUARANTEEING THE
SOLVENCY OF THE BANK.
902. The Attorney General of the United States, in an
opinion rendered May 7, 1909, said:
Replying to yours of the 29th ultimo, in which, at the request of the
Comptroller of the Currency, you ask for an opinion as to the power of
a national bank to enter into a contract with an insurance company
guaranteeing the solvency of the bank, and transmitting to me a form
of policy which is proposed to be issued by an insurance company pro-
posed to be organized, I beg to say that, as a general principle, I have
no doubt that it is entirely within the powers of a national bank to
contract for the insurance of its assets against loss. The form of the
proposed policy submitted in your letter is somewhat peculiar. It
purports to insure to the bank the payment of "a sum of money suffi-
cient to indemnify the bank for any and all losses suffered by it by
reason of theft, embezzlement, losses in realizing upon loans and in-
vestments, shrinkage in value of assets or otherwise, in an amount
equal to but not exceeding the net excess of its obligations, other than
by reason of the stock of the bank, over the total aggregate value of the
assets of the bank thus reduced by such losses; provided that there
shall be included in the assets of the bank all net sums which have
been realized by reason of the additional liability of the stockholders
of the bank."
Such contract is, in effect, an agreement to pay to the bank any defi-
ciency in its assets upon ultimate realization necessary to enable it to
pay all of its liabilities of every kind. The policy is to run for a period
of three months, but to be renewable thereafter for periods of three
months each with the consent of the insurance company, and at such
premiums as the insurance company may fix at least one month before
the expiration of the then current term of the insurance, the premium
in every case to be a pereentage of the average indebtedness of the bank
during the period covered by such renewal, with the provision that, if
Buch rate snail be in excess of one-sixteenth of 1 per cent upon such
average indebtedness, then and in such event the insurance company
shall be liable to account to the bank for the application of such pre-
mium paid by the bank in excess of one-sixteenth of 1 per cent, ' ' which
excess shall be applicable only to the payment of actual losses incurred
by the company by reason of claims under this and similar policies, and
any excess over such extra claims shall be divided pro rata among the
banks paying such extra rate of premium as a participation in the prof-
its during which period such extra rate of premium has been paid."
It is somewhat uncertain precisely what this paragraph means and
what its effect may be. It seems to me to be objectionable as com-
mitting the bank to a profit-sharing feature, which might be contended
to entail a corresponcung liability for losses; and, as the attorney for
the promoters of the proposed insurance company informs me that this
is not regarded as an essential part of the plan, I should advise that it
had better be eliminated from the policy.
Another provision contained in the policy subjects the bank to a
periodical examination by the examiners of the insurance company
without notice and at such times as the company may elect, one of
such examinations to be within each period of six months covered by
the policy and all renewals thereof. This period is probably inadver-
tently placed at six months, as the policy is proposed to be written for
periods of three months only. Aside from that, I very much question
the legality of this clause, or at least its enforceability. Section 5241
of the Revised Statutes provides that, "No association shall be subject
OPINIONS OF THE ATTORNEY GENERAJ.. 2]
to any visitorial powers other than such as are authorized by this title,
or are vested in the courts of justice."
WTiile this statute does not prohibit the bank from permitting an
examination of its books, in my opinion it does operate to prohibit it
from obligating itself to permit sucn examination; and if the covenant
to insiire can be considered as in any respect dependent upon thia
agreement to permit examinations, it might be vitiated by the unlaw-
ful pro\ision. I should advise that the clause be reframed so as to
make it clear that the agreement to insure is not dependent upon the
failure to permit the examination, although it might be stipulated that
in case, at any time, the examiner of the company should not be
allowed access to the books of the bank for the purpose of making an
examination the company should have the option, upon reasonable
notice, to terminate the contract.
In my opinion, therefore, it is a matter for the discretion of the
directors and officers of a bank to determine whether or not they will
enter into any such contract in any given instance, this discretion to
be exercised in \dew of the solvency and general financial condition of
the company making the insurance and the reasonableness of the rate
of premium; and the form of the policy being modified to conform to
the foregoing suggestions, I see no legal reason why a bank may not
enter into it.
POWER OF A NATIONAL BANK TO MAKE A CONTRACT
WITH AN INSURANCE COMPANY BY WHICH THE COM-
PANY INSURES AND GUARANTEES EACH DEPOSITOR
IN THE BANK THE FULL PAYMENT OF HIS DEPOSIT
THEREIN.
903. The Attorney General of the United States, in an
opinion rendered March 31, 1915, said:
I have the honor to acknowledge the receipt of your letter of Feb-
ruary 12, 1915, inclosing letter of the Comptroller of the Currency,
opinion of the Acting Solicitor of the Treasury, and brief filed with
the Comptroller on behalf of a guaranty company and certain national
banks, in which the question is raised as to whether a national bank
may enter into a contract with a guaranty company under which, in
consideration of premiums paid by the bank, the company "insures
and guarantees each depositor in the bank the full pa\Tnent of his de-
posit therein." You ask my opinion upon this question.
In my opinion, it is within the power of a national bank to enter into
such a contract.
The law confers upon national banks such incidental powers as are
required to meet all legitimate demands of the banking business, and
to enable them to conduct their affairs safely and prudently within the
scope of their charters. Section 5136, Revised Statutes; First National
Bank v. National Exchange Bank (92 U. S. 122, 127). The power to
give security for deposits seems to be recognized by section 5153,
Kevised Statutes, as among these incidental powers. The section last
mentioned, after pro\iding that all associations created under the act,
shall, when so designated by the Secretary of the Treasury, be deposi-
taries, further provides that "The Secretary of the Treasury shall re-
auire the associations thus designated to give satisfactory security, by
tne deposit of United States bonds and otherwise, for the safe keeping
and prompt payment of the public money deposited with them," etc.
It is believed that this section is more reasonably construed as a recog-
nition of the existence of the power on the part of national banks to
give security for deposits than as a grant by implication of authority to
give security for Government deposits alone.
The power of banks to give security for deposits or for pa>Tnent of
their debts has been frequently recognized. It has been held that the
property of a bank may oe pledged as security for a debt ( United Staffs
v. Robertson (1831), 5 Pet., 641, 650); that a bond with sureties may be
given to prevent depositors from withdrawing their accounts {Wylit v.
Commercxal A: Farmers' Bank (1902), 41 S. E., 504, 509; 63 S. C, 406):
and that a national bank may give its bond with sureties to secure a
depoedt of State funds {State of Nebraska v. First National Bank of
OrUam (1898), 88 Fed., 947, 951).
218 OPINIONS OF THE ATTORNEY GENERAL.
The power to contract for guaranteeing or securing depositors arises
from the nature of the relation existing between the banks and their
depositors. The relation created between the bank and a depositor by
the receipt of deposits is that of debtor and creditor. (National Bank
V. Millard (1869), 10 Wall., 152, 155; Davis v. Elmira Savings Bank
(1896), 161 U. S., 275, 288.) The power to receive deposits, expressly
granted to every national bank (sec. 5136, R. S.), is, of course, indis-
pensible to the conduct of the business of banking; and the extent of
its exercise is in a degree the measxu'e of the success of the bank. The
ability of a bank to obtain deposits largely depends upon the confidence
of depositors, or the belief that their deposits are secure. Loss of such
confidence on the part of depositors is usually attended with loss and
inconvenience to them, to the bank, and to the public. The law ac-
cordingly imposes upon the bank an imperative duty not only to repay
deposits but to keep them secure. For the protection of depositors, its
revenues and property are pledged, its stockholders are made subject
to a double liability, and its directors may be held liable for a viola-
tion of their duties.
The means by which depositors are to be protected and secured are
not expressly limited or restricted by statute. A large discretion is left
to the officers and directors. They may use such means for the purpose
as are not prohibited by or inconsistent with the provisions of the law
and as they may reasonably find to be suitable and proper and not incon-
sistent with the prudent conduct of the affairs of the bank within the
scope of its charter. "Whatever protects the depositors," it has been
said, "protects the bank, because it assures confidence in the bank.'-
(JVoble State Bank v. Haskell (1908), 22 Okla., 48, 89.)
A contract of insurance or guaranty, such as described in the ques-
tion submitted, may afford protection to depositors by securing the per-
formance of an obligation on the part of the bank which otherwise
might not be performed. And it is not unreasonable to believe that
Buch a contract, at the same time, may prove valuable to the bank be-
caxise of the confidence it may assure. No reason is perceived for pro-
hibiting a national bank, in the discretion of its directors, from so se-
curing its depositors, or for denying to the bank such benefits as they
believe may accrue in the form of increased confidence resulting from
Buch a contract.
Opinions of former Attorneys General, dated, respectively, July 28,
1908 (27 Op., 37), and April 6, 1909 (27 Op., 272), are referred to in the
inclosures as having been construed by the Comptroller of the Ciirrency
as holding that national banks are without authority to pay, as part of
their legitimate expenses, premiums on policies insuring their deposi-
tors against loss.
As I view these opinions, the conclusion in neither of them is incon-
Bifltent with the conclusion reached herein. The opinion of July 28,
1908, construing the Oklahoma State banking act, determined that a
national bank could not lawfully participate in the plan contemplated
by the act for the guarantee of deposits, because it involved essentially
a guarantee to the depositors of other banks that they should be paid in
full — a contract which was deemed beyond the powers of the bank to
make. The opinion of April 6, 1909, held that national banks in the
State of Kansas could not avail themselves of the bank depositor's
guaranty law of that State. The inquiry, upon the answer to which
the decision rests, was whether an acceptance of the provisions of
the Kansas law "would so control the conduct of the affairs of national
banks aa to expressly conflict with the laws of the United States. ' '
As pointed out in the opinion of the Solicitor of the Treasury, the
more recent opinion of May 7, 1909 (27 Op., 324), in which the form of
a policy of insurance guaranteeing the assets of a national bank against
loss was approved provided certain suggested modifications should be
made, is more nearly in point on the question now under consideration,
and is in harmony with the views herein expressed.
The language employed in the opinions of July 28, 1908, and April
8, 1909, to the effect that national banks are without power to contract
for insuring that depositors shall be paid in full, was used in the course
of argument merely, applied to a question which it was not necessary
to determine, and may be disregarded so far as inconsistent with this
opinion.
INDEX.
219
INDEX TO NATIONAL-BANK ACT, ETC.
llndcx to Federal reserve act, p. 251.1
A.
Paragraph.
Abstract of report of condition to be included in annual report 110
Abstraction, penalty for 436
Acceptance of drafts or bills of exchange by member banks of Federal Reserve
System 206, 207
Acknowledgment. (See Oath.)
Acknowledgment of organization certificate 203
Acting Comptroller of the Currency 103
Act, the national-bank 200
Acts:
Of a general nature, not included in national-bank act, affecting national
banks 700-770
Special, authorizing change of name or location of national bank 803
Additional Deputy Comptroller 104
Administrator, power of national banks to act as 208
Administrators, not personally liable 242
Advertisements (see also Publication, Printing):
Imitation of circulation in, penalty for 345
Notice to creditors of insolvent banks 516
Agency, National Bank Redemption, provisions for 414, 415
Agent:
Association as fiscal, of Government 243
Bonds, examination by 310
Central reser^-e city 401
Central resers^e city, additional 401
Circulation, to witness destruction 339
Foreign branches of national banks as fiscal, of United States 210
Insurance, when national bank may act as 209
Liquidating bank 522
Reserve 401 407
Reserve, city, additional central, provisions for 401
Shareholders, appointment and qualifications of 522
Shareholders, duties of 522
Special, to examine bank failing to redeem notes 508
"Witnessing destruction of circulation by 339
Aggregate amount of circulation not limited 332
Aiding misdemeanors of officers 436
Alaska, reserve requirements, etc., for national banks in 411
Allotment. (See Shares.)
Allotment of United States bonds to be purchased by Federal reserve bank 316
Amendments:
Proposed, to national -bank act to be made in Comptroller's report 110
Restriction of, to articles of association 225
Suggested, to improve sj'stem, to appear in annual report 110
Amount:
Of bond of Comptroller of Currency 102
Of bond of Deputy Comptroller of Currency 103
Of bonds required to be on deposit 302, 313
Of capital required 224
Of circulation obtainable 323
Of circulation that may be redeemed at one time, minimum 414
Of dividends that may be declared 429
Of redemption fund required 414
Of reserve required to be held by —
Banks elsewhere than in re.serve city 405
Central reserve city banks 407
Country banks 405
Reserve city banks 406
221
222 INDEX TO NATIONAL-BANK ACT, ETC.
Amount — Continued. paragraph.
Of tax on circulation 444
Of United States bonds that may be refunded in one year 316
Recoverable for usurious interest charges 423
That national banks may borrow 427
Annual examination of bonds by association 310
Annual meeting of shareholders 232
Annual report of Comptroller of the Currency 110
Appointment:
Agent, shareholders 522
Agent to examine bonds 310
Agent to witness destruction of circulation 339
Clerks of Comptroller's office 105
Committee to examine plates, etc 328
Committee to witness destruction of circulation 339
Comptroller 101
Deputy Comptroller 103
Directors of associations 204
Dissenting shareholders, committee of apprisal 219
Examiners of associations 527
Officers of associations 204
Receivers of associations 515, 520
Shareholders' agent 522
Special commission for preliminary examinations of associations 320
Vacancies in board of directors 237
Appraisal. (See Shares.)
Appraisal of value of stock to be purchased from shareholders dissenting to ex-
tension of charter 219
Approval of Comptroller of Currency required for extension of charter 217
Approval of request for receiver to buy property 524
Articles of association:
Amendment of, for extension of corporate existence 215, 216
Amendment of, restricted 225
Converted State bank, execution of, by 245
Increase of capital stock by amendment of 229
Proceedings in regard to, and form of 201
Provisions for elections when not provided for in 238
Reduction of capital stock , 230
Assessments:
For examination 527
Impairment of capital 430
Plates, engraving of 220, 414
Redemption of circulation 3i3
Repayment of tax 449
Reports of circulation, failure to make 447, 448
Reports of condition and earnings and dividends, failure to make 443
Semiannual duty 446
Shareholder's personal liability ^4 240
Tax on unauthorized circulation 708-710
Transportation of notes 414
Assessors, shareholders' lists accessible to 439
Assets:
Comptroller's annual report to contain statement of national banks 110
Expense of receiver paid from 519
Failed bank, may be turned over to agent 522
Insolvent banks, distribution of 517
Of consolidated banks 503
Receiver to collect, etc 515
Receiver to sell on order of court 515
Report of condition to contain statement of 440
Shareholders' agent to distribute 522
United States has paramount lien on 511
Assignee, failure to pay installments 227
Assignment (see also Treasurer United States; Bonds, United States):
Of assets after insolvency void 529
Re§:ister of bonds 307
United States bonds as security for circulation 306
INDEX TO NATIONAL-BANK ACT, ETC. 223
Parajrraph.
Assistant Deputy Comptroller..'. 104
Assistant Treasurer of United States:
Circulation of liquidated and insolvent banks, duty of 505
Circulation, unfit, to be sent to Treasurer for redemption 414
Fraudulent notes to be marked by 746
Public moneys to be deposited with 730, 731
Unauthorized withdrawal of public money from 737
Associations:
Defined 300
National banking, provisions for formation of 201
Organized under act of 1863 not affected 247
To be notified of transfer of bonds 308
To issue gold notes 341
Assorting charges for redeemed circulation 414
Attachment, not to issue prior to final judgment of court 529
Attorney General, opinions of 900-903
Auction:
Bonds of expiring associations 221, 504
Bonds of liquidating associations 221, 504
Bonds, sale of, when association has failed to pay its circulating notes 511
Enforcement of assessment, impaired capital 430
Purchase of property by receiver 523
Sale of delinquent national-bank stock 430
Sale of dissenting shareholders' stock 219
Authority:
To commence business 320
To coin aUver dollars 722
224 INDEX TO NATIONAL-BANK ACT, ETC.
B.
Paragraph.
Bad debts defined 429
Ballot. (See Elections; Shareholders.)
Bank balances, net to or from to be used in reserve calculations 410
Bank circulation. (See Circulation.)
Bank examiners 527
Bank examinations 527
Banking house :
Association may own 223
Location 400
Banking powers (see also Real estate and national banking associations) :
Corporate 204
Incidental 204
Banks not in reserve cities. (See Country banks.)
Banks other than national, statement to be given in annual report 110
Bills of exchange:
Discount of 422
Illegal transfer of, void .* 529
Interest on 422
Member bank of Federal Reserve System may accept 206
Not considered borrowed money 425
Penalty for official malfeasance, relative to 436
Restrictions on loans, not applicable to 425
Restriction on associations, liability, not applicable to 427
Transfer of, to create a preference, void 529
Bimetalism 762
Board of directors. (See Directors.)
Bonds, official:
Comptroller 102
Deputy Comptroller 103
Officers of associations 204
Public depositaries 243
Receiver 515
Shareholders' agent 522
Shareholders', on election of agent 522
Bonds, others, to secure deposits 243
Bonds, United States:
Annual examination of, provided for 310
Assignment or transfer of, to be countersigned by Comptroller 306
Association to be notified of transfer or assignment 308
Cancellation of, forfeited, for circulation redeemed 510
Circulation issuable on 304, 317, 323
Circulation obtainable on 304, 317, 323
Comptroller, access to records of, and deposit with Treasurer 309
Coupon, to be exchanged for registered 305
Deficiency in proceeds from sale of, what first lien 511
Defined 301
Deposit of, not required to begin business 302
Depositaries required to deposit 243
Depreciation in value of, how made good 311
Exchange of, for Treasury gold notes 318
Exchange of, permitted 311
Forfeiture of, for failure to redeem circulation 508
General provisions respecting 311
Gold, banks to deposit 341
Government depositaries, deposit of, required 243
Increase of deposit of 304
Interest on, liable for penalty for failure to make reports to Comptroller. . . 443
Interest on, liable for penalty for failure to make returns and pay taxes .... 425
Interest on, withheld on impaired capital 430
Lawful money, deposit of, to retire circulation and withdraw 312
INDEX TO NATIONAL-BANK ACT, ETC. 225
Bonds, United States — Continued. Paragraph.
Liquidating bank, reassignment of 504
Minimum amount to be deposited 302, 313
Maximum circulation issuable on 323
Obligations of the United States, including, defined 739
Panama Canal, available as security for circulation 303
Panama Canal, additional issue of, authorized 767
Panama Canal, authorized by act of August 5, 1909, not receivable as se-
curity for circulation 768
Penalty for illegal dealing in counterfeit 746
Penalty for illegal possession or use of material for printing 741
Penalty for passing counterfeit 743
Penalty for taking or possessing unauthorized impressions of tools, etc.,
used in printing 74-5, 746
Record of transfer or assignment of, to be kept by Comptroller 307
Reduction of deposit of 304
Refunding under provisions of Federal reserve act 304
Refunding of 316, 757
Registered, to be deposited with Treasurer United States 301, 302
Relation of, on deposit to capital 304
Return of, to association 311
Sale of, at auction for failure to redeem circulation 511
Sale of, privatsly, at not less than par, for failure to redeem circulation. . 512
Secretary of Treasury authorized to sell, to make good gold reserve 750
Taxation, exempt from 716
Tax on circulation secured by 444
Tax on circulation seciu-ed by Panama Canal bonds 303, 444
To secure deposits 243
Transfer of, how effected 306
Treasurer of United States to have access to records of Comptroller relative to 309
Treasurer United States to hold , in trust for association 306
Withdrawal of, and of circulation 312, 414
Withdrawal of 304
Bookkeeper. {See Officers.)
Books. {See Comptroller; Treasurer United States.)
Borrowed money {see Liability of association, Loans):
Limit of amount 427
To make good gold reserve, by Secretary of Treasury, authorized 750
Branch banks:
Chicago Worid 's Fair 803
Louisiana Exposition 803
State banks entering system by conversion may retain 246
Branches, foreign, authorized 210
Broker, when national bank may act as broker in procuring loans on real estate . 209
Bureau of Comptroller of Currency 100
Bureau of Currency, expense of 327
Bureau of Engraving and Printing, Director of, designated as custodian of
plates, dies, etc., of Federal reserve and national bank notes 327
Business:
Authorization of association to begin, when 226, 319
Place of 400
Suspension of, after default to pay circulation 509
Business paper:
Discount of 422, 427
Excepted from limit on loans 425
By-laws prescribed by directors of national banks 204
161312°— 20 15
226 INDEX TO NATIONAL-BANK ACT^ ETC.
c.
Paragraph.
Call for report of condition 440
Cancellation. {See Bonds, United States, circulation.)
Cancellation of bonds forfeited 510
Cancellation of circulation redeemed 514
Capital stock:
Agent of shareholders to distribute assets ratably 522
Amount required 224
Amount to be paid before association begins basiness 226, 319
Appointment and qualification of shareholders' agent 522
Assessment for impairment of 430
Association to begin business, amount to be paid 226
Borrowed money must not exceed 427
Branches of converted State banks " 246
Certificate of officers and directors required relative to payment of 226, 319
Circulation not to be used to create increase of 428
Circulation outstanding not exceeding 5 per cent of, free from taxation 706
Circulation, proportion to , 304
Conversion of State banks authorized 245
Creditors' bill against shareholders 521
Deposit of United States bonds based on 302
Directors, individual liability of 526
Directors, qualification of 233
Disposition of, delinquent shareholders 227
Dividends declared on, and net earnings in excess of dividends to be
reported 442
Dividends on, and creation of sxirplus 424
Dividends on, when prohibited 429
Division of, into shares, and number and value of each 225
Enforcement of assessment, to make good impairment of 430
Enforcing individual liabilities of shareholders of, by receiver 520
Enforcing payment of 227
Holders of shares of, in expiring associations to be extended or reorganized,
to have preference in allotment of shares 219
Holding of shares of, required by directors 233 236
Impairment of, assessment for 430
Impairment of, receiver may be appointed for failure to make good 520
Increase of, provisions for 228, 229, 304
Individual liability of shareholders 240
Liability of association not to exceed , except on account of certain demands. 427
Liquidation, shareholders owning two- thirds of, may vote to go into 500
List of shareholders of, to be transmitted to the Comptroller 439
Loans on security of shares, or purchase of, prohibited 426
Loans restricted to 10 per cent of, including surplus, etc 425
Minimum amount, required of national banks 224
Minimum of bonds to 302
Number of shares and amount of, stated in organization certificate 202
Of national banks held by converted State banks 245
Payment of, provisions for 226
Penalty for failure to make good impairment of 430
Personal liability of shareholders 240
Population to govern minimum amount 224
Purchase of, prohibited 426
Receiver may be appointed when, impaired 430
Receiver may be appointed when, not fully paid in 227
Reduction of, provisions for 230, 304
Relation of bond deposit to 304
Restoration of, when below the minimum required 227
Shareholders of, list to be kept and subject to inspection 439
Shareholders owning two-thirds of, may place an association in liquidation. . 500
INDEX TO NATIONAL-BANK ACT, ETC. 227
Capital Block — Continued. Paragraph.
Shareholders owning two-thirds of, may change title and location 211
Shareholders owning two-thirds of, may increase 228, 229
Shareholders owning two-thirds of, may reduce 230
Shareholders owning two-thirds of, may extend corporate existence 216
Shareholders entitled to one vote on each share of, neld by 231
Shareholders of, converted State banks not liable, when 240
Shareholders of, not consenting to an extension may withdraw 219
Shares of, acquired for debt to be disposed of, when 426
State taxation of shares of 451
Subscriptions to, when payable 226
Surplus fund to be created to the amount of 20 per cent of 424
Transfer of shares 241
United States registered bonds to be deposited as security for circulation
to be based on 302
When increase of, becomes valid 228
Withdrawal of bonds on reduction of, or closing of business 304
Withdrawal of bonds, limited 311
Withdrawal of, prohibited 429
Cashier (see also President; Officers):
Appointment of 204
Bank examiner may examine, on oath 527
Bond assignment by 306
Certificate of officers and directors 319
Certificate of stock payment 226
Circulating notes, to sign 324, 337
Election or appointment of 204
Embezzlement by 436
Examiner of own bank, can not be 527
Expiration of corporate existence, certification by 221
Extension of corporate existence, certification by 216
False certification of checks 436
Incomplete circulation, provisions relative to 417
Increase of stock, certification of 228
Liquidating bank, duty in 501
Penalty for —
Countersigning or delivering circulation improperly 344
False certification of checks 434, 439
Issuing circulation of expired associations 747
Official malfeasance 436
Pledging, etc., circulation 432
Unauthorized receipt of public money 738
Protest of circulation, waiving notice of 507
Proxy, not to act as 231
Reports of condition, verified by 440, 441
Reports of earnings and dividends, verified by 442
Shareholders, lists of, by 439
Signature of, forged or wanting, not to invalidate circulation 417
Taxable circulation, returns by 446
Unauthorized circulation, returns by 710
Voluntary liquidation, certified by 501
Cash reserve required :
Banks elsewhere than in reserve city 405
Central reserve city 407
Reserve city banks 406
Central reserve agents. (See Agents; Reserve; Reserve agents.)
Central reserve cities:
Cash reserve required -lO?
Number and classification of 'lOl
Certificate:
Certified copy of organization, evidence ~W
Comptroller s, of authority 320
Converted State banks 245
Destruction of circulation on retirement account 416
Destruction of notes 339
Execution of organization 203
Extension of corporate existence 217
228 INDEX TO NATIONAL-BANK ACT, ETC.
Certificate — Continued. Paragraph.
Increase of stock valid, when 228
May be withheld, when 320
Officers and directors to attest 319
Of deposit as time deposits 403
Of payment of stock 226
Organization, to specify 202
Payment of installments of stock to be certified 226
Publication of Comptroller's, of authority 321
Purchase of property by receiver, required 523
Reduction of stock valid, when 230
Sealed, of Couiptroller, evidence 703
To be made by association, showing bonds deposited with Treasurer 310
Voluntary liquidation oOl
Certificates:
Gold, issue of 433
Gold 754
Silver ' 755
United States, subject to State tax 717
Certification of checks, when forbidden, penalty for 434, 435
Certified checks, receivable under certain conditions for duties on imports,
internal taxes, etc 769, 770
Certified copies of reports, etc 703. 704
Change of location, special acts authorizing 803
Change of title and location 211
Change of title and location, debts not affected by 212
Charges for transportation and assorting of circulation for redemption 414
Charter (see also Corporate existence):
Certificate of Comptroller authorizing the bank to begin business known as. 320
Extension of 215
Forfeiture of. 526
Issue of, to national banks 320
Reextension of 222
Term for which issued 204
Charter number of Fifth-Third National Bank of Cincinnati, Ohio, changed . . . 802
Charter number to be printed on circulation 325
Checks:
Certified, receivable for duties on imports and internal taxes 769, 770
False certification of, unlawful 434
Falsely certified, an obligation of association 434
Penalty for false certification of 435
Chicago, 111. , designated as central reserve city 401
Cincinnati, Ohio, change of charter number of Fifth-Third National Bank 802
Circulation:
Aggregate amount not limited 332
Amount of, obtainable 323
Amount of, obtainable by gold banks 341
Association may issue 204
Association to receive interest on bonds as long as, honored 311
Associations consolidating, deposit of lawful money to retire, unnecessary. 503
Associations to redeem, in lawful money on demand 401
Banks other than national, tax on 708-710
Bonds in excess of amount required may be withdrawn 304
Bonds forfeited when, dishonored 508
Bonds having been forfeited 508
Bonds, United States, to secure 302
Capital not to be reduced below amount of outstanding 230
Cancellation of redeemed 514
Certificates of destruction, by whom executed 339
Charter number on 325
Collection of tax on 448
Consolidating banks 503
Cost of plates to be paid by association 414
Counterfeiting, etc 344, 346, 740, 741, 747
Countersigning unlawfully 344
Denominations, minimum 329
Deposit of lawiul money to withdraw 314
INDEX TO NATIONAL-BANK ACT, ETC. 229
Circulation — Continued. Paragraph
Deposit of United States bonds to secure 302
Deposit of bonds to be increased when capital is increased 304
Destroyed, to be replaced by an equal amount of new notes 414
Disposition of redemption account balances 416
Enforcins; payment of tax on 448
Examination of bank upon request of, by a2;ent of Comptroller 508
Expense of plates for new notes of extended banks 220
Expenses of redemption, how paid 414
Expired associations, penalty for issuing 747
Extended bank, shall differ "from prior issue 220
Failed banks, redemption of 505
Failure to redeem 507
Federal reserve banks 317
For what, is receivable 337
Fraudulent notes to be so stamped 748
Gain from lost and destroyed 220
Gold banks, amount not limited 342
Gold bank, to be redeemed in gold coin 341
Government depositaries to receive, at par 243
Imitation of, prohibited 345
Increasing capital stock, use of, prohibited 428
Inscription on 324, 341
Lawful money deposit to retire circulation limited 314
Limit on aggregate amount of 323
Liquidating banks, redemption of 505
Liquidating bank to deposit lawful money to redeem 504
Maceration of ". 339, 340
Minimum amount that may be withdrawn 312
Minimum denominations 329
Minimum deposit of bonds required 302
Mutilation of, prohibited 346
Not considered borrowed money 427
Notice of redemption of, to be forwarded to bank 414
Notice to present, for redemption when bonds have been forfeited 510
Of converted State bank, where redeemable 246
Other, prohibited for national bank 338
Panama Canal bonds to secure 303
Paper for printing 326
Penalty for engraving, etc., without authority 742
Penalty for failure to make return of, taxable 447
Place for redemption of 414
Plates and dies for printing of 327
Plates and dies to be engraved for 324
Pledging, as security prohibited 428
Profit on unredeemed, inures to the United States 220
Proceedings when return is not made 712
Prohibition against circulating uncurrent notes 431
Proportion to bonds deposited 323
Proportion to capital 302
Protest of 507
Receivable at par by all national banks 425
Receivable for what 337
Redeemed, to be canceled 514
Redemption fund 414
Redemption of, closed banks 505, 506
Redemption of, extended banks 220
Redemption of, incomplete 417
Redemption of, in United States notes 414
Redemption of, liauidating banks 505, 506
Redemption recoras 513
Reduction or retirement of 313
Refunding excess tax 449
Register of Treasury's signature to be on 324
Reserve not determined by 402
Reserve not to be kept on 402
Reserve requirement repealed 402
280 IXDEX TO NATIONAL-BANK ACT, ETC.
Circulation — Continued. Paragraph.
Restriction of tax pro\'isions 714
Restriction on notes less than SI 718
Restriction on notes less than $5 329
Restriction on notes of $5 323
Retirement account 416
Retirement of 314, 315
Retiring, under provisions of Federal reserve act 304
Semiannual return of, subject to tax 446. 711
Signing 324, 337, 417
Statement concerning, of closed banks to appear in annual report of Comp-
troller 110
Tax on 444
Tax on converted bank 713
Tax on, insolvent banks remitted 451, 715
Tax on, secured by Panama Canal bonds 303
Tax on, State bank issue 705, 712
Tax on, subject to State law 717
Treasurers and public depositaries to return all, of closed banks 505
When exempt from tax ^ 706
When issuable 337
Withdrawal of, by depositing lawful money, limitation of 312, 314, 414
Worn or mutilated, to be redeemed 414
Worn out or mutilated, destroyed 339, 340
Citizens' national banking associations, where 214
Claims (see Insolvency: Receiver), notice to present, against insolvent banks. . 516
Classification of central reserve cities 401
Clearing house, receipt in settlement of balances of gold and silver certificates
bv 433
Clerks:
Appointment and qualification of, by the Secretary 105
Clerical force for the redemption of circulating notes 415
Duties of, fixed by the Comptroller 105
Employment of, for the bureau, by the Comptroller 105
Names and compensation of, in annual report and Official Register 110, 111
Of banks can not act as proxy 231
Closed associations {see Insolvency), statement to appear in annual report 110
Coin (see Gold : Silver), right to redeem circulation in 414
Coins, Philippine Islands, legal tender 719
Collection of penalty for failure to make semiannual return of circulation 446
Collection of tax on circulation, enforcement of 448
Commencement of business, provisions to be complied with, prior to 319
Commercial paper:
Discount of 422, 427
Excepted from limit on loans 425
Commission, not to be paid officer, director or employee of member bank 438c
Commissioner of Internal Revenue, tax on circulation of insolvent banks to be
remitted by 715
Commissioner of Internal Revenue, returns of circulation other than national,
to be made to 711,712
Committee:
Of appraisal 219
Of destruction, pro\'isions for 339
Compounding debts of insolvent national banks 515
Comptroller of Currency:
Action as to agent of shareholders 522
Agent, special, to be appointed for association failing to redeem circulation . 50S
Annual report to be made to Congress by 110
Appointment, term, and salary of 101
Approval required for extension of charter 217
Approve receiver 's purchase of property 524 , 525
Approve reserve agent 40i
Articlefl of association and organization certificate of national banks to be
filed with 201, 202
Assessment of tax on circulation when bank fails to make return 447
Bond of 102
Bonds and records ot, with Treasurer, access to 309
INDEX TO NATIONAL-BANK AOT, ETC. 231
Comptroller of Currency — Continued. Paragraph.
Bonds, sale of, privately or at public auction, by 511, 512
Bond transfers to be recorded by 307
Capital stock, increase or reduction of, to be approved by 228, 229, 230
Certificate to begin business 320
Certificates of destruction of circulation on retirement account 416
Certified copy of organization certificate, evidence 704
Charter number of bank, to be put on circulating notes 1 )y 325
Circulation —
Of extended banks to be destroyed 1 )y 220
Plates and dies to be engraved bv order of 324
To be issued by * 323
Worn, mutilated, destruction of 339, 340
Cited in injunction of receiver 518
Clerks 105
Creditors of failed banks, dividends to be paid to, by 517
Distribution of annual report of 112, 113
Duties of 100
Enforce stockholders' liability 240
Engraving of plates for printing of circulation to be ordered by 324
Enjoined by bank, how 518
E\adence, sealed certificates 703
Examiners, appointed by 527
Examiners' salary', recommended by 527
Examiners' reports to 527
Exchange of bonds to secure circulation 311
Expense of examinations assessed by 527
Expense of bureau 327
Extension of corporate existence, approval of, by 215
Federal Reserve Board, ex officio member of 101
Fine for failure to make reports to 443
Forfeit, cancel, or sell bonds for default in payment of notes 512
Forfeiture of charter, suit to be brought by 526
Impairment of capital, action to be taken by 430
Interest in banks, prohibited 106
Jurisdiction of district court to enjoin 701
Liquidation of associations, to be notified of 501
List of shareholders, copy to be sent to 439
National bank examiners appointed by 527
Notice to banks short in reserve 402
Notice to creditors of insohent banks 516
Notice to present circulation for redem])iion when bonds have been for-
feited 510
Oath of directors to be filed with 236
Oath to l)e taken and Iwnd to be given by 102
Organization certificate to be filed with 203
Payment of ca])ital to he certified to 226
Plates and dies, examination of 328
Printing annual re])ort of 112, 113
Proceedings to enjoin 701, 702
Qualification of 102
Reappraisal of value of stock of shareholders by 219
Receivers appointed 1 )y 402, 515, 620
Reports of banks, other than national, to be obtained and published, by. . 110
Reports to be made to 440,441
Report to be made annually to Congress 1 10
Rooms, etc 1 '^8
Salar^' of 101
Seal of 107
Shareholders' agent, action as to ^22
State banks converted, approved by 245
Term of 101
Title and location, change of, to be approved l>y 211
Title of national banks subject to approval of 202
Transfer and assignment of bonds to be con ntersignod 1 'y 306
To determine if association can commence business 319
Withdrawal of circulation to have consent of 314
232 INDEX TO NATIONAL-BANK ACT, ETC.
Paragraph.
Comptroller of Treasury, refunding of excess payment of tax on circulation to
be approved by 449
Condition, report of 440
Congress:
Comptroller's annual report to be made to 110, 111
Visitatorial powers of 527
Consent of two-thirds necessary for extension of charter 216
Consolidation of national banks, provisions for 503, 503a
Contract insuring or guaranteeing deposits by national banks 903
Contracts, power for association to make 204
Contributions, political, prohibited 437
Conversion of national gold banks into currency banks 343
Conversion, State banks 245
Corporate existence:
Expiration of 221
Extension of 215-217
Reextension of 222
Term of 204
Corporate powers. (See Powers.)
Corporate seal, power to adopt and use 204
Corporation {see also Liability of associations), association becomes, when 204
Coporations, interlocking directorates forbidden 234, 235
Cost. {See Expense.)
Cost of plates 220, 414
Counterfeits {see Fraudulent notes, etc.) 748
Counterfeiting, making or using notes, plates, tools, etc 740, 748
Counterfeiting, plates and dies, to be guarded against 324
Countrj' banks:
Caeh reserve required 405
Distribution of reserve 405
Reserve required to be held with Federal reserve bank 405
Reserve requirements for 405
Reserve that may be held with bank in reserve or central reserve cities... 405
Coupon bonds, to be exchanged for registered = 305
Courts. {See Crimes, jurisdiction, etc.)
Creditors:
Bill in equity by, against shareholders 521
Checks falsely certified a valid obligation of association 436
Directors' liability 526
Expiration of existence, notice to 221
Insolvency, notice of , to 516
Nonpayment of circulation, notice of, to 510
Payment of assets of failed banks 517
Preference of, illegal 529
Rights not to be impaired 529
Shareholders, list of, subject to inspection by 439
Shareholders, personal liability of, to 240
Voluntarj^ liquidation, notice of , to 501
Creditor's bills; against shareholders 521
Crimes, jurisdiction, etc.:
Abstraction of money, funds, etc 436
Aiders and abettors 436
Counterfeiting circulation, etc 740, 744
Dealing in counterfeit circulation 746
Embezzlement 436,732,737,738
Enjoining of Comptroller and receiver 518
Evidence, certified copy of organization certificate 704
Evidence, sealed certificate of Comptroller competent 703
False certification of checks 434, 435
False entries 436
Forging or counterfeiting United States securities 740
Having or taking unauthorized impressions of tools, etc 744, 745
Illegal possession or use of material for circulation 742
Imitating circulation for advertising purposes 345
Improper countersigning or delivering circulation 344
Interlocking directorates forbidden 235
INDEX TO NATIONAL-BANK ACT, ETC. 233
Crimes, jurisdiction, etc. — Continued. Paragraph.
Issuing circulation without authority 436
Issuing circulation of expired associations 747
Jurisdiction, general, of national-bank cases 214, 218
Jurisdiction to enjoin Comptroller or receiver 701
Misapplication, willful 436
Mutilating circulation 346
Obligations of the United States defined 739
Official malfeasance 436
Passing counterfeit circulation 743
Pledging United States notes or bank circulation 432
Political contributions 437
Suits in which United States or its officers are parties 700
Taking unauthorized impression of tools, etc 744
Violation of national-bank act 526
Currency. {See Circulation; Gold; Gold certificates; Silver; Silver certifi-
cates; Lawful money; United States note certificates; Federal reserve notes.)
Currency Bureau:
Designation of Office of Comptroller of Currency 100
Expense of 327
Expense of, in liquidating failed banks Ill
Offices, vaults, etc., for 108
Submission of list of employees 110, 111
Custodian of plates and dies, etc., for Federal reserve and national-bank notes. . 327
234 INDEX TO NATIONAL-BANK ACT, ETO.
D.
Paragraph
Date of election of directora 238
Date upon which an association becomes a body corporate 204
Date when application for extension of charter may be made 215
Dates for payment of tax on circulation 303
Dealing in counterfeit circulation, penalty for 746
Debts, compounding of:
Not affected by change of title or location. : 212
Real estate held for 223
Declaration of dividends 428
Default in payment of circulation 507, 509
Deficiency. {See Bonds; Capital; Circulation; Receiver; Reserve.)
Definitions:
Bad debta 429
Central reserve cities 401
Demand and time deposits 403
Of national banking associations and associations 300
Of United States bonds 301
Reserve cities 402
Delinquent shai"eholders, sale of stock of 430
Delivery of circulating notes 323
Demand deposits defined 403
Demands for which'national-bank notes are receivable 337
D enominations :
Circulation of gold banks 341
CiiTulation of national banks 324
Converted Ptate-bank shares 245
Gold certificates 433, 754
Panama Canal bonds 767
Shares of national-bank stock 225, 245
Silver certificates 755
Treasury notes 764
Depositaries of public moneys 243, 244
Depositaries of the United States, circulation of liquidating and insolvent
banks, duty of, to return 505
Deposit guaranty law:
Kansas 901
Oklahoma. . . 900
Deposit not required in consolidation 503
Deposit of United States bonds not required 302
Deposit of lawful money:
For circulation of extending banks 220
To redeem circulation of liquidating banks 502
To withdraw circulation 311
Deposits:
Insolvent banks, deposit of funds of 515
Insurance or guaranty of, by national banks 903
Not considered borrowed money 427
Public money 243, 244, 730
Postmasters' 731
Reserve to be kept on 405, 407, 414, 744
Reserve determined by 402, 410
To redeem circulation, disposition of 416
United States, no reserve required to be held against 413
Various kinds defined 403
With nonmember banks limited 408
Depreciation {see Bonds; Circulation) in value of bonds to secure circulation. . 311
Deputy Comptroller of Currency:
Additional, bond of 104
Appointed by Secretary of the Treasury 103, 104
Appointment 103
INDEX TO NATIONAL-BANK ACT, ETC. 235
Deputy Comptroller of Currency — Continued. Paragraph.
Bond 103
Duties 103
Interest in bank prohibited 106
Oath to be taken 103
Salary of 103
Deputy comptroller, additional:
Bond of 104
Powers of 104
Salary of 104
Description of national-bank notes 324
Designation of central reserve cities 401
Destruction committee provided for 339
Destruction of circulation of extended banks 220
Destruction of worn out and mutilated notes 339, 340
Dies. {See Plates.)
Director of Bureau of Engraving and Printing designated as custodian of dies,
plates, etc., of Federal reserve and national-bank notes 327
Directors:
Appointment or election of 204
Assessment for impairment of capital, provisions for enforcement of 430
Attestation of reports to Comptroller by 440
Capital impaired, duties in 227
Certificate of officers and 319
Certification of, to extension 216
Conversion of State banks, action by 245
Dividends, declaration of , by 428
Duties of 204
Election of 204
Election postponed 238
Embezzlement , penalty 436
Enforcing payment of capital 227
Failure to hold annual election 23(S
Forfeiture of charter for violation, etc., by 526
Interlocking, prohibited 234
Liquidated bank, duties in 501
Liability of 526
Names and residences of, to be ascertained by Comptroller 319
Not to be appointed by the Comptroller to examine own bank 527
Number and election of 232
Number, constituting board of 232
Oath of 236
Penalty for issuing circulation of expired association 747
Penalty for official malfeasance 436
Penalty for political contributions 437
Penalty for unauthorized receipt of public monev 738
President '. 239
President of board to be a 239
Powers of 204
Provisions for 232
Proxy can not act as 231
Purchase of securities from or sale to director 438d
Qualifications of 233
Rate of interest paid directors 43Se
Restrictions as to interlocking 234
Sale of stock acquired from delinquent shareholdera 227
Shareholders dissenting to extension to give notice, etc 219
Term of 232
Three-fourt hs to be resident of State 233
Vacancies in board of 237
Disbursing funds of United States officers, depositing with national-bank
depositaries 730
Disbursing officers, penalty for unauthorized deposit of public money, by 737
Discount. (See Loans; Liability of association; Interest.)
Dismissal of officers 20-1
Disposal of redeemed circulating notes 513
Disposition of assets of insolvent banks ^17
236 INDEX TO NATIONAL-BANK ACT, ETC.
Paragrapli,
Disposition of earnings, by United States, from Federal reserve banks 750
Disposition of redemption account 416
Dissenting shareholders, withdrawal of, on extension 219
Dissolution {see Expiration of corporate existence; Forfeiture; Insolvency;
Liquidation) of banks not extending period of succession 221
Distinctive paper:
National-bank circulation, etc., to be printed on 326
Unauthorized possession or use of 742
Distribution of assets by shareholders' agent 522
Distribution of reserve:
Banks elsewhere than in reserve cities 405
Central reserve cities, banks in __ 407
Reserve cities, banks in 406
District attorney, suita in which United States or its officers are parties, to be
conducted by : 700
District court, jurisdiction of, to enjoin Comptroller 701
Dividends:
Comptroller to make ratable, of assets of insolvent banks 517
Directors may declare, when 424
Earnings and, to be reported 442
Not to be paid by certain converted State banks when surplus is impaired . . 240
Penalty for failure to report earnings and 4^3
Prohibited when reserve is short 409
Restriction on association's liability 427
Unearned, prohibited 429
Unpaid, not considered borrowed money 427
Divisions of Issue and Redemption established in office of United States Treas-
urer 752
Drafts:
Against deposits not considered borrowed money 427
Liability of association, relative to 427
Member banks of Federal Reserve System may accept 206
Obligations of United States, including 739
Official malfeasance 436
Penalty for mutilating 346
Dues. {See Tax; Duties.)
Duties:
Associations organized under the act of February 25, 1863 247
Circulation —
Converted State banks 713
Enforcing payment of , on 448
Exempt from" 706
Not receivable for customs 337
Refunding excess on 449
Restrictions on 714
Semiannual on 444, 447
Unauthorized 705, 710
Comptroller's 100
Deputy Comptroller's 103
Directors' 204, 232, 236
Disbursing officers' 730
Examiners' 527
Gold certificates receivable for 754
Imports and internal taxes may be paid by certified check 769, 770
Officers' 204
On imports, certified checks receivable for, under certain conditions 770
PubUc depositaries, designation and 243
Receiver, appointment and 515
Shareholders ' agent 522
Duty of Treaijurer i* regard to circulation of liquidating and insolvent banks. 505
INDEX TO NATIONAL-BANK ACT, ETC. 237
E.
Paragraph.
Earnings and dividends to be reported 442
Earnings by United States from Federal reserve banks, disposition of 750
Election of president of the board 239
Election or appointment of directors, appointment officers 204, 232
Elections:
Change of title or location 211
Corporate powers 204
Extension of corporate existence 7 215
Failure to hold annual 238
Failure to hold at appointed time 238
Increase of stock 229
Number of directors 232
Oath of directors 236
Qualifications of directors 233
Qualifications of shareholders 231
Reduction of stock 230
Shareholders' a^ent 522
Voluntary liquidation 500
Embezzlement, misapplication of funds, etc.:
Money-order funds 732
Penalty for 436
Unauthorized deposit of public money by disbursing officer 737, 738
Employees and expenses 110, 327
Employees, rate of interest paid 438e
Enforcing payment of capital stock, provisions for 227
Enforcing payment of tax on circulation 448
Enforcement of act in reference to interlocking directorates 235
Engra\'ing. (See Circulation; Plates and dies.)
Enjoining Comptroller or receiver from further proceedings 518
Equity, bills in, against shareholders 521
Estates, liability of, as shareholders 242
Estimate of reserve requirements 410
Evidence. 703, 704
Examination of organization proceedings preliminary to granting authority to
begin business 319 ,
Examinations:
Annual, of bonds 310
Ascertainment of value of stock of dissenting shareholders 219
Assessment for 527
Bonds and records, provisions for 309
Compensation of examiners 527
Examiners to make 527
Expense of 527
Federal reserve banks 527
Foreign branches of national banks 210
Limitation of visitatorial powers 528
List of shareholders subject to 439
Member banks 527
National banks 527
Number to be made 527
Plates and dies, annually 328
Preliminary, to begin business 319
Preliminary, expense of 519
Qualification of examiners 527
Special, of extended associations 217
State banks and trust companies i>27
238 INDEX TO NATIONAL-BANK ACT, ETC.
Examiners: Paragraph.
Appointment of 527
Member bank not to make loan or grant any gratuity to 438a
Not to perform any service for compensation for any bank or officer 438b
Not to disclose name of borrowers or collateral without first obtaining
written consent of the Comptroller 438b
Powers of 527
Qualifications of 527
Reports of 527
Salaries of 527
Special commission 320
Exceptions:
Associations organized under the act of 1863 319
Converted State bank may continue to hold stock of other national banks.. 245
Converted State banks may retain branches 246
Converted State banks, par value of stock 245
Indebtedness of national banks, restriction on 427
Insolvent national banks not required to pay tax 450
Tax on obligations of United States 716
Tax on circulation secured by Panama Canal bonds 303
To limit on amount of loans 425
To restriction on amount of borrowed money 427
Excessive loans 425
Excess payment of tax on circulation, refunding of 449
Exchange, bills of, member banks of the Federal Reserve System may accept. . . 206
Exchange of bonds 323
Exchange of bonds to secure circulation 311
Exchange of certain United States bonds for Treasury gold notes by Federal
reserve banks 318
Exchange of coupon for registered bonds 305
Execution. {See Suit.)
Executor, power of national bank to act as 208
Executors, not personally liable 242
Existence:
Expiration of 221
Extension of 215
Reextension of 222
Term of corporate, of national banks 204
Expenditures on account of Panama Canal 767
Expenses:
Bureau of the Currency 327
Bureau, to be stated in Comptroller's annual report 110, 111
Circulation, redemption of 414
Circulation, transportation and redemption of retired 313
Duties of shareholders' agent relative to 522
Examinations 527
Examinations, dissenting shareholders 219
Examinations, special 217
Examiners 527
Liquidation of failed national banks Ill
Of examinations 527
Plates, cost of 220, 414
Plates and dies, examination of 328
Reappraisal for dissenting shareholders 219
Receivership, how paid 519
Receivership, paid prior to election of shareholders' agent 522
Sale of bonds 511
Sale of delinquent stock 227
Expiration of charter 221
Expired associations, penalty for issiung circulation of 747
Extension of charter 215
Extension of charter, provisiona for redemption of circulation 220
INDEX TO NATIONAL-BANK ACT, ETC. 239
F.
Failed national banks: Paragraph.
Redemption of circulation 505
Report of expenses Ill
Faihire {see Insolvency):
Of shareholder to pay installments 227
To hold election at appointed time 238
To make reports to Comptroller 443
To make return on circulation other than national 712
To pav up capital, assessment for 430
To redeem circulation 507
To redeem circulation of extended banks 220
False entry, penalty for, official malfeasance 436
Falsely certifying checks 434
Penalty for 435
Farm lands, loans on 205
Federal reserve agent:
Information concerning member banks to be famished Federal Reserve
Board by 527
Special examination of member banks to be approved by 527
Federal resers^e banks:
• Circulation may be issued to 317
Examination of 527
Examinations of, by Federal Reserve Board 440
Fiscal agents of IJnited States 6i5
Government depositaries 615
Government deposits in 244
Reserve required to be held with, by banks elsewhere than in reserve
cities 405
Reserve required to be held by reserve city banks 406
Reserve required to be held by central reserve city banks 407
Reserve, withdrawal of, by member banks 409
Special examination of member banks may be ordered by 527
Statements and reports by 440
Treasury gold notes may be obtained in exchange for certain United States
bonds 318
United States bonds, purchase of, by 316
Federal Reserve Board:
Approval required for exchange of United States bonds for Treasury gold
notes 318
Central reserve cities may be changed or added to, by 401
Comptroller of the Currency ex officio member of 101
Examination of Federal reserve banks ordered by 527
Examiners' salaries fixed by 527
Federal reserve banks may be required to purchase United States bond? by . 316
Federal reserve notes to be issued by Comptroller of Currency under the
supervision of 100
Information concerning member banks to be furnished by Federal reserve
agents 527
Interlocking directorate act as to banks and trust companies to be enforced
by 235
Issue of Federal reserve notes under supervision of 100
May change or add to central reserve cities 401
Permission for member bank to secure discounts for nonmember banks may
be granted by 408
Reduction of capital to be approved by 230
Reserve cities may be changed or added to by 401
Reserve withdrawals under regulations by -10!)
Special examination of member l^anks to be approved by 527
Statement? and reports from Federal reserve banks and member banks may
be reouired bv 440
240 INDEX TO NATIONAL-BANK ACT, ETC.
Federal reserve notes: Paragraph.
Comptroller of Cunency to issue, under supervision of Federal Reserve
Board 100
Execution of laws relating to 100
I ssue of 317
Federal Trade Commission, enforcement of part of interlocking directorate act
by 235
Fees {see Examiners; Receivers), protesting circulation 519
Fees not to be paid officers, directors, or employees of member bank 438
Piftb-Third National Bank, Cincinnati, Ohio, charter number changed 802
Filling vacancies 237
Fine. {See Penalty.)
Firm. {See Liability of association.)
First lien, United States has, on all assets 511
Fiscal agents {see Agent; Government depositaries). Federal reserve banks as.. 615
Five per cent redemption fund 414
Not counted as reserve 412
Foreign branches, national banks may establish 210
Foreign coins not legal tender 719
Issue of certificates on gold 754
Forfeiture of bonds when association refuses to redeem circulation 508
Forfeiture of charter, suit to be brought for, by Comptroller of the Currency 526
Forged signatures on bank notes not to prevent redemption of 417
Forgery of United States securities 740
Formation of national banking associations 201
Form of report of condition 440
Franchise, forfeiture of 526
Fraudulent notes. United States and national-bank officers to mark 748
Furniture for Currency Bureau 108
INDEX TO NATIONAL-BANK ACT, ETO. 241
G.
Paragraph.
Gain from failure to redeem circulation of extended banks 220
General fund of United States may be deposited in Federal reserve banks. . . . 615
Gifts, not to be made to officer, director, or employee of member bank 438
Gold:
Banks not required to take circulation of other banks at par 421
Certificates not to be issued when reserve of gold coin and bullion is depleted . 754
Certificates, when part of national-bank reserve 433
Circulation of gold banks redeemable in 341
Deposit of, for certificates 433, 754
Dollar, standard unit of value 749
Issue of certificates of deposit of 433, 754
Organization of gold banks 341
Reserve of one hundred and fifty millions 750
Reserve of gold banks to be silver and 342
Taxation of, gold certificates, etc., by State 717
Gold banks:
Circulation of, issuable 341
Conversion of 343
Deposit of bonds by 341
Exempted from provisions relative to other bank circulation 421
Organization of 341
Reserve required for 342, 401
Tax on circulation 444
Gold bank notes 341
Gold certificates:
Deposit of gold for _. 729, 754
Deposit of foreign gold coin for 754
Issue of, prohibited, when 729
Minimum denominations 729, 754
Payable to order 754
Receivable for 433,719,754
Gold coins:
Foreign, not legal tender 719
United States, legal tender 720
United States, legal tender in Philippine Islands 719
Gold notes, issue of, in exchange for certain United States bonds 318
Gold reserve in Treasury, gold certificates not to be issued when depleted 754
Government deposits 615
Government depositaries:
Deposit and withdrawal of public moneys 730
Deposits by certain postmasters 731
Designation and duties of 243
Federal reserve bank as 244
National banks as 243
National-bank circulation to be received by 243
National banks as financial agents of the Government 243
Penalty for misapplication of money-order funds 732
Penalty for unauthorized deposit of public moneys 737
Penalty for unauthorized receipt or use of public moneys 738
Reserves on. (See Federal Reserve act, pur. G19.)
Secretary of the Treasury to designate 243
Securities to be deposited by 243
Government's funds to be deposited, where *>15
Gratuity — Bank not to grant gratuity to any national-bank examiner 4:'^8a
Guaranty law :
Kansas 301
Oklahoma -'^^0
Guaranty of deposits by national banks - 903
Guaranty of solvency of bank ^^2
Guardian, power of national bank to act as 208
Guardians, not personally liable 242
1G4312°— 20 16
242 INDEX TO NATIONAL-BANK ACT, ETC.
H.
Hawaii: ^ Paragi-apli,
National banking laws applicable to 801
Reserve requirements, etc. , for national banks in 411
House of Representatives, Comptroller's report to be sent to 112
Hypothecation:
Of capital stock by directors restricted 233
Of circulation prohibited 428
Of stock by directors, prohibited 236
INDEX TO XATIONAL-BANK ACT, ETC. 243
1.
Paragraph.
Illegal preference of creditors 529
Illegal use of title "National " 530
Impairment of capital, assessment for 430
Import-s and internal taxes, duties on. may be paid by certified check 769, 770
Incomplete circulation (see also Circulation); Redemption of 417
Increa.'^e of capital 228, 229, 304
Individual liability, enforcement of 515
Individual liability of shareholders 240
Information concerning member banks to be furnished Federal Reserve Board
by Federal reserve agent 527
Injunction. {See Comptroller; Suits.)
Insolvency:
Assets, distribution of, by receiver 517
Expenses incident to. report of Ill
Funds of, where deposited 515
Impairment of capital 430
Jurisdiction of courts to enjoin Comptroller 701
Jurisdiction of national-bank cases 214, 218
Notice to creditors of associations in 516
Penalty for issuing circulation of associations in 747
Preference of creditors 529
Receiver, appointment of 515
Receiver, duties of 515
Receiver, when may be appointed 51 5, 520
Redemption of circulation of associations in 505
Shareholders' agent 522
Taxes on banks in, remitted 450, 715
Inspection of list of shareholders 439
Installments, capital stock may be paid in 226
Installments, failiu-e to pay 227
Insiu"ance agent, when national bank may act as agent for insurance company. . 209
Insvu-ance company, insurance of solvency of bank by 902
Insurance of deposits by national banks 903
Interest-bearing Treasury notes are legal tender 727
Interest in national banks prohibited:
By Comptroller 106
By Deputy Comptroller 106
Interest. {See also JJsury):
On bonds deposited with Treasurer 311
Rate of, chargeable by national banks 422
Interlocking directorates, when forbidden 234, 235
Internal Revenue, Commissioner of:
Penalty for failure to make returns to, of taxable circulation 712
Remission of tax against insolvent State banks 450, 715
Semiannual retiu-n to. of taxable circulation other than national 711
Internal taxes, certified checks receivable for, under certain conditions 770
International bimetalism, act March 14, 1900, relative to 762
Interstate Commerce Commission, enforcement of act in reference to interlock-
ing directorates, as to common carriers, by 235
Issue and Redemption Di^isions established, Treasurer's Ofhce 752
Issue of:
Circulation by Comptroller of Currency 323
Circulation to Federal reserve banks 317
Gold certificates 433
Gold certificates and gold certificates payable to order 754
Gold notes, provision for 34 1
Notes under |5 limited 329
Post notes, etc. , prohibited 338
Silver certificates 755
Treasury gold notes in exchange for certain United Statci bonds 318
Issuing circulation of expired associations, penalty for 747
Isthmian Canal Commission, estimate of cost of Panama Canal 767
244 INDEX TO NATIONAL-BANK ACTj ETC.
J.
Judgment (see also Suits): Paragraph,
Appointment of receiver when judgment obta,ined against bank 520
Illegal preference of creditors : 529
Jurisdiction {see Crimes J lurisdiction, etc.) of suits by or against national banks. 218, 423
K.
Kansas, deposits guaranty law 901
INDEX TO NATIONAL-BANK ACT, ETC. 245
li.
Larceny. (See Crimea, juriadiction, etc.)
Lawful money: Paragraph.
Defined 342, 414
Defined for gold banks 342
Deposit of, to retire United States bond-secm'ed circulation 312, 313, 314
Exemption of circulation from taxation, when, deposited 706
Expiring associations to deposit 221
Extended banks to deposit 220
Five per cent fund 414,416
Forfeiture of bonds for failure to redeem circulation in 508
Limit of amount, to be deposited monthly 314
Liquidating associations to deposit 502
Liquidating associations, consolidating not to deposit 503
Payment of protested circulation in 510
Protest of circulation for failure to redeem in 507
Receiver to be appointed for failure to maintain reserve of 402
Redemption account, disposition of 416
Reserve to be 402
Withdrawing circulation, deposit of 312, 313, 314, 414
Lawful-money reserve, determined by deposits 342, 410
Legal-tender coins, Philippine Islands 719
Legal tender:
Foreign coins not accepted as 719
Gold coins 720
Minor coins 724
Silver dollars 722, 751
Subsidiary silver coins 723
United States notes 725, 726, 727
Liability:
Association's, for pledging, etc., United States notes, etc 432
Converted State bank, for old notes 713
Creditor's bill against shareholders 521
Enforcement of individual, by receiver 515
Estates owning stock subject to 242
False certification of checks 434
Individual, of directors 526
Individual, of shareholders 240
Limited to amount of capital, except 427
Of stockholders who have transferred their shares 241
Shareholder's, debars from voting 231
Shareholders of certain banks exempt from 240
Trustees, exempt from, when 242
Liabilities:
Associations organized under the act of February 25, 1863 247
Change of title or location not to affect 212, 213
Comptroller's annual report to contain statement of national banks 110
Converted State banks 713
Deficiency in reserve not to increase 402
Deposit of lawful money relieves from, on circulation 504
Duties of receiver 515
Exceptions to limitation 427
Extended associations 218
Incurred under provisions of Federal reserve act, not considered borrowed
money 427
Limit of, for national banks 427
Liquidating associations, on consolidation ?>0:l
Loans, restrictions on 425
Reports of condition to show 440
Restrictions on 427
Statements of condition to show 440
To stockholders for unpaid dividends not considered borroweil mimey 427
Lien, United States has paramount, on assets of association 611, 769
246 INDEX TO NATIONAL-BANK ACT, ETC.
Limitations: Paragraph.
Associations, corporate existence 204
Bonds, vrithdrawal of 311, 312
Borrowed money not to exceed capital 427
Capital, converted State banks 245
Capital stock^
Increase of 228, 229
Payment of . . 226
Reduction of 230
Requisite amount of 224
Circulation —
Denominations 324
Deposit of lawful money on withdrawing 312
Exempt from tax, when 706
Obtainable 323
Obtainable by gold banks 341
Tax on 444, 714
To be taken at par 421
Unauthorized, tax on 708-710
Corporate existence of converted gold banks 343
Creditors of insolvent banks, notice to 516
Creditors of insolvent banks, illegal preference 529
Directors, number of 232
Dividends 424, 429
Expiration of corporate existence 221
Extension of corporate existence 215, 222
Gold certificates, denominations of 433
Impairment of capital 430
Interest rate _ , . . 422
Isssue of notes under $5 329
Jurisdiction, general, of national-bank cases 214, 2l8, 701
Lawful money deposited to retire circulation 313
Liability of national banks 427
Location of associations, change of 211
Loans to one individual, etc 425
"National," in title of bank 530
Place of business 400
PubUc depositaries 243
Real estate holdings 223
Reserve, gold banks 342
Receiver, appointment of 520
Receiver, purchase of property to protect trust 523
Reports of condition, transmitted 440
Reports of earnings and dividends, transmitted 442
Reserve requirements 402
Reserve with central reserve agents 401, 405, 406
Reserve with Federal reserve banks 405
Reserve with reserve agents 402, 405
Shareholders, personal lial>ility of 240
Shareholders, personal liability of shareholders of certain converted banks. . 240
Shares of stock, par value 225
Shares of stock, directors to own 233
State taxation of money 717
State taxation of national banks 451
Stock purchased or acquired 426
Suits, conduct of 700
Time for which own stock taken for debt may be held 426
Time in which recovery may be made for usurious interest charges 423
United States bonds deposited 302
Visitorial powers 528
Voluntary liquidation, vote 500
Voluntary liquidation, deposit of lawful money 502
Voters at elections 231
INDEX TO NATIONAL-BANK ACT, ETC. 247
Liquidation: Paragraph.
Bonds withdrawn 504
Creditor's bill against shareholders 521
Consolidation 503
Expiring associations to comply with provisions for 221
Lawful money to be deposited 502
Notice of, to be published 501
Penalty for issuing circulation of associations in 747
Redemption of circulation of associations in 505, 506
Sale of bonds, when 504
Vote required 500
Liquidation and receivership {see also Iif|uidation; Receiver):
Bonds, deficiency in, first lien on assets for redemption of circulation 511
Bonds, forfeiture of 508
Bonds, sale of, at auction 511
Bonds, sale of, privately 512
Bonds, withdrawal of 504
Charter, forfeiture of 526
Circulation , protest of 507
Consolidation, provisions for 503
Creditor's bill against sharehold?rs 521
Deposit of collections by receiver 515
Deposit of lawful money on liquidation 502
Distribution of assets of insolvent associations 517
Enjoining proceedings 518
Enjoining proceedings, where brought 702
Expiring associations 221
Illegal preference of creditors 529
Jurisdiction, general, of national-bank cases 214
Jurisdiction of district courts 701
Notice of vote to Liquidate 501
Notice to creditors of insolvent associations 516
Notice to present circulation for redemption 510
Penalty for issuing circulation of expired associations 747
Receiver, appointment of 515
Receiver, purchase of property to protect trust o2:i
Receiver, when may be appointed 520
Receivership, expenses of 519
Shareholders' agent, appointment of 522
Shareholders' agent, duties of 522
Suits, conduct of 700
Suspension of business for nonpayment of circulation 509
Taxes on insolvent associations remitted 450, 715
Vote required for liquidation 500
List of shareholders 439
Loans :
Associations' liability restricted 427
Bank not to grant loan to any national bank examiner 438a
Circulation as collateral for, restricted 428
Limitation of, to one individual, etc 425
No officer, director, or employee to receive any commission for any loan. . 438c
On farm lands 205, 223
Prohibited on security of own stock 426
Prohibited when reserve is short 409
Real estate, prohibited 223
Location (see also Title and location):
Change of 21 1, R()3
Of banking house -'OO
Organization certificate, to state 202
Losses, bad debts and, to be deducted from profits before declaring dividend . . 429
Lost or stolen national-bank notes, redemption of 417
248 INDEX TO NATIONAL-BANK ACT, ETC.
M.
Maii-eration; ^ Paragraph.
Redeemed circulation to be disposed of by 340
Redeemed circulation of failed and liquidated banks to be disposed of by . 506
Management by directors 232
Maximum. (See Bonds; Capital; Circulation; Limitations.)
May change name and location, how 211
Meetings, annual 232
Member bank examiners 527
Member banks:
Depositaries of United States 615
Examinations by Federal Reserve Board 527
Limit to deposit that may be kept with nonmember bank 408
Officer, director, or employee not to receive any fee, commission, etc 438
Prohibited from securing discounts from Federal reserve banks for non-
member banks 408
Pro\'isions for national banks outside of continental United States to become 411
Reserve requirements 403-412^13
Reserve, withdrawal of, from Federal reserve banks 409
Statement and reports by 441
Method of refunding United States bonds as permitted by Federal reserve act. 316
Minimum (see Bonds; Capital; Circulation; Limitation) amount of capital 224
Minor coins:
Philippine Islands, legal tender 719
United States, when legal tender 724
Misapplication :
Money-order funds 732
Penalty for 436
Misdemeanor. (See Crimes; Penalty; Official malfeasance.)
Money-order funds, misapplication of 732
Moneys. (See Lawful money; Legal tender; Circulation; Public moneys.)
Monthly installments, capital may be paid in 226
Mortgages:
Assignment of, when illegal 529
Assignment, when official malfeasance 436
Real estate, possession, etc. , of, by association 223
Mutilated, circulation of failed and liquidated to be 506
Mutilated or worn circulation, redemption of 339,414
INDEX TO NATIONAL-BANK ACT, ETO. 249
N.
Paragraph.
Name, change of, by national bank 211, 803
Name of association to be approved of by Comptroller of Currency 202
National, use of the word, in titles of associations other than national, prohibited. 530
National -bank act:
Authority for title 200
Provides for a national currency, etc 200
Status of national banks organized under the act of February 25, 1863 247
National -bank examiners 527
National Banking Association defined 300
National Banking Associations:
Acceptance of drafts and bills of exchange 206
Amendment of articles of association restricted 225
Articles of association entered into by 201
Borrowed money restricted 427
Branches may be retained by converted State banks 246
Capital required 224
Cancellation of redeemed circulation 514
Certificate of officers and directors 319
Change of name and location 803
Change of title and location 211-213
Charter forfeiture 526
Charter number to be printed on circulation of 325
Circulation obtainable by .- 323
Circulation of, tax on 444-450, 717
Circulation of, to be redeemed in United States notes 414
Circulation to be taken at par 421
Circulation of, for what receivable 337
Circulation unsigned or with forged signatures to be redeemed 417
Closed bank circulation 505, 506
Comptroller and Deputy Comptroller not to be interested in, issuing circu-
lation 106
Consolidation, no deposit required for circulation of liquidated banks 503
Conversion of State banks into 245
Corporate and incidental powers of 204
Defined 300
Depositaries of public money 243
Deposit of bonds by. requirement repealed 302
Directors of, individually liable, when 526
Directors, number and election of 232
Directors, oath of 236
Directors, qualifications of 233
Election, holding annual 232, 238
Enjoining proceedings 518
Examination of, prior to being authorized to begin business 319, 320
Examiners of 527
Excepted from certain taxes on circulation 714
Expiration of corporate existence, provisions on 221
Extended bank circulation 220
Exchange of bonds 305
Extension of corporate existence of 215, 217
Foreign branches 210
General provisions respecting bonds 311
Gold bank circulation, provisions for issuing 341
Gold banks may be organized 34 1
Gold banks, conversion of 343
Increase of capital stock by 228, 229
Insurance or guaranty <>f deposits by 903
Lending on own stock prohibited 426
250 INDEX TO NATIONAL-BANK ACT, ETC.
National Banking Associations — Continued. Paragraph.
Liquidating bank circulation 502-506
Liquidation, provisions for 500-504
Loans on farm landa 205
Loit or stolen notes of, to be redeemed 417
Not required to deposit United States bonds 302
Organization certificate to specifically state 202
Payment of stock prior to beginning "business 226
Place of business 400
Political contributions prohibited 437
Post notes, issue of, prohibited 338
Power to act as trustee, administrator, executor, or registrar of stocks and
bonds 208
Power to insure solvency of bank 902
Preparation of bank circulation 324
President of, to be chosen by board 239
Publication of certificate of authority 321
Purchasing own stock prohibited 426
Receiver may be appointed for failure to restore capital 227
Reduction of capital stock 230
Receiver for, when may be appointed 520
Redemption and destruction of circulation of 339, 340, 414
Redemption account, disposition of 416
Regulation of business of 400
Relation of bond deposit to capital of 304
Reserve requirements 403-412
Reserve requirements outside of continental United States 411
Security for circulation 302. 303
Shares of stock 225
Shareholders of, qualifications of, at election 231
Shareholders' agent 522
Shareholders of, personally liable 240
Shareholders of, when not personally liable 240
Status of, organized under the act of February 25, 1863 247
Subscribed stock not paid for, forfeited to 227
Suspension of business after default to pay circulation 509
Taxation of circulation of, by States, etc 716, 717
Tax provisions restricted 714
Taxes on insolvent, remitted 450, 715
Transfer of shares of stock 241
Where proceedings to enjoin must be brought 702
Withdrawing circulation 312, 313, 314
National banks deemed citizens of States in which located 214
National banking laws applicable to Hawaii 801
National banking laws applicable to Porto Rico 800
National-bank notes obligations of the United States 739
National-bank notes, penalty for counterfeiting 714
Newspaper:
Certificate of authority to commence business to be published in 321
Election notice to be given in 238
Impairment of capital, notice to be published in 430
Liquidation notice to be published in 501
Notice of meeting to elect shareholders' agent to be published in 522
Notice to creditors of insolvent banks to be advertised in 516
Reports of condition to be published in 440
Sale of stock of delinquent shareholders to be published in 227
New York City:
Associations in, reserve agents 402. 420
Bonds of liquidated banks that failed to make deposit, to be sold in 504
Bonds, sale of forfeited, in 511
Designated as central reserve city 401
Notice of expiration of corporate existence to be published in paper in 221
Notice of voluntary liquidation to be published in paper in 501
Met profits, (See Dividefida.)
INDEX TO NATIONAL-BANK ACT. ETC. 251
Nonmember banks: Paragraph.
Amount of deposit that may be kept with, by member banks, restricted . . 408
Discounts from Federal reserve banks not allowed through member banks. . 408
Reserve requirements for national banks that are 411
Nonresidents:
Directors 233
State, etc. , taxation of stock of 451
No release from liabilities by change of title or location 213
Notary public:
Acknowledgment of organization certificate before 203
Acknowledgment of reports 440-442
Protest of circulation by 507
Notes {see Circulation) of the United States are legal tender 725-727
Notice {see Publication; Printing):
Creditors of insolvent banks to present claim 516
Of election 238
Of sale of bonds 511
Of transfer of bonds to be given association 308
To present circulation for redemption when bonds have been forfeited 510
Notification of redemption of circulation by United States Treasurer 414
Number of:
Central reserve cities 401
Copies of annual report 112, 113
Examinations to be made 527
Reports of condition that may be called for 440
Null and void , illegal preference 529
252 INDEX TO NATIONAL-BANK ACT, ETC.
O.
Oath: Paragraph.
Certificate of officers and directors 226, 319
Directors 236
Examiners may take statement under 527
Execution of organization certificate 203, 245
Official, by Comptroller 102
Official, by Deputy Comptroller 103
Payment of installments 226
Reports of condition, and earnings and dividends 440-442
Semiannual return of circulation 446
Shareholders, list of 439
Obligations of the United States:
Defined 739
Exempt from taxation 716
Penalty for —
DeaUng in counterfeit 746
Illegal possession or use of material for 742
Passing counterfeit 743
Pledging 432
Taking or having unauthorized impression of tools, etc 745, 746
Office force for redemption of circulation 415
Officers {see also President; Cashier):
Bonds assigned to be signed by cashier or other 306
Certificate of directors and 319
Certificate of pajonent of increase of stock 228
Certification of payment of stock by president or cashier 226
Circulation properly signed by, issuable 337
Disqualified to examine national banking associations in which interested
as 527
Election or appointment of, by directors 204
Examination of, under oath 527
False certification of checks, forbidden 434
Forfeiture of charter, pro\'isions for 526
Forged signatures of, to circulation, not to invalidate 417
Fraudulent notes to be marked by 748
Interest rate of paid officers 438e
Oath, administration of, to reports 441
Official malfeasance, penalty for 436
Penalty for false certiication of checks 435
Penalty for improperly countersigned, etc., circulation 344
Penalty for issuing circulation of expired associations 747
Penalty for official malfeasance 436
Penalty for pledging, etc., circulation 432
Penalty for political contributions 437
Penalty for receiving commission for a loan 438c
Penalty for unauthorized receipt of public money 738
Preference of creditors 529
President of board a director 239
President or cashier —
Certification of extension 216
Certification of expiration of existence 221
Certification of liquidation 501
Waiving notice of protest 507
President or vice president and cashier to sign circulation 324
Proxy, not to act as 231
Receiver, appointment of, for violation of national-bank act by 520
Redemption of unsigned circulation 415
Reports of condition, verification of, by president or cashier 440, 441
Reports of earnings and dividends, attestation of, by president or cashier . . 442
Shareholders ' lists verified by president or cashier 439
Taxation, circulation subject to, returns by president or cashier. 446
Taxation, unauthorized circulation, returns by president or cashier 711
Officers, United States:
Deposit and withdrawal of public money 730
Penalty for improper countersigning or delivering circulation 344
Penalty for unauthorized deposit of public money 737
Receiving or disbursing public money to mark fraudulent 748
Offices, vaults, e'ic, assignment of, to the Comptroller by the Secretary 108
INDEX TO NATIONAL-BANK ACT, ETC. 253
Official: Paragraph.
Malfeasance, penalty for 43^
Register, information for m
Seal of Comptroller of the Currency 107
Oklahoma, deposit guaranty law 900
Organization and powers of national banks:
Amendment of articles of association 225
Articles of association 201
Branches of converted State banks 246
Capital stock 202
Capital stock requirements 224
Certificate of authority to begin business ' 320
Certificate of officers and directors 319
Change in title and location 211
Conversion of gold banks 343
Conversion of State banks 245
Corporate powers 204
Deposit of bonds 302
Directors, election of 238
Directors, number and election of 232
Directors, oath of 236
Directors, qualification of 233
Directors, to choose president 239
Directors, vacancy, how filled 237
Enforcing payment of stock 227
Examination preliminary to beginning business 319
Execution of organization certificate 203
Extension of corporate existence 215
Failure to hold election 238
Gold banks, conversion of 343
Gold banks, organization of 341
Incidental powers 204
Increase of capital stock, provisions for 228. 229
Increase of capital stock, when vaUd 228
Liquidation 500
Location and title, change of 211
Location 202
Organization certificate 202
Payment of stock 226
President, election of, by board 239
President, qualification of 239
Publication of certificate of authority to begin business 321
Reduction of capital stock, pro^dsions for 230
Restoration of capital stock 227
Shareholders 202
Shareholders, personal liability of 240
Shareholders, qualification of, at electiop 231
Shareholders, when personally liable 240
Shares of stock 225
State banks, conversion of 245
State banks, converted, may retain branches 246
Status of associations organized under act of Feb. 25, 1863 247
Title 202
Title and location, change of 211
Vacancies in board, how filled 237
Organization certificate:
Acknowledgment of 203
Certified copy of, evidence 704
Comptroller to grant or withhold 320
Conversion of gold banks 343
Conversion of State banks 245
Execution of 203
Sealed certificate of Comptroller, evidence. . "03
Specifications in 202
Other bonds to secure deposits 243
Other real estate owned - • 223
Other cities may be designated as central reserve cities 401
Other reserve cities. {See Reserve cities.)
Overdue paper "^^
254 INDEX TO NATIONAL-BANK ACT^ ETC.
P.
Panama Canal bonds: Paragraph.
Additional issue 767
Available and nonavailable as security for circulation 303, 768
Issued under act Aug. 5, 1909, not receivable as security for circulation. . 768
Tax on circulation secured by 303, 444
Panama, reserve rec^uirements, etc., for national banks in 411
Paper for printing circulating notes 326
Paper used for United States securities, penalty for use of without authority.. . 742
Par, bonds not to be sold at less than 512
Par, national banks to take notes of other national banks at 425
Par value of capital stock of converted State banks 245
Par value of stock 225
Passing counterfeit circulation, penalty for 743
Past due paper 429
Payment of:
Assessment for impaired capital 430
Capital stock, provisions relative to 226
Claims against insolvent banks 517
Tax on circulation - 444
Tax on circulation other than national 710
Payments for:
Purchase of property by receiver provided for 525
Whidi national bank notes are receivable 337
Penalty:
Appointment of receiver for violations of act 515, 520
Bond of Comptroller 102
Bond of Deputy Controller 103, 104
Circulating notes less than $1, issue of 718
Commission, penalty for receiving commission for a loan 438c
Counterfeiting circulation, etc 740, 747
Dealing in counterfeit circulation 746
Embezzlement, abstraction, willful misapplication, false entries, etc 436
False certification of checks ^ 435
Failure to make reports 443
Failure to pay installment on stock 227
Failure to redeem circulation 508
Forfeiture of charter for violauons of bank act 526
Forging or counterfeiting United States securities 740
Illegal possession or use of material for circulation 742
Imitating bank circulation for advertising purposes 345
Improper countersigning or delivering circulation 344
Interest, unlawful 423
Interlocking directorates T 235
Issuing circulation of expired associations 747
Jurisdiction of the United States courts 214, 218
Mutilating circulation 346
Misapplication of money-order funds 732
"National," unlawful use of the word 530
Official malfeasance 436
Passing counterf ei t circulation 743
Pledging United States notes or bank circulation 432
Keports to Comptroller, failure to make 443
Reserve, maintenance of 402
Reserve, shortage «. 409
Semiannual return of circulation, failure to make 446-449
Taking or having unauthorized impression of tools, etc 744, 745
Unautliorized deposits of public money 737
Unauthorized receipt or use of public money 738
Usury 422,423
Violations of any of the provisions of the bank act 526
Violations of section 22, Federal reserve act 438f
Period for which real estate may be held 223
Personal liability. (See Shareholders; Tnistees; Liability.)
Personal property, shares of stock of national banks taxed as 451
Philippine Islands, legal-tender coins — 719
INDEX TO NATIONAL-BANK ACT, ETC. 255
Philippine Islands; Paragraph.
Public funds in the United States to be deposited in member banks 615
Reserve rec^uirements, etc., for national banks in 411
Photographing United States securities without authority, penalty for 742
Place of business, organization certificate to state 202, 400
Place for redemption of circulation 414
Place where proceedings to enjoin Comptroller must be brought 702
Place where tax on shares in national banks is to be paid 451
Places where circulation may be redeemed 414
Plates:
Control of 327
Cost of engraving 220, 327, 414
Custody of 108
Engraving of 324
Examination annually 328
Expense of examination and destruction of 328
Extended banks 220
Liquidating bank, to be destroyed 328
Penalty for counterfeiting or having jtossession of counterfeit 742, 744
Penalty for taking unauthorized impression of tools, etc 744
Penalty for having false impressions of tools, etc 745
Pledging or hypothecating circulation prohibited 428
Political contributions prohibited 437
Population, relation of capital stock to 224
Porto Rico:
National banking laws applicable to 800
Reserve requirements, etc., for national banks in 411
Postal savings funds to be deposited in member banks 615
Postmasters;
Deposit of public funds by 731
Misapplication of money-order funds by . 732
Postmaster General, deposit of funds by authority of 732
Post notes, national banking associations prohibited from using 338
Power:
Comptroller to assess fine for failure to make reports 443
Of attorney to receive interest on bonds 311
Of national banks to act as trustee, executor, etc 208
Of national banks to insure deposits 903
To hold real property 223
Powers {see also Comptroller):
Granted to national banks 204
Incidental, of national banks 204
Of examiners 527
Of national banks to insure solvency of bank 902
Receiver 515. 523
Shareholders' agent 522
Trust company, powers of national banks 208
Visitatorial, limitations of 528
Preference :
In allotment of shares in aucceeding association 219
Of creditors illegal 529
Preliminary examinations, expense of 519
Preparation of circulation, provisions for 324
President (see also Officers):
Certificate of officers and directors 319
Certificate of stock payment 319
Countersigning or delivering circulation improperly 344
Director to be 239
Election or a])pointment of, by directors 201. 239
False certification of checks by, and penalty for 434. 435
Liquidating bank, duty in 501
Of the board, election of 239
Official malfeasance, penalty for " 436
Proxy, not to act as 231
Public money, unauthorized receipt of , by 738
Reports of condition, verified by 440
Reports of earnings and di\adends to be verified by 442
Signature of, forged, not to invalidate circulation 417
256 INDEX TO NATIONAL-BANK ACT, ETC.
President (see also Officers) — Continued. Paragraph.
Signature of, on circulation 324, 337
Violations of act, by, penalty for 436, 526
President of the United States, appointment of Comptroller by 101
Printing:
Annual report of the Comptroller, number printed and distribution of. . 110-112
Certificate of authority to begin business 321
Charter number on circulation 325
Circulating notes on distinctive paper 326
Circulation of associations 324
Circulation of extended banks 220
Creditors of insolvent associations, notice to 516
Notice of special annual election 238
Notice of sale of delinquent stock 227, 430
Notice of sale of bonds at public auction 511
Notice of liquidation 501
Notice of expiration 221
Peralty for counterfeiting circulation 741
Penalty for illegal piossession or use of material tor circulation 742
Penalty for imitating circulation 345
Penalty for taking or having unauthorized impression of tools, etc., for . . . 744, 745
Reports of condition 440
Shareholders agent, notice of election of 522
Voluntary liquidation, notice of. . 501
Private sale of bonds to secure circulation 512
Proceedings:
If shareholder fails to pay installments 227
To enjoin Comptroller 701, 702
Where no election is held on the proper day 238
Profits, undivided, not considered borrowed money 427
Prohibitions:
Borrowed money in excess of capital 427
Business not to be transacted until authorized by Comptroller 204
Circulation, pledging of 428
Comptroller or Deputy Comptroller from being interested in any association
issuing national currency 106
Counterfeiting, etc _. 740, 746
Deposit of Government money in banks not belonging to Federal Reserve
System 244
Imitation of circulation 345
Interlocking directorates ._ 234
Issuing circulation to unauthorized associations 344
Loaning on own stock 426
Loans in excess of a certain limit 425
Member bank limited in amount of deposit with, and forbidden to secure
discounts from. Federal reserve banks for nonmember banks 408
Mutilation of circulation 346
National-bank notes not to be used as security for loans 432
Notes less than $1 718
Officers of bank not to administer oath for reports of condition 441
Political contributions 437
Postmasters not to receive interest on deposits 731
Posts notes, issue of 338
Public funds of Philippine Islands, postal savings or any Government
funds not to be deposited in banks other than member 615
Purchase of own stock 426
Heserve shortage 409
Restriction as to visitatorial powers 528
Sale of bonds for default of payment of circulation at less than par 512
Unauthorized deposit of public money 737
Unauthorized receipt of public money 738
Uncurrent notes not to be put in circulation 431
United States notes not to be used as security for loans 436
Use of title "National" 530
Using plates to print notes without authority 742
Usurious rate of interest 422
Voters at elections 231
Withdrawal of capital 421
INDEX TO NATIONAL-BANK ACT, ETC. 257
Paragraph.
Proof of publication, report of condition 440
Protest of circulation:
Bonds forfeited, when 508
Bonds, sale of, when 51 1 . 512
Failure to redeem circulation 507
Provisions :
Appointment of receiver 51 5
Assessment when bank fails to make return on circulation 447
Dividends 424
Enforcing payment of tax on circulation 448
Examination of bonds and records 309-311
Excess payment of tax on circulation, refunding of 449
Federal Tleserve Board to sell United States bonds to Federal reserve
banks 316
For changes in deposit of bonds 304
For deposits by disbursing officers 730
For deposits by postmasters 731
For destruction and replacing of circulation 339, 340
For liquidation of banks at expiration of charter 221
For national banks outside the continental United States to become mem-
ber banks 411
For obtaining circulation 323
For organization of gold banks 341
For redeeming circulation 414
For redemption of circulation when charter is extended 220
For reimbursement of expenses for redemption of circulation 415
For withdrawal of circulating notes 312
Gold certificates, issue of 433
Impairment of capital 430
Inspection of list of shareholders 439
Liquidation 500. 501
Of articles of association 201
Of by-laws 204
Payment of tax on circulation 444
Reports of condition 440
Respecting bonds, general 311
Retirement of circulation by sale of United States bonds 315
Shareholders' agent, election of 522
Surplus 424
To be complied with before commencing business 302. 319
Proxies authorized 231
Proxies can vote for shareholders' agent 522
Publication (see also Printing) :
Annual election, notice of holding special 238
Certificate of authority to begin business 321
Creditors of insolvent associations, notice to 516
Nonpayment of circulation, notice to present 510
Reports of condition of national banks 440
Sale of bonds, notice of 511
Sale of delinquent stock, notice of 227, 430
Shareholders' agent, notice of election of 522
Voluntary liquidation, notice of 501
Public debt, national-bank circulation receivable for, with certain exceptions. 337
Public deposits (see alio Deposits) :
Banks to ^ve security for 243
Duty of disbursing officers 730
Duty of postmasters 731
Postmasters 731
Purchase of real estate 223
Public dues, certified checks receivable for, under certain conditions 770
PubUc sale of stock purchased from dissenting shareholders 219
Pulp from macerated circulation 340
Purchasing own stock prohibited 426
Purchase of property by receiver ■'•'2-'>, 525
Purchase of Umted States bonds by Federal reserve banks 316
Purpose of organization certificate to be stated therein 202
iUWTJ''— 20 17
258 INDEX TO NATIONAL-BANK ACT, ETC.
Q.
Qualification: Paragraph.
Comptroller of the Currency 102
Deputy Comptroller 103
Directors of national banks 233
Examiners of associations 527
Shareholders' agent 522
Quarters for Currency Bureau 108
INDEX TO NATIONAL-BANK ACT, ETC. 259
R.
Rate. [See Interest; Tax; Usury.) Paragraph.
Kate of interest which may be charged 422
"Ratio. (See Bonds; Capital and circulation.)
Real estate:
Investments and holdings restricted 223
Loans on, permitted with certain restrictions 205
Mortgages, limited 223
Subject to State, etc., taxation 451
Real estate broker, when national bank may act as broker in procuring loans
on real estate 209
Reassignment of bonds, liquidating bank 504
Receipt for bonds transferred 306
Receiver:
Appointment and duties of 515
Appointment of —
For failure to dispose of own stock 515
For failure to restore diminished capital 515
For false certification of checks 515
For nonpayment of circulation 515
For impairment of capital 515
For insolvency 520
For nonmaintenance of reserve 515
When capital reduced by failure to pay installments 227
Courts may enjoin 518
Deposit of collections by 515
Expenses of, how paid 519
General jurisdiction of national-bank cases 214
Jiirisdiction of district courts to enjoin Comptroller or 701
• National bank as receiver under trust company powers 208
Purchase of property by, to protect trust 523
Receiverships. (See Liquidation and receivership; Receiver.)
Rpcoinage of uncurrent subsidiary silver 757
Records, regulations for redemptions 513
Red Cross, subscriptions to 771
Redeeming circulation 414
Redemption:
Cancellation of circulation sent for 514
Deposit of lawful money for, of associations in liquidation 502
Division, Treasurer's Office, established 752
Disposition of, account 416
Enjoining Comptroller 518
Extended bank circulation 220
First lien on assets 511
Five per cent fund for—
To be maintained 414
Not part of lawful reserve 412. 414
Forfeitiu'e of bonds 508
Forged signatures not to prevent 417
General provisions respecting 414
Incomplete circulation 417
Issue and Redemption divisions established 752
Lawful money, of circulation 414
Liquidating bank circulation 504, 505
Lost national-bank notes 417
Notice to present circulation for 510
Of circulating notes issued prior to extension 220
Of circulation, place for 414
Proceeds from sale of bonds for, of circulation 504
Profit on circulation not presented for 220
Protest of circulation, for failure to redeem 507
Records of 513
Retirement account 416
260 INDEX TO NATIONAL-BANK ACT, ETC.
Redemption — Continued. , Paragraph.
Sale of bonds 511, 512
State bank circulation 706
Stolen national-bank notes 417
United States notes, of circulation, in 414
United States and Treasury notes, to be in gold 750
Unsigned circulation to be redeemed 417
Withdrawn circulation. 312. 313
Worn or mutilated circulation 339, 340
Redemption account, disposition of 414
Redemption of United States notes, gold coin and bullion to be set apart as
reserve for 750
Reduction of —
Bonds to secure circulation 311
Capital 230, 304
Circulating notes 313
Reextension of charter 222
Refunding —
Bonds under provision of Federal reserve act 315
Excess payment tax on circulation 449
Of United States bonds 759
Of United States bonds under Federal reserve act 315
Register of the Treasury, signature on circulation 324
Registered bonds, intended by term "United States bonds " 301
Registered bonds, exchange of coupon bonds for 305
Registrar of stock and bonds, power of national banks to act as 208
Registry of transfer of bonds 307
Regulations for exchange of bonds 323
Regulations for redemption records 513
Regulation of banking business:
Assessment, enforcement of 430
Circulation, improper use of 428
Dividends 424
Dividends prohibited, when 429
Examiners, appointment of 527
Examiners, compensation of 527
Impairment of capital 430
Interest, limited 422
Interest, unlawful, penalty for 423
Laws governing certain associations 300
Liability of association restricted 427
Loans, restrictions on 425
Net profits 424
Place of business 400
Real estate, purchasing, etc 223
Reports of condition 440
Reports, failure to make 443
Reports, verification of 441, 442
Reports of dividends and earnings 442
Reserve cities 402
Reserve cities, balances with agents 406
Reserve cities, central 401, 402
Reserve cities, requirements 402
Reserve requirements, gold banks 342
Shareholders, list of 439
State taxation of associations 451
Stock, holding, etc 426
Sxirplus and dividends 424
Uncurrent notes, use of, prohibited 431
Unearned dividends prohibited 429
Visitatorial powers, limitation of 528
Reimbursement (see Circulation; Expense; Plates and dies) of expenses for
redemption of circulation 415
Removal of Comptroller of the Currency 101
Replacing worn-out and mutilated circulation 339
INDEX TO NATION AL-BANK ACT, ETC. 261
Reports: Paragraph.
Amendments proposed in Comptroller's annual 110
Annual, number to be printed 112. 113
Annual, to be made to Congre.s.s 110
Banks' , other than national 110
Circulation, semiannual return of 446
Closed banks 1 10. 1 II
Condition of national banks in annual 110
Distribution of annual 112. 113
Dividend.s and earnings 442. 443
Failure to make, to Comptroller 443
List of shareholders 439
Of examiners 527
Payment of capital stock 226, 227
Printed, number of copies of annual 112, 113
Receiver, to Comptroller 515
Statement of condition of national banks, Federal reserve banks, and
member banks 440. 441
Requirements prior to commencing business 319
Requisite:
Amount of capital 224
Qualifications of directors 233
Requisites of organization certificate 202
Reser\-ation of rights of associations organized under act of 1863 247
Reser^•e :
Clearing-house certificates 402
Deposits to govern amount of 410
Determined by deposits, not circulation 402
Federal reserve banks, that may be held with 405-407
Five per cent fund not counted as 412. 414
Gold and silver, held by gold banks 342
Gold certificates 433
Lawful money 402, 414
Maintenance of 402
None required to be held against United States deposits 413
On circulation not required 402
Penalty for failure to maintain 402
Proportion of, with agents 401, 405, 406
Proportion of, with Federal reserve bank 405
Requirements 402-412
Required to be held with Federal reserve bank 407
Requirements for gold banks 342
Silver certificates 729
Withdrawal of, from Federal reserve bank 409
Reserve agents (««€ afeo Agent), balance with 401, 405. 406
Reserv^e cities:
Additional, provisions for 401, 402
Cash reserve required 406
Central, deposits in 401, 402, 405, 406
Central, provisions for 401
Classification of 402
Designation of 402
Distribution of reserve to be held by banks in 406
Names of 402
Requirements, not applicable to gold banks in San Francisco 401
Requirements of associations in 402, 406
Reserve requirements 406
Reserve that may be held with, by banks elsewhere than in reserve cities . . . 405
Reserve requirements:
Banks not in reserve or central reserve cities 405
Central reserve cities 401. 407
Country banks 405
Estimate of 410
Five per cent redemption fund not counted as reserve 412
How estimated ■* 1*^
Reserve cities other than central 402, 406
When effective 404
262 INDEX TO NATIONAL-BANK ACT, ETC.
Residences: Paragraph.
List of shareholders and, reported annually 439
List of shareholders and, in organization certificate 202
National ban'cs 214
Qualifications of directors of associations 233
Resources. (See Assets.)
Restoration of capital stock, provisions for 227, 430
Restrictions:
Amount of lawful money that may be deposited to withdraw circulation. . 314
Gold certificates, issue of 729
Notes less than $1 718
On banks' indebtedness 427
On loans 425
State tax on national-bank shares 451
Tax on circulation 714
Upon use of circulating notes 428
Visitatorial powers limited 528
Resumption of specie payments 329
Retirement account, circulation for which deposits made to redeem 416
Retirement of:
Circulating notes 313
Circulation by deposit of lawful money 314
Circulation by sale of L'nited States bonds 315
Retiring circulation under provisions of Federal reserve act 315
Returns. (5ee Circulation; Reports; Taxation.)
Right of shareholders to vote 231
Rooms, vaults, and furnitiure for Currency Bureau 108
INDEX TO NATIOXAL-BANK ACT, ETC. 263
s.
Paragraph.
St. Looiis designated as a central reserve city 401
Salaries of examiners 527
Sale:
Assets of insolvent association, by receiver 515
Assets of insolvent associations, by shareholders' agent 522
Bonds, for failure to redeem circulation 504, 508, 511, 512
Of stock purchased from dissenting shareholders ' 219
Stock, for delincjuent payment of installment 227
Stock, for impairment of capital 4.30
Stock taken for debt 426
Savings accounts as time deposits 403
Savings banks, statements to be given in annual report 110
Seal, power of association to adopt and use 204
Seal of Office of Comptroller:
Certified copy of organization certificate under, evidence 704
Certificates under, competent evidence 703
Description, impression of, and certificate of approval by Secretary' of the
Treasury-, to be filed with the Secretary of State 107
Devised by Comptroller and approved by Secretary 107
Secretary of Interior, report to, of bureau employees Ill
Secretary of State, description, impression, and certificate of seal of Comp-
troller to be filed with 107
Secretary of the Treasury:
Agent, special, to be appointed for associationB failing to redeem circula-
tion 508
Appointment of clerical force, for redemption of circulation, by 415
.Appointment of Comptroller on recommendation of 101
Appointment and classification of clerks by 105
Appointment of Deputy Comptroller by 103, 104
Assignment of rooms, etc., for the Comptroller by 108
Authorized to exchange registered for coupon bonds 305
Authorized to issue 3 per cent gold bonds and Treasury gold notes 318
Certified checks may be received for duties, internal taxes, and all public
dues upon regulations prescribed by 770
Circulating notes printed under direction of 326
Circulation, worn or mutilated, destruction of, by 339, 340
Clerks for Comptroller of the Currency appointed by 105
Deposit of Government moneys upon direction of 615
Depositaries of public moneys designated bj' 243
Duties of Comptroller under general direction of 100
Earnings from Federal reserve banks, disposition of, by 750
Examiners, appointments to be approved by 527
Exchange of bonds, terms of, prescribed by 31 1, 323
Gold certificates, authority to issue 433, 729
Gold certificates to be issued by 754
Gold dollar to be maintained as standard unit of value by 749
Gold notes may be issued by, in exchange for certain United States bonds. . . 318
Gold reserve for redemption of United States aud Treasury notes to be
maintained by 750
May prescribe rules for printing charter numbers on circulation 325
Kational bank examiners, appointments to be approved by 527
Notice to present circulation for redemption when bonds have been for-
feited 510
Organization of national banks with capital less than $100,000 to be approved
by 224
Panama Canal bonds, additional issue by 767
Plates and dies, regulations for, examination of, to be approved by 328
Post-office money-order funds placed in national banks designated by... 732
264 INDEX TO NATTONAL-BANK ACT, ETC.
Secretary of the Treasury — Continued. Paragraph.
Public-money deposits 730
Pulp from maceration to be disposed of by 340
Purchase of property by receiver to be approved by 524, 525
Recommendation of appointment of Comptroller by 101
Receivers, appointment of, by Comptroller, concurrence in by, in certain
cases ; 402
Refunding United States bonds 759
Regulations for redemption records 513
Regulations for reimbursement of circulation retirement account 416
Seal of office of Comptroller to be approved by 107
State- bank circulation, regulations for redemption of, to be prescribed by. 706
Sureties on bond of Comptroller of Currency to be approved by 102
Sureties on bond of Deputy Comptroller to be approve by 103, 104
When silver dollars are coined. Treasury notes to be canceled, and silver
certificates to be issued by 753
Withdrawal of circulation to be approved by 314
Sections of Revised Statutes, not included in the national-bank act, affecting
national banks 700-770
Seciu-ity for circulation (see Bonds, United States), United States bonds as. . 302, 303
Security for Government deposits 243
Security for loans:
Personal 204
United States notes and national bank notes not to be used as 432
Semiannual return of circulation 440
Senate :
Comptroller appointed by the President, by and with the advice of 101
Comptroller's report to be sent to 112
Shareholders:
Agent of, to return to, assets of insolvent associations 522
Annual meeting 232
. Appointment and qualification of agent of 522
Assessment for impairment of capital 430
Assets of insolvent association to be returned to, ratably after debts are paid . 517
Consent of, necessary to extension 216
Conversion of State banks, requirements 245
Creditor's bill against 521
Directors, election or appointment of , by 204, 232
Dissenting to extension, may withdraw 219
Duties of agent of 522
Enforcement of assessment for impairment of capital stock 430
Enforcing payment by, of installments 227
Estates and funds with trustee liable for assessment 242
Extension of corporate existence 215, 216
Failure to pay installments 227
Impairment of capital, assessment 430
Increase of capital stock by 228, 229
Individual liability of 240
Liability, enforcement of, by receiver 515, 520
Liability of, who have transferred their shares 241
List of, to be kept and sent to Comptroller 439
List of, subject to inspection 439
Location, change of, by 211
Names, residences, and number of shares held by each in organization
certificate 202
Personal liability of, in certain converted State banks 240
Provision for election by, when 238
Proxies, voting by 231
Qualifications of directors 233
Reduction of capital stock by 230
Rights, and liabilities of, on transfer of shares 225
Title and location of association, change of, by 211
Vote of, necesary to place association in liquidation * 500
Voters, qualification of 231
INDEX TO NATIONAL-BANK ACT, ETC. 265
Shares: Paragraph.
Association not to own or hold its own , except 426
Capital stock number, and name of holders to be stated in organization
certificate 202
Consent of owners of two-thirds, necessary to extension 216
Converted State bank to be the same as prior to conversion 245
Disposition of, taken for debt 426
Fifty per cent of aggregate value of, to be paid in prior to beginning busi-
ness 226
Holding of, in other banks by converted banks authorized 245
Installments, payment, and certification of 226
List of owners of, to be kept and copy s<^;nt to Comptroller 439
Loan on security of, prohibited 426
Oath of director relative to 236
Owners of two-thirds may place association in liquidation 500
Organization certificate to state capital and number of 202
Personal property 225, 451
Preference in allotment of, in succeeding associations J19
Purchased or acquired 426
Qualifications of directors 233
Receiver may be appointed for failure to dispose of, taken 426, 515
Sale or forfeiture of, for failure to pay installments due 227
Sale of, when necessary 219, 426, 430
State taxation of 451
Transfer of : 225
Value of, of shareholders dissenting to extension, how ascertained 219
Value, par, of each 225, 245
Voting.... 231
Signature on circulation :
Not required for redemption of 417
President or vice president and cashier 324
Treasurer and Register, United States 324
Silver:
Construed to be lawful money, when 342
Reserve of gold banks to gold and 342
Silver certificates:
Clearing-house balances payable in 729
Denominations of 755
Issue of, in place of Treasury notes, when 753
Issue of, when 753, 755
Reserve of national banks may be 729
Silver coinage:
Dollars 751, 753
Subsidiary 756, 757
Silver coins:
Foreign, not legal tender 719
Philippine Islands, legal tender 719
United States, are legal tender 722, 723
Silver dollars to remain legal tender 722, 751
Solicitor of the Treasury, conduct of suits under direction and supervision of . . . 700
Special acts relating to national banks 803
Special agent. {See Agent.)
Special customs deposits, certified checks receivable for, under certain condi-
tions 770
Special examination for extension of charter 217
Special reports, authority for - 440
Specie payments, no notes under |5 to be issued after resumption of 329
Standard unit of value, gold dollar declared to be 749
State banks:
Branches of, converted 246
Circulation of, when exempt from taxation 706
Conversion of 245
Examination (member banks) 527
Penalty for failure to make return of tax on circulation 712
Penalty for unauthorized receipt of public money 738
Reports of, provided for HO
266 INDEX TO NATIONAL-BANK ACT, ETC
State banks — Continued. Paragraph.
Return of taxable circulation 711
Sharebolders' personal liability, exceptions 240
Shares of, converted '. 245
Statement of condition 110
Tax on circulation 705
Tax on circulation of converted 713
Tax on unauthorized circulation 708-710
State courts. {See Comptroller; Suits.)
State, Territory, or District:
Change of title or location of associations 211
Conversion of bank organized under authority of laws of 245
Interest, national banks not to take, etc., in excess of legal rate in 422
"National, " use of the word in titles 530
Qualification of directors 233
Proceedings to enjoin Comptroller or receiver to be brought in district in
which association is located 702
Taxation of circulation of State, etc. , associations 705, 7l5
Taxation of money by 716, 717
Taxation of national banks by 451
Stationery, etc 108
Status not changed by extension of charter 218
Status of associations organized under the act of 1863 247
Statutory bad debts defined 429
Stock:
Amount of capital, to be stated in organization certificate 202
Increase of capital 228
Of national banks may be held by converted State banks 245
Par value of 225
Payment and certification of 226
Purchased or acquired 430
Keduction of capital „ . . 230
Transfer of shares 225
Stocks, United States, exempt from taxation 716
Stolen national-bank notes, redemption of 417
Subsidiary silver coinage 756, 757
Succession:
Expired associations 219
Period of, national banks 204
Suits:
Against United States officers or agents 700
Certified copy of organization certificate evidence in 704
Circuit and district courts, jurisdiction of 214, 218, 701
Corporate powers of associations 204
Creditors' bill against shareholders 521
Crimes, jurisdiction, etc. {See Crimes.)
District coiu*ts, jurisdiction of; to enjoin Comptroller 701
Enjoining Comptroller or receiver 518
Forfeiture of charter 526
Proceedings to enjoin Comptroller to be brought, where 702
Sealed certificate of Comptroller competent evidence 703
Shareholders' ajgent 522
Shareholders' liability, to enforce 515
Solicitor of the Treasury to direct and supervise certain 700
Surplus:
Converted State banks with capital of $5,000,000 240
Creation of 424
Loans, limit of, measured by capital and 425
Surplus and dividends, provisions for surplus and payment of dividends 424
Surrender of bonds. {See Bonds, United States.)
Suspension of business after refusal to pay circulation 509
INDEX TO NATIONAL-BANK ACT, ETC. 267
T.
Paragraph.
Taking unauthorized impressions of tools, p)enalty for 744
Tax:
Circulation—
Enforcing payment of 448
Exempt from 706
Failure to make returns 447
Of converted State lianks 713
Tlate and time of payment 444
"Refunding excess 449
Secured by Panama Canal bonds 303
Semiannual return of 446
Money of all kinds subject to, by States, etc 717
Notes", State banks, corporation, company, or persons 70.5-708, 710
Notes, State banks, corporation, company, or persons, failure to make
returns 712
Notes, State banks, corporation, company, or persons, semiannual return. . 711
Provisions restricted on circulation 714
Hemission of, on insolvent national banks 450, 715
State taxation of national banks 451
Taxation. {See Tax.)
Taxes:
Internal-revenue, on imports may be paid by certified checks 769
Teller. {See Officers.)
Term:
Of office for directors 232
For which charter is issued 204
For which real estate may be held 224
Territorial court. {See Comptroller; Redemption ; State, etc.)
The national-bank act, authoritv for title 200
Time:
Allowed for transmission of reports of condition 440
Deposits defined 403
For paj-ment of assessment for impairment of capital 430
For pa\Tnent of tax on circulation 444
In which liquidating banks must deposit lawful money 502. 504
In which United States bonds may be refunded 315
Title and location, change of, by national banks 211, 213, 803
Title of association to be approved by Comptroller of Currency 202
Transfer of bonds 306
Association to be notified 308
Record of 307
Transfer of shares of capital stock, effect of 241
Transfer of shares of stock 225
Transfers {see Treasurer, United States; Bonds, United States), when void 529
Transportation charges for redeemed circulation 414
Treasurer, United States:
Application to sell bonds to be filed with 315
Circulation of liquidating and insolvent banks, duty of 5U5. 606
Circulation, tax on, to be paid to 444
Circulation, withdrawal of, provisions for 314
Deposits of bonds with 302
Deposit of bonds with, to secure circulation 323
Deposit of lawful money with, by liquidating bank i>02
Disposition of redemption account 416
Enforcing tax on circulation 448
Examination of bonds and records, provisions for 309, 310, 311
Federal Reserve Board to be furnished with list of application.^ to .sell bonds. 316
Fine for failure to make reports to Comptroller to be retained by 443
Interest on bonds to be retained by, when 430. 448
268 INDEX TO NATTONAL-BANK ACT, ETC.
Treasurer, United States — Continued. Paragraph.
Lawful money to redeem circulation of extended banks to be deposited
with 220
Proceedings on default in making return on circulation subject to duty. . . 448
Public moneys to be deposited with Assistant Treasurer, Government de-
positaries, or 730, 731
Piu"chase of property by receiver, approval to be filed with 524
Receiver to pay all money received to 515
Redemption —
Fund to be kept with 414
Of circulation by 414
Of circulation in United States notes by 414
Semiannual return to, of circulation subject to duty 446
Signature of, on circulation 324
Tax, excess, refunding 449
Tax on circulation, to be paid to 444
Transfer of bonds in trust for associations to be made to 306
Treasury, extended banks to reimburse, cost of new plates 220
Treasury notes:
Cancellation of „ . . 753, 756
Demand, legal tender 726
Interest-bearing 727
Issue of 318, 764
Redeemable in gold 750
Tax, exempt from 716
Treasury, United States (see also Treasurer, United States):
Association to reimburse, for cost of redemption of circulation and plates.. 414
Currency Biu-eau in 100
Divisions of Issue and Redemption established 752
Notice to present circulation at 510
Penalty for failure of associations to report, to be paid into 443, 446
Redemption account, disposition of 416
Redemption fund, 5 per cent, in 414
Redemption of circulation at 312, 414, 505, 513, 514
Trial for violation of interlocking directorate act 235
Trust companies:
Examinations (member) 527
Trust, purchase of property by receiver to protect - 523
Trustees:
Not personally liable 242
Power of national banks to act as 208
INDEi TO NATIONAL-BANK ACT, ETC. 209
tr.
Paragraph.
Unauthorized deposit of public money, by disbursing ofRr^'xr , . . 737
Unauthorized receipt or use of public money by banks, etc 738
Uncurrent notes, issue of, prohibited 431
Uncurrent subsidiary silver, recoinage of 757
Undivided profits not considered borrowed money 429
Unearned dividends prohibited 429
Unfit circulation, redemption of 414
United States (see also Officers of the United States; Crimes, jurisdiction, etc.):
Bonds. (See Bonds.)
Coins are legal tender 720-724
Courts of, may enjoin proceedings 518
Courts, jurisdiction of, not affected 214
Debt, deposits to redeem circulation to be reported monthly as 416
Deposits in Federal reserve banks 615
Deposits. (See Government depositaries.)
Gain by failure to redeem notes by extended banks 220
Obligations, exempt from taxation 716
Obligation of, defined 739
Securities, penalty for counterfeiting or forging 740
Suits in which, is a party 700
United States disbursing officers:
Fraudulent notes to be marked by 748
Penalty for unauthorized deposit of public money 737, 738
Withdrawal of public money 730
United States notes:
Are legal tender 725
Circulation of banks redeemable in 414
Fraudulent, to be marked 748
Issue of 764
Obligations of United States defined 739
Penalty for:
Dealing in counterfeit 746
Illegal use or possession of material for printing 745
Passing counterfeit 743
Pledging, etc. 432
Taking or having unauthorized impressions of tools, etc 744. 745
Redeemable in gold • 750
Subject to taxation by States, etc 717
Unit of value, gold dollar to be standard 749
Unpaid dividends not considered borrowed money 427
Unsigned national bank curreecy, redemption of 417
Using plates to print notes without authority 742
Use of circulation, restricted 428
Use of title " National " prohibited 530
Usury:
Interest, when not 422
Penalty for 423
270 INDEX TO NATIONAL-BANK ACf, ETC.
V.
Paragraph.
Vacancies, board of directors, filling Z37
Value of capital stock of converted State banks, par 245
Value of capital stock, par 225
Vaults for Currency Bureau 108
Verification of report of condition 441
Vice president {see also Officers):
Bonds, United States, may sign transfer of 306
Circulation, may sign 324, 337
Election or appointment of 204
Proxy, not to act as 231
Violations of provisions of national-bank act, forfeitiu-e of charter for 526
Visitatorial powers restricted 528
Visitatorial powers, limitation of 528
Void, illegal preference 529
Voluntary liquidation. {See Liquidation.)
Vote required:
For change of title or location 211
For conversion of State bank 245
For increase 229
For liquidation 204, 500
For reduction 230
For shareholders' agent 522
For voluntary' liquidation 500
To fix date of election 238
Voters, qualifications of shareholders at elections 231
INDEX TO NATIONAL-BANK ACT, ETC. 271
Paragraph.
When receiver may be appointed 520
Where proceedings to enjoin Comptroller must be brought 702
Withdrawal :
Bonds, general provisions respecting 311, 414
Circulation, provisions for 312, 313, 314, 414
Deposit and, of public moneys 730, 737
Dissenting shareholders 219
Expired associations, bonds of 221
Illegal preference of creditors 529
Liquidating associations, bonds of 504
Of reserve from Federal reserve bank 409
Reduction of capital 230
Unearned dividends 429
Woni-out circulation, destroying and replacing 339
INDEX TO THE FEDERAL RESERVE ACT.
A.
Acceptance: Paragraph.
Failure of national banks to signify 602e, 602f
Of terms of act 602b
Acceptances, bankers' 613b, 614
Acceptances rediscounted by Federal reserve banks 613b, 613c
Accommodation extended to member banks 604c
Accounts:
Foreign 614
With other Federal reserve banks for exchange purposes 614
Acknowledgment of organization certificate of Federal reserve banks 604a
Act of March 14, 1900, parity provisions reaflirmed 626
Act of May 30, 1908, certain provisions extended, etc 627
Additional national-bank circulation 627
Tax rate changed 627a
Additional reserve and central reserve cities 611e
Administrators, national banks as 611k
Advancements extended to member banks 604c
Ad^dsory council 612, 612a
Agencies, foreign 614
Agent, when bank may act as insurance agent or as broker in procuring loans
on real estate 613c
Agent, Federal reserve 604f
Alaska 602,619g
Reserve requirements for national banks in 619g
Aldrich- Vreeland Act, effect on 627
Amending section 5154, United States Revised Statutes 608
Amendment to section 5202, United States Revised Statutes, liability of
national banks 613c
Amount of capital required for Federal reserve banks 6021
Amount of capital stock required to be subscribed to 602c
Amount:
Of Federal reserve bank circulating notes not limited 618b
Of Federal reserve notes that may be issued 616a
Of gold notes that may be issued to Federal reserve banks 618c
Of redemption fund required for Federal reserve notes 616d
Of reserve required for Federal reserve notes 616b
Of reserve required to be held by —
Banks elsewhere than in reserve cities 619a
Central reserve city banks 619c
Country banks 619a
Reserve citv banks - - 619b
Of United States bonds that may be purchased by Federal reserve banks
from member banks 618a
That may be loaned on farm lands 624
Annual report of Federal Reserve Board to House of Representatives 610g
Application for Federal reserve notes 616a
Application for Federal reserve notes subject to action of Federal Reserve
Board ■•■- 616e
Application for membership after organization of Federal reserve banks b05
Appointment of:
Employees of Federal Reserve Board 6lll
Examiners ^-"^
Members of Federal Reserve Board 610
.164312°— 20 18 273
274 INDEX TO FEDERAL RESERVE ACT.
Appropriation: Paragraph,
For expenses of organization committee 602n
For expenses of printing Federal reserve notes 616i
Assessments for examiners 621a
Assessment on Federal reserve banks:
To pay cost of Federal reserve notes 616h
To pay salaries and expenses of board 610b, 611 1
Assistants to organization committee 602n
Attorneys not to receive fee or other consideration other than usual fee or salary. 622b
Authority of Reserve Bank Organization Committee 602a
INDEX TO FEDERAL RESERVE ACT. 275
B.
Bank: Pararraph.
Balances, net, to or from to be used in reserve calculations 619f
Defined 601
Examinations 621 -C22, 625n
Bank examiners:
Appointment of G21
Gratuities to, prohibited 622a
Loans to, prohibited 622a
Powers of 621
Salaries of 621i
Secrecy enjoined of 622a
Service to banks and their directors, officers, etc., restricted to official
duties 622
Bankers' acceptances 613b- 614
Banks:
Eligible G02b, 608, 609 609d
May become national, how 608
Not in reserve cities. {See Coimtry banks.)
Outside continental United States 619g
Bed pieces for Federal reserve notes 616h
Bills of exchange:
Acceptable by member banks 613b
Bought by Federal reserve banks from member banks 614
Foreign 614
Limit to liability of national banks not to include 613c
Open-market operations 614
Rediscounted by Federal reserve banks 613a-613c
Bills of State and subdivisions thereof dealt in by Federal reserve banks 614
Bills receivable, subject to rediscount 613a-613c
Board, held to mean Federal Reserve Board 601
Board of directors of Federal reserve bank {see also Federal reserve bank,
directors of) 604c-604i
Certificate to be made by, when capital is increased or reduced 605d, 606
Bond, Federal reserve agent 611i
Bonds, United States:
Dealt in by Federal reserve banks 614
Hypothecation of, by Federal reserve banks 614
National banks not required to deposit prior to commencement of business. . 617
Purchase of, by Federal reserve banks 618a
Refunding 618-618c
To secure Federal reserve bank notes 604b
"Two's" exchange for 1-year gold notes and 30-year gold bonds 618c
Thirty-year 3 per cent gold, without circulating privileges 618c
In exchange for 1-year 3 per cent Treasury notes 618d
Branch:
Federal reserve banks 603
National banks —
Foreign 625
In dependencies 625
By-laws of Federal reserve banks 604b
276 INDKX TO FEDERAL BESERVE ACT.
c.
Paragraph.
Cable transfers, purchase and sale of, in open market 614
Cancellation of Federal reserve notes 616c
Capital, amount required to enable State bank to become member bank 609f
Capital stock of Federal reserve banks:
Allotment of 602c, 604a
Cancellation and redemption of 605e, 606
Dividends 607
Hypothecation of, prohibited when owned by member bank 605a
Increase and decrease of 605-606
Liability of holders ^ 602d. 606
Maximum amount permitted to be held by any one individual or corpo-
ration 602h
Minimum amount of, before organization 602 1
Net earning, apportionment of 607
Payment for 602c, 602g, 609
Shares of $100 each 605
Subscriptions to^
After organization of Federal reserve banks 605b
By banks 602c, 604, 619g
By public 602g, 602h
By State banks 604, 609, 609a
By trust companies 604, 609, 609a
By trust companies in District of Columbia 604, 602b, 602c
By United States 602i
Transfer of 602h, 602k, 605a
Voting power of, limited 602j
Cash reserve required:
Banks elsewhere than in reserve cities 619a
Central reserve city banks 619c
Reserve city banks 619b
Central reserve cities 602 m
Cash reserve required 619c
Number may be increased or decreased. 611e
Reserve board to control 611e
. Status of 602 m
Certificate of:
Increase of capital of Federal reserve banks 605d
Organization of Federal reserve banks 604a
Reduction of capital of Federal reserve banks 606
Certificates of deposit as time deposits 619
Chairman of board of directors of Federal reserve banks 604d, 604f
Changing collateral for Federal reserve notes 616g
Charter forfeited by national banks not accepting terms of this act 602f
Charter of Federal reserve banks to be for 20 years 604b
Checks receivable at par by Federal reserve banks, when 616j
Circulating notes of:
Federal reserve banks, issue of 618b
Member banks, retirement of 618, 618a
Circulation {see Federal reserve bank notes and Federal reserve notes):
Federal reserve notes 616, 616a
Limit to liability of national banks not to include 613c
Civil service, President may place employees of Federal Reserve Board under. . 6111
Class A directors 604d, 604e
Class B directors 604d, 604e
Class C directors 604d, 604i
Clearing house for Federal reserve banks and member banks 6161
Collateral for Federal reserve notes 616a
Substitution of 616g
INDEX TO FEDERAL RESERVE ACT. 277
Paragraph.
Collection charges 616k
Collateral, limit to liability of national banks not to include 613c
Commercial paper:
Eligible for rediscount 6I3a
Foreign 614
Purchase and sale of 614
Security for Federal reserve notes 616a
Comptroller of the Currency:
Duties performed under direction of the Secretary of the Treasury 610h
Duties when Federal reserve districts have been established 604
Examination of member banks 621
Examiners' salaries, recommended by 621a
Examiners' reports to 621
Expense of examination, assessed by 621a
Federal reserve notes, issued by 61 Id
Federal reserve notes, unfit for circulation, to be returned to 616c
May permit examiners to disclose information in regard to member banks. . 622b
Member of Federal Reserve Board 610
Member of Reserve Bank Organization Committee 602
National-bank examiners appointed by 62 1
Organization certificate of Federal reserve banks to be filed with 604a
Plates, dies, etc., for Federal reserve notes under 8uper\"ision and control of. 616h
Powers of 610h
Salary of 610
Suits against national banks not complying with terms of this act 602f
Congressman not allowed to be member of Federal Reserve Board or officer or
director 604d
Congress, visitatorial powers of 621b
Contracts, powers of Federal reserve banks to make 604b
Conversion of State banks 608
Corporate seal. Federal reserve banks 604b
Correspondents, foreign 614
Council, Federal ad\isory 612, 612a
Country banks:
Cash reserve required 619a
Distribution of reserve 619a
Reserve requirements for 619a
Reserve required to be held with Federal reserve bank 619a
Reserve that may be held with bank in reserve or central reserve city 619a
County bonds, etc., dealt in by Federal reserve banks 614
Currency act of Mar. 14, 1900, parity provisions reaffirmed 626
Currency associations 627
Ciistoms, Federal reserve notes receivable for 616
278 INDEX TO FEDERAL RESEBVE ACT,
D.
Paragraph.
Daily report by Federal reserve agent of Federal reserve notes 616a
Definitions 601
Demand and time deposits 619
Demand deposits defined -». 619
Dependencies:
Branches of national banks in 625
National banks in 619g
Depositories 615
Deposits:
In Federal reserve banks 613, 614, 615
Reserves against 616b
In member banks, reserves against 619, 619f
Limit to liability of national banks not to include 613c
Of Government funds - . 613, 615
Secretary of Treasury to receive deposits of gold coin or gold certificates
tendered by Federal reserve bank or agent 616m
Various kinds defined 619
With Federal reserve agent of Federal reserve notes, gold, etc., by Federal
reserve banks 616f , 616g
"With nonmember banks, limited 619a
Denomination of gold notes issuable to Federal reserve banks 618c
Deputy Federal reserve agent 604f
Description of Federal reserve notes G16c, 616h
Destruction of Federal reserve notes 616c
Dies, etc. , for Federal reserve notes 616h
Directors (see Federal reserve banks, directors of):
Branch Federal reserve banks 603
Liability for violation of this act by national banks 602f
Not to receive fee or other considerations for loan 622c
Of Federal reserve banks, suspension or removal of 611f
Discount rates:
Established : .614
Increased by tax on deficiency in reserve requirements 611c
Recommendations by council 612a
Discounts:
By Federal reserve banks 613a
Extended to member banks 604c
Dissolution of:
Federal reserve bank C04b, 607
National member banks 602f
Distribution of reserve :
Banks elsewhere than in reserve city 619a
Central reserve city, banks in 619c
Reserve city, banks in 619b
District:
Bonds, etc., dealt in by Federal reserve banks 614
Certificates showing geographical lines of Federal reserve 604
Held to mean Federal reserve district 601
District of Columbia, trust companies in, eligible 602b
Dividends:
Of Federal reserve banks 607
Prohibited when reserve is short 619e
Unpaid, limit to liability of national banks not to include 613c
Doubtful assets of Federal reserve banks, ^vritten off 611g
Drafts:
Limit to liability to national banks, not to include 613c
Receivable at par by Federal reserve banks, when 6l6j
Rediscounted by Federal reserve banks 613a
Drainage, bonds, etc., dealt in by Federal reserve banks 614
Duties:
Of Federal advisory council 612
Of Reserve Bank Organization Committee 602
Interest rate of paid directors 622e
Securities, purchase of and sale to directors 622e
INDEX TO FEDERAL RESEEVE ACT. 279
E.
Paragraph.
Earnings, division of U07
Election of directors of Class A and Class B 604e
Eligible banks 602b, 608, 60&-€09d
Employees not to receive fee or other consideration other than usual salary 6J2c
Employees not to receive a greater rate of interest than other depositors 622e
Employees of Federal reserve banks 604b
Employees of Federal Reserve Board 6111
Estimate of reserve requirements 619f
Examiners:
Appointment of 621
Examiner, member bank not to make loan or grant any gratuity to 622a
Examiner not to perform any service for compensation for any bank or
oflBcer 622b
Examiner not to disclose names of borrowers or collateral without first ob-
taining written consent of Comptroller 622b
Powers of 621
QuaUfications of 621
Reports of 621
Salaries of 621a
Examinations:
Assessments for 621a
Bank 621-622, 625
Examiners to make 621
Expense of 621a
Federal reserve banks 621c
Member banks 621, 621b
National banks 621
Number to he made 621
Of foreign branches of national banks 625
Of plates, dies, bed pieces, etc.. of Federal reserve notes 616h
Qualifications of examiners 621
State bank and trust companies 621
Exceptions to limit to liability of national banks 613c
Exchange, account with other Federal reserve banks for purposes of 614
Exchange charges 616k, 6161
Exchange of certain United States bonds for gold notes 618d
Executive officers of Federal Reserve Board 610
Executors, national banks as 611k
Exempt from taxes except real estate 607a
Exempt from taxes, gold notes issued in exchange for gold bonds 618c
Expenses:
For Federal reserve notes 616h, 616i
Of examiners 621a
Of Federal advisory council 612
Of Federal Reserve Board 610b
Exports, acceptances on, eligible as discounts by Federal reserve and member
bfcnks '. 613h
Extension of additional currency act to June 30, 1U15 t>27
280 LNDEX TO FEDERAT, RESERVE ACT.
F.
Paragraph.
Failure to accept tenns of this act 602e, 602f
Failure to make report, penalty 609c-609d
Farm lands, loans on 624
Federal advisory council 612, 612a
Federal reserve agent 604f
Bond required of 611i
Daily report on issue and withdrawal of Federal reserve notes 616a
Deposits with, of Federal reserve notes, gold, etc., by Federal reserve
banks 616f, 616g
Deputy 604f
Federal reserve notes issued to Federal reserve banks through , 616
Federal reserve notes, applications for, made to 616a
Gold coin or gold certificates to be received as deposits by Secretary of
Treasury when tendered by Federal reserve bank or agent 616m
Information concerning member banks to be furnished Federal Reserve
Board by 621b
Powers of, second to those of Secretary of Treasury 610f
Salary of 604f
Special examination of member banks to be approved by 621b
Federal reserve banks 602a
Acceptances, purchase and sale of, in open market 614
Rediscount of 613b, 613c
Account with other Federal reserve banks 613, 614, 6161
Advances to, by means of Federal reserve notes 616
Amount of capital stock to be subscribed to 602c
Application for Federal reserve notes subject to action of Federal Reserve
Board 616e
Bankers' acceptances, purchase and sale of, in open market 614
Bills of exchange — •
Purchase and sale of 614
Purchase from member banks 614
Bills of State and political subdivision thereof dealt in ". 614
Branches 603
Foreign connections 614
By-laws 604b
Cable transfers, purchase and sale of 614
Capital stock of 6021
Certificate of organization 604
Charter, term of 604b
Checks received at par, when 616j
Circulating notes, issue of 618b
Circulating notes, redemption of 618b
Clearing-house provisions 6161
Collateral deposited with Federal reserve agent for Federal reserve notes. . 616a
Increasing, to reduce liability for notes 616f
Substitution of ." ,. 616g
Withdrawal of 616g
Collection charges 616k, 6161
Commercial paper —
Purchase and sale of 614
Rediscount of 613a-613c
Security for Federal reserve notes 616a, 616f , 616g
Contracts, power to make 604b
Corporate body 604b
Powers of. 604b
Council, recommendations by 612a
Depository, Government 613, 615
INDEX TO PEDEBAL RESERVE ACT. 281
Federal reserve banks — Continued.
Deposits — Paragraph.
Defined and classified 619
From member banks 613, 616j
From or in other Federal reserve banks 613, 614, 616j
From the United States 613, 615
Reserves against 616b
With Federal reserve agent of Federal reserve notes, gold, etc. . . 616f, 616g
Directors 604f-604i
Chairman of (Federal reserve agent) 604(1, 604f
Bond required of 611i
Chosen, how 604d, 604e, 604f
Classification of 604d
Compensation of 604g
Duties of G04c
Extension of discount, advancement and accommodations by 004c
Number and classification of 604d
Qualifications of 604d
Removal of 61 If
Suspension of 611f
Term of 604d , 604i
Vacancies (;04i
Discount rates to be established fillc, 614
Discount by Federal reserve bank of paper secured by United Slates bonds
issued since April 24, 1917 Glim
Dissolution of 604b. 607
Dividends of 607
Doubtful assets of, to be written off 611g
Drafts, received at par, when 616]
Earnings, divisions of 607
Employees 604b
Establishment of, to be officially announced by Secretary of Treasury 619
Examination of 621c
Examination of member banks by 621b
Exchange charges 616k
Exempt from taxes 607a
Expense of Federal Reserve Board to be paid by 610b
Federal reserve notes. (See Federal reserve notes.)
Fiscal agent of the United States 615
Foreign connections 614
Franchise tax 607
Gold bond, 30-year 3 per cent without circulating privilege 618c, 618d
Under same general terms as United States threes without circulating
privilege now issued 618c
Gold coin or gold certificates to be received as deposits by Secretary of
Treasury when rendered by Federal reserve bank or agent 616m
Gold loans, made of, and contracted for 614
Gold, purchase and sale of 612a, 614
Gold notes, 1-year 3 per cent without circulating privilege GI8c, 618d
Exempt from taxes 618c
Government deposits 613, 615
Hypothecation of United States bonds for gold loans 614
Individual liability of shareholders 602d
Liquidation of 607, 611h
Loans made of, and contracted for 614
Municipal securities dealt in 614
National banks must become shareholders of 602b. 602e, 602f
Net earnings of, apportionment of 607
Notes of (see Federal reserve notes) 604b. 611d
Notes of State and political subdivisions thereof dealt in 614
OflBcers and employees 604b
Ofl&cers of, may be removed or suspended 611f
Open-market operations 614
Organization of 602a, 604a, 604h
Official announcement of, by Secretary of Treasury 619
Powers of ". .604b, 613-614
282 INDEX TO FEDERAL RESERVE ACT.
Federal reserve banks — Continued. Paragraph.
Purchase of United States bonds from member banks 618a
Redemption fund 616c-616d, 616f
Rediscount —
Of acceptances 613b
Of bills receivable 613a
Of notes, drafts, and bills of exchange 613a
Of paper of other Federal reserve banks 611b
Recommendations by council 612a
Regulations by board 611b. 613c
Refunding United States bonds held by member banks 618-618b
Reorganization of 611h
Reserve required to be held with —
By banks elsewhere than in reserve cities 619a
By central reserve cities 619c
By reserve city banks 619b
Reserve requirements for Federal reserve notes 616b, 616d
May be suspended by board 611c
Tax on deficiency in 611c
Reserve, withdrawal of, by member banks 619o
Reserves —
Against deposits 616b
Against Federal reserve notes 61 6b. 616d
Of member banks 619-619g
Revenue bonds of State and political subdivisions, dealt in 614
Safeguarding bonds, notes, collateral, funds, etc 6111
Salaries and expenses of board paid by 610b, 611e
Seal, corporate 604b
Senators, Representatives, prohibited from being directors of 604d
Special examinations of member banks may be ordered by 621b
State banks may become members 609-609d
State bills, notes, bonds, and warrants dealt in 614
Statement of condition to be published weekly by board 611a
Stockholders of, responsibility and liability of 602d, 606
Stock of. (See Capital stock.)
Succession of 604b
Suits, by or against 604b
Supervision of, by board 611a-611j
Surplus funds 607
Suspension of 611h
Taxes, free from, except on real estate 607a
Transfer of funds among, and charges therefor 616k
United States bonds —
Dealt in 614
Hypothecated for gold loans 614
United States bonds of member banks purchased by 618a, 618b
United States deposits 613, 615
Warrants of State and political subdivisions thereof dealt in 614
Worthless assets to be written off 611g
Federal Reserve Board:
Admission of banks other than national 609-609d
Annual report of 610g
Application for Federal reserve notes may be granted or rejected by 616©
Approval of, required for issue of bonds in exchange for 1-year gold notes. . . 618c
Authorized to review decisions of Reserve Bank Organization Committee. 602
Chairman of 610c
Class C directors designated by 604d, 604f
Clearing house —
For reserve banks, designation by 6161
For member banks, designation by 6161
Creation of 610
Directors of Federal reserve banks may be suspended or removed by 611f
Discounts by Federal reserve banks, character to be determined by 613a
Discount rates subject to approval of 614
Doubtful or worthless assets of Federal reserve banks to be ordered written
off books of Federal reserve banks 611g
INDEX TO FEDERAL RESERVE ACT. 283
Federal Reserve Board — Continued. Paragraph.
Employees of, not in classified service (il 11
Examinations of Federal reserve banks and member banks 611a
Examinations ordered by 621-621c
Examiners' salary fixed by G21a
Expenses of, how paid 610b, 61 le
Extension of discounts etc., by directors, sul)ject to orders of 60-lc
Federal advisory council, expenses to be approved by 612
Federal reserve banks may be required to purchase United States bonds
by 618a, G18b
Federal reserve notes issued under the supervision of 610h
Federal reserve notes issued and retirement regulated by Gild
Foreign branches of national banks 625
Foreign business to be approved by 614
Governor of 610a
Information concerning Federal reserve banks to be furnished to, by Fed-
eral reserve agent 621b
Issue of Federal reserve notes regulated by 616, 616a
Interest on rediscounts to be fi.xed by 611b
Making farm loans 624
Meetings of 610c
Members of 610
Conditions precedent on 610, 610d
Oath of office 610, 610d
Qualifications of 6 10a
Removal of, by President 610
Restriction on, during and after term of office 610, 610d
Salaries of 610
Term of 610
National banks to act as trustee, etc., by permission of 611k
Offices 610a
Open-market operation operated by 614
Permission for member banks to secure discounts for nonmember banks
may be granted by 619d
Powers of 611-611e
Powers secondary to those of Secretary of Treasurj^ when 610f
Power to add to list of cities prohibited from making farm loans 624
Purchase of United States bonds by Federal reserve banks on order of 618a
Redemption fund for Federal reserve notes to be required by 616d
Rediflcounting of paper of Federal reserve banks by other Federal reserve
banks 611b
Report of, to House of Representatives 610g
Safeguarding assets of Federal reserve banks by 6 1 li
Special examination of member banks to be approved by 62 lb
Substitution of collateral for Federal reserve notes to be regulated by 61 6g
Suits against national banks not complying with terms of this act 602f
Suspension of reserve requirements by 6 1 Ic
Transfer of public stock in Federal reserve banks to be regulated by 602k
Vacancies 610e
Vice governor 6 10a
Violations of act, of Federal reserve banks, duty of 6 1 1 h
Federal reserve cities 602, 604
Federal reserve banks therein G02a
Federal reserve districts 602, G04
Designation by number 602
Farm land loans confined to 624
How apportioned 602
Increase in number of 602
Readjustment of 602
Federal reserve notes (obligations of United States):
Acceptable for 616
Application for 611b, 616a, 616e
Authorization of 616
Cancellation and destruction of 616c
Character of 616c, 61Gh
Collateral for 616a
Coat of making, etc 616h, 616i
284 INDEX TO FEDERAL RESERVE ACT.
Federal reserve notes (obligations of United States) — Continued. Paragraph.
Daily report of issue and withdrawal of 616a
Denominations of 616h
Deposit by bank of issue with Federal reserve agent 616f
Description of 616c, 616h
Destruction of 616c
Examination of plates, dies, etc 616h
Expense for making, issue, and redemption paid by Federal reserve
banks 616h, 616i
Form of 616h
Held for distribution, where 616h
Identification marks on 616c, 616h
Interest paid to United States on account of 616e
Issue and retirement of, regulated by board 611d, 616
Liability for, may be reduced 616f
Lien on assets 616e
Paper for 616i
Penalty for pacing out, by Federal reserve bank, other than bank of issue . . 616c
Plates, dies, paper, etc 616h, 616i
Printing of 616h, 6161
Purpose of 616
Receivable for ^ 616
Received by Federal reserve bank other than bank of issue 616c
Recommendations concerning, by council 612a
Redeemed in gold on demand 616
Redemption fund 616c, 616d, 616f
Redemption of 616, 616c, 616f
Reduction of, liability for 616f
Reissue of notes deposited with Federal reserve agent 616f
Reserves against 616b, 616d
Return to bank of issue 616c
Securities for 616a, 616b
Substitution of collateral for 616g
Supervision of 611d
Federal reserv^e notes (circulating, obligations of Federal reserve banks) 604b
For United States bonds purchased of member banks by Federal reserve
banks 604b, 618b
For United States bonds with circulation pri\alege against which no cir-
culation is outstanding * . . . 604b, 618b
Issued and redeemed as national-bank notes 604b, ^618b
Fiscal agent of United States:
Federal reserve banks as 615
In foreign countries, dependencies 625
Five per cent redemption fund not counted as reserve 620
Foreign acceptances 614
Foreign agencies of Federal reserve banks 614
Foreign branches of national banks 625
Foreign correspondents 614
Forfeiture of charter by national banks for not accepting terms of this act 602f
Franchise tax on Federal reserve banks 607
INDEX TO FEDERAL RESEEVE ACT. 285
Paraijraph
General fund of United States may be deposited in Federal reserve banks 615
General fund of United States Treasury may be deposited in Federal reserve
banks 615
General repealing clause 626
General supervision of Federal reserve banks by board 611j
Gold bonds, 30-year 3 per cent, without circulation privilege G18c
Under same conditions as United States 3 per cent without circulation
privilege now issued 618c
Gold deposits for reduction of Federal reserve notes 616f
Gold loans by Federal reserve banks 614
Gold notes, 3 per cent, 1 year, without circulation privilege 618c
Exempt from taxes GlSc
May be exchanged for 30- year 3 per cent gold bonds G18c, 618d
Gold, purchase and sale of, by Federal reserve banks 612a, 614
Gold, redemption fund for Federal reserve notes to be in 616d
Gold reserve required for Federal reserve notes 616b
Government deposits 613, 615
Government funds to be deposited, where 615
Governor of Federal Reser\'e Board 610a
Granting of application for Federal reserve notes 616e
Gratuities to bank examiners prohibited 622a
Paragraph.
Hawaii, reserve requirements, etc., for national banks in 619g
House of Representatives, annual report of Federal Reser\'e Board to 61 Og
Hypothecation :
Of Federal reserve bank stock by member banks prohibited 605a
Of United States bonds by Federal reserve banks for gold loans 614
286 IKDEX TO FEDERAL RESERVE ACT.
I.
Paragraph
Imports, acceptances on, eligible as discounts by Federal reserve and member
banks 613b
Incidental powers necessary to comply with this act 604b
Income from Federal reserve bank exempt from taxation 607a
Increase of capital of Federal reserve banks 605-605d
Individual liability of shareholders 602d
Individual liability of stockholders of national banks 623
Information concerning member banks to be furnished Federal Reserve Board
by Federal reserve agent 621b
Information, examiners not to disclose 622b
Insohent member banks 606
Interest rate for rediscount fixed by board 611b, 613c
Interest rate increased by tax on deficiency in reserve requirements 611c
Interest rates on Federal reserve notes 616e
Invalidating clause 629
Investment securities not eligible for discount by Federal reserve banks 613a
Irrigation bonds, etc., dealt in by Federal reserve banks 614
Issue of circulating notes by Federal reserve banks 618b
Issue of Federal reserve notes 616, 616a
Issue of gold notes of United States in exchange for certain United States bonds, 618d
INDEX TO FEDERAL EESERVE ACT. 287
li.
Tarn era ph.
Lawful money deposits for reduction of liability for Federal reserve notes 616b
Liabilities, rights and powers of State banks when member banks 609p
Liabilities incurred under the provisions of this act 613c
Liabilities of national banks 613c
Liability for Federal reserve notes, reduction of 61 6f
Liability of director of national banks violating this act 602f
Liability of stockholders:
Of Federal reserve banks 602d, 606
Of national banks 623
Lien on assets amount of Federal reserve notes first 61 6e
Limitations, none on amount of Federal reserve bank notes 604b
Limit not placed on amount of Federal reserve bank circulating notes 618b
Limit to amount of acceptance on imports and exports 613b
By Federal reserve banks 613b
By member banks 613b
Limit to amount of gold notes issuable to Federal reserve banks 618c
Limit to amount of public stock in Federal reserve bank held by one individual,
etc 602h
Limit to amount of United States bonds that Federal reserve banks may pur-
chase from member banks 618a
Limit to maturity of discounts by Federal reserve banks 613a, 613b
Liquidating of member banks 605e
Liquidating of Federal reserve banks , 607, 611h
Loans of gold by Federal reserve banks 614
Loans on farm lands 624
Loans prohibited when reserve is short 619e
Loans to bank examiners proliibited 622a
Loan, no officer, director, or employe© to receive a commission for any loan 622c
288 INDEX TO FEDERAL RESERVE ACT.
M.
Paragraph.
Manager branch Federal reserve banks 603
Market operations open 614
Maturity of discounts of Federal reserve banks limited 613a, 613b
Maximum amount of public stock in Federal reserve bank held by one indi-
vidual, etc 602h
Meetings of Federal reserve council 612
Member banks (see also National banks) 601, 602b, 608, 609
Acceptance rediscounted by Federal reserve bank 613b
Acting as agent for nonmember banks, restrictions 619d
Alaska 602, 619g
Application for membership as, after organization of Federal reserve bank 605c
Balances in Federal reserve banks, considered as reserve 619f
Bills of exchange —
Acceptable 613b
Rediscounted by Federal reserve banks 613a, 613b
Sold to Federal reserve banks '. 614
Capital, amount required of State bank to become member bank 609f
Collection charges 618a
Depositories of United State 615
Deposits in Federal reserve bank 613
Deposits, reserves against 619-619b
Deposits with nonmember bank -. 619d
Directors not to accept fees for loans 622c
Dividends are not to be paid when reserves are below requirements 619e
Drafts —
Acceptable 613b
Rediscounted by Federal reserve banks 613a, 613b
Examiners 621
Examinations of , 621b
Examinations of Federal reserve banfcs on request of 10 member banks 62lc
Exchange charges - 616k
Hypothecation of stock of Federal reserve banks prohibited 605a
Individual liability of - 602d
Insolvency of 606
Insurance agent, when may act as 613c
Limit to deposits that may be kept with nonmember banks 619d
Liquidation of - 605e
Loans and gratuities to bank examiners prohibited 622a
Loans may not be made when reserves are below requirements 619e
Loans on real estate 624
National banks {see National banks) 602c-602f
608
Notes rediscounted by Federal reserve banks 613a, 613b
Officers and employees not to accept fees, etc 622c
Outside continental United States 619g
Prohibited from securing discounts from Federal reserve banks for non-
member banks - 619d
Provisions for national banks outside continental United States to become . . 619g
Real estate, when bank may act as broker in procuring loans on 613c
Refunding United States bonds securing circulation 618, 618a
INDEX TO FEDERAL RESEIIN K ACT. 289
Paragraph.
Report of condition by G09c
Report of earnings and dividends by (JOOc
Reserve recjuirements 611m, 6H>-fi20
Reserve, withdrawal of, from Federal reserve banks G19e
Reserves 619-619f
Against deposits G19-6l9f
Balances in Federal reserve banks considered as 61 9f
Banks in central reserve cities (i 1 9c
Banks in reserve cities GlOb
Banks not in central reserve or reserve cities 619a
Checking against, in Federal reserve banks 619e
Net balance due to and from other banks considered in estimating 619f
State banks as G09
Withdrawal from Federal reserve bank 609e
Deposits with nonmember banks 619d
Examinations of 621
Member banks, rights, powers, and liabilities of 609g
Stock in Federal reserve banks 602c, 604
605
Transfer of stock in Federal reserve banks G02k, 605a
Trust companies as 609
Deposits with nonmember banks 619d
Examinations of '. 621
Withdrawal from Federal reserve bank 609e
Trust companies in District of Columbia 602b
Members, Federal advisory council 612
Minimum amotint of capital of Federal reserve banks 6021
Mints, Federal reserve notes may be deposited in GlGh
Mortgages on farm lands G24
Municipal securities dealt in by Federal reserve banks 614
164.312°— 20 1^
290 INDEX TO FEDERAL RESERVE ACT.
N.
National banking associations: Paragraph.
Defined 601
Examiners of 621
Reserve requirements 619
Reserve requirements outside continental United States 619g
National-bank examiners (see also Examiners) :
Prohibited from performing other services for banks, etc 622b
Prohibited from receiving loans or gratuities from member banks 622a
National banks (see also Member banks) 601
Administrators 611k
Alaska 602, 619g
Branches in foreign countries and dependencies 625
Capital stock —
Decrease of 605d, 606
628
Increase of 605a, 605d
Charter bonds no longer required 617
Circulation —
Act of May 30, 1908, extended 627
Retirement of 618
Tax rate for certain circulating notes changed 627a
Commencing business, pro\'i8ions for deposit of United States bonds vtith
Treasury repealed 617
Dependencies 619g
Deposits, time, and interest thereon 624
Directore' liability 602f
Dissolution for failure to enter system 602f
Executors 611k
Foreign branches 625
Hypothecation of stock in Federal reserve banks 605a
Liability of 613c
Loans on farm lands 624
Mortgages on farm lands 624
Must become member banks 602b, 602e
Notes of —
Liability for cost of, unaffected 616i
May be retired 618, 618a
Other banks may become 608
Outside continental United States ^^%
Penalty for failure to enter system 602e, 602r
Philippine Islands 619g
Redemption fund for notes not counted as reserve 620
Refunding bonds 618, 618a
Registrar of stocks and bonds 611k
Required to become member banks 602b, 602e
602!
Retirement of circulating notes 618, 618a
State banks may convert to 608
Stock in Federal reserve bank 602c, 604
605
Stockholders, responsibility and liability 602f , 623
Surplus, increase or decrease of 605
Time deposits and interest thereon 624
Transfer of stock in Federal reserve banks 602k, 605a
Trustees 611k
National currency association 627
INDEX TO FEDERAL RESERVE ACT. 29]
Nonmember banks: Paragrraph.
Alaska 619g
Amount of deposits that may be kept with nonmember banks restricted 619d
Deposits with 619d
Discounts from Federal reserve banks not allowed through member banks . . 619d
Member banks may not act as agents for, in applj-ing for or receiving dis-
counts from Federal reserve banks 619d
Outside continental United States 619g
Nonmember national hanks, reserve requirements 619g
Notes:
Federal reserve. (See Federal reserve notes.)
Of State or political subdivisions thereof dealt in by Federal reserve banks. 614
Rediscounted by Federal reserve banks 613a, 613b
Treasury, 1-year 3 per cent, coupon or registered 618c
Exempt from taxes 618c
May be changed for 30-year 3 per cent gold bonds 618c, 618d
Number of examinations to be made 621
Number of Federal reserve cities 602
292 INDEX TO FEDEEAL RESERVE ACT.
O.
Paragraph.
Obligation of Federal reserve banka to purchase gold notes 618c
Obligations of Federal reserve banks, circulating notes are 618b
Obligations of United States, Federal reserve notes 616
Officers and employees of Federal reserve banks 604b
Officers not to receive fee or other consideration for loan _ 622c
Officers, rate of interest paid on deposits : - 622e
Officers of Federal reserve banks, suspension or removal of 611f
Open-market operations 614
Recommendations by council 612a
Organization certificate of Federal reserve banks 604a
Organization committee. {See Reserve Bank Organization Committee.)
Other reserve cities. {See Reserve cities.)
INDEX TO FEDERAL RESEBVE ACT. 293
P.
Paragraph.
Panama, reserve requirements, etc., for national banks in 619g
Paper for Federal raserve notes GI61
Parity maintained G20
Par, when checks and drafts receivable by Federal reserve banks at G16j
Payment of expenses of organization committee 602n
Payments of capital stock subscriptions 602c
Penalties:
Acceptance of fees, etc., by directors, officers, and employees of member
banks ". 622c
Divulging information by bank examiners 622b
Failure to make report 609c, 609d
Gratuities to bank examiners 622a
Loans to bank examiners 622a
Member banks not national banks for failure to comply with conditions,
etc ^ 609c, 609d
National banks failing to comply with provisions of this act 602e, 602f
Paying out Federal reserve notes by Federal reserve banks other than bank
of issue 616c
Reserve shortage 619e
Violation of section 22, Federal reserve act 622f
Violations of act by Federal reserve banks 61 Ih
Period for which Federal reserve bank charter is issued G04b
Philippine Islands:
Bank in, may not become member bank 6 I9g
Public funds in United States to be deposited in member banks 615
Reserve requirements for national banks in 619g
Plates, dies, etc., for Federal reserve notes 616n
Political subdivisions, bonds, etc., dealt in by Federal reserve banks 614
Porto Rico, reserve requirements, etc., for national banks in 619g
Postal savings funds to be deposited in member banks 6 15
Powers of:
Examiners 621
Federal advisory council 612a
Federal reserve banks 604b, 613-6 14
Federal Reserve Board 611-6111
Not to conflict with those of Secretary of Treasury 61 Of
Reserve Bank Organization Committee 602
State bank as member bank 609g
President may place Federal Reserve Board employees under civil service. . . 6111
President of United States, members of Federal Reserve Board appointed
by 610, 610e
Printing Federal reserve notes 616h
Prohibitions:
Central reserve city banks from making farm loans 624
Gratuities and loans to bank examiners 622a
Member banks limited in amount of deposits with and forbidden to secure
discounts from Federal reserve banks for normiember banks 619d
Members of Federal Reserve Board, Assistant Secretary of Treasury, and
Comptroller of Currency not to hold olTice in any member bank. . . 610, 610d
National-bank examiners not to perform other services for banks, etc 622b
Officers and employees, from receiving fee for loan 622c
Public funds 01 Philippine Islands, postal savings, or any Government
funds not to be deposited in any bank other than member bank 615
Reserve shortage 619e
Restrictions as to visitatorial powers 621b
Senators and Representatives not allowed to be members of Federal Re-
serve Board or director of Federal reserve bank ()04d
Transacting business by Federal reserve bank until authorized by Comp-
troUer 604b
294 INDEX TO FEDERAL RESERVE ACT.
Paragraph.
Profits, iindivided, limit to liability of national bank not to include 613c
Pro\Tsions for national banks outside continental United States to bec;ome
member banks 619g
Public dues, Federal reserve notes receivable for 616
Public Federal reserve bank stock 602g
Amoimt of, limited to any one individual or corporation 602h
Liability of holders o^ ()02d, 602g
Par value of 602g, 605
Payment for 002c, 602g
Tax free 607a
Transfer of 602h
Voting power, none 602j
Purchase of:
Bills of exchange from member banks 614
Gold notes by Federal reserve banks 618c
United States bonds by Federal reserve banks 618a
Q.
Paragraph.
Qualification of examineis 621
INDEX TO FEDERAL RESERVE ACT. 295
R.
Parapraph.
Rate of taxation on "additional currency " fi27a
Rates of discount (iilb, 6Uc, 014
Rates of interest on Federal reserve notes 616e
Real estate loans G24
Reclamation bonds, etc., dealt in by Federal reserve bank G14
Redemption fund:
In United States Treasury for Federal reserve notes G16c, 616d, 016!
Not counted aa reserve (5 per cent, of national banks) 020
Of Federal reserve notes G18b
Redemption of Federal reserve bank circulating notes 618b
Rediscount by Federal reserve banks:
Acceptances G13b
Bills of exchange 013a
Bills receivable 613a
Drafts 013a
Notes .' 013a
Paper discounted by other Federal reserve banks 01 lb
Paper, rediscounted, as collateral for Federal reserve notes 010a
Recommendations by council 012a
Regulations by board 611b, 613c
Reduction :
Of capital of Federal reserve bank 605, 605d, 606
Of liability for Federal reserve notes 616f
Refunding bonds 618-018c
Registrar of stock and bonds, national bank as Ollk
Regulations :
For Federal reserve notes Gild
For transfer of funds and charges therefor among Federal reserve banks 01 Ok
For transfer of public stock in Federal reserve banks 002k
To be prescribed by organization committee 002b
Reissue of Federal reserve notes deposited mth Federal reserve agent 01 Of
Rejection of application for Federal reserve notes 01 Oe
Removal or suspension of officer or director of Federal reserve bank 01 1 f
Reorganization of F'ederal reserve banks (> 1 1 b
Repealing clause, general 020
Report of board to House of Representatives OlOg
Report of condition by Federal reserve banks, weekly Oil a
Report of condition by member banks 609c>
Report of earnings and dividends by member banks G09r
Reports:
Of examination 021
Of foreign branches of national banks 025
Representatives not allowed to become members of Federal Reserve Board or
directors of Federal reserve banks 604d
Requiring national banks to become member banks 602b
Reserve banks held to mean Federal reserve banks 001
Reserve bank organization committee 002
Admission of banks other than national banks 009, 009a
Allota stock of Federal reserve banks to United States G02i
Appropriation for expenses of 002n
Certificates showing districts to be filed ^vith Comptroller 004
Designates Federal reserve cities and districts 002, 002a
Exercises jiowera of chairman of Federal Reserve Board until such is
appointed 004.1, 004e. 004h
General powers of 602a, 002n
How constituted 002
Majority a quorum 602
Offers stock of Federal reserve bank to public <'02g
Organizes each Federal reserve bank 002a
296 IXDEX TO FEDERAL EESERVE ACT.
Paragraph.
Reserve cities 602m
Cash reserve required 619b
Distribution of reserve 619b
Federal Reserve Board to control 611e
Number may be increased or decreased 611e
Reserve requirements 619b
Reserve that may be held with, by banks elsewhere than in reserve cities. 619a
Reserve districts. {See Federal reserve districts.)
Reserve requirements of Federal reserve banks'
Against deposits 616b
Against Federal reserve notes 616b, 616d
Suspension of, by board 611c
Tax on deficiency in 611c
Reserve requirements of member banks 619-619f
Banks in central reserve cities 619c
Banks in reserve cities 619b
Banks not in central reserve or reserve cities 619a
Country banks 619a
Central reserve cities 619c
Estimate of 619f
Redemption fund not counted as reserve 620
Recommendations by council 612a
Reserve cities other than central 619b
To be held with Federal reserve banks 619d
■^Tien effective 619
Reserve :
That may be held with member banks 619a, 619b
Withdrawal of, from Federal reserve banks 619e
Reserves, tax on deficiency in 611c
Increase rates of interest and discount 611c
Restriction, ^dsitatorial powers limited 621b
Retirement of:
Federal reserve notes 611d
National-bank notes 618, 618a
Revenue bonds of State or political subdivisions thereof dealt in by Federal
reserve banks 614
Rights of State bank when member bank 609f
INDEX TO FEDERAL RESERVE ACT. 297
S.
Paragraph.
Safeguarding assets of Federal reserve banks 61 li
Salaries:
Of examiners C21a
Of Federal Reserve Board employees 6111
Of members of Federal Reserve Board 610
Salary :
Director Federal reserve bank 604g
Federal reserve agent 604f
Savings accounts as time deposits 619
Seal of Federal reserve bank 604b
Secretary' of Agriculture, member of Reserve Bank Organization Committee... 602
Secretary of Tre^ury:
Amount of redemption fund for Federal reserve notes determined by 616d
Assistant, restrictions on, subject to term 610
Circulating notes of Federal reserve banks, form to be prescribed by 618b
Chairman of Federal Reserve Board 610c
Deposit of Government funds upon direction of 615
Deposit of gold coin or certificates to be received when tendered by Fed-
eral reserve bank or agent 616m
Earnings from Federal reserve banks to be used under regulations pre-
scribed by 607
Examiners' appointment to be approved by 621
Gold notes and bonds issued in exchange for certain United States bonds
by 618c, 618d
Maintaining of parity 626
Member of Federal Reserve Board 610
Member of Reserve Bank Organization Committee 602
Payment of expenses of Organization Committee to be approved by 602n
Plates, dies, etc., for Federal reserve notes engraved by direction of 616h
Powers heretofore vested in, unchanged ." 610f
Redemption fund for Federal reserve notes controlled by 616c
Redemption fund required by 615
Strengthening gold reserves 626
Section 5154, United States Revised Statutes, amended 608
Section 5202, United States Revised Statutes, amended 613c
Securities:
Dealt in by Federal reserve banks 614
Purchase and sale of, recommended by council 612a
Security:
For Federal reserve notes 616a, 616b
For gold transactions 614
Senate, members of Federal Reserve Board to be confirmed by 610
Senators and Representatives not allowed to be members of Federal Reserve
Board or officers or directors of Federal reserve banks 604d
Shareholders of Federal reserve banks, liability of 602d, 606
Short title, "Federal Reserve Act" 600
Special examination of foreign branches of national banks 625
State banks as member banks 601 , 609, 609d
Amount capital required to become member bank 609f
Deposits with nonmember banks 619d
Examinations of 621
Requirements precedent G09a
Requirements subsequent 609b, 609c
Withdrawal from membership in Federal reserve bank 609e
Subscription to stock 609
Surrender of privileges G09d
298 INDEX TO FEDERAL RESERVE ACT.
Paragraph
State banks may become national banks 608
State revenue bonds, warrants, etc., dealt in by Federal reserve banks 614
Statement of condition of Federal reserve banks, weekly 611a
Strengthening gold reserves of the United States 626
Stock of Federal reserve banks. (See Capital stock.)
Stockholders of Federal reserve banks, liability of 602d, 606
Stockholders of national banks, responsibility and liability of 602f, 623
Subscription to capital stock of Federal reserve banks:
After organization of Federal reserve banks 605b
By banks 602c, 604
By public 602g
By State banks 604, 609, 609a
By trust companies 604, 609, 609a
By trust companies in the District of Columbia 602c, 604
By United States 602i
Substitution of collateral for Federal reserve notes 616g
Sub treasury , Federal reserve notes may be deposited in 616h
Succession of Federal reserve banks 604b
Suits against national banks not complying with terms of this act 602f
Suits by or against Federal reserve banks 604b
Supervision of:
Federal reserve banks by board 611j
Federal reserve notes 611d
Siu-plus funds of Federal reserve banks 607
Free from taxation 607a
On dissolution or liqmdation 607
Suspension:
Of Federal reserve banks 611h
Of reserve requirements by Federal Reserve Board 611c
Or removal of officers or directors of Federal reserve banks 6111
INDEX TO FEDERAL RESERVE ACT. 299
T.
Taxes: Paraj^raph.
Federal reserve banks free from, except on real estate 607a
Federal reserve notes receivable for 616
For paying out Federal reserve notes by bank other than bank of issue 616c
Franchise, on Federal reserve banks 607
Gold notes, 1 year, 3 per cent, without circulation privilege, free from 618c
Income on capital stock and surplus of Federal reserve banks free from. . . 607a
On deficiency in reserve requirements 611c
Rates of, for certain circulating notes of national banks, changed 627a
Term of office for directors of Federal reserve banks 604d, 604i
Time deposits defined 619
Time deposits in national banks 624
Title "Federal reserve act" 600
Transfer of Federal reserve stock 602h, 602k, 605a
Transfer of national bank stock, effect of, on liability of stockholder 623
Treasiirer of United States:
Application to, for retirement of circulating notes by member banks.. 618, 618a
Expenses of organization committee payable by 602n
Federal reserve notes received by 616c
Quarterly report to Federal Reserve Board of applications to sell bonds. . . 618a
Treasury Department:
Federal reserve notes redeemable at 616
Federal reserve notes may be deposited in 616h
Treasury gold notes issuable to Federal reserve banks in exchange for certain
United States bonds 618c, 618d
Trust companies:
As member banks. {See State banks as member banks) 601, 602b, 608, 609d
In District of Colunabia 602b
(Member) examinations 621
Withdrawal from membership in Federal reserve bank 609e
Trustees, national banks as 611k
300 INDEX TO FEDERAL RESERVE ACT,
u.
Uiiited States: Paragraph,
Applications to sell bonds 618
Deposits in banks 615
Earnings of Federal reserve banks accruing to 607
Federal reserve notes, obligations of 616
Treasurer, quarterly report to Federal reserve bank of 618a
United States bonds {see also Bonds, United States):
Charter requirements for national banks repealed 617
Dealings in, by Federal reserve banks 614
Discount by Federal reserve bank of paper secured by United States bonds
issued since April 24, 1917 611m
Hypothecation of, for gold by Federal reserve banks 614
Refunding 618-618c
Purchase of, by Federal reserve banks 618a
Thirty-year 3 per cent gold, exchanged for 1-year 3 per cent Treasury
notes 618c, 618d
Twos exchanged for 1-year 3 per cent gold notes 618c
Twos exchanged for 30-year 3 per cent gold bonds 618c
United States deposits of Government funds 613, 615
United States Federal reserve bank stock 602i
Unpaid dividends, limit to liability of national banks not to include 613c
Undivided profits, limit to liability of national banks not to include. ........ 613c
INDEX TO FEDERAL RESERVE ACT. 301
V.
Parafn^aph.
Vacancies in membersliip of Federal Reserve Board GlOe
Vice governor of Federal Reserve Board GlOa
Violation of provisions of act 602f, 609d
Visitatorial powers over banks restricted 621b
Vote required to convert State bank to a national bank 608
Voting power of Federal reserve bank stock 602j, 604e
W.
Warrants of State or political subdivisions thereof dealt in by Federal reserve
banks 614
Weekly statement of condition by Federal reserve banks 611a
Withdrawal from membership in Federal reserve bank by State bank or trust
company 609e
Withdrawal of:
Collateral for Federal reserve notes 616g
Of reserve from Federal reserv'e banks 619e
Worthless assetfl of Federal reserve banks to be written off 611g
INDEX TO SECTIONS OF REVISED STATUTES.
Section.
324
325
326
327
328
323
330
331
332
333
330
736
884
885
3408
3411
3412
3413
3414
3415
3416
3417
3583
3584
3585
3586
3587
3588
3589
3590
3620
3640
3641
3642
3643
3644
3645
3646
3647
3648
3649
3701
302
Page.
11
11
12
12
12
13
13
13
13
13
181
182
182
182
182
182
183
183
183
184
184
184
185
186
186
186
186
186
187
187
188
42
42
42
42
42
42
42
42
42
42
185
Section.
3847
4046
5133
5134
5135
5136
5137
5138
5139
5140
5141
5142
5143
5144
5145
5146
5147
5148
5149
5150
5151
5152
5153
5154
5155
5156
5157
5158
5159
5160
5161
5162
5163
5164
5165
5166
5167
5168
5169
5170
5171
5172
Page.
188
188
20
20
20
21
32
32
32
33
33
34
34, 177
34
35
35
40
40
40
40
40
41
42
43, 131
44
44
50
50
51, 156
51
52
52
53
53
53
53
54
58
59
59
59
61
Section.
Page.
5173
61
5174
62
5175
62
5176
62
5177
62
5178
63
5179
63
5180
63
5181
63
5182.....
63, 187
5183
63
5184
64
5185
64
5186
65
5187
65
5188
66
5189
66
5190
70
5191
72
5192
73
5193
80
5194
80
5195
80
5196
80
5197
80
5198
81
5199
81
5200
81
5201
83
5202
83, 146
5203
84
5204
84
5205
84
5206
85
5207.....
85
5208
86
5209
87
5210
90
5211
90
5212
91
5213
92
5214
92
Section.
5215
5216
5217
5218
5219
5220
5221
5222
5223
5224
5225
5226
5227
5228
5229
5230
5231
5232
5233
5234
5235
5236
5237
5238
5239
5240
5241
5242
5243
5413
5414
5415
5430
5431
5432
5433
5434
5437
5488,
5497
Page.
93
94
94
94
95
99
99
100
100
101
102
102
103
103
104
104
104
105
105
105
106
106
106
107
111
112, 161
113
113
113
191
192
192
192
193
194
194
194
194
191
191
o
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