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63RD CONGRESS
FIRST SESSION
H. R.
In the House o f Representatives
1913
Mr. Glass o f V irginia introduced tne follow in g b i l l waich was referred to the
Banking and Currency Committee and ordered to be prin ter.
A BILL
To provide an e la s tic currency, furnishing means o f rediscounting coa»@r&ial paper,
protect tne cred itors o f National Banking A ssociations, and esta blish a more e ffe c
t iv e supervision o f banking in the United States.
Be i t enacted by tne Senate and House o f Representatives o f the United States o f
America in Congress assembled.
SECTION 1. That the Act o f M 30, 1903, e n titled "An Act to amend the Nation
ay
a l Banking Law,* be and tne same is hereby repealed.
S ec. 2.
ot?
Thet w ith in s ix t y days a ft e r the passage
th is a c t ,
the S e cre ta ry o f the Treasury, the Comp*
t r o i l e r o f the Currency and the A ttom ey•G eneral o f the
United S ta tes a c tin g an a "Reserve Sank O rga n iza tion
Committee" s h a ll prepare and p u b lish a l i s t o f twenty
re se rv e c i t i e s chosen from those now a u th orize d by law
find
div id e the c o n tin e n ta l United S ta te s in to
twenty d i s t r i c t s , each d i s t r i c t to co n ta in one o f the
s a id reserv e c i t i e s ;
P rovid ed , th a t the d i s t r i c t s s h a ll
be ap p ortion ed with due regard to the conven ien ce and
customary cou rse o f b u sin ess <~nd not n e c e s s a r ily in h a r
mony w ith the area o f the s e v e r a l S t a te s .
The d is t r i c t *
may be re a d ju ste d and new d i s t r i c t s nay from tin e to
time be cre a te d by the Board h e r e in a ft e r e s ta b lis h e d
a c tin g upon a j o i n t a p p lic a t io n made by n ot le s s
than
ten N ational banks s itu a t e d w ith in one o f the e x is t in g
d is tr ic ts .
The d i s t r i c t s
thus c o n s t it u t e d s h a ll be
known as "N ation al Reserve D i s t r i c t s " and s h a ll be de
sig n a ted by number a ccord in g to the p lea su re o f the Re
serv e Bank O rga n iza tion Committee h e r e in a ft e r r e fe r r e d
to as the O rga n iza tion Committee.
The s a id O rga n iza tic
Committee s h a l l , in accordance w ith r e g u la tio n s to be
e s ta b lis h e d by themselves p roceed to orga n ize in each
o f the rese rv e c i t i e s a fo r e s a id a N ation al Reserve Bank.
Such N ational Reserve Ranks s h a ll be known, by the number
and d i s t r i c t to which they belon g and may add to t h e ir
title s
the name o f the c i t y in which they are i o c r t e d ; - -
as "N ation al Reserve Bank o f C h icago; F i r s t D i s t r i c t " - -
and so f o r t h ,
^very N ation al Bank lo c a te d w ith in a
given d i s t r i c t s h a ll be req u ired to su b scrib e to the cap*
l t a l o f the N ation al Reserve Bank o f that d i s t r i c t a sum
X o ft i J i ^ S S e t f
equ al to 20 per centum o f I ts own paid up and unimpaired
c a p i t a l , one h a l f o f such s u b s c r ip tio n to be paid in und
§/ a
0
/o
f
i
"
er the terms and c o n d itio n s p r e s c rib e d by the N ation al
t * >*v *
banking A ct with r e fe r e n c e to s u b s c r ip tio n s
o f N ation al Banking A s s o c ia tio n s .
to the s to c k
l i e remainder o f the
s u b s c r ip tio n s or any p a rt th e r e o f s h a ll become a l i a b i l i
ty o f the s u b s c r ib e r s , s u b je c t to c a l l and payment th e re
o f whenever n ecessa ry to meet the o b lig a t io n s o f the Natio n a l
Reserve Bank under such terns and in accordance
w ith such r e g u la tio n s aa the Board o f D ir e c to r s o f s a id
N ational Reserve Bank may p r e s c r ib e ;
v |Uiv M
w
~
P rov id ed , 'That no
N ation al re se rv e Bank s h a ll be orga n ized w ith a paid up
—
! n
T 1 --
I■ I
- >*~
I <rvnv, M , - |
.-,1 . .nnniiumnft -. i
) .
"—
' * *f*
* * t*’
c
and unimpaired c a p it a l a t the time o f begin n in g bu sin ess
f /T e c *
l e s s in amount than > 5,000,000.
The O rga n izetion Com
**
m ittee h e r e in b e fo r e provid ed fo r s h a ll have pow er-to ap
p o in t such a s s is t a n ts and in cu r such expenses in c a r r y
ing out the p r o v is io n s o f th is a c t as i t s h a l l deem n ec
e s s a ry ; and such expenses s h a ll be payable by the ■trea
sury o f the United S ta te s upon voucher approved by the
S e cre ta ry o f the Treasury, not to exceed in the aggre
gate
•&.
at
u
"50,000.
“1
S e c. 9.
That i t s h e l l be la w fu l fo r any N ational
Banking A s s o c ia tio n having a c a p it a l o f not le s s than
$ 1 ,C00t000 to e s t a b lis h branches under such ruins and r e
g u la tio n s as may be p r e s c rib e d by the C om p troller o f the
C urrency, with the approval o f the S e cre ta ry o f the Trea
su ry ; P rovid ed , That the number o f such branches s h a ll
n ot exceed one fo r each |5P0,0C0 o f c a p it a l stocit issue^
by the parent i n s t i t u t i o n ; and p rovid ed fu rth e r that no
branch s h a ll be lo c a te d o u tsid e the r a t io n a l Deserve D is
t r i c t in which the parent bank has i t s head o f f i c e .
Sec* 9. A*
That any bank or banking a s s o c ia t io n or
tr u s t company in co rp o ra te d by s p e c i a l law o f any S t a te ,
or organ ized under the gen era l laws o f any S t a te , and
having a paid up unimpaired c a p it a l s u f f i c i e n t to e n t i t l e
i t to become a N ation al Banking /a s s o c ia tio n under the
p ro v is io n s o f th is a c t or o f the N ation al Banking A c t,
may make a p p lic a t io n to the fe d e r a l Reserve Board h e r e in
a f t e r crea ted fo r the r ig h t to s u b sc rib e to the s to c k o f
the r a t io n a l Reserve ^ank orra n ized w ith in the r a t io n a l
Reserve d i s t r i c t in which such l o c a l bank or banking a s
s o c ia t i o n or tr u s t company e x i s t s .
The F ederal Reserve
Board nay a t i t s d is c r e t i o n e n t i t l e such a p p ly in g bank
to become a sto c k h o ld e r in the N ation al Reserve Bank o f
the d i s t r i c t in which i t is lo c a te d or a t i t s d is c r e t io n
may r e j e c t such a p p lic a t io n , and in the even t o f r e j e c t
io n , the a c t io n taken s h a ll be f i n a l .
I t s h a ll be the duty o f the F ederal Reserve
Board to e s t a b lis h r u le s and r e g u la tio n s f o r the g en era l
Government o f i t s condu ct in a ctin g upon a p p lic a t io n s
made by the s ta te banks and banking a s s o c ia t io n s h e r e in
b e fo r e r e fe r r e d t o , f o r s to c k ownership in the R a tion a l
Reserve ^anks.
Guoh r e g u la tio n s s h a ll re q u ire o f a p p ly
ing banks not organ ized under F ederal law that they com
p ly r i t h the rese rv e requirem ents and submit to a l l in
s p e c tio n and c o n t r o l whether p rovid ed in th is a c t or in
the N ation al Banking A ct or in any oth er s ta tu te o f the
U nited S ta tes a p p lic a b le to N ation al "anking A s s o c ia tio n s .
Ko such ap p lyin g "brink s h a ll be adm itted to s to c k owner
s h ip in a n a tio n a l Reserve Bank u n less in e^ery r e s p e c t
i t conforms to the standard o f re se rv e s and o f manage
ment en forced upon n a tio n a l Banks o f s im ila r c a p i t a l i z a
t io n .
v-
R ec. 10,
That there s h e l l he cre a te d a F ederal Re
es o f members ho e in a t t e r d esign ated as c la s s e s
. 3. and
C.
C lass A sha 11 cons 1 s t o f Reserve Rank R epresan t e t l ves equal in number to tw ice the number o f R a tion a l
Reserve ’’ anks, and in clu d in g two members re p re se n tin g each
such Tank.
5
C lass B s h a ll c o n s is t o f Government Reserve
R ep resen ta tiv es who s h a ll be three in number and s h a ll be
r
ex o f f i c i o
the S e c re ta r y o f the Treasury, the C om p troller
o f the Currency, and the S e cre ta ry o f A g r ic u ltu r e .
C lass C s h a ll c o n s is t o f Government Reserve
O ffic e r s who s h a ll be three in number.
Reserve Bank R ep resen ta tiv es ( c l a s s A) s h a ll
be s e le c t e d by b a l l o t by the d ir e c t o r s o f R a tio n a l Re
serve nanks a t a regu lar d ir e c t o r s m eeting c a l le d fo r that
ourpose.
Each N ation al 'e serve Bank s h a ll be e n t i t l e d
to choose two R ep re se n tstiv e s who s h a ll them selves be
members o f the d ir e c t o r a t e o f the N a tion a l R eserve Rank
they r e p r e s e n t.
The chairman o f the board o f d ir e c t o r s
o f each N ation al r e se rv e Bank s h a ll be i n e l i g i b l e fo r
e l e c t i o n as r member o f the Federal Reserve Board.
Government R eserve R e p resen ta tiv e s ( c la s s B)
s h a ll be ex o f f i c i o
the S e cre ta ry o f the Treasury, the
C om p troller o f the Currency and the S e c re ta r y o f A g r ic u lt u r e •
Government Reserve O ffic e r s
(c la s s C) s h a ll
be d esign s ted by the P resid en t o f the United P ta tes by
end with the a d v ice end consen t o f the Senate end s h a ll
be three in number.
I t s h a ll be the duty o f the P r e s i
dent o f the United S ta tes to r e s ig n s te one Government Re
serve O ffic e r ns P resid en t o f the F ed eral Reserve Board,
one ns V ic e -P r e s id e n t o f the s a id Board, and one as S e
c r e ta r y o f the s a id Board.
'lie term o f o f f i c e o f the
Government Reserve O ff ic e r so d esign a ted ns P resid en t
s h a ll be ten years and the terms o f o f f i c e o f the o f f i
ce rs d e sig n a te d .a s V ic e -P r e s id e n t and S e cre ta ry r e s p e c t
iv e ly s h a ll be f i v e years each .
Upon assem bling fo r the f i r s t time members
o f the F ederal Peserve Board b elon g in g to c la s s A s h a ll
sep a ra te In to two groups under such r e g u la tio n s as the
Board nay la y down fo r e f f e c t i n g the sa id grou p in g .
One
such group s h a ll h old o f f i c e f o r three y e a r s , d a tin g from
the f i r s t o f January n ext su cceed in g the e l e c t i o n 01 mem
b e r s , the oth er fo r s i x years n ext su cceed in g such e l e c t
io n .
Each group s h a ll in c lu d e , a ' n ea rly as may b e , one
h a l f the t o t a l number" o f members o f c la s s A.
th e r e a fte r
every member o f the sa id Board b elon g in g to c la s s A s h a ll
h o ld o f f i c e f o r a term o f s i x y e a rs,
^ s c r n c ie s in c la s s
A s h a ll be f i l l e d , as they ary o c c u r , in the manner p re s
c r ib e d f o r the o r ig in a l c h o ice o f members b elon g in g to
the c la s s in which such va ca n cies o c c u r .
Board s h a ll be h^ld on January 1, 1914.
At the s a id
m eetin g, members o f the Board a fo r e s a id , b e lo n g in g to
c la s s A, s h a ll choose from among th e ir own number by b a l
l o t three members, no two o f whom s h a l l have been chosen
by the same r a t io n a l 'e s e r v e Bank, rho s h a ll be known as
Federal Reserve Committeemen.
The th ree members thus
chosen s h a l l , with the members o f c la s s e s B and C, con
s t i t u t e an e x e cu tiv e committee o f the Federal Reserve
Board o f nine members, which s h a ll be known as the Fed
e r a l Reserve Committee,
’ he Feeret* ry o f the Treasury
s h a ll be ex o f f i c i o chairman o f the F ederal Reserve
Board and Chairman o f the F ed era l Reserve Committee.
The
©
d u tie s o f the p r e s id e n t, v ic e -p r e s id e n t and s e c r e t a r y ,
and th e ir com pensation s h a ll be e s ta b lis h e d in bylaws to
be adopted by the E xecu tive Committee and approved by
the F ederal Reserve Board.
Members o f the F ederal Re
serv e Co rnittee s h a ll continue to h old o f f i c e u n t il the
e x p ir a t io n o f th e ir terms as members o f the F ederal Re
serve Board ns h e r e in b e fo r e e s ta b lis h e d .
The powers and fu n c tio n s h e r e in a ft e r con
fe r r e d upon the F ed era l Reserve Board s h a ll be e x e r c is e d
by the
e d e ra l Reserve Committee In accordan ce w ith by
laws to be e s ta b lis h e d by s a id Board.
Rut s a id Commit
tee must f u l l y re o r t i t s a c tio n on each and every m atter
o f bu sin ess f a l l i n g w ith in i t s j u r i s d i c t i o n to r gen eral
meeting o f the ^oard to be convened n ot le s s fr e q u e n tly
than once each month.
E very member o f s: id board may
m#iy a t h is d is c r e t io n atten d m eetings o f the E xecutive
Committee e l though he s h a ll have no v ote a t such meet
in g s .
Ro member o f c la s s A who s h a ll he chosen rs
h e re in p ro v id e d , a member o f the Federal Reserve Committee
s h e l l con tin u e to h old o f f i c e or to a c t as a d i r e c t o r o f
any bank or banking I n s t it u t io n or N ation al Reserve r *nk;
end b e fo r e e n te r in g upon h is d u tie s as a member o f the f e d
e r a l Reserve Committee he s h a ll c e r t i f y under oath to the
S e c r e ta r y o f the Treasury th at he hag com plied w ith the
requirem ents o f th is
s e c tio n .
Acceptance o f membership
in the F ederal Reserve Committee by any member o f the
F ed eral Reserve Board s h a ll a u to m a tica lly c lo s e h is term
as a F ederal R eserve Rank Represent** tiv e and the N ation
a l r e s e rv e Bank from which he was o r i g i n a l l y chosen s h a ll
a t once proceed to the c h o ic e o f a s u cce sso r in the
ner h e r e in b e fo r e d e s c r ib e d ,
isn-
whenever a vacancy s h a ll
occu r among the three members o f the F ederal Reserve Com
m ittee who are choaeys from the members o f c la s s A, a su c
c e s s o r s h a ll w ith in t h ir t y days be chosen to f i l l
vacancy a fo r e s a id , by
the
the rrethod h e r e in b e fo r e s p e c i f i e d
f o r the o r ig in a l c h o ice and when chosen the s a id s u c c e s s
or s h a l l h old o f f i c e f o r the unexpired term o f the member
whose p la ce he is s e le c t e d to f i l l .
<
-he three members o f
the F ed eral Reserve Committee chosen F ederal Reserve Re
p r e s e n ta tiv e s (c la s s A) s h a ll h old o f f i c e
fo r the terms
fo r which they we-e o r i g i n a l l y s e le c t e d as members o f the
F d e ra l Reserve Hoard by the method h e r e in b e fo r e p rov id ed .
’e
Fee. 12.
That upon the nom ination o f the
r e s id e n t
o f the F ederal Reserve Board the E xecu tive Committee
h e r e in b e fo r e e s ta b lis h e d s h e l l a p p oin t a l l o f f i c e r s and
employees o f the s a id Board end o f the s a id Committee
s h p ll hrve p orer to determine th e ir rerauneration, tenure
o f o f f i c e and d u t ie s .
The Federal -e s o r v e Committee
s h a ll f i x the com penretion o f a l l o f f i c e r s e x p r e s s ly
named bjr the p r o v is io n s ol
th is a c t .
The F ederal Reserve Committee s h e l l hrva
f u l l c o n t r o l, s u b je c t to the Federal Reserve Board, o f
U.e d e ta ile d management o f s r id Board.
For th is purpose
i t s h e l l meet r e g u la r ly once a w<*ek a t the o f f i c e oi the
.
Board or a t such oth er p la ce s
the Chairman o f the Board.
may be d esign s ted by
S p e c ia l m eetings may bo c a l l
ed by the Chairman or by any three members.
The F ederal Reserve Board s h a ll ap p oin t a
Boa I'd o f Examiners c o n s is t in g o f three members, to r e
p o rt a t any time upon the c o n d itio n s o f c r e d i t , the hind
o f b u sin ess done, and the proper con d u ct o f the d isco u n ts
at each R a tion a l Reserve T
,ank or o f any in d iv id u a l bank;
and a ?id Board may a u th orize the employment o f s u it a b le
a s s is t a n t s , i f needed, f o r th is work o f exam in ation .
he fe c r e t a r y o f the Treasury as Chairman
o f the F ederal Reserve Board and Chairman o f tho Execut
ive Committee s h a ll be r e s p o n s ib le f o r the d i s c i p l i n e
o f the E xecutive S t a f f o f the Board, determ ine the dut
ie s o f the v a riou s persons con cern ed , secu re the p re
p a ra tion o f
the r e p o r ts to be made to the E xecutive
Coramittee and the members o f the Board, and perform e l l
oth er d u tie s p e rta in in g to h is o f f i c e .
A ll o f h is s e ts
s h a ll be s u b je c t to the review o f the E xecutive Committee
and i t s d e c is io n in a l l m atters p e rta in in g to h is d u ties
s h a ll be f i n a l u n less reversed by the Board.
In the ab
sence or I lln e s s o f the S e cre ta ry o f the Treasury, h is
d u tie s s h a ll d ev olv e upon the C om p troller o f the Curren
cy a c tin g as Vice-Chairm an.
The expenses o f the P d e ra l "e s e r v e Board
’e
s h a ll be paid by the N ation al Reserve Banks out o f th e ir
g ross r e c e ip t s in such a manner and a t such times as the
Board s h a ll d i r e c t .
Each Reserve p ank s h a ll pay such
a p o r t io n o f s a id expenses as Its c a p it a l rod su rplus
bear to the aggregate c a p it a l and su rp lu s o f a l l .
At a l l meetings o f the Board a quorum s h a ll
c o n s i s t o f tw o -th ird s i t s
t o t a l number o f members.
A
m a jo rity o f th ose p resen t s h a ll be req u ired to pass any
r e s o lu t io n .
Each member s h a ll be reim bursed f o r h is
rea son a b le t r a v e llin g and oth er n ecessa ry expenses fo r
attendance on each d ie t in g , on vouchers approved by the
E xecu tive Committee
,
S ec. 13.
js J
f ^
lha t the F ederal Reserve Board h e r e in b e fo re
e s ta b lis h e d s h a ll be a u th orized and empowered
(a ) to examine once each month at i t s d i s
c r e t io n the accounts and books o f each N ation al re se rv e
bank.
apportionm ent
(b ) To determine the
of
fe d e r a l d e p o s its ©none the r a t io n a l "e s e r v e Banks.
( c ) m req u ire a N ation al Reserve Bank to
o
r e d is c o u n t paper o f any oth er r a t io n a l Reserve Bank.
(d ) To a s c e r ta in once each month the c h a ra ct
er o f the paper h e ld by each r a t io n a l Reserve Bank, and
tc re q u ire at i t s d is c r e t io n the sus pens .ton o f fu rth e r
issu e s f o r a d esign ated p e r io d .
(e ) To e s t a b l i s h each week or as much o ft e n
or ns req u ired a ra te o f d is c o u n t which s h a ll be manda
tory upon each N ation al Reserve Bank and fo r each c la s s
o f paper; P rovid ed , That s a id ra te o f d is c o u n t need n ot
be uniform f o r a l l reserv e banks; and, p rovid ed fu rth e r
th at the Federal Reserve Board s h a ll graduate the rate
o f d is c o u n t made mandatory upon any F ed eral Reserve Bank
in p ro p o rtio n to the e x te n t o f the is s u e s and d e p o s it
l i a b i l i t i e s as compared with the r e se rv e funds o f such
banks.
(f)
To suspend f o r r p e rio d not exceed in g
t h ir t y days (and to renew such su sp en sion f o r p eriod s
o f not to exceed f i f t e e n days) any and every re se rv e r e
quirem ent s p e c i f i e d in t h is a c t .
(g ) To e s t a b lis h a graduated tax which s h e ll
■■
■
.
S ec, 15. A.
„
, tA j / L i
A A
^ ^
That any R a tion a l Reserve Bank may a t
i t s orn d is c r e t io n purchase in the open market e it h e r
from dom estic or fo r e ig n hanks or in d iv id u a ls , bankers
b i l l s and b i l l s o f exchange o f the kinds and m a tu ritie s
by th is a c t made e l i g i b l e f o r r e d is c o u n t.
4 ^ J
S ec. 21.
u ib
t
/ >
A / *rVV' ^
That a l l moneys no?' h eld in the generr 1
fund o f the Treasury s h e ll w ith in s i x months from the
oassage o f th is a c t he d e p o site d in j fliio n p l Reserve
Ranks; and th e r e a fte r the revenues o f the Government s h a ll
he r e g u la r ly d e p o site d in such banks end disbursem ents
s h e l l be made by check drawn a g a in st such d e p o s it s .
s h a ll be the duty o f the Federal Reserve Board h e re in
e s ta b lis h e d to ap p o rtio n the funds o f the Government
among the s a id N ation al neserve Bank3.
! *\rr / v
It
I n te r e s t on d e p o s it s ; snd no K u tion el Banking A s s o c ia tio n
sh?i 11 pay I n t e r e s t on funds o f oth er bpnks d e p o site d
with i t .
/ t i t-/
/£ A
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u
( l 7f
_ V- -j/V*’
^
,0C* 23.
That sny N ation al Reserve Bank n -y a t i t s
f/ I »
KJ
d i s c r e t i o n , s u b je c t to the p r o v is io n s o f th is n e t, make
apolx ca tlo n to the F ederal Reserve Board th rough tjie
l o c a l J jadarJB.1 263iL£BP Ngent f o r F ederal Reserve n o te s .
Fa id n otes s h a ll be in a l l re sp o c ts a i n i l a r to a x is tigs,
f h j t,
i< t io n s I dank n otes excep t th e t they s h a ll n ot bear any
a
/W f,
4
legend or s u p e r s c r ip tio n in d ic a tin g that they are s e
cured by United S ta te s or oth er bonces.
But no n a tio n a l
eserv e Bank s h a l l r e c e iv e in the aggregate n otes e x
A « ;.h *
*
/
ceed in g
p
sum equal to jthe fr e e ve^ue o f the c a p it a l
s to ck o f such Bank plus the s to c k h o ld e r s ’ in d iv id u a l
55^ *
l i a b i l i t y , o r j i n the aggregate a sum double the fa ce
. A
value o f the c a p it a l s to c k o f such Tank.
Upon r e c e iv in g
an a p p lic a t io n f o r notes from any N ation al Reserve Bank,
the F ederal Reserve Board 3 h a ll im m ediately issu e said
n otes to the Bank making s a id a p p lie s t io n .
Any Ration*
a l Reserve Bank d e s ir in g to reduce i t s c i r c u l a t io n nay
do s o , upon the same c o n d itio n s no^ p r e s c rib e d fo r the
Jo
[i 1^2-
retirem en t o f R a tion a l bank n o te s ; P rov id ed , That nothV
s
Ing in the s ta tu te s o f the United S ta le s s h a ll preven t
a N ation al Reserve Bank from r e t i r i n g i t s ou tstan din g
ftp -
notes as r a p id ly as i t s o f f i c e r s and d ir e c t o r s a ry deem
bee t.
I t s h a ll be the duty o f every r a t io n a l Re
serv e Bank to r e c e iv e on d e p o s it a t par the notes o f
A
-
ev ery oth er R a tion a l Reserve Bank and o f every R a tio n a l
i n k i n g A s s o c ia tio n .
Every N a tion a l Reserve Bank 'h a l l
p rovid e f o r the redem ption o f i t s or-n n otes on demand
in g o ld a t one p o in t in every re se rv e d i s t r i c t throughout
the United n t a t e s .
The method o f such redem ption and
the p ro v is io n s under which I t s h e l l he c a r r ie d on s h e l l
be s u b je c t to c o n t r o l by the F ed eral Reserve Board, rnd
i t s h a ll he the duty o f sa id Board to e s t a b lis h such
r u le s end re g u la tio n s that a l l n otes issu ed by N ation al
Reserve Banks s h a ll be m aintained c o n v e r t ib le in to g old
a t par w ithou t exchange throughout the United S ta ten .
I t s h a ll be the duty o f every R a tio n a l Re
serve Bank to r e c e iv e on d e p o s it a t par and w ithou t
charge f o r exchange checks ana d r a ft s drawn by any o f
i t s s to ck h o ld e rs or d e p o s ito r s upon any oth er s to c k h o ld
ers or d e p o s ito r s and checks and d r a ft s drawn by any
s to c k h o ld e r or d e p o s ito r in any oth er N ation al Reserve
Bank upon funds to the c r e d i t o f sa id sto c k h o ld e r or
d e p o s ito r in s a id Reserve Bank l a s t m entioned.
eral
The Fed
ecerv e Board s h a ll make and prom ulgate from time
to time r e g u la tio n s govern ing the
tr a n s fe r o f funds a t
par among R a tion a l Reserve Banks and may a t I ts d i s
c r e t io n e x e r c is e the fu n ctio n s o f a c le a r in g house fo r
R a tion a l Reserve Banks.
S e c. 36.
That no r a t io n a l Pank s h a ll h e r e a fte r make
any loan or gra n t any g r a tu ity to any examiner o f such
Bank.
Any Bank o ffe n d in g a g a in st th is p r o v is io n s h a ll
he deemed g u il t y o f a misdemeanor, and s h a ll he fin e d
n ot more than ".1*000 and a fu r th e r sun equ al to the
o f f i c e r s o f a bank making such loan or gra n tin g such
g r a tu it y s h a ll be lik e w is e deemed g u ilt y o f a raisdemeano r , and s h a ll be fin e d n ot to exceed
' _
' h*
A.
'T ' A
500.
Ony examiner
him s h a ll be deemed g u il t y o f a misdemeanor, and s h a ll
be fin e d n ot more than
500, and a fu rth e r sum equal to
the money no loaned or g r a tu ity g iv en .
0<
!V/<fiea
'
y p y 'f . / . v*: J ■ >*•-.. ,r * '
?/
,*'‘
S e c . 39.
'
That r.ny r a t io n * 1 '’.pnkir.p; f 3 C ocir t,la;i n ot
s itu a t e d in a Reserve C ity or C en tral -© serve C ity may
/t*
*
0 "r
V
\
rapke loan s (secured) by^lnproved (and unencumbered) farm
lan d , |nnd so much o f s e c t io n
, R evised s t a t u t e s ,
as p r o h ib its the making o f such loan s by banks so s it u a t
ed s h a ll bo and the same is hereby re p e a le d , p ro v id e d ,
k~ f ^ f ''
th at no such loan s h a ll be made to an amount exceed in g
50 per centum o f the a ctu a l v- lue o f the p ro p e rty o f f e r
ed as s e c u r it y , and such p r o p e r tie s s h a ll he s itu a t e d
w ith in the R a tion a l Reserve d i s t r i c t In which the sa id
bank is lo c a t e d ; and provided fu r th e r th at the aggregate
<A
9
*mount o f such loans made by any one bank sh a ll^ n ot e x Z /^ ft
T i-v
ceecl a sum equ al to 25 per cen t o f the c a p it a l and su r
p lu s , unim paired, o:. such bank.
The Federal Reserve Board s h a ll have power
fit/ /)**■
k '■
/ t /V
. .
from time to time to add to the l i s t oi c i t i e s in which
R a tion a l Ranks s h a ll not be perm itted to make loans s e
cured upon r e a l e s ta te in the manner d e s cr ib e d in th is
sec tio n .
.
}>r« d/u-* f Cr* / .
r*'
>
e/y+MS S'*
.
»A C
$
1
paid as the cere ray be r i t h in t e r e s t a t f i v e per ce n t
pe r a nmim to bo roc kone d f r or: the d f to oi ti:e » p > i n t •
o
meat o f the r e c e iv e r .
t f t e r r r e c e iv e r s h a ll have been
appointed to c lo n e up the s f f s i r r
o f any K a t i o a l P«nk*>
in g / s e o c i a t i o n , the bonds o f the United S t a t e s , i f any,
d e p o s ite d by s a id 'a sso cia tio n w ith the Treasurer o f the
U nited S ta tes s h e ll be s o ld an p rovid ed by law and the
proceeds o f such e e ls s h a ll be p ? id in to the n a tio n a l
Tank Insurance Fund,
"he C om p troller of ti e Currency
s h a ll fo rth w ith c o l l e c t f o r the b e n e f i t o f s a id fund fros
the a s s e ts o f the bank and from the s foe ’h o ld e r r th e r e o f,
:
a ccord in g to th e ir l i a b i l i t y , such susi a s , with the ’'ank1
balan ce in the Tietional Fank Insurance Fund, a h r ll equal
tlie amount o f i t s c ir c u la t i n g notes and o f i t s d e p o s its
outstanding*
And f o r th ir purpose the U nited C trier,
s h a ll* on b e h a lf o f the n a tio n a l ~>rnk Insurance Fund,
have a paramount l i e n upon a l l the a a s e ts o f the Asso
c ia t io n * and such fund s h a ll be made good out o f such
a s s e ts in p re fe r e n c e to any and a l l oth er claim s what
s o e v e r , e x ce p t the n ecessa ry c o s t and expense o f ad
m in is te r in g the se n s.
/ Ii^L4^
■ /%*
t
''f\ jj^
M
$ • * { %, 4
’
p #'
i"'* *
j r'v *
* p-A*U
v*
#*
4 ,
*** w
%
I
/
Hoc*
.
Tar;! every v« t i a n c l Banking ‘ s r o c lr t lc m
s h a ll a t r l l tin e s keep and hrv# on A« posit, w ith the
: e d e r r l Hererve Board fo r the purposes h e r e in a ft e r sp e
c i f i e d n sum in cu rren t funds equ al to f i v e per con tuns
o f i t s capita. X, « u rplus , m l u n d ivid ed p r o f i t * •
Aho
t e t r i ftmount so kept on d e p o s it s h e l l c o n s t it u t e r fund
.
to bo known an
the r a t io n a l lb nk insurance ‘ und," which
fund s h a ll be h o ld f o r the fo llo w in g purpose, and fo r
no o th e r , nam ely;—
honovor the B om p troller o f
ho
urroncy
oh/ 11 h" v-' he co/io s a t i s f i e d by the p r o t e s t or the wo Iv o r
and a dmis r ion s p e c i f i e d
In s e c t io n 622C or by the r e
p o r t provided f o r in a u c tio n 5227 o t the d e v ise d B tn tuten o f the United u ta tea th at any A s s o c ia tio n h rs r e
fused to pay i t s c ir c u la t i n g n otes on dor;r nc! in la w fu l
money, or whenever th
P t l i i f o f the Currency r h - 11
have bo core s a t i s f l e d o f the in s o lv e n c y o f any Ur io n n l
ranking A s s o c ia tio n and ?h 11 have appoin ted a r e c e iv e r
H* p rovid ed in s e c t io n 1 o f the a c t o f June 3 0 , 1076,
C om p troller s h a l l d ir e c t the redem ption o f such c i r c u l
s t in g notes - ud the payment o.
a l l ou tsta n d in g d e p o sits
whether demend or tim e, o f such in s o ’1
Ml t i c
' " nk-
ing A s s o c ia tio n from the U s lio n s 1 Bank Insurance Fund
r f o r e s a id , such , nynent to he made w ith in s i x t y dryo
from the cla to o f the a p p oin t en t o f a r e c e i v e r , and s
n otes and d e p o s it s s h a ll thereupon be no redeemed or
~ ec.
.
f a t whenever the Comptroller o* the
h
Currency s h a ll r s c e r t f i n whet d e f i c i e n c y , i f en yt
\/
e x is t s between the aggregate c o l l e c t i o n s f o r
the bene
f i t o f the ’ a t lo n a l ran’: Insurance Fund in the cane o f
any f a i l e d brnk and the amount o f i t - ou tsta n d in g
l i a b i l i t i e s redeemed end to be redeemed ?rom the -aid
fu n d s,
t h r e e -f y i » the o f such d e f i -
c ie n c y from the K rtio n a l reserv e ^ank o f the d i s t r i c t
in which the f i l l e d bank was lo c a t e d , and o n e -fo u r th
from the K stio n a l r e s e rv e ranks o f the oth er d i s t r i c t s
throughout the U nited f t a l e s , d is t r i b u t i n g s a id onefo u rth finonr sa id r a t io n a l -e a e r v e Banks in. p ro p o rtio n
Ow
wJ
. , , l#
:‘ock.
ny : : •-is- 1 I j B t m
•
gsr
11 if
f o r the b e n e f i t o f the K s tio n s l Bank
Insurance ' rnd shal l a‘ ;• y t i e
exceed its u v- i * i-cd
oroflto le v y a pro rata assessment In proportion to
capital upon Its shareholders, and said shareholders
shall within ten drys a fte r receiving notice o; s ich
assessment, remit the amount for which they are thus
made 1
liable to the Uationsl
©serve Bank in rbich they
are sh areh old ers*
"he Federal deserve Board mr y deposit
the sums jr id into the N ation al
auk Insurance
und
with the National Reserve Banks of the sever: 1 d is
tr ic ts in which said sums originate*
And such de
posits shall be held in gold coin or lawful money for
t f*
r*th M i for no others*
P rov id ed , Thet the S e c re ta r y o f the Treasury be and
is h ereby A u th orised , in h la d i s c r e t i o n , to ecus# to
• ft''
be inven ted in bond© o f the United r>t?»t*« eny p o rtio n
o f the "'nnursmce "und h e r e in b e fo r e provided f o r ; end
such bondr r .h rll ' e hold ?<nd dispon ed o f f o r the bene*
f i t o f such Fund.
1
'
*ny s t f t o b m k or t r u s t company c o n p ly in g
< j X
' it h the tern s o f thin s e t n*y p a r t ic ip a t e in
the ope re lio n s •o f the K p tlon el Benk Insurance Fund
upon cor. il lio n s
serve Po?*rd*
K
/
'
to V
e r t b lis h e d b y . the F ed eral Re
''■*
That ©very < t lo 'ia l T*'nk goln ^ id* to
‘a
l iq u id a t io n , v olu n ta ry or in v o lu n t a r y ,. r h c 11 , p r io r to
tho payment o f i t s c r e d it o r s and th • d is t r i b u t i o n o*
'
m y o f i t r r e s e ts to i t s sh a r e h o ld e rs , d e p o s it w ith the
1 e d e ra l * eserve Board law fu l money to the f u l l m ou n t
o f i t a ou tstan din g n o t e s , an : nhr 11, in a d d it io n , pay
to the a fo r e s a id Treasurer such assessm ent f o r the bene
f i t o f the F r t io n s l Peak Insurance Fund as the Com ptrol
l e r she 11 judge to be r e q u is it o to meet ruch bank’ s
lia b ility
f o r the
reimburse, -eni o f the Insurance Fund
f o r any d e fic ie n c y r e s u lt in g from the pr yment therefrom
o f the n otes and d e p o s its o f banks which s h a ll heve f a i l
ed p r ic e r to the date when such bank s h a l l Z° in to
liq
u id a tio n .
’ivory s t a t e bank or tr u s t conp ny or
oth er i n s t i t u t i o n perm itted to p a r t ic ip a t e in the op er
a tio n s o f the r a t io n a l ^ank Insurance Fund under th is
a c t s h a ll when adm itted to such p a r t ic ip a t io n execu te
such c o n t r a c t , instru m en t, o r oth er o b ll& r tio n as s h a ll
be req u ired by the F ed era l Reserve Board to secure to
the F a tio n a l Bank Insurance Fund the pro rata n osccsn en t
o f s a id bank in the ev en t o f i t s r> £ in t0
oin
iq u id a t io n .
S ec.
.
The t e l l in tore.- t a ccru in g from th#
Investm ent ft! • ny p o rtio n o f t he
fo r m : >
.
Fund, and e l l funds r e c e iv e d in payment o f the d u tie s
on c i r c u la t i o n provided f o r in ti ls a c t s h e ll be n fund
supplem entary *md in a d d itio n to the Insure nee Fund, to
be used on ly in case s a id Insurance Fund s h e l l ever b e/
come i n s u f f i c i e n t to redeem any bank notes issu ed or
d e p o s its ou tstan din g under the p r o v is io n s o f thin a c t ,
end i t s h a ll n o t be taken in t o a ccou n t in e stim a tin g
*
the amount o f assessm ents n ecessa ry to r e p le n is h s a id
Insurance Fund or in repayment to banks o f t h e ir c o n tr i
bu tton s to the Insurance Fund*
henever the s a id Fund w ith accurcul
s t io n s o f i n t e r e s t s h a ll exceed in the aggregate ten
per centum o f the c a p it a l su rp lu s and u n d ivid ed p r o f i t s
o f the banks p a r t ic ip a t in g in i t s o p e ra tio n s such oxcos
s h r l l be returned to the c o n t r ib u tin g bs/jka in p r o p o r iion to t h e ir p a rt c o n tr ib u tio n s to r> id fund.
-
n ee.
"hot every r a t io n a l Banking ‘ s n o c in t lo n
s h a ll a t r a i times keep and have on d e p o s it w ith the
F ed eral re se rv e Board f o r th~ purposes h e r e in a ft e r sp e
c ifie d •
u” in cu rren t funds equal to one h a l f o f one
per centum o f i t s c a p i t a l , su rp lu s 'n o undivided pro
fit.
"'ho ■.1 7 rmoun*. no kept on d e p o s it r i l l c o n s t i t
u te a fund to be known ns ’’ lie r a t io n a l Bank Liquid? t in g Fund” w! ich s h a ll '■© h eld f o r ti e fo llo w in g purpose
rud f o r no o th e r , namely;
henever the C om p troller o f the Cur rone
s h a l l have become s a t i s f i e d by the p r o t e s t or the r n iv o r
and adm ission s p e c ifie d in s e c t io n 5226 or by the r e p o r t
provid ed f o r in s e c t io n 5227 o f the R evised R trtuton
o f the United P la te s that m y "
o c la t io n has refu sed
to pry i t s c ir c u la t i n g n otes on isla n d in law fu l money,
or* whenever the Comptro H e r o f the Currency sh 11 have
bee
.e s a t i s f i e d o f the In solv en cy o f any Tlrtio! r 1 Bank
in g f a s o e l a t i o n , and shr 11 hrvo appointed n r e c e i v e r ,
as provided in s e c t io n 1 o f the a c t o f June 3 , 1876,
the C om p troller s h r lI n d ir e c t the redem ption o f such c i r
cu la tin g n otes from the proceeds o f the U nited f ta le s
bonds h eld by the Treasurer o f the U nited f t ' tes n
se
c u r it y fo r a r id n otes rr p rovid ed by law and o h "11
d i r e c t the liq u id a t io n o f a l l ou tsten d in g d e p o s its *t oX
o r demand or time from the R a tio n a l Bank L iq u id a tin g
Fund e fo r e s n id , such p? yrnent to be made w ith in s i x t y
days from the d a t'1 o f ’.he appointment ox n r*ecci'rr r •
he sa id r e c e iv e r s h a l l , im m ediately upon h is a p p o in t-
n e n t, p roceed to n v a lu a tio n o f the a s s e ts o f the L e tlo n i n k i n g *s s o c le l io n to which ho has been named and
r h a ll w ith in ten
•ye r e p o r t to the C om p troller o f the
Currency the probable r e a l iz a b le v ? lu© o f the a s s e ts o f
t i e m i d "SFiociation e x c lu s iv e o f the «uas in v o ste d in
United S ta te s bond”; fo r the p r o t e c t io n o f its? ou ts tend.'.ny c i cu lrtirr* no tee .
* f the a fo r e s a id r e p o r t o f the
r e c e iv e r s h e ll be approved by the C om p troller o f the
Currency, the sa id C om p trol'er s h e l l c e r t i f y i t
© the
~ e c r o t ry o f the > * * s u r y , ami i t s h e l l be the duty o f
U e s a id S e c r e ta r y , n otin g eg Chairsnn o f the ; ed e rn l
eaerve Board to d ir e c t tho payment to the r e c e iv e r o f
the f c i t e 1 Nntio a- Bank!
A s s o c ia tio n o f n sum from
Uie N ation al Bank L iq u id a tin g fund equal to tho v a lu a t
ion o f i t s a s se ts e x c lu s iv e oi United S ta te s bonds h eld
i u
ti e p r o t e c t io n o f c i e u la tin g n otes as a proved by
U:e C om p troller.
It
h a ll be the duty o f the s a id r e
c e i v e r , 1m e d ia te ly upon the r e c e i pt o f the nvm a f o r e n<\, to d e c la r e and pry a iiv id e n d to a l l d e p o s ito r s
o f the r a t io n a l Banking 's s o c i f t l o n to rh lo h he has h*on
n mod pro r a t r ,
In live p ro p o rtio n borne by the sum r e
c e iv e d from the r a t io n a l Bank Liquid- tin g Fund to the
t o t a l ou tstan din g d e p o s it s o f the f a i l e d bank whether
de an<: or U e a • h e re in b e fo r e d e s c r ib e d ,
T h erea fter
the N ation al Bank l i q u i d / tin - Fund s h a ll have a p r io r
*is n from the a s s e ts o
r;’ v' CfKl h” nt *
t h e f i i l e d bank to the amount
fun;! for
the reimbursement o f de o r ! t o r s .
I t s h a ll be the duty o f the r e c e iv e r n fo re sn id to wind
up the a f f r ir n o f the f p i l e d henk to whidi ho 1© d^nlrriated ^
r - p io ly a~
y b e , in the rr-oine • 'to- p r o fi led
•
by le ~ , reiroburs In ; the Nation* 1 ?»nk liq u id a t in g Fund
to th© e x te n t o f the p r io r l ie n h e re in b e fo re ostr.bl lsh o d ,
r-a ! •p ly i ig the onouhtr r e a lis e d , 1: m y , over m d above
tho m ou n t o f ouch p r io r lio n to the p rop ortio n s to I I *
quidot.i >n o f such romalnln : claim s ar n«y s t i ^ l i c c u t4
* ^
<n
3
s i ' rid in : r y i n e t the f lie d ! nk, in the rr mer
j r c : •o i : - p r i o r i tie s
rub-
.rnvl *d >-y e r i t!. t ; l x .
he F ed era l d eserve P orrt jary d e p o s it
■N l
th
i r r p id In ’ o the K n tion rl ? nk Liquid*.tiny Fund
w ith the f'e t io ? 1
V
in
h lch
j-• id
•
©nerve Fenka o f the se v e ra l djM.T-J.ot*
r,ur:r- o r ig in a t e .
tnJ rueh
> ,p o s it
r.hr 11
he h e ld in £oId* coin or le w fu l m ney fo r the purposes
h e re in b e fo re "©t fo r t h end fo r no o th e r .
Itir i
;^
au th orised
x
ecret* -y cb the
ro v id e d ,
/••■saury be and i * her eby
in h i" d in e r© tlo n , to oruse to 1 e invented
in bond? o f the Unite.; ~ tatoo any p o rtio n o f U M o u ld s©
n tin g Fund h e r e in b e fo re provided f o r r-.n #uch borun ohr XI
*
; d isp o se d o f fo r the b e n e fit o f su*ny r t r t o bank o r t r u s t company comply^*
iny with t.h*> terra o f th is a c t , rr.y pa* t i e l p f tr in tho
oper* t lo n - o f the I'r.tiorr 1 F nk liq u id : tin.
cend i ll o n e to h
B oord.
Fund upon
or t M ir he • by the Federal renerve
*
@FedFRASER