The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
283 X-7136 FBIHClPiLt D t l l ^ ^ C t e S KBfWEEN H.5. 11362 and H.R. 10841. On March 7, 1932, Mr. S t e a g a l l introduced H.R. 10241, a b i l l "to amend t h e National Banking Act and the Federal Reserve Act, and to p r o v i d e a guaranty fund f o r d e p o s i t o r s i n n a t i o n a l "banks." On A p r i l 14, 1932, he introduced H.R. 11362, a b i l l having g e n e r a l l y t h e same p u r poses . In the following paragraphs, t h e r e a r e s e t f o r t h the more import- ant d i f f e r e n c e s between the two b i l l s , (H.R. 10241 being r e f e r r e d to as t h e old b i l l and H.R. 11362 as the new b i l l . ) The old b i l l contained a p r o v i s i o n e l i m i n a t i n g t h e e x i s t i n g a u t h o r i t y f o r the o r g a n i z a t i o n of a n a t i o n a l bank with a minimum c a p i t a l of $25,000 i n a c i t y of l e s s than 3,000 i n h a b i t a n t s . The p r o v i s i o n e l i m i n a t - ing t h i s a u t h o r i t y i s r e t a i n e d i n the new b i l l which p r o v i d e s , however, t h a t a n a t i o n a l bank may be organized with a c a p i t a l of not l e s s than $25,000 f o r t h e purpose of succeeding t o t h e business of an e x i s t i n g bank. Whereas the old b i l l would have eliminated the double l i a b i l i t y of shareholders of n a t i o n a l banks h e r e a f t e r organized except those banks which have 'branches, t h e new b i l l omits t h e exception as t o n a t i o n a l banks having branches, thus making the exemption from double l i a b i l i t y apply i n the case of a l l n a t i o n a l banks h e r e a f t e r organized. The old b i l l contained a p r o v i s i o n e l i m i n a t i n g from the Federal Reserve Act the p r o h i b i t i o n upon making c o l l e c t i o n or exchange charges a g a i n s t Federal r e s e r v e banks, but the new b i l l would not change t h e law on t h i s s u b j e c t . The new b i l l c o n t a i n s c e r t a i n a d d i t i o n a l p r o v i s i o n s r e g a r d i n g n a t i o n a l and member banks: (a) a l i m i t upon the r a t e of i n t e r e s t which may be p a i d upon d e p o s i t s , (b) p r o v i s i o n s making t h e r a t e of dividend X-71S6 - 2 - which nay be paid, by a member ban 1 ; dependent upon the amount of i t s s u r p l u s , and (c) p r o v i s i o n s f o r t h e removal of an o f f i c e r or d i r e c t o r of a n a t i o n a l bank where h i s s e r v i c e i s detrimental to i t s o p e r a t i o n . The p r o v i s i o n s of the old b i l l with r e f e r e n c e to the Federal Banking L i q u i d a t i n g Board and the Guaranty Fund a r e a l s o amended in certain p a r t i c u l a r s . The old b i l l provided f o r a t o t a l i n i t i a l payment by member banks of $200,000,000 ( i n a d d i t i o n to t h e payments by t h e United S t a t e s and the Federal Reserve Banks) based p a r t l y upon demand d e p o s i t s and p a r t l y upon time d e p o s i t s , wherea s the new b i l l provides f o r an i n i t i a l payment by member banks of only $100,000,000, based on a l l d e p o s i t s . The new b i l l a l s o p e r m i t s nonmember banks to become c o n t r i b u t o r s to the guaranty fund and to share in i t s b e n e f i t s under c e r t a i n c o n d i t i o n s , one of which i s t h a t t h e c o n t r i b u t i o n of a nonmember bank s h a l l be * twice t h e amount r e q u i r e d of a member bank having t h e same amount of d e p o s i t s . Authority i s a l s o given by the new b i l l f o r borrow- ing by t h e L i q u i d a t i n g Board from the 'Reconstruction Finance Corporation u n t i l January 22, 1934, up to t h e maximum of $500,000,000. 2841 i 285 X-7136-a SUMMARY OF THE PROVISIONS OF H.R. 11362. The p r o v i s i o n s of t h i s b i l l d i v i d e themselves conveniently into four portions: (a) amendments t o t h e National Banking Laws; (t>) amendments to the F e d e r a l Reserve Act; (c) p r o v i s i o n s a f f e c t i n g member banks but not amending any s p e c i f i c p r o v i s i o n s of law; and (d) p r o v i s i o n s e s t a b l i s h i n g a Federal Guaranty Fund f o r d e p o s i t o r s i n member banks of the Federal Reserve System. AMENDMENTS TO NATIONAL BAM DIG LAWS. The amendments to t h e National Banking Laws, which a r e cont a i n e d i n Sections 1, 2, 3 and 4 of the b i l l , r e f e r i n a l l cases only to n a t i o n a l banks which may be organized h e r e a f t e r . t h r e e important changes i n the law: (1) These amendments contain The e x i s t i n g a u t h o r i t y f o r the o r g a n i z a t i o n of a n a t i o n a l bank with a minimum c a p i t a l of $25,000 i n p l a c e s of not exceeding 3,000 i n h a b i t a n t s would be replaced by a p r o v i s i o n aut h o r i z i n g the f o r m a t i o n of a n a t i o n a l bank with a minimum c a p i t a l of $25,000 f o r the purpose of succeeding to the business of an e x i s t i n g bank, (2) no n a t i o n a l bank may be organized u n l e s s i t has a s u r p l u s of not l e s s than 10# of i t s c a p i t a l s t o c k , and (3) p r o v i s i o n s f o r the double l i a b i l i t y of shareholders of n a t i o n a l banks a r e e l i m i n a t e d . Section 1 of t h e b i l l e l i m i n a t e s from Section 5138 of the Revised S t a t u t e s the p r o v i s i o n t h a t n a t i o n a l banks may be organized i n p l a c e s of not exceeding 3,000 i n h a b i t a n t s with a minimum c a p i t a l of $25,000, and i n s e r t s a p r o v i s i o n i n l i e u thereof which would permit the • • X-7136-a -2- t 286 formation of a n a t i o n a l tank f o r the purpose of succeeding to the "business of an e x i s t i n g hank, i n the d i s c r e t i o n of the Comptroller of the Currency, with a minimum c a p i t a l of $25,000. Section 3 of t h e b i l l amends Section 5138 of t h e Revised S t a t u t e s so as to provide t h a t no n a t i o n a l bank s h a l l be organized except with an i n i t i a l surplus equal to 10% of i t s c a p i t a l s t o c k , and provides a number of corresponding amendments to other p r o v i s i o n s of t h e n a t i o n a l banking laws i n order t o make them conform to t h i s requirement. Thus, f o r t h i s purpose: Section 5168 of the Revised S t a t u t e s , which r e q u i r e s t h e Comptroller of the Currency to examine i n t o the condition of a n a t i o n a l bank, and e s p e c i a l l y whether 50$ of i t s c a p i t a l s t o c k has been paid i n , i n order to determine whether the bank i s l a w f u l l y e n t i t l e d to commence b u s i n e s s , i s amended to r e q u i r e the Comptroller t o a s c e r t a i n a l s o whether 50$ of the r e q u i r e d i n i t i a l surplus has been p a i d i n . The Act of November 7, 1918, as amended, p r o v i d i n g f o r t h e c o n s o l i d a t i o n of n a t i o n a l banks, and f o r t h e c o n s o l i d a t i o n of a S t a t e bank with a n a t i o n a l bank, i s amended to r e q u i r e t h a t the consolidated i n s t i t u t i o n i n each such case s h a l l have an i n i t i a l s u r p l u s , as well as a c a p i t a l s t o c k , i n the amount r e q u i r e d f o r the o r g a n i z a t i o n of a n a t i o n a l bank i n the p l a c e i n which i t i s l o c a t e d . * Section 5154 of the Revised S t a t u t e s , providing f o r the conv e r s i o n of a S t a t e bank i n t o a n a t i o n a l bank, i s amended to r e q u i r e t h a t the converted i n s t i t u t i o n have an i n i t i a l s u r p l u s k 287 X-7136-a — 3 — not l e s s than t h a t r e q u i r e d f o r the o r g a n i z a t i o n of a n a t i o n a l "bank i n the p l a c e i n which i t i s l o c a t e d . Section 5140 of the Revised S t a t u t e s , r e q u i r i n g a t l e a s t 50$ of the c a p i t a l stock of a n a t i o n a l hank t o be p a i d i n b e f o r e i t i s authorized to commence b u s i n e s s and t h e remainder to be p a i d i n i n 10$ monthly i n s t a l l m e n t s i s amended to make s i m i l a r requirements with regard to t h e r e q u i r e d i n i t i a l surplus. Section 5141 of the Revised S t a t u t e s , which a u t h o r i z e s t h e s a l e of t h e stock of any shareholder who f a i l s t o pay any i n s t a l l m e n t on h i s stock as r e q u i r e d by law, i s amended so as t o give t h e same a u t h o r i t y i n t h e case of a f a i l u r e to pay any i n s t a l l m e n t of the i n i t i a l s u r p l u s . Section 5205 of the Revised S t a t u t e s , which provides f o r assessments upon stockholders of a n a t i o n a l bank i n case i t s c a p i t a l s t o c k i s not paid up or i n case of an impairment t h e r e i n and f o r the appointment of a r e c e i v e r when the d e f i c i e n c y i s not made up within t h r e e months a f t e r n o t i c e , i s amended to provide f o r such assessments where t h e i n i t i a l s u r p l u s i s not p a i d up and f o r the appointment of a r e c e i v e r where t h e def i c i e n c y i n i n i t i a l surplus i s not met w i t h i n the t h r e e months' period. Apparently an impairment i n i n i t i a l s u r p l u s would not be grpunds f o r such an assessment. The p r o v i s i o n of Section 5)305 a u t h o r i z i n g the s a l e of the stock of a s h a r e - X-7136-a 288 - 4 holder who f a i l s to pay such assessment a g a i n s t him would be omitted "by t h i s amendment, apparently by mistake. Section 5143 of t h e Revised S t a t u t e s , which a u t h o r i z e s r e ductions in c a p i t a l s t o c k of n a t i o n a l banks, i s amended so as to include s u r p l u s in i t s p r o v i s i o n s . The amendment i s ambiguous, but a p p a r e n t l y a l l the p r e s e n t requirements f o r a r e d u c t i o n of c a p i t a l , including t w o - t h i r d s ' vote of s h a r e h o l d e r s and approval of the Federal Reserve Board and of the Comptroller-of the Currency, would be a p p l i c a b l e as to every r e d u c t i o n in s u r p l u s . Section 3 of the b i l l amends Section 5151 of the Revised S t a t u t e s and Section 23 of t h e Federal Reserve Act so as to e l i m i n a t e the p r o v i s i o n f o r the double l i a b i l i t y of shareholders as to n a t i o n a l banks h e r e a f t e r organized. Section 4 of t h e b i l l provides t h a t the p r o v i s i o n s of Sections 1, 2 and 3 s h a l l apply only to n a t i o n a l banks organized a f t e r the date of the enactment of t h i s Act, s t i p u l a t i n g , however, t h a t the p r o v i s i o n s of law amended by such s e c t i o n s s h a l l apply, in t h e i r now e x i s t i n g form, to a l l n a t i o n a l banks organized p r i o r to t h e enactment of t h i s a c t . X-7136-a 289 — 5 — AMEREMENTS TO THE FSDERAL zysvzve ACT. S e c t i o n s 5 and 6 of t h e b i l l c o n t a i n amendments to the Federal Reserve Act w i t h r e g a r d to the d i s t r i b u t i o n of earnings of Federal r e s e r v e banks, and t h e g i v i n g of immediate c r e d i t by Federal r e s e r v e banks f o r items r e c e i v e d f o r c o l l e c t i o n . S e c t i o n 5 would amend the f i r s t paragraph of Section 7 of the Fede r a l Reserve Act so a s to p r o v i d e t h a t the net e a r n i n g s of each Federal r e s e r v e bank s h a l l be d i s t r i b u t e d as f o l l o w s : A f t e r the nayment to member banks of t h e 6$ dividend now provided f o r and t h e payment of 10$ of t h e n e t e a r n i n g s to s u r p l u s , one-half of t h e remainder of t h e n e t e a r n i n g s s h a l l be p a i d to t h e Federal Guaranty Fund f o r d e p o s i t o r s of member banks, (provided f o r i n l a t e r s e c t i o n s of t h i s b i l l ) and t h e remaining one-half s h a l l b e p a i d to t h e member banks in p r o p o r t i o n to the amount of t h e i r c a p i t a l stock. The payment of the f r a n c h i s e t a x by Federal r e s e r v e banks to t h e United S t a t e s would thus be e l i m i n a t e d . The second paragraph of Section 7, with r e g a r d to t h e manner in which funds p a i d to t h e United S t a t e s e i t h e r a s a f r a n c h i s e t a x or upon d i s s o l u t i o n of t h e Federal r e serve bank a r e to b e used, i s amended to make t h e n e c e s s a r y corresponding changes. Section 6 would amend Section 13 of t h e Federal Reserve Act by adding a t t h e end of the f i r s t paragraph a new paragraph r e q u i r i n g a Fede r a l r e s e r v e bank upon a p p l i c a t i o n of " a sending bank" to g i v e immediate c r e d i t f o r checks and d r a f t s r e c e i v e d from such bank f o r c o l l e c t i o n and a u t h o r i z i n g the Federal r e s e r v e bank to charge I n t e r e s t on t h e amount of the X-7136»a — • 6 ™ c r e d i t a t the c u r r e n t rediscount r a t e pending the c o l l e c t i o n of the item or, with the approval of the Federal Reserve Board, to e s t a b l i s h a time schedule f o r t h i s purpose. i 391 X-7136-a - 7 MISCELLANEOUS PROVISIONS NOT AMENDING ANY SPECIFIC PROVISION OF LAW. Sections 7, 8 and 9 of the b i l l contain c e r t a i n p r o v i s i o n s which a f f e c t n a t i o n a l banks and member banks of the Federal Reserve System but which do not in terms amend any s p e c i f i c p r o v i s i o n of the National Banking Act, the Federal Reserve Act or any o t h e r s t a t u t e . Section 7 would p r o h i b i t the payment of i n t e r e s t a t a r a t e in excess of 4$ p e r annum by any member bank of the Federal Reserve System upon any d e p o s i t made a f t e r the enactment of the a c t . Section 8 would p r o h i b i t a member bank (a) to pay any d i v i d end u n l e s s i t s s u r p l u s i s more than 25$ of i t s p a i d - i n c a p i t a l stock, (b) to pay any dividend a t a r a t e in excess of 6$ p e r annum u n l e s s i t s surplus i s more than 50$ of i t s p a i d - i n c a p i t a l stock, or (c) to pay any dividend i n excess of 8$, u n l e s s i t s surplus i s more than 100$ of i t s p a i d - i n c a p i t a l s t o c k . Where i t s s u r p l u s i s more than 100$ of i t s p a i d - i n c a p i t a l s t o c k , the r a t e of dividend would not be l i m i t e d . Section 9 would r e q u i r e the Comptroller of the Currency, whenever he f i n d s t h a t the continued s e r v i c e of any o f f i c e r or d i r e c t o r of a n a t i o n a l bank i s d e t r i m e n t a l to i t s s a f e operation, to c e r t i f y t h i s f a c t to the Federal Bank L i q u i d a t i n g Board (provided f o r in a l a t e r s e c t i o n of the bill). Within t h i r t y days t h e r e a f t e r the board would be r e q u i r e d to ho%d a hearing a t which such o f f i c e r or d i r e c t o r would have the r i g h t to be heard and be r e p r e s e n t e d by counsel. If the board a f f i r m s the f i n d i n g X-7136-a - 8 k * - of the Comptroller, i t would "be required to order the removal of the o f f i c e r or d i r e c t o r and to n o t i f y the "bank involved, which must t h e r e upon take such a c t i o n as may be necessary to remove the o f f i c e r or director. I 2 9 2 * 2 9 3 X-7136-a a 9 - PROVISIONS FOB GUARANTY FUND FOE DEPOSITORS OF MEMBER BAMS. The remaining s e c t i o n s of the b i l l , designated Sections 201 to 211, and comprising what i s known a s T i t l e I I of the b i l l , provide f o r the establishment of a Federal Bank Liquidating Board and f o r the guaranty cf the d e p o s i t s of member banks. Section 201 of the b i l l e s t a b l i s h e s a Federal Bank Liquidating Board c o n s i s t i n g cf the Secretary of the Treasury, the Comptroller of the Currency, and t h r e e c i t i z e n s of the United S t a t e s appointed by the P r e s i d e n t by and with the advice and consent of the Senate. The a p p o i n t i v e members, not mere than one of whom s h a l l be of the same p o l i t i c a l p a r t y a s the P r e s i d e n t , a r e to hold o f f i c e f o r four years and each i s to receive a s a l a r y of $10,000 p e r annum. The appointive members a r e i n e l i g i b l e during the time they a r e in o f f i c e , and f o r one year t h e r e a f t e r , to hold o f f i c e or employment in any member bank or in or on the Federal Reserve Board. The L i q u i d a t i n g Board s h a l l e l e c t i t s own chairman and o t h e r o f f i c e r s and may employ and f i x the compensation of i t s o f f i c e r s , a t t o r n e y s , a g e n t s , examiners and employees, but the compensation s h a l l not be a t a r a t e in excess of $10,000 p e r annum in any c a s e . Expenses a r e to be p a i d out of the guaranty fund h e r e i n provided f o r . Section 202 e s t a b l i s h e s a Federal guaranty fund f o r d e p o s i t o r s in member banks of the Federal reserve system. This fund i s to be c r e a t e d by payments from t h r e e sources; (a) The e n t i r e amount h e r e t o f o r e p a i d to the United S t a t e s a s a f r a n c h i s e tax by the Federal reserve X-7136-a - 10 - "banks s h a l l be p a i d by the United S t a t e s to th6 guaranty fond; (t>) She Federal reserve "banks a r e to pay to the fund $150,000,000, the amount r e q u i r e d of each to "be determined pro r a t a according to the amount of i t s surplus on December 31, 1931; and (c) The board s h a l l r e q u i r e the member banks to pay to the fund such an amount as i t may f i x , not exceeding $100,000,000, the amount required of each member bank to be determined pro r a t a according to i t s average d e p o s i t s during the precoding calendar y e a r . At any tine a f t e r one year subsequent to the pay- ment of the above amounts, the board -nay, i f in i t s judgment the amount of the fund i s inadequate, r e q u i r e the member banks to pay annually to the fund not more than $100,000,000 pro r a t e d among them according to t h e i r average d e p o s i t s f o r the preceding calendar y e a r . A l l sums pay- a b l e e i t h e r by a Federal r e s e r v e bank or by a member "bank a r c s u b j e c t to the c a l l of the L i q u i d a t i n g Board, except t h a t amounts a s s e s s e d a g a i n s t member banks s h a l l be payable in i n s t a l l m e n t s of not more than 25$ of the assessment. I f a t any time the amount of the fund exceeds $500,000,000, and in the judgment of the Board i s in excess of the amount r e q u i r e d f o r the purposes of the law, the Board s h a l l make a refund of the excess amount to the c o n t r i b u t i n g banks, the amount of the refund to any bank being pro r a t e d according to i t s c o n t r i b u t i o n to the l a s t annual cont r i b u t i o n of a l l banks. Sums in the guaranty fund may be investe d by the board in i n t e r e s t bearing o b l i g a t i o n s of the United S t a t e s or deposited in member banks without i n t e r e s t . j 295 X-7136-a — ll — Section 203 provides t h a t whenever a n a t i o n a l bank which has c o n t r i b u t e d to the fund has been closed by i t s d i r e c t o r s or by the Compt r o l l e r of the Currency, or has become insolvent in the judgment of the Comptroller, he s h a l l so c e r t i f y to the l i q u i d a t i n g board, which s h a l l proceed to take over and wind up the bank in accordance with the lav;. The Board i s to have the same powers and d u t i e s and i s to be s u b j e c t to the same l i m i t a t i o n s as the Comptroller in winding up such a n a t i o n a l bank. Within t h i r t y days a f t e r the r e c e i p t of the c e r t i f i c a t e of i n - solvency by the board, a committee c o n s i s t i n g of one person appointed by the board, one appointed by the owners of a m a j o r i t y of the stock of the bank and one appointed by the d e p o s i t o r s of more than 50 per cent of the o u t s t a n d i n g d e p o s i t s of the bank s h a l l e s t i m a t e the value of the a s s e t s and t h e amount of the l i a b i l i t i e s of t h e bank and make a statement of the amount of the outstanding deposit of each d e p o s i t o r . Section 204 provides that* on t h e b a s i s of t h i s e s t i m a t e , as modified by the board, and not l e s s than n i n e t y days a f t e r t h e c e r t i f i c a t i o n of insolvency, the board s h a l l pay to each d e p o s i t o r whose o u t s t a n d i n g deposit i s not more than $1,000 not l e s s than f i f t y per cent t h e r e o f , and to each other depositor not l e s s than twentyf i v e per cent of h i s o u t s t a n d i n g d e p o s i t , or $500, whichever i s greater. Within s i x months a f t e r such payment the board i s to pay each depositor of the former c l a s s the remaining amount due him (and i t would seem to b e the i n t e n t i o n to provide t h a t other d e p o s i t o r s s h a l l , w i t h i n t h i s s i x months 1 p e r i o d , be p a i d an a d d i t i o n a l twentyf i v e per cent of t h e i r d e p o s i t s , but no such p r o v i s i o n i s contained X-713S-^i — 12 in t h e b i l l . ) 3 9 6 — 7 i t h i n the next s i x months p e r i o d an a d d i t i o n a l twenty- f i v e per cent s h a l l he p a i d to a l l d e p o s i t o r s not yet p a i d and w i t h i n s i x months t h e r e a f t e r f u l l payment s h a l l be made to a l l d e p o s i t o r s . Section 205 provides t h a t the board, or a l i q u i d a t i n g agent duly a u t h o r i z e d by t h e board, may borrow money on t h e s e c u r i t y of t h e a s s e t s of any i n s o l v e n t n a t i o n a l bank f o r t h e purpose of paying i t s d e p o s i t o r s and c r e d i t o r s . Section 206 provides t h a t in case of insolvency of a S t a t e member bank, t h e board s h a l l request i t s r e c e i v e r or l i q u i d a t i n g agent to submit a r e p o r t and estimate such as t h a t r e q u i r e d of the Committee in the case of a n a t i o n a l bank; and the board upon approval of such r e p o r t and estimate s h a l l >ay the r e c e i v e r or l i q u i d a t i n g agent in t r u s t f o r the d e p o s i t o r s the same amounts, and a t the same times, as in the case of n a t i o n a l banks. For t h i s purpose, the board i s given the power of examination of such an insolvent S t a t e member bank. Section 207 makes i t mandatory upon the Federal Reserve Board, a f t e r h e a r i n g , to f o r f e i t the membership of any member bank f a i l i n g to comp l y with the requirements of the b i l l with r e s p e c t to the Guaranty Fund or any r e g u l a t i o n of the Liquidating Board; and a n a t i o n a l bank f a i l i n g to comp l y with such p r o v i s i o n s of the b i l l s h a l l , in a d d i t i o n , f o r f e i t a l l r i g h t s and f r a n c h i s e s granted to i t by the law ( a p p a r e n t l y without any court p r o ceeding, but upon the b a s i s of the h e a r i n g conducted by t h e Federal Reserve Board.) 4 » X-7136-a . 297 - 13 Section 308 provides t h a t any bank, vhich i s not a member of the Federal Reserve System, with a c a p i t a l and surplus of not l e s s than $25,000, may with the approval of the Liquidating Board, c o n t r i b u t e to the guaranty fund and upon insolvency the d e p o s i t o r s of such bank s h a l l be e n t i t l e d to t h e same b e n e f i t s as those of an i n s o l v e n t S t a t e member bank under s e c t i o n 206 above. No nonmember bank may c o n t r i b u t e to the guaranty f u n d , however, u n t i l a f t e r examination of the bank and determination by the L i q u i d a t i n g Board t h a t t h e bank i s i n sound f i n a n c i a l c o n d i t i o n and, as a condition to the p r i v i l e g e of c o n t r i b u t i n g to t h e f u n d , the bank must submit t o examination by t h e Board a t any time; with a p r o v i s o , however, t h a t f o r a period of not exceeding t h r e e years a f t e r the passage of the Act, a nonmember bank may share i n the b e n e f i t s of the guaranty fund upon c e r t i f i c a t e of the S t a t e examining a u t h o r i t i e s t h a t such bank i s i n sound f i n a n c i a l c o n d i t i o n . The amount of the i n i t i a l c o n t r i b u t i o n s and annual c o n t r i b u t i o n s of nonmember banks s h a l l be twice t h e amount of those r e q u i r e d of member banks. Sums payable by nonmember banks s h a l l be s u b j e c t to c a l l of the L i q u i d a t i n g Board but the amount of any assessment s h a l l be payable i n i n s t a l l m e n t s of not more than 25$ each. The L i q u i d a t i n g Board may r e q u i r e a nonmember bank to withdraw from p a r t i c i p a t i o n i n the b e n e f i t s of the guaranty fund or r e q u i r e i t "to go i n t o l i q u i d a t i o n and r e c e i v e the b e n e f i t s of such p a r t i c i p a t i o n " . Upon withdrawal from p a r t i c i p a t i o n , t h e bank s h a l l be p a i d a p a r t of i t s l a s t annual c o n t r i b u t i o n , the amount to be r e p a i d decreasing p r o p o r t i o n a t e l y according t o the X-7136-a , - 14 number of months which have elapsed s i n c e such l a s t c o n t r i b u t i o n . Section 309 a u t h o r i z e s the Liquidating Board, u n t i l January 22, 1934, to borrow from the Reconstruction Finance Corporation such sums as may be deemed necessary to carry out the purposes of the law, but not i n excess of $500,000,000 at any one time. The Reconstruction Finance Corporation " s h a l l make such loans" as a r e applied f o r by the L i q u i d a t i n g Board and a p p l i c a t i o n s by t h e board s h a l l be p r e f e r r e d above other a p p l i c a t i o n s and expedited i n every way p o s s i b l e . No s e c u r i t y s h a l l be r e q u i r e d f o r such loans and they s h a l l bear i n t e r e s t a t a r a t e agreed upon by t h e board and the corporation. Such a loan s h a l l be repaid i n i n s t a l l m e n t payments out of the guaranty fund and a l l such leans s h a l l be payable i n f u l l not l a t e r than January 22, 1942. The Reconstruction Finance Corporation i s r e q u i r e d to i s s u e , i n accordance with the p r o v i s i o n s of the Recons t r u c t i o n Finance Corporation Act, such n o t e s , debentures, bonds and other o b l i g a t i o n s as may be necessary t o carry out t h e purposes of t h i s law. Section 210 a u t h o r i z e s t h e Liquidating Board t o make r e g u l a t i o n s ^ e c e s s a r y to carry out the provisions with r e s p e c t to t h e Guaranty Fund. Section 211 a u t h o r i z e s a p p r o p r i a t i o n s of such sums as may be necessary to carry out the provisions of t h i s a c t . 2 9 8
@FedFRASER