Full text of Emergency Banking Relief Act

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[P ublic —No. 1—73d C o n g r e s s ]

IH. R. 1491]
AN A C T
To provide relief la the existing national emergency in banking, and for other
purposes;

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That the Con­

gress hereby declares that a serious emergency exists and that it is
imperatively necessary speedily to put into effect remedies of
uniform national application.
TITLE I

Section 1. The actions, regulations, rules, licenses, orders and
proclamations heretofore or hereafter taken, promulgated, made, or
issued by the President of the United States or the Secretary of the
Treasury since March 4, 1933, pursuant to the authority conferred
by subdivision (b) of section 5 of the Act of October 6, 1917, as
amended, arc hereby approved and confirmed.
S e c . 2. Subdivision ( b ) of section 5 of the Act of October 0, 1917
(40 Stafc. L. 411), as amended, is hereby amended to read as follows:
“ (b) During time of war or during any other period of national
emergency declared by the President, the President may, through
any agency that he may designate, or otherwise, investigate, regulate,
or prohibit, under such rules and regulations as he may prescribe, by
means of licenses or otherwise, any transactions in foreign exchange,
transfers of credit between or payments by banking institutions as
defined by the President, and export, hoarding, melting, or ear­
marking of gold or silver coin or bullion or currency, by any person
'within the United States or any place subject to the jurisdiction
thereof; and the President may require any person engaged in any
transaction referred to in this subdivision to furnish under oath,
complete information relative thereto, including the production of
any books of account, contracts, letters or other papers, in connec­
tion therewith in the custody or control of such person, either before
or after such transaction is completed. Whoever willfully violates
any of the provisions of this subdivision or of any license, order,
rule or regulation issued thereunder, shall, upon conviction, be fined
not more than $10,000, or, if a natural person, may be imprisoned
for not more than ten years, or both; and any officer, director, or
agent of any corporation who knowingly participates in such
violation may b^ punished by a like fine, imprisonment, or both.
As used in this subdivision the term 4person ’ means an individual,
partnership, association, or corporation.”
S ec . 3. Section 11 of the Federal Reserve Act is amended by
adding at the end thereof the following new subsection:
“ (n) Whenever in the judgment of the Secretary of the Treasury
such action is necessary to protect the currency system of the United
States, the Secretary of the Treasury, in his discretion, may require




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any or all individuals, partnerships, associations and corporations
to pay and deliver to the Treasurer of the United States any or all
gold coin, gold bullion, and gold certificates owned by such indi­
viduals, partnerships, associations and corporations. Upon receipt
of such gold coin, gold bullion or gold certificates, the Secretary
of the Treasury shall pay therefor an equivalent amount of any
other form of coin or currency coined or issued under the laws of
the United States. The Secretary of the Treasury shall pay all
costs of the transportation of such gold bullion, gold certificates,
coin, or currency* including the cost of insurance, protection, and

such other incicfental costs as may be reasonably necessary. Any
individual, partnership, association, or corporation failing to comply
with any requirement of the Secretary of the Treasury made under
this subsection shall be subject to a penalty equal to twice the value
of the gold or gold certificates in respect of which such failure
occurred, and such penalty may be collected by the Secretary of the
Treasury by suit or otherwise."

Sec. 4. In order to provide for the safer and more effective oper­
ation of the National Banking System and the Federal Reserve
System, to preserve for the people the full benefits of the currency
provided for by the Congress through the National Banking System
and the Federal Beserve System, and to relieve interstate commerce
of the burdens and obstructions resulting from the receipt on an
unsound or unsafe basis of deposits subject to withdrawal by check,
dming such emergency period as the President of the United States
by proclamation may prescribe, no member bank of the Federal
Reserve System shall transact any banking business except to such
extent and subject to such regulations, limitations and restrictions as
may be prescribed by the Secretary of the Treasury, with the
approval of the President. Any individual, partnership, corpora­
tion, or association, or any director, officer or employee thereof,
violating any of the provisions of this section shall be deemed guilty
of a misdemeanor and, upon conviction thereof, shall be fined not
more than $10,000 or, if a natural person, may, in addition to such
fine, be imprisoned for a term not exceeding ten years. Each day
that any snch violation continues shall be deemed a separate offense.
TITLE II
Sec. 201. This title may be cited as the 44Bank Conservation Act.”
S e c . 202. As used in this title, the term “ bank” means (1) any
national banking association, and (2) any bank or trust company
located in the District of Columbia and operating under the super­
vision of the Comptroller of the Currency; and the term “ State”
means any State, Territory, or possession of the United States, and
the Canal Zone.
8»o. 203. Whenever he shall deem it necessary in order to conserve
the assets of any bank for the benefit of the depositors and other
creditors thereof, the Comptroller of the Currency may appoint*a
conservator for such bank and require of him such bond and security
as the Comptroller of the Currency deems proper. *The con­
servator, under the directicm of the Comptroller, shall take possession
o f the books, records, and assets of every description of such bank,




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and take such action as may be necessary to conserve the assets of
such bank pending further disposition of its business as provided
by law. Such conservator shall have all the rights, powers, and
privileges now possessed by or hereafter given receivers of insolvent
national banks and shall be subject to the obligations and penalties,
not inconsistent with the provisions of this title, to which receivers
are now or may hereafter become subject. During the time that such
conservator remains in possession of such bank, the rights of all
parties with respect thereto shall, subject to the other provisions
of this title, be the same as if a receiver had been appointed therefor.
All expenses of any such conservatorship shall be paid out of the
assets of such bank and shall be a lien thereon which shall be prior
to any other lien provided by this Act or otherwise. The conservator
shall receive as salary an amount no greater than that paid to
employees of the Federal Government for similar services.
S e c . 2 0 4 . The Comptroller of the Currency shall cause to be made
such examinations of the affairs of such bank as shall be necessary
to inform him as to the financial condition of such bank, and the
examiner shall make a report thereon to the Comptroller of the Cur­
rency at the earliest practicable date.
S e c . 2 0 5 . If the Comptroller of the Currency becomes satisfied that
it may safely be done and that it would be in the public interest, he
may, in his discretion, terminate the conservatorship and permit such
bank to resume the transaction of its business subject to such terms,
conditions, restrictions and limitations as he may prescribe.
S e c . 206. While such bank is in the hands of the conservator
appointed by the Comptroller of the Currency, the Comptroller may
require the conservator to set aside and make available for with­
drawal by depositors and payment to other creditors, on a ratable
basis, such amounts as in the opinion of the Comptroller may safely
be used for this purpose; and the Comptroller may, in his discre­
tion, permit the conservator to receive deposits, but deposits received
while the bank is in the hands of the conservator shall not be subject
to any limitation as to payment or withdrawal, and such deposits
shall be segregated and shall not be used to liquidate any indebted­
ness of such bank existing at the time that a conservator was
appointed for it, or any subsequent indebtedness incurred for the
purpose of liquidating any indebtedness of such bank existing at the
time such conservator was appointed. Such deposits received while
the bank is in the hands of the conservator shall be kept on hand in
cash, invested in the direct obligations of the United States, or
deposited with a Federal reserve bank. The Federal reserve banks
are hereby authorized to open and maintain separate deposit
accounts for such purpose, or for the purpose of receiving deposits
from State officials in charge of State banks under similar
circumstances.
S e c . 207. In any reorganization o f any national banking associa­
tion under a plan o f a kind which, under existing law, requires the
consent, as the case may be, (a) of depositors and other creditors
or (b) o f stockholders or (c) of both depositors and other creditors
and stockholders, such reorganization shall become effective only (1)
when the Comptroller of the Currency shall be satisfied that the plan
of reorganization is fair and equitable as to all depositors, other ered-




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itors and stockholders and is in the public interest and shall have
approved the plan subject to such conditions, restrictions and limita­
tions as he may prescribe and (2) when, after reasonable notice of
such reorganization, as the case may require, (A) depositors and
other creditors of such bank representing at least 75 per cent in
amount of its total deposits and other liabilities as shown by the
books of the national banking association or (B) stockholders own­
ing at least two-thirds of its outstanding capital stock as shown by
the books of the national banking association or (C) both depositors
and other creditors representing at least 75 per cent in amount of the
total deposits and other liabilities and stockholders owning at least
two-thirds of its outstanding capital stock as shown by the books of
the national banking association, shall have consented in writing
to the plan of reorganization: Provided, however. That claims or
depositors or other creditors which will be satisfied in full under the
provisions of the plan of reorganization shall not be included among
the total deposits and other liabilities of the national banking asso­
ciation in determining the 75 per cent thereof as above provided.
When such reorganization becomes effective, all books, records, and
assets of the national banking association shall be disposed of in
accordance with the provisions of the plan and the affairs of the
national banking association shall be conducted by its board of
directors in the manner provided by the plan and under the condi­
tions, restrictions and limitations which may have been prescribed
by the Comptroller of the Currency. In any reorganization which
shall have been approved and shall have become effective as provided
herein, all depositors and other creditors and stockholders of such
national banking association, whether or not they shall have con­
sented to such plan of reorganization, shall be fully and in all
respects subject to and bound by its provisions, and claims of all
depositors and other creditors shall be treated as if they had con­
sented to such plan of reorganization.
Sec. 208. After fifteen days after the affairs of a bank shall have
be^n turned back to its board of directors by the conservator, either
with or without a reorganization as provided in section 207 hereof,
the provisions of section 206 of this title with respect to the segre­
gation of deposits received while it is in the hands of the conservator
and with respect to the use of such deposits to liquidate the indebted­
ness of such bank shall no longer be effective: Provided, That before
the conservator shall turn back the affairs of the bank to its board
of directors he shall cause to be published in a newspaper published
in the city, town or county in which such bank is located, and if no
newspaper is published in such city, town or county, in a newspaper
to be selected by the Comptroller of the Currency published in the
State in which the bank is located, a notice in form approved by the
Comptroller, stating the date on which the affairs of the bank will
be returned to its board of directors and that the said provisions of
section 206 will not be effective after fifteen days after such date;
and on the date of the publication of such notice the conservator
shall immediately send to every person who is a depositor in such
bank under section 206 a copy of such notice by registered mail ad­
dressed to the last known address of such person as shown by the
records of the bank, and the conservator shall send similar notice in




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5

like manner to every person making deposit in such bank under sec­
tion 206 after the date of such newspaper publication and before the
time when the affairs of the bank are returned to its directors.
S ec . 209. Conservators appointed pursuant to the provisions of this
title shall be subject to the provisions of and to the penalties pre­
scribed by section 5209 of the Revised Statutes (U. S. C., Title 12,
sec. 592); and sections 112,113,114,115,116 and 117 of the Criminal
Code of the United States (U. S. G\, Title 18, secs. 202, 203, 204, 205,
206 and 207), in so far as applicable, are extended to apply to con­
tracts, agreements, proceedings, dealings, claims and controversies
by or with any such conservator or the Comptroller of the Currency
under the provisions of this title.
S e c . 210. Nothing in this title shall be construed to impair in any
manner any powers of the President, the Secretary of the Treasury,
the Comptroller of the Currencv, or the Federal Reserve Board.
S e c . 211. The Comptroller of the Currency is hereby authorized
and empowered, with the approval of the Secretary of the Treasury,
to prescribe sucli rules and regulations as he may deem necessary in
order to carry out the provisions of this title. Whoever violates any
rule or regulation made pursuant to this section shall be deemea
guilty of a misdemeanor and, upon conviction thereof, shall be fined
not more than $5,000, or imprisoned not more than one year, or both.
TITLE III
Ssc. 301. Notwithstanding any other provision of law, any national
banking association may, with the approval of the Comptroller of
the Currency and by vote of shareholders owning a majority of the
stock of such association, upon not less than five days’ notice, given
by registered mail pursuant to action taken by its board of directors,
issue preferred stoclv in such amount and with such par value as shall
be approved by said Comptroller, and make such amendments to its
articles of association as may be necessary for this purpose; but, in
the case of any newly organized national banking association which
has not yet issued common stock, the requirement of notice to and
vote of shareholders shall not apply. No issue of preferred stock
shall be valid until the par value oi all stock so issued shall be paid in.
S ec . 302. (a) The holders of such preferred stock shall be entitled
to cumulative dividends at a rate not exceeding 6 per centum per
annum, but shall not be held individually responsible as such holders
for any debts, contracts, or engagements of such association and shall
not be liable for assessments to restore impairments in the capital of
such association as now provided by law with reference to holders of
common stock. Notwithstanding any other provision of law, the
holders of such preferred stock shall have such voting rights, and
such stock shall be subject to retirement in such maimer and on such
terms and conditions, as may be provided in tlie articles of associa­
tion with the approval of the Comptroller of the Currency.
(b) No dividends shall be declared or paid on common stock until
the cumulative dividends on the preferred stock shall have been paid
in full; and, if the association is placed in voluntary liquidation or a
conservator or a receiver is appointed therefor, no payments shall be
made to the holders of the common stock until the holders of the




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preferred stock shall have been paid in full the par value of such
stock plus all accumulated dividends.
S e c . 3 0 3 . The term “common stock" as used in this title means
stock of national banking associations other than preferred stock
issued under the provisions of this title. The term “capital’’ as used
in provisions of law relating to the capital of national banking asso­
ciations shall mean the amount of unimpaired common stock plus
the amount of preferred stock outstanding and unimpaired; and the
term “ capital stock ", as used in section 12 of the Act of March 1 4.
1 9 0 0 , shall mean only the amount of common stock outstanding.
S e c . 304. If in the opinion of the Secretary of the Treasury any
national banking association or any State bank or trust company
is in need of funds for capital purposes either in connection with the
organization or reorganization of such association. State bank or
trust company or otherwise, he may, with the approval of the Presi­
dent, request the Reconstruction Finance Corporation to subscribe
for preferred stock in such association, State bank or trust company,
or to make loans secured by such stock as collateral, and the Recon­
struction Finance Corporation may comply with such request. The
Reconstruction Finance Corporation may, with the approval of the
Secretary of the Treasury, and under such rules and regulations as
he may prescribe, sell in the open market or otherwise the whole or
any part of the preferred stock of any national banking association.
State bank or trust company acquired by the Corporation pursuant
to this section. The amount of notes, bonds, debentures, and other
such obligations which the Reconstruction Finance Corporation is
authorized and empowered to issue and to have outstanding at any
one time under existing law is hereby increased by an amount suffi­
cient to carry out the provisions of this section.
TITLE IV
S e c . 4 0 1 . The sixth paragraph of Section 1 8 of the Federal
Reserve Act is amended to read as follows:
“ LTpon the deposit with the Treasurer of the United States, (a)
of any direct obligations of the United States or (b) of any notes,
drafts, bills of exchange, or bankers’ acceptances acquired under
the provisions of this Act, any Federal reserve bank making such
deposit in the manner prescribed by the Secretary of the Treasury
shall be entitled to receive from the Comptroller of the Cur­
rency circulating notes in blank, duly registered and counter­
signed. When such circulating notes are issued against the security
of obligations of the United States, the amount of such circulating
notes shall be equal to the face value of the direct obligations of the
United States so deposited as security; and, when issued against the
security of notes, drafts, bills of exchange and bankers’ acceptances
acquired under the provisions of this Act, the amount thereof shall
be equal to not more than 90 per cent of the estimated value of such
notes, drafts, bills of exchange and bankers’ acceptances so deposited
as security. Such notes shall be the obligations of the Federal
reserve bank procuring the same, shall be in form prescribed by the
Secretary of the Treasury, shall be receivable at par in all parts of
the United States for the same purposes as are national bank notes,




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and shall be redeemable in lawful money of the United States on
presentation at the United States Treasury or at the bank of issue.
The Secretary of the Treasury is authorized and empowered to pre­
scribe regulations governing the issuance, redemption, replacement,
retirement and destruction of such circulating notes and the release
and substitution of security therefor. Such circulating notes shall
be subject to the same tax as is provided by law for the circulating
notes of national banks secured by 2 per cent bonds of* the United
States. No such circulating notes shall be issued under this para­
graph after the President has declared by proclamation that the
emergency recognized by the President by proclamation of March
6, 1933, has terminated, unless such circulating notes are secured by
deposits of bonds of the United States bearing the circulation priv­
ilege. When required to do so by the Secretary of the Treasury,
each Federal reserve agent shall act as agent of the Treasurer of
the United States or of the Comptroller of the Currency, or both,
for the performance of any of the functions which the Treasurer
or the Comptroller may be called upon to perforin in carrying out
the provisions of this paragraph. Appropriations available for dis­
tinctive paper and printing United States currency or national bank
currency are hereby made available for the production of the circu­
lating notes of Federal reserve banks herein provided; but the United
States shall be reimbursed by the Federal reserve bank to which such
notes are issued for all expenses necessarily incurred in connection
with the procuring of such notes and all other expenses incidental to
their issue, redemption, replacement, retirement and destruction.77
S e c . 402. Section 10(b) of the Federal Reserve Act, as amended,
is further amended to read as follows:
“ S ec . 10(b). In exceptional and exigent circumstances, and when
any member bank has no further eligible and acceptable assets avail­
able to enable it to obtain adequate credit accommodations through
rediscounting at the Federal reserve bank or any other method pro­
vided by this Act other than that provided by section 10 (a), any
Federal reserve bank, under rules and regulations prescribed by the
Federal Reserve Board, may make advances to such member bank
on its time or demand notes secured to the satisfaction of such Fed­
eral reserve bank. Each such note shall bear interest at a rate not
less than 1 per centum per annum higher than the highest discount
rate in effect at such Federal reserve bank on the date of such note.
No advance shall be made under this section after March 3, 1934, or
after the expiration of such additional period not exceeding one year
as the President may prescribe."
S ec . 403. Section 13 of the Federal Reserve Act, as amended, is
amended by adding at the end thereof the following new paragraph:
“ Subject to such limitations, restrictions and regulations as the
Federal Reserve Board may prescribe, any Federal reserve bank may
make advances to any individual, partnership or corporation on the
promissory notes of such individual, partnership or corporation
secured by direct obligations of the United States. Such advances
shall be made for periods not exceeding 90 days and shall bear inter­
est at rates {fixed from time to time bv the Federal reserve bank,
subject to the review* and determination of the Federal Reserve
Board.”




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TITLE V
S e c . 5 0 1 . There is hereby appropriated, out of any money in the
Treasury not otherwise appropriated, the sum of $2,000,000, which
shall be available for expenditure, under the direction of the Presi­
dent and in his discretion, for any purpose in connection with the
carrying out of this Act.
S e c . 5 0 2 . The right to alter, amend, or repeal this Act is hereby
expressly reserved. If any provision of this Act, or the application
thereof to any person or circumstances, is held invalid, the
remainder of the Act, and the application of such provision to other
persons or circumstances, shall not be affected thereby.

Approved March 9th 1933 8.30 p. m.