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56THCONGRESS,

1st Session.

) HOUSE OF REPRESENTATIVES. (
]
\

DOCUMENT

No. 10.

ANNUAL REPORT
OF THE

COMPTROLLER OF THE CURRENCY
TO THE

FIRST SESSION OF THE FIFTY-SIXTH CONGRESS
OF

THE UNITED STATES.

DECEMBER 4 , 1899.

IN TWO VOLUMES.
VOLUME I.

WASHINGTON:
GOVERNMENT PRINTING OFFICE.




1899.




TREASURY DEPARTMENT,
Document No. 2155A.

Vol. T.

Comptroller of the Currency.

C0 NTENTS .
Page.
Condition of national banks at date of each report during the year
ix
Analy sis of reports of condition of national banks
X
Classification of loans
x
Fluctuations in national-bank circulation
xi
Reserve requirements
xi
Reserve required, and. held, on September 7
xi
Classification of reserve funds
xi
Recommendations relative to bank-note currency
xi
Emergency circulation, demand, for
XII
Governmental currency, credit of
xn
Contraction of deposits and loans of national banks in 1893
xn
Delay incident to printing national-bank circulation
xn
Cancellation of orders for additional circulation in 1893
xn
Limit of money stringency
xm
Fluctuations of reserve of national banks in 1893
xm
Emergency circulation necessary to lessen effects of industrial and bank panics
xm
Renewal of recommendations relative to emergency circulation
xm
President's recommendation relative to issue of circulation to par of bonds
xnr
Object of allowing banks to issue circulation to par of bond deposit
xm
Present profits not sufficient to warrant issuing circulation to the maximum
xiv
Recommendation authorizing issue of circulation to par of bonds with special tax on the 10 per
cent increase
xiv
Reduction or abolishment of the present tax on circulation recommended
xiv
Tax on franchise of banks to replace that on circulation
xiv
Advantages of removing the tax on circulation and placing it on the franchise of the banks
xiv
Profit on circulation at various rates of tax thereon
xiv, xv
Probable increase of circulation resulting from amendments of the laws as recommended
xvi
Available bond-secured emergency circulation based upon present amount of bonds on deposit. xvi
Summary of the views of the Comptroller on the circulation question
xvi
Detailed statement of the profit on national-bank circulation taxed at various rates issued to
par, and also to 90 per cent of bond deposit
XVIII
Repeal of law prohibiting increase of bank circulation within a certain period
XVIII
Importance of additional vault room for incomplete currency
xix
Circulation ordered and amount canceled owing to delay in printing in 1893
xix
Limitation of loans
xix
Renewal of recommendations made by the Comptroller in 1898, relative to limitation of loans ... xix
Law authorizing incorporation of banks with a minimum capital of $25,000 recommended
xx
Examinations of national banks
xx
Methods pursued in making examinations
xx
Increase of funds for examinations recommended
xx
International and intercolonial banking
xx
Increased banking facilities necessary for the rapidly growing business between the United
States and the new territories
xxi
Renewal of recommendations of a year ago that laws be passed authorizing the incorporation
of international and intercolonial banks
xxi
Insolvent national banks
xxn
Receiverships terminated during the year
xxn
Reduction of the expenses of receiverships
xxn
Inactive receiverships
xxn
Consolidation of receiverships
xxn
Failures since the organization of the national-banking system
xxn
Nominal assets, disposition of assets and of collections of insolvent national banks since the
organization of the system
xxm
III




IV

CONTENTS.

Page.
Percentage of expenses incident to the liquidation of insolvent national banks
xxm
Second assessment upon, and rebate to, stockholders in case of incorrect assessment, ruling
relative to
xxm
Ruling of the courts upon reassessments
xxm
Investigation as to loan and deposit accounts, rates of interest, aggregate loans and deposits of
banks in the United States
xxiv
Detailed statement of returns, by classes of banks, relative to deposit and loan accounts
xxvi
Estimated amount of loans, deposits, and number of loan and deposit accounts of all banks in
the United States in June, 1899
xxxi
Lost and destroyed national-bank notes
xxxi
Estimated percentage of lost and destroyed national-bank notes
xxxi
Organization of national banks
xxxi
Comparative statement of changes in national bank capital during the year, by organizations,
liquidations, etc
xxxi
Capital, by States, of national banks organized during the year
xxxn
Organizations, liquidations, and failures of national banks during the existence of the system, xxxn
Expiration of the corporate existence of national banks since July 12, 1882
xxxn
Circulation and bonds
xxxn
Comparative statement of national-bank circulation in 1898 and 1899
xxxn
Amount and kinds of bonds on deposit as security for circulation on October 31, 1899 and 1898. XXXII
Net decrease in bond deposit during the year
xxxn
Earnings and dividends of national banks
xxxm
Percentage of dividends to capital, etc., of national banks
xxxm
Tax on circulation, capital, and surplus, cost of redemption of circulating notes and examiners'
fees during the year
xxxm
Average dividends paid by national banks during the past thirty years
xxxm
Taxes and expenses to which national banks are subject
xxxm
State banks and banking institutions
xxxm
Satisfactory returns relative to banks other than national
xxxiv
Comparative statement of principal items of resources and liabilities of banks other than
national from 1895 to 1899, inclusive
xxxiv
Comparative statement of resources and liabilities of national and all other banks and banking
institutions in 1899
xxxiv
Dividends of incorporated State banks
. xxxv
Principal items of resources and liabilities and number of depositors of mutual and stock
savings banks
xxxv
Growth of savings banks since 182U
xxxv
Average rates of interest, limit of deposits, and mode of investment of funds of mutual savings
banks
xxxvi
Classification of deposits in savings banks in Vermont, Rhode Island, and Connecticut
xxxvi
Resources and liabilities of loan and trust companies and private banks
xxxvn
Average banking funds and average per capita of such funds in each and all classes of banks
June 30,1899
xxxvn
Assets and liabilities of insolvent State and private banks that failed during the year
xxxvn
Insolvent State and private banks since January 1,1893
xxxvn
Dividends paid by insolvent State and private banks
xxxvin
Expenses incident to the liquidation of insolvent State and private banks
xxxvin
Foreign banking institutions
xxxvin
Capital, circulation, and total assets of Canadian banks
XXXVIII
Total assets, capital, and circulation of banks of Australasia
xxxvin
Comparative statement of the incorporated and private banks of the United Kingdom, including
colonial and foreign banks with London offices, December, 1898, and June, 1899
xxxvin
Cash resources, loans and discounts, securities, circulation, and deposits of the principal foreign
banks of issue in September and October, 1899
xxxix
Statistical and other information relative to commerce and banking in the Philippines, Cuba,
Porto Rico, and Hawaii
XLI
Extract from report of Edward W. Harden, special commissioner, on financial and industrial
conditions in the Philippine Islands
XLI
Condition of Banco Espanol Filipino
XLIII
Hongkong and Shanghai Banking Corporation, condition of
XLIV
Monte De Piedad Savings Bank of Manila
XLVI
Letter from A. E. Bates, Paymaster-General, United States Army, relative to payment of troops
in insular possessions
XLVii
Letter from Pablo Desvernino, secretary of finance, Cienfuegos, Cuba, on banking conditions in
Cuba




XLVIII

CONTENTS.

V

Page.
Letter from P. Salazer on currency question in Porto Rico
XLIX
Letter from Charles M. Pepper on banking and industrial conditions in Cuba
L
Dispatch from Madrid relative to the repudiation of " "Weyler's scrip "
LI
Resources and liabilities of the Bank of Hawaii
LII
Exports from the United States to Cuba, Porto Rico, Hawaii, and the Philippines, 1889 to 1899... LII
Commerce of the United Kingdom, France, and Germany with Cuba, Porto Rico, Philippines,
and Cent'ral and South America
LII

CONTENTS OF

APPENDIX.

National-bank act
Digest of national-bank decisions

1
85
APPENDIX TABLES.

No.
No.
No.
No.

No.

No.
No.
No.
No.
No.
No.
No.
No.
No.

No.

No.
No.
No.
No.

No.

No.

1. Names and compensation of officers and clerks in the office of the Comptroller of the
Currency October 31,1899
2. Expenses of the office of the Comptroller of the Currency for the year ended J u n e 30,
1899
3. Number of national banks organized, number now in operation, and the number passed
out of the system since February 25,1863
4. Number and authorized capital of national banks organized and number and capital of
banks closed in each year ended October 31 since the establishment of the nationalbanking system, with the yearly increase or decrease
5. Number of national banks organized, in liquidation, and in operation, with their capital, bonds on deposit, and circulation issued, redeemed, and outstanding on October
31,1899
6. Number of national banks organized, in voluntary liquidation, insolvent, and number and
capital of associations in active operation on January 1 of each year from 1864 to 1899.
7. Number of national banks organized, in voluntary liquidation, insolvent, and in operation
in each State and Territory October 31,1899
8. Number and capital of national banks organized in each State and Territory during the
year ended October 31,1899
9. Number of pending applications for authority to organize national banks approved during the year 1899
10. Number and capital of national banks in each State extended under the act of J u l y 12,
1882
11. Number, capital, and circulation, by States, of national banks the corporate existence of
which was extended during the year ended October 31,1899
12. National banks the corporate existence of which will expire during the year ending
October 31,1900, with the date of expiration, capital, U. S. bonds, and circulating notes.
13. Number and capital of national banks that will reach the expiration of their corporate
existence during t h e period of ten years from 1900 to 1909, inclusive
14. National banks closed to business, by voluntary liquidation and otherwise, during the
year ended October 31,1899, with date of authority to commence business, date of closing, capital, and circulation issued, redeemed, and outstanding
15. Authorized capital stock of national banks on the first day of each month from J a n u a r y
1,1876, to October 31,1899, bonds on deposit to secure circulation, circulation secured
by bonds, lawful money on deposit to redeem circulation, and national-bank notes outstanding, including notes of national gold banks
16. Profit on national bank circulation, based on a deposit of $100,000 United States b o n d s . . .
17. Changes in capital, bonds, and circulation of national banks, by geographical divisions..
18. Decrease or increase of national-bank circulation during each of the years ended October
31, 1891 to 1899
19. National-bank circulation issued, lawful money deposited to retire circulation, from
J u n e 20, 1874, to October 31, 1899, and the amount on deposit, by States, at the latter
date
20. National-bank notes outstanding, lawful money on deposit to redeem circulation, bonds
on deposit to secure circulation, and public deposits on October 31, 1899, with the
changes during the preceding year and the preceding month
21. Quarterly increase or decrease in national-bank circulation from January 14, 1875, to
October 31, 1899




335
336
336

337

338
339
339
340
340
341
341
342
342

343

345
350
351
356

357

358
15
59

VI

CONTENTS.

Page.
No. 22. National-bank notes issued, redeemed, and outstanding, by denominations and amounts,
on October 31, 1864 to 1899, inclusive
361
No. 23. National gold bank notes issued, redeemed, and outstanding October 31, 1899
364
No. 24. National-bank notes issued during the year ended October 31, 1899, and the total amount
issued, redeemed, and outstanding
364
No. 25. Additional circulation issued monthly on bonds for years ended October 31, from 188G to
1899
364
No. 26. Number and denominations of national-bank notes issued and redeemed since the organ
ization of the system, and the number outstanding October 31,1899
365
No. 27. Vault account of currency received and issued by this Bureau during the year
365
No. 28. National banks having no circulation outstanding
365
No. 29. Additional circulation issued and retired, by States, during the year ended October 31,
1899, and the total amount issued and retired since June 20, 1874
366
No. 30. National-bank notes received monthly for redemption during the year by the Comptroller and the redemption agency of the Trea»ury, together with the total amount
received since June 20, 1874
367
No. 31. National-bank notes received at this Bureau and destroyed yearly since the establishment of the system
367
No. 32. Vault account of currency received and destroyed during the year
368
No. 33. Taxes assessed on circulation, deposits, and capital of national banks from 1864 to 1882.. 368
No. 34. Taxes assessed on national-bank circulation, cost of redemption, cost of plates, and
examiners' fees, 1883 to 1899
369
No. 35. Taxes collected on capital, deposits, and circulation of national banks to June 30,1899.. 369
No. 36. Taxes collected on circulation, deposits, and capital of banks, other than national, by
the Internal-Revenue Bureau, 1864 to 1882
369
No. 37. Number of national and other banks and bankers in the United States, and amount of
tax paid on capital and surplus due on July 1, 1898, as shown by returns to the Commissioner of Internal Revenue during the year ended June 30, 1899; average capital
and surplus of national banks based on reports of condition made during the fiscal year
ended June 30, 1898, and estimated amount of taxes paid thereon; also the duty paid
on national-bank circulation in the year ended J u n e 30, 1899
370
No. 38. Specie and bank-note circulation of the United States from 1800 to 1859
371
No. 39. Coin and paper circulation of the United States, 1860 to 1899
372
No. 40. Currency and gold, 1862 to 1878
373
No. 41. United States bonds on deposit to secure circulating notes of national banks on June 30,
1865 to 1899, and amount owned and held by banks for other purposes, including those
deposited to secure public deposits
375
No. 42. United States bonds on deposit to secure circulating notes of national banks on October
31, 1882 to 1899
376
No. 43. Interest-bearing bonded debt of the United States, 1865 to 1899
377
No. 44. United States bonds, monthly range of prices in Now York, 1860 to October 31, 1899
378
N o. 45. Investment value of United States coupon bonds, 1888 to 1899
411
No. 46. Number of national banks in each State, etc., capital, bonds on deposit to secure circulation on September 7,1899, minimum amount of bonds required, and excess on deposit,
September 7,1899, and September 20,1898
412
No. 47. Number of national banks in each State, etc., with capital of $150,000 and under, 1898
and 1899
414
No. 48. Number of national banks in each State, etc., with capital exceeding $150,000, 1898 and
1899
415
No. 49. Comparative statement of the resources and liabilities of national banks, 1864 to 1899... 416
No. 50. Abstract of the resources and liabilities of national banks on September 7, 1899 in New
York, all central reserve cities, other reserve cities, elsewhere, and the aggregate in
the United States
419
No. 51. Highest and lowest points reached in the principal items of resources and liabilities of
national banks during the existence of the system
420
No. 52. Percentages of loans, United States bonds, and lawful money to the aggregate resources
of national banks, 1866,1887 to 1899
420
No. 53. Classification of loans made by national banks in reserve cities, etc., in October, 1895 to
1899
421
No. 54. Classification of loans by national banks in New York City for the last six years
423
No. 55. Classification of loans and discounts in national banks in the reserve cities, etc., on September 7,1899
424
No. 56. Loans and discounts, capital, surplus, other undivided profits, and circulation of national
banks on September 7,1899
426
No. 57. Specie and circulation of national banks at date of each report from December, 1898, to
September 7,1899
428




CONTENTS.

VII

Page
No. 58. Gold, silver, coin certificates, legal tenders, and currency certificates held by national
banks at date of each report since January 20, 1877
448
No. 59. Specie held by national banks in New York City at date of each report since February
28,1890
454
No. 60. Deposits and reserve of national banks on or about October 1,1874 to 1899
456
No. 61. Lawful money reserve of national banks December 1,1898, to September 7,1899
458
No. 62. Deposits in national banks, reserve required and held December 1, 1898, to September 7,
1899
478
No 63. Net deposits of national banks, reserve required and held on three dates in 1894 to 1899.. 479
No. 64. Lawful money reserve of national banks at date of each report since October 3,1893
482
No. 65. Depositors, deposits, borrowers, loans, and average rates of interest paid on deposits
and received on loans and discounts, by national and other banks, July 12, 1889, July
18, 1894, and June 30, 1899
484
No. 66. Number of depositors, amount of deposits, number of borrowers, and amount of loans
and discounts of national banks, as reported to the Comptroller of the Currency, July
12, 1889, July 18, 1894, and June 30, 1899, arranged by geographical divisions
498
No. 67. Number of depositors, amount of deposits, number of borrowers, and amount of Joans
and discounts of State, private, and savings banks and trust companies, as reported
to the Comptroller of the Currency, July 12, 1889, July 18, 1894, and June 30, 1899,
arranged by geographical divisions
499
No. 68. Number of depositors, amount of deposits, number of borrowers, and amount of loans
and discounts of national, State, private, and savings banks and trust companies, as
reported to the Comptroller of the Currency, July 12, 1889, July 18, 3.894, and June
30, 1899, arranged by geographical divisions
500
No. 69. Loans and deposits of national banks, as shown by reports of condition on July 12,1889,
and June 30, 1899, and the amount and rate per cent of increase in each geographical
division and in the United States
501
No. 70. Loans and deposits of State, savings, and private banks, and loan and trust companies, as
shown by reports of condition on June 30, 1889, and June 30, 1899, and the amount and
rate per cent of increase in each geographical division and in the United States
501
No. 71. Abstract of reports of earnings and dividends of national banks from September 1,1898,
to September 1, 1899
502
No. 72. Ratios to capital and to capital and surplus of the earnings and dividends of national
banks in each State, etc., from March 1, 1895, to September 1, 1899
510
No. 73. Number of national banks, their capital, surplus, dividends, net earnings, etc., 1870 to
1899
514
No. 74. National banks in voluntary liquidation under the provisions of sections 5220 and 5221,
United States Revised Statutes
515
No. 75. National banks in liquidation under section 7, act July 12, 1882, succeeded by associations with the same or different titles
535
No. 76. National banks in voluntary liquidation under the provisions of sections 5220 and 5221,
United States Revised Statutes, for the purpose of organizing new associations under
the same or different titles
537
No. 77. National banks in liquidation under section 7, act July 12, 1882
540
No. 78. National banks in the hands of receivers, dates of organization and failure, cause of failure, dividends paid while solvent, circulation issued, redeemed, and outstanding, 1864
to 1899, inclusive
542
No. 79. Insolvent national banks, dates of failure and final liquidation, assets, collections, dividends paid, etc . 1864 to 1899
562
No. 80. Capital, nominal assets at date of failure, and disposition of assets of insolvent national
banks the affairs of which have been closed, 1864 to 1899
590
No. 81. Capital, surplus, and other liabilities of national banks which failed during the year...
610
No. 82. National banks against the capital stock of which an additional assessment has been
levied, with amount of capital, and date and amount of assessment
610
No. 83. National banks in favor of the stockholders of which a rebate of assessment has been
made, with amount of assessment, and date and amount of rebate
611
No. 84. National-bank receiverships in an inactive condition
611
No. 85. National banks the affairs of which were closed during the year
612
No. 86. Dividends paid to creditors of insolvent national banks during the year
613
No. 87. Comparative statement of the transactions of the New York clearing house for the last
forty-five years
616
No. 88. Comparative statement for two years of the transactions of the New York clearing
house
617
No. 89. Exchanges, oalances, percentage of balances to exchanges, and percentage of funds used
in settlement of balances by the New York clearing house, 1892 to 1899, inclusive
017




VIII

CONTENTS.

Page.
No. 90. Clearing-house transactions of t h e assistant treasurer of t h e United States a t N e w Y o r k
for t h e year ended October 1, 1899
618
No. 91. Transactions of t h e clearing houses of t h e United States, 1892 to 1899, inclusive
618
No. 92. Comparative statement of t h e exchanges of t h e clearing houses of t h e United States for
the years ended September 30, 1899 and 1898
619
No. 93. Monetary systems and stocks of money in the principal countries of t h e world, in 1899. 620
A b s t r a c t of reports of condition of State, savings, and private banks, and loan and t r u s t oompanies
,
623
Depositors, deposits, and average deposit in savings b a n k s in each State, 1898 and 1899
639
G r o w t h of savings banks, as indicated by number of depositors and amount of deposits since
1820
640
Cash resources of national and other b a n k s on J u n e 30, 1899
641
Specie and other cash resources of State b a n k s from 1873 to 1899
642
Dividends paid by State b a n k s and loan and t r u s t companies
643
Capital stock of banks, by classes, in each State on J u n e 30, 1899
644
Population, and banking funds in t h e aggregate and per capita, in each State and geographical
division
645
Resources of banks, by classes, in each State and geographical division
646
Insolvent State and private b a n k s for t h e year ended A u g u s t 31, 1899
647
Liabilities, dividends paid, etc., of insolvent State and private b a n k s in each State since 1893.. 648
Summary of r e t u r n s relative to insolvent State and private b a n k s yearly from 1893 to 1899
648
Condition of loan and t r u s t companies in t h e District of Columbia on September 7, 1899
649
Resources and liabilities of t h e first b a n k of t h e United States in J a n u a r y , 1809 and 1811
050
Resources and liabilities of t h e second bank of t h e United States from 1817 to 1840
651
Principal items of resources and liabilities of State banks from 1774
652
Condition of t h e chartered banks of t h e Dominion of Canada on September 30, 1899
657
Resources and liabilities of the banks of t h e United Kingdom in December, 1898, and J u n e , 1899. C58
Resources and liabilities of t h e banks of Australasia on J u n e 30, 1899
660
Summary of t h e statements of condition of State and savings banks, and loan and t r u s t companies of Connecticut on October 1, 1899
660
Aggregate resources and liabilities of national b a n k s from October, 1863, to October, 1899
661
A b s t r a c t of reports of condition of national b a n k i n g associations on December 1, 1898, February 4, April 5, J u n e 30, and September 7,1899
689
Summary of t h e condition of national b a n k s in each State, Territory, and reserve city from
December 1,1898, to September 7,1899
771
Important items of resources and liabilities of national banks by States from 1863 to 1899
827
Index
853




REPORT

THE COMPTROLLER OF THE CURRENCY.
TREASURY DEPARTMENT,
OFFICE OF THE COMPTROLLER OF THE CURRENCY,

Washington, December ^, 1899.

SIR: In compliance with the requirements of section 333 of the
Revised Statutes of the United States, I submit herewith the thirtyseventh annual report of the operations of the Currency Bureau for
the year ended October 31, 1899.
CONDITION OF HANKS.

During the year five statements of condition of national banks have
been made, and in the following table are set forth, in detail, the
resources and liabilities of the banks at date of each report.
SUMMARY OF REPORTS OF CONDITION OF NATIONAL BANKS DURING THE YEAR.

Dec. 1—8,590 \ Feb. 4—3,579 ! April 5—3,583 j June 30—3,583
bunks.
I
banks.
;
banks.
i
banks.

Sept. 7—3,595
banks.

RESOURCES.

Loans and discounts .
Overdrafts
U. S. bonds to secure
circulation
U. S. bonds to secure
U. S. deposits
U. S. bonds on hand ..
Premiums on U. S.
bonds
Stocks, securities, etc .
Banking house, furniture, and fixtures.
Other real estate and
mortgages owned ..
Due from national
banks
Due from State banks
and bankers
Due from approved
reserve agents
Checks a n d other
cash items
Exchanges for clearing house
Bills of other national
banks
Fractional currency,
nickels, and cents ..
Gold coin
Gold Treasury certificates
Gold clearing-house
certificates

5,230,584. 52 $2,496,751 251.11
2,214,394,838. 1582,299,041,947. 32 $2,403,410,895. 06: 8,492.
19,231,907.24
17,945,729.63
22,G74,456. 74
i.
18,542,345..20
T~
'~
15, 724,395. 38
238,586,290.00

235,209,290.00

233,731,140.00

89,100,240. 0
25,028,370.0

89,200,540. 00
22,154,400. 00

19,859,781. 311
19,061,207.4
259,135, 809. 88 276,704,595. 5

228,870,310.00

18,569,916.95
300,281,257.80

95,528,020. 00|
29,224,090. 00;

79,190,505.

79,173,842.

30,965,488.

30,583,528.

193,886,881.

203,074,179.

56,246,803.

60,391,784.. 03

359,371,346.

432,035,501.85

19,223,078.

17,056,884.1
.10

194,981,281.

.30
75,672,644.3

22,092,333.

.00
20,650,964.0

1,016,620.
129,009,745.

1,107,636.
134,336,296.

78,,497,040.
21,,031,310.

17,, 715,752.
,428,927.
305,
,905,167.
79,006,522.33;
78,
,477,935.
30,900, 209. 90!
30,
,873,819.
213,213,074.25
223,
,634,310.
58,340,492. (51
56,
,668,464.
412,677,297.19
406,
,631,637.
18,806,769.38
25,
,003,934.
212,818, 211. 29
203.
,557,261.
20,711,021.00
19.
1,109,785.32
1,, 107,699.:
133,190,652.27 137,,690,618.:

229,639,610.00
80,976, 980.00
19,328, 220.00
17,626,212.72
320,437,066.36
79,064, 021.51
30,255, 465.34
212,431, 744.50
59,288, 465.86
414,126, 660.44
17,414, 999.52
1.54,800, 514.95
20,077, 605.00
1,121, 297.56
117,082, 951.86

17,586,450.00

17,669,500.00

17,708,880.00

;,152,39OJ

41,389, 130.00

1°M,879. 000. 00!

169,910, 000. 00

166,311,000.00

\ 195,000. i

133,140, 500.00




REPORT OF THE COMPTROLLER OF THE CURRENCY.
SUMMARY OF REPORTS OF CONDITION OF NATIONAL BANKS DURING THE Y E A R —

Continued.
Dec. 1—3,590
banks.

Feb. 4—3,579
banks.

April 5—3,583
banks.

J u n e 30—3,583
banks.

Sept. 7—3,595
banks.

RESOURCES—COllt'd.
Silver dollars
Silver Treasury certificates
Silver fractional coin.
Legal-tender notes . . .
U. S. certificates of
deposit
Five-per-cent redemption fund
Due from. Treasurer
U.S
Total .

$8,012,695.00

$8,151,429.00

$8,246,829.00

$8,361,974.00

$7,998,538.00

32,700,654.00
6,412,166.84

35,359,818.00
6,416,451.75

32,193,899.00
6,511,292.62

32,578,638.00
6,543,425.80

32,458,505.00
6,501,758.97

117,845,702.00

116,003,066.00

110,235,423.00

116,337,935.00

111,214,651.00

21,140,000.00

19,820,000.00

18,590,000.00

10,540,000.00

10,286,903.25

10,306,883.84

10,095,518.01

10,116,130.63

17,905,000.00
10,484,284.11

2,181,696.22
1,340,945.87
1,736,037.32
1,629,855.16
2,174,649. GG
4,313,394,519.10!4,403,883,073.2014,039,138,160.36 4,708,833,904.84 4,650,355,133.44

LIABILITIES.
Capital stock paid in..
Surplus fund
Undivided profits, less
expenses and taxes.
National-bank notes
outstanding
State-bank notes outstanding
Due to other national
banks
Due to State banks
and bankers
Dividends unpaid....
Individual deposits... o
U. S. deposits
Deposits of U. S. disbursing officers
Notes and bills rediscounted
Bills payable
Liabilities other than
those above
Total

620.
246!

516,
695,

94, 403,
207, ,093,
55,
521 ,988,
272, 905,
1, 243,
09 r-.269,
324,
5,580,

00
28
31;
50!

608. 301,245.
247, 522,450.

, 050,

202,570.00
169,893.65

004,805,327.00
248,140, 107.55

605,772, 970.00
248,449,234.99

80, 439,845.

93, 687,856.72

94,175,584.64

102,066,430.50

203, 630,184.

829,270.00

199,358,382.50

200,345,567.50

53,112,

53,110.50

53, 108.50

,964,563,

599, 170,922.37

50;
000,

53, 108.50

:.85

594,609, 884.34

5,832,609.61

5,831,775.01

6,053,440.79

620,476.19
675,587.74

2,154,782.17
6,078,284.70

4,365,777.08
9,945,237.89

22,162,378.87

15,391,173.52

19,745,568.45

598,340,

98
82 312, , 136,056,
333, 177,342.39 334,004,533.98 334,258,085.48
1,, 455,443.
18
1.30
932,494.28
7,735, 327.07
1,137,392.24
212, 232, ,193,156. 2,437,223,420.29 2, 522,157!
508.99 2,450,725, 595.31
,
81.,120,873, 13
73
81,340,227.75
70,481! 616.36
72,826, 840.37
42

5,502,537.62

54
25

-1,313,394,

007,
240,

752,621.
383,891.

38

19,421,092.85

10 4,403,883,073.20 4,639,138,100.30 i, 708,833,904.84!4,050,355,133.44

On September 7, 1899, reports of condition were submitted by
3,595 national banks, with a paid-in capital of $605,772,970. The surplus fund and undivided profits amounted to $248,449,234.99 and
$102,066,430.50, respectively. The individual deposits reached $2,450,725,595.31 and the aggregate liabilities $4,650,355,133.44. The loans
and discounts on the date named aggregated $2,496,751,251.11.
By comparison of the September 7 returns with those made on September 20, 1898, there is shown an increase in loans and discounts
of $340,789,623.20. Of the aggregate loans on the former date,
$1,063,701,130 were secured by stocks, bonds, and other collateral;
$907,109,304 represents two or more name paper, and $525,940,817
single-name paper, including both demand and time.
An examination of the loans, as classified in the returns, indicates
that 62.83 per cent of the loans of banks in central reserve cities is
secured by stocks, bonds, or other collateral; 21.65 per cent is paper
with two or more individual or firm names, and 15.52 per cent singlename paper. Of the loans of the banks in other reserve cities, 46.68
per cent is with collateral, 29.66 per cent two or more name paper, and
23.65 per cent single name. Outside of the reserve cities, 26.76 per
cent of the loans is covered by collateral, 50.12 per cent is represented
by two or more name paper, and 23.13 per cent single-name paper.



REPORT OF THE COMPTROLLER OF THE CURRENCY.

XI

Of the total loans of all national banks, 42 per cent is with collateral
security; nearly 37 per cent is paper with two or more individual or
firm names, and 21 per cent paper with one or more individual or firm
names, including both demand and time.
In amounts due from other banks and bankers there was an increase
of $160,391,896.68; in specie, $44,697,225.44; and in aggregate
resources, $646,844,088.57. The decrease during the year in capital
stock has been $15,652,568; and the increase in surplus and profits,
$9,945,459.06; individual deposits, $419,271,055.02; and in bank
deposits, $230,532,614.88.
By comparison of the returns on June 30 with those on September
7, it is noted that the resources of the banks on the former date were
greater by $58,478,771.40 than on September 7, the reduction being
occasioned by the withdrawal of deposits between those periods. Notwithstanding this reduction in total resources, the loans and discounts
of the banks on September 7 exceeded the amount on June 30 by
$4,520,666.59, and were the highest at any date during the existence
of the national-banking system.
The fluctuations in the amount of outstanding circulating notes of
the banks have been as follows:
On July 14,1898, the amount outstanding was $189,866,298; increased
on September 20 to $194,483,765; on December 1 to $207,093,317; and
from February 4, 1899, to September 7, decreased from $203,636,184
to $200,345,567.
The law requires the maintenance by national banks in central reserve
cities of a cash reserve of 25 per cent upon deposit liabilities. The
banks in other reserve cities are required to hold the same percentage
of reserves, but one-half of the legal requirement may consist of deposits
with approved reserve agents in central reserve cities. Banks outside
of reserve cities are required to maintain a reserve of 15 percent, twofifths of which must consist of cash in bank and three-fifths may be
represented by deposits with approved reserve agents. On September
7 the net deposit liabilities of the national banks of the country aggregated $3,031,463,016.68, which required a reserve of $630,789,147.62.
The reserve held aggregated $890,568,825.90, or 29.38 per cent. The
composition of this reserve was as follows:
Specie, $338,571,383.83; legal tenders and United States certificates
of deposit for legal tenders, $127,754,651; due from reserve agents,
$414,126,660.44; redemption fund with Treasurer of the United States,
$10,116,130.63.
The cash reserve required was $406,314,452.36 and the cash held
$466,326,034.83, or, approximately, $60,000,000 more than the legal
requirement. The total reserve held is seen to have been nearly 10
per cent in excess of the requirements of law.
RECOMMENDATIONS RELATIVE TO BANK-NOTE CURRENCY.

Section 333 of the Revised Statutes of the United States provides
that the Comptroller of the Currency, in his annual report to Congress, shall suggest amendments to the banking laws by which the
system may be improved.
There is one reform needed in the bank-note currency of the United
States, concerning the general principles of which there seems little



XII

REPORT OF THE COMPTROLLER OF THE CURRENCY.

room for honest controversy. This is a provision for an emergency
circulation which can be used in those seasons of the year in which
the moving of crops requires an increase in the circulating medium,
and to lessen the disastrous effects of the immense liquidation of
credits incident to a financial panic. The widespread ruin and misery
affecting all classes of citizens and all kinds of business, which results
from an industrial and financial panic, is such that any measure
designed to forestall or to lessen its destructive power should properly
demand the highest degree of consideration. A time of active commerce and normal financial conditions such as we are enjoying at
present is most opportune for the deliberate and careful discussion of
measures which, if adopted now, may in a measure relieve the
embarrassments above indicated and the keenness of the distress of
commercial and industrial interests incident to such panics as those of
1873 and 1893.
It is true that the enactment of legislation by which the credit of
our governmental currency may be protected from the effects of deficient revenues and from the influences of commercial panic, is important as a measure of governmental policy at this time. The panic of
1893 and an ensuing period of deficiency in governmental revenue
demonstrated that fact; but they likewise demonstrated the necessity
of circulation of some nature by the banks which could be used to
supply the demands during such an extreme emergency for a liquidating medium whose existence would tend to protect solvent institutions
of all kinds from forced bankruptcy resulting from a money panic.
The object of such a circulation is neither to provide profits to the
banks nor to serve as a basis for the expansion of commercial credits
under normal conditions. It would be to the country at large what
the clearing-house certificates have proved to be in times of panic in
some of our larger cities.
The necessity for such circulation, designed for the mutual protection of banks and the public in times of panic and money stringency,
and so heavily taxed as to compel its retirement after the period of
acute demand for money is passed, is made clearer by a reference to
conditions prevailing in 1893.
The deposits of the national banks of the country between May 4 and
October^, 1893, were reduced in the sum of $378,767,691; the contraction in balances on deposit with other banks was $51,198,856; the
contraction in stocks and securities was $2,177,912. The banks took
out $31,265,616 of new circulation and borrowed $36,615,092 in their
efforts to meet the general demands upon them. As a matter of fact,
the necessary delay incident to printing national-bank notes by the
Government after receiving the order for circulation by the banks,
amounting on the average to twenty-five days, prevented the issuance
of a larger circulation at this time, the acute crisis having passed by
the time the notes were ready for delivery, and the order for the notes
canceled by the banks in consequence.
The amount of orders canceled for this cause during the period
above named is estimated at $11,000,000. Even with the aid of this
additional circulation and borrowing, the national banks of the country
to meet this drain in deposits were compelled to contract their loans
during this period in the sum of $318,767,691, taking this immense
amount from the productive industries of the country and carrying



REPORT OF THE COMPTROLLER OF THE CURRENCY.

XIII

disaster, not only to employer and employee, but to every class of our
citizens.
The records of this office show that with our banking system as a
whole the money stringency incident to a financial panic is soon over.
At most it is a matter of but a few months. The crisis of a panic once
passed, the arrested wheels of general business start moving very
slowly, and the unproductive and unloaned capital of the country stagnates in the banks.
In May, 1893, during the panic, the average reserve of the banks of
the United States was 26.4 per cent, and in December, 1893, 35.7 per
cent. In May, 1893, the banks of New York City held reserves of
only 28.5 per cent, and in December, 1893, they held 41.2 per cent, or
$66,663,000 above the required legal reserve of 25 per cent.
These facts prove that emergency circulation which could be used to
lessen the disastrous effects of the liquidation incident to an industrial
and bank panic would be needed for but a few months, and would not
remain %as a disturbing and unusual factor in business long after its
time of maximum influence.
In connection with the recommendations which he embodies hereafter, the Comptroller repeats the recommendation made by him in his
last report to Congress, to wit:
For the purpose of allowing elasticity to bank-note issues to protect the banks and
the community in times of panic, a small amount of uncovered notes, in addition to
the secured notes, should be authorized by law under the following limitations: They
should be subjected to so heavy a tax that they could not be issued in normal times
for the purpose of profit, but would be available in times of emergency. The tax
should be so large upon the solvent issuing banks as to provide a fund, which, in
connection with the pro rata share of the assets of an insolvent bank, would be sufficient to redeem the notes in full, without necessitating any preference of note holders
over depositors of any insolvent issuing bank. The tax should be so large as to force
this currency into retirement as soon as the emergency passes. Such a currency
could be used only to lessen the evil effects of the too rapid liquidation of credits
which are collapsing under a financial panic, but could not be profitably used as a
basis of business speculation and inflation. It should be to the business community
what the clearing-house certificates are to our cities in times of panic—a remedy for
an emergency, not an instrument of current business.

In view of the fact that our national banking system is composed of
over 3,600 separate institutions scattered throughout our great country and surrounded by diversified business conditions, the problem of
the enactment of such a law, involving as it does a departure to some
extent from the principle of a bond-secured circulation, presents grave
difficulties, arising partly out of the natural conservatism of our people and from the fact that the plan will be somewhat experimental. That
such a law providing for the protection of the business community
shall be ultimately passed is of great importance. A.marked degree
of elasticity, however, is possible of attainment in connection with our
present system of bond-secured national bank notes.
The Comptroller believes that, in accordance with the President's
recommendation, national banks should be allowed to issue circulation
to the par of the United States bonds deposited by them for circulation,
and that, in connection with the law authorizing this, provision can be
made for a secured emergency circulation.
The object of allowing banks to take out circulation to the par of the
bonds is to induce them to furnish for the use of the public a larger
amount of circulation than is in existence at present. The present rate1



XIV

REPORT OF THE COMPTROLLER OF THE CURRENCY.

of profit to be derived by the banks from their circulation is not sufficient to justify them in offering a larger amount, but any method of
increasing the profits on circulation will result in an increase.
It is true that the authorization of an issue of currency to the par of
the deposited bonds, subject to the present rate of tax, is one method
of inducing a larger circulation, but it is not the only method. By a
modification of the present rate of taxation on bank notes, coupled
with the authorization of issues to the par of the bonds, the same
inducements can be offered for a larger circulation and yet provision
be made for a secured emergency circulation.
The Comptroller, therefore, would recommend legislation authorizing the issuance of national-bank note circulation to the par of the
deposited United States bonds, and that the additional 10 per cent circulation thus allowed the banks be subjected to a tax at the rate of 2
or 3 per cent per annum for the time used, which will tend to prevent
its unrestricted use under normal conditions, and to save it for use at
those periods of the year when crops are to be moved, and in those
periods of panic when it is most valuable both to the banks and the
business public as a means of assisting the general liquidation of credits. With the object of securing an increase in the present bank-note
circulation, he would recommend the reduction or abolishment of the
present tax of 1 per cent per year on the circulation to 90 per cent of
the deposited bonds—the amount of the reduction in the tax on currency to be collected from the necessary per cent of tax on the capital
and surplus of national banks if requisite to the public revenues. To
allow the banks to issue up to the par of the bonds, unsubjected to additional tax on the 10 per cent extra circulation, will result in their immediately taking out their additional circulation for the purpose of profit.
Business credits will be extended and adjusted to correspond with such
increase of the currency, and practically the same inelasticity will characterize our bank-note issues then as now. With the advent of a panic
we would have no additional means of lessening the necessity of a call
upon the business community to furnish, by the repayment of loans,
practically the bulk of the deposits drawn by frightened depositors.
It will be seen from an examination of the calculations given hereinafter that exactly the same rate of profit could be realized by the
banks upon circulation to 90 per cent of the bonds deposited, taxed at
four-ninths of 1 per cent per annum, as they could realize upon circulation to the par of the bonds at the present tax of 1 per cent.
It will also be seen that if the tax on the 90 per cent of circulation
should be entirely abolished, or shifted to the franchise of banks, that
the profit on circulation would be much larger than could be realized
upon circulation issued to the par of the bonds subjected to the present
tax.
This rate of profit to be realized upon untaxed circulation issued to
90 per cent of the bonds would be so large that upon circulation issued
to the par of the bonds it would be necessary to reduce the tax down
to three-fifths of 1 per cent before an equal profit upon par circulation
could be made.
It will also be noted that exactly the same rates of profit could be
made upon 90 per cent circulation taxed one-sixth of 1 per cent as
could be made upon par circulation taxed three-fourths of 1 per cent.
In the judgment of the Comptroller these tables show conclusively



REPORT OF THE COMPTROLLER OF THE CURRENCY.

XV

that by modification in forms of taxation the same relative increase in
general bank-note circulation, with an emergency circulation in addition, can be obtained, while only an increase without an}r elasticity
could be obtained under any system of uniform taxation upon par
circulation.
For the purpose of indicating- that within the range of the possible
modification of taxation on a circulation to 90 per cent of the bonds,
provision can be made for an'emergency circulation of 10 per cent to
the par of the bonds, while amply encouraging the increase in general
note circulation desired, the Comptroller summarizes the result of
calculations given more in detail hereafter.
PROFIT IN DOLLARS UPON CIRCULATION ISSUED AGAINST A DEPOSIT OF $100,000, GOVERNMENT 4 PER CENT BONDS MATURING IN 1907, AT PRESENT PRICE, BEING THE POSSIBLE AMOUNT TO BE REALIZED UNDER DIFFERENT RATES OF TAXATION IN A D D I -

TION TO 6 PER CENT ON THE CAPITAL INVESTED IN BONDS, WITH MONEY WORTH 6
PER CENT.

On $90,000 circulation, being 90 per cent of $100,000 bonds, 1 per cent tax
on circulation under present laws
On $100,000 circulation to par of bonds, uniform 1 per cent tax
On $90,000 circulation to 90 per cent of bonds, taxed four-ninths of 1 per
cent, making possible an issue of $10,000 emergency circulation, to be
taxed at the rate of 2 or 3 per cent for the time issued
On $100,000 circulation to par of bonds, uniform tax of three-fourths of 1
per cent
On $90,000 circulation to 90 per cent of par of bonds, taxed one-sixth of 1
per cent, making possible an issue of $10,000-emergency circulation, to be
taxed at the rate of 2 or 3 per cent for the time issued *
On $100,000 circulation to par of bonds, uniform tax of three-lifths of 1 per
cent
On $90,000 circulation to 90 per cent of par of bonds without taxation,
making possible an issue of $10,000 emergency circulation, to be taxed at
the rate of 2 or 3 per cent for the time issued.

$279. 88
779. 88
779. 88
1, 029. 88
1, 029. 88
1,179. 88
1,179. 88

In the foregoing figures no profit is calculated as accruing upon the
emergency circulation.
The Comptroller believes that the levying of a tax of one-sixth of
1 per cent upon circulation to 90 per cent of the par of the bonds
and allowing the banks to issue currency to the par of the bonds by
paying a tax at the rate of 2 or 3 per cent per annum on the excess up
to the par when outstanding, will result in the desired increase in our
general bank note issues, and provide a marked degree of elasticity in
our circulation.
In this connection the Comptroller can not properly discuss the
question of taxation of banks as related to the public revenues further
than to say that the imposition of a tax upon the capital and surplus of
the banks to offset any reduction in the tax on currency will remove
any objection to his recommendation on the grounds that it lessens the
share of the public burden which the banks should properly bear.
In considering the probable effect on the amount of bank circulation
outstanding which will result from a change in rates of taxation it
must be remembered that the calculation would properly include, if
it could be safely made, an estimate of the increased price of Government bonds, which will probably be incident to a greater demand for
these bonds from the banks seeking profit on circulation under the
modified rate of taxation.



XVI

REPORT OF THE COMPTROLLER OF THE CURRENCY.

This increased price of bonds may be such as to negative to some
degree the desired effect of an increased bank note circulation, since
it will tend to lessen the profits on circulation. It must be remembered, however, that this objection can be made to any method of
increasing the apparent profits on bank note circulation, including the
method of authorizing issues to par, subject to a uniform tax.
The Comptroller believes that from the passage of laws altering, as
suggested, the rate and method of taxation of national-bank notes,
an increase of at least $100,000,000 may be reasonably expected.
Based upon our present bond-secured bank note circulation, which
amounts to about $207,000,000, and this added amount, we would have,
under such laws, an available bond-secured emergencv circulation of
at least $30,000,000
As a summary of his views on this subject, the Comptroller would
call attention to the following propositions:
First. Whether or not legislation be passed providing for an uncovered emergency circulation for needed protection from the disastrous
effects of panics, a very much larger degree of elasticity can be
imparted to our present bond-secured bank-note currency, thus making it of greater use in seasons of the year in which the demand for currency is above the normal, and of invaluable assistance in times of panic.
Second. This result can be obtained by the enactment into law of the
President's recommendation that national banks be allowed to issue to
the par of the Government bonds deposited by them as security, and
by the modification of the present tax upon national banks as follows:
After determining approximately the lowest rate of profit which
will call into circulation the additional amount of national-bank notes
deemed necessary for public convenience, this rate of profit should be
reached by lessening or shifting to the franchise of banks the present
1 per cent tax on circulation to 90 per cent of the par of the Government bonds securing it. A tax of 2 or 3 per cent should then be
levied on the excess of circulation over 90 per cent of the bonds,
which will make of such excess circulation a secured emergency circulation only to be used when it becomes a public necessity, and not as a
means of profit by the banks under normal conditions.
The general increase in bank circulation desired being possible of
attainment through the lowering of the tax on the 90 per cent circulation, this additional tax on the 10 per cent excess circulation to the par
of the bonds will not materially interfere with such general increase,
and will only operate to create an emergency circulation of great value.
Third. As the use of rediscounts and bills payable on the part of the
Western and Southern banks at certain seasons of the year is regarded
as evidencing the need of an elastic circulation, and as bearing upon
the question of the measure of relief which may be expected from the
bond-secured emergency circulation here recommended, the Comptroller
will state that without any general increase in bank note circulation
as a result of new legislation, the possible emergency circulation of
$20,000,000 immediately available, based on bonds securing the present
circulation, amounts to more than the combined bills payable and rediscounts of all the national banks of the United States outstanding at any
time within the last three years.
If the Comptroller's estimate of a possible bond-secured emergencv
circulation of $30,000,000 be correct, this amount is about double the
average combined bills payable and rediscounts of the entire national
system outstanding within that period.



REPORT OF THE COMPTROLLER OF THE CURRENCY.

XVII

As the elastic and uncovered issues of the joint-stock banks of England, Scotland, and Ireland, comprising all the uncovered bank notes
there issued, may be cited as illustrating the advantages of an elastic
circulation, the Comptroller would also call attention to the fact that
these entire issues are but a small amount more than the $20,000,000
bond-secured emergency circulation which would be immediate^
available on existing bond deposits in the United States under the
legislation recommended. And with an increase in general bank note
circulation, resulting from modified laws, we would probably have a
bond-secured emergency circulation in this country larger than the
emergency circulation of the joint-stock banks of England, Scotland,
and Ireland, which is secured only by the general assets of the banks,
without preference over other creditors.
Fourth. Even if a special uncovered emergency circulation be provided, to be used only in case of panics, the plan here suggested of
changing the taxation and issues of secured bank notes will afford an
elastic circulation of value in times of money stringency not approaching the severity of a panic.
With or without the legislation for the special uncovered emergency
circulation, the bond-secured emergency circulation will be of great
public use.
Fifth. If provision be made for an uncovered emergency circulation
for use in times of panic, subject to a tax so large as to be repressive
at all other times, the 10 per cent bond-secured emergency circulation
herein recommended might be taxed at the rate of 2 per cent per annum
for the time issued instead of at the rate of 3 per cent, thus allowing
its freer use under more normal conditions. But if no uncovered circulation for panics be provided, the more repressive tax of 3 per cent
seems desirable upon the bond-secured emergency circulation.
Sixth. There is no need, under normal conditions, of a large amount
of emergency circulation or a high degree of elasticity in bank note
circulation. The immense volume of checks, drafts, and bills of
exchange, based upon the assets of banks and often called bank-credit
currency, expands and contracts in accordance with the demand of
trade and business, and is the medium through which the great bulk
of the business of our country is transacted. It is extremely elastic,
and varies in amounts at different seasons of the same year. It is generally amply adequate to the business needs of the country, except in
times of disturbed confidence and financial panic.
Seventh. The issuance of bank asset notes under normal conditions
and in the present development of our banking system can not be
justified by the plea that without them the needed elasticity of banknote currency can not be obtained. Nothing except the avoidance of
panic can at present justify any experiments with bank asset currency.
When authorized for use in times of panic the notes should be so heavily
taxed that they can circulate only while a panic lasts, and like clearinghouse certificates should be a remedy simply for a rare emergency.
In seeking the theoretical advantages of fluidity in bank circulation
we should take no risks with its solidity.
The following table, to which reference has already been made, shows
the calculation in detail of profits on bond-secured national bank note
circulation under the present and different methods of taxation and
issue:
CUR 99
II



XVIII

KEPORT OF THE COMPTROLLER OF THE CURRENCY.

PKOFIT ON NATIONAL BANK CIRCULATION, SECURED BY $100,000 UNITED STATES 4 PER
CENT BONDS OP 1907 COSTING $113,125, MONEY BEING WORTH 6 PER CENT: FIRST,
WITH CIRCULATION 90 PER CENT OF BONDS, TAX 1 PER CENT; SECOND, CIRCULATION
PAR OF BONDS, TAX 1 PER CENT; THIRD, CIRCULATION 90 PER CENT OF BONDS, TAX
FOUR-NINTHS OF 1 PER CENT; FOURTH, CIRCULATION PAR OF BONDS, TAX THREE-FOURTHS
OF 1 PER CENT; FIFTH, CIRCULATION 90 PER CENT OF BONDS, TAX ONE-SIXTH OF 1
PER CENT; SIXTH, CIRCULATION PAR OF BONDS, TAX THREE-FIFTHS OF 1 PER CENT;
AND SEVENTH, CIRCULATION 90 PER CENT OF BONDS, WITH NO TAX.

Receipts.

Deductions.

SI

If

18
as.
« f-t

Tax.

I IS

III
X

ent.\
90 per cent. $5,400 $1,000 $9,400;
>,
$90, 000/
Par.\
6,000 4,000{ 10,000
$100,000/

1 per cent.
$900 }$62.50 $1,370.12 $2,332.62 $7,067.38 $6,787.50 $279.88
1 per cent. \a,62.501 1,370.12
2,432.62 7,567.38 6,787.50
$1,000

6 of 1 per cent.
9,400!
$400
il

90 per cent.\ 5,400
$90,000/

62.501 1,370.12 1,832. 62 7,567.38 6,787.50

779.88
779.88

| f of 1 per cent. \ 62.
2,182.62 7,817.38; 6,787.501,029.88
$750 / 62.50! 1,370.12
I
i
90 per cent.l j , 4 0 0 4,00o| 9, 400' r i <>f 1 p e r c
1 62.50i 1, 370.12 1,582.62 7,817. 38! 6,787.501,029.88
5 4UU
l
$90,000/! '
uj
)
i
!
a r
c 000 4,000 10,000 / § of 1 per cent.
$ioofo o 6}| '
7,967.38; 6,787.501,179.88
Par. i
$100,000/

4,000i 10,000

4 000

'

'

9 400

'

i

No tax.!

62. 50 1,370.12 1, 432. 62

7,967.38 6, 787. 50 1,179.88

REPEAL OF SECTION 9 OF ACT OF JULY 12, 1882.

Section 9 of the act of July 12, 1882, prohibits the increase of bank
circulation within six months after the deposit of lawful money to
reduce circulation. The repeal of this section is necessarily precedent
to any reform in national banking currency which provides for a greater
elasticity, and is recommended. Even under the present laws a
greater elasticity will be incident to our national-bank note issues if
this section be repealed. A plethora of money leads the banks to
retire their currency, and when a money stringency afterwards occurs
there should be no unnecessary obstructions to an increase by the
banks of their note issues, then doubly important to the needs of the
business community.



REPORT OF THE COMPTROLLER OF THE CURRENCY.

XIX

REMEDY FOR DELAY IN FILLING ORDERS FOR BANK-NOTE CURRENCY.

The Comptroller would respectfully call attention to the very great
importance of an appropriation to increase the size of the vaults for
the storage of incomplete national-bank currency in this Bureau in
order to enable it to respond to the demand of the banks and the business community for circulating notes in case of sudden need. With
the present inadequate facilities for storage, a sufficient amount of
incomplete currency can not be kept on hand, and as it requires from
twenty-five to thirty days to complete an order received from a bank
for bank-note plate printing, the public and the banks are frequently
put to great inconvenience by this necessary delay. In the panic of
1893 the suffering and damage to which the business community and the
banks of the country were put, because of the fact that there had not
been provided for this Bureau a few feet additional of needed storage
room, can be inferred from the fact that of total orders for currency
during the panic, amounting to $42,000,000, orders for over $11,000,000
were countermanded, the crisis of the money panic having passed
before the twenty-five days necessary for the preparation of the currency had expired. With additional storage room, the Bureau will be
enabled to keep on hand a sufficient stock of incomplete currency, so
that orders from the banks can be filled upon receipt without delay.
LIMITATION OF LOANS.

In his last report the Comptroller called attention to the desirability
of a modification of the law limiting certain loans to 10 per cent of the
capital of the bank, and pointed out that the effect of this provision
was to encourage the making of loans, large in proportion to their total
assets, in smaller banks and smaller communities, while it prohibited
such loans in the larger cities where they could be made in accordance
with the urgent demands of trade and consistent with the soundest
banking principles. He pointed out that the defective and unequal
working of the present provision was due to the greater ratio borne
hy banking resources to banking capital in the larger communities
as compared with the like ratio in smaller communities.
The present section of the law regulating excessive loans should be
so altered as to allow the banks of larger communities to have more
nearly the privilege of loaning a given per cent of their total assets to
one individual, which now belongs, under a strict compliance with the
present provision, to the banks of the smaller communities. The law
against excessive loans should then be made enforceable by the enactment of an amendment providing a penalty for infractions.
The Comptroller, as before, would recommend that section 5200 of
the Revised Statutes be amended by adding after the words 4' shall at
no time exceed one-tenth part of the amount of the capital stock of such
association actually paid in" the following words:
Provided, That the restriction of this section as to the amount of total liabilities to
any association, of any person, or of any company, corporation, or firm for money
borrowed, shall not apply where a loan in excess of one-tenth part of the capital
stock shall be less than 2 per cent of the total assets of said bank at the time of making said loan. Said loan shall be at all times protected by collateral security equal
to or greater in value than the excess in the amount of said loan over one-tenth of
the capital stock.

A strict penalty should then bo provided for infractions of the
amended section.




XX

REPORT OF THE COMPTROLLER OF THE CURRENCY.
NATIONAL BANKS OF $25,000 CAPITAL.

In accordance with the recommendation of the President and the
Secretary of the Treasury, and for the purpose of affording our smaller
communities the business advantages incident to increased banking
facilities, the Comptroller would urge the enactment of laws authorizing the organization of national banks with a capital of $25,000 in
towns of 2,000 or less population.
NATIONAL BANK EXAMINATIONS.

The work of the corps of national-bank examiners during the year
is worthy of special commendation. It is of course improper, for
obvious reasons, for the Comptroller to point out the specific cases
where, through the instrumentality of the examiners and their notification to directors of dangerous practices on the part of active bank
officers, institutions have been protected from grave danger of
insolvency.
During the year a system of special examinations has been on trial
with advantageous results in marked instances. There has been utilized throughout the country special expert examiners, and an effort is
being made through them to better supervise the work of local
examiners as well as to add to the information of the Comptroller as
to the condition of the national banks. The exchange of lists of banks
for examination among examiners has been more frequent than heretofore, although the more exact knowledge of local credits, possible to
a local examiner, limits the extent to which this can be done consistent
with the best results.
In connection with the efforts of the Comptroller to determine the
safety of loans, examiners have been requested to keep a convenient and
uniform tabulation of approximate lines of larger credits extended by
the banks for his reference.
The benefit to the service resulting from the fund for special examinations of national banks, an increase in which was granted by Congress, as recommended in the last report of the Comptroller, has been
material. By means of this fund investigations were conducted which
resulted in decisive action by the Comptroller in relation to the affected
banks, which investigations and resultant information would have been
otherwise impracticable. While this fund is small, the benefits derived
from it merit special mention.
The Comptroller recommends an increase in the annual fund provided for examinations of bank-note plates, and for the compensation
of examiners engaged in special examinations of $2,000, making the
fund $5,000 instead of $3,000, as at present.
INTERNATIONAL AND INTERCOLONIAL BANKING.

In his last report the Comptroller called attention to the need of
laws authorizing and regulating banks for the transaction of international and intercolonial banking, and recommended the establishment of a commission to investigate banking and commercial conditions
in the new possessions of the United States with a view to obtaining
more exact knowledge of the nature of the banking legislation essential to the best interests of these new possessions, and to our own
country in its business relations with them.



REPORT OF THE COMPTROLLER OF THE CURRENCY.

XXI

The past year has emphasized the need of such legislation, and the
Comptroller again calls attention to the disadvantage at which our
country is placed by the lack of proper banking facilities, not only in
South American commerce, but in our commerce with our new possessions.
The need of banking facilities to care for the rapidly growing business between the United States and the territories over which she now
exercises sovereignty is such that of necesshvy banking institutions
have already been established over which there is little or no Governmental supervision.
The earlier that intelligent and careful consideration can be given by
Congress to the question of banking legislation for the new possessions,
both for the local regulation of their domestic systems and the regulation of their banking relations with the United States, the better it
will be for the domestic prosperity and trade relations of both.
For purpose of reference, and through the courtesy of the Secretary
of the Treasury and the Secretary of War, and others, the Comptroller
publishes, in an appendix to this report, information relative to financial
conditions in Cuba and Porto Rico, including extracts from the report
of Special Commissioner Edward W. Harden, who has gathered information relative to financial and banking conditions in the Philippines,
all of which indicates the necessity and desirability of early action by
Congress upon this important subject.
The Comptroller would renew his recommendations of one year ago
that laws be passed authorizing the incorporation of banks organized
for the purpose of carrying on international and intercolonial banking,
as distinguished from domestic banking, and that as preliminary thereto
a commission be established to investigate local conditions and report
upon the nature of the legislation best adapted for the interests of this
country and her new possessions.
In this connection he would again call attention to the existing situation by quoting briefly from his last report:
Unless some such legislation is provided, the American exporter and importer, in
his trade with America's own colonies, will be compelled to endure all the disadvantages under which, in all South American markets and in many other markets of the
world, he now labors in his competition with foreigners enjoying superior banking
facilities.
When, by means of international banks and their branches, the proper banking
facilities are afforded those engaged in foreign trade, they transact their business with
these banks in much the same manner as the domestic shippers of the United States
transact ^business with our present banks.
The American in his South American trade, as compared with the foreigner in
the same line of business, is subjected to the same relative disadvantages as are
experienced by a domestic shipper without banking facilities, as compared with
another who possesses them.
Domestic dealers in supplies, in good credit, may make contracts with domestic
wholesale purchasers in good credit for the sale and shipment of goods, for which
the consignee gives his acceptance, payable at different intervals, sometimes months
after the delivery to him of the shipment.
The consignor discounts this accepted draft, given him for the goods, with his bank,
thus receiving his capital at once for reinvestment and enabling him to transact a
larger business than if the capital invested in the goods was locked up until the
maturity of the acceptance. On the other hand the consignee has the difference
between the time of the arrival of the shipment and the maturity of the draft to sell
the goods and to collect from the purchaser all or a portion of the amount necessary
to pay the draft.
The situation of the shipper without banking facilities is in sharp contrast. He
must ordinarily sell for cash, instead of on credit, to the consignee, as he needs his
capital in most cases for immediate reinvestment. As a result, in his competition



XXII

REPORT OF THE COMPTROLLER OF THE CURRENCY.

with his more favored rivals he is not only compelled to accept lower prices, involving smaller margins of profit, but he must do a smaller business on the same capital
invested.
Thus, as compared with the English exporter, who, when his goods are shipped,
can receive advances from an English international bank upon the credit of his bills
of lading and of the foreign consignee, concerning whose credit the home bank,
through its foreign branch, is well advised, the American shipper, in the majority of
instances, is denied such privileges, and must await entire, instead of partial, reimbursement until the arrival of the goods at the foreign market and the collection of
the draft for the purchase price made at the time of shipment.
In addition to this disadvantage, the American exporter and importer in his trade
with South American countries transacts all his business of consequence through
English banks in terms of English money, paying the rates of exchange fixed by
these foreign institutions.
INSOLVENT NATIONAL BANKS.

At the date of the last annual report of this Bureau the number of
national banks remaining in the hands of receivers was 158. During
the past year 12 banks have been placed in the hands of receivers, and
35 receiverships terminated, leaving at the present time 135 insolvent
banks in the hands of receivers appointed by the Comptroller.
The assets of these insolvent national banks at the date of the present
report are of the nominal value of $39,894,770.
Special attention has been given to the reduction of expenses of the
several receiverships; and in the remaining receiverships, as compared
with last year, a total reduction of about $50,000 in salaries, legal and
other annual expenses, has been attained. There are at this time nineteen receiverships in the hands of one receiver at Washington. The
assets of this latter class of banks are nominal in value and by the plan
adopted a considerable additional annual saving has been made, which
goes to increase the dividends to creditors.
In addition to the number of receiverships which have been completely liquidated, 38 receiverships have been placed on the inactive
list. In such cases the fixed salaries of the receivers are terminated,
and they are allowed compensation only for services actually performed.
There are at present 94 receivers who have in charge the assets of
the 135 insolvent banks, a number of such receivers administering
upon the affairs of two or more banks.
The 12 national banks which failed during the year makes a total of
387 failures from the organization of the Bureau to the date of this
report, including 17 banks restored to solvency.
The policy of consolidating two or more banks and placing them in
the hands of one receiver in the same city or locality has been found
to be satisfactory, inasmuch as it results in the saving of salaries of
receivers and in a lessening of legal and other expenses.
The administration of all insolvent banks is well advanced, and within
a few months a number of receiverships will be closed.
In the appendix will be found a table showing the nominal value of the
assets of the banks that have been or are being liquidated by receivers,
with the collections, disbursements, claims proved, and dividends paid.
For the purpose, however, of indicating the general cost of administration of the affairs of insolvent banks in the hands of the Government there is presented herewith a summary of the tables given in
detail in the appendix.



REPORT OF THE COMPTROLLER OF THE CURRENCY. XXIII
NOMINAL ASSETS AT DATE OF SUSPENSION.

Estimated good
Estimated doubtful
Estimated worthless
Additional assets secured since suspensi< m .

:.

Total assets

$79,376, 277
71,154,423
53, 538,125
31, 567, 953
235, 636, 778

DISPOSITION OF ASSETS.

Offsets allowed and settled
Losses on assets compounded or sold under order of court
Nominal value of assets returned to stockholders
Nominal value of remaining assets
Collected from assets
Total

$17,436,261
70, 721, 452
5, 966,121
39, 894, 770
101, 618,174
235, 636, 778

Collected from assets im above
Collected from assessments upon shareholders

101, 618,174
16,166, 815

Total collections from all sources

117, 784, 989

DISPOSITION OF COLLECTIONS.

Loans paid and other disbursements
Dividends paid
Legal expenses
Receivers' salaries and all other expenses
Cash on hand
Cash returned to stockholders
Total

$21,106, 742
83, 087, 236
3,571, 685
6, 095, 799
2, 604, 290
1,319, 237
117, 784,989

Total amount assessed against shareholders
37,032, 070
Total amount of claims proved
127,002, 895
Percentage of collections from assets, including offsets allowed
60. 82
Percentage of collections from assessments upon stockholders
43. 65
Percentage of legal expenses to collections from all sources, including
offsets....
2.64
Percentage of all other expenses to collections from all sources, including
offsets
4. 51
Percentage of total expenses to collections from all sources, including
offsets
7.15

Ruling as to second assessment upon stockholders and rebate to stockholders in case of incorrect assessments.—Since the inauguration by the

Comptroller of the rule of making a second assessment upon stockholders of an insolvent national bank when the first assessment, through
miscalculation of the value of assets, was less than the legal liability
of the stockholders, and of rebating to the stockholders any excess
beyond their legal liability which had been mistakenly collected through
like error, as was delineated in the report of 1898, the stockholders of
10 insolvent banks have been subjected to a second assessment aggregating in amount the sum of $386,000. In the same period of time
there has been rebated to stockholders of 6 insolvent banks a sum
aggregating $46,831.37 in cases where the amount realized from the
first assessment was greater than the individual liability of each stockholder.
The power of the Comptroller, under his ruling, to make the second
assessment has been tested in four courts of competent jurisdiction.
In two different circuit courts of the United States and in the circuit
court of appeals of the ninth circuit the action of the Comptroller has
been sustained, and in one circuit court of the United States the power
of the Comptroller to make subsequent assessments was denied. The
last-mentioned case will be appealed to the circuit court of appeals.



XXIV

REPORT OF THE COMPTROLLER OF THE CURRENCY.

INVESTIGATION AS TO LOAN AND DEPOSIT ACCOUNTS, RATES OF INTEREST, AGGREGATE DEPOSITS AND LOANS OF ALL BANKS OF THE
UNITED STATES.

During the past year the Comptroller has made an effort to gather
statistics which would best evidence the later growth and development
not only of the national banking system, but of the other banking institutions of the country operating under State laws. In this connection
he has instituted an investigation as to the number of loans and deposit
accounts, the interest received on loans and paid on deposits, and the
amount of loans and deposits of the banks of all systems in the United
States in the years 1889, 189-1, and 1899. A compliance with the
request for information which he has made upon the banks of the
country has involved them in much clerical labor, and the very general response which has been made by them is indicative of much
public spirit on their part.
As compliance with requests for statistical information of the nature
asked is a matter wholly optional with the banks, the Comptroller
desires to express his appreciation of the courtesy of the institutions
whose labor voluntarily performed has enabled him to present to the
public statistics which he believes to be of economic value.
No detailed investigation into the total number of bank loans and
deposit accounts in the United States has heretofore been made, and
the results of this investigation are instructive and significant.
A copy of the blank furnished by the Comptroller to be filled in by
the reporting banks is given herewith.
Charter No.
(Location)
Date

, 1899.

T h e COMPTROLLER OF THE CURRENCY,

Washington, 1). C.
SIR: In compliance with your request of June 30, I give herewith the data desired
with respect to the number of depositors in and number of borrowers from this the
Bank,
, together with the amount of deposits, loans, and the average
rates of interest paid and received, as shown by the books on the dates indicated.
Individual deposits, including cortiiicates of deposit.

Loans and discounts, including
overdrafts.

r
Amount of
of Ar v e e a S e
Amount ot
at
loans and
Number of j deposits. cent of indiscounts.
j depositors.
(Omit
borrowers.
terest paid
cents ^
wieea paiu
cents.) o n d e p o s i t s

July 12,1889
July 18,1894
June 30,1899

Average
rate per
sent of interest re-

(

_

;

}

Population of this place at date of latest census,

i

.
—

i_

, Cashier,
Bank.

In considering the deductions to be drawn from the figures herewith
presented, it must be remembered that allowance should be made for
those individuals or corporations who use more than one bank for
both borrowing and depositing. There was, of course, no way practicable in which exact information upon this subject could be obtained,
and unquestionably certain borrowers and depositors have been counted
twice or more times, since several banks may have included the same
person as a borrower or depositor in making their returns to the
Digitized forComptroller. The actual number of depositors and borrowers is, of
FRASER


REPORT OF THE COMPTROLLER OF THE CURRENCY.

XXV

course, much less than the number of deposit and loan accounts which
are indicated by the tables given herewith; and considering the number of corporations doing a large business through agents keeping
local deposits for branch offices, as well as the other causes for duplication of deposits and loans for account of the same individual or corporation, the Comptroller is unable to arrive at a satisfactory basis for
estimating the per cent of allowance to be made in determining the
approximate number of individual depositors and borrowers.
In the tables given only the banks from which the Comptroller was
able to secure either a detailed report, in response to his circular, or a
statement of condition have been included as a basis for estimates.
But, in conjunction with the reports, statistics as to number and capital
of banks given in the annual report of the Commissioner of Internal
Revenue furnish a basis for an estimate as to the deposit accounts,
aggregate deposits, loans, capital, and number of loans of the combined banking systems of the United States, as will appear hereinafter.
The Comptroller has received answers to his inquiries from about
two-thirds of the banks composing the national s}^stem. With these
banks, as with the banks other than national, he has based his estimates
as to all banks upon the ratios found to exist in the reporting banks.
Since the Comptroller has the general statement of financial conditions
of the nonreporting banks, these estimates may be considered as fairly
reliable.
As illustrating the method of arriving at these estimates, the probable number of deposit accounts in the national banks of the United
States on June 30, 1899, is arrived at as follows:
On that date, 2,417 of these banks having reported deposit accounts
numbering 1,991,183, and deposits amounting to $1,830,116,140, the
average deposit of the reporting banks is found by dividing the amount
of the deposits by the number of accounts, giving an average deposit
of $919.
The total outstanding individual deposits of the entire national system of 3,583 banks, as shown by their published reports of condition
June 30, 1899, amount to $2,522,157,509, and this sum is then divided
by $919, giving the estimated number of deposit accounts for the entire
system on that date as 2,744,459.
The same method, using total loans and discounts as a basis, is pursued in estimating the total number of loans of the national S}^stem.
This method is also used in estimating the number of deposit accounts
and loans in banking institutions other than national.
For the reason that the proportion of banks, other than national,
responding to the Comptroller's inquiries is not so large as in the case
of the national banks, the same degree of accuracy can not be claimed
for the estimates relating to other banks as for those relating to the
national system. Yet so large a number of these banks have reported
that the estimates based upon their returns are considered to be of
value.
The manifest disadvantages under which this investigation has been
made emphasize the importance, in the interests of banking and financial
knowledge, of more intimate relations between the State officers supervising the different State banking systems and the Comptroller. It
has been the constant effort of the Comptroller and his predecessors
to establish with these officers those relations most conducive to mutual
exchange of infoimation and cooperation in bank supervision where
circumstances required. Gratifying progress has been made, but much




XXYI

REPORT OP THE COMPTROLLER OF THE CURRENCY.

room for improvement still remains. The great totals here given indicate the wonderful banking and financial strength of the country and
its people, and in the interest of the common good, as well as of financial science, and as something due to ourselves and the world, it is
fitting that we strive to more exactly and completely gather and tabulate the facts here of necessity somewhat roughly estimated.
For their able and discriminating cooperation in tabulating and systematizing the thousands of reports received in connection with this
inquiry, the Comptroller desires to acknowledge his indebtedness to
Mr. W. J. Fowler, the chief of the organization division of the Bureau,
and his assistants. Among the general deductions to be made from
this investigation may be mentioned the following:
First. That the number of individual depositors in the banks of the
United States is constantly increasing, as indicated by the regular
increase in the number of deposit accounts of the different systems
estimated as follows:
Banks, etc.

Date.

July 12, 1889
July 18, 1894
June 30,1899
July 12, 1889
July 18, 1894
June 30,1899
July 12,1889
July 18,1894
June 30,1899
July 12,1889
July 18,1894
June 30,1899
July 12,1889
July 18,1894
June 30,1899

National banks
.....do
do
Savings banks
do
.....do
State and private banks
do
do
Loan and trust companies . . .
do
do
Total all banks reporting
do
do

Number
of banks
reporting.
3,239
3,770
3,583
849

1,024

942

2,995
4,490
4,947

120
224
260

1

7,203
9,508
9,732

Estimated
number of
depositors'
accounts.
1,650,044
2,071,360
2,744,459
3,811,059
4,818,247
5,207,653
1,071,267
1,699,958
2,838,326
177,601
404,201
642,198
6,709,971
8,993,766
11,432,636

Estimated grand total for the year 1899, based upon banks reporting as above and statistics as to nonreporting banks obtained from tax
returns to the Commissioner of Internal Revenue: Number of banks,
12,804; depositors' accounts, 13,153,874.
Second. That there is a demand from borrowers for the use of the
greater proportion of the deposits of banks, and while the number of
individual borrowers is increasing, the depositors greatly outnumber
the borrowers, and the increase in the number of borrowers is much
less than the increase in the number of depositors, as indicated by the
rate of increase in the number of loans estimated as follows:
Number
of banks Estimated
number
reportof loans.
ing.

Date.

July 12, 1889
July 18, 1894
June 30, 1899
July 12, 1889
July 18, 1894
June 30, 1899.
July 12, 1889
July 18, 1894
June 30, 1899
July 12, 1889
July 18, 1894
June 30, 1899
July 12, 1889
July 18, 1894
June 30, 1899

National banks
do
do
Savings banks
do
do
State and private banks . .
do
.....do
Loan and trust companies
do
do
Total all banks reporting.
do
.....do




3,239
3,770
3,583
849

1, 106,377
1, 332,722
1, 550,034

1,024

942

2,995
4,490
4,947

1
1

7,203
9,508
9,732

2
2
3

120
224
260

223,769
301,685
357,733
804,725
281,085
905,566
53,670
75,202
98,331
188,541
990,694
911,664

REPORT OF THE COMPTROLLER OF THE CURRENCY.

XXVII

Estimated grand total for the year 1899, based upon banks reporting
as above, and statistics as to nonreporting banks, obtained from tax
returns to the Commissioner of Internal Revenue: Number of banks,
12,804; number of loans, 5,067,252.
Third. That the growth of the banking systems is being characterized by a gradually lessening rate of interest charged on loans, the
average rates being estimated as follows:
Date.

July
July
June
July
July
June

12,1889
18,1894
30,1899
12,1889
18,1894
30,1899

Banks, etc.

j Average
i rate of
I interest
I charged \
i on loans.

National banks .
do
do
Savings banks ..
do
do

Per cent.
(1.1
5.8
5.3
5.2
5.2
4.9

Banks, etc.

July
July
June
July

' Average
rate of
interest
charged
on loans.

12,1889
18,1894
30,1899
12,1889

I State and private banks.!
•
do
;
;
\
do
j Loan and trust com- j
i panics
July 18,1894 I
do
June 30,1899 |
do
!

Vr cent.
7.6
7.2
4.9
5.0
4.6

Fourth. That a gradually lessening rate of interest is being paid upon
deposits, the average estimated rates, where paid, being as follows:
Date.

July
July
June
July
July
June

12,1889
18,1894
30,1899
12,1889
18,1894
30,1899

Banks, etc.

National banks .
do
do
Savings b a n k s . . .
do
do

Average j
rate of !
interest ||
paid on i;
deposits, i I
Per >cnt.
3.6

3.5
2.9
4.0
3.7
3.4

Average
rate of
interest
paid on
deposits.

Banks,etc

July
July
June
July

12,1889
18,1894
30,1899
12,1889

State and private banks. I
do
!
do
!
Loan and trust com- |
panies
July 18,1894
.do
i
June 30,1899 i
do.

4.0
3.9
3.4
3.6
3.4
3.1

Fifth. That, considering the larger clientage of national and savings
banks, the average deposit of the individual or corporation is slowly
increasing, as evidenced by the estimated average deposit account, as
follows:
Banks, etc.

Date.
July
July
June
July
July
June
July
July
June
July
July
June

12,1889
18,1894
30,1899
12,1889
18,1894
30,1899
12,1889
18,1894
30,1899
12,1889
18,1894
30,1899

National banks
do
do
Savings banks
do
do
State and private banks
do
do
Loan and trust companies
do
do




Average
j deposit
\ account.

i
|
!
I
!
i
\
'
i

$874
810
919
379
369
419
551
426
433
1,687
1,166
1,301

XXVIII

REPORT OF THE COMPTROLLER OF THE CURRENCY.

Sixth. That the average size of the loans, all classes of banks considered, has not varied much in the last decade, the estimates being1 as
follows:
Average
amount
of loan.

Date.
.July
July
June
July
July
June
July
July
June
July
July
June

SI,608
1,459
1,618
3,591
3,404
3,071
747
577
505
5,432
4,980
6,092

12, 1889 National banks .
18, 1894 . . . . d o
30, 1899
do.
12, 1889 Savings banks,
do
18, 1894
30, 1899
.do.
12, 1889 State and private banks .
18, 1894
.do
30, 1899
.do.
12, 1889 Loan and trust companies .
18, 1894
do
30, 1899
do

Seventh. That the growth in the aggregate of individual deposits
has been as follows:
Banks, etc.

Date.
July 12, 1889
July 18, 1894
June 30, 1899
July 12, 1889
July 18, 1894
June 30, 1899
July 12, 1889
July 18, 1894
June 30, 1899
July 12, 1889
July 18, 1894
June 30, 1899
July 12, 1889
July 18, 1894
June 30, 1899

Number
of banks Total deposits.
reporting.

National banks.
do
do
;....:
Savings banks
do
.do.
State and private banks .
do
.do.
Loan and trust companies,
do
.do.
Total all banks reporting .
do
do

442,137,979
677,801,201
522,157,509
444,391,325
777,933,242
182,006,424
590,268,199
724,182,043
228,995,364
299,612, 899
471,298,816
835,499,064
776,410,402
651,215,302
768,658,361

Estimated grand total for the year 1899, based upon banks reporting
as above, and statistics as to nonreporting banks obtained from tax
returns to the Commissioner of Internal Revenue: Number of banks,
12,804; total deposits, $7,513,954,361.
Eighth. That the growth in aggregate loans has been as follows:
Banks, etc.

Date.

July
July
June
July
July
June
July
July
June
July
July
June
July
July
June

12,1889
18,1894
30,1899
12,1889
18,1894
30,1899
12,1889
18,1894
30,1899
12,1889
18,1894
30,1899
12,1889
18,1894
30,1899 i

National banks
do
do
Savings banks
do
do
State and private b a n k s . . .
do
do
Loan and trust companies.
do
.do.
Total all banks reporting.
do.
do .




Number
of banks

Total loans

report- and discounts.
ing.
3,239
3 770
3,583
849
1,024
942
2,995
4,490
4,947
120
224
260
7,203
9,508
9,732

779,054,528
944,441,315
507,954,980
803,554,096
026,937,808
098,598,589
601,129,314
739,186,087
962,311,008
291,534,324
374,504,202
599,031,033
475,272,262
085,069,412
167,895,610

REPORT OF THE COMPTROLLER X)F THE CURRENCY.

XXIX

Estimated grand total for the year 1899, based upon banks reporting
as above and statistics as to nonreporting banks obtained from tax
returns to the Commissioner of Internal lie venue: Number of banks,
12,804; total loans and discounts, $5,751,467,610.
By further reference to the tables printed hereinafter the number
of banks of each class reporting in response to the request of June 30,
1899, may be found, and detailed statements showing the basis for the
estimates above given.
NUMBER OF BANKS, BY CLASSES, REPORTING IN RESPONSE TO REQUEST OF J U N E 30,
1899, RELATIVE TO NUMBER OF DEPOSITORS' ACCOUNTS, AMOUNT OF DEPOSITS, INTEREST RATES ON THE DATES INDICATED, THE TOTAL AMOUNT OF DEPOSITS AS SHOWN
BY REPORTS OF CONDITION ON THE SAME OR APPROXIMATE DATES, AND THE ESTIMATED NUMBER OF DEPOSITORS' ACCOUNTS.

NATIONAL BANKS.
Banks from which reports of condition were received, including
those reporting in response to
request of June 30, 1899.

Banks reporting in response to request of June 30, 1899.

Total inde- Aver- Aver- Total
Number of dividualof
posits
age
age
Num- depositors' banks report- deposit inter- number. accounts ing number
acest ber of
reported.
of deposit count, rate. banks.
accounts.

Date.

July 12,1889
Tulv 18,1894
June 30,1899 ....

1,800
2,236
2,417

1,076,607
1,424,966
1,991,183

$940,939,440
1,155,191,588
1,830,116,140

$874
810
919

P.ct.
3.6
3.5
2.9

Total
individual
deposits.

Estimated

; number of

depositors'
accounts.

81,442,137,979 !
1,677,801,201
2,522,157,509

1,650,044
2,071,360
2,744,459

$590, 268 199 |
724, 182 043
1,228, 995 364

1. 071, 267
1, 699, 95S
838, 326

$299, 612,899 I
471, 298,816 j
835, 499,064

177 601
404 201
642 198

STATE AND PRIVATE BANKS.
July 12,1889..
July 18,1894..
J u n e 30,1899 .

765
. 1 445
. 2 314

265 291
502, 756
966 394

$146, 308 150
214, 442 510
418, 281 267

$551
426
433

!

2 995
3 9 ! 4, 490
4 j 4, 947
°
4

LOAN AND TRUST COMPANIES.
July 12,1889..
July 18,1894..
J u n e 30,1899 .

52
130
181

73 484
205 368
443 321

$123,994,590
239,504,892
576,724,117

$1, 687
1, 166
1, 301

6

120
224
260

3i 4

3. 1

SAVINGS BANKS.
July 12,1889
July 18,1894
J u n e 30,1899

452
592
712

2,646,491 $1,004,596,854
3,413,477 1,261,450,416
4,254,516 1,782,974,485

$379
369
419

TOTAL STATE AND PRIVATE BANKS, LOAN AND
BANKS.
1 269
July 12, 1889
July 18, 1894
2 167
J u n e 30, 1899 . . . . 3 207

4
3.7
3.4

849 $1,444,391,325
1,024 1,777,933,242
942 2,182,006,424

TRUST

2,985,266 $1,274,899,594
4,121,601 1,715,397,818
5,664,231 2, 777,979,869

COMPANIES, AND

3

3,811,059
4,818,247
5, 207, 653

SAVINGS

964 $2 334, 272, 423
2 973, 414, 101
6 149 4, 246, 500, 852

5 059 927
6 922 406
8 688 177

! 7,203 $3,776,410,402
! 9,508 4,651,215,302
I 9,732 6,768,658,361

6,709,971
8,993,766
11,432.636

5 738

TOTAL ALL BANKS.
July 12,1889
J uly 18,1894
J une 30,1899

3,069
4,061,873 $2,215,839,034 I
4,403
5,546,567 ! 2,870,589,406 !
! 5,624 | 7,655,414 I 4,608,096,009 I




XXX

REPORT OF THE COMPTROLLER OF THE CURRENCY.

NUMBER OF BANKS, BY CLASSES, REPORTING, IN RESPONSE TO REQUEST OF J U N E 30,
1899, RELATIVE TO NUMBER OF LOANS, AMOUNT OF LOANS AND DISCOUNTS, INTEREST AND DISCOUNT RATES ON THE DATES INDICATED, THE TOTAL AMOUNT OF LOANS
AND DISCOUNTS AS SHOWN BY REPORTS OF CONDITION ON THE SAME OR APPROXIMATE DATES, AND THE ESTIMATED NUMBER OF LOANS.

NATIONAL BANKS.
Banks from which reports of condition were received, including
those reporting in response to
request of J u n e 30, 1899.

Banks reporting in response to request of J u n e 30, 1899.

Date

! Num| ber.

Number of
loans reported.

Total loans
and discounts
of banks reporting number of lo«ns.

Average
loan.

Aver- Total
age
numinter- ber of
est
banks.

1,800
2,236
2,417

642,851 $1,033,529,239
809 676 1,181,308,075
1,028,385 1,664,172,965

Estimated
number
of loans.

rate.

P. ct.
July 12, 1889
July 18, 1894
J u n e 30,1899

Total loans
and discounts.

81,608
1,459
1,618

3,239 81,779,054,528
3,770 1,944,441,315
3,583 2,507,954,980

6.1
5.8
5.3

1,106,377
1,332,722
1,550,034

$601,129,314
739,186,087
962,311,008

804,725
1,281,085
1,905,566

STATE AND PRIVATE BANKS.
J u l y 12, 1889.
July 18, 1894.
J u n e 30,1899.

765
1,445
2,314

172,819 | $129,107,680 |
332,230 ! 191,677,897 |
630,601 I 318,336,084 i

$747
577
505

7.6 | 2,995
7.2 ! 4,490
4,947
6.7

LOAN AND TRUST COMPANIES.
July 12, 1889.
July 18, 1894.
J u n e 30,1899.

130
181

$94,395,202
17,377
32,336 , 161,034,302
58,916 j 358,932,167

$5,432
4.9
4,980 i 5.0
6,092 I 4.6

120
224
260

$291,534,324 i
374,504,202 1
599,031,033 \

53,670
75,202
98,331

$803,554,096 i
1,026,937,808
1,098,598,589

223,769
301,685
357,733

SAVINGS BANKS.
J u l y 12, 1889
July 18, 1894
J u n e 30. 1899 . . . .

452
592
712

156,261
216,172
310,295

$561,136,040 j $3,591
5.2
735,908,720
3,404
5.2
953,108,181 I 3,071 , 4.9

849
1,024
912

TOTAL STATE AND PRIVATE BANKS AND LOAN AND TRUST COMPANIES AND SAVINGS
BANKS.
July 12, 1889
' 1,269 :
July 18, 1894
2,167
J u n e 30, 1899 . . . . 3,207 i

346,457 ! $784,638,922 |
580,738 | 1,088,620,919 I
999,812 ! 1,630,376,432

I 3,964 $1,696,217,734
' 5,738 2,140,628,097
6,149 2,659,940,630 j

1,082,164
1,657,972
2,361,630

7,203 $3,475,272,262
9,508 4,085,069,412
9,732 5,167,895,610

2,188,541
2,990,694
3,911,664

TOTAL ALL BANKS.
July 12,1889
3,069
July 18,1894
| 4,403
J u n e 30, 1899 . . . . 5,624

989,308 $1,818,168,161
1,390,414 I 2,269,928,994
2,028,197 3,294,549,397

From the foregoing tables it will be seen that information relative to
the resources and liabilities of incorporated and private banks in 1899
has been received from 9,732 such institutions. By reference to the
annual report of the Commissioner of Internal Revenue for the year
1899 it is found that 12,804 banks and bankers paid tax on capital and
surplus under the war-revenue act of June 13, 1898. This indicates
that there are practically 3,000 incorporated and private banks in the
country relative to whose condition no definite knowledge was obtainable, the cause being in many instances a lack of State laws requiring



REPORT OF THE COMPTROLLER OF THE CURRENCY.

XXXI

statements of condition. From an estimate based upon the returns to
the Internal-Revenue Bureau the capital of all banks of all kinds is
approximately $1,150,000,000, and on the assumption that the capital,
loans, and deposits of the 3,000 nonreporting banks will average about
the same as of the State and private banks from Avhich reports have
been received, the aggregate capital of the nonreporting banks is
$180,000,000; loans, $583,572,000; and deposits, $745,296,000. Adding
these amounts to loans and discounts, respectively, of reporting banks,
makes the estimated aggregate loans of all banks for 1899 $5,751,467,610,
and deposits $7,513,954,361.
Assuming that the average loans and deposits of nonreporting banks
are the same as in State and private banks from which returns have
been received, their total estimated number of loans is 1,115,588, and
deposit accounts 1,721,238, which, added to the results given in the
tables for reporting banks, makes the estimated total loans in all banks
of the country for 1899 5,067,252, and the estimated number of
deposit accounts 13,153,874.
LOST AND DESTROYED NATIONAL-BANK NOTES.

For the purpose of ascertaining the approximate gain to the Government on account of lost or destroyed national-bank notes, which, under
the law, inure to its benefit, some research has been made. This examination is necessarily incomplete, but it can be regarded as fairly indicative of the average rate of loss of notes. From the date of the organization of the national-banking system to the close of the year 1869,
covering a period of six years, 15 national banks were declared insolvent
and placed in the hands of receivers. The total outstanding circulation
of these banks at the date of failure was $1,554,400, of which amount
there had been presented to the Department for redemption up to October 31,1898, $1,548,262, leaving outstanding of the original amount only
$6,138. As this is at the rate of only 3.9 mills on the dollar, or a little
less than two-fifths of 1 per cent, and as unquestionably some portion
of this small amount will yet be presented for redemption, it is safe to
conclude that the gain to the Government on account of lost, destroyed,
and unredeemed national-bank notes is very small.
ORGANIZATION OF NATIONAL BANKS.

On October 31, 1898, there were in existence 3,598 national banks,
with authorized capital stock of $624,552,195. During the year ended
October 31,1899, 78 banks, with capital of $16,495,000, were organized,
and 15 associations increased their capital stock, in the aggregate,
$2,985,000. Within the same period 66 banks, with capital of
$26,510,000, were placed in voluntary liquidation by the shareholders;
12 insolvent banks, with capital of $800,000 (including 2 banks with
$150,000 capital, heretofore in voluntary liquidation), were placed in
the charge of receivers, and 79 banks reduced their capital to the
extent of $8,994,150. These transactions occasioned a net reduction
of the capital stock since October 31, 1898, of $16,024,150. The
authorized capital stock of the 3,601 national banks on October 31,
1899, was $608,528,045.
The number and capital of banks organized during the past year
exceed the number and capital of those in 1898 by 22 and $(),80o,ooo,



XXXII

REPORT OF THE COMPTROLLER OF THE CURRENCY.

respectively. Pennsylvania exceeds other States in point of number,
11 banks having been organized, with capital aggregating $1,760,000.
Eight banks were established in Ohio, and the same number in Texas;
6 in New York; 5 in Iowa; 4 in Illinois; 3 each in Indiana, Massachusetts, Missouri, Nebraska, New Jersey, and Oklahoma; 2 each
in Kentucky, Mississippi, North Carolina, West Virginia, and 1 each
in Alabama, California, Indian Territory, Kansas, Louisiana, Michigan, New Hampshire, New Mexico, Wisconsin, and Virginia. In
aggregate capital Massachusetts leads, with $4,500,000; followed by
Ohio with $3,350,000, and Missouri with $2,150,000. In addition to
the banks organized the Comptroller has approved applications for
the organization, in the various States and Territories, of 36 banks,
with capital aggregating $2,550,000. Of the 78 associations formed
during the year 69 were primary organizations, and 9, with capital
aggregating $2,250,000, were conversions of State banks. Since the
establishment of the national-banking system 5,229 banks have been
organized, of which 1,258 have been placed in voluntary liquidation
and 387 in the charge of receivers. This indicates that only about
7 per cent of the total number of national banks organized have failed.
Twenty-two national banks, with capital stock of $3,155,000, reached
the expiration of their corporate existence during the past year and
renewed their charters for a further period of twenty years. During
the coming year 45 associations, with capital aggregating $6,942,100,
will reach the expiration of their corporate existence, and during the
ten years ending December 31, 1909, the corporate existence of 1,255
banks, with capital aggregating $175,538,150, will expire. Since the
passage of the act of July 12, 1882, providing for the extension of the
corporate existence of national banks, renewals of charters have been
granted to 1,692 banks, with capital aggregating $410,686,115.
CIRCULATION AND BONDS.

The outstanding circulation of national banks on October 31, 1899,
aggregated $243,066,624, of which $207,920,774 was secured by bonds,
and $35,145,850 by lawful money deposited with the Treasurer of the
United States on account of liquidating and insolvent associations, and
those reducing circulation. The decrease of circulation secured by
bonds was $2,124,682, the increase secured by lawful money $5,562,170,
and the net increase during the year $3,437,488.
The amount and kinds of bonds on deposit as security for circulation
on October 31, 1899 and 1898, are shown in the following table:
Chin lges.
Class.

1

1899.

1898
Increase

Pacific sixes
Fives .
...
Fours (1907)
Fours (1895).
Twos
Threes
Total
Total increase.
Net decrease




Decrease.

$14,665,600
128,822,050
18,242,750
20,907,600
49,825,160

$2,906,000
16,231,900
139,436,050
23,990,650
22,047,750
31,006,120 ""§18,819*646"

$2,906,000
1,566,300
10,614,000
5,747,900
1,140,150

232 463 160

235,618,470

21,743,350
18,819,040

18,819,040

3,155,310

REPORT OF THE COMPTROLLER OF THE CURRENCY.

XXXIII

EARNINGS, DIVIDENDS, ETC.

Since the passage of the act of March 3, 1869, requiring every
national-banking association to report within ten days after the declaration of any dividend the amount of such dividend, and the amount of
net earnings in excess of such dividend, the reports issued from this
Bureau have contained statements relative thereto for each semiannual
period. The average capital and surplus of national banks for the year
ended March 1,1899, were $610,426,625 and $248,209,205, respectively.
The gross earnings during that period were $147,031,571.36, of which
$32,333,875.43 were devoted to losses and premiums; $65,382,255.18
to expenses and taxes; and $46,331,009 to the payment of dividends.
The average rate of dividends to capital was 7.6 per cent, dividends to
capital and surplus 5.4 per cent, and net earnings to capital and surplus 5.8 per cent.
The semiannual duty on national bank circulation during the fiscal
year ended June 30, 1899, amounted to $1,991,743.31; expense of
redemption of circulating notes, $121,291 (an average per $1,000 of
$1.34); examiners7 fees, $244,903.62. From the returns to the Commissioner of Internal Revenue, as shown by his report for 1899, the
tax imposed by the war-revenue act of June 13, 1898, collected on
capital and surplus of the 12,804 incorporated banks and bankers of
the United States, based on the average capital and surplus during the
year ended June 30, 1898, aggregated $3,750,836.99. The returns
from national banks were not compiled separately in that Bureau, but
an estimate based upon the average capital and surplus of such banks
during the year named, as shown by reports of condition to this
Bureau, indicates the payment by them of $1,752,802.
The average capital of national banks during the thirty years ended
with March 1, 1899, is shown to have been $543,244,571, the average
surplus $166,255,080, dividends $44,468,735, the average rate of dividends to capital 8.2 per cent, and dividends to capital and surplus 6.2
per cent.
National banks are subject to a semiannual duty of one-half of 1 per
cent upon the average amount of circulating notes outstanding during
the prior six months.
Under the operations of the war-revenue act of June 13, 1898, the
banks are subject to the following tax: Fifty dollars per annum on
capital employed not exceeding $25,000, and for every additional $1,000
in excess of $25,000 two dollars. In estimating capital surplus is
included. With respect to national banks this tax amounts to one-fifth
of 1 per cent.
National banks are charged with the cost of redemption of their circulating notes and for the expense of examinations.
The national bank act permits the taxation of shares of stock of
national banks and the real property of associations by States, counties, and municipalities.
STATE BANKS AND BANKING INSTITUTIONS.

The Comptroller is pleased to call attention to the assistance rendered by the State officials charged with the supervision of the different
State banking systems in securing statistics relating to banking systems other than the national system. In almost all cases the cooperation
of the State officers was willingly and effectively given, and the very
OUR 99
in



XXXIV

REPORT OF THE COMPTROLLER OF THE CURRENCY.

general call made by them at the suggestion of the Comptroller for
statements of State banks on June 30, 1899, enables him to present a
very complete and accurate statement of the entire banking resources
of the United States on that date.
The Comptroller is enabled to present in this report, for June 30,
1899, detailed information relative to the condition of 6,149 State and
private banking institutions of the country, including practically 90
per cent of the incorporated banks in existence, although only about
20 per cent of the private banks and bankers. As stated, the returns
are for June 30, although in a few States the returns for that date
were not obtainable, State laws prohibiting calling for reports other
than at fixed dates. It is satisfactory to note that official returns were
received relative to incorporated banks in all of the New England and
Middle States, all of the Eastern States except Delaware, all of the
Southern States except South Carolina, Alabama, Arkansas, and Tennessee, and all of the Western States with the exception of South
Dakota. From the last-named State official returns were received, but
at too late a date for incorporation with the returns from other States.
In the Pacific States official returns were received from Washington,
California, and Arizona only.
In detail, information has been received relative to the condition of
4,191 State banks, 260 loan and trust companies, 942 savings banks,
and 756 private banks and bankers. Abstracts of these reports, by
classes, States, and geographical divisions, appear in the appendix.
To enable comparisons to be made, in the following table are shown
the principal items of resources and liabilities of all reporting banks
other than national for the years 1895-1899, inclusive.
1899.
Loans
Bonds
Cash
Capital
Surplus and
profits
Deposits
Resources

undivided

$2,417,468,494 B2,279,515,283 $2,231,013,262 $2,480,874,360
1,375,026,025 1,210,827,389 1,248,150,146 1,304,890,322
169,198,601
227,743,303
193,094,029
194,913,450
422,052,618
400,831,399
380,090,778
370,073,788
370,397,003
3,185,245,810
4,138,990,529

362,602,702
3,276,710,916
4,200,124,955

382,436,990
3,324,254,807
4,258,677,065

399,706,497
3,664,797,296
4,631,328,357

!, 659,940,630
., 527,595,160
210,884,047
368,746,648
418,798,087
[,246,500,852
> 196,177,381
,

By reference to the foregoing table, it is noted that the aggregate
resources of the banks have increased from $4,138,990,529 in 1895 to
$5,196,177,381 in 1899. There have been slight fluctuations in the
capital stock and surplus accounts during the five years, but the individual deposits have increased steadily from $3,185,245,810 in 1895 to
$4,246,500,852 in 1899.
In the following table is exhibited in a condensed form the principal
items of assets and liabilities of national and all other banks reporting
on June 30, 1899:

Loans
United States bond?'
Other bonds
Cash
Capital
Surplus and profits
Deposits
Total resources



3,583 national
banks.

6,149 other
banks.

$2,507,954,980
346,114,413
305,428,927
512,414,941
604,865,327
342,321,752
2,522,157,509
4,708,833,904

$2,659,940,630
173,973,738
1,353,621,422
210,884,047
368,746,648
418,798,087
4,246,500,852
5,196,177,381

9,732 banks.
$5,167,895,610
520,088,151
1,659,050,349
723,298,988
973,611,975
761,119,839
6,768,658,361
9,905,011,285

REPORT OF THE COMPTROLLER OF THE CURRENCY.

XXXV

As this table indicates, information has been received from 9,732
national banks, state banks, and private banks and bankers, with
resources aggregating $9,905,011,285, of which $5,167,895,610 constitute the loans and discounts, $520,088,151 United States bonds,
$1,659,050,349 other bonds, stocks, and securities, and $723,298,988
cash in bank. Of the cash resources, 62 per cent is in specie, viz,
gold 53 per cent and silver 9 per cent. The capital stock of the banks
aggregates $973,611,975, surplus and undivided profits $761,119,839,
and deposits $6,768,658,361.
In connection with the information relative to the resources and
liabilities of banks other than national, an attempt was made to obtain
returns relative to the amount and per cent of dividends paid. Returns
with respect to this point were confined to 949 banks, with capital of
$63,468,827. The amount and per cent of dividends paid were
$4,871,142, and 7.7 per cent, respectively. Reports relative to dividends paid by loan and trust companies were confined to 21 corporations, with capital aggregating $5,946,100, the average rate of dividends paid being 6.05 per cent.
SAVINGS BANKS.

The savings banks of the country from which returns have been
received number 942, of which 655 are mutual savings banks, the latter being institutions without capital stock operated by trustees for
the exclusive benefit of the depositors. With the exception of eleven
(four in Ohio, five in Indiana, and one each in West Virginia and Wisconsin), institutions of this character are located in the New England
andEastern States. The assets of these banks aggregate$2,150,717,200;
the surplus fund and undivided profits accounts $165,572,734 and
$19,511,471, respectively. The deposits, aggregating $1,960,709,131,
are held by 5,079,732 depositors, the average deposit being $385.99.
The stock savings banks number 287, with capital aggregating
$17,492,223; surplus fund and other undivided profits $8,235,114 and
$1,927,720, respectively. Banks of this character hold savings deposits
to the amount of $218,759,168 and deposits subject to check $2,538,125.
The savings depositors number 443,870, the average account being
$492.84.
The aggregate resources of the 942 mutual and stock savings banks
amount to $2,400,831,472; savings deposits, $2,179,468,299; number of
depositors, 5,523,602, and average deposit account $394.57. The loans
of the savings banks aggregate $1,098,598,589, of which $878,126,859
are secured by real estate, $156,359,308 by collateral other than real
estate, and $64,112,422 by personal and other security. The investments in United States bonds amount to $136,930,208; State, county,
and municipal bonds, $512,777,336; railroad bonds and stocks,
$167,998,336; bank stocks, $36,637,920; other stocks, bonds, and securities, $230,796,388.
In the appendix are given statistics for the current and prior year
relative to the number of depositors, amount of deposits, and average
deposits by States and geographical divisions, and also of the growth
of savings banks in the United States as indicated by number of institutions, amount of deposits, and number of depositors. The statistics
last referred to include information with respect to the average savings-bank deposit in the years 1820, 1825, 1830, 1835, 1840, 1845 to
1899, inclusive, and the average deposit per inhabitant in each census



XXXVI

REPORT OF THE COMPTROLLER OF THE CURRENCY.

year from 1820 to 1890, inclusive, and annually subsequent to the
latter date.
The following table, taken from the last annual report of the Bank
Examiner of Maine, contains information relative to the limit of
deposits in mutual savings banks, average rates of interest paid on
deposits, and the class of securities in which savings banks are authorized to invest their funds:
AVERAGE RATE OF INTEREST PAID TO DEPOSITORS, LIMIT OF DEPOSIT, AND MODE OF
INVESTMENT OF FUNDS BY THE MUTUAL SAVINGS BANKS OF THE UNITED STATES.
Average
rate of in- Limit of deposits.
• terest.

States.
Maine .

3.53

a$2,000

New Hampshire .

3.50

Unlimited.

Vermont
Massachusetts.

4.00

Rhode Island.
Connecticut..

4.00
3.95

4.00

Total New England
States

a$2,000
b SI,000 a year. ,
($1,600 in all.) I
Unlimited, j
$1,000 a year, j

Mode of investment.
Loans on real estate and collateral security, bank stock, public funds, steam and
street railroad and corporation bonds
and stock.
Loans on real estate and collateral security, bank stock, public funds, railroad
and corporation bonds and stock.
Loans on real estate and collateral security, public funds, bank stock.
Loans on real estate and collateral security, public funds, railroad bonds, bank
stock.
Very slight restrictions.
Loans on real estate and collateral security, public funds, railroad bonds, bank
stock.

C3.83

New York

3.46

New Jersey

3.50

Pennsylvania .

4.00

Delaware

4.00

Maryland

3.50

$3,000 Loans on real estate, United States and
certain State bonds, municipal bonds of
New York State and a few cities.
$5,000 Loans on real estate and collateral security (limited), public funds, railroad
bonds.
$5,000 j Loans on collateral security and real estate, public funds. (Very slight restrictions) .
$50 per month. Any security.
($2,000 in all.)
$500 a year.
Do.

Total Eastern States.
4.00

Unlimited.

Loans on real estate, United States and
State bonds, municipal bonds of West
Virginia.
$5,000 Any security.
4.00
4.50 $500 a y e a r Loans on real estate, United States and
($5,000 in all).
State bonds,municipal bonds of Indiana.
$1,000 a year. Loans on real estate and collateral (ex4.00
cept railroad), public funds.

West Virginia
Ohio
Indiana .
Wisconsin .
Total other States
Total mutual savings
banks of the United
States.

C4.13

a Except widows, orphans, etc.
b Except charitable institutions and court orders.
c Average for each group of States.
d Average for all the States.

Efforts were made to obtain information relative to the classification
of deposits, but the statistics received are confined to the savings
banks of Vermont, Rhode Island, and Connecticut. In the Vermont
savings banks 110,540 depositors have to their credit $1,500 or less,



REPORT OF THE COMPTROLLER OF THE CURRENCY.

XXXVII

and 2,829 over $1,500. Depositors in the Rhode Island savings banks
to the number of 100,852 have a credit of $500 or less; 18,138 over
$500, but less than $1,000; and 21,825, $1,000 or over. In the Connecticut savings banks depositors with $1,000 or less to their credit
number 326,469; with over $1,000 but less than $2,000, 33,928; over
$2,000, and not over $10,000, 15,142; and over $10,000, 271.
LOAN AND TRUST COMPANIES AND PRIVATE BANKS.

Reports of condition have been received from 260 loan and trust
companies, with capital aggregating $104,308,722; surplus, $79,707,194;
other undivided profits, $25,908,973. The individual deposits of
these companies aggregate $835,499,064, and their total resources
$1,071,525,994.
In a number of instances returns from private banks are included
with State institutions, but returns have been received separately from
756 private banks and bankers, whose resources aggregate $87,787,253.
These banks have capital amounting to $13,987,676, and individual
deposits, $64,974,392.
In the appendix will be found a table showing the population of each
State and geographical division on June 1, 1899, as estimated by the
Government Actuary, and, in connection therewith, the banking funds,
that is, capital, surplus, undivided profits, and individual deposits of
national, State, and private banks on or about June 30, 1899. These
funds aggregate $8,512,300,108, the average per capita of all banks
being $111.61. The average per capita of national banks is $45.59;
State banks, $19.81; loan and trust companies, $13.71; savings banks,
$31.40, and private banks, $1.10.
STATE AND PRIVATE BANK FAILURES.

During the year ended August 31,1899, twenty-six State and private
banks and bankers have failed, with assets aggregating $7,790,244 and
liabilities $10,448,159, as shown by reports furnished to this office by
the Bradstreet Company.
During the past summer, through the courtesy of the Bradstreet
Company, the Comptroller was placed in possession of a list of all
banking institutions other than national which were closed between
January 1,1893, and June 30,1899. A copy of this list was furnished
to each national-bank examiner with instructions to ascertain by correspondence with the liquidating agents the results of the liquidation
of all such banks in his territory. The investigation entailed a great
amount of time and labor on the part of the examiners, but it is
believed that the results obtained are more satisfactory than heretofore published with respect to insolvent State and private banks.
The list referred to includes 923 State and private banks which suspended temporarily and resumed, those placed in voluntary liquidation,
and those which were insolvent and placed in charge of receivers or
assignees. It is impossible owing to the meagerness of the returns to
state the number of each class. More or less satisfactory information
is at command relative to the affairs of 283 banks which were insolvent
and were liquidated by receivers or assignees. The capital of these



XXXVIII

REPORT OF THE COMPTROLLER OF THE CURRENCY.

insolvent banks aggregated $14,754,169; other liabilities at Jate of suspension, $55,103,915; nominal assets at date of suspension, $62,739,332;
collections from assets, $32,925,233; collections from shareholders,
$1,517,178; amount and per cent of dividends paid, $30,965,165 and
56.19 per cent, respectively.
Of the 283 failures 117 occurred in 1893, the liabilities of the banks
which failed in that year being $32,858,222, and dividends paid
$21,970,559. There were 48 failures in 1896, liabilities and dividends
paid being $8,848,908 and $3,122,298, respectively. In 1895 the failures numbered 45, with liabilities of $5,935,740; 1897, 28 failures, liabilities, $2,398,973; 1894, 18 failures, liabilities, $1,389,400; 1898, 13
failures, liabilities, $1,349,328, and during the first six months of 1899,
14 failures, with liabilities aggregating $2,323,344.
The forms used by the examiners in obtaining returns called for
data with respect to the expenses incident to liquidation of the trusts,
but the information received on that subject was confined to 189 banks,
with liabilities aggregating $31,319,811. These banks paid dividends
to the amount of $13,458,485, or 42.97 per cent, the expenses being
$2,626,661, or 16.3 per cent of the total collections.
Summaries of the returns from the 283 banks referred to, by States
and years, will be found in the appendix.
FOREIGN BANKING INSTITUTIONS.

In the appendix will be found a report of condition, under date September 30, 1899, of the chartered banks of the Dominion of Canada.
The capital of these banks aggregates $64,183,377; notes in circulation,
$46,682,028, and total liabilities, $427,870,875. The average rate of
dividends paid to the shareholders of these banks was 7 per cent.
Statements are also given in the appendix of the condition of the
banks of Australasia on June 30, 1899. The capital of the banks
amounts to £21,940,959; bank notes in circulation, £4,350,332, and
total liabilities, £163,163,664.
The London Economist publishes semiannually a statement of the
condition of the incorporated and private banks of the United Kingdom,
including colonial and foreign banks with London offices. These statements for the close of the half years ended December, 1898, and June,
1899, are given in the appendix. The capital stock of the Bank of
England and other incorporated and private banks in the United Kingdom in December, 1898, aggregated £83,907,926, and in June, 1899,
£84,195,340. The bank notes outstanding, including notes of the Bank
of England, increased from £42,465,004 in December to £43,987,254
in June. The resources, which amounted to £986,211,641 in December,
increased in June to £1,019,431,686. The aggregate resources of the
joint stock and private banks of the United Kingdom and the colonial
and foreign banks with London offices increased from £1,387,920,755
to £1,463,283,386 during the same period. During the year ended
December, 1898, the Bank of England paid a stock dividend of 10 per
cent. The average rate of dividends by the joint stock and private
banks of the United Kingdom for the same period was-12.29 per cent.
The cash resources, loans and discounts, government and other
securities, circulating notes outstanding and deposits of the principal
foreign banks of issue on the dates indicated, appear in recent issues



REPORT OF THE COMPTROLLER OF THE CURRENCY.

XXXIX

of the London Statist and the Economist and are set forth in the following table, the figures representing millions of pounds sterling:
Banks.

Date.

Gold.

Bank of England
Bank of France
Bank of Germany
Bank of Russia
Bank of Austria-Hungary.
Bank of Spain
Bank of Belgium
Bank of Holland
Banks of Switzerland
Bank of Italy

1899.
Oct. 18
Oct. 19
Oct. 14
Sept. 23
Oct. 14
Oct. 14
Oct. 12
Oct. 14
Oct.
7
Sept. 30

£

Total

.

. . .

Cash not Loans
Silver. classified. a n d discounts.
£

£
32.9

Circulation.

Deposits.

£
48.1

£
51.7
28.8
24.9
69.4

215.9

17

10.4

9

£
28.2
155.2
61.7
56.1
60.5
60.7
21.4
18.1
8 8
35. 3

180. 3

237.8

86.4

506.0

75.8 """47"""

13! 5

i6.4

2.7
3.9

13.6
5.8
.4

126. 6

77.2

35.2
90.9

IT

£

Securities.

35*5"
54.6 !
30.3
21. G
57.4
16.7
11.3

14. 4
14. 9

30.8
2.1
.4
7.8

In conclusion, it is with pleasure that the Comptroller calls attention
to the faithful and efficient services of his associates in the Bureau, and
he desires to express his sincere appreciation of their fidelity to the
public service.
CHARLES G. DAWES,

Corn/ptroiler of the Currency.
The SPEAKER OF THE HOUSE OF REPRESENTATIVES.




STATISTICAL AND OTHER INFORMATION RELATIVE TO COMMERCE AND
BANKING IN THE PHILIPPINES, CUBA, PORTO RICO, AND HAWAII.
[Extract from report of Edward W- Harden, special commissioner of United States, on financial and
industrial conditions of the Philippine Islands.]

The Spanish Government kept no statistics of currency or finance, and the bankers can give only estimates of the most general character of the amount of currency
in the islands. Practically all of the business of the archipelago is carried on in
Manila.
The three banking institutions at Manila do the business of the islands, though
two have branches in Iloilo. The most careful estimate of the currency of the
islands is therefore likely to be incorrect. There are 8,000,000 people in the islands,
according to the estimate of the Spanish Government, of whom only a small fraction
live in the territory contiguous to Manila and Iloilo. When money once leaves
these centers it passes out of the knowledge of business men, and it is impossible,
therefore, to form any correct idea of the amount of money in the islands. There is
$6,000,000 in Philippine dollars coined by the Spanish Government and sent out a
year ago, of which only a small percentage is now in Manila. It is estimated there
is now in circulation $10,000,000 of subsidiary coins, the 10-cent, 20-cent, and 50-cent
pieces, which have been recoined from Mexican dollars by the Spanish Government.
The estimate of the Mexican dollars now in circulation, as given by one of the best
informed bankers in the islands, is from $20,000,000 to $25,000,000. This, with the
$2,500,000 of notes of the Banco Espanol Filipino now in circulation, constitutes the
currency of the islands. This would make a total of from $40,000,000 to $45,000,000,
speaking roughly, for the entire islands, or, approximately, $5 per capita for the
total population of the islands. It must not be overlooked that these figures are
given on a silver basis, and that therefore in figuring on our own standard all of
these figures must be cut in two. On a gold basis the currency of the islands is
therefore from $20,000,000 to $22,500,000, or $2.50 per capita, figuring on the total
population of the islands.
Three banking institutions do the banking business of the Philippine Islands, aside
from that done by the large commercial houses, which buy and sell exchange, and
to a limited extent carry on the business which legitimately belongs to banking
institutions. Of the three banks the two most important are branch concerns, the
third being a local institution controlled by Spaniards and natives. The Banco Espanol Filipino is a local institution having its headquarters in Manila and with a branch
in Iloilo. The two branch banks are the Manila agencies of the Hongkong and
Shanghai Banking Corporation, Limited, with headquarters in Hongkong, China,
and the Chartered Bank of India, Australia, and China, Limited, with headquarters
in London. The Hongkong and Shanghai bank and the Chartered bank do the
principal exchange business of Manila, while the Spanish bank does largely a local
business, having had up to the time of the occupation of Manila by American troops
the financial business of the Spanish Government for the islands. The Spanish
bank is tho only one which issues notes, and these to a limited extent are in common
circulation throughout the islands, being accepted at par everywhere where business
is carried on with the outside world. Throughout the interior nothing but silver is
in general circulation.
No statements were required by the Spanish Government from any of the banking
institutions showing the condition of their liabilities and assets. The banks were
compelled to make statements upon which taxes were collected, but these were of a
character which gave no adequate idea of the condition of the institutions. So far
as the Hongkong and Shanghai and Chartered banks are concerned, the general
statements of the two corporations would apply to the branch concerns in Manila.
They were conducted as a part of the whole, and the success or the failure of either
was dependent upon the corporation. Therefore, the statements of the two corporations are the only statistics available which would show either the resources or
liabilities of the banks concerned. The last statement available from the Spanish
bank in Manila is that submitted to the stockholders at the general meeting of the




XLII

REPORT OF THE COMPTROLLER OF THE CURRENCY.

concern in February of the present year. The changes which have been brought by
the war have materially affected this concern, and the report made in February is
far from being a correct statement of its present situation. It is the nearest to being
correct, however, of anything obtainable. There is appended to this report a translation of the last balance sheet of the Spanish bank, together with the statement of the
Hongkong and Shanghai bank for the fiscal half year ended June 30, 1898, and the
last report of the Chartered bank presented at the stockholders' meeting in London,
April 20, 1898.
There is in Manila a savings institution and public pawn shop, which is practically
under the control of the church. It is called the "Monte de Piedad." It was
established to make loans to the poor people, and has done a good work during the
few years it has been in existence. It has been fairly successful, and has proved to
be a source of profit to those who are interested in it. Under the charter issued to it
by the Spanish Government in the islands it is allowed to operate a pawn department
as well as a savings department. In the pawn department loans are made on gold,
silver, jewelry, and clothing in good repair, at 6 per cent per annum. The savings
department receives small sums on deposit from the working classes, on which interest
at the rate of 4 per cent is paid, and the money received in the savings department
is used in making loans upon personal property. In making loans on pledges of gold,
silver, or jewelry the article is appraised at the intrinsic value of the material in
each, without regard to mounting or workmanship. Loans are made on clothing in
good condition. On gold and silver loans are made for one year, and on clothing
for six months; but this time may be extended by renewing the pledge and paying
the accrued interest. If the article pledged has, in the opinion of the appraisers,
depreciated in value the renewal will be made only to the extent of such newly
appraised value. Unredeemed pledges are sold at public auction, and if the articles
bring more than the amounts loaned on them and accrued interest the balances are
held to the credit of the persons making the pledges. The savings bank opens
accounts on deposits of sums from 50 cents to $25, and interest is compounded annually. One week's notice is required for the withdrawal of any deposit. During the
year 1896 there were received 44,991 pledges, on which there was advanced a total
of $1,041,194, a decrease of $15,049 over the business done in 1895. There is given
in the appendix an extract from the annual report of the bank for the year 1896.
The banks of which mention is made represent the entire banking industry of the
Philippine Islands. There is a good deal of trade between the various islands in the
group, and shipment of the products of one island to another island settles trade
balances for goods imported from the other island. In this way a good deal of trade
is carried on which requires no considerable amount of currency.
The laws which govern banking in the Philippine Islands are of a most general
character. No statements are required from banking institutions other than those
upon which taxes are imposed, and there is no officer charged with the duty of
examining the condition of banks to determine their solvency. Practically, the only
laws which affect the banking interest are those which relate to business generally.
The Banco Espanol Filipino is operated under a charter from the Spanish Government, and a renewal of this charter was granted two years ago covering a period of
twenty-five years, of which there is therefore twenty-three years yet to run. The
two branch banks, the Hongkong and Shanghai, ancl the Chartered Bank, in establishing a business in Manila, filed with the Government officials copies of their deeds
of settlement, and on the filing of these documents were given permission to begin
business.
Under the charter of the Banco Espanol Filipino it is permitted to issue bank notes
in amount equal to three times its capital stock. The present capital of the bank is
$1,500,000, and its note issue may, therefore, amount to $4,500,000. On September
30 there was in circulation, as previously stated, approximately, $2,500,000 of these
notes. These notes are issued on a silver basis, and are payable on demand to bearer.
The charter requires that there shall be maintained in cash and paper which can be
realized on in ninety days a sufficient amount to cover its outstanding obligations in
bank notes, deposits, and accounts current. There must be maintained in the bank's
vaults silver in amount equal to at least one-third of the notes in circulation.
The question of the future currency of the Philippines is one which is of vital
importance to all business men in the islands. The best-informed men in Manila are
unanimous in their opinion that under present conditions the silver currency is the
only one suited to the islands. A great deal of the trade of the Philippines is with
China and Japan, the Straits Settlements, India, and Australia. In China and Japan
and in India the whole trade is on a silver basis, though Japan has adopted the gold
standard, having, however, as the basis of its currency, a gold dollar which is, approximately, worth only 50 cents, and its currency therefore in effect is on a silver basis,
the same as China and India.



REPORT OF THE COMPTROLLER OF THE CURRENCY. XLIII
The natives of the Phillipine Islands are conservative to a degree in the matter of
their currency, and it would be a long and tedious task to educate them to a dollar
which would be worth twice that now in circulation. Notwithstanding the Americans have a force of 15,000 soldiers in Manila who are paid in gold, the people of the
islands will have nothing but silver. All of the soldiers, when they are paid in gold,
take their money to one of the banks and exchange it for local currency. The native
will take the Mexican dollar, worth less than 50 cents gold, in preference to the
United States dollar, worth 100 cents. Any change in the coinage will require time
for the natives to become accustomed to it before it will be accepted readily. If the
United States retain the Philippine Islands, a special coinage of silver dollars might
be minted for circulation in the archipelago,the same as the British dollar has been
put in circulation in the Straits Settlements, in Hongkong, and in other ports where
British interests predominate. If this should be done, it would probably be advisable to have the inscription in Spanish, as only a small proportion of the inhabitants
understand English, while practically all understand enough Spanish to enable them
to decipher the inscription on a coin. In time the gold standard might be put in
force in the islands, but in the opinion of the business men generally it would have
to be accomplished slowly, and consideration would have to be given to the conservative attitude of the people, and to the fact that they would have to be educated
to the value of the new currency. As an evidence of their conservatism, one of the
directors of Banco Espanol Filipino said that when his bank a few years ago changed
the form of its bank notes it required several years to educate the people to the new
note, which at first they refused to accept as current money.
In the framing of the laws for the government of the islands it would seem that a
due regard to the interests of depositors would require the examination of banks
and the publishing of statements of assets and liabilities, as done in the United
States by the Government in the case of national banks and by the States in the
case of State institutions. The same law, it would seem, should provide for the
keeping of a certain percentage of its deposits in cash in the vaults of the banks, and
that the same precautionary measures should be taken as in the United States.
BANCO ESPANOL FILIPINO,
BANKING TRANSACTIONS.

Operations in 1897, 3,659, amounting to
Operations in 1896, 4,781, amounting to
Increase in 1897

$33, 642, 399. 75
21, 699, 285. 55
11, 943,114. 20

ACCOUNTS CURRENT.

Deposits:
Operations in 1897, 8,737, amounting to
Operations in 1896, 8,591, amounting to
Increase in 1897
Checks:
Operations in 1897, 27,905, amounting to
Operations in 1896, 23,753, amounting to
Increase in 1897
Deposits:
Transactions in 1897, 301, amounting to
Transactions in 1896, 250, amounting to
Increase in 1897
Distribution of profits:
Paid to shareholders
Carried to legal reserve fund
Carried to voluntary reserve fund
Balance for next half year
Total



88, 286, 647. 39
61, 356, 817. 77
26, 929, 829. 62
88, 285, 392. 80
61, 611, 367. 47
26, 674, 025. 33
1, 515, 295. 62
555, 959. 98
959,335. 64
201, 000. 00
75, 000. 00
23, 796. 00
20, 208. 97
320,004.97

XLIV

REPORT OF THE COMPTROLLER OF THE CURRENCY.

CONDITION OF BANCO ESPANOL FILIPINO ON THE 31ST OF DECEMBER,

1897.

ASSETS.

Real estate
Fixtures and office furniture
Bills receivable
Deposits on accounts current
Various accounts
Cash on hand

$80,000.00
3, 500. 00
4,180, 712.05
953, 435. 77
2, 488, 203. 98
4,920, 694. 88

Total

12, 626, 546. 68
LIABILITIES.

Capital stock
Reserve fund, legal
Reserve fund, voluntary
Deposits
Accounts current
Checks accepted
Notes on hand
Notes in circulation
Unpaid dividends
Eighty-eighth dividend
Loss and gain

1,500, 000. 00
225, 000. 00
435, 000. 00
1, 308, 988.14
2, 913, 317. 68
1, 674, 264. 82
62, 505. 00
4, 355, 505. 00
11, 757.10
120, 000. 00
20, 208. 94

.*

Total

12, 626, 546. 68

CONDITION OF THE HONGKONG AND SHANGHAI BANKING CORPORATION, JUNE 30,

1898.

LIABILITIES.

Paid-up capital
Reserve fund
Marine insurance account
Notes in circulation
Current accounts:
Silver
Gold (£6,606,984 8s. 8d)

$10, 000, 000. 00
8, 000, 000. 00
250, 000. 00
9, 342, 568.18
$48, 051,168. 45
68, 581, 866. 48

Fixed deposits:
Silver
Gold (£2,616,881 7s. 5d.)

30, 552, 284. 95
27,174, 388. 84

Bills payable (including drafts on London bankers and short-sight
drawings on London office, against bills receivable and bullion
shipments)
Profit and loss account
Total

116, 633, 034. 93

57, 726, 673. 79
17, 293, 785. 85
2, 685, 395. 02
221, 931, 457. 77

ASSETS.

Cash
Bullion in hand and in transit
Indian and colonial securities
Investments, viz:
£250,000 2 | per cent consols lodged with the
Bank of England as a special London reserve $1, 900, 000. 00
£481,000 consols and other sterling securities.. 4,992, 000. 00
Bills discounted, loans, and credits
Bills receivable
Bank premises
Total



38,149,199. 45
6, 926, 873. 93
5,173, 373. 32

6, 892, 000. 00
87, 550, 970. 03
76, 290, 818. 89
948, 222.15
221,931,457.77

REPORT OF THE COMPTROLLER OF THE CURRENCY.

XLV

GENERAL PROFIT AND LOSS ACCOUNT, HONGKONG AND SHANGHAI BANKING CORPORATION, JUNE 30, 1898.
DEBIT.

To amounts written off:
Remuneration to directors
To dividend account:
£1 5s. per share on 80,000 shares (£100,000, at 4s. 6d.)
To dividend adjustment account:
Difference in exchange between 4s. 6d., the rate at which the
dividend is declared, and Is. lid., the rate of the day
To transfer to reserve fund
To transfer to bank-premises account
To balance carried forward to next half year
Total

$15, 000. 00
444, 444. 44
599, 033. 82
1, 000, 000. 00
250, 000. 00
376, 916. 76
2,685,395.02

By balance of undivided profits, December 31,1897.. $298, 863. 22
By amount of net profits for the six months ended
June 30,1898, after making provision for bad and
doubtful debts, deducting all expenses and interest
"". and due
2, 386, 531. 80
2, 685, 395. 02
Total

2,685,395.02
RESERVE FUND.

To balance

9, 000, 000.00

By balance, December 31,1897
By transfer from profit and loss account

8, 000,000. 00
1,000, 000. 00

Total

9, 000, 000. 00

CIRCULATION OF THE CHARTERED BANK OF INDIA, AUSTRALIA, AND CHINA, DECEMBER

31, 1897.
£.
To capital paid up in full
800, 000
To reserve fund
375, 000
To notes in circulation
669,379
To current accounts
2, 695, 927
To fixed deposits
3, 760, 784
To bills payable:
Drafts on demand and at short sight on head
£•
s. d.
office and branches
808,033 0 2
Drafts on London and foreign bankers
1, 374, 629 10 5
2,182, 662
To loans payable against securities
1,015, 741
To due to agents and correspondents
13, 345
To sundry liabilities
185,140
To profit and loss
132, 402
Total




s.
0
0
3
8
8

a.
0
0
4
11
2

10
13
7
9
19

7
4
9
9
9

11, 830, 384 1

XLVI

REPORT OF THE COMPTROLLER OF THE CURRENCY.

Liability on bills of exchange rediscounted, £3,877,629 lls. 10d., of which up to
this date £2,640,247 0s. 3d. have run off.
£

s. d.

By cash in hand and at bankers
1, 308,455 0 9
By bullion
781,576 16 3
By Government and other securities
703, 071 5 11
By security against note issue a
277, 491 14 0
By bills of exchange
3, 940, 366 13 3
By bills discounted and loans
4,454, 776 1 7
By due by agents and correspondents
210,972 12 8
By balance between head office and branches, including exchange
adjustments
,
27,139 17 1
Bysundry assets
18,266 14 5
By bank premises and furniture at the head office and branches...
108, 267 5 8
Total

11, 830, 384 1 7

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31,

1897.

DEBIT.

To interim dividend for the half year to June 30 last, at the rate of
8 per cent per annum
To bonus to staff
To balance proposed to be dealt with as follows:
£

Dividend, at the rate of 10 per cent per annum,
for the half year to date
Reserve fund
Officers' superannuation fund
Profit and loss, new account

s.

0
0
0
19

s. d.

d.

40,000
75, 000
5, 000
12, 402

£

32, 000 0 0
10, 000 0 0

0
0
0
9
132,402 19 9

Total

174,402 19 9
CREDIT.

By balance December 31,1896
By gross profits for the year, after providing for bad
£
s. d.
and doubtful debts
292,533 19 3
Deduct expenses of management and general charges
at head office and branches
131,809 2 0

13, 678 2 6

Net profits for the year

160, 724 17 3

Total

174,402 19 9
MONTE DE prEDAD.

The following is a summary of the report made at the last meeting of stockholders
of the Monte de Piedad Savings Bank of Manila, which is a public pawn shop operated there:
In 1896 there were received 44,991 pledges, on which were loaned $1,025,145, a
decrease in business compared with 1895 of $15,049. Renewed pledges to the amount
of $399,731 were received in 1896, an increase of $54,319 on corresponding transactions in 1895. In 1896 there were redeemed 30,269 pledges, on which had been
loaned $638,877 and interest charged and collected to the amount of $17,895.18. In
1896 there were sold at auction 1,036 unredeemed pledges, on which was realized
$15,177, and the accrued interest on pledges so sold amounted to $1,109.07, and commission charged of 5 per cent amounted to $514.22.
a The bank, in terms of its amended charter, has deposited with the Hongkong and
Straits governments and with the Crown agents for the colonies securities to the
value of £277,491 14s., as special reserve for its note issue.



EEPORT OF THE COMPTROLLER OF THE CURRENCY. XLVII
The following table shows the total increase of profits and commissions for the
year 1896:
Redeemed
pledges.

Increase
Decrease

1896.

Auction
sales.

$25,185.17
21,990.18

$1,109.07
812.26

3,772.33

189G
1895

Renewed
pledges.

$17,895.18
H 122 85

Years.

3,194.99

296.81

Commissions.
$514.22
551.55

Total.
$44,703.64
37,476.85
7,226.79

37.33

This table shows a total increase of profits for 1896 over 1895 of $7,226.79.
If the disturbances of public order were noticed in the pawn department, they produced still greater effects in the business of the savings bank. During the first half
year there was an increase of deposits amounting to $83,337.13. Had the second half
year continued as favorable the total increase for the year would have been $166,674.2(3,
but there wTas shown a decrease of $23,404.04. Between deposits and interest paid
out this year there has been disbursed a sum amounting to $389,849.83, which is in
excess of deposits by $23,404.
By virtue of authority conceded to discount promissory notes with the funds on
deposit we have realized by interest $22,782.42, being an increase for 1896 over the
business of 1895 of $11,309.62.
RECAPITULATION OF RECEIPTS AND DISBURSEMENTS FOR 1896.

Interest collected in every way
Expenditures of every description
Amount capitalized this year

$72, 368.19
57, 758.17
„

14, 610. 02

[Copy of letter to the Comptroller of the Currency from A. E. Bates, Paymaster-General, IT. S. Army.]
W A R DEPARTMENT, PAYMASTER-GENERAL'S OFFICE,

Washington, November IS, 1899.

Referring to our conversation and your request to know how the troops in our
insular possessions are paid, I have the honor to inform you that all the troops in
the service of the United States are paid either monthly or bimonthly in the legal
coin of the United States or in checks drawn by the paymaster on the Treasury or
some of its branches.
When our armies first occupied these countries, in the summer of 1898, as there
were no banking facilities existing between the islands and the United States, it was
necessary to ship the currency in kind from the Treasury in the United States to the
disbursing officers in the islands. Thus there was shipped by the Pay Department a
little more than $8,656,000 to the Philippine Islands between the time when our
troops landed there in 1898 and the middle of September, 1899. To the islands of
the West Indies a very large amount of money bad also been sent at more or less risk.
When I received the annual report of the chief paymaster in Manila, I observed
that he had never received any currency for New York or San Francisco exchange
except such as came to him from the officers and soldiers in the ordinary course of
business, and from these sources he received back about one-third of the total
amount paid out. As our currency does not circulate there commercially, but is
driven out lby the cheaper Mexican coin, it was evident that about two-thirds of the
amount shipped to Manila was being shipped back again, either directly or through
London.
With a view of checking and, if possible, arresting this backward flow of currency,
I arranged with the Treasury a transfer system by cable, by which I was enabled to
give the banking institutions free exchange on New York. To do this the chief paymaster in Manila was directed to receive, from any source, all the American currency
they wished to transfer and to cable the amount received and the house where the
credit was desired to the Paymaster-General. Upon the receipt of this advice, the
Paymaster-General directs the chief disbursing officer of the Paymaster-General's
Office to place the amount to the credit of the party in Manila with their banking
house in New York, which he does, and cables the fact to Manila. Receipt is then



XLVIII

REPORT OF THE COMPTROLLER OF THE CURRENCY.

forwarded to the chief paymaster, Manila, and the transaction is complete. The
money remains there for use again, at a cost of a few dollars for cable expense.
The immediate effect of this system of exchange was to raise the value of our currency in Manila 2 per cent and to give us there nearly $500,000. This will add
between $200,000 and $300,000 more pay per annum to our soldiers in those islands,
and I hope it will save the cost and risk of transportation of five or six million dollars
per annum. Even with all the advantage derived from this method of exchange the
chief paymaster has to be a sort of subtreasurer and keep a large amount of gold and
silver on hand; but until this country establishes some branch banks and depositories
in our island possessions it is the best that can be done.
The same problem is being solved in the same way in Cuba and Porto Rico, where
we are making a great effort to force our currency into general circulation, with some
gratifying results.
Paymaster-General,

A. E. BATES,
United States Army.

[Copy of letter of Pablo Desvernino, secretary of finance, Cienfuegos, Cuba. Furnished by War
Department.]
[Third indorsement.]
DEPARTMENT OF FINANCE, Havana, June 3, 1899.

Respectfully returned. The information requested in the inclosed letter is as to
what steps are necessary to be taken in order to obtain the requisite franchises to
establish a bank of exchange and deposits in the city of Cienfuegos, with branches
at Sancti Spiritus, and perhaps other places, and as to what rules and regulations, if
any, have been established by the authorities of the United States in reference thereto.
As to the first part of the information requested, I beg to say that no franchises are
to be obtained for banking purposes of any kind, as banking business can be undertaken here by any parties, provided they comply with the requirements of the general laws contained in the code of commerce.
As to whether any rules and regulations have been established by the American
Government in reference to banks, I have to say that none have been established up
to date modifying or changing in any way the provisions, still in force, of the said
code of commerce.
I may add, in order to facilitate the understanding of this matter, that any kind
of bank, and, therefore, banks of exchange and deposit, can be freely established by
any persons, either citizens or foreigners, of full age, by simply making and acknowledging before a notary public a contract or deed which shall state the names of the
parties, the name by which said bank is to be known, the particular city or place
where its operations of discount and deposit are to be carried on, the amount of the
capital, the term of the company, the transactions and operations they propose to
deal in, and such other covenants and agreements as the parties may deem convenient to enter into.
If the bank is a stock company, the contract or deed before the notary shall also
state the maximum amount of capital stock, which pan be freely agreed upon by the
parties without any restriction, the terms within which the capital stock shall be paid
in, the number of directors who shall manage the affairs of the company, there being
no restriction or limitation to the free agreement of the parties on this point, and such
other agreements as the parties may decide upon in regard to the meeting of stockholders, meetings of directors, powers and authority of directors, mode of election of
directors and officers, modes of calling together meetings of directors and stockholders, form of adopting resolutions, either by directors or stockholders, as the case may
be, in regard to the number of votes required thereto and the number of stockholders
or directors necessary to constitute a quorum.
The responsibility of stockholders for the contracts and debts of the company is
limited to the amount they may have paid in for the stocks held by them and for the
amount they may have subscribed for.
The shares of stock may be issued to bearer or in the name of the stockholder.
These companies may issue bonds or obligations, either to bearer or to the person
to whom they maybe issued, but the amounts of the obligations issued and outstanding at any time may not exceed the amount loaned by the bank according to the
titles or other evidences of said loan held by the bank.
Another of the requisites to be complied with is that of being registered in what is



REPORT OF THE COMPTROLLER OF THE CURRENCY.

XLIX

here called " The Mercantile Registry," in whose books an entry is made, stating the
names of the parties, the date and contents of the notarial instrument drawn, as before
stated, for the formation of the company, the issues of stocks, the number and amount
of each series, and such other details as are required by the provisions of the code of
commerce.
Except for tax or other fiscal purposes, the law does not generally provide for the
inspection or supervision of banking companies by any Government official, such as
superintendents or examiners.
If the bank is a stock company they shall have to publish monthly in the Official
Gazette a statement or balance of the operations carried on and the estimated value
of the securities that may be held by the bank.
The tax at present levied on banks is 9.38 per cent per annum of the net profits
that may have been realized, and if the bank be a stock company they shall have to
pay only 7.50 per cent of said net profits.
At the time of the constitution of the company it shall have to pay, once for all, a
tax of one-half of one 1 per cent of the value of the capital contributed.
If the bank has made any issue of stock the amount that may be paid in for these
stocks shall be considered as capital, and subject, therefore, to the above-mentioned
duty or tax.
At the time of the dissolution of the company the same tax duty of one-half of
one per cent will have to be paid on the capital or property distributed to partners
or transferred over to another company.
These are the essential regulations in regard to banking business in this country.
I beg only to add that, now that the exclusive privilege that the Spanish bank had to
issue bank notes has ceased in this island, banks of issue can be freely established
under provisions similar to other banks.

[Letter of P. Salazer, in report of Robert P. Porter, special commissioner, on the currency question in
Porto Rico.]
YORK, August 12, 1898.

SIR: At the request of Mr. Robert P. Porter I have given due consideration to the
matter of the Porto Rico currency question, and, as requested by him, I beg leave to
present to you the following considerations:
The solution of this problem seems rather difficult because of the opposite interests
involved in the matter and the natural desire of the Administration to find an equitable settlement to the satisfaction of all concerned. In a country like Porto Rico,
where the basis of all business has leaned upon long credits in connection with both
foreign and local transactions, especially the latter, the problem offers more than
one aspect to the consideration of those called upon to solve it.
I advocate a radical change in the currency of the country, by the immediate
exchange of the provincial peso and its fractions for the currency of the United
States, on the basis of the average rate of exchange that has ruled in Porto Rico for
drafts on the United States for the last five years, say 75 per cent, as a premium on
American gold. The measure will certainly meet the approval of the holders of
specie who at any time have been disposed to invest their savings at the said rate of
exchange, which, in fact, is more than what the specie is worth intrinsically.
The loss which the United States Government would have to bear by the transaction, taking up a coin which is worth about 38 cents for 57.20, can be charged to the
general budget of the island in four installments at the rate of 25 per cent each year.
I estimate the amount of specie actually in circulation not to exceed five millions in
round numbers, the bulk of it, perhaps as much as two-thirds, in the hands of the
Banco Espanol, a sort of government bank, that holds the deposits of the native
Spaniards, thus leaving a small portion scattered among the private mercantile institutions and the poorer class of the people. The latter will certainly entertain little
fear of making any loss by the exchange, as, speaking in general, the Porto Rico
laborer has little savings, or perhaps none at all.
The savings banks in the island are reduced to three—at San Juan, Ponce, and
Mayaguez—and what deposits they may have will chiefly belong to the private merchants and planters and so-called local bankers. Even if this measure should inflict
some nominal loss on the poorer classes, they are wise enough to understand that
the loss is practically offset by the fact that they could buy the necessaries of life so
much cheaper. Before closing this item I would further suggest, in order to save
the island from the burden that the loss in the operation would impose upon the
Treasury of the United States, and consequently upon the Porto Eico people, in case
CUR 99
IV



L

REPORT OF THE COMPTROLLER OF THE CURRENCY.

the United States Government should be called, by virtue of the impending negotiations of peace, to defray certain sums which eventually may go to the hands of the
Spanish Government or the Spanish people, that the Porto Rico provincial pesos
should be paid back to them at their face value.
I desire to mention as briefly as possible that the Spanish Government exchanged
in 1895 the previous currency of the country, Mexican silver, by giving the holder
of every $100 ninety-five of the new issue, which, as is well known, is of a lower
value than the Mexican dollar. The Spanish Government promised to indemnify
the holders of specie of this loss by sending to the Porto Rico treasury whatever
profits the Central Government might derive from the operation. This was only
done in part, by remitting to the Porto Rico treasury $500,000 in gold, which, however, was soon sent to the mother country as a gift from Porto Rico to build a war
ship to be named Porto Rico, which, however, never appeared on the surface of the
seas. I firmly believe that Spain has still a chance to use this little specie to some
advantage, owing to the distress of her treasury, in spite of her arbitrary disposition
prohibiting the circulation of that currency outside of Porto Rico.
The next important step which naturally comes up with the exchange of the specie
is the settlement of all debts contracted before the new currency comes into circulation. In my opinion they should be reduced in the same proportion as the specie,
thus allowing the debtor to pay $100 United States gold for $175 of his standing debt.
That this can be worked with no inconvenience and with little loss to anyone is obvious. The sugar planter and the coffee grower who has borrowed money of the merchant or banker to run his plantation will have to suffer by the adoption of the gold
standard, which brings down the nominal price of his product; but this is compensated for by the reduction of his debt in the same proportion. The merchant or
banker, who generally deals with foreign countries on the basis of gold, loses nothing
by receiving $100 gold instead of 175 pesos, as this difference was already charged to
the planter when the merchant sold the goods, and if the creditor is a banker he
would not be better off if he had the cash in hand.
The only dark spot in the whole matter is the sugar planter, owing to the low price
at which he would be compelled to sell his product if the gold standard is finally
established, as, on account of the inadequate machinery, the lack of proper means to
irrigate the most fertile zone of the island, and, above all, due to the enormous and
unequal taxes that this industry has had to bear in relation to other industries, the
result is that the actual owners of sugar plantations have only been able to carry on
the works regularly because of the depreciated currency that gives them the benefit
of the exchange. The United States Government will certainly not allow its newly
acquired territory to run the same hard luck of the English West Indies, where the
sugar problem has become a question of to be or not to be. I believe that in the
natural course of events Porto Rico sugars will ultimately be admitted free of duty
into the United States, but in the meantime I would suggest that some measure
should be devised to protect the interests of the sugar planter, who will surely receive
a heavy blow if the currency problem be solved in the way above recommended.
As an illustration, I would add that the actual production of sugar in Porto Rico is
about 50,000 tons, and that with the natural impulse that American enterprise will
develop this important business the production will never exceed 150,000 to 200,000
tons. Finally, I recommend that the funds to take up the present currency of the
island should be sent there, as follows: 70 per cent in gold and greenbacks, 15 per
cent in silver one-half and one-quarter dollars, 5 per cent in dimes, 5 per cent in
nickels or half dimes, and 5 per cent in 1-cent pieces.
Respectfully, yours,
P. SALAZAR,

Of A. S. Lascelles & Co., Coffee Exchange, New York.
Hon. LYMAN J. GAGE,

Secretary of the Treasury, Washington, D. C,

[Letter from Charles M. Pepper, author of " To-Morrow in Cuba."]
WASHINGTON, D. C , November 18, 1899.

DEAR MR. DAWES: Referring to the matter of banking and currency in Cuba there
are two points which I think are important to be understood in the United States.
The first is the probability that the circulating medium of Cuba may ultimately be
American standard money whatever political changes take place. The second is the
demand for information throughout the island regarding Government regulation of
banks as practiced in the United States.



REPORT OF THE COMPTROLLER OF THE CURRENCY.

LI

Concerning the first point, the whole monetary system of Cuba at present may be
said to be in a state of transition. The profits of banking from exchange have probably been reduced since the end of Spanish sovereignty. Under the Spanish rule
the finances of the island were managed by making drafts on London and Paris,
largely against silver, which was the common medium of exchange, though circulating only as subsidiary coinage.
The present condition is anomalous, because the Spanish and French gold coins
are still given the inflated and artificial value which was placed upon them by the
official decree of the Spanish Government. The persistence with which the Spanish
silver circulation has held its own is also anomalous. It has not driven out better
money, but it has kept an artificial value as a medium of common circulation which
has been surprising.
Anyone who studies the financial conditions must reach the conclusion that the
time will come when the inflation in the Spanish and French gold coinage will cease
and they will circulate at their bullion value on a parity with the gold coinage of the
United States. How or when this change will come I do not venture to predict.
After the American monetary standard was established by direction of the American
Executive, the Cuban bankers protected their depositors by announcing that all
deposits would be paid at the inflated value of the money in which they had been
made. This was simply just and honorable, but it appears to me that a period of
readjustment must come. With the reconstruction of the sugar and tobacco industries, the cash balance in favor of Cuba will be very large, and it seems as though
there will be ample American money in the island for all the purposes of trade. It
would be interesting and valuable to determine at the end of the present year the
amount of money in circulation, though only an approximation could be had.
Regarding the second point, I have found everywhere in the island a wide-spread
demand for information regarding the methods of regulating banks in the United
States. Everybody who studies the industrial situation realizes that a system of
agricultural banks is essential to the development of the island and its continued
prosperity, but there is great difference of opinion regarding the basis of such banks
and the extent of state regulation and control. Since Cuba outside of the larger seaports has lacked both savings banks and banks of discount, the whole subject is a
new one. The people would be distrustful of any banking institution which did not
in some manner have an official sanction or guaranty back of it. They woujd
demand very strict measures of state control and regulation before their confidence
as depositors could be secured.
Regarding banks of issue, I think you will find that the general feeling is against
them. In the beginning, even in the commercial centers, it was difficult to get
American greenbacks or bank bills accepted as the equivalent of gold and silver, and
that feeling yet prevails. The issuance of an amount of paper money, said to be
$18,000,000, during the last insurrection has much to do with this feeling. This
money was commonly known as " Weyler's scrip," because it was issued during
Weyler's term as Captain-General. The issue was by the Spanish Bank of the Island
of Cuba. It was issued by direction of the Spanish Government, through the bank,
which held a semiofficial relation toward the Government. There was, however,
no safeguard surrounding it, such as surrounds the notes of the national banks in
the United States.
The paper notes known as " Weyler's scrip" went through the usual experience
of irredeemable paper money, but before the intervention of the United States they
had reached the stage where the coercion of the Spanish Government and various
schemes for converting them were unable to keep them in circulation. The notes
are now quoted at rates varying from 6 to 9 cents on the dollar. This might be called
a speculative value. The basis of this speculative value is two-fold. Though the
Spanish Bank has been reorganized and disputes liability for the issue, some of the
holders of the notes have an idea that a legal liability will be enforced in the courts,
which will at least cause a compromise and the taking up of the scrip at some valuation. The other basis is the belief that the Spanish Cortes can be induced to recognize the Government liability for the notes and make provision for redeeming them.a
Whether either of these views be ultimately justified the experience of the people of
the island with paper currency has been too recent and too painful to cause them
to look favorably on any form of bank-note issues as a circulating medium.
Very truly yours,
CHAKLES M. PEPPER.
Hon. CF^RLES G. I)AWES,
Comptroller of the Currency.
a An Associated Press dispatch from Madrid, dated Nov. 24, 1899, states that—" In the Senate to-day
Primp Minister Silvela declared that the Government Would not pay the bank notes issued by the
Spanish Bank of Cuba during the time that Weyler was Captain-General of the island,"



LII

REPORT OF THE COMPTROLLER OF THE CURRENCY.

CONDENSED STATEMENT OF RESOURCES AND LIABILITIES OX JUNE 30, 1899, OF THE
BANK OF HAWAII, HONOLULU, II. I.

[The American Banker.]
RESOURCES.

Loans and discounts
Bonds
Cash on hand
Other items
Total

$1, 270, 268. 46
26, 900. 00
503, 255. 31
152,108. 79
1, 952, 532. 56
LIABILITIES.

Capital stock
400, 000. 00
Undivided profits
40, 619. 46
Deposits
1, 330,143. 87
Other credits
181, 769. 23
Total
1, 952, 532. 56
The officers and directors of the bank are: Charles M. Cooke, president; P. C.
Jones, vice-president; C. H. Cooke, cashier; F. C. Atherton, assistant cashier; Henry
Waterhouse, Tom May, F. W. Macfarlane, E. D. Tenney, and J. A. McCandless,
directors.
EXPORTS FROM THE UNITED STATES TO CUBA, PORTO RICO, HAWAII, PHILIPPINES,
1889 TO 1899.
[Bureau of Statistics.
Year.

»

To Porto
Rico.

To Cuba.
$11,691,311
13,084,415
12,224,888
17,953,570
24,147,698
20,125,321
12,807, 661
7,530,880
8,259,776
9,561,656
18,612,039

1889
1890
1891
1892
1893
1894
1895
1896
1897
1898
1899

$2,224,931
2,297,5a
2,155,234
2,856,003
2,510,607
2,720,508
1,833,544
2,102,094
1,988,888
1,505,946
2,687,706

To Hawaii.
$3,375,661
4,711 417
5,107,212
3,781,628
2,827,663
3,306,187
3,723,057
3,985,707
4,690,075
5,907 155
9,305,470

To Philippines.
$179,646
122 276
124,572
60,914
154,378
145,466
119,255
162,446
94,597
127 804
404,193

EXPORTS FROM THE UNITED STATES TO CUBA, PORTO RICO, HAWAII, AND PHILIPPINES,
COMBINED, IN EACH YEAR FROM 1889 TO 1899.

1889
1890
1891
1892
1893
1894
1895
1896
1897
1898
1899

$17, 471, 550
20, 215, 646
19,611, 906
24, 652,115
29, 650, 346
26, 297,482
18,483, 517
13,781,127
14,761, 336
17,102, 561
31, 009, 408

'.
_
•

COMMERCE OF THE UNITED KINGDOM, FRANCE, AND GERMANY WITH CUBA, PORTO
RICO, PHILIPPINES, AND CENTRAL AND SOUTH AMERICA.

[Bureau of Statistics.]
United Kingdom, 1898.

France, 1897.

Germany, 1897.

Exports to.

Cuba and Porto Rico
Philippines
. .
Central America

South America
Total




Imports
from.

Exports to.

Imports

from.

Exports to.

Imports
from.

$2,960,910
1,116,964
2,770,207
87,506,235

$89,855
7,283,175
5,696,238
91,983,420

$331,652
135,100
214,992
46,552,826

$2,476,525
2,161,600
892,265
97,588,636

$1,394,442
567,868
1,367,586
35,420,826

$3,653,776
271,796
11,345,742
86,831,920

94,354,316 105,052,688 ; 47,234,570 103,119,026

39,250,722

102,103,234

THE NATIONAL-BANK ACT
AS AMENDED,

WITH OTHER LAWS RELATING TO
NATIONAL BANKS.

CUR 99.




1

THE NATIONAL-BANK ACT, AS AMENDED, WITH OTHER LAWS
RELATING TO NATIONAL BANKS.
(Index to sections of Revised Statutes, p. 83.)

CHAPTER ONE.
THE CURRENCY BUREAU.
1.
2.
3.
4.
5.
6.

The national-bank act.
Comptroller of the Currency.
His appointment, term, and salary.
His qualification.
Deputy Comptroller.
Interest in national banks prohibited.

7.
8.
9.
10.
11.
12.

Office clerks.
Seal of office.
Offices, vaults, etc.
Annual report.
When report is printed.
Number of copies to be printed.

1. THE NATIONAL-BANK ACT.—Sec. 1 of the act of June 20, 1874,
provides that the act entitled "An act to provide a national currency
secured by a pledge of United States bonds, and to provide for the
circulation and redemption thereof," approved June third, eighteen
hundred and sixty-four, shall hereafter be known as the "National-Bank
Act."
2. COMPTROLLER OF THE CURRENCY. (SEC. 324.) There shall be in
the Department of the Treasury a Bureau charged with the execution
of all laws passed by Congress relating to the issue and regulation of
a national currency secured by United States bonds, the chief officer
of which Bureau shall be called the Comptroller of the Currency, and
shall perform his duties under the general direction of the Secretary
of the Treasury.
3. His APPOINTMENT, TERM, AND SALARY. (SEC. 325.) The Comptroller of the Currency shall be appointed by the President, on the
recommendation of the Secretary of the Treasury, by and with the
advice and consent of the Senate, and shall hold his office for the term
of five years, unless sooner removed by the President, upon reasons to
be communicated by him to the Senate; and he shall be entitled to a
salary of five thousand dollars a year.
4. His QUALIFICATION. (SEC. 326.) The Comptroller of the Currency shall, within fifteen days from the time of notice of his appointment, 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 responsible sureties, to be approved by the Secretary of the Treasury, conditioned for the faithful discharge of the
duties of his office.
5. DEPUTY COMPTROLLER. (SEC. 327.) There shall be in the Bureau
of the Comptroller of the Currency a Deputy Comptroller of the Currency, to be appointed by the Secretary, who shall be entitled to a
salary of two thousand eight hundred dollars a year, and who shall
possess the power and perform the duties attached by law to the office
of Comptroller during a vacancy in the office or during the absence or
inability of the Comptroller. The Deputy Comptroller shall also take




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REPORT OF THE COMPTROLLER OF THE CURRENCY.

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.
6. INTEREST IN NATIONAL BANKS PROHIBITED. (SEC. 329.)

It

shall not be lawful for the Comptroller or the Deputy Comptroller of
the Currency, either directly or indirectly, to be interested in any association issuing national currency under the laws of the United States.
7. OFFICE CLERKS. (SEC. 328.) The Comptroller of the Currency
shall employ, from time to time, the necessary clerks, to be appointed
and classified by the Secretary of the Treasury, to discharge such duties
as the Comptroller shall direct.
8. SEAL OF OFFICE. (SEC. 330.) The seal devised by the Comptroller
of the Currency for his office, and approved by the Secretary of the
Treasury, shall continue to be the seal of office of the Comptroller,
and may be renewed when necessary. A description of the seal, with
an impression thereof, and a certificate of approval of the Secretary of
the Treasury, shall be filed in the office of the Secretary of State.
9. OFFICES, VAULTS, ETC. (SEC. 331.) There shall be assigned, from
time to time, to the Comptroller of the Currency, by the Secretary of
the Treasury, suitable rooms in the Treasury building for conducting
the business of the Currency Bureau, containing 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.
10. ANNUAL REPORT. (SEC. 333.) The Comptroller of the Currency
shall make an annual report to Congress, at the commencement of its
session, exhibiting—
First. Condition of national banks.—A summary of the state and condition of every association from which reports have been received the
preceding year, at the several dates to which such reports refer, with
an abstract of the whole amount of banking capital returned by them,
of the whole amount of their debts and liabilities, the amount of circulating notes outstanding, 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 information in relation to such
associations as in his judgment may be useful.
Second. Closed hanks.—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. Amendments proposed.—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. Condition of other banks.—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. Employes and expenses.—The names and compensation of the
clerks employed by him, and the whole amount of the expenses of the
Digitized forbanking department during the year.
FRASER


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5

11. W H E N ANNUAL REPORT IS PRINTED. (SEC. 3811 ) When the
Animal Report of the Comptroller of the Currency upon the national
banks and banks under State and Territorial laws is completed, or
while it is in process of completion, if thereby the business may be
sooner dispatched, the work of printing shall be commenced, under the
superintendence of the Secretary, and the whole shall be printed and
ready for delivery on or before the first day of December next after the
close of the year to which the report relates.
12. NUMBER OF COPIES TO BE PRINTED.—The act of January 12,
1895, provides that there shall be printed of the Annual Report of the
Comptroller of the Currency ten thousand copies; one thousand for the
Senate, two thousand for the House, and seven thousand for distribution by the Comptroller of the Currency.

CHAPTER TWO.
ORGANIZATION AND POWERS OF NATIONAL BANKS,
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.

Articles of association.
Organization certificate.
Execution of organization certificate.
Corporate powers.
Amount of capital stock required.
Shares of stock.
Payment of capital stock.
Enforcing payment of capital.
Restoration of capital.
Examination of organization proceedings.
Certificate of officers and directors.
Deposit of United States bonds.
Comptroller's certificate of authority.
Publication of certificate of authority.
Number and election of directors.
Qualifications of directors.
Qualifications of directors in Oklahoma.

30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.

Qualifications of voters at elections.
Oaths of directors.
Failure to hold annual election.
Vacancies in board of directors.
President shall be a director.
Organization of gold banks.
Conversion of gold banks.
Conversion of State banks.
Capital of State banks.
Converted banks may retain branches.
Personal liability of shareholders.
Exception for trustees, etc.
Amendment of articles restricted.
Increase of capital stock.
When increase becomes valid.
Reduction of capital stock.
Change of title and location.
Status of national banks organized
under the act of February 25,1863.

13. ARTICLES OF ASSOCIATION. (SEC. 5133.) Associations for carrying on the business of banking under this Title may be formed by any
number of natural persons, not less in any case than five. They shall
enter into articles of association, which shall specify in general terms
the object 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. 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 Currency, to be filed and preserved in his office.
14. ORGANIZATION CERTIFICATE. (SEC. 5134.) The persons uniting
to form such an association shall, under their hands, make an organization certificate, which shall specifically state—
First. Title.—The name assumed by such association; which name
shall be subject to the approval of the Comptroller of the Currency.
Second. Location.—The place where its operations of discount and
deposit are to be carried on, designating the State, Territory, or District, and the particular county and city, town, or village.
Third. Capital stock.—The amount of capital stock and the number
of shares into which the same is to be divided.



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

Fourth. Shareholders.—The names and places of residence of the
shareholders and the number of shares held by each of them.
Fifth. Object of certificate.—The fact that the certificate is made to
enable such persons to avail themselves of the advantages of this
Title.
15. EXECUTION OF ORGANIZATION CERTIFICATE. (SEC. 5135.) The
organization certificate shall be acknowledged before a judge of some
court of record or notary public, and shall be, together with the
acknowledgment thereof, authenticated by the seal of such court or
notary, transmitted to the Comptroller of the Currency, who shall
record and carefully preserve the same in his office.
16. CORPORATE POWERS. (SEC. 5136.) Upon duly making and filing
articles of association and an organization certificate, the association
shall become, as from the date of the execution of its organization certificate, a body corporate, and as such, and in the name designated in
the organization certificate, it shall have power—
First. Seal.—To adopt and use a corporate seal.
Second. Term of existence.—To have succession for the period of
twenty years from its organization, unless it is sooner dissolved according to the provisions of its articles of 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. Contracts.—To make contracts.
Fourth. Suits.—To sue and be sued, complain and defend, in any
court of law and [or] equity, as fully as natural persons.
Fifth. Officers.—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. By-laws.—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 transferred, its general business conducted, and the privileges granted to it by law exercised and enjoyed.
Seventh. Incidental powers.—To exercise by its board of directors, or
duly authorized officers or agents, subject to law, all such incidental
powers as shall be necessary to carry on the business of banking; by
discounting and negotiating promissory 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 personal 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 Comptroller of the Currency
to commence the business of banking.
17. AMOUNT OF CAPITAL STOCK EEQUIRED. (SEC. 5138.) No association shall be organized under this Title with a less capital than one
hundred thousand dollars, except that banks with a capital of not less
than fifty thousand dollars may, with the approval of the Secretary of
the Treasury, be organized in any place the population of which does
not exceed six thousand inhabitants. No association shall be organized in a city the population of which exceeds fifty thousand persons
with a less capital than two hundred thousand dollars.
18. SHARES OF STOCK. (SEC. 5139.) The capital stock of each association shall be divided into shares of one hundred dollars each, and



REPORT OF THE COMPTROLLER OF THE CURRENCY.

7

be deemed personal property, and transferable on the books of the
association in such manner as may be prescribed 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 the rights and
liabilities of the prior holder of such shares.
19. PAYMENT OF CAPITAL STOCK. (SEC. 5140.) At least fifty per
centum of the capital stock of every association shall be paid in before
it shall 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 installment shall be certified to the
Comptroller, under oath, by the president or cashier of the association.
20. ENFORCING-PAYMENT OF CAPITAL. (SEC. 5141.) Whenever any
shareholder, or his assignee, fails to pay any installment on the stock
when the 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 published and of general circulation in the city
or county where the association is located, or if no newspaper is published in said city or county, then in a newspaper published nearest
thereto, to any person who will pay the highest price therefor, to be 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 may 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.
21. EESTORATION OF CAPITAL. (SEC. 5141.) 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 increased to the required
amount; in default of which a receiver may be appointed, according to
the provisions of section fifty-two hundred and thirty-four, to close up
the business of the association.
22. EXAMINATION OF ORGANIZATION PROCEEDINGS. (SEC. 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 capital stock has been duly paid in, and that such association has complied
with all the provisions of this Title required to be complied with before
an association shall be authorized to commence the business of banking, the Comptroller shall examine into the condition of such association, ascertain especially the amount of money paid in on account of
its capital, the name and place of residence of eachoi 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 provisions of this Title required to entitle it to engage in the business of
banking.
23. CERTIFICATE OF OFFICERS AND DIRECTORS. (SEC. 5168.) 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



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

whether the association is lawfully entitled to commence the business
of banking.
24. DEPOSIT OF UNITED STATES BONDS. (SEC. 5159.) Every association, 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, as security
for its circulating notes, any United States registered bonds bearing
interest, to an amount where the capital is one hundred and fifty thousand dollars or less, of not less than one-fourth of the capital, and fifty
thousand dollars where the capital is in excess of one hundred and fifty
thousand dollars. (NOTE.—As amended by sec. 8 of the act of July
12, 1882.)
25. COMPTROLLER'S CERTIFICATE OF AUTHORITY. (SEC. 5169.)
If, upon a careful examination of the facts so reported, and of any
other facts which may come to the knowledge of the Comptroller,
whether by means of a special commission appointed by him for the
purpose of inquiring into the condition of such association, or otherwise, 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
complied with all the provisions required to be complied with before
commencing the business of banking, and that such association is
authorized to commence such business. But the Comptroller may
withhold from an association his certificate authorizing the commencement of business whenever he has reason to suppose that the shareholders have formed the same for any other than the legitimate objects
contemplated by this title.
26. PUBLICATION OF CERTIFICATE OF AUTHORITY. (SEC. 5170.)
The association shall cause the certificate issued under the precedingsection to be published in some newspaper printed in the city or county
where the 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.
27. NUMBER AND ELECTION OF DIRECTORS. (SEC. 5145.) The affairs
of each association shall be managed by not less than five directors,
who shall be elected by the shareholders at a meeting to be held at any
time before the association is authorized by the Comptroller of the Currency to commence the business of banking, 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.
28. QUALIFICATIONS OF DIRECTORS. (SEC. 5146.) Every director
must, during his whole term of service, be a citizen of the United
States, and at least three-fourths of the directors must have resided in
the State, Territory, or District in which the association is located for
at least one year immediately preceding their election, and must be
residents 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 director. Any director who ceases to
be the owner of ten shares of the stock, or who becomes in any other
manner disqualified, shall thereby vacate his place.
29. QUALIFICATIONS OF DIRECTORS IN OKLAHOMA.—Sec. 17 of the

act of May 2, 1890, provides " that the provisions of Title sixty-two of
the Revised Statutes of the United States relating to national banks,
and all amendments thereto, shall have the same force and effect in
the Territory of Oklahoma as elsewhere in the United States:




REPORT OF THE COMPTROLLER OF THE CURRENCY.

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"Provided, That persons otherwise qualified to act as directors shall
not be required to have resided in said Territory for more than three
months immediately preceding their election as such."
30. QUALIFICATIONS OF VOTERS AT ELECTIONS. (SEC. 5144.) In
all elections of directors, and in deciding all questions at meetings of
shareholders, each shareholder shall be entitled to one vote on each
share of 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.
31. OATHS OF DIRECTORS. (SEC. 5147.) Each director, when appointed or 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 making 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.
32. FAILURE TO HOLD ANNUAL ELECTION. (SEC. 5149.) If, from
any cause, an election of directors 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 city, 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 newspaper published nearest thereto. If the articles of association do notfixthe 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.
33. VACANCIES IN BOARD OF DIRECTORS. (SEC. 5148.) Any vacancy
in the board shall be filled by appointment by the remaining directors,
and any director so appointed shall hold his place until the next election.
34. PRESIDENT SHALL BE A DIRECTOR. (SEC. 5150.) One of the
directors, to be chosen by the board, shall be the president of the board.
35. ORGANIZATION OF GOLD BANKS. (SEC. 5185.) Associations may
be organized in the manner prescribed by this Title for the purpose
of issuing notes payable in gold.
36. CONVERSION OF GOLD BANKS.—The act of February 14, 1880,
provides that any national gold bank organized under the provisions
of the laws of the United States may, in the manner and subject to the
provisions prescribed by section fifty-one hundred and fifty-lour of the
Revised Statutes of the United States, for the conversion of banks
incorporated under the laws of any State, cease 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 powers and privileges, and shall be subject to the same duties^
responsibilities, and rules, in all respects, as are by 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.



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

37. CONVERSION OF STATE BANKS. (SEC. 5154.) Any bank incorporated by special law, or any banking institution organized under a
general law of any State, may become a national association under this
Title by the name prescribed in its organization certificate; and in such
case the articles of association and the organization certificate may be
executed by a majority of the directors of the bank or banking institution; and the certificate shall declare that the owners of two-thirds of
the capital stock have authorized the directors to make such certificate,
and to change and convert the bank or banking institution into a national
association. A majority of the directors, after executing the articles
of association and organization certificate, shall have power to execute
all other papers, and to do whatever may be required to make its organ
ization 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 the
directors of the association until others are elected or appointed in
accordance with the provisions of this chapter; and any State bank
which is a stockholder in any other bank, by authority of State laws,
may continue to hold its stock, although either bank, or both, may be
organized under and have accepted the provisions of this Title. When
the Comptroller of the Currency has given to such association a certificate, under his hand and official seal, that the provisions of this Title
have been complied with, and that it is authorized to commence the
business of banking, the association shall have the same powers and
privileges, and shall be subject to the same duties, responsibilities, and
rules, in all respects, as are prescribed for other associations, originally
organized as national banking associations, and shall be held and
regarded as such an association. But no such association shall have a
less capital than the amount prescribed for associations organized under
this Title.
38. CAPITAL OF STATE BANKS. (SEC. 3410.) The capital of any State
bank or banking association which has ceased or shall cease to exist,
or which has been or shall be converted into a national bank, shall be
assumed to be the capital as it existed immediately before such bank
ceased to exist or was converted as aforesaid.
39. CONVERTED BANKS MAY EETAIN BRANCHES. (SEC. 5155.) It
shall be lawful for any bank or banking association, organized under
State laws and having branches, the capital being joint and assigned
to and used by the mother bank and branches in definite proportions, to
become a national banking association in conformity 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 redeemable at the mother bank and each branch to be regulated by the
amount of capital assigned to and used by each.
40. PERSONAL LIABILITY OF SHAREHOLDERS. (SEC. 5151.) The
shareholders of every national banking association shall be held individually responsible, 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 such shares, except that shareholders
of any banking association now existing under State laws having 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 the 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 the surplus provided for in this



REPORT OF THE COMPTROLLER OF THE CURRENCY.

11

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 the deficiency is made good; and in case of such deficiency the Comptroller of the Currency may compel the association to
close its business and wind up its affairs under the provisions of chapter
four of this Title.
41. EXCEPTION FOR TRUSTEES, ETC. (SEC. 5152.) Persons holding stock as executors, administrators, guardians, or trustees shall not
be personally 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.
42. AMENDMENT OF ARTICLES BESTRICTED.—Sec. 5139 provides
that no change shall be made in the articles of association of a national
bank by which the rights, remedies, or security of the existing creditors
of the association shall be impaired.
43. INCREASE OF CAPITAL STOCK. (SEC. 5142.) Any association
formed under this Title may, by its articles of association, provide for
an increase of its capital from time to time, as may be deemed expedient, 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. Sec. 1 of the act of May 1,
1886, provides that any national banking association may, with the
approval of the Comptroller of the Currency, 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.
44. WHEN INCREASE BECOMES VALID. (SEC. 5142.) 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.
45. REDUCTION OF CAPITAL STOCK. (SEC. 5143.) Any association
formed under this Title may, by the vote of shareholders owning twothirds of its capital stock, reduce its capital to any sum not below 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 circulation, nor shall any such reduction be made until the amount of the
proposed reduction has been reported to the Comptroller of the Currency and his approval thereof obtained.
46. CHANGE OF TITLE AND LOCATION.—Sees. 2,3, and 4 of the act

of May 1, 1886, provide:
SEC. 2. That any national banking association may change its name
or the place where its operations of discount and deposit are to be carried on to any other place within the same State, not more than thirty
miles distant, with the approval of the Comptroller of the Currency,
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 selected shall be sent to the office of the Comptroller



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

of the Currency, but no change of name or location shall be valid until
the Comptroller shall have issued his certificate of approval of the
same.
SEC. 3. That all debts, liabilities, rights, provisions, and powers of
the association under its old name shall devolve upon and inure to the
association under its new name.
SEC. 4. That nothing in this act contained shall be so construed as
in any manner to release any national banking association under its
old name or at its old location from any liability, or affect any action
or proceeding in law in which said association may be or become a
party or interested.
47. STATUS OF NATIONAL BANKS ORGANIZED UNDER THE ACT OF
FEBRUARY 25,1863. (SEC. 5156.) That nothing in this Title shall affect

any appointments made, acts done, or proceedings had or commenced
prior to the third day of June, eighteen hundred and sixty-four, in or
toward the organization of any national banking association under the
act of February twenty-five, eighteen hundred and sixty-three; but all
associations which on the third day of June, eighteen hundred and
sixty-four, were organized or commenced to be organized under that.
act shall enjoy all the rights and privileges granted, and be subject to
all the duties, liabilities, and restrictions imposed by this Title, notwithstanding all the steps prescribed by this Title for the organization of
associations were not pursued, if such associations were duly organized
under that act.

CHAPTER THREE.
BANK CIRCULATION.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.

United States bonds denned.
Security for circulation.
Relation of bond deposit to capital.
Exchange of bonds.
Bonds held by Treasurer.
Record of bond transfers.
Notice of transfer.
Examination of bonds and records.
Annual examination of bonds.
General provisions respecting bonds.
Amount of circulation obtainable.
Preparation of bank circulation.
Circulationshallbear charter number.
Control of plates and dies.
Examination of plates and dies.
Circulation, for what receivable.
Circulation of gold banks.

65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.

Worn-out or mutilated circulation.
Provisions for redeeming circulation.
Withdrawing circulation.
General provisions for withdrawing
circulation.
Circulation of extended banks.
Circulation of liquidating banks.
Circulation of closed banks.
Regulations for redemption records.
Redeemed notes to be canceled.
Redemption in United States notes.
Disposition of redemption account.
Redemption of incomplete circulation.
Banks take circulation at par.
Issue of other notes prohibited.
Fraudulent notes to be marked.

48. UNITED STATES BONDS DEFINED. (SEC. 5158.) The term "United
States bonds," as used throughout this chapter, shall be construed to
mean registered bonds of the United States.
49. SECURITY FOR CIRCULATION. (SEC. 5159.) Every association,
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, as security for
its circulating notes, any United States registered bonds, bearing interest, to an amount, where the capital is one hundred and fifty thousand
dollars or less, not less than one-fourth of the capital, and fifty thou


REPORT OF THE COMPTROLLER OF THE CURRENCY.

13

sand dollars where the capital is in excess of one hundred and fifty
thousand dollars. 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; and
such of those banks having on deposit bonds in excess of that amount
are authorized to reduce their circulation by the deposit of lawful money
as provided bylaw: Provided, That the amount of such circulating
notes shall not exceed in any case ninety per centum of the par value
of the bonds deposited as herein provided. (NOTE.—As amended by
sec. 4 of the act of June 20,1874, and sec. 8 of the act of July 12,1882.)
50. KELATION OF BOND DEPOSIT TO CAPITAL. (SEC. 5160.) The
deposit of bonds made by each association shall be increased as its capital may be paid up or increased, so that every association shall at all
times have on deposit with the Treasurer registered United States bonds
to the amount required by law. 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 any excess
of bonds beyond the amount required by law, and upon which no circulating notes have been delivered.
51. EXCHANGE OF BONDS. (SEC. 5161.) To facilitate a compliance
with the two preceding sections, the Secretary of the Treasury is 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.
52. BONDS HELD BY TREASURER. (SEC. 5162.) All transfers of
United States bonds made by any association under the provisions of
this 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 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 appointed 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 payment of any circulating notes that have been or
may 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.
53. EECORD OF BOND TRANSFERS. (SEC. 5163.) The Comptroller of
the Currency shall keep in his office a book in which he shall cause to
be 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 account the transfer
is made, the name of the party to whom it is made, and the par value
of the bonds transferred.
54. NOTICE OF TRANSFER. (SEC. 5164.) The Comptroller of the Currency shall, immediately upon countersigning and entering any transfer or assignment by the Treasurer of any bonds belonging 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.
55. EXAMINATION OF BONDS AND EECORDS. (SEC. 5165.) The Comptroller of the Currency shall have at all times, during office hours, access
to the books of the Treasurer of the United States for the purpose of
ascertaining the correctness of any transfer or assignment of the bonds



14

REPORT OF THE COMPTROLLER OF THE CURRENCY.

deposited by an association, presented to the Comptroller to counter
sign; and the Treasurer shall have the like access to the book mentioned
in sectionfifty-onehundred and sixty three, during office hours, to ascertain the correctness of the entries in the same; and the Comptroller
shall also at all times have access to the bonds on deposit with the
Treasurer to ascertain their amount and condition.
56. ANNUAL EXAMINATION OF BONDS. (SEC. 5166.) Every association having bonds deposited in the office of the Treasurer of the United
States shall, once or oftener in each fiscal year, examine and compare
the bonds pledged by the association with the books of the Comptroller
of the Currency and with the 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 custody 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 purx>ose; 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 bv the Treasurer, shall be retained by the association.
57. GENERAL PROVISIONS BESPECTINO BONDS. (SEC. 5167.) The
bonds transferred to and deposited with the Treasurer of the United
States by any association 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 Comptroller 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 inoperative
whenever such association fails to redeem its circulating 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 thousand dollars, upon the surrender to him and the cancellation 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 by 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 with 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 that the market or cash value of
the remaining bonds is not below the amount required for the circulation issued for the same.
58. AMOUNT OF CIRCULATION OBTAINABLE.—Sec. 10 of the act of

July 12, 1882, provides that upon a deposit of bonds as described by



REPORT OF THE COMPTROLLER OF THE CURRENCY.

15

sections fifty-one hundred and fifty-nine and fifty one hundred and
sixty, the association making the same shall be entitled to receive from
the Comptroller of the Currency circulating notes of different denomi
nations, in blank, registered and countersigned as provided by law,
equal in amount to ninety per centum of the current market value, not
exceeding par, of the United States bonds so transferred and delivered,
and at no time shall the total amount of such notes issued to any such
association exceed ninety per centum of the amount at such time
actually paid in of its capital stock.
59. PREPARATION OF BANK CIRCULATION. (SEC. 5172.) In order to
furnish suitable notes for circulation, the Comptroller of the Currency
shall, under the direction of the Secretary of the Treasury, cause plates
and dies to be engraved, in the best manner to guard against counterfeiting and fraudulent alterations, and shall have printed therefrom,
and numbered, such quantity of circulating notes, in blank, of the
denominations of five dollars, ten dollars, twenty dollars, fifty dollars,
one hundred dollars, five hundred dollars, and one thousand dollars, as
may be required to supply the associations entitled 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
written or engraved signatures of the Treasurer and Eegister, and by
the imprint of the seal of the Treasury; and shall also express upon
their face the promise of the association receiving the same to pay on
demand, attested by the 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.
00. CIRCULATION SHALL BEAR CHARTER NUMBER.—Sec. 5 of

the

act of June 20,1874, provides that the Comptroller of the Currency
shall, under such rules and regulations as the Secretary of the Treasury
may prescribe, cause the charter numbers of the associations to be
printed upon all national-bank notes which may be hereafter issued
by him.
01. CONTROL OF PLATES AND DIES. (SEC. 5173.) The plates and
special dies to be procured by the Comptroller of the Currency for the
printing of such circulating notes shall remain under his control and
direction.
02. EXAMINATION OF PLATES AND DIES. (SEC. 5174.) The Comptroller of the Currency shall cause to be examined, each year, the
plates, dies, but pieces [bed pieces], and other material from which the
national-bank circulation is printed, in whole or in part, and file in his
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 expenses of any
such examination or destruction shall be paid out of any appropriation
made by Congress for the special examination of national banks and
bank-note plates.
03. CIRCULATION, FOR WHAT EECEIVABLE. (SEC. 5182.) After any
association receiving circulating notes under this Title has caused its
promise to pay such notes on demand to be signed by the president or
vice-president and cashier thereof, in such manner as to make them
obligatory promissory notes, payable on demand at its place of business, such association may issue and circulate the same as money.
And the same shall be received at par in all parts of the United States



16

REPORT OP THE COMPTROLLER OF THE CURRENCY.

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 demands owing by the United States to individuals,
corporations, and associations within the United States, except interest
on the public debt, and in redemption of the national currency.
64. CIRCULATION OF GOLD BANKS. (SEC. 5185.) Associations may
be organized in the manner prescribed by this Title for the purpose of
issuing notes payable in gold; and upon the deposit of any United
States bonds bearing interest payable 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
noue of them of 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 office at which they are issued, in gold coin of the United States,
and shall be so redeemable.
65. WORN-OUT OR MUTILATED CIRCULATION. (SEC. 5184.) It shall
be the duty of the Comptroller of the Currency to receive worn-out or
mutilated circulating notes issued by any banking association, and
also, on due proof of the destruction of any such circulating 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 be macerated in presence of four persons, one to be
appointed by the Secretary 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 Secretary of the Treasury may prescribe. A certificate of such maceration, signed by the
parties so appointed, shall be made in the books of the Comptroller,
and a duplicate thereof forwarded to the association whose notes are
thus canceled.
66. PROVISIONS FOR REDEEMING CIRCULATION.—Sec. 3 of the

act

of June 20, 1874, provides that every association organized, or to be
organized, under the provisions of the said act, and of 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 be 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
dollars 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
respective 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 association so notified shall forthwith deposit with the Treasurer
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 depositary of



REPORT OF THE COMPTROLLER OF THE CURRENCY.

17

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 rendered otherwise unfit for use, they shall be forwarded to the Comptroller of the
Currency and destroyed, and replaced as now provided bylaw: Provided, That each of said associations shall reimburse to the Treasury
the charges for transportation and the costs for assorting such notes;
and the associations hereafter organized shall also severally reimburse
to the Treasury the cost of engraving such plates as shall be ordered
by each association respectively; and the amount assessed upon each
association shall be in proportion to the circulation redeemed, and be
charged to the fund on deposit with the Treasurer.
67. WITHDRAWING^ CIRCULATION.—Sec. 4 of the act of June 20,
1874, provides that any association organized under this act, or any of
the acts of which this is an amendment, desiring to withdraw its circulating notes, in whole or in part, may, upon the deposit of lawful money
with the Treasurer of the United States in sums of not less than ninethousand dollars, take up the bonds which said association 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 section 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.
68. GENERAL PROVISIONS FOR WITHDRAWING CIRCULATION.—

Sees. 8 and 9 of the act of July 12, 1882, provide: (SEC. 8.) That the
national banks which shall hereafter make deposits of lawful money
for the retirement in full of their circulation shall, at the time of their
deposit, be assessed for the cost of transporting and redeeming their
notes then outstanding, a sum equal to the average cost of the redemption of national-bank notes during the preceding year, and shall thereupon pay such assessment; and all national banks which have heretofore made or shall hereafter make deposits of lawful money for the
reduction of their circulation shall be assessed, and shall pay an assessment in the manner specified in section three of the act approved June
twentieth, eighteen hundred and seventy-four, for the cost of transporting and redeeming their notes redeemed from such deposits subsequently to June thirtieth, eighteen hundred and eighty-one.
SEC. 9. That any national banking association now organized, or
hereafter organized, desiring to withdraw its circulating notes, upon a
deposit of lawful money with the Treasurer of the United States, as
provided in section four of the act of June twentieth, eighteen hundred
and seventy-four, or as provided in this act, is authorized to deposit
lawful money and withdraw a proportionate amount of the bonds held
as security for its circulating notes in the order of such deposits; and
no national bank which makes any deposit of lawful money in order to
withdraw its circulating notes shall be entitled to receive any increase
of its circulation for the period of six months from the time it made
such deposit of lawful money for the purpose aforesaid: Provided,
That not more than three millions of dollars of lawful money shall be
deposited during any calendar month for this purpose: And provided
further, That the provisions of this section shall not apply to bonds

CTJR99
2


18

REPORT OF THE COMPTROLLER OF THE CURRENCY.

called for redemption b^ the Secretary of the Treasury, nor to the withdrawal of circulating notes in consequence thereof.
69. CIRCULATION OF EXTENDED BANKS.—Sec. 6 of the act of July
12,1882, provides that the circulating notes of any association so extending the period of its succession which shall have been issued to it prior
to such extension shall be redeemed at the Treasury 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 of
United States notes, providing for redistribution of national bank currency, and for other purposes,'7 and such notes when redeemed shall be
forwarded to the Comptroller of the Currency, and destroyed, as now
provided by law; and at the end of three years from the date of the
extension of the corporate existence of each bank the association so
extended shall deposit lawful money with the Treasury of the United
States sufficient to redeem the remainder of the circulation which was
outstanding at the date of its extension, as provided in sections fifty-two
hundred and twenty-two, fifty-two hundred and twenty-four, and fiftytwo hundred and twenty-five of the Eevised Statues; and aiiy 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 for 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 association which shall obtain the benefit of this act shall reimburse to the
Treasury the cost of preparing the plate or plates for such new circulating notes as shall be issued to it.
70. CIRCULATION OF LIQUIDATING BANKS. (SEC. 5225.) Whenever
the Treasurer has redeemed any of the notes of an association which
has commenced to close its affairs, he shall cause the notes to be mutilated 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 destroyed in the manner prescribed in section fifty-one
hundred and eighty-four.
71. CIRCULATION OF CLOSED BANKS.—Sec. 8 of the act of June 20,
1874, provides: And it shall be the duty of the Treasurer, assistant
treasurers, designated depositaries, and national bank depositaries of
the United States to assort and return to the Treasury for redemption
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.
72. REGULATIONS FOR REDEMPTION RECORDS. (SEC. 5232.) The
Secretary of the Treasury may, from time to time, make such regulations
respecting the disposition to be made of circulating notes after presentation 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.
73. REDEEMED NOTES TO BE CANCELED. (SEC. 5233.) All notes of
national banking associations presented at the Treasury of the United
States for payment shall, on being paid, be canceled.
74. REDEMPTION IN UNITED STATES NOTES.—Sec. 3 of the act

approved June 20, 1874, provides that when the circulating notes of
any such associations, assorted or unassorted, shall be presented for
redemption, in sums of one thousand dollars or any multiple thereof, to
the Treasurer of the United States, the same shall be redeemed in
United States notes.




REPORT OF THE COMPTROLLER OF THE CURRENCY.

19

75. DISPOSITION OF BEDEMPTION ACCOUNT.—Sec. 6 of the act of

July 14,1890, provides that upon the passage of this act the balances
standing with the Treasurer of the United States to the respective
credits of national banks for deposits made to redeem the circulating
notes of such banks, and all deposits thereafter received for like purpose, shall be covered into the Treasury as a miscellaneous receipt, and
the Treasury of the United States shall redeem from the general cash
in the Treasury the circulating notes of said banks which may come
into his possession 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, reimbursement of their amount shall be made to
the Treasurer, under such regulations as the Secretary of the Treasury
may prescribe, from an appropriation hereby created, to be known as
4
' national-bank notes, redemption 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 aud 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.
76. EEDEMPTION OF INCOMPLETE CIRCULATION.—The act of July
28, 1892, provides that the provisions of the Revised Statutes of the
United States, providing for the redemption of national-bank notes,
shall apply to all national bank notes that have been or may be issued
to, or received by, any national 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 vicepresident and cashier.
77. BANKS TAKE CIRCULATION AT PAR. (SEC. 5196.) Every national banking association formed or existing under this Title shall
take and receive at par, for any debt or liability to it, any and all notes
or bills issued by any lawfully organized national banking association.
But this provision shall not apply to any association organized for the
purpose of issuing notes payable in gold.
78. ISSUE OF OTHER NOTES PROHIBITED. (SEC. 5183.) No national
banking association shall issue post notes or any other notes to circulate as money than such as are authorized by the provisions of this
Title.
79. FRAUDULENT NOTES TO BE MARKED.—Sec. 5 of the act of June
30,1876, provides that all United States officers charged with the receipt
or disbursement of public moneys, and all officers of national banks,
shall stamp or write in plain letters the word " counterfeit," " altered,'7
or "worthless7' upon all fraudulent notes issued in the form of and
intended to circulate as money which shall be presented at their places
of business; and if such officer shall wrongfully 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.




20

REPORT OF THE COMPTROLLER OF THE CURRENCY.

CHAPTER FOUK.
TAX ON CIRCULATION.
80.
81.
82.
83.
84.
85.
86.

Tax on circulation.
Semiannual return of circulation.
Proceedings on default.
Enforcing tax on circulation.
Refunding excess tax.
Circulation, when exempt from tax.
Tax on unauthorized circulation.

87. Semiannual return of taxable circulation.
88. Failure to make such return.
89. Tax on converted bank circulation.
90. Tax provisions restricted.
91. Taxation of notes, etc.

80. TAX ON CIRCULATION. (SEC. 5214.) In lieu of all existing taxes,
every association shall pay to the Treasurer of the United States, in the
months of January and July, a duty of one-half of one per centum each
half year upon the average amount of its notes in circulation.
81. SEMIANNUAL EETURN OF CIRCULATION. (SEC. 5215.) In order
to enable the Treasurer to assess the duties imposed by the preceding
section, each 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 prescribe, of the average amount of its notes
in circulation 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 collected
either out of the interest as it may become due such association on the
bonds deposited with the Treasurer, or, at his option, in the manner in
which penalties are to be collected of other corporations under the laws
of the United States.
82. PROCEEDINGS ON DEFAULT. (SEC. 5216.) Whenever any association fails to make the half-yearly return required by the preceding
section, 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.
83. ENFORCING TAX ON CIRCULATION. (SEC. 5217.) Whenever an
association fails to pay the duties imposed by the three preceding sections, the sums due maybe collected in the manner provided for the collection of United States taxes from other corporations; 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.
84. REFUNDING EXCESS TAX. (SEC. 5218.) In all cases where an
association has paid or may pay in excess of what may be or has been
found due from it, on account of the duty required to be paid to the
Treasurer of the United States, the association may state an account
therefor, which, on being certified by the Treasurer of the United
States, and found correct by the Comptroller of the Treasury, shall be
refunded in the ordinary manner by warrant on the Treasury.
85. CIRCULATION, WHEN EXEMPT FROM TAX. (SEC. 3411.) Whenever the outstanding circulation of any bank, association, corporation,
company, or person is reduced to an amount n ot exceedin gfiveper centum
of the chartered or declared capital existing at the time the same was
issued, said circulation shall be free from taxation; 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.



REPORT OF THE COMPTROLLER OF THE CURRENCY.

21

86. TAX ON UNAUTHORIZED CIRCULATION.—Sees. 19, 20, and 21 of

the act of February 8, 1875, provide:
SEC. 19. That every person, firm, association, other than nationalbank associations, and every corporation, State bank, or State banking
association shall pay a tax of ten per centum on the amount of their
own notes used for circulation and paid out by them.
SEC. 20. That every such person, firm, association, corporation, State
bank, or State banking association, and also every national banking
association, shall pay a like 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 municipal corporation, used for circulation and paid out by them.
SEC. 21. That the amount of such circulating notes, and of the tax
due thereon, shall be returned, and 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.
87. SEMIANNUAL RETURN OF TAXABLE CIRCULATION. (SEC. 3414.)
A true and complete return of the monthly amount of circulation, as
aforesaid, and of the monthly amount of notes of persons, town, city,
or municipal corporation, State banks, or State banking associations
paid out as aforesaid for the previous six months, shall be made and
rendered in duplicate on the first day of December and the first day of
June by each of such banks, associations, corporations, companies, or
persons, with a declaration annexed thereto, under the oath of such
person, or of the president or cashier of such bank, association, corporation, or company, in such form and manner as may be prescribed by the
Commissioner of Internal Revenue, that the same contains a true and
faithful statement of the amounts subject to tax,as aforesaid; and one
copy shall be transmitted 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.
88. FAILURE TO MAKE SUCH RETURN. (SEC. 3415.) In default of the
returns provided in the preceding section the amount of circulation,
and notes of persons, town, city, and municipal corporations, State
banks, and State banking associations paid out, as aforesaid, shall be
estimated by the Commissioner 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, corporation, company,
or person so in default shall pay a penalty of two hundred dollars,
besides the additional penalty and forfeitures provided in other cases.
89. TAX ON CONVERTED BANK CIRCITLATION. (SEC. 3416.) Whenever any State bank or banking association has been converted into a
national banking association, and such national banking association
has assumed the liabilities of such State bank or banking association,
including the redemption of its bills, by any agreement or understanding whatever with the representatives of such State bank or banking
association, such national banking association shall be held to make
the required return and payment on the circulation outstanding, so long
as such circulation shall exceed five per centum of the capital before
such conversion of such State bank or banking association.
90. TAX PROVISIONS RESTRICTED. (SEC. 3417.) The provisions of
this chapter relating to the tax on the circulation of banks and to



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

their returns, except as contained in sections thirty-four hundred and
eleven, thirty-four hundred and twelve, thirty-four hundred and thirteen, and thirty-four hundred and sixteen, and such parts of sections
thirty-four hundred and fourteen and thirty-four hundred and fifteen
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 " NATIONAL
BANKS."
91. TAXATION OF NOTES, ETC. (SEC.

3701.) All stocks, bonds,
Treasury notes, and other obligations of the United States shall be
exempt from taxation by or under State or municipal or local authority.
The act of August 13,1894, provides: (SEC. 1.) That circulating notes of
national banking associations and United States legal-tender notes and
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 shall 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 manner 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 deemed or held
to change existing laws in respect of the taxation of national banking
associations.
CHAPTER FIVE.
REGULATION OF THE BANKING BUSINESS.
92. Laws governing certain associations.
93. Place of business.
94. Reserve cities and reserve requirements.
95. Reserve not maintained.
96. Reserve agents' balances counted as
reserve.
97. Clearing-house certificates counted
as reserve.
98. Redemption fund counted as reserve.
99. United States note certificates
counted as reserve.
100. Redemption of such certificates.
101. United States gold certificates
counted as reserve.
102. Reserve requirements for gold banks.
103. Reserve deposit in central reserve
city.
104. Additional reserve cities.
105. Additional central reserve cities.
106. Real estate.
107. Interest.
108. Penalty for unlawful interest.
109. Surplus and dividends.

110. Restriction on loans.
111. Associations must not hold their own
stock.
112. Restriction on bank's liability.
113. Improper use of bank circulation.
114. Unearned dividends prohibited.
115. Assessment for impairment of capital.
116. Provision for enforcement of assessment.
117. Prohibition against uncurrent notes.
118. List of shareholders^
119. Reports of condition.
120. Verification of such reports.
121. Reports of dividends and earnings.
122. Penalty for failure to report.
123. Reports of other banks.
124. State taxation of national banks.
125. National-bank examiners.
126. Qualification for examiner.
127. Compensation of examiners.
128. Examinations in District of Columbia.
129. Limitation of visitorial powers.
130. Use of "National" in titles.

92. LAWS GOVERNING CERTAIN ASSOCIATIONS. (SEC. 5157.) The
provisions of chapters two, three, and four [three,five,and seven of this
edition] of this Title, which are expressed without restrictive words, as
applying to " national banking association," or to " associations," apply
to all associations organized to carry on the business of banking under
any act of Congress.
93. PLACE OF BUSINESS. (SEC. 5190.) The usual business of each
national banking association shall be transacted at an office or banking
house located in the place specified in its organization certificate.



REPORT OF THE COMPTROLLER OF THE CURRENCY.

23

94. EESERVE CITIES AND EESERVE EEQUIREMENTS. (SEC. 5191.)
Every national banking association in either of the following cities:
Albany, Baltimore, Boston, Cincinnati, Chicago, Cleveland, Detroit,
Louisville, Milwaukee, New Orleans, New York, Philadelphia, Pittsburgh, Saint Louis, San Francisco, and Washington, shall at all times
have on hand, in lawful money of the United States, an amount equal
to at least twenty five per centum of the aggregate amount of its deposits; and every other association shall at all times have on hand, in lawful money of the United States, an amount equal to at least fifteen per
centum of the aggregate amount of its deposits.
95. EESERVE NOT MAINTAINED. (SEC. 5191.) Whenever the lawful
money of any association in any of the cities named shall be below the
amount of twenty-five per centum of its deposits, and whenever the
lawful money of any other association shall be below fifteen j)er centum
of its deposits, such association shall not increase its liabilities by making any new loans or discounts otherwise than by discounting or purchasing bills of exchange payable at sight, nor make any dividend of
its profits until the required proportion between the aggregate amount
of its 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 association, as provided in section fifty-two hundred and
thirty-four.
96. EESERVE AGENTS' BALANCES COUNTED AS EESERVE. (SEC.

5192.) Three-fifths of the reserve of fifteen per centum required by the
preceding section to be kept may consist of balances due to an association from associations approved by the Comptroller of the Currency,
organized under the act of June three, eighteen hundred and sixty-four,
or under this Title, and doing business in the cities of Albany, Baltimore, Boston, Charleston, Chicago, Cincinnati, Cleveland, Detroit,
Louisville, Milwaukee, New Orleans, New York, Philadelphia, Pittsburg, Eichmond, Saint Louis, San Francisco, and Washington.
97. CLEARING-HOUSE CERTIFICATES COUNTED AS EESERVE.—

Clearing-house certificates, representing specie or lawful money specially deposited for the purpose, of any clearing-house association shall
also be deemed to be lawful money in the possession of any association
belonging to such clearing house, holding and owning such certificate,
within the preceding section.
98. EEDEMPTION FUND COUNTED AS EESERVE.—Sec. 3 of the act

of June 20,1874, provides that thefiveper cent redemption fund, which
shall at all times be kept on deposit with the Treasurer of the United
States, shall be counted as a part of the lawful reserve.
99. UNITED STATES NOTE CERTIFICATES COUNTED AS EESERVE.

(SEC. 5193.) The Secretary of the Treasury may receive United States
notes on deposit, without interest, from any national banking associations, in sums of not less than ten thousand dollars, and issue certificates therefor in such form as he may prescribe, in denominations of
not less than five thousand dollars, and payable on demand in United
States notes at the place where the deposits were made. The notes so
deposited shall not be counted as part of the lawful-money reserve of
the association; but the certificates issued therefor may be counted as
part of its lawful-money reserve, and may be accepted in the settlement



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

of clearing-house balances at the places where the deposits therefor
were made.
100. REDEMPTION OF SUCH CERTIFICATES. (SEC. 5194.) The power
conferred on the Secretary of the Treasury, by the preceding section
shall not be exercised so as to create any expansion or contraction of
the currency; and United States notes for which certificates are issued
under that section, oi other United States notes of like amount, shall
be held as special deposits in the Treasury and used only for redemption of such certificates.
101. UNITED STATES GOLD CERTIFICATES COUNTED AS EESERVE.—

Sec. 12 of the act of July 12, 1882, provides that the Secretary of the
Treasury is authorized and directed to receive deposits of gold coin
with the Treasurer or assistant treasurers of the United States, in sums
not less than twenty dollars, and to issue certificates therefor in denominations of not less than twenty dollars each, corresponding with the
denominations of United States notes. The coin deposited lor or representing the certificates of deposit shall be retained in the Treasury
for the payment of the same on demand. Said certificates shall be
receivable for customs, taxes, and all public dues, and when so received
may be reissued; and such certificates, as also silver certificates, 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 receivable in the settlement of clearing-house balances: Provided, That the
Secretary of the Treasury shall suspend the issue of such gold certificates whenever the amount of gold coin and gold bullion in the Treasury
reserved for the redemption of United fetates notes falls below one
hundred millions of dollars; and the provisions of section fifty-two
hundred and seven of the Revised Statutes shall be applicable to the
certificates herein authorized and directed to be issued.
102. EESERVE EEQUIREMENTS FOR GOLD BANKS. (SEC. 5186.)
Every association organized for the purpose of issuing notes payable
in gold shall at all times keep on hand not less than twenty-five per
centum of its outstanding circulation, 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 provisions of this Title: Provided, That, in applying the same to associations organized for issuing
gold notes, the terms ulawful money" and u 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
within the limitation of circulation mentioned in this Title.
103. EESERVE DEPOSIT IN CENTRAL EESERVE CITY. (SEC. 5195.)
Each association organized in any of the cities named in section fiftyone hundred and ninety-one 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.
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.
104. ADDITIONAL EESERVE CITIES.—Sec. 1 of the act of March 3,
1887, provides that whenever three-fourths in number of the national
banks located in any city of the United States having a population of
fifty thousand people shall make application to the Comptroller of the



REPORT OF THE COMPTROLLER OF THE CURRENCY.

25

Currency, in writing, asking that the name of the city in which such
banks are located shall be added to the cities n,amed in sections fiftyone hundred and ninety-one and fifty-one hundred and ninety-two of
the Eevised Statutes, the Comptroller shall have authority 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, an
amount equal to at least twenty-five per centum of its deposits, as provided in sectionsfifty-onehundred and ninety-one andfifty-onehundred
and ninety-five of the Eevised Statutes.
105. ADDITIONAL CENTRAL EESERVE CITIES.—Sec. 2 of the act of

March 3, 1887, 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 Comptroller 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 lawfulmoney reserve of the national banks located in other reserve cities may
be deposited, as provided in sectionfifty-onehundred and ninety-five of
the Eevised 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 Eevised Statutes.
106. EEAL ESTATE. (SEC. 5137.) A national banking association may
purchase, hold, and convey real estate for the following purposes, and
for no others:
First. Such as shall be necessary for its immediate accommodation
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 judgments, 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 xmrehased
to secure any debts due to it, for a longer period than five years.
107. INTEREST. (SEC. 5197.) Any association may take, receive,
reserve, and charge on any loan or discount made, or upon any note,
bill of exchange, or other evidences of debt, interest at the rate allowed
by the laws of the State, Territory, 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 Territory, 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 from 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 interest,
shall not be considered as taking or receiving a greater rate of interest.
108. PENALTY FOR UNLAWFUL INTEREST. (SEC. 5198.) The taking,
receiving, reserving, or charging a rate of interest greater than is



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

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 been 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 representatives, 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.
109. SURPLUS AND DIVIDENDS. (SEC. 5199.) The directors of any
association may semiannually declare a dividend of so much of the net
profits of the association as they shall judge expedient; 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,
110. EESTRICTION ON LOANS. (SEC. 5200.) The total liabilities to
any association, of any person, or of any company, corporation, or firm
for money borrowed, including in the liabilities of a company or firm
the liabilities of the several members thereof, shall at no time exceed
one-tenth part of the amount of the capital stock of such association
actually paid in. But the discount of bills of exchange drawn in good
faith against actually existing values, and the discount of commercial
or business paper actually owned by the person negotiating the same
shall not be considered as money borrowed.
111. ASSOCIATIONS MUST NOT HOLD THEIR OWN STOCK. (SEC.

5201.) No association shall make any loan or discount on the security
of the shares of its own capital 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 good faith; and
stock so purchased or acquired shall, within six months from the time
of its purchase, be sold or disposed 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.
112. EESTRICTION ON BANK'S LIABILITY. (SEC. 5202.) J T association
So
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 association for dividends and reserve profits.
113. IMPROPER U S E OF BANK CIRCULATION. (SEC. 5203.) No association shall, either directly or indirectly, pledge or hypothecate any of
its notes of circulation for the purpose of procuring money to be paid
in on its capital stock, or to be used in its banking operations, or otherwise; nor shall any association use its circulating notes, or any part
thereof, in any manner or form, to create or increase its capital stock.
114. UNEARNED DIVIDENDS PROHIBITED. (SEC. 5204.) No association, or any member thereof, shall, during the time it shall continue its
banking operations, 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



REPORT OF THE COMPTROLLER OF THE CURRENCY.

27

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 an3^ associations, on which interest is past due and
unpaid for a period of six months, unless the same are well secured,
and in process 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 association under section
fifty-one hundred and forty-three.
115. ASSESSMENT FOR IMPAIRMENT OF CAPITAL. (SEC. 5205.)
Every association which shall have failed to pay up its capital stock, as
required by law, and every association whose capital stock shall have
become impaired by losses or otherwise, shall, 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 Comptroller, a receiver may be appointed to
close up the business of the association, according to the provisions of
section fifty-two hundred and thirty-four.
116. PROVISION FOR ENFORCEMENT OF ASSESSMENT.—Sec. 4 of the

act of June 30, 1876, provides that if any shareholder or shareholders
of a bank shall neglect or refuse, after three months' notice, to pay the
assessment, as provided in this section, it shall be the duty of the board
of directors to cause a sufficient amount of the capital stock of such
shareholder or shareholders to be sold at public auction (after thirty
days7 notice shall be given by posting such notice of sale in the office
of the bank and by publishing such notice in a newspaper of the city
OT 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.
117. PROHIBITION AGAINST UNCTJRRENT NOTES. (SEC. 5206.) No
association shall at any time pay out on loans or discounts, or in purchasing drafts or bills 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 association
which at the time of such paying out or putting in circulation is not
redeeming its circulating notes in lawful money of the United States.
118. LIST OF SHAREHOLDERS. (SEC. 5210.) The president and
cashier of every national 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,



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

119. REPORTS OF CONDITION. (SEC. 5211.) Every association shall
make to the Comptroller of the Currency not less than five reports during each year, according to the form which may be prescribed by him,
verified by the oath or affirmation of the president or cashier of such
association, and attested by the signature of at least three of the
directors. Each such report shall exhibit, in detail and under appropriate heads, the resources and liabilities of the associations at the
close of business on any past day by him specified, and shall be transmitted to the Comptroller within five days after the receipt of a request
or requisition 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 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 knowledge of its condition.
120. VERIFICATION OF SUCH REPORTS.—The act of

February 26,

1881, provides that the oath or affirmation required by section fifty-two
hundred and eleven of the Revised Statutes, 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 located, or any other
officer having an official seal, authorized in such State to administer
oaths, shall be a sufficient verification as contemplated by said section
fifty-two hundred and eleven: Provided, That the officer administering
the oath is not an officer of the bank.
121. REPORTS OF DIVIDENDS AND EARNINGS. (SEC. 5212.) In addition to the reports required by the preceding section, each association
shall report to the Comptroller of the Currency, within ten days after
declaring 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.
122. PENALTY FOR FAILURE TO REPORT. (SEC. 5213.) Every association which fails to make and transmit any report required under
either of the two preceding sections shall be subject to a penalty of
one hundred dollars for each day after the periods, respectively, 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 deposited 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.
123. REPORTS OF OTHER BANKS.—Sec. 6 of the act of June 30,1876,
provides that all savings banks or savings and trust companies organized under authority of any act of Congress shall be, and are hereby,
required to make, to the Comptroller of the Currency, and publish, all
the reports which national banking associations are required to make
and publish underthe pro visionsofsectionsfifty-twohundred and eleven,
fifty-two hundred and twelve, andfifty-twohundred and thirteen of the
Revised Statutes, and shall be subject to the same penalties for failure
to make or publish such reports as are therein provided; which penalties may be collected by suit before any court of the United States in



REPORT OF THE COMPTROLLER OF THE CURRENCY.

29

the district in which said savings banks or savings and trust companies may be located. And all savings or other banks now organized, or
which shall hereafter be organized in the District of Columbia, under
any act of Congress, which shall have capital stock paid up in whole
or in part, shall be subject to all the provisions of the Revised Statutes,
and of all acts of Congress applicable to national banking associations,
so far as the same may be applicable to such savings or other banks:
Provided, That such savings banks now established shall not be required
to have a paid-in capital exceeding one hundred thousand dollars.
124. STATE TAXATION OF NATIONAL BANKS. (SEC. 5219.) Nothing
herein shall prevent all the shares in any association from being
included in the valuation of the personal property of the owner or
holder of such shares, in assessing taxes imposed by authority of the
State within which the association is located; but the legislature 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 exemx>t the real property of associations from either State, county, or municipal taxes, to the same
extent, according to its value, as other real property is taxed.
125. NATIONAL-BANK EXAMINERS. (SEC. 5240.) The Comptroller of
the Currency, with the approval of the Secretary of the Treasury,
shall, as often as shall be deemed necessary or proper, appoint a suitable person or persons to make an examination of the affairs of every
banking association, who shall have power to make a thorough examination into all the affairs of the association, and in doing so to examine
any of the officers and agents thereof on oath; and shall make a full
and detailed report of the condition of the association to the Comptroller.
126. QUALIFICATION FOR EXAMINER. (SEC. 5240.) But no person
shall be appointed to examine the affairs of any banking association
of which he is a director or other officer.
127. COMPENSATION OF EXAMINERS. (SEC. 5240.) All persons appointed to be examiners of national banks not located in the redemption cities specified in section five thousand one hundred and ninety-two
of the Eevised Statutes of the United States, or in any one of the States
of Oregon, California, and Nevada, or in the Territories, shall receive
compensation for such examination as follows: For examining national
banks having a capital less than one hundred thousand dollars, twenty
dollars; those having a capital of one hundred thousand dollars and less
than three hundred thousand dollars, twenty-five dollars; those having
a capital of three hundred thousand dollars and less than four hundred
thousand dollars, thirty-five dollars; those having a capital of four hundred thousand dollars and less than five hundred thousand dollars,
forty dollars; those having a capital of five hundred thousand dollars
and less than six hundred thousand dollars, fifty dollars; those having
a capital of six hundred thousand dollars and over, seventy-five dollars;
which amounts shall be assessed by the Comptroller of the Currency
upon, and paid by, the respective association so examined, and shall
be in lieu of the compensation and mileage heretofore allowed for making said examinations; and persons appointed to make examinations of
national banks in the cities named in section five thousand one hundred
and ninety-two of the Eevised Statutes of the United States, or in any



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

one of the States of Oregon, California, and Nevada, or in the Territories, shall receive such compensation as may be fixed by the Secretary of the Treasury upon the recommendation of the Comptroller of
the Currency; and the same shall be assessed and paid in the manner
hereinbefore provided.
128. EXAMINATIONS IN DISTRICT OF COLUMBIA. (SEC. 332.)

The

Comptroller of the Currency, in addition to the powers conferred upon
him by law for the examination of national banks, is further authorized,
whenever he may deem it useful, to cause examination to be made into
the condition of any bank in the District of Columbia organized under
act of Congress. The Comptroller, at his discretion, may report to
Congress the results of such examination. The expense necessarily
incurred in any such examination shall be paid out of any appropriation made by Congress for special bank examinations.
129. LIMITATION OF YISITORIAL POWERS, (SEC. 5241.) No association shall be subject to any visitorial powers other than such as are
authorized by this Title, or are vested in the courts of justice.
130. U S E OF "NATIONAL" IN TITLES. (SEC. 5243.) All banks not
organized and transacting business under the national currency laws,
or under this Title, and all persons or corporations doing the business
of bankers, brokers, or savings institutions, except savings banks
authorized by Congress to use the word "national" as a part of their
corporate name, are prohibited 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 committed after the third
day of September, eighteen hundred and seventy-three, shall subject
the party chargeable therewith to a penalty of fifty dollars for each day
during which it is permitted or repeated.

CHAPTEE SIX.
EXTENSION OF CORPORATE EXISTENCE.
131. Corporate existence may be extended.
132. Consent of two-thirds necessary.
133. Special examination of bank.

134. Status not changed by extension.
135. Dissenting shareholders may withdraw.

131. CORPORATE EXISTENCE MAY BE EXTENDED.—The act of July
12, 1882, provides: (SEC. 1) That any national banking association
organized under the acts of February twenty-fifth, eighteen hundred
and sixty-three, June third, eighteen hundred 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
fifty-one hundred andfifty-fourof the Eevised Statutes of the United
States, may, at any time within the two years next previous to the
date of the expiration 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 association, 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.



J * uan, uuiviPTROLLER OF THE CURRENCY.

31

132. CONSENT OF TWO-THIRDS NECESSARY. (SEC. 2.) That such
amendment of said articles of association shall be authorized by the
consent in writing of shareholders owning not less than two-thirds of
the capital stock of the association; and the board of directors 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 application made by the president" or cashier for the
approval of the amended articles of association by the Comptroller;
and such amended articles of association shall not be valid until the
Comptroller shall give to such association a certificate under his hand
and seal that the association has complied with all the provisions
required to be complied with and is authorized to have succession for
the extended period named in the amended articles of association.
133. SPECIAL EXAMINATION OF BANK. (SEC. 3.) That upon the
receipt of the application and certificate of the association provided for
in the preceding 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 preceding section, or if it appears that the condition of said association is not satisfactory, he shall withhold such certificate of approval.
134. STATUS NOT CHANGED BY EXTENSION. (SEC. 4.) That any association so extending the period of its succession shall continue to enjoy
all the rights and privileges and immunities granted and shall continue
to be subject to all the duties, liabilities, and restrictions imposed by
the Eevised Statutes of the United States and other acts having reference to national banking associations, and it shall continue to be in all
respects the identical association it was before the extension of its
period of succession.
135. DISSENTING SHAREHOLDERS MAY WITHDRAW. (SEC. 5.) That
when any national banking association has amended its articles of
association as provided in this act, and the 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 approval, 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 committee of three persons, one
to be selected by such shareholder, one by the directors, and the third
by the.first two; and in case the value so fixed shall not be satisfactory to any such shareholder, he may appeal to the Comptroller 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 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 shareholder, from said bank; and the shares
so surrendered and appraised shall, after due notice, be sold at public
sale, within 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 entitled
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.



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

OHAPTEE SEVEN.
LIQUIDATION AND RECEIVERSHIP.
136. Two-thirds vote required for liquidation.
137. Notice of voluntary liquidation.
138. Deposit of lawful money.
139. No deposit required for consolidation.
140. Bonds of liquidating banks.
141. Banks whose existence has expired.
142. Protest of bank circulation.
143. Bonds forfeited if circulation is dishonored.
144. Bank may enjoin further proceedings.
145. Where proceedings must be brought.
146. Suspension of business after default.
147. Notice to present circulation for redemption.
148. Bonds sold at public auction.
149. First lien for redeeming circulation.

150.
151.
152.
153.
154.
155.
156.
157.
158.
159.
160.
161.
162.
163.

Bonds sold at private sale.
Appointment and duties of receiver.
When receiver may be appointed.
Notice to creditors of insolvent
banks.
Distribution of assets of insolvent
banks.
Expenses of receivership—how paid.
Forfeiture of charter.
Individual liability of directors.
Receiver may purchase property to
protect his trust.
Taxes on insolvent national banks
remitted.
Appointment and qualification of
shareholders' agent.
Duties of shareholders' agent.
Illegal preference of creditors.
Creditor's bill against shareholders.

136. TWO-THIRDS VOTE REQUIRED FOR LIQUIDATION. (SEC. 5220.)
Any association may go into liquidation and be closed by the vote of
its shareholders owning two-thirds of its stock.
137. NOTICE OF VOLUNTARY LIQUIDATION. (SEC. 5221.) Whenever a vote is taken to go into liquidation it shall be the duty of the
board of directors to cause notice of this fact to be certified, under the
seal of the association, by its president or cashier, to the Comptroller
of the Currency, and the publication thereof to be made for a period of
two months in a newspaper published 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.
138. DEPOSIT OF LAWFUL MONEY. (SEC. 5222.) Within six months
from the date of the vote to go into liquidation the association shall
deposit with the Treasurer of the United States lawful money of the
United States sufficient to redeem all its outstanding circulation.
The Treasurer shall execute duplicate receipts for money thus deposited,
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.
139. No DEPOSIT REQUIRED FOR CONSOLIDATION. (SEC. 5223.) An
association which is in good faith 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 assets
and liabilities shall be reported by the association with which it is in
process of consolidation.
140. BONDS OF LIQUIDATING BANKS. (SEC. 5224.) W n e n e v e r a s . u £
ficient deposit of lawful money to redeem the outstanding circulation
of an association proposing to close its business has been made, the
bonds deposited by the association to secure payment of its notes shall
be reassigned to it, in the manner prescribed by section fifty-one hun


REPORT OF THE COMPTROLLER OF THE CURRENCY.

33

dred and sixty-two. And thereafter the association and its shareholders shall stand discharged from all liabilities npon the circulating notes,
and those notes shall be redeemed 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 representatives.
141. BANKS WHOSE EXISTENCE HAS EXPIRED.—Sec. 7 of the

act

of July 12, 1882, provides that national banking associations whose
corporate existence has expired or shall hereafter expire, 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 twentyone and fifty-two hundred and twenty-two of the Eevised Statutes
in the same manner as if the shareholders had voted to go into liquidation, as provided in section fifty-two hundred and twenty of the
Eevised 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 associations is hereby
extended for the sole purpose of liquidating their affairs until such
affairs are finally closed.
142. PROTEST OF BANK CIRCULATION. (SEC. 5226.) Whenever any
national banking association fails to redeem in the lawful money of the
United States any of its circulating notes, upon demand of payment
duly made during the usual hours of business, at the office of such
association, 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 offers to waive demand
and notice of the protest, and, in pursuance of such offer, makes, signs,
and delivers to the party making 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 making 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 thereof. 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 jurisdiction, 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.
143. BONDS FORFEITED IF CIRCULATION IS DISHONORED. (SEC.

5227.) On receiving notice that any national banking association has
failed to redeem any of its circulating 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 ascertain 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 ascertained.
If from such protest, and the report so made, the Comptroller is satisfied
that such association has refused 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 association forfeited to the
United States, and they shall thereupon be so forfeited.

CUR 99
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REPORT OF THE COMPTROLLER OP THE CURRENCY.

144. BANK MAY ENJOIN FURTHER PROCEEDINGS. (SEC. 5237.)
Whenever an association against which proceedings have been instituted, on account of any alleged 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 such court, after citing
the Comptroller of the Currency to show cause why further proceedings should not be enjoined, and after the decision of the court or finding of the jury that such association has not refused to redeem its
circulating notes, when legally presented, in the lawful money of the
United States, shall make an order enjoining the Comptroller, and any
receiver acting under his direction, from all further proceedings on
account of such alleged refusal.
145. W H E R E PROCEEDINGS MUST BE BROUGHT. (SEC. 736.)

All

proceedings by any national banking association to enjoin the Comptroller of the Currency, under the provisions of any law relating to
national banking associations, shall be had in the district where such
association is located.
146. SUSPENSION OF BUSINESS AFTER DEFAULT. (SEC. 5228.) After
a default on the part of an association to pay any of its circulating notes
has been ascertained by the Comptroller, and notice thereof has been
given by him to the association, it shall 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.
147. NOTICE TO PRESENT CIRCULATION FOR BEDEMPTION. (SEC.

5229.) Immediately upon declaring the bonds of an association forfeited for nonpayment of its notes, the Comptroller shall give notice,
in such manner as the Secretary of the Treasury shall, by general rules
or otherwise 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 presented 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.
148. BONDS SOLD AT PUBLIC AUCTION. (SEC. 5230.) Whenever
the Comptroller has become satisfied, by the protest or the waiver and
admission 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.
149. FIRST LIEN FOR REDEEMING CIRCULATION. (SEC. 5230.) 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 association, 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.
150. BONDS SOLD AT PRIVATE SALE. (SEC. 5231.) The Comptroller
Digitized formay, if he deems it for the interest of the United States, sell at private
FRASER


REPORT OF THE COMPTROLLER OF THE CURRENCY.

35

sale any of the 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 prescribed by sectionsfifty-onehundred and sixtytwo, fifty-one hundred and sixty-three, andfifty-onehundred and sixtyfour.
151. APPOINTMENT AND DUTIES OF EECEIVER. (SEC. 5234.) On
becoming satisfied, as specified in sections fifty-two hundred and
twenty-six andfifty-twohundred and twenty-seven, that any association
has refused to pay its circulating notes as therein mentioned, and is in
default, the Comptroller of the Currency 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 possession of the books, records, and assets of every description 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 necessary 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 proceedings.
152. WHEN EECEIVER MAY BE APPOINTED.—Sec. 1 of the act of

June 30,1876, provides that whenever any national banking association
shall be dissolved, and its rights, privileges, and franchises declared
forfeited, as prescribed in section fifty two hundred and thirty-nine of
the Eevised Statutes of the United States, or whenever any creditor of
any national banking association shall have obtained a judgment against
it in any court of record, and made application, 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 days, or whenever the Comptroller shall become satisfied of the insolvency of the
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-two hundred and thirty-four of said statutes.
A receiver may also be appointed, under the provisions of section fiftytwo hundred and thirty-four of the Eevised 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
thirty days. (Sec. 5141, E. S.)
For failure to make good the lawful-money reserve within thirty days
after notice. (Sec. 5191, E. S.)
Where a bank purchases or acquires its own stock, other than 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, E. S.)
Where an association fails to make good any impairment in its capital
stock and refuses to go into liquidation within three months after receiving notice. (Sec. 5205, E. S.)
The act of any officer, clerk, or agent of any association in violation
of the provisions relating to the false certification of checks shall sub
ject such bank to the appointment of a receiver. (Sec. 5208, E. S.)


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REPORT OF THE COMPTROLLER OF THE CURRENCY.

153. NOTICE TO CREDITORS OF INSOLVENT BANKS. (SEC. 5235.) The
Comptroller shall, upon appointing a receiver, cause notice to be given,
by advertisement in such newspapers as he may direct, for three consecutive months, calling on all persons who may have claims against
such association to present the same and to make legal proof thereof.
154. DISTRIBUTION OF ASSETS OF INSOLVENT BANKS. (SEC. 5236.)
From time to time, after full provision 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 adjudicated 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, shail
be paid over to the shareholders of such association, or their legal representatives, in proportion to the stock by them respectively held.
155. EXPENSES OF RECEIVERSHIP—How PAID. (SEC. 5238.) All fees
for protesting the notes issued by any national banking association
shall be paid by the person procuring the protest to be made, and such
association shall be liable therefor; but no part of the bonds deposited
by such association shall be applied to the payment 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 association
before distribution of the proceeds thereof.
156. FORFEITURE OF CHARTER. (SEC. 5239.) If the directors of
any national banking association shall knowingly violate, or knowingly
permit any of the officers, agents, or servants of the association 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, however, be determined and adjudged by a proper circuit, district, or Territorial court of the United States, in a suit brought for
that purpose by the Comptroller of the Currency, in his own name,
before the association shall be declared dissolved.
157. INDIVIDUAL LIABILITY OF DIRECTORS. (SEC. 5239.) 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.
158. RECEIVER MAY PURCHASE PROPERTY TO PROTECT H I S

TRUST.—The act of March 29,1886, provides: (SEC. 1.) That whenever
the receiver of any national 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 authority to use and employ
so much of the money of said trust as may be necessary to purchase
such property at such sale.
SEC. 2. That such request, if approved by the Comptioiler of the
Currency, shall be, together with the certificate of facts in the case and



REPORT OF THE COMPTROLLER OF THE CURRENCY.

37

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 Currency allowed, and notice
thereof, with copies of the request, certificate of facts, and indorsement of approvals, shall be filed with the Treasurer of the United
States.
SEC. 3. That whenever any such request shall be allowed as hereinbefore provided, the said Comptroller of the Currency shall be, and is,
empowered to draw upon and from such funds of any such trust as
• may be deposited 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 x>ayments 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 purpose only and in such manner as he may determine and order.
159. TAXES ON INSOLVENT NATIONAL BANKS EEMITTED.—The act

of March 1,1879, provides that whenever and after any bank has ceased
to do business by reason of insolvency or bankruptcy 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 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; and the Commissioner of Internal Bevenue, 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.
160. APPOINTMENT

AND

QUALIFICATION

OF SHAREHOLDERS'

AGENT.—Sec. 3 of the act of June 30,1876, as amended by acts of August 3,1892, and March 2,1897, provides that whenever any association
shall have been or shall be placed in the hands of a receiver, as provided
in section fifty-two hundred and thirty-four and other sections of the
Eevised Statutes of the United States, and when, as provided in section
fifty-two hundred and thirty six thereof, the Comptroller of the Currency
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 depositing lawful money 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 in 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 meeeting the shareholders shall determine
whether the receiver shall be continued and shall wind up the affairs of
such association, or whether an agent shall be elected for that purpose,
and in so determining 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 suid receiver shall be continued, the said receiver shall



38

KEPORT OF THE COMPTROLLER OF THE CURRENCY.

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 ballot,
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 and number shall be declared the agent for
the purposes hereinafter provided; and whenever any of the shareholders 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 the 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 assets 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 empowered and directed to execute any deed,
assignment, transfer, or other instrument in writing that may be necessary 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 discharged from any and all liabilities to such
association and to each and all the creditors and shareholders thereof.
161. DUTIES OF SHAREHOLDERS7 AGENT.—Sec. 3 of the act of June
30,1876, as amended by acts of August 3, 1892, and March 2,1897, provides: 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,
compromise, 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 conclusion of his trust render to such district or circuit
court a full account of all his proceedings, receipts, and expenditures 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 village where the business of the said association was carried 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 published 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 representing at least a majority of the stock in value and number of shares, and
shall have executed a bond to the shareholders conditioned for the faithful performance of his duties, in the penalty fixed by the shareholders



REPORT OF THE COMPTROLLER OF THE CURRENCY.

39

at said meeting, with two sureties, to be approved 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 hereinbefore provided administrators or executors of deceased 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 subsequently received shall be distributed as follows:
u
First. To pay the expenses of the execution of the trust to the date
of usuch 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 assessments 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.??
162. ILLEGAL PREFERENCE OF CREDITORS. (SEC. 5242.) All transfers of the notes, bonds, bills of exchange, or other evidences of debt
owing to any 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 utterly null and
void. No attachment, injunction, or execution shall be issued against
such association or its property before final judgment in any suit,
action, or proceeding in any State, county, or municipal court.
163. CREDITOR'S BILL AGAINST SHAREHOLDERS.—Sec. 2 of the

act

of June 30, 1876, provides that when any national banking association
shall have gone into liquidation under the provisions of section five
thousand two hundred and twenty 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 bill, brought by
such creditor on behalf of himself and of all other creditors of the
association, against the shareholders 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.




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REPORT OF THE COMPTROLLER OF THE CURRENCY.

CHAPTER EIGHT.
CRIMES, JURISDICTION, ETC.
164. Penalty for improper countersigning
or delivering circulation.
165. Penalty for pledging United States
notes or bank circulation.
166. Penalty for imitating bank circulation for advertising purposes.
167. Penalty for mutilating circulation.
168. Penalty for counterfeiting circulation.
169. What are obligations of the United
States.
170. Penalty for illegal possession or use
of material for circulation.
171. Penalty for passing counterfeit circulation.
172. Penalty for taking unauthorized
impressions of tools.
173. Penalty for having such impressions.
174. Penalty for dealing in counterfeit
circulation.

175. Penalty for issuing circulation of
expired associations.
176. False certification of checks.
177. Penalty for false certification of
checks.
178. Penalty for official malfeasance.
179. Jurisdiction of circuit courts to enjoin Comptroller.
180. General jurisdiction of nationalbank cases.
181. Sealed certificates of Comptroller
are competent evidence.
182. Certified copy of organization certificate as evidence.
183. Suits against United States officers
or agents.
184. Indian Territory.

164. PENALTY FOR IMPROPER COUNTERSIGNING OR DELIVERING
CIRCULATION. (SEC. 5187.) No officer acting under the provisions of

this Title shall countersign or deliver to any association, or to any other
company or person, any circulating 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.
165. PENALTY FOR PLEDGING UNITED STATES NOTES OR BANK
CIRCULATION. (SEC. 5207.) No association shall hereafter offer or receive

United States notes or national-bank notes as 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 officers 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 benefit
of the party bringing such suit. Sec. 12 of the act of July 12, 1882,
provides that the provisions of this section shall apply to the United
States certificates of gold and silver coin.
166. PENALTY FOR IMITATING BANK CIRCULATION FOR ADVERTISING PURPOSES. (SEC. 5188.) It shall not be lawful to design,

engrave, print, or in any manner make or execute, or to utter, issue,
distribute, circulate, or use any business or professional card, notice,
placard, circular, handbill, or advertisement in the likeness or similitude of any circulating 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 this Title, or 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 whatever.
Every person who violates this section shall be liable to a penalty of
Digitized forone hundred dollars, recoverable one-half to the use of the informer.
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41

167. PENALTY FOR MUTILATING CIRCULATION. (SEC. 5189.) Every
person who mutilates, cuts, defaces, disfigures, or perforates with holes,
or unites or cements together, or does any other thing to any bank bill,
draft, note, or other evidence of debt, issued by any national banking
association, or who causes or procures the same to be done, with intent
to render such bank bill, draft, note, or other evidence of debt unfit to
be reissued by said association, shall be liable to a penalty of fifty dollars, recoverable by the association.
168. PENALTY FOR COUNTERFEITING CIRCULATION. (SEC. 5415.)
Every person who falsely makes, forges, or counterfeits, or causes or procures to be made, forged, or counterfeited, or willingly aids or assists in
falsely making, forging, or counterfeiting, any note in imitation of, or purporting to be in imitation of, the circulating notes issued by any banking
association now or hereafter authorized and acting under the laws of the
United States; or who passes, utters, or publishes, or attempts to pass,
utter, or publish, any false, forged, or counterfeited note purporting to
beissued by any such association doing a banking business, knowing the
same to be falsely made, forged, or counterfeited, or who falsely alters,
or causes or procures to be falsely altered, or willingly aids or assists in
falsely altering any such circulating notes, or passes, utters, or publishes, or attempts to pass, utter, or publish as true, any falsely altered
or spurious circulating note issue, or purporting to have been issued, by
any such banking association, knowing the same to be falsely altered or
spurious, shall be imprisoned at hard labor not less than five years nor
more than fifteen years, and fined not more than one thousand dollars.
169. WHAT

ARE OBLIGATIONS OF THE

UNITED STATES. (SEC.

5413.) The words "obligation or other security of the United States"
shall be held to mean all bonds, certificates of indebtedness, nationalbank currency, coupons, United States notes, Treasury notes, fractional
notes, certificates of deposit, bills, checks, or drafts for money drawn
by or 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.
170. PENALTY FOR ILLEGAL POSSESSION OR USE OF MATERIAL
FOR CIRCULATION. (SEC. 5430.) Every person having control, cus-

tody, or possession of any plate, or any part thereof, from which has
been printed, or which may be prepared by direction of the Secretary
of the Treasury for the purpose of printing, any obligation or other
security of the United States, who uses such plate, or knowingly
suffers the same to be used for the purpose of printing any such or
similar obligation, 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; and every person who engraves, or causes or procures
to be engraved, or assists in engraving, any plate in the likeness of
any plate designed for the printing of such obligation or other security,
or who sells any such plate, or who brings into the United States from
any foreign place any such plate, except under the direction of the Secretary of the Treasury or other proper officer, or with any other intent,
in either case, than that such plate be used for the printing of the obligations or other securities of the United States; or who has in his
control, custody, or possession any metallic plate engraved after the
similitude of any plate from which any such obligation or other security
has been printed, with intent to use such plate, or suffer the same to be
used in forging or counterfeiting any such obligation or other security,
or any part thereof; or who has in his possession or custody, except
under authority from the Secretary of the Treasury or other proper
officer, any obligation or other security, engraved and printed after




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REPORT OF THE COMPTROLLER OF THE CURRENCY.

the similitude of any obligation or other security issued under the
authority of the United States, with intent to sell or otherwise use the
same 5 and every person who prints, photographs, or in any other manner makes or executes, or causes to be printed, photographed, made, or
executed, or aids in printing, photographing, making, or executing any
engraving, photograph, print, or impression in the likeness of any such
obligation or other security, or any part thereof, or who sells any such
engraving, photograph, print, or impression, except to the United
States, or who brings into the United States from any foreign place
any such engraving, photograph, print, or impression, except by direction of some proper officer of the United States, or who has or retains
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 punished by a fine of not more than Hye thousand dollars,
or by imprisonment at hard labor not more than fifteen years, or by both.
171. PENALTY FOR PASSING COUNTERFEIT CIRCULATION. (SEC.

5431.) Every person who, with intent to defraud, passes, utters, publishes, or sells, or attempts to pass, utter, publish, or sel], or brings into
the United States with intent to pass, publish, utter, or sell, or keeps
in possession or conceals, with like intent, any falsely made, forged,
counterfeited, or altered obligation, or other security of the United
States, shall be punished by a fine of not more than five thousand dollars and by imprisonment at hard labor not more than fifteen years.
172. PENALTY FOR TAKING UNAUTHORIZED IMPRESSION OF TOOLS.

(SEC. 5432.) Every person who, without authority from the United
States, takes, procures, or makes, upon lead, foil, wax, plaster, paper,
or any other substance or material, an impression, stamp, or imprint of,
from, or by the 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 impressing, or in making other
tools, implements, instruments, or things, to be used, or fitted or
intended to be used, in printing, 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 banking association under the
laws thereof, shall be punished by imprisonment at hard labor not more
than ten years, or by a fine of not more thanfivethousand dollars, or both.
173. PENALTY FOR HAVING SUCH IMPRESSIONS. (SEC. 54331) Every
person who, with intent to defraud, has in his possession, keeping,
custody, or control, without authority from the United States, any
imprint, stamp, or impression, taken or made upon any substance or
material whatsoever, of any tool, implement, instrument, or thing used,
or fitted, or intended to be used for any of the purposes mentioned in
the preceding section; or who, with intent to defraud, sells, gives, or
delivers any such imprint, stamp, or impression to any other person,
shall be punished by imprisonment at hard labor not more than ten
years, or by a fine of not more than five thousand dollars.
174. PENALTY FOR DEALING IN COUNTERFEIT CIRCULATION. (SEC.

5434.) Every person who buys, sells, exchanges, transfers, receives, or
delivers any false, forged, counterfeited, or altered obligation or other
security of the United States, or circulating note of any banking association organized or acting under the laws thereof, which has been or
may hereafter be issued by virtue of any act of Congress, with the intent
that the
 same be passed, published, or used as true and genuine, shall


BEPOBT OP THE COMPTROLLER OF THE CURRENCY.

43

be imprisoned at hard labor not more than ten, years, or fined not more
than live thousand dollars, or both.
175. PENALTY FOR ISSUING CIRCULATION OF EXPIRED ASSOCIATIONS. (SEC. 5437.) In all cases where the charter of any corporation

which has been or may be created by act of Congress has expired or
may hereafter expire, if any 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 of paying or redeeming its notes and obligations,
knowingly issues, reissues, or utters as money, or in any other way knowingly puts 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 knowingly aids in
any such act, he shall be punished by a line of not more than ten
thousand dollars, or by imprisonment not less than one year nor more
than five years, or by both such fine and imprisonment. 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, wTho 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 and otherwise circulate the same.
3 76. FALSE CERTIFICATION OF CHECKS. (SEC. 5208.) It shall be
unlawful for any officer, clerk, or agent of any national banking association to certify any check drawn upon the association unless the person
or company drawing the check has on deposit with the association, 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 the
association; but the act of any officer, clerk, or agent of any association, in violation of this section, shall subject such bank to the liabilities and proceedings on the part of the Comptroller as provided for in
section fifty-two hundred and thirty-four.
177. PENALTY FOR FALSE CERTIFICATION OF CHECKS.—Sec. 13

of the act of July 12, 1882, provides that any officer, clerk, or agent of
any national banking association who shall willfully violate the provisions of section fifty-two hundred and eight of theKevised Statutes of
the United States, or who shall resort to any device, or receive any fictitious obligation, direct or collateral, in order to evade the provisions
thereof, or who shall certify checks before the amount thereof shall have
been regularly entered to the credit of the dealer upon the books of the
banking association, shall be deemed guilty of a misdemeanor and
shall, on conviction thereof in any circuit or district court of the United
States, be fined not more than five thousand dollars, or shall be imprisoned not more than fiYe years, or both, in the discretion of the court.
178. PENALTY FOR OFFICIAL MALFEASANCE. (SEC. 5209.) Every
president, director, cashier, teller, clerk, or agent of any association who
embezzles, abstracts, or willfully misapplies any of the moneys, funds, or
credits of the association, or who, without authority from the directors,
issues or puts in circulation any of the notes of the association; or who,
without such authority, issues or puts forth any certificate 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 the
association, with intent, in either case, to injure or defraud the associa-




44

REPORT OF THE COMPTROLLER OF THE CURRENCY.

tion or any other company, body politic or corporate, or any individual
person, or to deceive any officer of the association or any agent
appointed to examine the affairs of any such association; and every
person who with like intent aids or abets any officer, clerk, or agent in
any violation of this section, shall be deemed guilty of a misdemeanor,
and shall be imprisoned not less than five years nor more than ten.
179. JURISDICTION OF CIRCUIT COURTS TO ENJOIN COMPTROL-

LER. (SEC. 629.) The circuit courts shall have original jurisdiction of
all suits brought by any banking association established in the district for which the court is held, under the provisions of Title u THE
NATIONAL BANKS," to enjoin the Comptroller of the Currency, or any
receiver acting under his direction, as provided by said Title.
180. GENERAL JURISDICTION OF NATIONAL-BANK CASES.—Sec.

4 of the act of July 12, 1882, provides that the jurisdiction for suits
hereafter brought by or against any association established under any
law providing for national 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
and parts of laws of the United States inconsistent with this proviso
be, and the same are hereby, repealed. Sec. 4 of the act of March 3,
1887, provides that all national banking associations established under
the laws of the United States shall, for the purposes of all actions by
or against them, real, personal, 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 provisions 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.
181. SEALED CERTIFICATES OF COMPTROLLER ARE COMPETENT
EVIDENCE. (SEC. 884.) Every certificate, assignment, and conveyance

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
authenticated 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.
182. CERTIFIED COPY OF ORGANIZATION CERTIFICATE AS EVIDENCE. (SEC. 885.) Copies of the organization certificate of any national

banking association, duly certified by the Comptroller of theCurrency
and authenticated by his seal of office, shall be evidence in all courts
and places within the jurisdiction of the United States of the existence
of the association and of every matter which could be proved by the
production of the original certificate.
183. SUITS AGAINST UNITED STATES OFFICERS OR AGENTS. (SEC.

380.) All suits and proceedings arising out of the provisions of law
governing national banking associations, in which the United States or
any of its officers or agents shall be parties, shall be conducted by the
district attorneys of the several districts under the direction and supervision of the Solicitor of the Treasury.
184. INDIAN TERRITORY.—Sec. 31 of the Act of May 2,1890, provides
that all laws relating to national banking associations shall have the same
Digitized forforce and effect in Indian Territory as elsewhere in the United States.
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REPORT OF THE COMPTROLLER OF THE CURRENCY.

45

OHAPTEE NINE.
TRUST COMPANIES, ETC., DISTRICT OF COLUMBIA.
185. Proviso n for organization.
186. Organiza "on certificate of company.
187. Charter OL ained from District Commissioners.
188. Notice of intention to apply for
charter.
189. Charter filed with recorder of
deeds for the District.
190. Trust companies under Comptroller's
supervision.
191. Powers of these companies.
192. Competent to act as trustee, etc.
193. Qualifications of such trustee, etc.
194. Security for faithful performance of
trust.
195. Privileges extended to existing corporations.
196. Real estate.
197. Period of corporation's existence.
198. Provisions relating to capital stock.
199. Enforcement of subscriptions to
stock.
200. Annual report to Comptroller.
201. Tax on gross earnings.
202. Liability for failure to report.

203.
204.
205.
206.
207.
208.
209.
210.
211.
212.
213.
214.
215.
216.
217.
218.
219.

Perjury and larceny.
Transfer of stock.
Liability of stockholders.
Money payment of capital stock
required.
Number and election of directors.
Appointment of officers.
By-laws.
Directors liable for payment of unearned dividends.
Directors' liability may be avoided.
Responsibility of directors for excess
liabilities.
Trustee, etc., not liable on stock
assessment.
Increase of capital.
Certified copy of incorporation certificate competent evidence.
No bond or other security required
of trust companies.
District supreme court has jurisdiction of trust companies.
All similar District corporations
subject to this act.
Provisions for amendment.

185. PROVISION FOR ORGANIZATION.—The act of October 1,1890,
sec. 1, provides that corporations may be formed within the District of
Columbia for the purposes hereinafter mentioned in the following manner: Any time hereafter any number of natural persons, citizens of
the United States, not less than twenty-five, may associate themselves
together to form a company for the purpose of carrying on in the District of Columbia any one of the three classes of business herein specified, to wit:
First. A safe deposit, trust, loan, and mortgage business.
Second. A title insurance, loan, and mortgage business.
Third. A security, guaranty, indemnity, loan, and mortgage business : Provided, That the capital stock of any of said companies shall
not be less than one million of dollars: Provided further, That any of
said companies may also do a storage business when their capital stock
amounts to the sum of not less than one million two hundred thousand
dollars.
186. ORGANIZATION CERTIFICATE OF COMPANY. (SEC. 2.) That
such persons shall, under their hands and seals, execute, before some
officer in said District competent to take the acknowledgment of deeds,
an organization certificate, which shall specifically state—
First. Title.—The name of the corporation.
Second. Purposes.—The purposes for which it is formed.
Third. Period of existence.—The term for which it is to exist, which
shall not exceed the term of fifty years, and be subject to alteration,
amendment, or repeal by Congress at any time.
Fourth. Officers.—The number of its directors, and the names and
residences of the officers who for the first year are to manage the affairs
of the company.
Fifth. Capital stock.—The amount of the capital stock and its subdivision into shares,



46

REPORT OF THE COMPTROLLER OF THE CURRENCY.

187. CHARTER OBTAINED FROM DISTRICT COMMISSIONERS. (SEC.

3.) That this certificate shall be presented to the Commissioners of the
District, who shall have power and discretion to grant or to refuse to
said persons a charter of incorporation upon the terms set forth in the
said certificate and the provisions of this act.
188. NOTICE OF INTENTION TO APPLY FOR CHARTER. (SEC.

4.)

That previous to the presentation of the said certificate to the said Com
missioners notice of the intention to apply for such charter shall be
inserted in two newspapers of general circulation printed in the District
of Columbia at least four times a week for three weeks, setting forth
briefly the name of the proposed company, its character and object, the
names of the proposed corporators, and the intention to make application for a charter on a specified day, and the proof of such publication
shall be presented with said certificate when presentation thereof is
made to said Commissioners.
189. CHARTER FILED WITH EECORDER OF DEEDS FOR THE DISTRICT. (SEC. 5.) That if the charter be granted as aforesaid it, together

with the certificate of the Commissioners granting the same indorsed
thereon, shall be filed for record in the office of the recorder of deeds
for the District of Columbia, and shall be recorded by him. On the
filing of the said certificate with the said recorder of deeds as herein
provided, approved as aforesaid by the said Commissioners, the persons named therein and their successors shall thereupon and thereby be
and become a body corporate and politic, and as such shall be vested
with all the powers and charged with all the liabilities conferred upon
and imposed by this act upon companies organized under the provisions
hereof: Provided^ however, That no corporation created and organized
under the provisions hereof, or availing itself of the provisions hereof
as provided in section eleven, shall be authorized to transact the business
of a trust company, or any business of a fiduciary character, until it
shall have filed with the Comptroller of the Currency a copy of its certificate of organization and charter and shall have obtained from him
and filed the same for record with the said recorder of deeds a certificate
that the capital stock of said company has been paid in and the deposit
of securities made with said Comptroller in the manner and to the extent
required by this act.
190.

TRUST COMPANIES UNDER COMPTROLLER'S

SUPERVISION.

(SEC. 6.) That all companies organized hereunder, or which shall under
the provisions hereof become entitled to transact the business of a trust
company, shall report to the Comptroller of the Currency in the manner
prescribed by sections fifty-two hundred and eleven, fifty-two hundred
and twelve, and fifty-two hundred and thirteen, Eevised Statutes of the
United States, in the case of national banks, and all acts amendatory
thereof or supplementary thereto, and with similar provisions for compensating examiners, and shall be subject to like penalties for failure
to do so. Th@ Comptroller shall have and exercise the same visitorial
powers over the affairs of the said corporation as is conferred ux>on him
by section fifty-two hundred and forty of the Eevised Statutes of the
United States in the case of national banks. He shall also have power,
when in his opinion it is necessary, to take possession of any such company for the reasons and in the manner and to the same extent as are provided in the laws of the United States with respect to national banks.
191. POWERS OF THESE COMPANIES. (SEC. 7.) That all companies
organized under this act are hereby declared to be corporations possessed of the powers and functions of corporations generally, and shall
have power—



REPORT OF THE COMPTROLLER OF THE CURRENCY.

47

First. Contracts.—To make contracts.
Second. Suits.—To sue and be sued, iinplead and be impleaded, in
any court as fully as natural persons.
Third. Seal.—To make and use a common seal and alter the same at
pleasure.
Fourth. Loans.—To loan money.
Fifth. Special powers.—When organized under subdivision one of the
first section of this act to accept and execute trusts of any and every
description which may be committed or transferred to them, and to
accept the office and perform the duties of a receiver, assignee, executor, administrator, guardian of the estates of minors, with the consent
of the guardian of the person of such minor, and committee of the
estates of lunatics and idiots whenever any trusteeship or any such
office or appointment is committed or transferred to them, with their
consent, by any person, body politic or corporate, or by any court in the
District of Columbia, and all such companies organized under the first
subdivision of section one of this act are further authorized to accept
deposits of money for the purposes designated herein upon such terms
as may be agreed upon from time to time with depositors, and to act as
agent for the purpose of issuing or countersigning the bonds or obligations of any corporation, association, municipality, or State, or other
public authority, and to receive and manage any sinking fund on any
such terms as may be agreed upon, and shall have power to issue its
debenture bonds upon deeds of trust or mortgages of real estate to a
sum not exceeding the face value of said deeds of trust or mortgages,
and which shall not exceed fifty per centum of the fair cash value of
the real estate covered by said deeds or mortgages, to be ascertained
by the Comptroller of the Currency. But no debenture bonds shall be
issued until the securities on which the same are based have been
placed in the actual possession of the trustee named in the debenture
bonds, who shall hold said securities until all of said bonds are paid;
and when organized under the second subdivision of the first section
of this act said company is authorized to insure titles to real estate and
to transact generally the business mentioned in said subdivision; and
when organized under the third subdivision of section one of this act
said company is hereby authorized, in addition to the loan and mortgage business therein mentioned, to secure, guaranty, and insure individuals, bodies politic, associations, and corporations against loss by or
through trustees, agents, servants, or employees, and to guaranty the
faithful performance of contracts and of obligations of whatever kind
entered into by or on the part of any person or persons, association,
corporation or corporations, and against loss of every kind: Provided,
That any corporation formed under the provisions of this act when
acting as trustee shall be liable to account for the amounts actually
earned by the moneys held by it in trust in addition to the principal so
held; but such corporation may be allowed a reasonable compensation
for services performed in the care of the trust estate.
192. COMPETENT TO ACT AS TRUSTEE, ETC. (SEC. 8.) That in all
cases in which application shall be made to any court in the District of
Columbia, or wherever it becomes necessary or proper for said court to
appoint a trustee, receiver, administrator, guardian of the estate of a
minor, or committee of the estate of a lunatic, it shall and may be
lawful for said court (but without prejudice to any preference in the
order of any such appointments required by existing law) to appoint
any such company organized under the first subdivision of section
one of this act, with its assent, such trustee, receiver, administrator.



48

REPORT OF THE COMPTROLLER OF THE CURRENCY.

committee, or guardian, with the consent of the guardian of the person
of such minor: Provided, Jwwever, That no court or judge who is an
owner of or in any manner financially interested in the stock or business of such corporation shall commit by order or decree to any such
corporation any trust or fiduciary duty.
193. QUALIFICATIONS OF SUCH TRUSTEE, ETC. (SEC. 9.) That
whenever any corporation operating under this act shall be appointed
such trustee, executor, administrator, receiver, assignee, guardian, or
committee as aforesaid, the president, vice-president, secretary, or treasurer of said company shall take the oath or affirmation now required by
law to be made by any trustee, executor, receiver, assignee, guardian,
or committee.
194. SECURITY FOR FAITHFUL PERFORMANCE OF TRUST. (SEC. 10.)

That when any court shall appoint the said company a trustee, receiver,
administrator, or such guardian, or committee, or shall order the deposit
of money or other valuables with said company, or where any individual
or corporation shall appoint any of said companies a trustee, executor,
assignee, or such guardian, the capital stock of said company subscribed
for or taken, and all property owned by said company, together with
the liability of the stockholders and officers as herein provided, shall
be taken and considered as the security required by law for the faithful performance of its duties, and shall be absolutely liable in case of
any default whatever.
195. PRIVILEGES EXTENDED TO EXISTING CORPORATIONS. (SEC.

11.) That any safe deposit company, trust company, surety or guaranty
company, or title-insurance company now incorporated and operating
under the laws of the United States or of the District of Columbia, or
any of the States, and now doing business in said District, may avail
itself of the provisions of this act on filing in the office of the recorder
of deeds of the District of Columbia, or with the Comptroller of the
Currency, a certificate of its intention to do so, which certificate shall
specify which one of the three classes of business set out in section one
it will carry on, and shall be verified by the oath of its president to the
effect that it has in every respect complied with the requirements of
existing law, especially with the provisions of this act; that its capital
stock is paid in as provided in section twenty-one of this act and is not
impaired, and thereafter such company may exercise all powers and
perform all duties authorized by any one of the subdivisions of section
one of this act in addition to the powers now lawfully exercised by such
company.
196. REAL ESTATE. (SEC. 12.) That any company operating under
this act may lease, purchase, hold, and convey real estate, not exceeding
in value five hundred thousand dollars, and such in addition as it may
acquire in satisfaction of debts due the corporation, under sales,
decrees, judgments, and mortgages. But no such association shall
hold the possession of any real estate under foreclosure of 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.
197. PERIOD OF CORPORATIONS' EXISTENCE. (SEC. 13.) That the
charters for incorporations named in this act may be made perpetual,
or may be limited in time by their provisions, subject to the approval of
Congress.
198. PROVISIONS EELATING TO CAPITAL STOCK. (SEC. 14.) That
the capital stock of every such company shall be at least one million
dollars, and at least fifty per centum thereof must have been paid in,
in cash or by the transfer of assets as hereinafter provided in section



REPORT OF THE COMPTROLLER OF THE CURRENCY.

49

twenty-one of this act, before any such company shall be entitled to
transact business as a corporation, except with its own members, and
before any company organized hereunder shall be entitled to transact
the business of a trust company, or to become and act as an administrator, executor, guardian of the estate of a minor, or undertake any
other kindred fiduciary duty, it shall deposit, either in money or in
bonds, mortgages, deed of trust, or other securities equal in actual
value to one-fourth of the capital stock paid in, with the Comptroller
of the Currency, to be kept by him upon the trust and for the purposes
hereinafter provided; and the vsaid Comptroller may from time to time
require an additional deposit from any such company, to be held upon
and for the same trust and purposes, not exceeding, however, in value
one-half the paid-in capital stock; and the said Comptroller shall not
issue to any corporation the certificate heretofore provided for until
said deposit with him of securities required by this section. Within
one year after the organization of any corporation under the provisions
of this act, or after any corporation heretofore existing shall have
availed itself of the powers and rights given by this act in the manner
herein provided for, its entire capital stock shall have been paid in.
199.

ENFORCEMENT

OF SUBSCRIPTIONS

TO STOCK. (SEC.

15.)

That the capital stock of every such company shall be divided into
shares of one hundred dollars each. It shall be lawful for such company to call for and demand from the stockholders, respectively, all
sums of money by them subscribed, at such time and in such proportions as its board of directors shall deem proper, within the time specified in section fourteen, and it may enforce payment by all remedies
provided by law; and if any stockholder shall refuse or neglect to pay
any installment as required by a resolution of the board of directors,
after thirty days' notice of the same, the said board of directors may
sell at public auction, to the highest bidder, so many shares of said
stock as shall pay said installment, under such general regulations as
may be adopted in the by-laws of said company, and the highest bidder
shall be taken to be the person who offers to purchase the least number
of shares for the assessment due.
200. ANNUAL EEPORT TO COMPTROLLER. (SEC. 16.) That every
such company shall annually, within twenty days after the first of
January of each year, make a report to the Comptroller of the Currency, which shall be published in a newspaper in the District, which
shall state the amount of capital and of the proportion actually paid,
the amount of debts, and the gross earnings for the year ending December thirty-first then next previous, together with their expenses, which
report shall be signed by the president and a majority of the directors
or trustees, and shall be verified by the oath of the president, secretary,
and at least three of the directors or trustees.
201. TAX ON GROSS EARNINGS. (SEC. 10). And said company shall
pay to the District of Columbia, in lieu of personal taxes for each next
ensuing year, one and a half per centum of its gross earnings for the
preceding year, shown by said verified statement, which amount shall
be payable to the collector of taxes at the times and in the manner that
other taxes are payable.
202. LIABILITY FOR FAILURE TO REPORT. (SEC. 17.) That if any
company iails to comply with the provisions of the preceding section,
all the directors or trustees of such company shall be jointly and severally liable for the debts of the company then existing, and for all that
shall be contracted before such report shall be made: Provided, That
in case of failure of the company in any year to comply with the pro
CUR 99
4


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REPORT OF THE COMPTROLLER OF THE CURRENCY.

visions of section sixteen of this act, and any of the directors shall, on
or before January fifteenth of such year, file his written request for
such compliance with the secretary of the company, the Comptroller of
the Currency, and the recorder of deeds of the District of Columbia, such
director shall be exempt from the liability prescribed in this section.
203. PERJURY AND LARCENY. (SEC. 18.) That any willful false
swearing in regard to any certificate or report or public notice required
by the provisions of this act shall be perjury, and shall be punished as
such according to the laws of the District of Columbia. And any misappropriation of any of the money of any corporation or company formed
under this act, or any money, funds, or property intrusted to it, shall
be held to be larceny, and shall be punished as such under the laws of
said District.
204. TRANSFER OF STOCK. (SEC. 19.) That the stock of such company shall be deemed personal estate, and shall be transferable only on
the books of such company in such manner as shall be prescribed by
the by-laws of the company, but no shares shall be transferable until
all previous calls thereon shall have been fully paid, and the said stock
shall not be taxable, in the hands of individual owners, the tax on the
capital stock, gross earningvS of the company hereinbefore provided
being in lieu of other personal tax. All certificates of the stock of any
company organized under this act shall show upon their face the par
value of each share and the amount paid thereon.
205. LIABILITY OF STOCKHOLDERS. (SEC. 20.) That all stockholders
of every company incorporated under this act, or availing itself of its
provisions under section eleven, shall be severally and individually liable to the creditors of such company to an amount equal to and in
addition to the amount of stock held by them, respectively, for all debts
and contracts made by such company.
206. MONEY PAYMENT OF CAPITAL STOCK KEQUIRED. (SEC. 21.)

That nothing but money shall be considered as payment of any part of
the capital stock, except that in the case of any company now doing
business in the District of Columbia in any of the classes herein provided for, or under any act of Congress or by virtue of the laws of any
of the States, and which company has actually received full payment in
money of at least fifty per centum of the capital stock required by this
act and which company desires to obtain a charter under this act, all
the assets or property may be received and considered as money, at a
value to be appraised and fixed by the Comptroller of the Currency:
Provided, That all such assets and property are also transferred to and
are thereafter owned by the company organized under this act.
207. NUMBER AND ELECTION OF DIRECTORS. (SEC. 22.) That the
stock, property, and concerns of such company shall be managed by not
less than nine nor more than thirty directors or trustees, who shall,
respectively, be stockholders and at least one-half residents and citizens
of the District of Columbia, and shall, except the first year, be annually
elected by the stockholders at such time and place and after such published notice as shall be determined by the by-laws of the company, and
said directors or trustees shall hold until their successors are elected
and qualified.
208. APPOINTMENT OF OFFICERS. (SEC. 23.) That there shall be a
president of the company, who shall be a director, also a secretary and
a treasurer, all of whom shall be chosen by the directors or trustees:
Provided, That only one of the above-named offices shall be held by
the same person at the same time. Subordinate officers may be
appointed by the directors or trustees, and all such officers may be



REPORT OF THE COMPTROLLER OF THE CURRENCY.

51

required to give such security for the faithful performance of the duties
of their office as the directors or trustees may require.
209. BY-LAWS. (SEC. 24.) That the directors or trustees shall have
power to make such by-laws as they deem proper for the management
or disposal of the stock and business affairs of such company, not
inconsistent with the provisions of this act, and prescribing the duties
of officers and servants that may be employed, for the appointment of
all officers, and for carrying on all kinds of business within the objects
and purposes of such company.
210. DIRECTORS LIABLE FOR PAYMENT OF UNEARNED DIVIDENDS. (SEC. 25.) That if the directors or trustees of any company

shall declare or pay any dividend, the x>ayment of which would render
it insolvent, or which would create a debt against such company, they
shall be jointly and severally liable as guarantors for all of the debts
of the company then existing, and for all that shall be thereafter contracted, while they shall, respectively, remain in office.
211. DIRECTORS' LIABILITY MAY BE AVOIDED. (SEC. 26.) That if
any of the directors or trustees shall object to declaring of such dividend or the payment of the same, and shall at any time before the time
fixed for the payment thereof file a certificate of their objection in writing with the secretary of the company and with the recorder of deeds
of the District they shall be exempt from liability prescribed in the preceding section.
212.

EESPONSIBILITY OF DIRECTORS FOR EXCESS LIABILITIES.

(SEC. 27.) That if the liabilities of any company shall at any time exceed
the amount of the fair cash value of the assets, the directors or trustees
of such company assenting thereto shall be personally and individually
liable for such excess to the creditors of the company after the additional liability of the stockholders has been enforced.
213. TRUSTEE, ETC., NOT LIABLE ON STOCK ASSESSMENT. (SEC. 28.)

That no person holding stock in such company as executor, administrator, guardian, or trustee shall be personally subject to any liability
as stockholder of such company, but the estate and funds in the hands
of such executor, administrator, guardian, or trustee shall be liable in
like manner and to the same extent as the testator or intestate or the
ward or the person interested in such trust fund would have been if
he had been living and competent to act and hold the stock in his own
name.
214. INCREASE OF CAPITAL. (SEC. 29.) That any corporation which
may be formed under this chapter may increase its capital stock by
complying with the provisions of this chapter to any amount which
may be deemed sufficient and proper for the purposes of the corporation.
215. CERTIFIED COPY OF INCORPORATION CERTIFICATE COMPETENT EVIDENCE. (SEC. 30.) That a copy of any certificate of incor-

poration filed in pursuance of this chapter, certified by the recorder of
deeds to be a true copy and the whole of such certificate, shall be
received in all courts and places as presumptive legal evidence of the
facts therein stated.
216. No BOND OR OTHER SECURITY EEQUIBED OF TRUST COMPANIES. (SEC. 31.) That no bond or other collateral security, except

as hereinafter stated, shall be required from any trust company incorporated under this act for or in respect to any trust, nor when appointed
trustee, guardian, receiver, executor, or administrator, with or without
the will annexed, committee of the estate of a lunatic or idiot, or other
fiduciary appointmentj but the capital stock subscribed for or taken.



52

REPORT OF THE COMPTROLLER OF THE CURRENCY.

and ail property owned by said company and the amount for vvhich said
stockholders shall be liable in excess of their stock, shall be taken and
considered as the security required by law for the faithful performance
of its duties and shall be absolutely liable in case of any default whatever; and in case of the insolvency or dissolution of said company the
debts due from the said company as trustee, guardian, receiver, executor, or administrator, committee of the estate of lunatics, idiots, or any
other fiduciary appointment, shall have a preference.
217. DISTRICT SUPREME COURT HAS JURISDICTION OF TRUST COMPANIES. (SEC. 32.) That the supreme court of the District of Columbia,

or any justice thereof, shall have power to make orders respecting such
company whenever it shall have been appointed trustee, guardian,
receiver, executor, or administrator, with or without the will annexed,
committee of the estate of a lunatic, idiot, or any other fiduciary, and
require the said company to render all accounts which might lawfully
be made or required by any court or any justice thereof if such trustee,
guardian, receiver, executor, administrator, with or without the will
annexed, committee of the estate of a lunatic or idiot, or fiduciary
were a natural person. And said court, or any justice thereof, at any
time, on application of any person interested, may appoint some suitable person to examine into the affairs and standing of such companies,
who shall make a full report thereof to the court, and said court, or
any justice thereof, may at any time, in its discretion, require of said
company a bond with sureties or other securities for the faithful performance of its obligation s, and such sureties or other security shall be
liable to the same extent and in the same manner as if given or pledged
by a natural person.
218.

A L L SIMILAR DISTRICT CORPORATIONS SUBJECT TO THIS

ACT. (SEC. 33.) That no corporation or company organized by virtue
of the laws of any of the States of this Union and having its principal
place of business within the District of Columbia, shall carry on, in the
District of Columbia, any of the kinds of business named in this act
without strict compliance in all particulars with the provisions of this
act for the government of such corporations formed under it, and each
one of the officers of the corporation or company so offending shall be
punished by fine not exceeding one thousand dollars, or imprisonment
in some State's prison not exceeding one year, or by both fine and
imprisonment, in the discretion of the court. This section shall not
take effect till six months after the approval of this act.
219. PROVISIONS FOR AMENDMENT. (SEC. 34.) That Congress may
at any time alter, amend, or repeal this act, but any such amendment
or repeal shall not, nor shall the dissolution of any company formed
under this act, take away or impair any remedy given against such
corporation, its stockholders or officers, for any liability or penalty
which shall have been previously incurred: Provided, That the courts
of the District of Columbia shall not have power to appoint any trustee,
trustees, guardians, receivers, or other trustee of a fund or property
located outside of the District of Columbia, or belonging to a corporation or person having a legal residence or location outside of said
District,




REPORT OF THE COMPTROLLER OF THE CURRENCY.

53

CHAPTEE TEN.
GOVERNMENT DEPOSITARIES.
220. Designation and duties of public
depositaries.
221. Deposit and withdrawal of public
moneys.
222. Provisions for deposits by certain
postmasters.

223. Penalty for misapplication of moneyorder funds.
224. Penalty for unauthorized deposit of
^ tblic money.
225. Penalty for unauthorized receipt or
use of public money.

220. DESIGNATION AND DUTIES OF PUBLIC DEPOSITARIES. (SEC.

5153.) All national banking associations, designated for that purpose
by the Secretary of the Treasury, shall be depositaries of public money,
except receii>ts from customs, under such regulations as may be prescribed by the Secretary; and they may also be employed as financial
agents of the Government; and they shall perform all such reasonable duties, as depositaries of public moneys and financial agents of
the Government, as may be required of them. The Secretary of the
Treasury shall require the associations thus designated to give satisfactory security, by the deposit of United States bonds and otherwise,
for the safekeeping and prompt payment of the public money deposited
with them, and for the faithful performance of their duties as financial
agents of the Government. 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 whatever association issued,
which have been paid into the Government for internal revenue, or for
loans or stocks.
221. DEPOSIT AND WITHDRAWAL OF PUBLIC MONEYS. (SEC. 3620.)
It shall be the duty of every disbursing officer having any public
money intrusted to him for disbursement to deposit the same with the
Treasurer or some one of the assistant treasurers of the United States,
and to draw for the same only as it may be required for payments to
be made by him in pursuance of law; and draw from 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 warrant on the Treasurer or an assistant treasurer of the
United States. In places, however, where there is no Treasurer or
assistant treasurer, 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 jmblic creditors.
222. PROVISIONS FOR DEPOSITS BY CERTAIN POSTMASTERS. (SEC.

3847.) Any postmaster, having public money belonging to the Government, at an office within a county where there are no designated depositaries, treasurers of mints, or Treasurer or assistant treasurers of the
United States, may deposit the same, at his own risk and in his official capacity, in any national bank in the town, city, or county where
the said postmaster resides; but no authority or permission is or shall
be given for the demand or receipt by the postmaster, or any other
person, of interest, directly or indirectly, on any deposit made as herein
described; and every postmaster who makes any such deposit shall
report quarterly to the Postmaster-General the name of the bank where
such deposits have been made, and also state the amount which may
stand at the time to his credit.



54

REPORT OF THE COMPTROLLER OF THE CURRENCY.

223. PENALTY FOR MISAPPLICATION OF MONEY-ORDER FUNDS.

(SEC. 4046.) Every postmaster, assistant, clerk, or other person employed in or connected with the business or operations of any moneyorder office who converts to his own use, in any way whatever, or loans,
or deposits in any bank, except as authorized by this Title, or exchanges
for other funds, any portion of the money-order funds, shall be deemed
guilty of embezzlement, and any such person, as well as every other
person advising or participating therein, shall, for every such offense,
be imprisoned for not less than six months nor more than ten years,
and be fined in a sum equal to the amount embezzled; and any failure
to pay over or produce any money-order funds intrusted to such person
shall be taken to be prima facie evidence of 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 money-order account books of the Sixth Auditor.
But nothing herein contained shall be construed to prohibit any postmaster depositing, under the direction of the Postmaster-General, in a
national bank designated by the Secretary of the Treasury for that
purpose, to his own credit as postmaster, any money-order or other
funds in his charge, nor prevent his negotiating drafts or other evidences of debt through such bank, or through United States disbursing
officer, or otherwise, when instructed or required to do so by the Postmaster-General for the purpose of remitting surplus money-order funds
from one post-office to another, to be used in payment of money orders.
Disbursing officers of the United States shall issue, under regulations
to be prescribed by the Secretary of the Treasury, duplicates of lost
checks drawn by them in favor of any postmaster on account of moneyorder or other public funds received by them from some other postmaster.
224. PENALTY FOR UNAUTHORIZED DEPOSIT OF PUBLIC MONEY.

(SEC. 5488.) Every disbursing officer of the United States who deposits
any public money intrusted to him in any place or in any manner,
except as authorized by law, or converts -to his own use in any way
whatever, or loans with or without interest, or for any purpose not
prescribed by law withdraws from the Treasurer or any assistant
treasurer, or any authorized depository, or for any purpose not prescribed by law transfers or applies any portion of the public money
intrusted to him, is, in every such act, deemed guilty of an embezzlement of the money so deposited, converted, loaned, withdrawn, transferred, or applied; and shall be punished by imprisonment with hard
labor for a term not less than one year nor more than ten years, or by
a fine of not more than the amount embezzled or less than one thousand
dollars, or by both such fine and imprisonment.
225. PENALTY FOR UNAUTHORIZED EECEIPT OR USE OF PUBLIC
MONEY. (SEC. 5497.) Every banker, broker, or other person not an

authorized depositary of public moneys, who knowingly receives from
any disbursing officer, or collector of internal revenue, or other agent
of the United States, any public money on deposit, or by way of
loan or accommodation, with or without interest, or otherwise than in
payment of a debt against the United States, or who uses, transfers,
converts, appropriates, or applies any portion of the public money for
any purpose not prescribed by law, and every president, cashier, teller,
director, or other officer of any bank or banking association, who violates any of the provisions of this section, is guilty of an act of embezzlement of the public money so deposited, loaned, transferred, used,
converted, appropriated, or applied, and shall be punished as prescribed
in section fifty-four hundred and eighty-eight.



KEPORT OF THE COMPTROLLER

OF THE CURRENCY.

55

CHAPTBE ELEVEN.
MISCELLANEOUS.
226. LEGAL TENDER AND LAWFUL MONEY.—The following state-

ment concerning the legal-tender properties of money of the United
States is based upon United States Kevised Statutes, sections 3585,
3586, 3587, 3588, 3589, and 3590, and the acts amendatory thereof and
additional thereto:
Gold coin, standard silver dollars, subsidiary silver, minor coins,
United States notes, and Treasury notes of 1890 have the legal-tender
quality as follows: Gold coin is legal tender for its nominal value when
not below the limit of tolerance in weight; when below that limit it is
legal tender in proportion to its weight; standard silver dollars and
Treasury notes of 1890 are legal tender for all debts, public and private,
except where otherwise expressly stipulated in the contract; subsidiary
silver is legal tender to the extent of $10, minor coins to the extent of 25
cents, and United States notes for all debts, public and private, except
duties on imports and interest on the public debt. Gold certificates,
silver certificates, and national-bank notes are nori legal-tender money.
Both kinds of certificates, however, are receivable for all public dues,
and national-bank notes are receivable for all public dues except duties
on imports, and may be paid out for all public dues, except interest on
the public debt.
The term "lawful money" is understood to apply to every form of
money which is endowed by law with the legal-tender quality. (See
Opinions of Attorneys-General, vol. 17, p. 123.)
227. MISCELLANEOUS ACTS.—Be it enacted by the Senate and Rouse
of Representatives of the United States of America in Congress assembled,
That The First National Bank of Annapolis, 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, determine 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 Currency,
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 published in
two weekly papers in the city of Annapolis not less than four weeks.
SEC. 3. That whenever the location of said bank shall have been
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.
SEC. 4. That all the debts, demands, liabilities, rights, privileges, and
powers of The First National Bank of Annapolis shall devolve upon



66

KEPOKT OF THE COMPTROLLER OF THE CURRENCY.

The Traders' National Bank of Baltimore whenever such change of
name is effected.
SEC. 5. That this act shall take effect and be in force from and after
its passage.
Approved, June 7, 1872.
Acts of a similar nature to the one preceding have been enacted by
Congress for the following purposes:
Authorizing The Manufacturers' National Bank of New York to
change its location from the city of New York to the city of Brooklyn.
(Approved July 27, 1808.)
Authorizing The City National Bank of New Orleans, Louisiana, to
change its name to The G-ermania National Bank of New Orleans.
(Approved March 1, 1809.)
Authorizing The Second National Bank of Plattsburgh, New York,
to change its name to The Yilas National Bank of Plattsburgh. (Approved March 1, 1809.)
Authorizing The First National Bank of Delhi, New York, to change
its location and name to The First National Bant; 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, Pennsylvania, to
change its location and name to The Williamsport National Bank, Pennsylvania. (Approved December 22, 1870.)
Authorizing the Worcester County National Bank of Black stone,
Massachusetts, to change its location and name to The Franklin
National Bank, Massachusetts. (Approved February 9, 1871.)
Authorizing The Farmers7 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, l^ew
Y.ork, 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, Massachusetts, 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.
(Two acts, 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 Yernon, New
York, to change its location and name to The German National Bank of
Evansville, Indiana. (Approved January 11, 1873.)
Authorizing The First National Bank of Newnan, Georgia, to change
its 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 Yan,
New York. (Approved February 19, 1873.)



REPORT OF THE COMPTROLLER OF THE CURRENCY.

57

Authorizing The National Bank of Springfield, Missouri, to change its
name to The First National Bank of Springfield, Missouri. (Approved
March 3, 1873.)
Authorizing The Kansas Valley National Bank of Topeka, Kansas, to
change its 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 of
Minneapolis, Minnesota. (Approved January. 8, 1874.)
Authorizing The Second National Bank of Havana, New York, to
change its name to The Havana National Bank of Havana, New York.
(Approved January 9, 1874.)
Authorizing The Passaic County National Bank of Paterson, New
Jersey, to change its name to The Second National Bank of Paterson,
New Jersey. (Approved April 15,1874.)
Authorizing The Citizens7 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, Pennsylvania, to change its location and name to the Fifth National Bank of
Pittsburg, Pennsylvania. (Approved June 23, 1874.)
Authorizing The Citizens' National Bank of Sanbornton, New Hampshire, 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. (Approved
March 3, 1875.)
Authorizing The Slater National Bank of North Providence, Ehode
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 Auburn, New York.
(Approved March 3, 1875.)
Authorizing The Miners' National Bank of Braid wood, Illinois, to
change its location and name to The Commercial National Bank of
Wilmington, Illinois. (Approved January 31, 1878.)
Authorizing The Windham National Bank, Windham, Connecticut,
to change its location to the village of Williinantic, 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, Massachusetts, 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 M&rch 1^ 188L)




58

REPORT OF THE COMPTROLLER OF TPIE CURRENCY,

Authorizing The National Mechanics' Banking Association of New
York, New York, to change its name to Wall Street National Bank.
(Approved February 14, 1882.)
Authorizing The Lancaster National Bank of Lancaster, Massachusetts, 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, Pennsylvania, 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, Ohio, to change its
name to The First National Bank of Hillsborough, Ohio. (Approved
December 18, 1884.)
Authorizing The Slater National Bank of North Providence, Ehode
Island, to change its name. (Approved January 8, 1885.)
Authorizing The 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. (Approved
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 Larned, Kansas, to increase
its 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 a national bank at Chicago, 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.)
Section 2 of the act approved June 13, 1898, provides: "That from
and after July 1, 1898, special taxes shall be, and hereby are, imposed
annually as follows, that is to say: Bankers using or employing a capital not exceeding the sum of $25,000 shall pay $50; when using or
employing a capital exceeding $25,000, for every additional $1,000 in
excess of $25,000, $2, and in estimating capital surplus shall be included.
The amount of such annual tax shall in all cases be computed on the
basis of the capital and surplus for the preceding fiscal year.7'



INDEX TO NATIONAL-BANK ACT.
Paragraph.
A.
Acknowledgment. (See Oath.)
Acts, miscellaneous :
Synopsis of
*
Administrator. (See Trustee.)
Advertisements (see also Notice; Publication):
Imitation of circulation in, penalty for
Agent:
Bonds, examination by
Central reserve
Central reserve, additional
Circulation, to witness destruction
National banking associations as fiscal, of Government
Reserve
Reserve, additional, provisions for
Reserve, central
Reserve, additional central, provisions for
Shareholders, appointment and qualification of
Shareholders, duties of
Allotment. (See Shares.)
Amendments:
Proposed to act in Comptroller's report
Restriction of, to articles of national banking associations
Appointment:
Committee to examine bonds
Committee to examine plates, etc
Committee to witness destruction of circulation
Comptroller
Deputy Comptroller
Directors of associations
Dissenting shareholders, committee of appraisal
Examiners of associations
Office clerks
Officers of associations
Receivers of associations
Special commission for preliminary examination oi associations.
Vacancies in board of directors
Appraisal. (See Shares.)
Articles of association:
Amendment of, for extension of corporate existence
Amendment of, restricted
Execution of, by converted State banks
Increase of capital stock by amendment of
Provisions for elections when not provided for in
Reduction of capital stock
Specification of object of association in
Title and location, change of
Assessments:
Examinations
•
Impairment of capital
Plates, engraving of
Redemption of circulation
Repayment of
Reports, failure to make
Shareholders' personal liability
Assessors:
Shareholders' lists accessible to
Assets:
Comptroller's report to contain statement of national banks
Expenses of receiver paid from
Insolvent banks, distribution of
Receiver to collect, etc
Reports of condition to contain statement of
Shareholders' agent to distribute
Assignment. (See Treasurer United States; Bonds, United States.)
Assistant Treasurer United States:
Circulation, unfit, to be sent to Treasurer for redemption
Fraudulent notes to be marked by
Obligations of United States
Public moneys deposited with
Unauthorized withdrawal of public money from
Associations:
•
Defined
Attachment:
Not to issue prior to final j udgment — c
•»




Page.

227

166
56
103
105
65
220
94
104
103
105
160
161

14
24
25
16
53
23
24
24
25
37
38

10
42

4
11

56
62
65
3
5
16
135
125
7
16
151,152
25
33

14
15
16
3
3
6
31
29
4
6
35

132
42
37
43

31
11
10
11
9
11
5
11

45
13
46

29
127
27
115,116
66,69 16,18
66, 68, 69 16,17,18

-

i
j
j 40,

38
28
10,35

4
36
36
35
28

• j 221,
I
j
|
- •I

59

16
19
41
53
54
22
39

60

REPORT _OF_ THE COMPTROLLER OF THE CURRENCY.
Index to national-hanlc act—Continued.
Paragraph.

Auction:
Bonds of expiring associations
Bonds of liquidating associations
Enforcement of assessment
Purchase of property by receiver
Sale of delinquent stock
Sale of dissenting shareholder's stock
Authority. (See Certificate.)
B.
Bad debts:
Denned
Ballot. (See Elections; Shareholders.)
Bank circulation. (See Circulation.)
Bills of exchange:
Illegal transfer of
Interest on
Penalty for official malfeasance, relative to
Restriction on loans, not applicable to
Restriction on associations' liability, not applicable to
Transfer of, to create a preference, void
Bonds, official:
Comptroller
Deputy Comptroller
Officers of associations
Public depositaries
Receiver
Shareholders' agent
Shareholders', on election of agent
Bonds, United States:
Annual examination of, provided for
Assignment or transfer of, to be countersigned by Comptroller
Association to be notified of transfer or assignment
Called for redemption
Cancellation of, forfeited, for circulation redeemed
Circulation issuable on
Circulation obtainable on
Comptroller to have access for examination to records and, deposited with
Treasurer
Converted State banks to comply with provisions of law relative to
Coupon, to be exchanged for registered
Deficiency in proceeds from sale of, what first lien
Defined
Deposit of, required of associations prior to beginning business
Depreciation in value of, how made good
Depositaries required to deposit
Exchange of, permitted
Forfeiture of, for failure to redeem circulation
»
General provisions respecting
Gold banks to deposit
Government depositaries, deposit of, required
Increase of deposit of
Interest on, liable for penalty for failure to make tax returns and pay tax
Interest on, liable for penalty for failure to make reports to Comptroller
Lawful money, deposit of, to retire circulation and withdraw
Maximum amount which may be deposited to secure circulation .
Maximum circulation issuable on, to gold banks
Minimum amount to be deposited
Obligations of United States, including, defined
Penalty for illegal dealing in counterfeit
Penalty for illegal possession or use of material for printing
Penalty for passing counterfeit
Penalty for taking or possessing unauthorized impressions of tools, etc., used in
printing, etc
Reassignment of, to liquidating bank
Record of transfer or assignment of, to bo kept in office of Comptroller
Registered, to be deposited witli Treasurer United States
Relation of, on deposit to capital
Return of, to association
Sale of, at auction for failure to redeem circulation
Sale of, privately, at not less than par, for failure to redeem circulation
Taxation, exempt from all
Transfer of, how effected
Treasurer United States to have access to records of Comptroller relative to
Treasurer United States to hold, in trust for association
Withdrawal of, and of circulation
Withdrawal of
Bookkeeper. (See Officers.)
Books. (See Comptroller; Treasurer United States.)
Borrowed money. (See Liability of Association; Loans.)
Branches:
Converted banks may retain



Page.

141,148
140 148
116
158
20
135

33,34
32,34

114

26

162
107
178
110
112
162

39
25
43
26
26
39

4
5
16
220
151
160
160

3
3
6
53
35
37
37

56
52
54
68
147

14
13
13
17
34
12
14

49 I
58
55 i
37 |
51 I
149
48
24,49
57
220
57
143
57
64
220
50
81
122
67
58
64
24,49
169
174
170
171

27

36

7

31

13
10
13
34
12
8,12
14
53
14
33
14
16
53
13
20
28
17
14
16
8,12
41
42
41
42
42
32
13

172,173
140
53
49
50
57
148
150
91
52
55
52
67
50

13
14
34
34
22
13

39

10

I?

13
17

61

REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-dank act—Continued.

Page.
Business:
Authorization of association to begin, when...
Suspension of, after default to pay circulation.
Business paper. (See Commercial paper.)
By-laws:
Prescribed by directors of national banks
C.
Cancellation. (See Bonds, United States; Circulation.)
Capital stock:
Agent of shareholders to distribute assets ratably
Appointment and qualification of shareholder's agent
Approval of Secretary required, when
Association organized to begin business, when
Branches of converted State banks
Certificate of officers and directors required relative to payment of
Circulation outstanding not exceeding 5 per cent of, free from taxation
Compensation of examiners based on, except in certain cases
Conversion of State banks authorized, when
Creditor's bill against shareholders
Deposit of United States bonds based on
Directors, individual liability of
Directors, qualifications of
Dividends declared on, and net earnings in excess of dividends to be reported
Dividends on, and creation of surplus
Dividends on, when prohibited
Disposition of, delinquent shareholders
Division of, into shares and number and value of each
Duties of agent of shareholders
Enforcment of assessment, to make good impairment of
Enforcing individual liability of shareholders of, by receiver
Enforcing payment of
Failure to dispose of shares of, purchased or acquired by associations
Holders of shares of, in expiring associations to be extended or reorganized to
have preference in the allotment of shares
Holding of shares of, required by directors
Impairment of, assessment for
Impairment of, receiver may be appointed for failure to make good
Increase of, provisions for
Liabilities of an association not to exceed, except on account of certain demands..
Liquidation, shareholders owning two-thirds of, may vote to go into
q
,
g
,
y
L i t of shareholders of, to be t i t t d t th Comptroller
f t b transmitted to the C t l l
List f h h l d
,
L
it of shares or purchase of, prohi
f h
h
f
hibited
Loan on security
Loans restricted to 10 per cent of
Minimum amount required of national banks
Number of shares and amount of, stated in organization certificate
Payment of, provisions for
Penalty for failure to make good impairment of
Personal liability of shareholders
Receiver may be appointed when—impaired
Receiver may be appointed when, not fully paid in
Reduction ot, provisions for
Relation of bond deposit to
Restoration of, when below the minimum required
Shareholders of, list to be kept and subject to inspection
Shareholders owning two-thirds of, may place an association in liquidation
Shareholders owning two-thirds of, may change title and location
Shareholders owning two-thirds of, may increase stock
Shareholders owning two-thirds of, may reduce stock
Shareholders owning two-thirds of, may extend corporate existence
Shareholders entitled to one vote on each liable when
Shareholders of converted State banks notshare of, held by
Shareholders of, not consenting to en extension may withdraw
Shares of, acquired for debt to be disposed of when
Savings and other banks organized in the District of Columbia under act of Congress subject to provisions of this act
Savings banks now established not required to have, exceeding $100,000
State banks converted into national shall be assumed to have the same, as immediately prior to conversion
State taxation of shares of
Surplus fund to be created to the amount of 20 per cent of
United States registered bonds to be deposited as security for circulation to be
based on
When increase of, becomes valid
Withdrawal of bonds on reduction of, or closing of business
Withdrawal of bonds, limited
Cashier (seealso President; Officers):
Bond assignments by
Certificate of officers and directors
Certificate of stock payment
-




19
146

7
34

16

161
160
17
19
39
19, 23
85
127
37
163
24
157
28
121
109
114
20
18
161
116
152
20
152

38
37
6
7
10
7
20
29
10
39
8
36
8
28
26
26
7
6
38
27
35
7
35

135
31
115
152
43
112
136
118
111
110
17
14
19
115
40
115
152
45
50
21
118
136
46
43
45
132
30
40
135
111

31
9
27
35
11
26
32
27
26
26
6
5
7
27
10
27
35
11
13
7
27
32
U
11
1
1
31
9
10
31
26

123
123

28
28

38
124
109

10
29
26

49
44
50
57

12
11
13
14

52
23
19

13
7
7

62

REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-bank act—Continued.
Page.

Cashier (see also President; Officers)—Continued.
Election or appointment of
Expiration of corporate existence, certification by
Extension of corporate existence, certification by
False certification of checks
,
Incomplete circulation, provisions relative to
Increase of stock, certification of
Penalty for—
Countersigning or delivering circulation improperly
,
False certification of checks
Issuing circulation of expired associations
Official malfeasance
Pledging, etc., circulation
Unauthorized receipt of public money
President or vice-president and, to sign circulation
Protest of circulation, waiving notice of
Proxy, not to act as
Keports of condition, verified by
Reports of earnings and dividends, verified by
Shareholders, lists of, by
Signature of, forged or wanting, not to invalidate circulation
Taxable circulation, returns by
Unauthorized circulation, returns by
Voluntary liquidation, certified by
,
Central reserve agents. (See Agent; Reserve; Reserve agents.)
Certificate:
Certified copy of organization, evidence
Comptroller's, of authority
Converted State banks
Execution of organization
Extension of corporate existence
.'
Increase of stock valid, when
May be withheld, when
Officers and directors
Organization, to specify
Payment of installments of stock to be certified
Publication of Comptroller's, of authority
Reduction of stock valid, when
Sealed, of Comptroller, evidence
Voluntary liquidation
•
Certified copies. (See Evidence.)
Charter number:
Circulation, to be printed on
Checks:
False certification of, unlawful
Falsely certified, an obligation of association
Penalty for false certification of
Circulation:
Amount of, obtainable
Amount of, obtainable by gold banks
Association may issue
Association to receive interest on bonds as long as, honored
Associations consolidating, deposit of lawful money to retire, unnecessary
Associations to redeem, in lawful money on demand
Bonds in excess of amount required may be withdrawn
Bonds forfeited when, dishonored
Certificates of destruction, by whom executed
Charter number on
Collection of tax on
Cost of engraved plates to be paid by association
Counterfeiting, etc
Deposit of United States bonds to secure
Deposit to be increased when capital is increased
Destroyed, to be replaced by an equal amount of new notes
Disposition of redemption account balances
Examination of bank upon protest of, by agent of Comptroller
Expense of plates for new notes of extended banks
Expenses of redeeming, withdrawn
Expenses of redemption, how paid
Extended bank, shall differ from prior issues
For what, is receivable
Fraudulent n'otes to be so stamped
Gold bank, to be redeemed in gold coin
Government depositaries to receive, at par
Inscription on
Increasing capital stock, use of, prohibited
Liquidating bank to deposit lawful money to redeem
Maximum deposit of bonds required
Minimum deposit of bonds required
Notice of redemption of, to be forwarded to bank
Other, prohibited for national bank
,



16
141
132
176
76
44

G

33
31
43
19
11

164
177
175
178
165
225
59
142
30
119
121
318
76
81
86
137

40
43
43
43
40
54
15
33
9
28

182
25
37
15
132
44
25
23
14
19
26
45
181
137

44
8
10
6
31
11
8
7
5
7
8
11
44
32

2f
r

27
19
20
21
32

15
176
176
177

43
43
43

49,58
64
16
57
139
103
50
143
65
59
83
66
164-175
24, 49
50
66
75
143
69
69
66
69
63
79
64
220
59,64
113
140
49
49
66
78

12,14
16
6
14
32
24
13
33
16
15
20
16
40,43
8,12
13
16
19
33
18
18
16
18
15
19
16
53
15,16
26
32
12
12
16
19

REPORT OF THE COMPTROLLER OF THE CURRENCY.

63

Index to national-bank act—Continued.
Tage.
Circulation—Continued.
P e n a l t y for failure to m a k e r e t u r n of taxable
.
*
P r e p a r a t i o n of
Pledging, as security prohibited
Profit on unredeemed, inures to t h e United States
Proceedings when r e t u r n is n o t made
Prohibition against circulating u n c u r r e n t notes
P r o t e s t of
Receivable a t par by all national b a n k s
Refunding excess t a x
Redeemed, to be canceled
Redemption fund of 5 per cent
Redemption of, in United States notes
Redemption of, extended bank
Redemption of, liquidating banks
Redemption of, closed b a n k s
Redemption of, incomplete
Restriction of tax provisions
Semiannual r e t u r n of, subject t o t a x
Statement concerning, of closed b a n k s t o appear in annual report of Comptroller.
Securities exempt from local t a x a t i o n
T a x on
T a x on unauthorized
T a x on converted bank
T a x on, insolvent b a n k s remitted
Treasurers and public depositaries to r e t u r n all, of closed banks
"When exempt from t a x
W h e n issuable as money
W h e n w i t h d r a w n , new will not be issued for six months thereafter
W i t h d r a w a l of, b y depositing lawful money
W o r n out or mutilated, destroyed
Citizens:
National-banking associations, where
Claims. (See I n s o l v e n c y ; Receiver.)
Clearing h o u s e :
Certificates issued by, counted as reserve
Receipt in settlement of balances of gold and silver certificates by
Clearing-house certificates. {See Clearing house; Reserve.)
Clerks;
Appointment and qualification of, by t h e Secretary
Duties of, fixed by t h e Comptroller
Employment of, for t h e B u r e a u by t h e Comptroller
Names and compensation of, in annual report
Coin. (See Gold-, Silver.)
Commercial p a p e r :
Discount of
Committee of appraisal. (See Dissenting shareholders.)
Comptroller of t h e C u r r e n c y :
Agent, special, to be appointed for association failing to redeem circulation
A n n u a l report t o be made t o Congress by
Appointment, term and salary of
Articles of association and organization certificate of national b a n k s to be filed
with
Authorized to examine b a n k s in t h e District of Columbia, organized under acts
of Congress
Bonds, sale of, privately or a t public auction b y
Capital stock, increase or reduction of, to be approved by
Circulation, worn, mutilated, destruction of
Distribution of Comptroller's reports
Duties of
Examiners, appointment of
Extension of corporate existence, approval of, by
Evidence sealed certificates
Forfeiture of charter, suit to be b r o u g h t b y
Gold banks, organization of
I n t e r e s t in national b a n k s , issuing currency, prohibited
Jurisdiction of circuit courts
Liquidation of associations to be approved b y
Notice t o creditors of insolvent b a n k s
Oath to be t a k e n and bond to be given by
P r i n t i n g report of
P l a t e s and dies, examination of
Qualifications of
-•
Receivers appointed by
I
Reports of banks other t h a n national to be obtained and published by
j
Reports to be made to
I
Reserve cities, designation of, by
State b a n k s converted, approval by
t
Title and location, change of, to be approved by
|
Title of national b a n k s subject to approval of
;
Congress:
I
Comptroller's report to be made to
,
I




180
97
101

23
24

107,112

25,26

143
10
3

33
4
3

13,14
128
150
43,45
65
12
2
125
131
181
156
35
6
179
137
153
4
11
62
4
95,151
123
119,121
104.105
37
46
14

30
34
11
16
5
3
29
30
44
36
9
4
44
32
36
3
5
15
3
23,35
28
28
24,25
10
11
5

10

4

64

REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-bank act—Continued.
e ™?h.

Consolidation:
Provisions for liquidation on
Corporate powers. (See Powers.)
Corporation (see also Liability of association):
Associat ion becomes a, when
Cost. (See Expenses.)
Coupon bonds. {See Bonds, United States.)
Courts. {See Crimes, jurisdiction, etc.)
Creditors:
13ill in equity by, against shareholders
,
Checks falsely certified a valid obligation of associations
Directors' liability
Expiration of existence, notice to
Illegal preference of
Insolvency, notice of, to
Nonpayment of circulation, notice of, to
Shareholders' agent, following settlement with
Shareholders, list of, subject to inspection by
Shareholders, personal liability of, to
Voluntary liquidation, notice of, to
,
Creditor's bills:
A gainst shareholders
Crimes, jurisdiction, etc.:
Counterfeiting circulation
Dealing in counterfeit circulation
Evidence, certified copy of organization certificate
Evidence, sealed certificate of Comptroller competent
False certification of checks
Having or taking unauthorized impressions of tools, etc
Illegal possession or use of material for circulation
Imitating circulation for advertising purposes
Improper countersigning or delivering circulation
Indian Territory
Issuing circulation of expired associations
Jurisdiction, general, of national-bank cases
Jurisdiction to enjoin Comptroller or receiver
Mutilating circulation
Obligations of the United States defined
Official malfeasance
,
Passing counterfeit circulation
Pledging United States notes or bank circulation
Suits against United States officers or agents
,
Taking unauthorized impression of tools, etc
Currency. (See Circulation: Gold; Gold certificates; Silver; Silver certificates;
Lawful money; United States note certificates.)
Currency bureau:
Designation of office of Comptroller of the Currency
Offices, vaults, etc., for

j
I
j
!
\

^ ° -

139

32

16

163
176
157
141
162
153
147
160
118
40
137
163

39
43
36
33
39
36
34
37
27
10
32
39

168
174
182
181
176,177
172,173
170
166
164
184
175|
J80 |
179 j
167
169
178
171
165
183
172

41
42
44
44
43
42
41
40
40
44
43
44
44
41
41
43
42
40
44
42

64
59 |
101 |
18, 37
99

16
15
24
i, 10
23

D.
Deficiency. (See Bonds; Capital; Circulation; Receiver; Reserve.)
Denominations:
Circulation of gold banks
Circulation of national b a n k s .
Gold certificates .
Shares of national-bank stock
*
United States not e certificates
Deposit of United States bonds. (See Bonds, United States.)
Depositaries. (See Government depositaries.)
Depreciation. (See Bonds; Circulation.)
Deputy Comptroller:
A ppointment of
Bond of
Duties of
Interest in bank issuing national currency prohibited b y . .
Oath to be taken
Salary of
Destruction. (See Redemption.)
Dies. (See Plates and dies.)
Directors:
Assessment, provisions for enforcement of, by
Association to elect or appoint
Attestation of reports to Comptroller, by
Certificate of officers and
Certification of, to extension
Conversion of State bank, action by
Dividends, declaration of, by

Enforcing payment of capital
Failure to hold annual election
Forfeiture of charter for violation, etc., by
Indian Territory, national-bank act relative to, in effect in .



o

5
5
5
6
5
5

3
3
4
3
3

116
16
119
23
132
37
109
20
32
156
184

27
6
28
7
31
10
26
7
9
36

U

REPORT OF THE COMPTROLLER OF THE CURRENCY.

65

Index to national-bank act—Continued.
Paragraph.

Directors—Continued.
Individual liability of
Names and residences of, to be ascertained by Comptroller
Number and election of
Oath of
Oklahoma, qualification of national bank, in
Penalty for issuing circulation of expired association
Penalty for official malfeasance
Penalty for unauthorized receipt of public money
President of board, to be a.
Powers of
,
Qualifications of
Qualifications of, in Oklahoma
Shareholders dissenting to extension to give no tice to, etc
Vacancies in board of
Discount. (See Loans; Liability of association; Interest.)
Dissenting shareholders:
Withdrawal of. on extension
Dissolution. {SeeExpiration of corporate existence; Forfeiture; Insolvency; Liquidation.)
Distinctive paper:
Unauthorized possession or use of
District of Columbia:
Supervision of banks in, authorized by Congress, by Comptroller
Dividends (see also Surplus and dividends):
Comptroller to make ratable, of assets of insolvent banks
Directors may declare, when
Earnings and, to be reported
Penalty for failure to report earnings and
Restriction on association's liability
Unearned, prohibited
Drafts:
Obligations of United States including
Official malfeasance
Liability of association, relative to
Penalty for mutilating
Dues. (See Taxation; Duties.)
Duties:
Associations organized under act of February 25,1863..<•
*
.*....
Circulation, converted State banks
Circulation, enforcing payment of, on
Circulation, exempt from
Circulation, not receivable for customs
Circulation, refunding excess on
Circulation, restrictions on
Circulation, semiannual on
Circulation, unauthorized
Comptroller's
Deputy Comptroller's
Directors'
Examiners'
Gold certificates receivable for
Notes, etc., other than national-bank circulation
Public depositaries, designation and
Receiver, appointment and
Shareholders' agent
,,,,.,
E.
Earnings. (See Dividends.)
Elections:
Change of title or location
..,«< . . . . . . < . . . . . . . . . . . . i .......*•&!.....,
Corporate powers
Extension of corporate existence
Failure to hold annual
Increase of stock
Number of directors
Oaths of directors
Quali tications of directors
•
Qualifications of shareholders
Reduction of stock
Shareholders' agent
Voluntary liquidation
Embezzlement. (See Crimes.)
Embezzlement, misapplication of funds, etc.:
Penalty for
Employees and expenses. (See Clerks; Expenses.)
Enforcing payment of capital stock:
Provisions for
Engraving. (See Circulation; Plates and dies.)
Equity. (See Creditor's bill against shareholders.)
Examination of organization proceedings:
Preliminary to authorizing, to begin business
•>
•

 99
5


Page.

135

31

170

41

128

30

154
109
121
122
112
114

36
26
28
28
26
26

169
178
112
167

41
43
26
41

47
89
83
85
63
84
90
80
86
2
5

12
21
20
20
15
20
21
20
21
3
3
8,9
29
24
22
53
35
38

27,31

125
101
91
220
151
161

46
16

11
6
30
9
11

131
32
43
27
31
28
30
45
160
136,137

9
11
37
32

178

43

20

22

66

REPORT OF THE COMPTROLLER OP THE CURRENCY.
Index to national-hank act—Continued.
Page.

Examinations:
Annual, of bonds
Ascertainment of value of stock of dissenting shareholders
Bonds and records, provisions for
Compensation of examiners
Comptroller may make, of all banks in the District of Columbia organized under
acts of Congress
Examiners to make
Limitation of visitorial powers
List of shareholders subject to
Plates and dies annually
Preliminary, to beginning business
Qualification of examiners
Special, of extended associations
Examiners:
Appointment of
Compensation of
Qualifications of
Special commission
Execution. (See Suits.)
Executor. (See Trustee.)
Existence:
Extension of
Term of corporate, of national banks
Expenses:
Bureau, to be stated in Comptroller's annual report
Circulation, redemption of
Circulation, tax on
Circulation, transportation and redemption of
Duties of shareholders' agent relative to
Examinations
,
Examinations, dissenting shareholders
Examinations, in District of Columbia
Examinations, special
Examiners, fees of
Plates, cost of
Plates and dies, examination of
Receiverships, how paid
Receiverships, paid prior to election of shareholders' agent
Sale of bonds
Sale of delinquent stock
F.
Failure. (See Insolvency.)
False entry:
Penalty for, official malfeasance
Fees. (See Examiners; Receivers.)
Fine. (See Penalty )
Firm. (See Liability of association.)
Fiscal agent. (See Agent; Government depositaries.)
Forfeiture. (See Interest; Bonds; Charter; Suits.)
Forgery. (See Crimes; Penalty.)
Franchise. (See Corporate powers; Violations of national-bank act.)
Fraudulent notes:
United States and national bank officers to mark »

14
31
13
29

128
125
129
118
62
22
126
133

30
29
30
27
15
7
29
31

125
127
126
25

29
29
29
8

131
16

30
6

10
66
80
68
161
127
135
128
133
127
69
62
155
160
149
20

4
16
20
17
38
29
31
30
31
29
18
15
36
37
34
7

178

43

79

19

101
64
101
77
35
101
35
101
102
91

24

64
36
64
77
35
80

16
9
16
19
9
24
20

101
101
101

24
24
24

11
0

24

G.

Gold:
Certificates not to be issued when reserve of gold coin and bullion is depleted...
Circulation of gold banks redeemable in
Deposit of, for certificates
Gold banks not required to take circulation of other banks at par
Gold banks, issue of circulation by, payable in
Issue of certificates of deposit of
Organization of gold banks
Reserve in Treasury
Reserve of gold banks to be silver and
Taxation of, by State, etc
Gold banks:
Circulation of, issuable
Conversion of
Deposit of bonds by
Exempted from provisions relative to other bank circulation
Organization of
Reserve required for
Tax on circulation
Gold bank notes. (See Gold banks; Circulation.)
Gold certificates;
Deposit of gold for
Issue of, prohibited, when
Minimum denomination
Receivable for
- -,
,...,..,.,.,,




56
135
55
127

102,103

16
24
19
9
24
9
24
24
22

REPORT OF THE COMPTROLLER OF THE CURRENCY.

07

Index to national-bank act—Continued.
Paragraph. Page.
Gold reserve in Treasury:
Gold certificates not to be issued when, depleted
Government depositaries:
Deposit and withdrawal of public moneys.
Deposits by certain postmasters
Designation and duties of
National banks as
National-bank circulation to be received by
National banks as financial agents of the Government
Penalty for misapplication of money-order funds
Penalty for unauthorized deposit of public moneys
Penalty for unauthorized receipt or use of public moneys
Secretary of the Treasury to designate
Securities to be deposited by
Guardian. (See Trustee.)

j!

|
|

I

101
221
222
220
220
220 |
220
223
224
225
220
220

24
53
S3
53
63
53
53
54
54
54
53
53

H.

House of Representatives:
Comptroller's reports to be sent to
Hypothecation. (See Pled ging.)

12
I.

Imports, interest on public debt:
Circulation of national banks not receivable for duties and interest
Improper use of circulation:
Pledging, hypothecating, etc
Uncurrent circulation
Incomplete circulation (see also Circulation):
Redemption of
Indian Territory:
National-bank act in effect in
Injunction. (See Comptroller; Suits.)
Insolvency:
Assets, distribution of, by receiver.
General j urisdiction of national-bank cases
Impairment of capital
Jurisdiction of courts
Notice to creditors of associations in
Penalty for issuing circulation of associations in
Preference of creditors
Receiver, appointment of
Receiver, duties of
Receiver, when may be appointed
Redemption of circulation of association in
Shareholders' agent
Taxes on bank in, remitted
ba
i,
Interest in national banks prohibited:
i l b
By Comptroller
By Deputy Comptroller
Internal Revenue, Commissioner of:
Penalty for failure to make returns to, of taxable circulation
Remission of tax against insolvent State banks
Semiannual return to, of taxable circulation other than national
J.
Judgment (see also Suits):
Appointment of receiver
Illegal preference of creditors
Jurisdiction. (See Crimes, jurisdiction, etc.)

15
113
117

26
27

76

19

184

44

154
180
115
179
153
175
162
151
151
152
| 151,1
I
71
I 160,161
159
6
6

36
44
27
44
36
43
39
35
35
35
18
37,38
37
4
4

88
159
87

21
37
21

152

35
39

226
102
85
141
69
66. 75
143
138
139
147
142
152
75
94
67,68

55
24
20
33
18
16,19
33
32
32
34
33
35
19
23

JL.

Larceny. (See Crimes, jurisdiction, etc.)
Lawful mo
ful money:
Defined
Defined for gold banks
Exemption of circulation from taxation when, deposited
Expiring associations to deposit
Extended banks to deposit
Five per cent fund
Forfeiture of bonds, for failure to redeem circulation in
Liquidating associations to deposit
Liquidating association, consolidating, not to deposit
Payment of protested circulation in
".
Protest of circulation, for failure to redeem in
Receiver to be appointed for failure to maintain reserve of
Redemption account, disposition of
Reserve to be
Withdrawing circulation, deposit of



n

68

REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-bank act—Continued.

Lawful money reserve:
Balances with agents
,
Clearing-house certificates
Gold banks
Gold and silver certificates
Five per cent fund
Lawful money on hand
Maintenance of
Receiver for failure to maintain
Reserve agents, proportion with
United States note certificates
Legal tenders:
Defined
Liability:
Association's, for pledging, etc., United States notes, etc ..
Converted State bank for old notes
Creditor's bill against shareholders
Estates owning stock subject to
False certification of checks
Individual, of directors
Limited to amount of capital, except
Personal, of shareholders
Restriction on
Shareholders' agent
Shareholders, debars from voting
Shareholders exempt from, when
Trustees, exempt from, when
Liabilities:
Associations organized under act of February 25,1863
Change of title or location not to affect
Comptroller's report to contain statement of national banks
Converted State banks
Deficiency in reserve, not to be increased
Deposit of lawful money relieves from, on circulation
Duties of receiver
Exceptions to limitation
Extended associations
Liquidating associations, on consolidation
Loans, restrictions on
Reports of condition to show
Restriction on
,
Shareholders' agent
Lien:
Illegal preference of creditors
Interest on bonds
United States has paramount, on assets of association
Limitations:
Associations, corporate existence
Bonds, withdrawal of
Capital, converted State banks
Capital stock, increase of
Capital stock, reduction of
Capital stock, payment of
Capital stock, requirements
Circulation, denomination
Circulation, deposit of lawful money on withdrawing
Circulation, increase of, restricted
Circulation exempt from tax
Circulation obtainable
Circulation obtainable by gold banks
Circulation to be taken at par
Circulation, tax on
Circulation, unauthorized, tax on
Comptroller or receiver may be enjoined, when
Corporate existence of converted gold banks
Creditors of insolvent banks, notice to
Creditors of insolvent bank, illegal preference
Directors, number of
Dividends
Expiration of corporate existence
Extended association, deposit of lawful money by
Extension of corporate*existence
Gold certificates, denominations of
Impairment of capital
Inspection of list of shareholders
Interest rate
Jurisdicton of courts
Jurisdiction, general, of national-bank cases
Lawful money deposited to retire circulation
Liability of national banks
Location of associations, change of
Loans



Page.
96,103
97
102
101
98
94
95
95
94
99

23, 24
23
24
24
23
23
23
23
23
23

226

55

165
89
163
41
176
157
112
40
112
160,161
30
40
41

40
21
39
11
43
36
26
10
26
37,38
9
10
11

47
46
10
89
95
140
151
112
134
139
110
119
112
160

12
11
4
21
23
32
35
26
31
32
26
28
26
37

162
83,122
149

39
20,28
34
6
16
57,67 14,17
10
37
43
11
45
11
19
7
17
6
59
15
17
67
17
68
20
85
49, 58 12,14
64
16
19
77
80,90 20,21
86
21
144
34
36
9
153
36
162
39
27
8
109,114
26
141
33
69
18
131
30
101
24
115
27
118
27
107
25
179
44
180
44
68
17
112
26
46
11
110
26

REPORT OF THE COMPTROLLER OF THE CURRENCY.

69

Index to national-lank act—Continued.

Limitations—Continued.
11
National'' in title of bank
Place of business
Public depositaries
_
Real estate holdings
Reserve, gold banks
Receiver, appointment of
Receiver, purchase of property to protect trust
Reports of condition, transmitted
Reports of earnings and dividends, transmitted
Reserve requirements
Reserve with central reserve agents
Reserve with reserve agents
Savings banks in District of Columbia, capital of
Shareholders' agent, duties of
Shareholders, personal liability of
Shareholders, personal liability of certain converted banks
Shares of stock, par value
Shares of stock, directors to own
State taxation of money
State taxation of national banks
Stock, purchased or acquired
Suits, conduct of
United States bonds deposited
United States note certificates, denominations of
United States gold certificates, issue of
United States Treasurer to redeem circulation presented, when...
Visitorial powers
Voluntary liquidation, vote
Voluntary liquidation, deposit of lawful money
Voters at" elections
Liquidation:
Bonds withdrawn
Creditor's bill against shareholders
Consolidation
Expiring associations to comply with provisions for
General jurisdiction of national-bank cases
Jurisdiction of courts
Lawful money to be deposited
Notice of, to be published
Penalty for issuing circulation of associations in
Redemption of circulation of associations in
Sale of bonds when
Vote required
Liquidation and receivership (see also Liquidation; Receiver):
Bonds, deficiency in, first lien on assets for redemption of circulation
Bonds, forfeiture of
Bonds, sale of, at auction
Bonds, sale of, privately
Bonds, withdrawal of
Charter, forfeiture of
Circulation, protest of
Consolidation, provisions for
Creditor's bill against shareholders
Deposit of lawful money on liquidating
Directors, individual liability of
Distribution of assets of insolvent associations
Enjoining proceedings
Enjoining proceedings, where brought
Expiring associations
Illegal preference of creditors
Jurisdiction, general, of national-bank cases
Jurisdiction of circuit courts
Notice of vote to liquidate
Notice to creditors of insolvent associations
Notice to present circulation for redemption
Penalty for issuing circulation of expired associations
Receiver, appointment of
Receiver, when may be appointed
Receiver, purchase of property to protect trust
Receivership, expenses of
Shareholders' agent, appointment of
Shareholders' agent, duties of
Suits, conduct of
Suspension of business for nonpayment of circulation
Taxes on insolvent associations remitted
Vote required for liquidation
Loans:
Associations' liability restricted
Circulation as collateral for, prohibited
Prohibited on security of own stock
Real estate, prohibited
Restrictions on
- *



Paragraph. Page.
130
93
220
106
102
152
158
119
121
94
103
96
123
161
40
40
18
28
91
124
111
183
24
99
99
74
129
136
138
30

30
22
53
25
24
35
36
28
28
23
24
23
28
38
10
10
6
8
22
29
26
44
8
23
23
18
30
32
32
9

140
163
139
141
180
179
138
137
175
140
136

32
39
32
33
44
44
32
32
43
18
32
32

149
143
148
150
140
156
142
139
163
138
157
154
144
145
141
162
180
179
137
153
147
175
151
152
158
155
160
161
183
146
159
136

34
33
34
34
32
36
33
32
39
32
36
36
34
34
33
39
44
44
32
36
34
43
35
35
36
36
37
38
44
34
37
32

112
113

26
26
26
25
26

70,71

HI

106
110

70

REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-bank act—Continued.
Paragraph.

Location (see also Title and location):
Change of
Organization certificate to state
Losses:
Bad debts and, exceeding profits ..

11
5
114

26

M.

Maceration:
Redeemed circulation to be disposed of by
Maximum. (See Bonds; Capital; Circulation; Limitations.)
Minimum. (See Bonds; Capital; Circulation; Limitations.)
Misdemeanor. (See Crimes; Penalty; Official malfeasance.)
Moneys. (See Lawful money; Legal tender; Circulation; Public moneys.)
Mortgages:
Assignment of, when illegal.-.'..
Official malfeasance
Purchase of, by receiver
Real estate, possession, etc., of, by association
Mutilated or worn circulation:
Redemption of
National:
Use of the word, in titles of associations other than national, prohibited
National- bank act:
Provides for a national currency, etc
Status of national banks organized under act of February 25, 1863
National banking associations:
Amendment of articles of association restricted
Articles of association entered into by
Branches may be retained by converted State banks
Capital required
Capital of converted State banks
Cancellation of redeemed circulation
Certificate of officers and directors
Circulation obtainable by
Circulation of, tax on
Circulation of, to be redeemed in United States notes
Circulation to be taken at par
Circulation of, for what receivable
Circulation unsigned or with forged signatures to be reduced
Closed bank circulation
Change of title and location
Charter forfeiture
Charter number to be printed on circulation of
Comptroller and Deputy Comptroller not to be interested in, issuing circulation..
Conversion of State banks to
Corporate and incidental powers of
Crimes, jurisdiction, etc
Deposit of bonds by
Directors individually liable when
Directors, number and election of
Directors, oath of
Directors, qualification of
Election, holding annual
Enjoining proceedings
Examination of, prior to being authorized to begin business
Expiration of corporate existence, provisions on
Extended bank circulation
Exchange of bonds
Extension of corporate existence of
General provisions respecting bonds
Gold bank circulation, provisions for issuing
Gold banks may be organized
Gold banks, conversion of
Incomplete circulation of
Increase of capital stock by
Liquidating bank circulation
Liquidation, provisions for
Lost or stolen notes of, to be redeemed
National-bank act relative to, in force in the Indian Territory
Oklahoma, qualification of directors in
Organization certificate to specifically state
Payment of stock prior to beginning business
Post-notes, issue of, prohibited
Preparation of bank circulation
Publication of certificate of authority
President of, to be chosen by board
Receiver may be appointed for failure to restore capital
Reduction of capital stock
Receiver for, when may be appointed



16

162
178
158
106

39
43
36
25

65

16

130

30

1
47

12

42
13
39
17
38
73
23
58
80-87
74
77

(33
76
71
46
156
60
6
37
16
164-183
24
157
27
31
28
32
144
25
141
69
51
132,133
57
64
35
36
76
43,44
70
136,140
76
184
29
14
19
78
59
26
34
21
45
152

11
5
10
6
10
18
7
14
20,21
18
19
15
19
18
11
36
15
4
10
6
40,44
8
36
8
9
34
8
33
18
13
31
14
16
9
9
19
11
18
32
19
44
8
5
7
19
15
8
9
7
11

71

REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-bank act—Continued.

PageNational banking associations—Cor .nued.
Redemption and destruction of circulation of
Redemption account, disposition of
Regulation of business of
Relation of bond deposit to capital of
Security for circulation
Shares of stock
Shareholders of, qualifications of, at elections
Shareholders' agent
Shareholders of, personally liable
Shareholders of, when not personally liable
Status of, organized under act of February 25,1863
Subscribed stock not paid for, forfeited to
Suspension of business after default to pay circulation.
Taxation of circulation of, by States, etc
Tax provisions restricted
Taxes on insolvent, remitted
"Where proceedings to enjoin may be brought
Withdrawing circulation
New York City:
Associations in, reserve agents

94, 96,
103
148
141
137

Bonds, sale of forfeited, in
Notice of expiration of corporate existence in paper in
Notice of voluntary liquidation in paper in
Net profits. (See Dividends.)
Nonresidents:
Directors
State, etc., taxation of stock of
Notary public:
Acknowledgment of organization certificates before
Acknowledgment of reports
Notice. (See Publication; Printing.)

28, 29
.124

j

15
119,120,
121

O.
Oath:
Certificate of officers and directors
Directors
Examiners may take statements under
Execution of organization certificate
Official, by Comptroller
Official, by Deputy Comptroller
Payment of installments
Reports of condition, etc
Semiannual return of circulation
Shareholders, list of
Obligations of the United States:
Defined
Penalty for dealing in counterfeit
Penalty for illegal possession or use of material for
Penalty for passing counterfeit
Penalty for pledging
Penalty for taking or having unauthorized impressions of tools, etc
Officers (see also President; Cashier):
Bonds assigned to be signed by cashier or other .
'
' '
"
Certificate of directors and
Certificate of payment of increase of stock.
Certification of payment of stock by president or cashier
Circulation properly signed, issuabfe
Disqualified to examine national banking associations in which interested as —
Election or appointment of, by directors
Examination of, under oath
False certification of checks forbidden
—
Forfeiture of charter, provisions for
Forged signatures ol\ to circulation not to invalidate
Fraudulent notes to be marked by
Oath, administration of, to reports
Official malfeasance, penalty for
Penalty for false certification of checks
Penalty for improper countersigned, etc., circulation
Penalty for issuing circulation of expired associations
Penalty for official malfeasance
Penalty for pledging, etc., circulation
Penalty for unauthorized receipt of public money
Preference of creditors
President of board a director
President or cashier, certification of extension
President or cashier, certification of expiration of existence
President or cashier, certification of liquidation




j

19,23
31
29
125
15, 37 6,10
3
4
3
5
7
19
28
119-121,
28
;
123
81-87 20,21
27
118
j
41
169
42
|
174
41
170
42171
40
165
42
172,173
52
23
44
19
63
126
16
125
176
156
76
79
120
178
177
164
175
178
165
225
162
34
132
141
137 i

13
7
11
7
15
29
6
29
43
36
19
19
28
43
43
40
43
43
40
54
39
9
31
33
32

72

REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-bank act—Continued.
Paragraph.

Officers (see also President; Cashier)—Continued.
President or cashier waiving notice of protest
President or vice-president and cashier to sign circulation
Proxy, not to act as
Receiver, appointment of, for violation of national-bank act by
Redemption of unsigned circulation
'
Reports of condition, verification of, by president or cashier
Reports of earnings and dividends, attestation of, by president or cashier
Shareholders' list, verified by president or cashier
Taxation, circulation subject to, returns by president or cashier
Taxation unauthorized circulation, returns by president or cashier
Officers, United States:
Deposit and withdrawal of public money
Penalty for improper countersigning or delivering circulation
Penalty for unauthorized deposit of public money
Receiving or disbursing public money to mark fraudulent
Offices, vaults, etc.:
Assignment of, to the Comptroller by the Secretary
Oklahoma:
Qualification of directors of association in
Organization and powers of national banks:
Amendment of articles of association
Articles of association
Branches of converted State banks
Capital stock
Capital stock requirements
Certificate of authority to begin business
Certificate of officers and directors
Change in title and location
Conversion of gold banks
Conversion of State banks
Corporate powers
Deposit of bonds
Directors, election of
Directors, number and election of
Directors, oath of
Directors, qualification of
Directors, qualification of, in Oklahoma
Directors, to choose president
Directors, vacancy, how
filled
Enforcing payment of stock
Examination preliminary to beginning business
Execution of organization certificate
Extension of corporate existence
Failure to hold election
Gold banks, conversion of
Gold banks, organization of
Incidental powers
Increase of capital stock, provisions for
Increase of capital stock, when valid
Liquidation
Location and title, change of
Location
Organization certificate
Payment of stock
President, election of, by board
President, qualification of
Publication of certificate of authority to begin business
Reduction of capital stock, provisions for
Restoration of capital stock
Shareholders
Shareholders, personal liability of
Shareholders, qualification of, at election
Shareholders, when personally liable
Shares of stock
State banks, capital of converted
State banks, conversion of
State banks, conversion of, and capital
State banks, converted may retain branches
Status of associations organized under act of February 25,1863
Title
Title and location, change of
Vacancies in board, how
filled
Organization certificate:
Certified copy of, evidence
Comptroller to grant or withhold
Conversion of gold banks
Conversion of State banks
Execution of
Sealed certificate of Comptroller, evidence
Specifications in




|
j
!
|
j
j
j
j
j

'

i

I

J
j
!

I
I

142
59
30
152
76
119
121
118
81
87
221
164
224
79

29
42
13
39
14
17
25
23
46
36
37
16
24
32
27
31
28
29
34
33
20
22
15
131
32
36
35
16
43
44
136
46
14
14
19
34
34
26
415
21
14
40
30
40
18
38
37
38
39
47
14
46
33
182
25
3(5
37
15
181
14

Page.

73

REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-batik act—Continued.

Page.

p.
Payment of capital stock:
Provisions relative to
Penalty:
Appointment of receiver for violations of act
Bond of Comptroller
Bond of Deputy Comptroller
Counterfeiting circulation
Dealing in counterfeit circulation
False certification of checks
Failure to pay installment on stock
Failure to redeem circulation
Forfeiture of charter
Illegal possession or use of material for circulation..
Imitating bank circulation for advertising purposes.
Improper countersigning or delivering circulation...
Interest, unlawful
Issuing circulation of expired associations
Jurisdiction of United States courts
Mutilating circulation
Misapplication of money-order funds
"National," unlawful use of the word
Official malfeasance
Passing counterfeit circulation
Pledging United States notes or bank circulation
Reports to Comptroller, failure to make
Reserve, maintenance of
Semiannual return of circulation
Taking or having unauthorized impressions or tools, etc
Unauthorized deposit of public money
Unauthorized receipt or use of public money
Personal liability. (See Shareholders; Trustee; Liability.)
Plates:
Control of
Cost of engraving
Custody of
Engraving of
Examination annually
Expense of examination and destruction of
Extended banks
Liquidating bank, to be destroyed
Penalty for counterfeiting, or having possession of counterfeit .
Penalty for taking unauthorized impressions of tools, etc
Penalty for having false impressions of tools, etc
P e y
g
p
di
i l t i
Pledging or h t h t i
hypothecating circulation:
Prohibited
-'
Population:
Relation of capital stock to
Postmasters:
Deposit of public funds by
Misapplication of money-order funds by
Postmaster-General:
Deposit of funds by authority of
Post-notes:
National banking associations prohibited from issuing
Powers (see also Comptroller):
Granted to national banks
Incidental, of national banks
Visitorial, limitation of
Preparation of circulation:
Provisions for
President {see also Officers):
Certificate of officers and directors
Countersigning or delivering circulation improperly
Director to be
Election or appointment of, by directors
False certification of checks and penalty for
Official malfeasance, penalty for
Proxy, not to act as
Public money, unauthorized receipt of, by
Signature of, forged, not to invalidate circulation
Signature of, on circulation
Violations of act by, penalty for
President of the United States:
Appointment of Comptroller by
Printing (see also Publication):
Annual report of the Comptroller, number printed and distribution of.
Certificate of authority to begin business
Charter numbers on circulation.



19
151, 152
4
5
168
174
177
20
143
156
170
166
164
108
175
180
167
223
130
178
171
1G5
122,123
95
81, 82.83,
86.88
172,173
224
225

35
3
3
41
42
43
7
33
36
41
40
40
25
43
44
41
54
30
43
42
40
28
23
20
21
42
54
54

61
66,69
9
59
62
62
69
62
170,172
173
172
173

15
16,18
4
15
15
15
18
15
41,42
42
42
42

113

26

222
223

53
54

223

54

78

19

16
16
129
59

15

23
164
34
16
176,177
178
30
225
76
59,63
152,156

7
40
9
6
43
43
9
54
19
15
35,36

12
26
60

5
8
15

74

REPORT OF THE COMPTROLLER OF THE CURRENCY.

Index to national-bank act—Continued.
Para- Page.
gragh.
Printing (see also Publication)—Continued.
Circulation of associations
Circulation of extended banks
Creditors of insolvent associations, notice to
Notice of special annual election
Notice of sale of delinquent stock
Notice of sale of bonds at public auction
Notice of liquidation
Notice of expiration
Penalty for counterfeiting circulation
Penalty for illegal possession or use of material for circulation
Penalty for imitating circulation
.
Penalty for taking or having unauthorized impressions of tools, etc., for
Provisions for, Comptroller's annual report
Reports of condition
Shareholders' agent, notice of election of
Voluntary liquidation, notice of
Protest of circulation:
Bonds forfeited, when
Bonds, sale of, when
,
Failure to redeem circulation
Publication (see also Printing):
Annual election, notice of holding special
Certificate of authority to begin business
Change of title or location, notice of
Creditors of insolvent associations, notice to
Expiration of corporate existence, notice of
Nonpayment of circulation, notice to present
Reports of condition of banks other than national in District of Columbia.
Reports of condition of national banks
Sale of bonds, notice of..
Sale of delinquent stock, notice of
Shareholders' agent, notice of election of..
Voluntary liquidation, notice of ..
Public debt. (See Imports and interest on public debt.)
Q.
Qualification:
Comptroller of the Currency
Deputy Comptroller
Directors of national banks
Directors of national banks in Oklahoma
Examiners of associations
Receivers of associations
Shareholders' agent
Rate. (See Interest; Taxation.)
Ratio. (See Bonds; Capital; Circulation.)
Real estate :
Investments and holdings restricted
,
Subject to State, etc., taxation
Receiver :
Appointment and duties of
Appointment of, for failure to dispose of own stock
Apx>ointmeiit of, for failure to restore diminished capital
Appointment of, for false certification of checks
Appointment of, for nonpayment of circulation
Appointment of, for impairment of capital
Appointment of, for insolvency
Appointment of, for nonmaintenance of reserve
Courts may enjoin
Expenses of, how paid
General jurisdiction of national-bank cases
Jurisdiction of circuit courts
Purchase of property by, to protect trust
Receiverships. (See Liquidation and receivership; Receiver.)
Redemption:
Cancellation of circulation sent for
Deposit of lawful money for, of associations in liquidation..
Disposition of, account
Enjoining Comptroller
Extended bank circulation
First lien on assets
Five per cent fund for, to be maintained
Five per cent fund for, part of lawful reserve
Forfeiture of bonds
Forged signatures not to prevent
General provisions respecting
Incomplete circulation
Liquidating bank circulation



59
69
153
32
20,116
148
137
141
168
170
166
172,173
11
119,123
160
137

15
18
36
9
7,27
34
32
33
41
41
40
42
5
28
37
32

143
148,150
142

33
34
33

32
26
46
153
141
147
123
119
148
20,116
160
137

9
8
11
36
33
34
28
28
34
7,27
37
32

4
5
28
29
126
160

3
3
8
8
29
35
37

106
124

25
29

151.
152
21
152
151
152
152
152
144
155
180
179
158

35
35
7
35
35
35
35
35
34
36
44
44
36

73
138

18
32
19
34
18
34
16
25
33
19
16
19
18

151,152

144
69
149
66
98
143
76
66
76
70,71

75

REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-bank act—Continued.
Paragraph.

Redemption—Continued.
Notice to present circulation for
Proceeds from sale of bonds for, of circulation
Profit on circulation not presented for
Protest of circulation, for failure to redeem
Provisions for, of circulation
Provisions for, of United States note certificates
Eecords of
Sale of bonds
State bank circulation, converted, provisions for
United States notes, of circulation in
Unsigned circulation to be redeemed
"Withdrawn circulation
Worn or mutilated circulation
Redemption account:
Disposition of
Register of the Treasury:
Signature on circulation
Registered bonds. (See Bonds, United States.)
Regulation of banking business:
Assessment, enforcement of
Circulation, improper use of
Dividends
Dividends prohibited, when
Examiners, appointment of
Examiners, compensation of
Impairment of capital
Interest, limited
Interest, unlawful, penalty for
Laws governing certain associations
Liability of association restricted
Loans, restrictions on
Net profits
Place of business
Real estate, purchasing, etc
Reports of condition
Reports, failure to make
Reports, verification of
Reports of dividends and earnings
Reports, verification of
Reserve cities
Reserve cities, balances with agents
Reserve cities, central
Reserve cities, requirements
Reserve cities, requirements, gold banks
Shareholders, list of
State taxation of associations
Stock, holding, etc
Surplus and di vidends
Uncurrent notes, use of, prohibited
Unearned dividends prohibited
Visitorial powers, limitation of
Reimbursement. (See Circulation; Expenses; Plates and dies.)
Reports:
Amendments proposed in Comptroller's
Annual, to be made to Congress
Banks, other than national
Circulation, semiannual return of
Closed banks
Condition of banks other than national
Condition of national banks in
*
Distribution of
Dividends and earnings
List of shareholders
Payment of capital stock
Printed, when
Printed, number of copies
Statement of condition of national banks
Reserve:
Clearing-house certificates
rive per cent fund
Gold and silver, held by gold banks
Gold certificates
Lawful money
Maintenance of
Penalty for failure to maintain
Proportion of, with agents
Requirements
Requirements for gold banks
Reserve agents, balance with
Silver certificates
United States note certificates



Page.

147
140
69
142
65
100
72

65

34
32
18
33
16
24
18
34
21
18
19
17
16

75

19

59

15

116
113
109
114
125
127
115
107
108
92
112
110
109
93
106
119
122
120
121
121

27
26
26
26
29
29
27
25
25
22
26
26
26
22
25
28
28
28
28
28

94,104

23,24

148,150

89
74
76
67,68

96

23

103,105

24,25

94
102
118
124
111
109
117
114
129

23
24
27
29
26
26
27
26
30

10
10
123
81
10
10
10
12

4
4
28
20
4
4
4
5
28
27
7
5
5
28

121,122

118
19
11
12
119,120

97

23

75,98

19,23

102
101
94
95
95

24
24
23
23
23

96,103

23,24

94
23
3 02
24
96,103 23,24
101
24
99
23

76

REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-hank act—Continued.

Reserve agents (see also A g e n t s ) :
Balance with
Central
Central, additional
Cities, additional, in which may bo located
Cities in which located
Reserve cities:
Additional, provisions for
Central, deposits in
Central, provisions for
Named
Requirements, not applicable to gold b a n k s in San Francisco..
Requirements of associations in
Residence:
List of shareholders and reported annually.
List of shareholders in organization certificate
National banks
Qualification of directors of associations

23
24
25
24
23
24
24
25
23
24
23
27
5
44
8
44

Resources. (See Assets.)
Restoration of capital s t o c k :
Provisions for
R e t u r n s . (See Circulation; R e p o r t s ; Taxation.)
Revised Statutes, United States:
Sections of this act, etc., index of

7,27
83

S.

Sale:
Assets of insolvent associations by receiver
Assets of insolvent associations by shareholders' a g e n t .
Bonds for failure to redeem circulation
Stock for delinquent payment of installment
Stock on impairment of capital
Stock t a k e n for debt
Savings b a n k s :
Limit of capital of existing, in t h e District of Columbia
Reports of, provided for in annual report
T r u s t companies and, in t h e District of Columbia
Seal of office of Comptroller:
Certified copy of organizat ion certificate under, evidence
Certificates under, competent evidence
Description, impression of, and certificate of approval by Secretary of t h e Treasury, to be filed w i t h t h e Secretary of State
Devised by t h e Comptroller and approved by Secretary
Secretary of S t a t e :
Description, impression, and certificate of seal of Comptroller to be filed with
Secretary of T r e a s u r y :
Agent, special, to be appointed for associations failing to redeem circulation
Appointment of Comptroller on recommendation of
Appointment and classification of clerks by
i ppointment of Deputy Comptroller by
Assignment of rooms, etc., for t h e Comptroller b y
Authorized to exchange registered for coupon bonds
Circulation, worn or mutilated, destruction of, by
Currency, expansion or contraction of, b y issue of currency certificates, prohibited by
Duties of Comptroller under general direction of
Exchange of bonds, terms of, prescribed by
Organization of national banks w i t h capital less t h a n $100,000 to be approved by
Plates and dies, examination of, by
Recommendation of appointment of Comptroller by
Receivers, appointment of, by Comptroller, concurrence in by, in certain c a s e s . .
Reserve cities, designation of, by Comptroller, to be approved by
Seal of office of Comptroller to be approved by
United States certificates may be issued by
Security for circulation. (See Bonds, United States.)
Security for loans:
Personal
Senate:
Comptroller's reports to be sent to
Shareholders:
Agent of, to r e t u r n to, assets of insolvent association
Appointment and qualification of agent of
Assessment for impairment of capital
Assets of insolvent association to be returned to, ratably
Consent of, necessary to extension
Conversion of State banks, requirements
Creditor's bill against
Directors, election or appointment of, by
Dissenting to extension may withdraw




151
161
140,143,
148,150
20
116
111

35
33
32,33
34
7
27
26

123
10
123

28
4
28

182
181

44
44
4
4

143
3
7
5
9
51
65

3
4
3
4
13
16

100
2
57
17
62
3
95
105

24
3
14
6
15
3
2;*
25
4
23

161
160
115
154
132
37
163

38
37
27
36
31
10
39
68
,
31

16,27

135

77

REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-bank act—Continued.
Paragraph.
Shareholders—Continued.
Duties of agent of
Election by, annually
Election or appointment of directors by
Enforcement of assessment for impairment of capital stock
Enforcing payment by, of installments
Estates and funds w i t h t r u s t e e liable for assessment
Extension of corporate existence
Increase of capital stock by
L i s t of, to be k e p t and copy sent to Comptroller
L i s t of, subject t o inspection
Location, change of, by
Barnes, residences, and number of shares held by each in organization certi tfcates
Personal liability of
Personal liability of, in certain converted Stace banks
Provisions for election by, when
Proxies, voting by
Qualifications of directors
Reduction of capital stock by
R i g h t s and liabilities of, on transfer of shares
Title and location of association, change of, b y ,
Vote of, necessary to place association in liquidation
Voting
Voting not allowed, when
Shareholders' agent. (See Agent.)
Shares:
Association not to own or hold its own except
Consent of owners of two-thirds, necessary t o extension
Converted State bank to be t h e same as prior to conversion
Disposition of, t a k e n for debt
Fifty per cent of aggregate value of, to be paid in prior to beginning b u s i n e s s . .
Holding of, in other banks, b y converted b a n k s authorized
Installments, payment and certification of
List of owners of, to be k e p t and copy sent t o Comptroller
Loan on security of, prohibited
Oath of director relative to
Owners of two-thirds, may place association in liquidation
Organization certificate to s t a t e capital and number of
Personal property
Preference in allotment of, in succeeding association
Qualifications of directors
Receiver may be appointed for failure t o dispose of, taken
Sale or forfeiture of, for failure to pay installments due
Sale of, when necessary
State taxation of
Transfer of
Value of, of shareholders dissenting to extension, how ascertained
Value, par, of each
Voting
Signature on circulation:
President or vice-president and cashier
Treasurer and Register, United States
Silver:
Construed to be lawful money, when
Reserve of gold banks t o be gold and
Silver certificates:
Clearing-house balances payable in
Reserve of national b a n k s may be
Solicitor of t h e T r e a s u r y :
Conduct of suits under direction and supervision of
Special agent. (See Agent.)
Special reports. (See Reports.)
State b a n k s :
Branches of converted
Capital of
Conversion of
Penalty for failure to m a k e r e t u r n of t a x on circulation
Penalty for unauthorized receipt of public money
Reports of, provided for
R e t u r n of taxable circulation
Shareholders' personal liability, exceptions
Shares of converted
T a x on converted
Tax on unauthorized circulation
State courts. (See Comptroller; Suits.)
State, Territory, or District:
Change of title or location of associations
Compensation of national-bank examiners
Conversion of bank organized under authority of laws of
Evidence




361
27, 32
16,27
116
20
41
131
43
118
118
46
14
40
40
32
30
28,29
45
18
46
136
30
30

27
7
11
30
11
27
27
11
5
10
10
9
9
8
11
6
11
32
9
9

111
132
37
111
19
37
19
118
111
31
136
14
18
135
28,29
152
20
20,111,
116,135
124
18
135
18,37
30

26
31
10
26
7
10
7
27
26
9
32
5
6
31
8
35
7
7,26
27,31
29
6
31
6,10

59
59

15
15

102,226
102

24, 55
24

101
101

24
24

183

44

39
38
37
88
225
10
87
40
37, 38
89
86

10
10
10
21
54
4
21
10
10
21
21

46
127
27
181,182

11
29
8

U

78

REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to national-bank act—Continued.
Page.

State, Territory, or District—Continued.
Examinations in District of Columbia
128
30
Interest, legal rate in, national banks not to take, etc., in excess of
107
25
• 'National,'' use of the word in tities
130
30
Qualification of directors
28
8
Proceedings to enjoin Comptroller or receiver, to be brought in district in which
association is located
,
34
145
Taxation of circulation of State, etc., associations
86-89
21
Taxation of money by
91
22
Taxation of national banks by
124
29
Succession:
Expired associations
135
31
Period of, national banks
16
Suits:
Against United States officers or agents
44
183
Certified copy of organization certificate evidence in
44
182
Circuit court's, jurisdiction of
44
179
Corporate powers of associations
16
Creditor's bill against shareholders
163
Crimes, jurisdiction, etc
164-184 40,44
District courts, jurisdiction of
44
180
Enjoining Comptroller or receiver
34
144
36
Forfeiture of charter
156
F
39
162
Illegal preference of creditors
44
184
Indian Territory, in
y,
44
179
idii
f i i
Jurisdiction of circuit courts
44
180
Jurisdiction, general, of national-bank cases
34
145
Proceedings to enjoin Comptroller to be brought, where
44
181
Sealed certificate of Comptroller, competent evidence
38
161
Shareholders' agent
35
151
Shareholders' liability, to enforce
y,
44
183
S l i i t of the Treasury to direct and supervise certain
t dit
Solicitor f th T
Surplus (see also Surplus and dividends):
10
40
Converted State bank with capital of $5,000,000
26
109
Creation of
10
40
Receiver may be appointed for deficiency
Surplus and dividends:
26
109
Provisions for surplus and payment of dividends
Surrender of Bonds. (See Bonds, United States.)
T.
Tax:
Bills of converted State bank.
21
89 I
Circulation, enforcing payment of
20
83 I
Circulation, exempt from
20
85 |
Circulation, failure to make returns
20
82 I
Circulation, rate and time of payment
20
80
Circulation, refunding excess
20
84 I
Circulat ion, semiannual return of
20
81 !
Money of all kinds subject to, by States, etc
22
21
Notes unauthorized
21
Notes unauthori zed, failure to make return
21
Notes unauthorized, semiannual return
87
Provisions restricted
.90, 91 21,22
37
Remission of, on insolvent national banks
]59
29
State taxation of national banks
124
58
War revenue, on capital and surplus
Taxation. (See Tax.)
Teller. (See Officers.)
Territorial court. (See Comptroller; Redemption; State, etc.)
Title and location:
Change of, by national banks
11
4C
Transfers. (See Treasurer United States; Bonds, United States.)
Treasurer, United States:
17
Circulation, withdrawal of, provisions for
8,12
Deposit of United States bonds with, to secure circulation
24,49
19
Disposition of redemption account
75
20
83
Enforcing tax on circulation
Examination of bonds and records, provisions for
55-57 13,14
Interest on bonds to be retained by, when
83,115, 20,27
Public moneys to be deposited with assistant treasurer, Government depos
taries, or
Proceedings on default in making return on circulation subject to duty.
Redemption fund to be kept with
Redemption of circulation by
Redemption of circulation in United States notes by
Semiannual return to, of circulation subject to duty
Signature of, on circulation
Tax, excess, refunding
Tax on circulation to oe paid to
Transfer of bonds in trust for associations to be made to
,



122

28

221
82
66
66
74
81
59
84
80 |
54 I

53
20
16
16
18
20
15
20
20

13

REPORT OF THE COMPTROLLER OF THE CURRENCY.

79

Index to national-lank act—Continued.
Paragraph. Page.
Treasury, United States (see also Treasurer, United States):
Associations to reimburse, for cost of redemption of circulation and plates.
Currency bureau in
Notice to present circulation at
Penalty for failure of associations to report to be paid into
Redemption account, disposition of
Eedemption fund, 5 per cent, in.
Redemption of circulation at

Trust:
Purchase of property by receiver to protect
Trustee:
Shareholders' liability, exemptions from
XI.
Uncurrent notes:
Issue of, prohibited.
United States (see also Officers of the United States; Crimes,,jurisdiction, etc.):
Courts of, may enjoin proceedings
Forfeiture of charter
United States disbursing officers:
Fraudulent notes to be marked by
Penalty for unauthorized d eposit of public money
Withdrawal of public money
United States notes:
Circulation of banks to be redeemed in
Fraudulent, to be marked
Issue of note certificates on deposit of
....•
Obligations of the United States defined
Penalty for dealing in counterfeit
Penalty for illegal use or possession of material for printing
Penalty for passing counterfeit
Penalty for pledging, etc
Penalty for taking or having unauthorized impressions of tools, etc
Redemption of certificates issued for
Subject to taxation by States, etc
Usury:
Interest, when not
Penalty for

V.
Vacancies:
Board of directors, filling
Vice-president (see also Officers):
Bonds, United States, may sign transfer of
Circulation, may sign
Election or appointment of
Proxy, not to act as
Violations of provisions of national-bank act:
Forfeiture of charter for
Visitorial powers:
Limitation of national banking associations, subject to .
Voluntary liquidation. (See Liquidation.)
Voters:
Qualifications of shareholders at elections

16
3
34
20,28
19
16
17,18
18

158

36

C6

41

117

27

144
156

34
36

79
224
221

19
54
53

74
79
99
169
174
170
171
165
100
91

18
19
23
41
42
41
42
40
42
24
22

107
108

25
25

172,173

33
52
59,63
16
30

13
15
6

156
129

30
9

W.

"Withdrawal:
Bonds, general provisions respecting.
Circulation, provisions for
Deposit and, of public moneys
Dissenting shareholders
Expired associations, bonds of
Illegal preference of creditors
Liquidation associations, bonds of
Reduction of capital
Unearned dividends




1
2
i
147
i 81,122
75
i
66
67,71,
I 72,73

57
67,68
221,224
135
141
162
140
45
114

14
17
53,54
31
33
39
32
11

INDEX TO ACT FOR INCORPORATION OF TRUST COMPANIES, ETC.
TRUST COMPANIES, ETC., IN THE DISTRICT OF COLUMBIA.
Paragraph.

A.
Amendment of act incorporating:
Provisions for
Annual report:
Liability for failure to make
Liability for failure to report for taxation
Required to be made to the Comptroller
Assets and capital:
Security when corporation is trustee, etc

219
202
202
200
216

B.
Bonds:
Debenture, issuance of
Deposit of other securities and, to secure debenture
Deposit of other securities and, with the Comptroller
District supreme court may require
Not required of trust companies, when
By-laws:
Directors or trustees to make

191
191
198
217
216
209

C.

Capital stock:
Enforcement of subscriptions to
Increase of
Liability of shareholders
Money payment of, required
Provisions relative to
Transfer of shares of
Trustee, etc., not liable on stock assessments
Charter:
Amendment, provisions for
Application for, notice of intention
Comptroller to certify to payment of .stock, etc
Copy of, etc., to befiledwith Comptroller
District Commissioners to issue
Recorder of deeds, to befiledwith
Comptroller of the Currency :
Annual reports to
Certificate of payment of capital stock and deposit of securities to be issued by.
Copy of organization certificate and charter to be filed with
Deposit of securities with
Existing corporations to file with, intention to organize under this act
Insolvency, corporation to be taken possession of, by
Trust companies under supervision of
Value of assets of existing corporations organizing under this act, to be ascer
tained by
Value of securities deposited for debenture bonds to be determined by
Corporate existence:
Limitation of, to be stated in organization certificate
Period of
Creditors:
Preferred
Stockholders' liability
D.
Directors:
Appointment of officer by. •
•
By-laws, adoption of, by.'
Enforcement of subscriptions to stock by
Liability of. for failure to report
Liability of, when may be avoided
Liable for payment of unearned dividends
Majority of, to sign annual report
Number and election of
Number of, to be stated in organization certificate
Qualifications of
Responsibility of, for excess liabilities
,
80




• •«

199
214
205
206
198
204
213
219
188
189
189
187
189
200
189
189
198
195
190
190
206"
191
186
197
216
205

208
209
199
202
211
210
200
207
186
207
212

REPORT OF THE COMPTROLLER OF THE CURRENCY.

81

Index to act for incorporation of trust companies, etc.—Continued.
Paragraph. Page.
187

46

217

52

210
211
210

51
51
51

E.
Election:
Directors, number and
Evidence:
Certified copy of incorporation certificate competent
G.
Gross earnings:
Liability for failure to report
Tax on

207

50

215

51

201
201

49
49

I.
Insolvency:
Comptroller to administer affairs of corporation in
Preferred claims in case of

190
216

46
51

191
191
210
21.1
212
202
205
194
199
213

46
46
51
51
51
49
50
48
49
51

188

46

200, 201
208
203

49
50
50

195
185

48
45

186
187
186

45
46
45

190
210, 212
218
199
202
203

46
51
52
49
49
50

J.
Jurisdiction. {See District supreme court.)
L.
Liability:
Corporations, as trustee.
. . . . . . ..<......«.....
Debenture bonds, issue of
Directors, for payment of unearned dividends
Directors', may be avoided
Directors', for excess
.».
Failure to make reports
Stockholders'
Stockholders and officers', for performance of trust
Subscriptions to stock
Trustee, etc., on stock assessment
N.
Notice:
Intention to apply for a charter to be published, etc
O.
Officers:
Annual report to be signed by certain
Appointment of
Perjury and larceny, penalty for
Organization:
Existing corporations
Provisions for
Organization certificate :
Execution of
Presented to Commissioners
Specifications in
P.
Penalty:
Corporations subject to the same, as provided for national banks
Directors' liability
Failure to comply with the provisions of this act
Failure to pay subscriptions to stock
Failure to pay taxes
Perjury and larcency
Perjury and larceny:
Defined
Penalty for
Powers:
General
Special
Preference:
Debts due as trustee, etc., shall have
President:
Annual report to be signed and verified by
Directors to choose
Privileges:
Extended to existing corporations, when
Purposes of corporations:
Safe deposit, trust, loan, and mortgage business
Security,
 guarantee, indemnity, loan and mortgage business
CUR
6
http://fraser.stlouisfed.org/ 99
Federal Reserve Bank of St. Louis

to to

District Commissioners:
Charter to be obtained from
District supreme court:
Jurisdiction of trust companies
Dividends:
Declaration of, by directors
Directors' liability for, how avoided
Directors liable for payment of unearned

50
50

191
191
216

46
46
51

200
208

49
50

195

48

185
185

45
45

82

REPORT OF THE COMPTROLLER OF THE CURRENCY.
Index to act for incorporation of trust companies^ etc.—Continued.
Paragraph.

Page.

Purposes of corporations—Continued.
Storage business
Title insurance, loan, and mortgage business .

185
185

45
45

Qualifications :
Directors..
Officers
Trustees.

207
208
193

50
50
48

Real estate:

R.
196

48

189

46

208
200

Purchase, holding, etc., of, by corporations
Recorder of deeds:
Charter of corporation to be filed with

50
49

s.

Secretary:
Appointment of
Verification of reports by
Securities. (See Bonds.)
Shares:
Directors' liability
Directors' liability, when ma3T be avoided
Enforcement of subscriptions to
Liability of stockholders
Par value of
Qualifications of directors
Trustees, etc., not liable on assessment
Transfer of
Similar district corporations:
Subject to this act
Stock. (See Capital stock.)
Stockholders:
Liability of
Subscriptions to stock:
Provisions for enforcement of
Supervision. (See Comptroller of the Currency.)
T.
Tax:
On gross earnings
Title:
Organization certificate to contain
,
Transfer of stock. (See Capital stock.)
Treasurer:
Appointment of
Trust:
Security for the faithful performance of.
Trustee, etc.:
Corporations competent to act as
Qualifications of corporations as
Security for performance of trust

210,

51
51
49
50
49
50
51
50
52
205

50

199

49

201
186 !

45

208 i

50

194

48

192
193
194

47
48
48

U.

Unearned dividends. (See Dividends.)
Visitorial powers:
Limitation of...




V.
190

INDEX TO SECTIONS OF REVISED STATUTES.
Section.
324..
325..
326 .
327..
328..
329..
330..
331..
332..
333..
380..
629..
736..
884..
885..
3410..
3411..
3414..
3415..
3416..
3417..
3585..
3586..
3587. .
3588..
3589..
3590..
3620..
3701..
3811..
3847..
4046..
5133..
5134..
5135..
5136..
5137..

Paragraph.

128
10
183
179
145
181
182
38
85
87
90
226
226
226
226
226
226
221
91
11
222
223
13
14
15
16
106

Section.
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.
5172.
5173.
5174.




Paragraph.
17
18,42
19
20,21
43,44
45
30
27
28
31
33
32
34
40
41
220
37
39
47
92
48
24,49
50
51
52
53
54
55
56
57
22, 23
25
26
59
61
62

Section.

5182
5183
5184
5185
5186.....
•5187
5188
5189
5190
5191
5192
5193
5194
5195
5196
5197
5198
5199
52U0
5201
5202
5203
5204
5205
5206
5207
5208
5209
5210
5211
5212
5213
5214
5215
5216
5217

Paragraph.
63
78
65
35,64
102
164
166
167
93
94,95
96
99
100
103
77
107
108
109
110
111
112
113
114
115
117
165
176
178
118
119
121
122
80
81
82
83

Section.

Paragraph.

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
5415
5430
5431
5432
5433
5434
5437
5488
5497

84
124
136
137
138
139
140
70
142
143
146
147
148,149
150
72
73
151
153
154
144
155
156,157
125-127
129
162
130
169
168
170
171
172
173
174
175
224
225

83

DIGEST OF NATIONAL BANK DECISIONS.
CONTENTS.
Page.
ABATEMENT
ACCOMMODATION PAPER
ACTIONS
AGENT OF SHAREHOLDERS
APPEAL,
ASSESSMENT
ATTACHMENT
BONDS OF OFFICERS
BOOKS, INSPECTION OF
BRANCH BANKS
BROKER.
CAPITAL STOCK
CASHIER
CERTIFICATE OF DEPOSIT
CERTIFICATION OF CHECKS
CHECKS
CIRCULATION
COLLATERAL SECURITIES
COLLECTIONS
CONSTITUTIONALITY
..
CONSTRUCTION OF LAW
CONVERSION
COSTS
CRIMINAL LAW
DEPOSITS
DEPUTY COMPTROLLER
>. _ _.
DIRECTORS
DISTRICT ATTORNEY
DIVIDENDS
ESTOPPEL
EVIDENCE
EXECUTION
EXPIRATION
EXTENSION
F A L S E ENTRIES
FORFEITURE OF CHARTER
FORGERIES
GUARANTY
:
INCREASE OF CAPITAL STOCK
INDICTMENT
- INJUNCTION




99
99
101
105
105
107
121
123
126
127
127
127
131
131
133
135
141
141
145
153
154
155
156
156
167
172
172
172
173
174
177
181
182
182
182
185
186
188
191
191
194

Page.
INSOLVENT BANKS
INTEREST
JURISDICTION . .
LEASE
LIABILITY OF BANK
LIEN
LIQUIDATION
LOANS
MANDAMUS
MARRIED WOMEN
MORTGAGE
NEGOTIABLE PAPER
NOTARY PUBLIC
NOTICE
OATH OF DIRECTOR
OFFICERS
OFFSET
P A S S BOOK
PLACE OF BUSINESS
POST NOTES
POWERS OF BANK
PRACTICE
..
PREFERENCE
PREFERRED CLAIMS
__
PRESIDENT
R E A L ESTATE ..
RECEIVER
REDUCTION OF CAPITAL STOCK..
REPORT OF CONDITION
RESIDENCE
RESTRAINING ACTS
SAVINGS BANKS
SHAREHOLDERS
SPECIAL DEPOSITS
TAXATION
TRANSFER OF STOCK
U L T R A VIRES
USURY
VICE-PRESIDENT
VOTING

85

195
202
204
213
214
218
220
221
225
225
225
228
236
236
239
240
253
259
259
259
260
262
264
272
277
277
279
285
285
286
286
286
286
289
294
315
321
324
334
334

TABUK O F CASTES.
A.
Page.

Aberdeen, First National Bank of, v.
Andrews etal
155,261,278
Aberdeen, First National Bank of, v.
Chehalis County et al
297,314
Adair, Tax Collector, v. Robinson et al.
300
Adams v. Daunis
208
Adams v. Mayor, etc., of Nashville
300
Adams v. Spokane Drug Company
256
.ZEtna National Bank v. The Fourth
National Bank
167
Agnew v. United States.
163
Alabama Iron and Railway Company v.
Austin
181,213
Alabama National Bank v. Halsey
230
Albany, National Albany Exchange
Bank of, v. Hills et al
309,311
Albany City National Bank v. Maher,
Receiver, etc
309
Albany, Supervisors of, v. Stanley
154
Alberger v. National Bank of Commerce
-.
268
Albuquerque National Bank v. Perea.. 294,298
Aldrich et al., I n r e .
308
Aldrichu Y a t e s . . .
120
Allen v. First National Bank of Xenia-.
222
Allentown, First National Bank of, v.
Hoch.
127,322
Allentown, First National Bank of, v.
Rex
292
Allentown National Bank v. Trexler...
233
Alves v. Henderson National Bank
326
American Exchange National Bank v.
Crooks
239
American Exchange National Bank v.
Dugan
239
American Exchange National Bank v.
Oregon Pottery Company
252
American National Bank v. Love 189
American National Bank v. National
Wall Paper Company
176
American Surety Company v. Pauly. - 125
Anderson v. Alton National Bank
153
Anderson v. First National Bank
323
Anderson v. Gill
145
Andersons. Kissam.
242
Anderson v. Line
110
Anderson v. Pacific Bank
268
Anderson v. Philadelphia Warehouse
Company
113,286
Andrews v. Varrell
253
Anheuser-Busch Brewing Association
v. Clayton
149
Anniston National Bank v. School Committee of Town of Durham
239
Armour Packing Company v. Davis
152
Armstrong v. American Exchange National Bank
195
Armstrong v. Bank
,._199
Armstrong v. National Bank of Boyertown __
_.
151
Armstrong v. Chemical National Bank.
143,
219,224,266
Armstrong v. Ettlesohn
284
Armstrong, I n r e .
_
146,198,267
Armstrong v. Second National Bank of
Springfield
127,259,260
Armstrong v. Stanage
129,195,281
Armstrong v. Trautman et al
212
Armstrong v. Warner
_
_
258
Armstrong v. Wood
129,281
Arnau v. First National Bank
106
Arnot v. Bingham
153
Aspinwall v. Butler
129,178
Atchison, Exchange National Bank of,
v. Washita Cattle Company
209
Atlanta National BaTik v. Davis
151
Atlantic National Bank v. Harris
156
Atlas National Bank v. Holm et al
231




Atlas National Bank v. Savery
Auburn, National Bank of, v. Lewis
Auburn Savings Bank v. Hayes
Austin v. The Aldermen

Page.
204
326
197,266
306

B.
Babcock v. Wolf
263,323
Bain etal. v. Peters.
197
Bailey v. Mosher
240,248
Bailey v. Sawyer
109,112
Baker v. Ault et al
194
Bakerv. Beach et al
118
Baker v. Old National Bank of Providence, R. I., e t a l
119
Baker v. Reeves et al
119
Baker v. Texarkana National Bank et al.
106
Balbach et al. v. Frelinghuysen. 148,168,253,273
Balch v. Wilson
255
Baldwin v. Canfield
277
Baldwin v. State National Bank of Minneapolis
227
Ballinger National Bank v. Bryan
226
Baltimore, Central National Bank of,
v. Connecticut Mutual Life Insurance
Company
221
Baltimore, National Exchange Bank of,
v. P e t e r s e t a l
247
Baltimore, Third National Bank of, v.
Boyd
214,218
1
Bangor, Merchants National Bank of,
v. Glendon
177
Bank v. Armstrong
217,262,283
Bank of Bethel v. Pahquioque Bank
101,
102,181,195,204,279
Bank v. Kennedy
279
Bank v. Lanier
218,222,322
Bankv. Latimer
269
Bank v. Mclntyre
155
Bankv. Zent
293
Bank of the Metropolis v. First National
Bank of Jersey City
237
Bank of Redemption v. Boston
294,297,298
Barbour v. National Exchange Bank...
258
Barhorst et ux. v. Armstrong et al
195
Barnes V. Swift.
212
Barnet v. Muncie National Bank
325
Bartlett v. Woodbine Savings Bank
238
Bashaw v. United States
173
Batchelor v. United States
158
Bates, I n r e
268
Bates v. Paddock
142
Bates v. Salt Springs National Bank . . .
219
Bath Savings Institution v. Sagadahoc
National Bank
.
173,321
Bayor v. American Trust and Savings
Bank
198
Beal v. Essex Savings Bank
287
Beal v. National Exchange Bank of Dallas
151
Beal v. City of Somerville
273
Beard v. Independent District of Pella.
276
Beardsley v. Webber
228
Beaver v. Beaver
171
Becker's Investment Agency v. Rea
223
Beckham v. Shackelford
282
Bell v. Hanover National Bank
143
Belleville, People's Bank of, v. Manufacturers' National Bank of Chicago
189
Benton v. German-American National
Bank..
236
Benton v. Holmes
253
Berney National Bank v. Guy on.
268
Bickf ord v. First National Bank of Chicago
134,135
Bird's Executors v. Cockrem . _
284
Birmingham National Bank v. Bradley.
103,
140,180,207
Birmingham National Bank v. Mayer..
198
87

REPORT OF THE COMPTROLLER OF THE CURRENCY.
Page.
Bissell v. The First National Bank of
Franklin
241
Blackmore v. Guarantee Company of
North. America et al . .
124
Blackmore v. Woodward et al
114
Blaine, First National Bank of, v. Blake 239,240
Blair v. First National Bank of Mansfield
_
240
Blanchard v. Commercial Bank of Tacoma
- 179,283
Bletz v. Columbia National Bank
204
Bloch v. Creditors
140
Board of County Commissioners of Rice
County v. Citizens' National Bank of
Faribault
304
Board of Commissioners of Montgomery County v. Elston
._ 141,295
Bobs v. People's National Bank
325
Boone County National Bank v. Latimer
267
Booth et al. v. Welles
273
Boston, Central National Bank of, v.
Hazard etal
281
Boston, City of, v. Beal
_
281,301
Boston National Bank, v. Jose
228
Boston National Bank v. City of Seattle 302
Bosworth v. Jacksonville National Bank
217
Bowdell v. Farmers and Merchants'
National Bank of Baltimore
109,286,316
Bowden v. Johnson
108,113,178,386,316
Bowden v. Santos
316
Bo wen v. Needles National Bank
101,
135,191,264,324
Bowman et al. v. Clark et al _
149
Bowman v. First National Bank
274
Boyer v. Boyer
296,298,300
Boykin v. Bank of Fayetteville
152
Boynolli?. State
295
Brayden's Estate, In re
131
Bradley v. The People
295
Brahan v. First National Bank
232
Branch v. The United States
170
Branch v. United States National Bank _
153
Bressler v. Wayne County
310
Breyf ogle et al. v. Walsh et al
] 94
Briggs v. Spaulding
244,248,280
Brinckerhoff v. Bostwick
102,206,247
Britton v. Evansville National Bank . . .
297
Brodrick v. Brown
114
Brooke v. Tradesmen's National Bank138
Brown v. Carbonate Bank of Leadville.
271
Brown v. Ellis
118
Brown v. Farmers and Merchants' National Bank
-.
175,251
Browne. Finn
286
Brown v. First National Bank
176
Brown v. French-.
._
176,194,284,312
Brown v. Marion National Bank
334
Brown v. Smith
213
Brown v. The Second National Bank of
Erie
331
Brown v. Tillinghast
131
Bruner v. First National Bank
202
Buchanan et al. v. Drovers' National
Bank of Chicago
325
Buchanan County, First National Bank
of, v.Deuel County-.
207,225
Buffalo County National Bank v. Gilcrest
106
Buffalo, Farmers and Merchants' National Bank of,v. Rogers _.
264
Buffalo German Insurance Company v.
Third National Bank
220
Buie v. Commissioners of Fayetteville.
312
Bullardv.Bank
128,218,316
Bundy v. Cocke
116
Bundy v. Jackson
318
Bunt v. Rheum
194
Burbage v. American National Bank...
239
Burlington, Howard National Bank of,
v. Loomis
227
Burnham et al. v. First National Bank
of Leoti
205
Burrillv. President, Directors, etc., of
the Nahant Bank
247
Burroughs v. Tradesmen's National
Bank
139
Burrows v. Niblack
262
Burrows v. State
—
138




Burtv. Bailey
287
Burtnett. Administrator, v. The First
National Bank
..
168
Burton v. Burley
259
Bushnell v. Leland
118
Bushnell v. The Chautauqua County
National Bank
260
Butler, Receiver, v. Aspinwall
111
Butler et al. v. Cockrill
175,198,219
Butler v. Coleman.
123,265
Butler v. Demmon
123
Butler v. Eaton
._ 107,129,286
Butlers. Mixter.
123
Butler v. Poole
102,110
Butler v. Whitney
123
C.
Cadiz, Bank of, v. Slemons.
_
174
Cadlei?. Baker
175
Cadlev. Tracy
204
Cady v. Case
139
Cake v. The First National Bank of
Lebanon
331
California Bank v. Kennedy
212,289
Camden, National State Bank of, v.
Pierce
_
300
Cameron v. First National Bank
223
Campbell v. First National Bank
252
Canfield v. The State National Bank of
Minneapolis
223
Carlisle, First National Bank of, v.
Graham
218
Carthage, City of, v. First National
Bank of Carthage
300
Case v. Bank
102,112,317
Case v. Citizens' Bank of Louisiana 265,266,319
Case, Receiver, v. Small
110,279,280
Casev. Terrell.
206,279
Casey v. Adams
101
Casey v. Galli
107,112,155,156,174,175,177
Casey v. La Societe de Credit Mobilier
de Paris
174,196,265,266,322
Castle v. Corn Exchange Bank _ _
140
Castles v. City of New Orleans
_
300
Cecil National Bank v. Thurber
_
194
Central National Bank v. Pratt
324
Central National Bank v. Richland National Bank
121
Central National Bank v. Spratlen
218
Central National Bank v. United States.
294,
297,298
Centralia, First National Bank of, v.
Marshall.
221
Charleston v. People's National Bank.. 130,294
Charlotte, First National Bank of, v.
National Exchange Bank of Baltimore
260
Charnley v. Sibiey e t a l
257
Chase National Bank v. Faurot
229,330
Chattahoochee National Bank v. Schley 290
Chattanooga, National Bank of, v.
Mayor
300
Chemical National Bank v. Armstrong.
143,
203,217,282

Chemical National Bank v. Bailey
196
Chemical National Bank v. City Bank.. 207,217
Chemical Bank v. City Bank of Portage.
104
Chemical National Bank v. Hartford
Deposit Company
197,214,283
Chemung, National Bank of, v. Elmira.
306
Chesapeake Bank v. The First National
Bank of Baltimore
153
Chetwood v. California National Bank .
105
Chetwood, Ex parte
105,284
Chicago, First National Bank of, v.
Corbin
211
Chicago, First National Bank of, v.
Reno County Bank
145
Chicago, First National Bank of, v.
Steinway etal
209
Chicago, German National Bank of, v.
Kimball
310
Chicago, Merchants' National Bank of,
etal., v. Sabinetal
182
Chicago Railway Equipment Company
u. Merchants' Bank
236
Chipman v. Ninth National Bank
172
Chism v. First National Bank

_..

139

REPORT OP THE COMPTROLLER OP THE CURRENCY.
Page.
Chrystie et al. v. Foster
251
Chubb v. Upton
130
Cincinnati, Hamilton and Dayton Railroad Company v. Metropolitan National Bank
102
Cincinnati, Union National Bank of, v.
Miller,Treasurer of Hamilton County,
Ohio
208
Cincinnati Oyster and Fish Company v.
N ational Lafayette Bank
135
Circleville, First National Bank of, v.
Bank of Monroe
146
Citizens1 Bank v. Houston.
151
Citizens1 National Bank v. Dowd
196,274
Citizens' National Bank v. Wintler
230
City National Bank v. Paducah
295
City National Bank v. Phelps
155
City National Bank v. Thomas
189
Claasen, In re
162
Claasen v. United States
162
Claffin v. Houseman
204
Clarion, First National Bank of, v.
Brenneman's Executors
182
Clarion, Second National Bank of, v.
Morgan...
324,3%0
Clarke National Bank v. The Bank of
Albion
133,241
Clemmer v. Drovers 1 National Bank
169
Cleveland, Cincinnati, Chicago and St.
Louis Railway Company v. Hawkins
etal
293
Cleveland, Brown <e Co. v. Shoeman
f
141
Cleveland, Commercial Bank of, v. Simmons
208
Clews et al.v.Bardon et al __
246
Clinton, Iowa, National Bank of, v. Dorsett Pipe and Paving Company
264
Cochecho National Bank v. Haskell
174,241
Cochran v. United States
183
Cockrill v. Abeles et al
249,278
Cockrill v. Butler et al
249
Cockrill v. Cooper et al
249
Coffey v. The National Bank of Missouri
155,290
Coffin v. The United States
158,159,161,193
Collins v. Chicago
294
Collins v. State
167
Colt v. Brown
254
Columbia National Bank v. Rice.... 175,180,239
Columbia National Bank v. Western
Iron and Steel Company
103,230
Columbus, The First National Bank of,
plaintiff in error, v. Garlinghouse
etal
331
Commercial Bank of Pennsylvania v.
Armstrong
149
Commercial National Bank v. Armstrong
150
Commercial National Bank v. Canniff._
107
Commercial National Bank v. First National Bank
139
Commercial Bank, In re
169,267
Commercial National Bank v. King
County
302
Commercial Nat. Bk., et al. v. Pirie et al.
191
Commercial National Bank v. City of
Seattle
_
302
Commissioners of Rice County v. Citizens1 National Bank of Faribault
295
Commissioners of Silver Bow County
uDavis
310
Commonwealth v. Bank of Kentucky ._
302
Commonwealth v. Barry
_
158
Commonwealth v. Deposit 1
Bank
_
302
Commonwealth v. Farmers Bank
302
Commonwealth v. Felton
157,158,204
Commonwealth v. Manufacturers and
Mechanics1 Bank of Philadelphia
300,302
Commonwealth v. Merchants and Manufacturers 1 National Bank
302
Commonwealth v. Frankfort National
Bank
302
Commonwealth v. State National Bank.
302
Commonwealth v. Tenney
_
157
Commonwealth Bank v. Clark
277
Commonwealth ex rel. Torrey v. Ketner 158,205
Concord, First National Bank of, v.
Hawkins
121,177
Concordia, First National Bank of, v.
Rowley
-329




89

Page.
Congdon & Co. v. Beard
240
Conklin y. The Second National Bank.. 127,316
Connecticut River Banking Company
et al. v. Rockbridge County
283
Consolidation National Bank v. Fidelity
and Casualty Company of New York.
124
Continental National Bank v. Eliot National Banket a l . .
121
Continental National Bank v. McGeoch. 200,249
Conway v. Halsey
102,247
Conzman v. First National Bank. _ _
300
Cooke v. The State National Bank of
Boston
133
Cook County National Bank v. United
States..
253,272
Cooper Insurance Company!'.Hawkins
323
Coopers. Hill
241
Cooper v. Leather Manufacturers 1 National Bank..
211
Corcoran v. Batchelder
221
Corn Exchange Bank v. Blye
280
Corn Exchange Bank v. Mechanics1 National Bank of Newark, N. J
122
County Commissioners v. Farmers and
Mechanics' National Bank
295,310
County of Lancaster v. Lancaster County National Bank.
309
Covington City National Bank v. Commercial Bank
238
Covington, Ky., Farmers and Traders 1
National Bank of, v. Greene et al
178
Covington, City of, v. First National
Bank
302
Covington, City of,V.German National
Bank
302
Cox v. Beck et al
334
Cox v. Elmendorf
288
Cox v. Montague
116
Cox v. Robinson
261,262
Cragie et al. v. Hadley.
272,274
Cragie v. Smith
149*
Crane v. Fourth Street National Bank..
152
Creveling et al. v. Bloomsbury National
Bank
137
Crocker v. First National Bank of Chetopa
325
Crocker v. Marine National Bank of
New York
208
Crocker v. Whitney
277
Crook v. First National Bank
103,170
Cruikshank v. Fourth National Bank..
209
Cummings v. National Bank
298
D.
Dakota, National Bank of, v. Taylor....
318
Dallas, National Exchange Bank of, v.
Beal...
148
Danforth et al. v. National State Bank
of Elizabeth
325
Darby v. Berney National Bank
242
Davenport Bank v. Davenport
296
Davenport National Bank v. Mittelbuscher, Collector, et al
154
Davisv.Cook
205,286
Davis v. Elmira Savings Bank
268,269,271
Davis v. Essex Baptist Society
109,286
Davis v. Industrial Manufacturing
Company
254
Davis v. Knipp
257
Davis v. Ranaall
324
Davis, Receiver, v. Stevens
109,286
Davisv. Watkins
121
Davis v. Weed
107
Dearborn v. The Union National Bank
of Brunswick
142
Dearborn v. Washington Savings Bank.
169
Decatur, First National Bank of, v.
Johnston
266
Decatur, First National Bank of, v.
Priest
216
Decorah, First National Bank of. v.
Holan
1...
231
De Haven v. Kensington National Bank.
218
Delano v. Butler
107,129
Delaware, Lackawanna and Western
Railroad Company v. Oxford Iron
Company
219
Denton v. Baker
284,285

90

REPORT OF THE COMPTROLLER OF THE CURRENCY.

Page.
Denver, American National Bank of, v.
National Benefit and Casualty Comp a n y et al. (Wiswall, intervener)
282
Deposit Bank v. F r a n k l i n County
302
Des Moines National Bank v. H a r d i n g . .
226
D i t t y v. Dominion National Bank of
Bristol,Va
202,218
Dorchester, F i r s t National Bank of, v.
Smith
329
Doty v. F i r s t National Bank
320
Doud et al. v. National Park Bank
188
D o u g h e r t y v. Hoffstetter
228
Dow v. I r a s b u r g h National Bank of Orleans...
209
D o w e t al.v.United S t a t e s . .
164
Drake v. Rolio
254
Dresser v. T r a d e r s ' National Bank
323
Driesbach v. National Bank
325
D r o v e r s ' National Bank v. Blue
230
Dumond v. Merchants' National B a n k . .
216
D u m o n t v. F r y .
220
Duncan v. F i r s t National Bank of Mount
Pleasant
203
D u t t o n v. Citizens' National Bank
303
D u t t o n v. F i r s t National Bank
303
D y g e r t v. Vermont Loan and T r u s t Co.
334
E.
E a n s v.Exchange Bank _.
155
Earle v. Coyle
121
Earle, In r e
145
East River National Bank v. Gove
215
Eastern Townships Bank v. Vermont
National Bank of St. Albans and Another
__._
223
Eaton v. Pacific National Bank
195
Eaton v. Union County National Bank.
302
Eccles v. Drovers and Mechanics 1 National Bank
283
"Elder v. First National Bank of Ottawa
222
Elkhart, F i r s t National Bank of, v. Armstrong.
147
E l k h a r t National Bank of E l k h a r t , Ind.,
v. N o r t h w e s t e r n G u a r a n t y Loan Co.
of Minneapolis, Minn.,et al
118,212
Ellis v. L i t t l e .
279
Ellis v. F i r s t National Bank of O l n e y . . .
326
El Paso National Bank v. Fuchs
217,258,292
El wood v. F i r s t National Bank
221
Eno, In r e
205
Evansville Bank v. B r i t t o n
299
Evansville, F i r s t National Bank of, v.
F o u r t h National Bank of Louisville.. 214,237
Evansville National Bank v. Metropolit a n National Bank
318
E v a n s v. United S t a t e s
192
E r i s m a n V.Delaware County National
Bank
100
Exchange National Bank v. Clement
12'5
Exchange National Bank v. Johnson et
al
233
Exchange National Bank v. W o l v e r t o n .
228
E x e t e r National Bank v. Orchard
329,330
F.
F a i r b a n k s v. M e r c h a n t s ' National Bank
239
Fairhaven, National Bank of, v. The
Phoenix W a r e h o u s i n g Company . 127,174,286
Fallkill National Bank v. Sleight
226
F a r m e r s ' Bank v. Board of Councilmen
of City of F r a n k f o r t
302
F a r m e r s ' Bank v. City of H e n d e r s o n . . 302
F a r m e r s ' Bank v. F r a n k l i n County
302
F a r m e r s ' National Bank v. Backus
263
Farmers" N a t i o n a l Bank v. Dearing
326
F a r m e r s ' National Bank v. Thomas
100
F a r m e r s a n d Mechanics' Bank v. Baldwin.
321
F a r m e r s a n d Mechanics' Bank v. Dearing
154,324
F a r m e r s a n d Mechanics' Bank v. Hoag
land
328
F a r m e r s a n d M e r c h a n t s ' National Bank
f.Novitch.
234
Farmers and Merchants' National Bank
v. Smith
323
Farmers and Merchants' National Bank
v. Waco Electric Railway and Light
Company
106,123,175,200,219,223,230,283




Page.
F a r m e r s and T r a d e r s ' National Bank v.
323
Connor
F a r m e r s and T r a d e r s ' National Bank v.
302
Hoffman
F a r m e r s and T r a d e r s ' N a t i o n a l Bank v.
189
Snodgrass
F a y e t t e County, National Bank of, v.
331
Dushane
Fidelity Safe Deposit a n d T r u s t Com213
p a n y v. A r m s t r o n g
Fifth National Bank v. A r m s t r o n g , e t c . 148,150
Fifth National Bank u. Central National
]39
Bank
109,175
Finn r. Brown
186
F i r s t National Bank v. Allen
156
First National Bank v. Anderson
150
First National Bank v. Armstrong
303
First National Bank v. Ayers
302
First National Bank v. Bailey
226
First National Bank v. Bayliss.
234
First National Bank v. Bonner
300
First National Bank v. Brodhecker
First National Bank v. California Na180
tional Bank
227
First National Bank v. Carter
106
First National Bank v. Cass County
231
First National Bank v. Cecil
303
First National Bank v. Chehalis County
228
First National Bank v.Chilson
First National Bank v. City National
152
Bank
First National Bank v. City of Richmond
315
139,170
First National Bank v. Clark
180
First National Bank v. Cody
230
First National Bank v. Collins _
First National Bank v. Commercial Na268
tional Bank
152
First National Bank v. Craig
256
First National Bank v.De Morse
First National Bank v. District Town179
ship of Doon (Iowa)
First National Bank v. Douglas County 297,304
First National Bank v. Dovetail Body
and Gear Company
175,200
First National Bank v. Forest
204
324
First National Bank v. Garlinghouse...
203
First National Bank v. Gruber
225
First National Bank v. G. V. B. Min. Co
278
First National Bank v. Haire
235
First National Bank v. Harris
180
First National Bank v. Hellyer
304
First National Bank v. Hershiro
153
First National Bank v. Hughes
First National Bank v. Huntington Dis219
tilling Company
226
First National Bank v. Lambert
228
First National Bank v. Laughlin
239,330
First National Bank v. Ledbetter
219
First National Bank v. L m d e n s t r u t h . . .
176
First National Bank v. Lynch
144
First National Bank v.Mann
First National Bank v. Mansfield Sav152
ings Bank
_
226
First National Bank v. Marshall
First National Bank v. Marshall and
176,226
Ilsley Bank
180
First National Bank v McKinnev
330
First National Bank v. Mclnturff
First National Bank v. Merchants' Na138
tional Bank
139
First National Bank v. Miller
205,325
First National Bank v. Morgan
322
First National Bankv. Munzesheimer..
First National Bank v. National Ex260,321
change Bank. _
139
First National Bank v. Nelson
First National Bank v. Northwestern
135,187
National Bank..
128
First National Bank v. Peavey
170
First National Bank v. Peltz
295
First National Bank v. Peterborough . _
268
First National Bank v. Sanford
144
First National Bank v. Schmidt
302
First National Bank v. City of Seattle _
231
First National Bank v. Smith
235
First National Bank v. Stuetzer
125
First National Bank v. Still
330
First National Bank v. Turner
„...
231
First National Bank v. Van Ness
»

REPORT OF THE COMPTROLLER OF THE CURRENCY.
Page,
F i r s t National Bank v. Weston
239
F i r s t National Bank v. Wills Creek Coal
Company
139
F i r s t National Bank v. Wood
100
F i r s t National Bank v. Zeims
228
Fisher v. Adams
283
Fisher v. Continental N ational B a n k . . .
197
Fisher v. Denver National Bank
144
F i s h e r y . Knight
255
Fisher v. Simons
282
Fisher v. Tradesmen's National Bank. 197
Fisher v. United States National Bank.
198
Fisher v. Yoder.
206
Flannegan et al. v. California National
241
Bank et al
304
Flint v. Board of Aldermen of Boston.
271
Flint Road Cart Company v. StephensFlorence Railroad and Improvement
Company v. CLase National Bank
99,329
Flour City National Bank v. Grover - -.
228
Flour City National Bank v. Miller - . . .
330
Foil's appeal
316
Follett v. Tillinghast
212
Forster v. Second National Bank
103
F o r t Edward, National Bank of, v. The
Washington County National Bank..
215
Fortier v. New Orleans National Bank.
201,
277,278
F o r t Scott, First National Bank of, v.
Drake
249
F o r t Worth, City National Bank of, v.
Hunter
225
F o r t Worth, City National Bank of, In re
225
Foss v. First National Bank of Denver.
210
F o s t e r s . Chase et al
115
Foster v. Lincoln et al
111, 117,320
Foster v. Rincker
149
F o s t e r s . Wilson
288
F o u r t h Street National Bank v. Yardley, receiver
272
F o w l e r s . Scully
277
Fox v. Home Company
100
Franklin County National Bank v. Beal.
150
Franklin National Bank v. Newcombo.
145
Frazer v. Seibern
295
Freeman Manufacturing Company v.
National Bank of Republic
194
Freiberg v. Stoddart
149
Frelinghuysen, Receiver, etc., v. Baldwin et al
284
F r i b e r g v. Cox
140,202
Friend, I n r e
152
Fridley v. Bowen
277
F u r b e r v. S t e p h e n s .
274

Gallot v. United S t a t e s .
164
Gardes v. United States
165
Garfleld National Bank v. Kirchway106
G a r d n e r s . Dunn
229
Garner v. Second National Bank
122
Garnett, First National Bank of, v.
Ayers
303
Gatch v. Fitch
113,265
Georgia National Bank v. Henderson . _
215
German National Bank v. Leonard
180
German National Bank v. Louisville
Butchers' Hide and Tallow Company,
175
German National Bank v. Meadowcrof t .
174
Germania National Bank v. Case
210
Gerner v. Thompson
102,186
Getman v. Second National Bank of Oswego
332
Gettysburg National Bank v. Chisolm 228
Gibbons v. Anderson et al
249
Gibbons v. Hecox.
219
Gibbs v. Howard
253
Gibson v. P e t e r s , receiver
...
173
Gilbert!?. McNulta
285
Girault v. United States
165
Glenn v. P o r t e r
319
Gloversville, National Bank of, v. Wells.
263
Gold Mining Company v. Rocky Mountain National Bank
221,222
Goldsbury v. I n h a b i t a n t s of W a r w i c k . .
306
Goldthwaite v. National Bank
255




91

Page.
Gordon -c. Third National Bank of Chattanooga
235
Goshen National Bank v. State
215,236
Graf ton, F i r s t National Bank of, v. Babbidge et al
....
238
Graham v. National Bank of N e w York.
277
281
Grant?;. Spokane National Bank et a l . .
211
Graves v. Cor bin
123
Graves v. The Lebanon National Bank.
163
Graves v. United States
253
Gray v. Rollo
140
Green v. Purcell National Bank
101,102
Green v. Wallkill National Bank
Greenville, F i r s t National Bank of, v.
262
Sherburne
269
Griffin v. P e t e r s
223
Grow v. Cockrill
G r u b e r v. First National Bank of Clar332
ion
Gruetter v. Stuart _
119
Grundy County National Bank v. Rulison
182
Guelich v. The National State Bank of
Burlington
145
Guernsey v. Black Diamond Coal and
Mining Company (Iowa)
202
Guild v. First National Bank of Deadwood
328
Guntersville, Bank of, v. Webb
169
Guthrie v, Reid
145,332
H.
Hackettstown National Bank v. Ming.. 176,194
106,243
Hadden et al. v. Dooley et al
Hade v. McVay
204
Hagar v. Union National Bank
121,218
Hale v. Walker
286
Hallam v. Tillinghast
210
Hallowell National Bank v. Marston...
233
Hambright v. National Bank
332
Hamer v. First Nati onal Bank
181
Hammond v. Hastings
219
Hancock National Bank v. Ellis
287
Harrington v. First National Bank of
240
Chittenango
122
Harvey i\ Alien
153
Harvey v. Girard National Bank
Harvey, receiver, etc., v. Lord
99
Hatch v. Johnson Loan and Trust Company
235
Hathaway v. First National Bank of
264
Cambridge
180
Hauerwas v. Goodloe
242
Haugan v. Sunwol
168
Hauptman v. First National Bank
Havens v. National City Bank of Brooklyn
123
Hawkins v. State Loan and Trust Company
104
Hayden v. Brown
173
200,271
Hayden v. Chemical National Bank
Hayden v. Thompson
103,173, 186,198
Hayden v. Williams
174, 181,289
267
Hayes, receiver, v. Beardsiey
111,316
Hayes v. Shoemaker
176
Hay ward v. Eliot National Bank
Hazard v. National Exchange Bank of
Newport
317
Heath v. Second National Bank of Lafayette
277
139,256
Heidelbach v. National Park Bank
Hendee v. Connecticut and Passunipsic
206
Railroad Company
102
Henderson v. Myers
Henderson v. O'Connor
151
Henderson, use of Second National
332
Bank of Titusville, v. Waid
322
Hennessy v. City of St. Paul et al
283
Hepburn v. Danville National Bank
202
Hepburn v. Kincannqn
315
Hepburn v. School Directors
281
Herman, In re
Hershire v. First National Bank _
297,304
235
Hettinger v. Meyers
_
287
Hibernia National Bank, appeal of
Higgins et al. v. Citizens' National
Bank of Kansas City.
329
Higgins v. Worthington
199

92

REPORT OF THE COMPTROLLER OF THE CURRENCY.

Hightstown, First National Bank of, v.
Christopher
236
Higley v. The First National Bank of
Beverly
331
Hill v. National Bank of Barre
328
Hill v. Exchange Bank _
300
Himrod v. Baugh
253
Hindman v. First National Bank of
Louisville etal
_
_
324
Hines v. Marmolejo
203
Hintermister v. First National Bank... 324,
325,326
Hirshv.Jones e t a l
101
Hiscock v. Lacy
206
Hitzv.Jenks
280
Hobart, receiver, etc., v. Gould
110
Hobart, receiver, etc., v. Johnson
110
Hobbs v. Chemica INational Bank (Ga.) 105
Hobbs v. Western National Bank. _
248,318
Hoke v. People
209
Holmes v. Boyd
_
277
HoltuThomas
_
113
Homer v. National Bank of Commerce .
220
Hopkinsville, City Bank of, v.Blackmore
275
Home v. Greene
141,295
Horton v. Mercer
287
Hot Springs Independent School District, etc., v. First National Bank of
Hot Springs
_
206
Houghton v. Hubbell
289
Howe v. Barney e t a l . .
102,247
Howelliv. The Village of Cassopolis
306
Hower v. Weiss Malting and Elevator
Company e t a l . .
194
Hubbell v. Houghton
118
Huffaker v. National Bank of Monticello
174
H u g h e s v. Neal Loan a n d Banking Company
152
Hughitt v. Hayes
254
Hulings v. Hulings Lumber Company
etal-.
138
Hulitt v. Bell et al
118
Humphreys v. Third National Bank of
Cincinnati, Ohio
181,264
Hungerf ord National Bank v. Van Nostrand
181
Hunt, appellant
132
Hunt,In r e
259
Hunt v. Townsend
150
Hutchinson National Bank v. Crow
179,278
I.
Illinois Paper Company v. Northwestern National Bank
269
Illinois T r u s t and Savings Bank v. F i r s t
National Bank a n d another, receiver,
etc
273
Imperial Roller Milling Company v.
First National Bank
253
Implement Company v. Stevenson
130
Importers and Traders' National Bank
^.Peters etal
150
Indian Head National Bank v. Clark
230
Indiana National Bank v. F i r s t National
Bank
186
Indianapolis, Meridian National Bank
of, v. F i r s t National Bank of Shelbyville
135
Insurance Company v. P h i n n e y
252
Irons e t al. v. Manufacturers' National
Bank of Chicago e t a l . 110, 111, 115,221,279,317
Israeli. Gale
100
J.
Jackson v. Fidelity a n d Casualty Company
284
Jackson V. U n i t e d S t a t e s .
253
J a c o b u s v. Monongahela National Bank
of Brownsville
121
Jefferson, National Bank of, v. B r u h n
etal
142,203
Jefferson, National Bank of, v. F a r e et al. 154,206
J e n k i n s v. N a t i o n a l Village Bank of
Bowdoinham
142
Jewettv.Whitcomb..
207
J e w e t t e t al v. Yardley
202
Johnson v. Laflin
315,316,317




Page.
Johnson v. National Bank of Gloversville
324,326
Johnston v. Charlottesville National
Bank
99
Johnston Fife H a t Company v. National
Bank...
217
Jones v. Rushyille National Bank _
300
Jordan, administratrix, etc., v. T h e
National Shoe a n d L e a t h e r Bank of
New York
253,322
K.
Kaiser e t al. v. F i r s t National Bank of
Brandon
233
Kaiser v. United States National Bank
(Ga.)_...
104
Kansas City, Mo., Metropolitan National Bank of, v. Campbell Commission Company
269
Kansas City, Merchants' National Bank
of,v.Lovitt
237
Kansas National Bank v. Quinton
262
Kansa3 Valley National Bank v. Rowell.
277
Kelley v. Pkoenix National Bank
153
Kelly, Maus & Co. v. Sioux National
Bank etal
211
Kelsey v. The National Bank of Crawford
_
155
Kennedy v. California Savings Bank
etal
261
Kennedy v. First National Bank
320
Kennedy v. Gibson
_
101,
102,107,112,113,114,173,279,287
Kentucky, Bank of, v. Armstrong
302
Kentucky, Bank of, v. Board of Councilmen of City of Frankfort302
Kentucky Flour Company's Assignee v.
Merchants National Bank
259
Kerrv.Urie
117
Kesner v. World's Fair Hippodrome
288
Keyser v. Hitz
107,172,225,286
Kimballv. Dunn
182
King et al. v. Armstrong, receiver
113,256
Kingman, Citizens' National Bank of, v.
Berry e t a l
250,252
Kirkwood v. Exchange National Bank .
236
Kirkwood v. First National Bank
236
Kissam v. Anderson
201
Klepper v.Cox
202
Kyle v. The Mayor, etc
304
L.
Lacon, The First National Bank of, v.
Myers
132
La Dow v. First National Bank
203
La Fayette, The National State Bank
of,t>.Ringel
132
La Grande National Bank v. Blum
228
La Grande Butter Tub Company v. National Bank of Commerce
_
268
Laing v. B u r l e y
108
L a k e E r i e a n d W e s t e r n Railroad Comp a n y v. Indianapolis N a t i o n a l Bank _. 267
L a k e National Bank v. Wolfeborough
Savings Bank e t al
209
Lamson v. Beard
_
240
Lanaux, La., Succession of
287
Lancaster County National Bank v.
Boffenmyer
231
L a n h a m v. F i r s t National Bank
329
L a Rose e t al. v. Logansport National
Bank e t a l .
_
_
_
124
Latimer v.Bard e t a l
130
Latimer v. Wood e t al
_
_
100
L a w r e n c e s . Stearns-.
_
177,252
Lazear v. National Union Bank of Baltimore
321,324,325,332
Leach r .Hale
261,290
Leather Manufacturers 1 National Bank
v. Cooper, j r
205
Lebanon National Bank v. K a r m a n y . . .
333
Lehman v. Rothbarth
106
Leoti, First National Bank of, v. Fisher.
294
Le Sassier v. Kennedy
205
Lewis v. Switz
114,287
Lexington, Town Council of, v. Union
National B a n k .
^05
L'HerbettetnPittsfield National Bank. 168,217
Libby v. Union N ational Bank
277

REPOET OF THE COMPTROLLER OF THE CURRENCY.

93

Page.
Page.
235
Lilianthal, In re
123' Mead v. National Bank of Pawling
199
Meldrurn v. Henderson
Lilly v. The Board of Commissioners of
100
Cumberland County
141,295 Memphis National Bank v. Sneed
Lincoln National Bank v. Butler
234 Mendota, First National Bank of, v.
Smith
306
Linn County National Bank v. Craw294,297
ford
99,206,207,229 Mercantile Bank v. New York
301
Lionberger v. Rouse 1
295 Mercantile National Bank v. Shields...
256
Mercer v. Dyer
Little Rock, Merchants National Bank
106
of, v.United States.
141,298,311 Merchants' National Bank v. Ault
1
292
Merchants National Bank v. C a r h a r t . .
Lockwood v. The American National
142
Bank
._.
155,239 Merchants' National Bank v. Demere..
1
Merchants National Bank v. GuilmarLogan County National Bank v. Townsend
154,205,260,322
tin
_
292
Merchants 1 National Bankv. McAnulty
106,
Louisiana, Citizens' Bank of, v. Board of
181,231
Assessors
.-298
1
159
Louisiana, Citizens' Bank of, v. Janin. _.
143 Merchants 1 National Bank v. McGee. -.
Merchants 1 National Bank v. McNeir..
179
Louisville Banking Company v. City of
278
Louisville
302 Merchants 1 National Bank v. Mears
107
Louisville, City of, v. Bank of Kentucky.
302 Merchants 1 National Bank v. Peet
Merchants 1 National Bank v. Robinson.
256
Louisville, Third National Bank of,"v.
Stone
_
315 Merchants National Bank v. School
District 1No. 8
172,204
Louisville, Third National Bank of, v.
Vicksburg Bank.
218 Merchants National Bank v. Sevier
etal
Louisville Trust Co. v. Kentucky National Bank et al
333 Merchants' National Bank v. Spates - - 103,231
Merchants' National Bank v. State Na
Lowell, Prescott National Bank of, v.
tional Bank
133,134,215, 259,260
Benjamin F.Butler
261
236
Luberg v. Commonwealth
158 Merchants' National Bank v. Tracy
151
Lucas v. Coe
119 MerchantsandFarmers' Bank v. Austin1
NaLucas v. Government National Bank...
324 Merchants and Manufacturers
tional Bank v. Cummings 1
145
Lyndonville National Bank v. Fletcher. 175,188
Lyons v. Lyons National Bank
260 Merchants and Manufacturers Bank v.
Pennsylvania..
314
Lyons, First National Bank of, v. Ocean
National Bank
241,247 Merchants and Planters' National Bank
v. Trustees of Masonic Hall
182,284
Merrill v. National Bank of JacksonM.
ville
107,174,177, 199,213
Merrill v. Florida Land Improvement
Madison, National Bank of, v. Davis
327,331
Company
_
197,316
Magruder v. Coltson
317 Metropolitan National Bank v. Claggett 156,205
Maguire v. Board of Revenue and Road
Metropolitan Trust 1Company v. FarmCommissioners of Mobile County
314
ers and Merchants National Bank...
.123,
Main, Assignee,v. Second National Bank
175,200,219,223, 230,283
of Chicago
_.
208 Meyers v. Valley National Bank
316
Manistee, Mich., First National Bank of,
Michigan Insurance Bank v. Eldred
155
et al. v. Marshall & Ilsley Bank of MilMidland National Bank v. Schoen.
231
waukee, Wis
177 Miller's estate
142
Manufacturers' National Bank v. ConMiller v. First National Bank
182
tinental Bank e t a l _.
151 Miller v. Heilbroix
309
1
Manufacturers National Bank, In re . .
196 Miller v. Howard etal
248
Mapesv. Scott.
277,278 Miller v. National Bank of Lancaster..
209
Marbury v. Farmers and Mechanics1
Miller v. Western National Bank.
....
169
National Bank
142 Milmo National Bank v. Carter.._
176
Marine National Bank v. Humphreys.232 Missouri River Telegraph Company v.
Market Bank v. Pacific National Bank..
266
F i r s t National Bank or Sioux C i t y . . . 205,326
Market and F u l t o n National Bank v.
Mix v. The National Bank of BloomingSargent.
232
177
ton
Marshall National Bank v. O'Neal
139 Mize v. Bates County National B a n k . . .
287
Massey v. Fisher
_
197,257,267 Mobile, National Commercial Bank of,
311
Mathews v. Columbia National Bank of
v. Mayor, etc., of Mobile
126
TacomaetaL.
130 Mohrenstecher et al. v. Westervelt
Matthews v. The Massachusetts NaMonongahela National Bank v. Over332
tional Bank
241
holt
M a t t h e w s v. S k i n k e r
278 Monmouth, F i r s t National Bank of, v.
216
M a y n a r d u Bank
_
_
156
Brooks
Mayor v. F i r s t National Bank of Macon.
298 Montagu et al. v. Pacific Bank et al
293
McAden v. Commissioners of MecklenMontgomery, F i r s t National Bank of,
147
b u r g County.
312
v. A r m s t r o n g
McBee v. Purcell National Bank
171 Monticello Bank v. Bostwick et al
_
187
McCann v. F i r s t National Bank of JefMontpelier, F i r s t National Bank of, v.
fersonville
130
Hubbardetal
M c C a r t n e y s . Kipp
222 Montpelier, First National Bank of, v.
McClellan v. Chipman
271
Sioux City Terminal Railroad and
McConville v. Gilmour
105
Warehouse Company (Trust ComMcCord v. California National Bank
139
pany of North America, intervener).
225
McCormick v. Market National Bank . 155, Moore v.Jones
214,323 Moore v. Mayor and Commissioners of 109,286
McCulloch v. Maryland
153
Fayetteville
McDonald, Receiver, v. Chemical Na311
Moores v. Citizens' National Bank of
tional Bank
141
Piqua
McDonald, Receiver, v. Williams
174,289 Morehouse v. Second National Bank of
237
McFarlin v. F i r s t National Bank
287
Oswego
333
McGhee v. F i r s t National Bank of ToMorelandf. Brown
294
bias
_
329 Morris v. Eufaula National Bank
217
1
McGhee v. I m p o r t e r s and Traders NaMorrison v. Price
111
tional B a n k . . .
190 Mound City Paint and Color Company
Mclver v. Robinson
_
296
v. Commercial National Bank
153
McLoghlin v. National Mohawk Valley
Mount Pleasant, First National Bank
Bank
._ 179,204
of, v. Tinsman
_.
203
310 Mount Sterling National Bank v. Green.
170
Digitized forMcMahon,v. The City of Chicago et a l . .
FRASER In re, v. Palmer
Me Veagh
304 Movius, Receiver, etc., v. Lee et al
240,244



94

REPORT OF THE COMPTROLLER OF THE CURRENCY.

Page.
Multnomah County et al. v. Oregon National Bank e t al
267
M u r p h y v. F i r s t National Bank
168
M u r r a y v. American S u r e t y Company
of New York
199,207
M u r r a y v. P a u l y . . .
132
Mustard v. Union National Bank
204
Myers v. Hettinger..
213
N.
National B a n k v . B u t l e r
_.
_
266
National Bank v. Carpenter
325
National Bank v.Case
107,141,286,316,317
National Bank of Redemption r. City
of Boston
312
National Bank v.Colby
122,196
National Bank v. Commonwealth .. 271,297,313
National Bank v. Danforth
333
Nat'onal Bank v. Drake
248
National Bank v. Earl
261
National Bank v. G r a h a m
289
National Bank v. Insurance Company. 220
National Bank v. Johnson
202,324
National Bank v. Kennedy
102
National Bank v. Matthews
277,278
National Bank v. Taylor
232,288
National Bank v. United States
312
National Bank v. W h i t n e y
277,278
National Bank of Commerce v. Atkinson
99,250,262
National Bank of Commerce v. City of
Seattle
302
National Bank of Commerce v. Galland
179,230
National 1
Bank of Commonwealth v. Mechanics National Bank
195,196
National Board of Marine U n d e r w r i t e r s
v. National Bank of t h e Republic
186
National Commercial Bank v. McDonnell
142,174
National Commercial Bank v. Miller &
Co.
_
133
National Exchange Bank v. P e t e r s et al.
195
National Exchange Bank v. Wilgus's
Executors _
232
National Gold Bank and T r u s t Company
^.McDonald
138
National Loan and Investment Co. v.
Rockland C o . .
240
National P a r k Bank v. Goddard
123
National P a r k Bank v. Gunst
101
National P a r k Bank v. Harmon
116
National P e m b e r t o n Bank v. P o r t e r
204
National Security Bank v. Butler
266
National Security Bank v. E d w a r d F .
Cushman
239
National Security Bank v. Price, Receiver
265
National State Bank v. Young
295
National Union Bank v. Earle
141
Neadv.Wall
287
Nebraska National Bank y. Ferguson . .
233
Nebraska, State of, v. National Bank of
Orleans
172,225,262
Neillf. Rogers Bros. Produce Company.
122
Nelson v. Burroughs
102
Nelson v. F i r s t National Bank of Killingly
144,178,236,238
N e w a r k Bank Company v. N e w a r k
294,297
Newark, National State Bank of, v.
Boylan
327
Newark, N o r t h W a r d National Bank
of, v. City of N e w a r k
295
Newbegin v. N e w t o n National Bank . . .
197
Newberg, National Bank of, respondent,!'. Daniel Smith -.
171
Newell v. National Bank of S o m e r s e t . .
327
N e w Orleans Canal and Banking Comp a n y v. City of New Orleans.
311
N e w Orleans National Bank v. Raymond
278
N e w Orleans, Germania National Bank
of, v. Case
108
N e w t o n National Bank v. N e w b e g i n . . _
200
N e w York, American Exchange National Bank of, v. F i r s t National Bank
of Spokane Falls e t al
._
224
New York Breweries Company v. Higgins
168




Page.
New York, Chatham National Bank of,
v. Merchants 1 National Bank of West
Virginia, a p p e l l a n t . .
208
New York, Chemical National Bank of,
v. A r m s t r o n g
262
New York Fidelity and Casualty Co. v.
Consolidated National Bank
125
New York, Germania Bank of, v,. L a
Folletteetal
229
New York, Market National Bank of, v.
Pacific National Bank of Boston
122
New York, Mayor of, etc., v. Tenth National Bank
_.
223
New York, Mercantile National Bank
of City of, v. Mayor, etc., of City of
New York and another
313
New York, Merchants1 National Bank
of the City of, v. Samuel and another.
140
New York, National Shoe and Leather
Bank of the City of, v. Mechanics1
National Bank of Newark, N. J
122
New York, People's Bank of the City
of, v. Mechanics1 National Bank of
Newark
122
New York, Security Bank of, v. National
Bank of the Commonwealth
102
New York Security and Trust Company et al. v. Lombard Investment
Company of Kansas et al
144,188
New York, the Metropolitan National
Bank of, v. Lloyd.
136
Niblack v. Cosier.
132,293
Nichols v, State.
169
Nickerson v. Kimball
308
Nicollet National Bank v. City Bank...
321
Niles v. Shaw
301
Noblesville, Citizens' State Bank of, v.
Hawkins
322
North Bennington, First National Bank
of, v. Town of Bennington
260
Northern Bank v. Bourbon County
302
Northern National Bank v. Maumee
Rolling Mill Company
99
N o r t h River Bank, In r e
272
N o r t h w e s t e r n National Bank v. J.
1
Thompson & Sons Manufacturing
Company
145
Norton v. Derby National Bank
104
O.
Oates v. First National Bank of Montgomery
154,324
Ocean National Bank v. Carll
206,280
O'Connor v. Brandt
258
O'Connors. Witherby
115
Oddie et al. v. The National City Bank
of New York..
136
O'Hare v. Second National Bank of
Titusville
221,222
Old National Bank v. German American
National Bank
151
Oldham v. Bank
235,258
Omaha, First National Bank of, v.
County of Douglas..
208,303
Omaha National Bank v. Walker et al..
189
Onondaga County Savings Bank v.
United States
151
Ordway v. Central 1National Bank
204,220
Ornn v. Merchants National Bank
277
Osborne v. Bank of the United States..
153
Oswego, Second National Bank of, v.
Burt
241
Overholt v. National Bank of Mount
Pleasant
325
Owensboro National Bank v. Owensboro
315
P.
Pacific National Barikv. Eaton
107,129,286
Pacific National Bank v. Mixter.... 102,121,123
Palmer v. McMahon.
294,299
Palmer v. National Bank of Allentown.
121
Pape v. Capital Bank of Topeka
260
Parker v. Robinson
115
Parkersburg National Bank v. Als
168
Park Hotel Co. v. Fourth National Bank
of St. Louis
101
Parkhurst v. First National Bank of
Clyde
329

REPORT OF THE COMPTROLLER OF THE CURRENCY.
Page.
260,290
Pattison v. Syracuse National Bank
324
Pauly v. Coronado Beach Company
229
Pauly v. O'Brien Pauly v. State Loan and Trust Com117
pany _.
144
Pauly v. Wilson
Pearce and Miller Engineering Company v.Brouer
H4
190
Pearce v. Rice
147
Peck et al. v. First National Bank
Pelton v. Commercial National Bank.. Penn Bank v. Farmers' Deposit Na- 295,298
tional Bank
259
Pennsylvania, Commercial Bank of, v.
Armstrong
149
People ex rel. Williams v. Assessors of
307
Albany
_
_
296
People ex rel. Williams v. Weaver
People v. The Commissioners of Taxes
and Assessments
People ex rel. Tradesmen National Bank
v. Commissioners of Taxes and Assessments--.
306
296
People v. The Commissioners
296
People v. Dolan
210
People v.Fonda..
.152
People v. Merchants' Bank
142
People v. Remington
133,257
People v. St. Nicholas Bank
174,260
People's Bank v. National Bank
People's Bank and Trust Company v.
258
Tufts
...._
234
People's National Bank v. Clayton
243
People's Savings Bank v. Hughes
326
Peterborough National Bank v. Childs269
Peters v. Bain
.
284
Peters v. Foster
208,280
Petition of Platt
Petri v. Commercial National Bank of
210
Chicago
209
Pettilon v. Noble
240
Phelps v. Beard
Philadelphia, Fourth Street National
276
Bank of, v. Yardley
147
Philadelphia National Bank v. Dowd-. Philadelphia, Third National Bank of,
v. Miller
324,325
Philler v. Jewett
_..
256
Phiilerv. Patterson
99, 144,261
257
Philler v. Yardley
Phillips v. Mercantile National Bank of
the City of New York
215
Phipps et al. v. Harding
234
Pickett v. Merchants' National Bank of
Memphis
327
Pickle v. People's National Bank
140
Pittsburg, Fifth National Bank of, y.
Pittsburgh and Castle Shannon Railroad Company
210
Pittsburg Locomotive and Car Works
141
v. State National Bank of Keokuk
Pittsburg, Third National Bank of, v.
Mylin
210
Platt v. Adriance
156
Platt v. Beach
280
Platt v. Beebe
175, 177.281
Platt v. Bentley
Plattsburg, First National Bank of, v.
Sowles et al
247
Pollard v. The State
154
Porter v. United States--167
Potter v. Beal et al
291
Potter v. Traders' National Bank
227
Poughkeepsie, City National Bank of,
v. Phelps
155
Prescott v. Iiaughey
248
Preston National Bank v. Emerson
180
Preston v. Prather
291
Price, Receiver, v. Abbott. _
281
Price, Receiver, v. Colson
281
Price, Receiver, v. Coleman et al
2(55
Price, Receiver of Venango National
Bank, v. Yates
109,110, 154,280
111
Price, Receiver, v. Whitney
Prosser v. First National Bank of Buffalo-.,
Providence Institution for Savings and
Jewels v. City of Boston
Pryse v. Farmers1 Bank



95

Page.
Puget Sound National Bank v. City of
Seattle
.*.._.
302
P u t n a m Savings Bank v. Beal
272,291
P u t n a m v. United States
160.252
Q.
Quanah, Tex., City National Bank of, v.
Chemical National Bank of St. Louis,
I Mo
243
j Quinv. Earle
172
I
R.
Rand et al. v. Columbia National Bank
119,177
of Tacoma, Wash., et al
135
Randolph National Bank v. Hornblower
121,122
Raynor v. Pacific N ational Bank
Resh v. F i r s t National Bank of Allentown
171
220
Reynes v. Dumont
_
173
Reynolds v. Bank of Mt. Vernon
Reynolds v. Crawfor sville Bank
. . 277,278
121
Rhoner v. National Bank of Allentown.
104
Ricaud v. Tysen
Ricaud v. Wilmington Savings and
319
T r u s t Company et al
260
Rich v. State National Bank of Lincoln.
182
Richards v. Attleboro National Bank ..
221,321
Richards et al. v. Incorporated Town of
211
Rock Rapids
227
Richards v. Kountze
Richardson v. Denegre
172
Richardson v. Louisville Banking Company
_181,
Richardson v. Continental National 204,285
Bank-.
272
Richmond, F i r s t National Bank of, v.
Davis _.
_.
150
Richmond, F i r s t National Bank of, v.
City of Richmond et al
296
Richmond, F i r s t National Bank of, v.
Wilmington and Weldon Railway
Company
153
101,
Richmond v. Irons
108,113,203,220,280, 286,316
296,306
Richmond, City of, v. Scott
226
Riddle v. Dow
_
Riddle v. F i r s t National Bank.
131.,259,279
227
Ridgely et al. v. F i r s t National Bank
Ridgely National Bank v. P a t t o n &
Hamilton
136
Ripley National Bank v. L a t i m e r
179,239
Riverside Bank v. F i r s t National Bank
135
of Shenandoah
Roberts, Receiver, etc., v. Hill, Administrator, etc ._
265

Robertson v. Buffalo County National
Bank
250
208
Robinson v. City of Wilmington et a l . .
248
Robinson v. Hall et al _
Robinson v. National Bank of Newbern. 121,209
Robinson v. Southern National Bank .. 121,156
113
Robinson v. Turrentine et al
Rochester, First National Bank of, v.
260
Harris
Rochester, First National Bank of, v.
Pierson.
_
_
101,321
Rock Springs National Bank v. Luman.
238
Rockville, The National Bank of, v. The
138
Second National Bank of La Fayette.
Rockwell v. Farmers' National Bank... 203.327
Roebling Sons Company v. First National Bank et al
Rome, Merchants' National Bank of, v.
Fouche 119
128
Rood v. Whorton
305
Root v. Erdelmeyer
180
Rose v. Winnsboro National BankRosenblatt v. Johnston
195,301
141,295
Ruffln v. Board of Commissioners
253
Ruggles v. Kuler
Rush v. First National Bank, Kansas
City
S.
St. Albans, In re F i r s t National Bank of107
St. Louis and San Francisco Railway
Company v. Johnston
148,197,273

96

REPORT OF THE COMPTROLLER OF THE CURRENCY.

3'ago.
St. Louis National Bank v. Allen et al -.
209
St. Louis National Bank v. Bloch
140
St. Louis National Bank v. Brinkinan...
210
St. Louis National Bank v. Papin
296
St. Paul, Merchants' National Bank of,
v. Hanson _.
232
Saffordr. First National Bank.
118
Salisbury v. First National Bank
180,232
San Diego County v. California National
Bank.
..
267,268,272
San Diego, In re Certain Shareholders
of the California National Bank of...
112
Sandy Hill, First National Bank of, v.
Fancher
304
San Francisco, Nevada Bank of, v. Portland National Bank
216
Sanger v. Upton
130
Savary v. Savary
253 |
Sayles v. Cox
199
Scammon v. Kimball
253
Schierenberg v. Stephens
195
School District v. First National Bank168
Schrader v. Manufacturers' National
Bank of Chicago
190
Schuyler National Bank v. Bollong
326,327
Scofleld v. State National Bank of Lincoln
227
Scott v. Armstrong
_
253,254,256
Scott v. Latimer.
289
Scott, Plaintiff in Error, v. National
Bank of Chester Valley
218
Scott et al. v. Pequonnock National
Bank
317
Scovill v. Thayer
130
Seattle National Bank v. City of Seattle .
302
Seattle, Puget Sound National Bank of,
uKing County et al
297
Second National Bank v. Dunn
229
Second National Bank v. Hewitt
230
Second National Bank v. Hughes et al..
127
Second National Bank v. Sproat
144
Second National Bank v. Wentzel
187
Security National Bank v. National
Bank of the Commonwealth
101,102
Seeber v. Commercial National Bank of
Ogden
189,243
Seeley v. New York National Exchange
Bank
.
130
Seligman v. Charlottesville National
Bank
99
Selma, City National Bank of, v. Burns137
Selma, First National Bank of, v. Colby - 99,122
Shafer v. First National Bank _
327
Sharpe v. National Bank of Birmingham
143
Sheffield et al., First National Bank of,
V. Tompkins.
215,237
Shenandoah National Bank v. Read. 194,263,323
Shinkle v. The First National Bank of
Ripley331
Shoemaker v. The National Mechanics'
Bank
141,221
Short et al. v. Hepburn
99,103,182,207
Showalteru.Cox
140
Shunk v. The First National Bank of
Galion
324
Shute v. Pacific National Bank
255
Sickels v. Herold
_
257
Simmons v. Aldrich
_
303
Simmons v. United States
_
162
Simons et al. v. Fisher......._
250
Sioux City, First National Bank of, v.
Peavey.
128,207,263
Sioux Valley State Bank v. Drovers'
National Bank
139
Skilesu Houston.-.
254
Sleppy v. Bank of Commerce et al
133
Smith v. First National Bank... 222,260,290,329
Smith v. Sabin
106
Smith v. The Exchange Bank of Pittsburg.
321,325
Smithsonv.Hubbelletal
211
Snohomish County v. Puget Sound
National Bank
212
Snyder f.Foster.
320
Snyder v. Mount Sterling National Bank
330
Snyder's Sons Company v. Armstrong .
255
Somerville,Cityof,i?.Beal
150,272




Page.

Southwick v. The First National Bank
of Memphis..
_
121
Sowles v. National Union Bank of
Swanton
123,285
Sowles v. Witters et al
112,173, 201,212
Spafford v. The First National Bank of
TamaCity
225
Speckart et al. v. German National Bank
etal
213
Spokane, City of, v. First National Bank
274
Spokane County v. Clark_.
267
Spokane County v. First National Bank.
274
Spokane, Exchange National Bank of. v.
Bank of Little Rock
188
Spring City, National Bank of, v. National Bank of Pottstown
219
Springfield, City of, v. First National
Bank of Springfield
310
Spurr v. United States
165
Squires v. First National Bank
103,243
Stafford National Bank v. Dover
295
Stanley v. Board of Supervisors of the
County of Albany
209,311
Stanton v. Wilkeson
113,279
Stapylton v. Anderson et al
101
Stapylton v. Carmichael
101
Stapylton v. Cie des Phosphates de
France
271
Stapylton v. Stockton
279
Stapylton v. Teague
101
Stapylton v. Tha
315
State v. Bardwel
169
225
State v. Carpenter
159
State v. Eifert
158
State v. Fields
141
State v. Gasting
278
State National Bank v. Flathers
State v. The National Bank of Baltimore
304
State, North Ward National Bank,
311
pros., v. Newark
State National Bank v. Newton National Bank
243
State of Nebraska v. First National
Bank
225
State v. Sattley
159
State v. Smith
159
State v. Teahan
159
State v. Tuller
158
State v. Wells
160
Staunton v. Wilkeson
102
Stearns v. Lawrence _
252
Steckel v. First National Bank of Allentown
292
Stephens v. Bernays.
_
155,206
Stephens v. Follett
112
Stephens v. Monongahela National
185,325
Bank...
Stephens v. Overstolz
185, 186,246
259
Stephens v. Schuchmann
Stetson v. City of Bangor
154. 298,304
Stevens v.Catlin..
235
Stewart v. Armstrong
174,197
Stewart v. National Union Bank of
221,222
Maryland
Stowe v. Yarwood
253
Strong v. Southworth et al
107,109
Stuart v. Harden et al
114,119, 262,319
Stufflebeam v. De Lashmutt
289
Sturdivant v. Memphis National Bank. 232,330
Sturgis National Bank v. Smyth
228
Sturgis, The First National Bank of, v.
250
Bennett et al
Sumter County v. National Bank of
312
Gainesville _
265
Sunman v. Gatch et al
299
Supervisors v. Stanley
Swope v.Leffingwell _.
277,278
321
Sykes v. Holloway et al

Tabor v. Commercial National Bank...
106
Tacoma, Columbia National Bank of,
etal., ^.Matthews
131
Tacoma, Wash.,National Bank of Commerce of, v. Wade et al
212
Tacoma, Washington National Bank
of, v. Eckels
221,281

REPORT OF THE COMPTROLLER OF THE CURRENCY.
Page.
Talbot v. Silverbow County, Montana.. 294,299
Talcott v. First IN ational Bank
259
Talmage v. Third National Bank
204,220
Tapley v. Martin
124,178
Tappan v. Merchants' National Bank...
299
Taylor v.Hutton
240.251
Taylor v. National Bank
131
Tecumseh, First National Bank of, v.
326
Overman
263
Tecumseh National Bank v. Harmon...
206
Tehan v. First National Bank et al
Tennessee et al., State of, v. Bank of
298
Commerce et al
142
Terry v. Birmingham National Bank ._
219
Texarkana National Bank v. Daniel
178
Thatcher v. West River National Bank.
Thayer v. Butler
107, 129,286
' 232
Third National Bank v. Angell
225.260
Third National Bank v. Blake
Third National Bank v. City of Louis302
ville.237
Third National Bank v. Harrison et al _
234
Third National Bank v. Hastings
280
Third National Bank, In re
Third National Bank v. Merchants' Na188
tional Bank
Third National Bank v. Stillwater Gas
172
Company
250.261
Thomas v. City National Bank
Thomas v. Farmers' Bank of Maryland. 155,156
132
Thomson v. Beal
226
Thompson National Bank v. Dow
Thompson v. German Insurance Company etal_.
116,117
Thompson!'. Pool
207,283
Thompson i;.St. Nicholas National Bank 133,321
Thompson v. Sioux Falls National Bank
135
Thornton v. National Exchange Bank _ 142,277
Tliurber v. Miller
.,
207
Ticonic National Bank v. Bagley
263
Tiffany v. National Bank of the State
of Missouri....
._.
202,203
Tillinghast v. Bailey et al
131
Tillinghast v. Carr
284
Timberlake et al. v. First National Bank
203
Titusville, Appeal of Second National
Bank of
332,333
Toledo, Merchants' National Bank of,
v. dimming 307,308
Tompkins County National Bank v.
Buimell and Eno Investment Company
230
Tootle et al. v. First National Bank of
Port Angeles _.
322
Tourtelot. v. Finke
119
Townsend v. Williams
169
Tradesmen's National Bank v. Bank of
Commerce
100,223
Tradesmen National Bank, People ex
rel.,v. Commissioners of Taxes and
Assessments
306
Tronholm, Comptroller, v. Commercial
National Bank
186
Trent Title Company v. Fort Dearborn
National Bank of C hicago
216
Trustees of First Presbyterian Church
v. National State Bank
182,260
Turner v. First National Bank of Keokuketal
279
Turner v. First National Bank of Madison _277
Turner v. Union National Bank
104
Turner v. Utah Title Insurance and
Trust Company
104
Turner v. Wells, Fargo & Co
104
Tuttle v. Frelinghuy sen
269
Twin City Bank v. Nebeker
313
Tyson v. Western National Bank of Baltimore
146
U.
Ulrich v. Santa Rosa National Bank . . . 104,106
Ulster County Savings Institution v.
Fourth National Bank
205
Underwood v. Metropolitan National
Bank
227

CUR 99
7



Page.
Union Gold Hill Mining Company v.
Rocky Mountain National Bank
223
Union Mills First National Bank v.
Clark
137
Union National Bank v. City of Chicago.
314
Union National BPnk v. City of Cleveland
219
Union National Bank v. Grant
284
Union National Bank v. Henry Dreyfus.
258
Union National Bank v. L., N. A. and C.
R. Company
325
Union National Bank v. Oceana County
Bank
136
Union Stock Yards National Bank v.
Duinond
216
Union Stock Yards National Bank v.
Moore et al
171,264
Uniontown, First National Bank of, v.
Stauffer
327
United States v. Allen
183
United States v. Allis
159,184
United States v. American Exchange
National Bank
151,1S7
United States, ex re!., v. Barry
185,334
United States v. Bennett
141
United States v. Booker
162
United States v. Britton
156,157. 158,193
158
United States v. Cadwallader
'
188
United States v. Clinton National Bank.
158
U nited States v. Conant
United States v. Cooke County National
Bank
154
United States v. Crecelitis
183
United States v. Curtis
193, 236,240
United States v. Edgertou
193
United States v. Ege
183
United States v. Eno
182
United States v. Fish
156 158,183
United States v. Folsom
184
United States v. French et al
183.192
United States v. Graves
183:285
United States v. Harper
157,183
United States v. Hughitt.
183,245
United States v. Jewett.
185
United States v. Kenney.
166
United States v. Knox . . _
]08
United States v. Lee
161
United States, plaintiff in error, v.
Mann
127,313
United States v. Means et al
240,246
United States v. Neale
244
United States v. National Bank of Ashe168
villeetal
United States v. National Exchange
208
Bank
192
United States v. Northway
163
United States v. Patterson, Keeper, etc.
166
United States v. Peters
U nited States v. Potter
162, 191,192
United States v. Stockgrowers' National
Bank of Pueblo
171
15(5
United States v. Taintor
154
United States v. Vorhee
191
United States v. Warner
167
United States v. Youtsey
United States Bung Manufacturing
256
Company v. Armstrong
United States National Bank v. First
National Bank of Little Rock et al.... 238, ,252
'228
United States National Bank v. MclSi air.
Upton v. National Bank of South Read277
ing
130
Uptonv. Tribilcock
Utica, First National Bank of, v. Waters
and another
309
V.
Valparaiso, Ind.,The Farmers' National
Bank of, v. Sutton Manufacturing
Company
154
Van Allen v. The American National
Bank
137,168
Van Allen v. The Assessors
294,295,299
Van Antwerp v. Hulburd
196,208
Van Campen, In re
157,183
Vance v. Mottley
242

98

REPORT OF TPIE COMPTROLLER OF THE CURRENCY.

Page.
Van Lenven v. First National Bank
2(51
Van Slyke v. State
295
Veazie Bank v. Fenno
HI, L~4,298,300
Veed er v. Mudgett
180
Venango National Bank v. Taylor
254,255
Vennerv. Cox
268
Vicksburg Bank v. Worrell
295
Viets v. The Union National Bank of
Troy
130
Vilas National Bank v. Barnard
100
Virginia, National Bank of, v. City of
Richmond et al
294
Vose v. Philbrook
253
Wachusett National Bank v. Sioux City
Stove Works
__
205

W.
Wadsworth v. Duncan _
103
Wads worth v. Hocking..
103
Wadsworth v. Laurie
103
Wait v. Dowley
300
Walker v. Miller
179
Walker et al. v. Windsor National
Bank
205
Wallaces. Hood...
120
Wallace v. Stone
152
Warner v. Penoyer et al
249
Warren v. Ds Witt County National
Bank
277
Warren v. First National Bank
219
Washington National Bank v. City of
Seattle
302
Washington National Bank v. King
County
302
"Washington National Bank r. Pierce.. _
239
Wasson\\ Bank
274,296
Wasson v. Hawkins
274
Waterloo, First National Bank of, v.
Elmore
277
Waterloo Milling Company v. Kuonster
151
Watkins v. National Bank of Lawrence
220
Watson v. Sheafe
169
Waxahachie National Bank v. Vickery_
215
Weaver v. Kelley
213
Weber v. Spokane National Bank
222
Weckler v. The First National Bank of
127,322
Hagerstown
Welles v. Graves
185, 186,246
111
Welles v. Larrabee
111
Welles v. Stout
Wellsburg. The First National Bank of,
251
v. Kimberlands
Wellston, First National Bank of, v.
147,261
Armstrong
142
West v. Bank of Rutland
146
West v. St. Paul National Bank
223,
Western National Bank v. Armstrong..
240,253
Western National Bank v. Wood
231?
243
Westervelt v. Mohrenstecher et al
218
West on v. Estey
West Side Bank v. Mechanics' National
122
Bank of Newark, N.J
Wharry v. Hale
_
278
Wheeler v. Union National Bank of
Pittsburg
327
Wheeler v. Walton & Wharm Company
283
Wheelock v. Kost
174, 195,286
Whitbeck v. Mercantile Bank _
_ 296,299
195,196
White v. Knox
White et al. v. Iowa National Bank of
105
Des Moiiies
Whitehall, First National Bank of, Respondent, v. James Lamb et al., Appellants
333
Whitney v. Butler
316
Whitney v. The First National Bank of
Brattleboro 290
Whitney et al. v. General Electric Company of New York et al
283




Page.
W h i t n e y National Bank v. P a r k e r
297
W h i t n e y et al., Appellants, v. Ragsdale,
Treasurer.
305
Whittaker v. Arawell National Bank . . 104,145
Whittemore v. Amoskeag National
Bank
204
Wichita National Bank et al. v. Smith.
£07
Wickham v. H u l l . .
108.20/5
Wild, In r e
203,827
Wilder v. Union National Bank
210
Wiley v. The First National Bank of
Brattleboro
290
Wiley v. Star buck
324
Williams, People ex rel., v. Weaver
296
Williams v. American National Bank of
Arkansas City, Kans., et al
131
Williams v. Board of Supervisors of the
County of Albany
310
Williams v. City National Ban!:
247
Williams v. Cox
140
Williams v. Weaver
298
Williamsport National Bank v. Knapp. 181.209
Wilmington, First National Bank of, v.
Herbert, State Treasurer
314
Wilson, Assignee, v. National Bank of
Rolla
323
Wilson v. Pauly
106,233
Wingate v. Orchard
257
Winstandley v. Second National Bank.
198
Winter v. Baldwin
126
Winters v. Armstrong
281
Winterset, National Bank of, v. Eyre
etal
"205.253,332
Winton v. Little
'
278
Witters v. Foster
102,206,244
Witters v. Sowles . . . 107J.55,201,225,245,256,290
Wolverton v. Exchange 1 ational Bank.
M
204
Wood, Appeal of..
131
Wood River Bank v.First National Bank
of Omaha
138,140,146,217
Woods v. People's National Bank of
Pittsburg
227
Woodward v. Ellsworth
301
Woolman v. Capital National Bank
258
Worcester National Bank v. Cheeney..
277
Worcester, Mass., First National Bank
of ,v.Lock-StitchFence Company ot al.
233
Wright v. First National Bank of
Greensburg
325
Wright v. Merchants1 National Bank...
279
Wright v. Robinson et al
139
Wylie v. Northampton National Bank,
290,
291,293,322
Wyman v. Citizens' I ational Bank of
N
Faribault
222
X.
Xenia, First National Bank of, v. Stewart
127,142,241
Y.
Yakima National Bank v. K n i p e . . .
178, 203
Yardley v. Clothier
253, 255
Yardley v. Philler
276
Yardley v. Wilgus
112, 286
Yerkes v. National Bank of Port J e r v i s .
261
Young v. Andrews et al
155,261, 278
Young v. McKay
112
Young v.Wempe et al
112, 172
Youngstown, First National Bank of, v.
Hughes et id.
127,298, 309

Seigler v. First National Bank of Allentown
Zimmerman v. Carpenter

171
118

REPORT OF THE COMPTROLLER OF THE CURRENCY.

99

ABATEMENT:

1. An action brought by the creditor of a national bank is abated by a decree
of a district or circuit court dissolving the corporation and forfeiting its
franchises. First National Bank of Sehna, v. Colby, 21 Wall., 609.
2. A creditor's bill was filed against a national bank before the passage of the
act of Congress of June 30, 1876 (19 St. at L., 03), and a receiver was
appointed, who took possession of the property of the bank. An amended
"bill was filed in the cause, after the passage of that act, to secure the
benefits of the act, to which all the stockholders were made parties.
Subsequently the Comptroller of the Currency appointed a receiver to
wind up the affairs of the bank, and this suit was brought by him against
one of the stockholders. Held, on demurrer to a plea in abatement, which
set forth these facts, that the defendant is entitled to judgment on the
ground that as the stockholders' liability can be completely enforced in
the suit in equity, the general rule applies that a debtor shall not be vexed
by two suits in the same jurisdiction for the same cause of action.
Harvey, Receiver, etc., v. Lord, 10 Fed. Rep., 236.
3. The pendency of a suit in a State court is not necessarily a bar to a suit in
a Federal court between the same parties, involving the same issues.
Short et al. v. Hepburn, 75 Fed. Rep., 113.
4. In an action by a creditor of a corporation against a stockholder to enforce
his statutory liability, an affidavit for attachment stating that the action
is to enforce the stockholders' liability under the Constitution and statutes for payment of the debts of the corporation and that the claim
against defendant is his liability as such stockholder, sufficiently states
the ' ; nature of plaintiff's claim.'' Rev. St., sec. 5522; Northern National
Bank v. Maumee Rolling Mill Co. {Com. PL), 2 Ohio N. P., 260.
ACCOMMODATION PAPER:

1. A national banking association can not guarantee the paper of a customer
for his accommodation. Seligman v. Charlottesville National Bank, 3
Hughes, 6'47.
2. The accommodation paper of a national banking association is void in the
hands of one who takes it with knowledge of its character. Johnston v.
Charlottesville National Bank, 3 Hughes, 657.
3. A national bank can not become an accommodation indorser. National
Bank of Commerce v. Atkinson, 55 Fed. Rep., 4-65.
4. A private corporation can not defend an action on its accommodation note
on the ground of ultra vires, as against a bona fide holder. Florence
Railroad and Improvement Company v. Chase National Bank (Ala.), 17
So,, 720.
5. As against a holder for value, a maker of an accommodation note can
defend only on the ground of actual payment. Flutter v. Patterson (Pa.
Sup.), 32 A., 26.
6. A director and stockholder of a national bank gave an accommodation note
to the bank's president, on the latter's request and representation that
the note was to be put in the hands of his personal creditor as security,
and on condition that no money should be drawn on the note, and that
the note should not be put in the bank. Without the knowledge of the
maker, he being aged and infirm of sight, the note was made payable to
the bank and placed therein, and a certificate of deposit for the amount
thereof issued to the president, and by him deposited with his creditor,
who held the same until the bank's failure. Held, that the maker was
liable on the note to the bank's receiver. Linn County National Bank
v. Crawford (C. C), 69 Fed. Rep., 532.
7. Complainants, on the request of a national bank needing funds, signed an
accommodation note for $10,000, payable to its order, with the understanding that it would discount the same, and use the proceeds in its
business. The bank at the same time agreed to place to the credit of
complainants on its books an amount equal to the proceeds of the note,
complainants stipulating that they would not check against this credit
except to pay the note or to reimburse themselves for paying it. The
credit was accordingly made, and the bank, after continuing business
for some time, failed, and complainants were compelled to pay the note.
They thereafter recovered a judgment at law against the bank's receiver
for the amount paid to take up the note, and then sued in equity for the



100

REPORT OF THE COMPTEOLLER OF THE CURRENCY.

ACCOMMODATION PAPER—Continued.

amount placed to their credit, according to the agreement. Held, that
they are not entitled to two judgments for the same debt and to dividends on both judgments until one of them was satisfied, and that the
bill must therefore be dismissed. Latimer v. Wood et a'L, 73 Fed. Rep.y
1001.
8. When the payee of an accommodation check, given for a particular purpose, deposits it in a bank in his own name and the bank makes advances
and extends credit on the faith of the deposit without notice of the trust,
its rights and equities are superior to the drawer of the check. Erisman v. Delaivare County National Bank, 1 Pa. Super. Ct., 14-4, ^
W. N. C., 518.
9. In an action on a note, it appeared that plaintiff bank discounted P. & Co.'s
paper to the full extent, consistent with its rules, and, in reply to an application for a further discount, suggested that the company get defendant
bank to discount the paper and allow plaintiff to rediscount it. The
company made its note to defendant, who indorsed it, and sent it on to
plaintiff, with whom it had an account, and the proceeds were placed to
defendant's credit. Defendant placed the amount of the note to the
credit of P. & Co., by whom it was at once checked out. This specific
amount credited to defendant by plaintiff was not checked out by
defendant, but checks in various amounts, in ordinary course of business, were drawn against its account, none of which apparently had any
special reference to the amount of the discount. Held, that defendant
was not an accommodation indorser. Fox v. Home Co. {Sup.), 35 N. Y.
S., 896, distinguished. Tradesmen's National Bank v. Bank of Commerce (Sup.), 39 N. Y. S., 554.
10. Where a note was signed by accommodation makers, and made payable to
a bank, on the understanding that it was to be deposited in the bank to
secure a loan for the purchase of wheat for a mill, with the ultimate
intention of paying off a mortgage on the mill, and such makers, without notice to the bank of any restrictions on the disposition of the note,
allowed the mortgagor, for whose benefit it was made, to have possession and control thereof, they can not complain that he effected an
immediate payment of the mortgage by procuring an indorsement to
himself from the bank, and then indorsing the note to the mortgagee.
First National Bank v. Wood (Tex. Civ. App.), 28 S. W., 384.
11. An answer which alleges that the note sued on was accommodation paper,
and was made and delivered on condition that defendants should not be
held liable thereon, provided there wTas delivered to plaintiff good business paper of the person accommodated, is insufficient, because it does
not allege that the agreement to replace such note with other paper was
made with plaintiff. Vilas National Bank v. Barnard (Sup.), 28
N. Y. S., 922.
12. Defendant, for the accommodation of the maker, indorsed blank notes in
the following form: "
after date,
promise to pay to the
order of
, at the Farmers' National Bank, Adams, N. Y. Value
received." Held, that the delivery of the indorsed blanks did not
authorize the holder to fill them out so as to make them payable '' on
demand" instead of at a specified time after date, or to add the words
4
' with interest." Farmers' National Bank v. Tliomas (Sup.), 29 N. Y. S.,
837.
13. An accommodation indorser on a note given in renewal of a note on which
he was also accommodation indorser, at its maturity, is not relieved of
liability because of his insanity at time of signing it, the bank taking it
in renewal having no notice of his insanity, and he having been sane
when the prior note was executed. Memphis National Bank v. Sneed
(Tenn. Sup.), 33 S. W., 716.
14. Accommodation paper is put into circulation for the purpose of giving
credit to the party for whose benefit it is intended, and, although he
can not maintain an action upon it against the accommodation maker
or indorser. a purchaser can do so, who acquires it while still current,
and gives the credit it was intended to promote, although with knowledge of its original character. Israel v. Gale, 77 Fed. Rep., 532.
15. One who takes accommodation paper from the party for whose benefit it
was made and gives him credit for the same on a precedent indebtedness, though advancing no money, is a holder of such paper for value.
Ib.



REPORT OF THE COMPTROLLER OF THE CURRENCY.

101

ACCOMMODATION PAPER—Continued.

16. The general authority of the president of a business corporation to make
and discount its promissory notes gives him no power to make a note of
the corporation payable to his own order, and one who discounts such a
note can not recover thereon against the corporation without showing
special authority for its execution. Park Hotel Co. v. Fourth National
Bank of St. Louis, 86 Fed. Rep., 742.
17. To the general rule that the acts and contracts of a general agent within
the scope of his powers are presumed to be lawfully done and made, there
is an exception as universal and inflexible as the rule. It is that an act
done or a contract made with himself by an agent on behalf of his principal is presumed to be, and is notice of the fact that it is, without the scope
of his general powers, and no one who has notice of its character may
safely recover upon it without proof that the agent was expressly and
specially authorized by his principal to do the act or make the contract.— Ib.
18. It is ultra vires of a corporation to make accommodation paper, or to
guarantee the payment of the obligations of others.— Ib.
19. A contract which a corporation has no power to make, it has no power to
ratify, and no power to estop itself from denying.—Ib.
20. A national bank receiver can not recover upon notes made for the accommodation and sole benefit of the bank, without consideration.
Stapylton
v. Teagne; same v. Anderson et ah; same v. Carmichael, 85 Fed. Rep., 407.
21. Accommodation indorsements or acceptances by a national bank are ultra
vires, and void in the hands of holders with notice. Bowen v. Needles
National Bank, 87 Fed. Rep., 430.
ACTIONS.

See Jurisdiction.

1. A national banking association is a foreign corporation within the meaning of a State statute requiring corporations created by the laws of any
other State or country to give security for costs before prosecuting a
suit in the courts of the State. National Park Bank v. Gunst, 1 Abb.
N. C, 292,
2. As a national banking association can acquire no title to negotiable paper
purchased by it, it can maintain no action thereon in a State where the
person suing must be owner of the paper. First National Bank of
Rochester v. Pier son, 24 Minn., 140.
3. A stockholder in a national bank can not maintain an action at law against
the officers and directors thereof to recover damages for willful waste
of the assets whereby the value of his shares was decreased and he became liable to an assessment thereon. His remedy must be sought in
equity. Hirsh v. Jones et ah, 56 Fed. Rep., 187.
4. The provision of the banking law, section 5198, Rev. Stat., which requires
that actions brought against national banking associations in State
courts shall be brought in the county or city in which the association is
located, applies only to transitory actions. It was not intended to apply
to actions local in their character. Casey v. Adams, 102 U. S., 66.
5. Under section 57 of act of 1864, suits may be brought by, as well as against,
any association. Kennedy v. Gibson, 8 Wall., 408.
6. Actions local in their nature may be maintained in the proper State court
in a county or city other than that where it is established. Casey v.
Adams, 102 U. S., 66.
7. A national bank may be sued in any State, county, or municipal court in
county or city where located. Bank of Bethel v. Pahquioque Bank, 14
Wall., 383.
8. Under the original act respecting national banks, and before the act of
June 30, 187(5, a court of equity had jurisdiction of suit to prevent or
redress maladministration or fraud against creditors, in voluntary liquidation of such bank, whether contemplated or executed; and such suit
by one creditor must be for all. Richmond v. Irons, 121 U. S., 27.
9. Suit may be brought against a national banking association though it is in
the hands of a receiver. Bank of Bethel v. Pahquioque Bank. 14 Wall.,
383; Security National Bank v. National Bank of the Commonwealth, 2
Hun., 287; Green v. The Wallkill National Bank, 7 Hun., 63.
10. A shareholder of a national banking association can not maintain an action
against the directors to recover damages sustained for neglect and mismanagement of the affairs of the association whereby it became insolvent and its stock was rendered worthless. Such an action can be



102

REPORT OF THE COMPTROLLER OF THE CURRENCY.

ACTIONS.

11.

12.

13.
14.

15.
16.
17.

18.

19.
20.

21.
22.
23.
24.
25.

26.

27.

See Jurisdiction—Continued.

brought only by the corporation itself. Conway v. Halsey, 15 Vroom.,
462; Howe v. Barney, 45 Fed. Rep., 668.
But where the receiver refuses to bring an action against negligent directors to recover the amount which the shareholders have been compelled
to contribute to pay the debts of the association, an action against such
directors may be brought by a shareholder on behalf of himself and the
c
other shareholders. Nelson v. Burroughs, 9 Abb. N. C,
280.
And when the receiver is a director and one of the parties charged with
misconduct and against whom a remedy is sought, the action may be
brought by a shareholder on behalf of himself and the other shareholders.
Brinckerhoff v. BostivicK, 88 N. Y., 52.
A receiver may sue either in his own name or the name of the bank.
National Bank y. Kennedy, 17 Wall., 19.
Suits and proceedings under the act in which the United States or their
officers or agents are parties, whether commenced before or after the
appointment of a receiver, are to be conducted by the district attorney,
under the direction of the Solicitor of the Treasury. Bank of Bethel v,
Pahquioque Bank, 14 Wall., 383.
But section 380, Rev. St., is directory merely, and the employment of private counsel by the receiver can not be made a ground of defense to a
suit brought by him. Ib.
Receivers may sue in the courts of the United States by virtue of the act,
without reference to the locality of their personal citizenship. Ib.
The provisions of the codes that every action must be brought in the name
of the real party in interest, except in the case of the trustee of an
express trust or of a person authorized by a statute to sue, does not
apply to the receiver of a national banking association suing in a Federal court held in a State which has adopted the code procedure; for the
right of the receiver to sue is derived from the national banking law.
Staunton v. Wilkeson, 8 Ben., 857.
Under section 1001, Rev. St., no bond for the prosecution of the suit, or to
answer in damages or costs, is required on writs of error or appeals
issuing from or brought to the Supreme Court of the United States by
direction of the Comptroller of the Currency in suits by or against
insolvent national banking associations or the receivers thereof. Pacific
National Bank v. Mixter, 114 U. S., 460.
The State statute of limitations applies to a suit brought by the receiver of
a national bank against a shareholder to recover an assessment upon his
stock to pay the debts of the bank. Butler v. Poole, 44 Fed. Rep., 586.
Whether a suit against a director for negligent performance of his duties,
as required by the statutes of the United States and the by-laws of the
association, will survive against the executor or administrator depends
upon State laws. Witters v. Foster, 26 Fed. Rep., 737.
Such action is not prescribed by the limitation of one year in Louisiana.
Case v. Bank, 100 U. S., 446.
On a bill filed by receiver against stockholders under section 50, where bank
fails to pay its notes, action by Comptroller must precede institution of
suit by receiver, and be set forth therein. Kennedy v. Gibson, 8 Wall., 498.
Creditors of the bank are not proper parties to such bill. Ib.
A compromise of a suit by the receiver of a national bank and counsel for
the United States will not be opened after a delay of seven years, no
fraud being shown. Henderson v. Myers, 11 Phil,, 616; 3 N. B. C , 750.
An action may be brought a/gainst a national bank, notwithstanding a
receiver of it has been appointed. Security Bank of New York v. National
Bank of the Commonwealth, 4 Thompson < • Cook, 518; 1 N. B. C , 774;
£
Green v. The Wallhill National Bank, 7 Hun., 63; 1 N. B. C, 786.
An action against the directors of a national bank under the provisions of
Rev. St., § 5239, can be maintained only by a receiver of the bank; and
an action by a private individual against such directors for damages
arising from the making of false reports or other violations of the national
banking act can only be maintained as an action at the common law in
the nature of an action of deceit. Gerner v. Thompson, 74 Fed. Rep., 125.
An action can not be maintained against a bank by the holder of a check
for refusal to pay it, unless the check has been accepted, although there
stands to the credit of the drawer on the books of the bank a sum more
than sufficient to meet the check. Cincinnati, H. & D. R. Co. v. Metropolitan National Bank {Ohio Sup.), 42 N. E., 700.




REPORT OF THE COMPTROLLER OF THE CURRENCY.
ACTIONS.

103

See Jurisdiction—Continued.

28. A bill by the receiver of an insolvent national bank against the shareholders to recover dividends unlawfully paid out of the capital at times
when the bank had earned no net profits may be brought without an
express order from the Comptroller of the Currency. Hay den v.
Thompson (C. C. A.), 71 F., GO.
29. Where both parties to an action claim title to land under legal proceedings, those through which defendant derives title being alleged to be
fraudulent, it is reversible error to instruct the jury that, upon the
record evidence, the title is vested in the plaintiff, whereas in fact the
defendant has the better title, unless it is defeated by fraud. Short et
al. v. Hepburn, 75 Fed. Rep., 113.
30. In an action involving the validity of a title claimed by defendants to have
been acquired under attachment and execution against one C , while
plaintiff charges that C. was a fictitious person, and the deed to him and
the proceedings against him were parts of a scheme of his supposed
grantor to defraud his creditors, it is error to charge the jury either
that, if C.'s whereabouts were unknown, it would make his title to the
property immaterial, or that the fact that C. was a fictitious person
would entitle the plaintiff to recover, irrespective of the circumstances
under which defendant acquired his title. Ib.
31. In an action by a depositor in an insolvent bank against the stockholders
to recover the balance due him at the time of the suspension of the bank,
it is not necessary to join as defendants persons who signed the articles
of incorporation, but have since transferred their stock, though such
transfer was not made in the manner provided by the articles of incorporation. Wadsworth v. Hocking, Gl III. App., 15G; Same v. Duncan,
Ib.; Samev. Laurie, Ib.
32. Where a person holds stock in a banking association as trustee, he is a
proper party defendant, to the exclusion of his beneficiary, in an action
brought by a depositor against the stockholders to recover the balance
due him at the time of the suspension of the bank. Ib.
53. An instrument headed by the name of a bank and a list of its officers,
reciting that plaintiff had left a sum of money to be loaned for his use,
<;
payable not to exceed six months, on return of this memorandum,"
and signed with the name of the person represented at the top of the
paper to be the cashier, the signature being followed by a scroll composed of the letters "chr.," shows priina facie a cause of action against
the bank for a return of the money loaned. Squires v. First National
Bank, SO III. App., 134.
34. An action ex contractu brought by an administrator to recover money
claimed to have been wrongfully paid to defendant by a bank constitutes an election and ratification of the payment, and precludes a subsequent action against the bank on the same claim. Crook v. First
# National Bank {Wis.), 52 N. IK, 1131.
35. The assignment of a promissory note vests the legal title in the assignee
and renders him a proper party plaintiff in an action thereon. Forster
v. Second National Bank, Gl III. App., 272.
36. In an action to recover the amount paid to the payee and indorser of a
check alleged to have been fraudulently altered as to amount, where
experienced cashiers were allowed to testify as experts for defendant to
the genuineness of the check, and chemical experts had testified for
plaintiff that writing could be removed by the use of acids without any
trace being left, plaintiff should have been allowed to cross-examine
defendant's expert witnesses as to their knowledge of the use and effect
of acids in removing ink. Birmingham National Bank v. Bradley {Ala.),
19 So., 791.
37. A complaint in an action on a note alleged its execution, and in a third
paragraph alleged that " n o part of said sum has been paid, and the
sainels wholly due;" and the answer admitted the execution of the note,
but denied "each and every allegation in paragraph three." Held, that
the denial was bad, as a negative pregnant. Columbia National Bank
v. Western Iron & Steel Co. {Wash.), 44 P., U538. In an action by the assignee of an invalid nonnegotiable instrument
against the assignor thereof, plaintiff must show that the maker was
insolvent when the instrument was made or became due, or that lie used
diligence to recover from the maker, and failed, or that suit against the
maker would have been of no avail. Merchants' National Bank v, Spates
{W. Va.)
8E




104

REPORT OF THE COMPTROLLER OF THE CURRENCY.

ACTIONS.

See Jurisdiction—Continued.

39. In an action against the receiver of an insolvent corporation, the facts
that he represents the corporation and produces its books of account do
not prevent him from contradicting the entries therein, as he represents
creditors also. Whittdker v. Amiuell National Bank (N. J. Ch.), 29 A.,
203.
40. In an action to recover on certificates of deposit alleged to have been
assigned plaintiff by deceased, where the complaint alleges and the
assignment recites a consideration of $1,000, and the assignment is
attacked as fraudulent, testimony that deceased said she intended plaintiff to have all her property when she died is incompetent. Turner v.
Utah Title Insurance & Trust Co., (Utah), 37 P., 91; Same v. Wells,
Fargo & Co., Ib., 94; Same v. Union National Bank, Ib., 95.41. In an action to recover money deposited by plaintiff with defendant under
an agreement that it is to ba paid to a third person on condition that the
latter deliver a deed to plaintiff within a certain time, such person is not
a necessary party. Ulrich v. Santa Rosa National Bank (Cal.), 37 P.,
500.
42. By authority of the directors of a national bank in Chicago, which had
acquired some of its own stock, the individual note of its cashier, secured
by a pledge of that stock, was, through a broker in Portage, sold to a
bank there. The note not being paid at maturity, the Portage bank sued
the Chicago bank in assumpsit, declaring specially on the note, which it
alleged was made by the bank in the cashier's name, and also setting
out the common counts. The bank set up that the purchase of its own
stock was illegal, and that money borrowed to pay a debt contracted
for that purpose was equally forbidden by Rev. Stat., section 5201. The
trial court was requested by the Chicago bank to rule several propositions of law, and declined to do so. Judgment was then entered for the
Portage bank. The supreme court of the State of Illinois held that the
Portage bank was entitled to recover under the common counts, and that
it was not necessary to consider whether the trial court had ruled correctly on the proposition of law submitted to it. Held, that that court,
in rendering such judgment, denied no title, right, privilege, or immunity specially set up or claimed under the laws of the United States, and
that the writ of error must be dismissed. Chemical Bank v. City Bank
of Portage, 64.6 Fed. Rep., 160.
43. No action may be maintained against a national bank upon a contract
made by its cashier on its behalf to guarantee a contract between third
persons for delivery of building materials. Norton v. Derby National
Bank, 61 N. II., 589; 60 Am. Rep., 334; 3 N. B. C, 568.
44. In an action by a receiver to recover an assessment on certain shares of a
national bank, defendant pleaded a prior judgment dismissing a bill
brought to charge her father's estate with the same assessment, to which
suit she was also a party. Held, that the causes of action were different—
that in the earlier suit being the alleged ownership of the shares by the
father at the date of the bank's failure, and that in the latter the alleged
ownership by the daughter of the same shares at the same date—and that,
therefore, the former suit operated as an estoppel only as to the matters
actually litigated and determined. Ricatid v. Tysen, 78 Fed. Rep., 561.
45. Where the causes of action are different, and the decree in a former suit
does not show on its face that the question involved in the present one
was directly and necessarily determined, evidence aliunde, consistent with
the record, may be received to show that it was actually determined. Ib.
46. An action by the receiver of an insolvent national bank, in which it is
alleged that the defendant, to which negotiable paper was sent by the
bank for collection, appropriated the proceeds thereof and refused to pay
the same over on demand, is an action for the conversion of chattels,
and is governed by the limitation fixed by subdivision 3 of section 338 of
the California Code of Civil Procedure relating to actions for '* taking,
detaining, or injuring any goods or chattels." Hawkins v. State Loan
& TrusfCo., 79 Fed Rep., 50.
47. Where a note executed solely for the accommodation of a bank was made
payable to the order of the bank's casnier and indorsed in blank, the
mere fact that the president of the bank negotiated the note for his personal benefit to a third person, who knew his office, was not of itself
notice to the purchaser of the facts, or sufficient to put him on inquiry
as to the legality of the president's act. Kaiser v. United States National
Bank (Ga.), 25 S. E., 620.




REPORT OF THE COMPTROLLER OF THE CURRENCY.
ACTIONS.

105

See Jurisdiction—Continued.

48. In an action by a bank upon a negotiable note payable to order, the title to
which, by appropriate endorsement, has become vested in the name of a
person as cashier, the declaration must show that such person is plaintiff's cashier, and that the ownership of the note sued upon is in plaintiff;
else it will be demurrable. Hobbs v. Chemical National Bank (Ga.),
25 S.E., 348.
49. A stockholder of an insolvent national bank may bring a suit in a State
court, in behalf of the bank and himself, as a representative stockholder,
against the directors, to recover money alleged to have been lost through
their negligence and breach of trust, when the bank's officers, the receiver,
and the Comptroller of the Currency have all refused to bring such a
suit. Ex parte Chetwood, 165 U. S., 443.
50. In an action by a national bank on railroad aid bonds the United States
alone can complain that the bank was not authorized to hold such bonds.
Town Council of Lexington v. Union National Bank (Miss.), 22 So., 291.
AGENT OF SHAREHOLDERS:

1. The Federal courts have the same jurisdiction of suits by and against the
" a g e n t s " of national banks appointed under the national banking acts
of Congress, when the "receivers" of an insolvent bank have been displaced by such "agents," as they have of suits by and against the
"receivers" of such banks, each being in the same sense officers of the
United States, and each representing in precisely the same relation the
bank in its corporate capacity; and this jurisdiction attaches without
regard to any diversity of citizenship of the parties or the amounts
involved. McConville v. Gilmour et at., 36 Fed, Rep., 277.
2. When the receiver of an insolvent national bank has been displaced by an
"agent" appointed under the acts of Congress in that behalf, it is proper
practice to substitute, upon motion, the " agent" as the plaintiff on the
record in place of the "receiver" in a suit already commenced by the
latter. Ib.
3. That a receiver of an insolvent national bank has applied to the proper
circuit court for authority to sell assets, and that thereafter an agent
has been appointed, under 19 Stat., 63, as amended by 27 Stat., 345, to
succeed the receiver, gives that court no authority to enjoin a stockholder in the bank from prosecuting actions in the State courts, in behalf
of the bank, against its directors^ or against using the bank's name in
writs of error sued out from the United States Supreme Court to review
the judgments of the State supreme court in such actions. Ex parte
Chetwood, 165 U. S., 443.
4. A duly elected "agent," who is substituted under the act of June 80, 1876
(19 Stat., 63), as amended by the act of August 3, 1892 (27 Stat., 345),
for the receiver of an insolvent national bank, to complete the winding
up of its affairs, proceeds with like authority to that of the receiver,
and is not an officer of the circuit court, though he is required by the
statute to render an account to it of all his proceedings, expenditures,
etc., and he and his sureties are finally discharged by its order. Ib.
5. Where an action brought by a stockholder in a national bank, in behalf of
the corporation while in the hands of a receiver, lias terminated, an
agent of the corporation elected to succeed the receiver as provided by
law, and charged with the duty of controlling and disposing of its assets
and of distributing the proceeds, is entitled to receive the proceeds of
such action, less a reasonable allowance to the plaintiff for his costs,
disbursements, and attorney's fees, Chetwood v. California National
Bank (Cal), 45 P., 854.
6. 27 Stat., 345, c. 360, \ 3, authorizes the election of an agent by the stockholders of a national bank in the hands of a receiver when all indebtedness to outside creditors has been paid, and provides that such agent,
after giving bond, shall be vested with the control of the bank's affairs
by the controller and receiver, being accountable to the circuit or distinct court of the United States. Held, that such agent takes the place
of the receiver, and is at least a quasi public officer, the regularity and
validity of whose appointment can not be questioned in a collateral
proceeding. Ib.
APPEAL:

1. Under act March 3, 1891, § 11, a writ of error must be sued out within six
months in order to authorize a review by the circuit court of appeals.
White et at. v, Iowa National Bank of Des Moines, 71 Fed, Rep., 97.



106

REPORT OP THE COMPTROLLER OF THE CURRENCY.

APPEAL—Continued.
2. Under the Louisiana Code of Practice providing (articles 364, 391) that third
persons may intervene in suits, either before or after issue, provided the
intervention do not retard the suit, but that persons so intervening must
be always ready to plead or exhibit their testimony, an appellate court
can not review the exercise of discretion by the trial court in refusing
an application by such an intervener, made after the commencement of
a trial, for a continuance, in order to enable the intervener to take steps
necessary to bring his intervention to an issue. It is not error to refuse
to admit evidence offered by such an intervener, when his intervention
has not been brought to an issue with the original parties. Baker v.
Texarkana National Bank et al., 74 Fed. Rep., 598.
3. On an appeal from an order denying a motion to dissolve an injunction
pendente lite, restraining an execution sale of personal property, held,
that the court of aj)peals could not determine questions of law which
might depend upon undisclosed facts, or questions of fact upon ex parte
affidavits of the character of those presented in the record; and that, as
the questions arising were proper subjects for deliberate examination,
the order would be affirmed under the rule that, where a stay of proceedings will not cause too great injury to defendants, it is proper to
preserve the existing state of things until the rights of the parties can
be fully investigated. Hadden et al. v. Dooley et al., 74 Fed. Rep., 429.
4. Where an order refusing to dissolve an injunction pendente lite restraining
a sheriff from selling certain silks on execution was affirmed, but it
appeared to the court that a sale of the goods would be to the pecuniary
advantage of both parties, held, that leave would be reserved to the court
below to modify its order so that by consent of the parties the silk
might be sold under the execution, after ample notice, and the proceeds
placed in the registry to await a final decision. Ib.
5. It is not indispensable that an exception to a ruling of the court on the
trial of an action should be brought before an appellate court by a bfll
of exceptions if it fully appears upon the record proper. Wilson v.
Pauly, 72 Fed. Rep., 129.
6. The only question presented being one of fact, as to which the evidence
is conflicting and apparently evenly balanced, the finding and judgment
of the district court should not be disturbed. Buffalo County National
Bank v. Gilcrest (Neb.), 66 N. W., 850.
7. Where the bill of exceptions purporting to contain the evidence in a case
is not authenticated by the certificate of the clerk of the trial court it
will not be examined. First National Bank v. Cass County (Neb.), 66
N. W., 300.
8. As each party may appeal from the same final judgment without making
separate cases of each appeal, the appellate court may consolidate into
one proceeding separate cases on appeal from the same judgment.
Farmers and Merchants' National Bank v. Waco Electric Railway and
Light Co. (Tex. Sup.), 34 S. W., 737.
9. An order requiring an answer to be made more definite, so as to show what
is pleaded as defense and what as counterclaim, rests in discretion, and
is not appealable. Garfield National Bank v. Kirchway (City Ct. N. Y.),
37 N. Y. S., 1140.
10. Where the record fails to show that notice of appeal was given, the appeal
will be dismissed. Merchants' National Bank v. Ault ( Wash.) ,44 P., 129.
11. A finding on conflicting evidence can not, on at>peal, be disturbed. Lehman v. Rothbarth (III. Sup.), 4$ N. F., 777; Smith v. Sabin (Cal.),43 P.,
588; Merchants' National Bank v. McAnulty (Tex. Sup.), 33 S. W., 963.
12. A rehearing will not be granted for consideration of a question not raised
on the original hearing. Arnau v. First National Bank (Fla.), 18 So.,
790.
13. Where, on appeal, the record does not contain the evidence, and findings
of fact were waived, it will be presumed that the allegations of the complaint were proven, and that the affirmative allegations in the answer
were not. TJlrich v. Santa Rosa National Bank (Cal.), 37 P., 500.
14. An objection and exception to the introduction of certain evidence, for
which no ground was assigned, can not be considered on appeal. Tabor
v. Commercial National Bank (C. C. A.), 62 F., 383.
15. On a trial by the court, where no request was made for a peremptory declaration that the evidence was insufficient to entitle plaintiff to judgment, a general finding for plaintiff can not be reviewed on a single
exception to the finding and the judgment thereon. Ib.




REPORT OF THE COMPTROLLER OF THE CURRENCY.

107

APPEAL—Continued.
16. Where no question of law is presented by the record a certificate by the
appellate court that the case involves questions of law of such importance that they should be passed on by the supreme court does not present any questions of law to be determined. Commercial National Bank
v. Canniff (III. Sup.), 37 N. E., 898.
17. In determining the questions at issue the supreme court can only look at
the record and not at the opinion of the appellate court. Ib.
18. Where in an action against a firm on a note signed by one partner the
court tries the case without a jury and found that such partner had no
authority to sign the note, but also found that the other partner afterwards ratified the signature, error in admitting evidence as to the former's authority to sign the note is immaterial. Merchants' National
Bank v. Peet (Wash,), 37 P., 290.
19. An appeal taken to the circuit court of appeals from a decree of the circuit
court entered in accordance with the mandate of the former court upon
a previous appeal, will be dismissed, even though an appeal lie to the
supreme court from the decision of the circuit court of appeals. Merrill
v. National Bank of Jacksonville, 78 Fed. Rep., 208.
ASSESSMENT. See Insolvent banks; Receiver; Shareholders; Transfer of stock.
1. Where a national banking association is insolvent, order of Comptroller of
Currency declaring to what extent the individual liability of stockholders sha'l be enforced is conclusive. Kennedy v. Gibson, 8 Wall., 498;
Casey v. Galli, 94 U. S., 673; National Bank v. Case, 99 U. S., 628.
2. Payments of assessments by stockholder in national bank on increased stock
can not be applied, in law or in equity, to discharge assessments by Comptroller in final liquidation of the bank. Pacific National Bank v. Eaton,
141 U. S., 227; Thayer v. Butler, Ib., 234; Butler v. Eaton, Ib., 240.
3. The assessments made by the Comptroller upon the shareholders of an
insolvent association bear interest from the date of the order. Casey v.
Galli, 94 U. S., 678.
4. Where shareholders have assessed themselves to the amount of the par
value of the stock for the purpose of restoring impaired capital, the
contributions made in pursuance of such assessment, though all used in
paying the debts of the association, will not so operate as to discharge
the shareholders from their individual liability. Delano v. Butler, 118
U. S., 684,
5. Where a married woman is by the State law capable of holding stock in a
national bank in her own right, she is liable to an assessment upon her
shares, though the law of the State does not authorize married women
to bind themselves by contracts for the payment of money. The law
annexes her obligations by its own force; no act or capacity to act on her
part is required. Witters v. Soivles, 32 Fed. Rep., 767; 85 Fed. Rep., 640.
6. Married women who are permitted by the laws of the State in which they
reside to become shareholders in national banks are liable to assessments
under the national banking laws. In re First National Bank of St.
Albans, 49 Fed. Rep., 120.
7. The coveture of a married woman who is a shareholder in a national bank
does not prevent the receiver of the bank from recovering judgment
against her for the amount of an assessment levied upon the shareholders
equally and rat ably under the statute. Keyser v. Hitz, 133 U. S., 138.
8. It is not essential, in an action to enforce the individual liability of the
shareholders of an insolvent national banking association, to aver and
prove that the assessment was necessary, for the decision of the Comptroller on this point is conclusive. Strong v. Southicorth, 8 Ben., 331;
Kennedy v. Gibson, 8 Wall., 498; Casey v. Galli, 94 U. S., 673.
9. And the fact that the title to the stock of a deceased shareholder vests in
his administrator does not relieve the estate from the burden of an
assessment. Davis v. Weed, 44 Conn., 569.
10. Nor will the fact that the administration is complete, and all the assets
have been distributed, defeat an action brought to recover the assessment. Ib.
11. The question whether there is a deficiency of assets, and when it is necessary to enforce the individual liability of shareholders, is for the Comptroller to determine; and his decision in this matter is final and conclusive. Kennedy v. Gibson, 8 Wall., 498; National Bankv. Case, 99 U. S.,
628; Casey v. Galli, 94 U. S., 673.



108

REPORT OF THE COMPTROLLER OF THE CURRENCY.

ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
12. The amount contributed by each shareholder should bear the same proportion to the whole amount of the deficit as his own stock bears to the
whole amount of the capital stock at its par value. And the solvent
shareholders can not be made to contribute more than their proportion
to make good the deficiency caused by the insolvency of other shareholders. United States y. Knox, 102 U. S., 422.
13. Where, to discharge liabilities of an insolvent bank, Comptroller assessed
against shareholders a sufficient per cent on par value of stock held by
each, some being insolvent, he can not provide for deficiency by new
assessment. Ib.
14. The estate of a deceased owner of national-bank stock is liable (Rev. St.,
sec. 5152) to an assessment levied against his exf* Tutors in consequence
of the failure of the bank after his death. Wickham v. Hull et al , 60
Fed. Rep., 326.
15. An action was brought against the executors of an estate to establish its
liability for an assessment on certain shares of national-bank stock.
The estate was at the time in possession of an Iowa probate court for
purposes of administration, for which reason the Federal court could
not enforce the liability, if adjudged to exist. Defendant set up the limitations contained in the Iowa statute (Code, sec. 2421) regulating the
settlement of estates. Held, That the Federal court would not pass upon"
the question whether this provision debarred complainant from sharing
in the estate, for, as the claim established in the Federal court must be
presented for allowance in the probate proceedings, the better practice
was to remit the question to the probate court. Ib.
16. Where a national bank issues certificates of its shares to a subsequent
purchaser in lieu of the certificates of the prior owner, without observing its by-law in regard to a transfer on its books, so far as creditors of
the bank are concerned a party taking and holding such shares of stock
will be subject to the liabilities imposed by section 5151 of the national
banking law. Laing v. Burley, 101 III., 591; 8 N. B. C, 869.
17. One to whom stock has been trarsferred in pledge or as collateral security
for money loaned, and who appears on the books of the corporation as
the owner of the stock, is liable as a stockholder for the benefit of creditors. Where the owner, holder, or pledgee of stock transfers it out and
out for the purpose of escaping liability as a shareholder to one who is
unable to meet such liability, or when the transfer is colorable and not
absolute, the transfer is ineffective as to creditors, and the transferrer
will be still liable. Therefore, when the G. bank loaned money and took
as collateral therefor shares of stock in the C. bank, which were duly
transferred in the books of the C. bank, and afterwards the Gr. bank
transferred, these shares to one of its clerks with an understanding that
he should retransfer on request, and the C. bank was then in failing condition, held, that the G-. bank was liable to contribute as a stockholder
to the debts of the C. bank. Germania National Bank of New Orleans
v. Case, Receiver, 99 U. S., 628; 2 N. B. C, 25.
18. A letter addressed to the receiver, and signed by the Comptroller of the
Currency, directing him to institute legal proceedings to enforce the individual liability of every stockholder, under the statute, is sufficient evidence that the Comptroller decided, before the suit, that it was necessary
to enforce the personal liability of the stockholders. Bowden v. Johnson, 107 U. 8., 251; 3 N. B. C, 55.
19. The liability of the stockholders bears interest from the date of said
letter. Ib.
20. Under the national banking act, the individual liability of the stockholder
survives as against the personal representatives of a deceased stockholder. Richmond v. Irons, 121 U. S., 27; 3 N. B. C, 211.
21. A stockholder sold certain stock several months before the insolvency of
the bank-, but the transfer was not made on the books till the date of the
bank's failure. Held, that the stockholder incurred the statutory liability. Ib.
22. Fifty shares of the stock of a national bank were transferred to F. on the
books of the bank October 29. A certificate therefor was made out, but
not delivered to him. He knew nothing of the transfer, and did not
authorize it to be made. On October 30 he was appointed a director and
vice-president. On November 21 he was authorized to act as cashier. He
acted as vice-president and cashier from that day. On December 12 he
bought and paid for 20 other shares. On January 2 following, while the




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109

ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
bank was insolvent, a dividend on its stock was fraudulently made, and
$1,750 therefor placed to the credit of F. on its books. He, learning on
that day of the transfer of the 50 shares, ordered D., the president of the
bank, who had directed the transfer of .the 50 shares, toretransferit. and
gave to D. his check to the order of D. individually for $1,250 of the
$1,750. The bank failed January 22. In a suit by the receiver of the
bank against F. to recover the amount of an assessment of 100 per cent
by the Comptroller of the Currency in enforcement of the individual liability of the shareholders, and to recover the $1,750, held, first, in view
of provisions of sections 5146, 5147, and 5210, Rev. St., it must be presumed conclusively that F. knew from November 21 that the books
showed he held 50 shares; second, F. did not get rid of his liability for
$1,250 by giving to D. his cheek for that sum in favor of D. individually.
Finn v. Brown, 142 U.S., 56.
23. In winding up an insolvent national bank, the Comptroller of the Currency
is vested with authority to determine when a deficiency of assets exists,
so that the individual liability of the stockholders may be enforced, and
no appeal lies from his decision. Bailey v. Sawyer, 1 N. B. C., 356; 4
Dill., 463.
24. The liability of a stockholder of a national bank is several, and is fixed by
his taking stock in the corporation. Ib.
25. When an assessment upon the stockholders is ordered by the Comptroller,
a suit at law is the proper remedy to enforce it. Jo.
26. A trustee holding shares in a national bank can not avail himself of his
exemption from personal liability for debts of the bank, unless his trusteeship appears on the books of the bank. Davis v. Essex Baptist Society,
U Conn., 582; 2 N. B. C, 110.
27. With a bequest of money a religious society purchased, and held in its own
name, shares in a national bank. The society had other donations
otherwise invested. Held, that the society was not a trustee, but an
ordinary stockholder, and liable to assessment for debts of the insolvent
bank, 1b.
28. One who procures a transfer to himself, on the books of a national bank, of
stock in such bank, becomes liable for the engagements of the bank as
prescribed in the national-bank act, although such stock was pledged
to him by the owner simply as security for a debt. Moore v. Jones, 3
Woods, 53; 2 N. B. C, 144.
29. .One in whose name shares of the stock of a national bank stand on the
bank books is subject to the individual l i a b i l ^ o f a shareholder, although
his holding of the stock was originally as collateral security for a loan
and the loan has been repaid and the stock certificate surrendered with
an executed iiower of attorney for transfer. Bowdell v. Fanners and
Merchants' National Bank of 'Baltimore, 14 Bankers' Magazine, 387; 2
N. B. C, 146.
30. The determination of the Comptroller as to the necessity of an assessment
on stockholders of an insolvent national bank for the payment of debts
is conclusive, and in a suit to enforce such an assessment the necessity
need not be alleged. Strong, Receiver, v. Southworth, 8 Ben., 331; 2
N. B.C., 172.
31. S. bought shares in a national bank and caused them to be transferred to
E., who was in his employ, S. remaining the real owner. Held, that S.
was liable as stockholder upon the failure of the bank. Davis, Receiver,
v. Stevens, 20 Alb. L. J., 490; 2 N. B, C, 158.
32. In an action by the receiver of a national bank to enforce the liability of
a shareholder, it appeared that the date of the defendant's subscription
to the stock was prior to May, 1866, when the receiver was appointed;
that the Comptroller of the Currency decided on the 28th of June, 1876,
that the enforcement of this liability to its full extent was necessary,
and instructed the receiver accordingly, and that this action was thereupon brought, Held, that although such decision and order of the
Comptroller were necessary preliminaries to a suit against the share
holder, yet, having been delayed without sufficient apparent reason for
more than six years from the date of the subscription, the statute of
limitations was a bar to the action, the State courts having decided that
an act necessarily preliminary to the commencement of a suit upon a
contract must be done within six years, unless sufficient reason for the
delay is shown. Price, Receiver, v. Yates, 10 Alb. L. J., 205; 2 N. B. C ,
204.




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REPORT OF THE COMPTROLLER OF THE CURRENCY.

ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
33. Actions by the receiver of a national bank against stockholders for assessments on the stock are subject to State statutes of limitations. Birfler
v. Poole, 44 Fed. Rep., 586.
34. A court has no power, under sec. 5324, U. S. Rev. St., to order the receiver
of a national bank to compound debts which, are not "bad or doubtful;"
and a composition under such an order of debts not "bad or doubtful,"
as the debt of a shareholder arising on his subscription to the stock, is
ineffectual, Price v. Yates, 19 Alb., L. J. 295.
85. A stockholder of an insolvent national bank, who happens also to be one of
its creditors, can not cancel or diminish the assessment to which the provisions of sec. 5151, Rev. St., make him liable by offsetting his individual
claim against it. Hobart, Receiver, etc., v. Gould, 8 Fed. Rep., 57.
36. Section 5151, Rev. St., among-other things, provides that the shareholders
of every national banking association shall be held individually responsible for all contracts, etc., to the extent of the amount of their stock
therein, at the par value thereof, in addition to the amount invested in
such shares. Held, that upon the insolvency of such a bank a shareholder who happens to be one of its creditors can not cancel or diminish
the assessment, to which the £>rovisions of this section make him liable,
by offsetting his individual claim against it. Ib.
37. The liability which shareholders in national banks incur under section 12
of the act of 1804, wThich provides for a liability " t o the extent of the
amount of their stock therein, at the par value thereof, in addition to
the amount invested in such shares," is that of principals, not of sureties.
Hobart, Receiver, etc., v. Johnson, 8 Fed. Rep.. 493.
88. Such a liability is not one on a " promise to pay the debt, or answer for the
default or liability, of any other person," within the meaning of the proviso to section 5 of the Revised Statutes of New Jersey of 1874, p. 469. Ib.
89. On the principle of estoppel, one can not take advantage of certain statutory provisions without incurring thereby the attendant liabilities. Ib.
40. Under sec. 5151, Rev. St., owners of stock in a national bank are liable for
its debts, and persons who hold themselves out or allow themselves to
be held out as owners of stock are also liable, whether they own stock
or not. Case, Receiver, v. Small et ah, 10 Fed. Rep., '122.
41. A married woman who owns stock in a national bank is not exempt on
account of her coverture from the liability imposed by the national currency acts upon all stockholders in such banks. Anderson v. Line, 14
Fed. Rep., 405.
42. After a national bank has become insolvent and has closed its doors for
business, its shareholders' liability to creditors is so far fixed that any
transfer of their shares must be held fraudulent and inoperative as
against the creditors of the bank. Irons et al. v. Manufacturers'' National
Bank of Chicago et al., 17 Fed. Rep., 308.
43. The Pacific National Bank of Boston was organized in October, 1877, with
a capital of $250,000, with the right to increase it to $1,000,000. In
November, 1879, its capital was raised to $500,000; September 13, 1881,
the directors voted to increase the capital to $1,000,000. On November
18,1881, the bank suspended. On December 13,1881, the directors voted
that as $38,700 of the increase of capital stock had not been paid in the capital be fixed at $961,300, and the Comptroller of the Currency was notified
to that effect, and he notified the bank, under Rev. St., sec. 5205, to pay
a deficiency on its capital stock by an assessment of 100 per cent. At
the annual meeting the assessment was voted, and on March 18,1882, with
consent of the Comptroller and the approval of the directors and the
examiner, the bank resumed business, and continued until May 20,1882,
when it again suspended and was put in the hands of a receiver. Prior
to May 20, 1882, $742,800 of the voluntary assessment had been paid in.
Complainant wTas the owner of twenty-five shares of stock on September
13,1881, and after the vote to increase the stock took twenty-five shares,
for which he paid $2,500 on October 1, 1881, and received a certificate.
He voted for the assessment at the annual meeting, and in February,
1882, paid the assessment on the old and new stock, and subsequently
sought to enjoin the suit at law against him by the receiver to enforce
his individual liability as a stockholder, under Rev. St., sec. 5151, on
the ground that the increase of capital was illegal and void, and that
the voluntary assessment, under Rev. St., sec. 5205, relieved the stockholders of individual liability. Held, that he was not entitled to relief,



REPORT OF THE COMPTROLLER OF THE CURRENCY.

Ill

ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
and the bill should be dismissed. Morrison v. Price, Receiver, 23 Fed,
Rep., 217.
44. A discharge in bankruptcy releases a shareholder of a national bank from
his statutory individual liability to creditors of the bank where, at the
time of his discharge, the claims of such creditors were provable, not
merely contingent. Irons et al. v. Manufacturers'1 National Bank et at.,
27 Fed. Rep., 591.
45. When bank stock was sold, but not transferred on the books of the bank,
and the bank afterwards failed, the executors of the person in whose
name the stock stood on the books were held liable for assessment,
although said stock had been paid for by a purchaser buying at the
request of the president of the bank, who gave him a cashier's check for
that purpose, placing the money so furnished to the credit of said purchaser on the books of the bank as a temporary loan, the intention being
ultimately to transfer said shares to a third party as part of a larger
proposed investment in stock, for which funds had been placed in the
hands of the president of the bank. Price, Receiver, v. Whitney ei al.,
28 Fed. Rep., 297.
46. Defendant subscribed for new stock in the reorganization of a bank, and
received a certificate on the basis of a total subscription of $500,000.
The actual increase was $461,300. He protested against the same, and
refused to vote on the stock, but retained his certificate until the bank
went into the hands of a receiver several months later. Field, that he
was liable to the receiver on his subscription, and it was too late to
claim that the increase as to him was invalid. Butler, Receiver, v.
Aspinwalh 83 Fed. Rep., 217.
47. A pledgee of shares of stock in a national bank, who does not appear by
the books of the bank or otherwise to be the owner, is not liable for an
assessment upon the shares on the insolvency of the bank, under Rev.
St., sec. 5151, rendering shareholders liable for the debts of the association to the extent of the par value of their stock. Welles v. Larrabee
et al., 36 Fed. Rep., 866.
48. One to whom the shares are assigned in trust as security for a debt due a
third person, and following whose name on the stock book of the bank
is the word "trustee," is not liable for the assessment under section 5151,
and is also within the provision of section 5152, exempting from such
liability persons holding stock as trustees. Ib.
49. In an action by the receiver of an insolvent national bank to recover of a
stockholder an assessment on his shares, the defendant alleged as a counterclaim that the Comptroller of the Currency had directed the bank to
restore the value of certain securities held by it which had been reported
worthless by an examiner; that certain of the stockholders, including
defendant, had raised a fund which was placed in the hands of trustees
to apply so much as might be from time to time required by the Comptroller to retire such securities; that the fund was deposited with the
bank with full notice of the purpose to which it was to be applied; that
a portion had been used to retire the securities designated, and that
when the bank failed the balance of the fund came into the hands of the
receiver, and was now claimed by him as a part of the ordinary assets
of the bank; that a certain portion of this balance belonged to defendant, which amount he asked to set off against plaintiff's demand. Held,
that a general demurrer based on the ground that no set-off or counterclaim was available in such an action would be overruled, as the claim
could be set off if it was of such a nature that the holder would be entitled to receive the full amount before distribution by the receiver to
general creditors. Welles v. Stout, 38 Fed. Rep., 807.
50. Where a shareholder of a national bank makes a bona fide sale of his stock
and goes with the purchaser to the Dank, indorses the certificate, and
delivers it to the cashier of the bank with directions to make the transfer
on the books, he has done all that is incumbent upon him to discharge
his liability, and he is not liable, though the cashier failed to make the
transfer, upon the subsequent suspension of the bank, for an assessment
made by the Comptroller of the Currency, under Rev. St., sec. 5151, to
pay the bank's debts. Hayes v. Shoemaker, 39 Fed. Rep., 319.
- 51. Defendant, for the purpose of helping a bank, of which complainant was a
stockholder, in a financial crisis, loaned it certain securities belonging to
complainant, and when complainant was informed of the fact she did not



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
object. She was assured by the bank's officers that if the bank was saved
the securities would be- returned, and if it failed the avails would be
credited on her assessment as a stockholder. The bank failed, and the
securities were not returned. Held, that she was not entitled, as against
other creditors, to set off the value of the securities against her assessment, but was, as to such value, on the same footing as any other creditor. Sowles y. Witters et al., 39 Fed. Rep., 403.
52. One who subscribes and pays for a specified number of shares of a "proposed increase" of the capital stock of a national bank, which increase
is in fact never issued, and to whom the bank officials transfer, instead,
old stock of the bank without his knowledge or consent, is not a " shareholder " within the meaning of Rev. St., sec. 5151, imposing individual
liability on the shareholders for the debts of national banks. Stephens
v. Follett et ah, A3 Fed. Rep., 81+2.
53. The fact that the subscriber for the new shares received a dividend on the
old shares so transferred to him does not estop him from denying his
liability as a shareholder, where such dividend was received in the belief
that it was paid to him by virtue of 3r s subscription to the new stock. Ib.
54. A person who becomes a stockholder in a national bank thereby submits
himself to the provisions of the national-bank act, and becomes liable to
be assessed to the extent of his statutory liability for all debts of the
bank existing while he holds his stock. Young v. Wempe et ah, 46 Fed.
Rep., 354.
55. In an action by the receiver of a national bank to enforce an assessment
under Rev. St., sec. 5151, against one credited on the transfer books
as a stockholder, it appeared that nearly a year before the failure he
had sold his stock to a broker for an undisclosed principal; that he
indorsed the same, and requested the broker to inform the cashier of
the transaction, and to have the stock transferred; that the broker
accordingly handed the stock to the cashier, gave him the necessary
information, and requested him to make the transfer. This the cashier
promised to do, but in fact the transfer was never made. The certificate recited that it was transferable on the books of the company " by
indorsement hereon and surrender of this certificate." Held, that in
requesting the cashier to make the transfer the broker acted as the
seller's agent, and that the latter did all that was required of him as a
prudent business man, and could not be held liable as a stockholder.
Young v. McKay, 50 Fed. Rep., 304.
56. A Federal court will not, even if it has the power under Rev. St., sec.
5234, grant an order authorizing a receiver of a national bank to compound the statutory liability of certain stockholders by accepting payment of a gross sum, less than is due, in satisfaction and discharge
thereof, although more money would thus be realized than by proceedings to collect the same in the usual way, whenT it appears probable
that such stockholders have fraudulently conve3 ed their property to
avoid their legal obligations as stockholders, or to shield themselves
from injury and exposure by litigation. In re Certain Shareholders of
the California National Bank of San Diego, 53 Fed. Rep., 38.
57. A person who is entered on the books of a national bank as the owner of
stock, but who is admitted to hold the stock in trust for the true owner,
is not liable as a stockholder for the debts of the bank, when the true
owner has been adjudged so liable, although nothing is realized upon
the execution of such judgment. Yardley v. Wilgns, 56 Fed. Rep., 965.
58. When the full personal liability of shareholders is to be enforced the
action must be at law. Kennedy v. Gibson, 8 Wall., 498; Casey v. Galli,
94 U. S., 673. '
59. And it may be at law, though the assessment is not for the full value of
the shares; for, since the sum each shareholder must contribute is a
certain exact sum. there is no necessity for invoking the aid. of a court
of equity. Bailey v. Saivyer, 4 Dill., 463; 1 N.B. 0., 356.
60. But the suit may be in equity. Kennedy v. Gibson, 8 Wall., 498.
61. It is no objection to a bill against stockholders within the jurisdiction of
the court that other stockholders, not within such jurisdiction, are not
codefendants. Ib.; Case v. Bank, 100 U. S., 446.
62. But a pledgee of shares of stock in a national bank who, in good faith and
with no fraudulent intent, takes the security for his benefit in the name
of an irresponsible trustee for the avowed purpose of avoiding individual



REPORT OP THE COMPTROLLER OF THE CURRENCY.

113

ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
liability as a shareholder, and who exercises none of the powers or rights
of a stockholder, incurs no liability as such to creditors of the bank in
case of its failure. Anderson, Receiver, v. Phila. Warehouse Company,
111 U. S., 479.
63. The individual liability of the shareholders of an insolvent association may
be enforced for the purpose of paying all of its liabilities, and not merely
for the purpose of paying its " debts," technically so-called. Stanton v.
Wilkeson, 8Ben., 357.
64. The individual liability of the stockholders must be restricted in its meaning to such contracts, debts, and engagements of the association as have
been duly contracted in the ordinary course of its business. And, therefore, creditors of an association who make settlements after the association is put into liquidation and receive from the president payment
of their claims in paper of the association, or of the individual notes of
the president himself, indorsed or guaranteed in the name of the association, are not to be considered as creditors of the association entitled to
subject the stockholders to individual liability, for these are new contracts. Richmond v. Irons, 121 U.S.,27.
65. The individual liability of the stockholders is enforceable only in behalf of
all the creditors, and any security given by a stockholder for his liability
in this respect should likewise be for the benefit of all the creditors.
Accordingly, a mortgage of all the individual property of a stockholder,
made after the bank has closed its doors, for the purpose of securing a
single depositor, is void as against a judgment obtained against such
stockholder in an action by the receiver to recover the amount of his
individual liability. Gatch v. Fitch, 34 Fed. Rep., 566.
66. Bill filed by receiver against transferrer and transferee to enforce such
liability will lie where it is for discovery as well as relief, as the transfer
would be good between the parties. Bowden v. Johnston, 107 U. S., 251.
67. A shareholder in a national bank, who is liable for its debts, is liable for interest thereon to the extent of the bank's liability, and not in excess of
the maximum liability fixed by statute. Richmond v. Irons, 121 U. S., 27,
68. The creditors of an insolvent association must seek their remedy through
the Comptroller, in the mode prescribed by the statute; they can not
proceed directly in their own names against stockholders or the debtors
of the bank. Kennedy y. Gibson, 8 Wall,, 498.
69. Each shareholder of a national banking association is individually liable
for its debts to the extent of the amount of his stock at its par value, in
addition to the amount invested in the shares held by him, and a receiver
appointed to wind up the affairs of such an association that has become
insolvent is authorized, under the direction of the Comptroller of the
Currency, to enforce the liability of its stockholders, and to collect from
each of them the necessary amount, up to the extent of his liability, for
the payment of the creditors. King et al, v. Armstrong, Receiver, 3%.
JM. E., 1G3; 50 Ohio St., 222.
70. Code N. C , sec. 1826, provides that no woman during coverture shall be
capable of making any contract to affect her real and personal estate
without the written consent of her husband. Held, that a purchase of
stock by a married woman is not a "contract" within the terms of the
statute, and that the wife is liable upon an assessment, although the
stock was purchased without the written consent of her husband.
Robinson v. Turrentine et al., 59 Fed. Rep., 554.
71. One in whose name stock of an insolvent national bank stood paid an
assessment thereon under a threat by the receiver to sue therefor,
though he claimed that he had sold the stock. More funds were collected than were required to pay the creditors of the bank. Held, that
such payment could not be recovered as having been made under a mistaken belief by the pay or that the whole amount would be required to
pay the creditors of the bank. Holt v. Thomas (Cal.), 38 P., 891,
72. The F. National Bank suspended business for lack of funds, and was
placed in charge of a bank examiner, who required that $50,000 should
be raised and placed in the bank before it could resume business. The
stockholders, including one B., the president, thereupon raised this sum,
in amounts equal to 50 per cent of their stock, and placed it in the bank.
The examiner caused entries to be made on the books indicating that
this contribution was a voluntary assessment, subject, after one year, to
the liabilities of the bank, and permitted the bank to resume. B., at a
CUR
8
 98


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REPORT OF THE COMPTROLLER OF THE CURRENCY.

ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
meeting of the directors subsequently held, protested against these book
entries, but afterwards signed reports in which the $50,000 was included
as surplus. At the time of the advance the bank held two notes of B.,
and discounted another note of his a few days before the expiration of
a year from the advance. Shortly after the expiration of the year the
bank again suspended payment.* Held, that the advance to the bank
was a voluntary assessment, and not a loan, and could not be set off
by B. in an action against him on the notes by the receiver of the bank.
Brodrick v. Brown, 69 Fed. Rep., 497.
73. M. bequeathed to his wife "for life or widowhood" 40 shares of stock in a
national bank, together with other personal property, providing that she
might use any of such personal property if necessary for her comfortable
support, and that, at her death or marriage whatever should remain of
such property should go in equal shares to his four children. The administrator with the will annexed of M.'s estate transferred the stock on the
books of the bank to M.'s widow. The bank having become insolvent,
and an assessment having been made by the Comptroller on the shareholders, for which a judgment was obtained against M.'s widow, which
remained unsatisfied, the receiver of the bank brought suit against M.'s
administrator to compel payment of the assessment out of M.'s general
estate. Held, that whether the widow took an absolute title to the stock
by virtue of her power of disposal, or a life interest with remainder to
the children, the beneficial ownership of the stock, in either case, had
passed from M.'s estate, and the estate could not be made liable for the
assessment. Held, farther, that the administrator properly transferred
the stock to the widow, and was not required to hold the legal title
thereto, as administrator or trustee, during her life or widowhood, but
that such transfer made no difference to the liability of the estate of M.,
since the beneficial interest would in either case have been in the widow
and children. Blackmore v. Woodward et ah, 71 Fed. Rep., 321.
74. The capital, the unpaid subscriptions to the capital stock, and the liability
of the holders of the paid-up stock to pay an additional amount equal to
the par value of their stock under section 5151, Rev. St., constitute
a trust estate sacredly pledged for the security of the creditors of a
national banking association. The willful destruction or diminution of
any part of this trust estate or the diversion of the proceeds of any
of it from the creditors of the bank is a fraud upon these creditors, and
subjects its perpetrator to a suit by them or their legal representative
for proper relief. Stuart v. Hayden et al., 72 Fed. Rep., 402.
75. One who knowingly permits his name to be entered upon the stock books
of a national bank, as the owner, individually, of stock therein, can not
be permitted, as against creditors or a receiver of the bank representing
them, to show that he was not the owner of the stock, and he is liable
for an assessment thereon, though he held the stock, in fact, as trustee
for the bank itself. Lewis v. Sivitz, 74 Fed. Rep., 881.
76. Ono C. wTas the holder of stock in the D. National Bank, and was also an
officer of the L. bank, which held stock in the D. bank. In the latter
capacity he was informed of an urgent demand upon the L. bank to send
$5,000 by telegraph in aid of the D. bank. Within a week after this
demand L. transferred his stock in the D. bank, without consideration,
to his five children, one of whom was a married woman, and two minors.
Within five months thereafter the D. bank failed and an assessment
was made on the stockholders. Held, that the transfer must have been
made by L. in contemplation of the liability, and that both he and his
transferees were liable for the assessment, the latter because the liability
was cast upon them by law when they became stockholders. Foster v.
Lincoln et ah, 74 Fed. Rep., 382.
77. In an action by the receiver of a national bank to enforce the individual
liability of a stockholder, an allegation in the complaint that on a given
date the Comptroller, having ascertained and determined that the assets,
property, and credits of the bank were insufficient to pay its debts and
liabilities, and, as provided by the act of Congress, made an assessment
and requisition on the shareholders of the said bank of a given sum upon
each share held and owned by them, respectively, at the time of its
default, and directed the receiver to take all necessary steps to enforce
the liability, is sufficient. Kennedy v. Gibson, 8 Wall., 4$8, distinguished;
Nead v. Wall (C. C.),70 F., 806.



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115

ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
78. One buying stock in a national bank in the names of his minor children
himself becomes liable to assessment as a shareholder, for minors are
incapable of assenting to become stockholders, so as to bind themselves
to the liabilities thereof. Foster v. Chase et at, 75 Fed. Rep., 797.
79. An executor who receives certificates of national-bank stock as part of the
assets of decedent's estate, and includes them in his inventory returned
to the probate court, is a shareholder, and liable as such for an assessment, under Rev. St., § 5151. subject to the relief granted by section
5152. Parker v. Robinson (C. C. A.), 71 F., 25G.
80. The complaint, in an action by the receiver of an insolvent national bank
to enforce an assessment on the shareholders, made by the Comptroller
of the Currency, need not aver that there was a necessity therefor, or
that the Comptroller determined that there 7was such necessity, though
the law provides that the Comptroller maj enforce the individual liability of the stockholders, if necessary to pay the debts of the bank. It
is enough that the complaint alleges that the Comptroller made the
assessment and directed its enforcement. O'Connor v. Wulierby (Cal.),
UP., 227.
81. The allegation of the complaint, in an action for an assessment on shareholders in a bank, that "defendant, though demanded, has failed and
refused to pay said assessment, or any part thereof," is a sufficient averment as against a general demurrer of nonpayment at the time action
was commenced. Ib.
82. In an action by the receiver of an insolvent national bank to enforce an
assessment on the shareholders, made by the Comptroller of the Currency, the necessity of the Comptroller's making as large an assessment
as that in suit can not be litigated. Ib.
83. The bill contemplated by the second section of the act of June 30, 1876, to
enforce the individual liability of stockholders in a national-banking
association that has gone into liquidation, need not purport expressly on
its face to be filed by the complainant on behalf of himself and all other
creditors, for the law would give it that effect and the court would so
treat it; but, if this was necessary, the bill might be amended in that
respect by leave of the court. Irons, Ex'r, etc., and others, v. Manufacturers' National Bank of Chicago and others, 17 Fed. Rep., SOS.
84. The manifest intention of the national-banking act is a distribution of its
assets in case a bank becomes insolvent equally among all the unsecured creditors, and the diligence of a creditor who files a creditor's bill
can give him no greater rights than are given any other creditor to share
in the distribution of the assets, and a prayer in the bill that such creditor be given priority over other creditors Will not be granted. Ib.
85. Where the original bill, filed before the passage of the act of June 30,1876,
was amended after the passage of that act so as to make the individual
shareholders defendants, and subject them to liability, such bill will not
be considered on that account multifarious. Ib.
86. The act of June 80,1876, did not create any new liability on the part of the
stockholders, or provide for enforcing such liability against them under
circumstances where it could not have been enforced before that act
was passed. This act is not retroactive, and does not create rights which
did not exist prior to its passage as against existing stockholders, though
it may be construed as limiting the tribunal in which proceedings are to
be instituted for enforcing the stockholder's liability to a United States
court, instead of allowing creditors to resort to any competent tribunal
with equity power. Ib.
87. Entering an order that " t h e complainants confessing the pleas of bankruptcy of defendants, it is ordered that this case be stayed as to them,"
does not amount to a final decree, but simply confesses the facts set up
in the plea, leaving the court to adjudge the law upon such facts whenever the main cause is heard. Ib,
88. Where the original bill was filed February 8, 1875, before the passage of
the act of June 80,1876, and a receiver was appointed February 26,1875,
thereunder, and an amended bill, making the individual stockholders
defendants, was filed October 5,1876, and after the filing of the amended
bill certain of the defendants were adjudged bankrupts, their pleas of
bankruptcy will constitute a sufficient bar in their behalf. Ib.
89. Where it is admitted by the defendants that they were shareholders in a
national bank, but the number of shares respectively held by them is



116

REPORT OF THE COMPTROLLER OF THE CURRENCY.

ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
not admitted, the names of the shareholders and the number of shares
held by each, as shown by the stock ledger and stubs of the stock certificates and the dividend sheets of the bank on which they respectively
drew the last dividends, will be prima facie proof of the number of
shares held, and, unless rebutted, sufficient. Ib.
90. A bill to enforce against the separate estate of a married woman an assessment upon shares of national-bank stock is not open to the objection
that it does not allege that she had the capacity to become a stockholder,
whether she became such before or after marriage, where it alleges
that she was the owner of the shares, and where a statute of the State
in which the bank is located (Dig. St. Ark. 1874, sec. 4194) provides
that a married woman may transfer her property, carry on any business and perform any services on her separate account, and that her
earnings shall be her separate property and may be used or invested by
her in her name. Bundy v. Cocke, 128 U. S., 185; 3 N. B. C, 316.
91. The bill alleging that the married woman is possessed of property in her
own right sufficient to pay the assessment and praying for a decree of
payment therefrom, and the bill of revivor filed after her death against
her husband praying for relief out of the assets received by him as her
legatee, devisee, or executor, the case is one of equitable cognizance. Ib.
92. A suit by the receiver of an insolvent national bank to collect an assessment by the Comptroller upon the stock from a stockholder who has made
an alleged fraudulent transfer of his shares is based upon the statutory
liability of the stockholder, and not upon any injury growing out of the
fraudulent transfer; and therefore the statute of limitations begins to run
from the date the assessment becomes due, and not from the discovery
of the fraud. Thompson v. German Ins. Co. et. al., 77 Fed. Rep., 258.
93. On a bill by the receiver of an insolvent national bank to collect an assessment by the Comptroller on the stock from a former stockholder, on the
ground that, to escape liability, he had transferred his shares, within
six months of the failure of the bank, to one having no means, it
appeared that the transfer was made on the books of the bank, no concealment thereof being attempted, and that the receiver made no inquiry
as to the nature of the transfer, and took no action against defendant
until the assessment had become barred. Held, that equity would not
relieve against the bar of the statute. Ib.
94. It is not necessary, in order to hold liable for an assessment upon the
shareholders of an insolvent national bank one who has transferred his
stock to an irresponsible person, to show that the transferrer had actual
knowledge of the insolvency of the bank at the time of the transfer, but
it is sufficient if he had good ground to apprehend its failure, and made
the transfer with intent to relieve himself from individual liability.
Cox v. Montague, 78 Fed. Rep., 845.
95. Upon the trial of a suit brought by the receiver of an insolvent national
bank to collect an assessment from one who had transferred his stock, a
letter written by the defendant to a bank examiner, in reply to an
inquiry about the bank, in which defendant admits his transfer of his
stock when the bank was embarrassed, is not a privileged communication, though the bank examiner's letter, to which it is a reply, is marked
"Confidential." Ib.
96. A corporation which receives shares of national-bank stock in pledge, with
power to use and sell, and which, in good faith, without suspicion of the
bank's insolvency, causes new certificates to be issued in the name of one
of its employees, merely because it is unwilling they should stand in the
name of the original owners, remains a mere pledgee, and is not liable,
as a shareholder, to assessment on the stock. National Park Bank of
City of New York v. Harmon, 79 Fed. Rep., 891.
97. L., a stockholder in the D. national bank, transferred his stock shortly
before its failure to his married daughter and other minor children. It
appeared from the circumstances surrounding the transaction that L.,
though perhaps not supposing the D. bank to be actually insolvent, was
advised of facts not generally known, which indicated such uncertainty
as to its ability to stand a run, which had apparently begun, as to make
it safer for him to dispose of his stock forthwith, and that the transfer
was made with the intent that, if all came out well, his children should
have the stock, while, if the bank met with disaster, he would not be
obliged to throw good money after bad, Held, that the transfer so made



REPORT OF THE COMPTROLLER OF THE CURRENCY.

117

ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
could not stand against the creditors of the bank, and L. was liable at
the suit of its receiver for an assessment on the stock. Foster v. Lincoin's Ex'r, 79 Fed. Rep., 170.
98. The circuit court has jurisdiction of an action to ascertain or fix the liability upon shares of an insolvent national bank which are alleged to
have been transferred with a fraudulent intent to escape such liability
when the amount of the assessment exceeds $2,000 exclusive of interest
and costs. Thompson v. German Ins. Co. etal., 76 Fed. Hep., 892.
99. The right of the receiver of an insolvent national bank to enforce the liability of stockholders, though created by United States statute, may be
barred by the running of a State statute of limitations. Ib.
100. The bar of a statute of limitations will be enforced, when applicable, in
equity as well as at law. Ib.
101. The action of the Comptroller in making an assessment against the stockholders of an insolvent national bank creates a right of action against
the stockholders, but is not the institution of a suit to enforce it so as
to stop the running of limitation. The statute begins to run from the
date the assessment becomes due. Ib.
102. A creditor who receives from his debtor a transfer of shares in a national
bank as security for his debt, and who surrenders the certificates to the
bank, and takes out new ones in his own name, in which he is described
as pledgee, and holds them afterwards in good faith as such pledgee and
as collateral security for the payment of his debt, is not a shareholder
subject to the personal liability imposed upon shareholders by Revised
Statutes,-section 5151. Pauly v. State Loan and Trust Company, 165
U. S., 606.
103. The previous cases relating to the liability of such shareholder examined
and held to establish:
(1) That the real owner of the shares of the capital stock of a nationalbanking association may, in every case, be treated as a shareholder
within the meaning of section 5151;
(2) That if the owner transfers his shares to another person as collateral security for a debt due to the latter from such owner, and if, by the
direction or with the knowledge of the pledgee, the shares are placed on
the books of the association in such way as to imply that the pledgee is
the real owner, then the pledgee may be treated as a shareholder within
the meaning of section 5151 of the Revised Statutes of the United States,
and therefore liable upon the basis prescribed by that section, for the
contracts, debts, and engagements of the association;
(3) That if the real owner of the shares transfers them to another
person, or causes them to be placed on the books of the association in
the name of another person, with the intent simply to evade the responsibility imposed by section 5151 on shareholders of national-banking
associations, such owner may be treated, for the purposes of that section,
as a shareholder, and liable as therein prescribed;
(4) That if one receives shares of the stock of a national-banking
association as collateral security to him for a debt due from the owner,
with power of attorney authorizing him to transfer the same on the
books of the association, and being unwilling to incur the responsibilities of a shareholder as prescribed by the statute, causes the shares to be
transferred on such books to another, under an agreement that they
are to be held as security for the debt due from the real owner to his
creditor—the latter acting in good faith and for the purpose only of
securing the payment of that debt without incurring the responsibility
of a shareholder—he, the creditor, will not, although the real owner
may, be treated as a shareholder within the meaning of section 5151; and
(5) That the pledgee of personal property occupies toward the pledger
somewhat of a fiduciary relation, by virtue of which, he being a trustee
to sell, it becomes his duty to exercise his right of sale for the benefit of
the pledger. Ib.
104. Where one residing in Maryland subscribes for stock of a national bank of
another State, and then transfers it to his wife, also a resident of Maryland, she becomes owner thereof, and is subject to stockholders' liability,
under Revised Statutes, United States, § 5152, without regard to the
laws of the other State relative to contract by married women, Kerr v.
Urie (Md.), 87 A., 789.



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

ASSESSMENT. See Insolvent banks; Receiver; Shareholder, etc.—Continued.
105. A person appearing on the books of a national bank to be absolute owner
of stock Is subject to stockholders liability, though holding it as
trustee. Ib.
106. It has been repeatedly settled by this court that the Comptroller of the
Currency has power to "appoint a receiver of a defaulting or insolvent
national bank, and to call for a ratable assessment upon the stockholders
of such bank, without a previous judicial ascertainment of the necessity
for such action; and the contention that there is presented in this case a
constitutional question not considered in the prior cases is an assumption
with no foundation in fact. Bushnell v. Leland, 164 U. S., 684*
107. As by Eev. St., U. S., sec. 5242, an attachment issued before final judgment
from a State court against a national bank is prohibited, such an attachment does not operate as notice to the absent defendant, so as to give
the court jurisdiction of the party or subject-matter. Safford v. First
National Bank (Vt.), 17 A., 748.
108. An assessment against the estate of an owner of national-bank stock, ill
the hands of his executrix, is enforceable in the Federal courts, though
proceedings for settlement of the estate are pending in the probate
court of Vermont. Brown v. Ellis, 86 Fed. Rep., 857.
109. The widow of a deceased stockholder of an insolvent national bank, who
by authority of the will undertook to settle the estate as executrix without judicial proceedings, but failed to transfer such stock to herself or
other person, can not, on the ground that the estate is fully settled,
escape- liability as executrix for assessments on such stock to the extent
of assets of the estate under her control. Baker v. Bexeh et al., 85
Fed, Rep., 830.
110. To a bill by a creditor of a corporation averring its insolvency and demanding the appointment of <i receiver, an accounting, and the enforcement
of the individual liability of the stockholders, the corporation is a. necessary party defendant. Elkhart National Bank of Elkhart, Ind., v.
Northwestern Guaranty Loan Company of Minneapolis, Minn., et al.,
84 Fed. Rep., 76.
111. Where the jurisdiction of the Federal courts depends on ths diverse citizenship of the parties, the Federal courts of the residence of stockholders of an insolvent corporation, organized under the laws of another
State, Lave no jurisdiction of a suit brought by a creditor of the corporation for VAI accounting and a receivership, and to enforce the individual
liability of the stockholders, if the corporation has not voluntarily
appeared in the action. In such case the nonresident corporation can
not be compelled to appear. Smith v. Lyon, 10 Sup. Ct., 303, 133 U. S.,
315, and Improvement Co. v. Gibney, 16 Sup. Ct., 272,'160 U. S., 217,
followed and applied. Ib.
112. In such a case the defendant stockholders who appear may set up this
defense by demurrer. 1 b.
113. Defendant acquired stock of a national bank through his agents, in whose
names the shares were registered on the books of the bank, and so
appeared when the bank became insolvent. Defendant had all the time
held the certificates, so indorsed that he might have had the shares registered in his own name. Held, that the receiver can recover from
defendant an assessment on said stock for the benefit of creditors,
though he might have proceeded against those in whose names the
shares appeared on the bank's stock register. Hubbell v. Houghton, 86
Fed. Rep., 547.
114. On notice from the Comptroller, under Rev. St., § 5205, that the bank's
capital is impaired so as to require an assessment on the stockholders,
such assessment is to be made by the stockholders themselves, and an
assessment by the directors is void. Httlitt v. Bell et al., 85 Fed. Rep., 98.
115. An assessment to restore impaired capital, under Rev. St., § 5205, is only
enforceable by subjecting the stock of persons refusing to pay. and no
action will lie against the stockholders personally. 16.
116. When an executor refuses to recognize, as a claim against decedent's
estate, an assessment by the Comptroller of the Currency upon nationalbank stock belonging to the deceased, a Federal court will assume jurisdiction of an action against the executor to determine the liability,
although the estate is in the course of administration in the probate
court. Zimmerman v. Carpenter, 84 Fed. Rep., 747.
117. The estate in the hands of an executrix at the date of the failure of a



REPORT OF THE COMPTROLLER OF THE CURRENCY.

119

ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
national bank is liable for the assessment on stock belonging to the
estate in the same manner as if deceased was living (Rev. St., ^1 5152);
and the fact that the time for filing claims against the estate has expired
is no bar to an action to fix such liability. Ib.
113. Where bank stock was transferred by an executrix to herself individually,
and she admits before suit is brought, and again in her answer, that
the transfer was without consideration, and is void, such admission does
not vacate the transfer, and a bill in equity will lie to determine the
liability of the estate on an assessment of the face value of the stock. Ib.
119. Where, at the hearing, the defendant raises the point that the claimant
has a plain, speedy, and adequate remedy at law, the court will not
make a decree if there is a plain defect of jurisdiction, but the bill will
be construed more liberally than if the point had been raised by demurrer. Ib.
120. A stockholder in a national bank, with knowledge that the bank is in a
failing condition, can not make a voluntary transfer of his stock to one
financially irresponsible, and thereby escape liability for assessments.
Baker v. Reeves et al., 85 Fed. Rep., 837.
121. The owner, by assignment of stock in a national bank at the timo of its
failure, is liable for assessments thereon, though his assignor, who transferred it knowing that the bank was in a failing condition, ij also
liable. Ib.
122. A pledgee of national-bank stock is not liable i«.s a r-tockhol<kv foi u-^ s ments except by estoppel. Baker v. Old National Punk of Vror'-l- "«r,
R. I., et al.', SG Fed. Rep., 1006.
123. Where shares of an insolvent bank are registered on the books '*F. A.
Cranston, Cashier Old National Bank, Providence, E. I.,"' the latter bank,
in a suit by the receiver to hold it liable as a shareholder for assessments,
is not estopped by the registry from setting up the fact that it holds the
stock merely as a pledge. Ib.
124. And the cashier, individually, is not estopped from avoiding liability on
the same ground. Ib.
125. An executrix, who is also the sole devisee and legatee under a will, does
not acquire title to national-bank stock constituting part of the estate,
so as to prevent the estate from being liable to an assessment made by
the Comptroller of the Currency, merely by the fact of having paid or
secured all the debts owing by decedent, the estate still remaining
unsettled. Tourtelot v. Finke, 87 Fed. Rep., 8J/.0.
126. A trustee, though not appointed by a will or an order of a court or judge,
is not personally liable for assessments against stock of an insolvent
national bank owned by this cestui que trust, but standing in his name,
where he has been guilty of no fraud, concealment, or negligence.
Lucas v. Coe, 86 Fed. Rep., 972.
127. In fixing the liability for assessments against stock of an insolvent national
bank, the effort of the court should be to ascertain who is the actual
owner, and to hold him, releasing the apparent owner if lie has done
nothing to deceive or mislead. Ib.
128. Where one subscribes for part of an increased issue of national-bank stock,
but actually receives original stock instead, and holds it for several
years, receiving dividends and paying assessments thereon, he will be
liable, upon failure of the bank, to assessment on such stock by the
Comptroller of the Currency. Rand et al. v. Columbia National Bank
of Tacoma, Wash., et al., 87 Fed. Rep., 520.
129. A sale of all the shares of stock held by a shareholder in a national bank,
when such sale is made under the provisions of and for the purpose set
forth in section 5205 of the Revised Statutes of the United States, as
amended by the act of June 30, 1876, is void, unless at such sale the
stock brings a ixriee equal in amount to the assessment placed thereon
under the provisions of that section. Merchants' National Bank of
Rome v. Fouche, Supreme Court of Georgia, July, 1S98.
130. One who holds shares of national-bank stock—the bank being at the time
insolvent—can not escape the individual liability imposed by the statute
by transferring his stock with intent to avoid that liability, knowing or
having reason to believe, at the time of the transfer on the books of the
bank, that it is insolvent or about to fail. Stuart v. Ilayden, 169 U. S.,
1; Gruetter v. Stuart, ib.
131. A transfer with such intent and under such circumstances is a fraud upon



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

ASSESSMENT. See Insolvent banks; Receiver; Shareholders, etc.—Continued.
the creditors of the bank, and may be treated by the receiver as inoperative between the transferrer and himself, and the former held liable as
p. shareholder without reference to the financial condition of the transferee. Ib.
132. The right of creditors of a national bank to look to the individual liability
of shareholders, to the extent indicated by the statute, for its contracts,
debts, and engagements, attaches when the bank becomes insolvent; and
the shareholder can not, by transferring his stock, compel creditors to
surrender this security as to him, and force the receiver and creditors
to look to the person to whom his stock has been transferred. Ib.
133. If the bank be solvent at the time of the transfer—that is, able to meet its
existing contracts, debts, and engagements—the motive with which the
transfer is made is immaterial, as a transfer under such circumstances
does not impair the security given to creditors; but if the bank be insolvent, the receiver may, without suing the transferee and litigating the
question of his liability, look to every shareholder who, knowing or having reason to know at the time that the bank was insolvent, got rid of
his stock in order to escape the individual liability to which the statute
subjected him. Ib.
134. Whether, the bank being in fact insolvent, the transferrer is liable to be
treated as a shareholder in respect of its existing contracts, debts, and
engagements, if he believed in good faith at the time of the transfer that
the bank was solvent—not decided; although he may be so treated, even
where acting in good faith, if the transfer is to one who is financially
irresponsible. Ib.
135. Where the circuit court and the circuit court of appeals agree as to what
facts are established by the evidence, this court will not take a different
view unless it clearly appears that the facts are otherwise. Ib.
13(3. A stockholder, by purchase in a national bank, can not defend against an
action by a receiver to recover an assessment on the ground that the
original capital stock of the bank was never paid in. Wallace v. Hood,
C. C, 89 Fed. Rep., 11.
137. One induced by the fraud of a national bank to purchase stock therein,
which the bank in reality owned, can not make an effectual tender of
rescission which will support an-action at law to recover the purchase
price after the bank has passed into the hands of a receiver. Ib.
138. In an action by the receiver of a national bank to enforce an assessment
against a stockholder, the latter can not maintain a cross petition to
recover the purchase price paid for his stock on the ground of the fraud
of the bank inducing his purchase. Ib.
130. The statutory inhibition against the purchase by a national bank of its
own stock does not render stock so purchased and held in the name of
a third person invalid after its sale to another for value. Ib.
140. One induced to purchase stock of a national bank by fraudulent representations, who retains it until a receiver is appointed, can only escape
liability for an assessment against stockholders by alleging and proving
every fact entitling him to be discharged from his contract as against
the creditors of the bank. Ib.
141. A right of action by the receiver of an insolvent national bank against a
stockholder to recover an assessment does not arise until the necessity
for the assessment has been determined and the assessment made by the
Comptroller; hence limitation runs against such an action only from
that time. Aldnch v. Yates, C. C, 95 Fed. Rep., 78.
142. The action of Comptroller of the Currency in making an assessment
against the stockholders of an insolvent national bank is conclusive as
to the necessity of such assessment, which can not be questioned
collaterally. Ib.
143. The ultimate liability of a stockholder of an insolvent national bank,
under the statute, is for the full amount of the par value of his stock,
if that amount is required, and when the Comptroller makes an assessment for a smaller amount, he has power to make a second assessment
if the first proves insufficient to pay the debt of the bank. Ib.
144. A stockholder in a national bank whose stock was sold at auction and
purchased by the cashier of the bank, to whom the certificate, with a
duly executed power of attorney to transfer indorsed thereon, was
delivered by the auctioneers with a request to transfer the stock, Held
not liable for an assessment made on the stock on the subsequent insol


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121

ASSESSMENT. See Insolvent banks : Receiver; Shareholders, etc.—Continued.
vency of the bank, though no transfer was ever made of the stock on
the books of the bank. Earle v. Coyle, C. C, 95 Fed. Rep., 99.
145. An assessment levied by the Comptroller of the Currency on a stockholder
of a national bank draws interest from the date such assessment is made
payable. Davis''s Estate v. Watkins, 76 N. W., 575.
146. The investment by the First National Bank of Concord, 1ST. H., of a part
of its surplus funds in the stock of the Indianapolis National Bank, of
Indianapolis, Ind., was an act which it had no power or authority in
law to do, and which is plainly against the meaning and policy of the
statutes of the United States and can not be countenanced; and the
Concord corporation is not liable to the receiver of the Indianapolis
corporation for an assessment upon the stock so purchased made under
an order of the Comptroller of the Currency to enforce the individual
liability of all stockholders to the extent of the assessment. The doctrine of estoppel does not apply to this case. First National Bank of
Concord v. Hawkins, 174 U. S., 864.
147. A pledgee of stock of a national bank, who sells it in accordance with
the terms of the pledge and becomes the purchaser, but never has it
transferred on the books of the bank, is not liable for an assessment
made under Rev. St., sec. 5151, on the bank's insolvency. Robinson v.
Southern National Bank of New York, 94 Fed. Rep., 964.
ATTACHMENT:

1. The stock of a shareholder indebted to it may be attached by the association and sold on execution. Hagar v. Union National Bank, 63 Me., 509.
2. No State court can issue an attachment against the funds of a national bank.
Although the provision forbidding attachments was evidently made to
secure equality among the general creditors in the division of the proceeds of the property in an insolvent bank, its operation is by no means
confined to cases of actual or contemplated insolvency, but the remedy
is taken away altogether and can not be used under any circumstances.
The effect of the provision in sec. 5242, Rev. St., is to write into all State
attachment laws an exception in favor of national banks, and all such
laws must be read as if they contained an exception in favor of national
banks. Pacific National Bank v. Mixier, 124 U. S:, 721.
3. No attachment can issue from United States circuit court in an action
against a national bank before final judgment in the cause, and a bond
given on such attachment is illegal. Ib.
4. An attachment can issue against a national bank from a State court. Robinson y. National Bank of Neivbern, 58 How. Pr., 806; 2 N. B. C, 309.
5. The provision of the national banking act that attachments, injunctions,
etc., shall not be issued by State courts against national banks before
final judgment relates only to actions against banks where the action is
brought, and not to cases, where the action is against a nonresident corporation. Southiviek v. The First National Bank of Memphis, 7 Hun.,
96; 1 N. B. C, 789.
6. An attachment will not lie before final judgment against the property in
this State of a national bank situated and doing business in another State.
Rhoner v. National Bamk of Allentown, Pa.: Palmer v. Same, 14 Hun.,
126; 2 N. B. C, 381.
7. An attachment can not be issued from a State court against a national
bank before final judgment, whether such bank be located in this State
or not. Central National Bank v. Richland National Bank, 52 Howard,
136; 1 N. B. C.,801.
8. The provision of the national banking act prohibiting attachments in stich
cases is not repealed by the act of Congress of July 12, 1888, providing
that the jurisdiction for suits thereafter brought against national banks
shall be the same as for suits against State banks, and repealing laws
inconsistent therewith. Raynor v. Pacific National Bank, 93 N. Y., 371;
3 N. B. C, 624.
9. An unrecorded transfer of national-bank stock will take precedence of a
subsequent attachment in behalf of a creditor without notice. Continental National Bank y. Eliot National Bank et aL, 7 Fed. Rep-, 369.
10. The loss of interest occasioned by an attachment wrongfully laid is clearly
an injury for which damages are recoverable against the wrongdoer.
Jacobus v. Monongahela National Bank of Brownsville, 35 Fed. Rep., 395.
11. Where shares of corporation stock are attached, the subsequently declared
dividends are as much bound by the attachments as the corpus of the
stock itself is. 1b.




122

REPORT OF THE COMPTROLLER OF THE CURRENCY.

ATTACHMENT—Continued.

12. Counsel fees and other expenses (not taxable as costs) paid or incurred in
defending against an attachment wrongfully laid are not recoverable as
damages in an action upon a statutory recognizance given when the
attachment was issued, conditioned for the payment to the party
aggrieved of " such damages as the court may adjudge." Ib.
13. When a creditor attaches the property of an insolvent bank, he can not hold
such property against the claim of a receiver appointed after the attachment suit was commenced. Such creditor must share pro rata with all •
others. First National Bank of Selma v. Colby, 21 Wall., 609; Harvey
v. Allen, 16 Blatch.,29.
14. Sureties on attachment bond against national bank who have received
assets of the bank to secure them from loss thereon, the obligation being
illegal, will be discharged in equity and be compelled to transfer their
collateral to the receiver of the bank. Pacific National Bank v. Mixter,
1U U.S., 731.
15: An attachment from a State court may not issue against an insolvent
national bank of that State. National Shoe and Leather Bank of the
City of New York v. Mechanics' National Bank of Newark % N. «/.; Corn
Exchange Bank v. Same; West Side Bank v. Same; 89 N. Y., 4.67; 3 N.
B. C , 601.
10. An attachment issued against an insolvent national bank is invalid (U. S.
R. S., sec. 5242) and is not made valid by the subsequent acquisition by
the bank of further capital. Raynor v. Pacific National Bank? 03 N. Y.,
371; 3 N. B. C, 624.
17. Although the bank after the issuing of the attachment paid a large amount
of its debts in full, this does not estop it from questioning the validity of
the attachment. Ib.
18. A receiver of a national bank situated in another State, though not a party,
may move to vacate an attachment. Peoples Bank of the City of New
York v. Mechanics' National Bank of 'Newark, 62 How. Pr.,*422;3
N. B. C., 670.
19. In an action against a national bank of another State an attachment
issued against its property in this State will be vacated upon proof of its
insolvency. Ib.
20. The defendant, a national bank at Boston, Mass., on November 18,1881,
closed its doors and was put in charge of a Government bank examiner,
and thus continued till March 14,1882, when the Comptroller allowed it
to resume. It transacted business till May 22,1882, when it was placed
in the hands of a receiver. An attachment was issued in this action
November 19,1881, against defendant's property in this State. At that
time its assets would have paid its debts and liabilities exclusive of its
capital, but it had refused to pay various legal obligations then due.
Held, that defendant had committed acts of insolvency within U. S. Rev.
St., sec. 5242, and the attachment should be vacated. Market National
Bank of New York v. Pacific National Bank of Boston, 30 Hun., 50; 3
N. B.C., 672.
21. Bank property attached by individual creditor after bank is insolvent can
not be sold to pay his demand against the claim of a receiver subsequently
appointed. National Bank v. Colby, 21 Wall., 609.
22. Where service is made on a national bank only by attachment and publication or service out of the State, the attachment, being prohibited by
Rev. St.. sec. 5242, should be vacated and the service set aside. Garner
v. Second National Bank (C. C.), 66 F., 569.
23. A bank which discounted a draft to which was attached, deliverable to its
order, a bill of lading of the goods against which the draft was drawn
was not required, on notice of nonacceptance of the draft, to charge the
amount thereof against the drawer's account, which was sufficient to
pay the draft, in order to enforce its lien on the property against an
attaching creditor of the drawer. Neill v. Rogers Bros. Produce Co.
(W.Va),23
S.E.,702.
24. In an action by an attaching creditor against certain plaintiffs in an action
to repleyy the attached pro|)erty for the apj)omtment of a receiver, L.,
who claimed a lien by virtue of an attachment prior to plaintiff's, was
not made a party to the action, and after the appointment of the receiver
he made a motion to modify the order made therein so far as it directed
the sheriff to deliver to the receiver the property held under his attach


REPORT OF THE COMPTROLLER OF THE CURRENCY.

123

ATTACHMENT—Continued.

25.

26.

27.

28.

29.

30.

31.

32.
33.
34.

35.

ment. Held, that L. might appeal from an order denying such motion.
National Park Bank v. Goddard (Sup.), 20 N. Y. S., 400; In re Lilianthai, ib.
A receiver who simply holds property pending the determination of an
action to settle the ownership of the same has no interest in such action
and will not be allowed to intervene. National Park Bank v. Goddard
(Sup.),20 N. Y. S., 526.
An attaching creditor of an insolvent corporation acquires no right superior to other creditors. Farmers and Merchants1 National Bank v. Waco
Electric Railway and Light Co. (Tex. Civ. App.)T36S.W.,131;
Metropolitan Trust Co. v. Farmers and Merchants1 National Baub.ib.
An attaching creditor of an insolvent corporation for which a receiver is
appointed after the attachment acquires no preference right or lien that
will deprive the court of the power to equitably apportion the earnings
of the property during the receivership to claims classed as operating
expenses. Ib.
An appearance, by counsel, of a nonresident attachment defendant, for the
sole purpose of moving a discharge of the levy and the dissolution of
the attachment, does not constitute a general appearance, and service
must be made by publication before default and judgment can be
entered. Exchange National Bank v. Clement (Ala.), 10 So.. S14.
In an action against a nonresident commenced by attachment, unless the
levy is fictitious or merely colorable, the defendant can not, as a ground
for*abating the action, dissolving the attachment, or vacating the levy,
traverse the ownership of the property attached, or deny having a
leviable interest therein. Ib.
A national bank holding funds belonging to a bankrupt estate as depositary of a bankrupt court can not be garnisheed in proceedings supplementary to execution. Havens v. National City Bank of Brooklyn, 6
Thompson & Cook, 346) 1 N. B. C.,783.
Under U. S. Revised Statutes, section 5242, providing that no attachment
before final judgment shall be issued in any State court against a national
bank, and U.S.Revised Statutes, section 9.15, entitling the plaintiff in
actions in the Federal courts to similar remedies by attachment to those
provided by the laws of the State in which such courts are held, a Federal court may not issue a writ of attachment before final judgment
against a national bank. Butler v. Coleman. Same v. Mixier, Same v.
Whitney, Same v. Demmon, 124, U. S., 721; 8 N. B. C, 201.
A bond given to release property from an illegal attachment is void. Ib.
The principal in a bond given in an attachment suit may maintain an
action in equity to have the bond declared void and the" property held
by the sureties as indemnity returned. Ib.
The levy of an attachment on the shares of a national bank under the Vermont" statutes (R. L., §§ 3261, 3262), which do not include national-bank
stock in their provisions, is of no effect against the defendant in attachment. Soicles v. National Union Bank of Sivanton, Vt., S2 Fed. Rep., 696.
It seems doubtful whether any attachment under State laws can operate
as a transfer of shares of national-bank stock, since such stock exists
solely under the laws of the United States, which provide for transfers,
and declare the effect thereof. Ib.

BONDS OF OFFICERS:

1. It is not necessary that national banking associations shall signify their
approval of the official bonds of their officers by memoranda entered
upon the journals or minutes of the directors. The acceptance is to be
presumed from the retention of the bond, and from the fact that the
officer is permitted to enter upon or continue in the discharge of his
duties. Graves v. The Lebanon National Bank, 10 Bush,., 23.
2. Where the sureties of an officer can reasonably bo presumed to have been
deceived by the statement of the condition of the bank published just
prior to the execution of the bond, and to have been led to think that
there was no deficit, whereas there had been a misapplication of a large
part of the funds by the officer whose bondsmen they became, which
fact would have been ascertained had the directors exercised ordinary
diligence, the sureties are discharged from their liability. Ib.
3. A surety on the bond of a cashier of a national bank is not discharged by
the fact that the cashier had, before the bond was given, committed



124

REPORT OF THE COMPTROLLER OF THE CURRENCY.

BONDS OF OFFICERS—Continued.

4.

5.

6.
7.

8.

9.
10.

11.
12.

13.

14.

frauds upon the bank, if such frauds were unknown to the officers of
the bank, although they were guilty of gross negligence in not discovering them. ' Tapleyv. Martin, 116 Mass., 275; 1 N. B. C, 611.
The engagement of a surety is a direct original agreement with the obligee
that in tho event his principal fails he will perform the original obligation, and whether it is entered into jointly with the principal or separately, the extent and character of the obligation are the same as to
both, depending only upon the form in which it is expressed. La Rose
et al. v. The Logansport National Bank et al., 102 Ind., 882.
The coHrtract of obligors, whether entered into separately or jointly with
the principal, if by its terms it appears that the principal is separately
bound by an original, independent contract, to which the contract for
security is collateral, and the obligors agree therein that the principal
will pay or perform according to his original engagement, and that they
will answer for his default in the event of failure, is a contract of
guaranty. Ib.
The contract of the sureties in the bond of a bank cashier, conditioned for
the faithful discharge of his duties by such cashier, is a contract of
guaranty. Ib.
A failure to give notice to guarantors of the default of their principal,
except in cases governed by commercial rules, is a matter of defense,
and resulting damages must concur with such failure in order to work
a discharge. Ib.
Where by a by-law of a bank its cashier is made responsible for the funds
and valuables of the bank, it can not be implied that his bond would
not become operative until all the other officers and employees were
denied access to such funds and valuables nor that he is responsible for
losses which may occur through the delinquencies of others. Ib.
The bond of a bank cashier, executed and approved two weeks after he
enters upon his duties, is upon sufficient consideration, and is operative,
at least, from the date of its approval. Ib.
Tho knowledge by an employer of the misconduct of an employee whose
conduct and fidelity have been guaranteed by another, which will, if
concealed, release the guarantor, must relate to the service in which the
employee is engaged, and must be something more than mere moral
delinquency unconnected with the subject-matter or the guaranty. Ib.
A continuing contract, guaranteeing the fidelity of a bank cashier, may
bo revoked by the guarantors without cause, upon proper notice, but
the right must be exercised reasonably. Ib.
A bond of suretyship for an employee, which is to " embrace and cover
only acts and defaults committed during its currency and within twelve
months next before the date of discovery of the act or default upon
which such claim is based," covers not only embezzlements made during
the year actually preceding their discovery, but also earlier embezzlements which would have been discovered within a year but for the fact
that during the year preceding the actual discovery the employee had so
falsified the books as to prevent such discovery. Consolidation National
Bank v. Fidelity and Casualty Company of Neiv York (C.C.), 67 F., 874.
Plaintiff, as receiver of a national bank, sued a former employee of the
bank and a guaranty company upon a bond of indemnity, against the
fraudulent acts of such employee, which contained a provision that it
should be essential to the validity of the bond that the employee's signature be subscribed thereto. The defendants pleaded non est factum.
The bond offered in evidence was not signed by the employee of the
bank and there was no evidence that it had been executed by the defendant company. The court sustained defendants' plea, and dismissed the
suit. Held, no error. Blaekmore v. Guarantee Company of North
America et al., 71 Fed. Rep., 868.
A bank employee's bond, conditioned for the reimbursement of any loss
sustained by reason of fraud or dishonesty in connection with his duties,
provided that any claim under the bond should embrace and cover only
acts and defaults committed during its currency and within twelve
months next before the date of discovery of the act or default upon
which such claim was based. Held, that the bond did not cover a default
committed more than twelve months prior to its discovery, which would,
however, have been discovered within a year from its commission had
not such discovery been prevented by the act of the employee in falsi-




REPORT OF THE COMPTROLLER OF THE CURRENCY.

125

BONDS OF OFFICERS—Continued.

15.

16.

17.

18.

19.

fying the books during the year preceding the discovery. G7 Fed. Rep.,
874, reversed. Fidelity and Casualty Company of New York v. Consolidated National Bank, 71 Fed. Rep., 116.
The cashier of a bank, whose bond, with sureties, was conditioned that he
would "faithfully and honestly discharge his duties as cashier, and
account for all such moneys, funds, and valuables" as came into his
hands, cashed a draft, payable to his order, amply secured by bills of
lading of cotton, and duly forwarded the same, with the bills of lading,
to a bank in another city for collection. The draft and bills of lading
were lost in the mail. The cashier's bookkeeper, whose duty it was to
check the statements and accounts with other banks, reported the draft
as credited on their account with the bank to which they had been forwarded, and his accounts balanced according to his report. The agent
of the railroad company, without production of the bills of lading, and
without the consent of the cashier, delivered the cotton to the consignee.
Held, that the cashier was not liable on his bond. First National Bank
v. Still (Tex. Civ. App.), 32 S. W., 61.
The A. Surety Co. executed and delivered to the C. bank a bond, insuring
the bank against loss by any act of fraud or dishonesty of its cashier in
connection with the duties of that office, or the duties to which, in the
bank's service, he might be subsequently appointed, occurring during
the continuance of the bond, and discovered within six months thereafter and within six months from the death, dismissal, or retirement of
the cashier from the service of the bank. The bond provided that the
surety company should be notified of "any act" of the cashier which
might involve a loss for which the company would be responsible '' as
soon as practicable after the occurrence of such act shall have come to
the knowledge " of the bank, and it required proofs of loss to be furnished to the surety company. The bank suspended payment and passed
into the hands of a receiver who afterwards notified the surety company
of the discovery of dishonest acts of the cashier, furnished proofs of
loss, and brought suit against the surety company on the bond. The
evidence upon the trial as to the time when the dishonest acts of the
cashier were discovered being conflicting, held, that the question whether
the required notice was given with reasonable promptness was for the
jury. Held, further, that the terms of the bond did not require notice
to be given of suspicions of dishonest acts. American Surety Company
v. Paidy, 73 Fed. Rep., 470; 170 U. S., 134.
The bank having suspended business on November 12,1891, but the cashier having continued in the service of the receiver until March following, when he resigned, held, that the services so rendered by him after
November 12th were rendered to the bank none the less because its
affairs were controlled by a receiver, and the surety company was not
absolved from liability for acts discovered more than six months from
November 12th, but within six months from his resignation. Held, further, that a proof of loss under the bond, which set forth with reasonable plainness, and in a manner by which a person of ordinary intelligence could not be misled, that certain sums of money had been taken
from the bank by means of acts of the cashier, described in such proof,
was sufficient, though it failed to aver explicitly that a loss had been
caused to the bank. Ib.
The '' teller's book " of the bank, which had been kept by one G., who died
before the trial, was offered in evidence to show that on certain days no
money was received for certificates of deposit. Held, that in connection with evidence of the course of business, by which, if received,
such money would be entered in the book, the evidence was competent,
though not conclusive. Ib.
For the purpose of showing the dealings with the bank of the president,
who was charged with having misappropriated the bank's money with
the cashier's aid, the president's ledger account was put in evidence,
together with the testimony of the bookkeeper who made the entries,
and who swore that they were correctly made from the original deposit
slips and checks furnished to him by the teller, who had died before the
trial; that it had been the teller's duty to verify all deposit slips, and to
pay the checks; and that all such slips and checks, when reaching the
bookkeeper's hands, bore marks indicating that they had been verified
or paid by the teller. Held, that the account was competent, and sum*




126

REPORT OF THE COMPTROLLER OF THE CURRENCY.

BONDS OF OFFICERS—Continued.

20.

21.
22.
23.

24.

25.
26.

27.

28.

ciently proven. Held, further, that evidence of acts of fraud, and dishonesty by the cashier, occurring before the date of the bond, and for
which no claim was made against the surety company, but which were
similar to the acts on which the claim was based, was admissible to
show that the acts on which the claim was based were intentional, and
not merely negligent, or due to oversight. Ib.
Prior to the issue of the bond sued on, the cashier and president of the bank
had conspired to rob it, and had been engaged in fraudulent practices.
When application was made for the bond the surety company required
a certificate from the bank of the cashier's good character. Such certificate was made by the president without, so far as appeared, any
direct authority from the board of directors, or any knowledge by them
that such certificate was made or required. Held, that the president's
knowledge of the cashier's dishonesty was not to be imputed to the bank,
so as to make it responsible for the misrepresentations contained in
such certificate. Ib.
"When a case goes twice to an appellate court, questions decided upon the
first occasion will not be considered upon the second. Mohrenstecher
el al. v. Westervelt, 87 Fed. Rep., 157.
Error in denying a motion to compel the plaintiff to elect between causes
of action is cured by instructions eliminating all but one cause. 1 b.
It is error to give instructions authorizing the jury, in determining
whether a transaction by which the cashier of a national bank obtained
X)ossession of some of its funds was a misapplication thereof, to consider
the fact that his indebtedness to the bank exceeded 10 per cent of its
capital. Ib.
Instructions that no devices for concealment, however elaborate, which a
bank cashier may adopt to conceal a transaction amounting to a misappropriation of its funds, can protect him, are erroneous, when there is
no evidence of any concealment whatever in respect to the transaction
in question. Ib.
The making of a loan exceeding 10 per cent of a national "bank's capital,
in the absence of fraud, is not a breach of the cashier's bond. Ib,
To constitute a misapplication of the funds of a bank, it is necessary that
some portion thereof shall be withdrawn from its possession or control,
or that some conversation be made, so as to deprive the bank of the
benefit thereof. Mere renewal of notes already in the bank's possession
does not, of itself, constitute a misapplication of funds. Ib.
The cashier of a bank having made large purchases of real estate, one of
the sureties on his bond made inquiries of several officers of the bank,
actively engaged in its affairs, as to whether the cashier had borrowed
money of the bank in order to make such purchases, and was informed
that the purchases were for the benefit of the bank, that no liability
accrued therefrom to the cashier to the bank, and that the cashier's total
indebtedness to the bank was but a few hundred dollars. Held, that the
bank was estopped subsequently to deny these statements, when the
sureties had relied thereon, and the cashier had in the meantime become
insolvent. Ib.
In a suit upon a bank cashier's bond, one of the sureties thereon was not
allowed to testify to statements of bank officers in reference to the
cashier's dealings with the bank, but the cashier himself was afterwards
permitted to testify to practically the same effect as the testimony
offered. Held, that the rejection was not harmless error, as the evidence could not be considered merely cumulative, in view of attacks
made upon the cashier's credibility, and of his interest in misrepresenting his transactions, if illegal. Ib.

BOOKS, INSPECTION OF:

1. Code of Alabama, 1886, sec. 1677, which provides that stockholders of all
corporations have the right to have access to and inspection and examination of the books, records, and papers of the corporation at all reasonable and proper times, applies to national banks located within the State;
and mandamus will lie against the officer having custody of the books
to enforce the right. Winter v. Baldwin 7 So., 734; 89 Ala., 483.
2. The rights of stockholders are not curtailed nor the statute in conflict with

U. S. Rev, St., which provide that national banks shall not be subject




REPORT OF THE COMPTROLLER OF THE CURRENCY.

127

BOOKS, INSPECTION OF—Continued.

to visitorial powers other than those authorized by Congress or vested
in the courts of jretire. Ib.

3. The officers of a national T t r A can n ^ b^ COIDJ) Il( 1 TO < v^f xt tli > b > >\s
of t h e b a n k t o S t a t e o n i c e i 5 i o i t h e p i i p o > o i I m " i ^ n I , i J ^ S I \ •>
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Bank of Youngstc
iv A . Ujghccf al , S^eo >d ><i4 o lal Bni I ^ • )in ,
*
2 N. B.C., 176.
4. A n a t i o n a l b a n k n i a ^ 1 * c ynpeil< 1 1 > d i c l o * t i l t r u n i - (
» J ^> >- > i >
a n d t h e a m o u n t s o i t h ( i r d e p > i s u n d e r t h e ' ) i ; i K > \ pi > ' ^ < i <
J
1
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f t«
s u b j e c t t o t a x a t i o n v,i* i m 1Iie c /»mtj , h i^ n ^ U « ) n ni> u { i ) < x«>±
4
t h a t p u r p o s e b y t L t o a » a . f">«' o M ' ^ t , ' < / " > c ', «
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Hughes
and anothu
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c o u r t b y w r i t o f r 5] xm ) r . //>
6. U n d e r s e c t i o n 3177 o r TM * R e w e d b t a t u i t , U S , c i n l i o IT* I ^ o^j 1 H I
c o l l e c t o r , d e p u t y c )^! f o * > l a ^ p ^ L t ' ^ >c m i e n< l i t \ e a i i ' c ' v u 7 ) i ^
d a y t i m e a n y b u i l d i n g r1* i n , t o % i t ! m l a ^ O i s t ^ c t w h ^ i a i j « itic ^ (>,
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a n d t h e p r o v i s i o n i s h it t ly ovvii »i c i *i ^ »i b u i T m ^ o , p « , o
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p e r s o n h a v i n g ; t h e ^ v * i c y c Q i p e i m 1 Hl^ix<eof t ' * * - • » * . , ^*i ^ J |
t o a d m i t s u c h office* (u* baiCcr h m i 1 > < \ t n l i r e ' a i
1 ( \ ^ < o\ \ M
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u n d e r t h i s p r o v i s i o i p a i d b«iil cli<vk«,\N]ix( ' i t \ a o ( i 1} , n u ! ^ h K 1 ^ 7 ^
s t a m p e d a t t h e t r u e f i t y \ \ e i e m a d e , ^i<;pe(!, a» d ^ i ° d , «
^ c
c l e s o r o b j e c t s s u l g e ( t t o t u u * i o i \ a n d t n otfi L ( i " b t r 1 -\\ . ^
»
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c h e c k s a r e m a y Is vv Hilly < u u ^ t ) s n f r e . i h e c 1 ( r t > * t > < u A u "TH h
checks.
United
b ah*-* p'ai t uj i i t, / ^ >, ^ . *1 t,i i* *~ C. r ,
y i

BRANCH BANKS:

1. A national bank located in another State can not keep an office for discount
and deposit in New York, and can not maintain an action upon a note
discounted at such oince. National Bank of Fairhaven v. The Plicenix
Warehousing Co., 6 Hun., 71; 1 N. B. C, 7SJf.
2. Under Rev. St., sec. 5190, providing that "the usual business of each
national banking association shall be transacted at an omce or banking
house located in the place specified in its organization certificate," a
national bank can not make a valid contract for the cashing of checks
upon it at a different place from that of its residence, through the agency
of another bank. Armstrong v. Second National Ban}: of Springfield,
38 Fed. Rep., 883.
BROKER:

A-national banking association is not authorized to act as a broker or agent
in the purchase of bonds and stocks. First National Bank of Aileniown
v. Hoeh, 89 Penn. St., 324; Weckler v. The First National Bank of Ilagerstown, 42 Md.,581*
CAPITAL STOCK.

See Shareholders; Transfer of stock.

1. A national bank can acquire an interest in its own stock only by purchase
to prevent a loss upon a debt previously contracted in good faith; and a
provision in certificates of stock in such bank that they shall not be
transferred until all the liabilities of the stockholder to the bank are
paid is void and of no effect. Conklin v. The Second National Bank, 45
N. Y.,655; 1 N. B.C., 693.
2. Where a national bank made a loan upon the pledge of its own shares and
afterwards sold the shares to obtain payment of the loan which exceeded
the amount realized from the shares, held, that the owner of the shares
could not on the ground that the statute forbids a national bank to take
its own shares as security recover from the bank the amount realized
upon the sale of the shares. First National Bank of Xenia v. Stewart,
107 U.S.,676; 3 N. B, C.,96.




128

REPORT OF THE COMPTROLLER OF THE CURRENCY.

CAPITAL STOCK. See Shareholders : Transfer of stock—Continued.
3. The articles of association and the by-laws of a national bank prohibited
the transfer of stock owned by any stockholder indebted to the bank
until such indebtedness should be satisfied. Held, That the prohibition
was invalid, under section 35 of the national banking act, and that the
bank could not thus acquire a lien on the shares of the stockholders.
Bullard v. Bank, 18 Wall., 589; 1 N. B. C, 93.
4. The right of creditors to look to unpaid portions of the capital stock as a
fund for the payment of their claims is not created by State statutes,
but is derived from general principles of law. The enforcement of such
right, therefore, is not dependent upon remedies provided by State legislation ; and if it appear that the State has, by statute, provided legal
remedies for the enforcement of equitable rights, the creditor may, at his
election, when proceeding in a Federal court, adopt the form of remedy
appropriate in courts of equity, or may sue at law, under the statute.
First National Bank of Sioux City v. Peavey, 69 Fed. Rep., 455.
5. The question whether the right of a creditor to look to unpaid capital stock
is legal or equitable in its nature, in any particular case, is to be determined, it seems, by the following principles: If a person has subscribed
for or purchased the stock under such circumstances that the corporation
itself, and through it its creditors, can call upon the stockholder for the
unpaid portions of the stock, then this claim is one at law, based upon
the express or implied terms of the subscription or purchase. If, however, by the terms of the original subscription or purchase, no liability is
assumed to make any further payments to the corporation on this stock,
and it is agreed between the corporation and the stockholder that the
stock shall be considered as full paid, then a creditor's right to look to
unpaid portions of the stock is equitable, and can not be enforced by
action at law, unless so provided by statute. Ib.
6. The A. Co. was organized with a capital of $1,000,000, in 40,000 shares of
$25 each, all of which were subscribed for by the eight incorporators of
the company. No cash was paid on the subscriptions, but property,
valued at $220,000, was conveyed to the company in payment for the
stock, without apx>lication to any specific shares. Immediately after the
organization of the company it was agreed by all the subscribers, at a
stockholders'meeting, that 16,000 shares should be contributed by the
subscribers to secure working capital, and that such shares should be
issued to trustees, who were authorized to sell the same as full paid and
nonassessable stock, at not less than $3 per share, two-fifths of the proceeds to be paid to the incorporators and three-fifths into the treasury
of the corporation. It did not appear that enough of the stock so contributed was sold to equal $220,000 at par value; but defendant purchased from one W., who was engaged on behalf of the company in
selling the stock, 800 shares, in the belief that they were owned by W.,
and were fully pa:d, as they were stated on their face to be, having no
knowledge or notice of the transactions leading to the sale of the stock
or of the facts in regard to its payment. Afterwards, the company having become insolvent, a receiver of its property sued defendant for the
amount of an assessment of $15 per share on the subscriptions to the
stock. Held, That the proceedings for the sale of the stock, as full paid,
must be construed as an appropriation, by the shareholders and the corporation, of the unapplied credit of $220,000 to the 16,000 shares contributed for sale, or to such of them as should be issued; and as it did
not appear that enough of the stock was sold to equal the $220,000, the
stock purchased by defendant, in the belief that it was full paid, must
be treated as being so in fact, and accordingly, the defendant was not
liable for the assessment. Rood v. Whorton, 74 Fed. Rep., 118.
7. Where suit is brought in equity to enforce subscriptions to the capital
stock of a corporation as part of a trust fund for the benefit of the creditors of such corporation, the bill must be so framed as to be for the
benefit of all the creditors who are entitled to the trust fund. First
National Bank v. Peavey (C. C.),75F., 154.
8. National banks have no authority to increase their capital stock except
as provided by Rev. St., sec. 5142, and act of Congress May 1,1886; and
where an increase is attempted to be made without obtaining the consent of two-thirds of the stock, the payment in full of the amount of
such increase, and the certificate and approval of the Comptroller of the
Currency, as required by those statutes, the proceedings are invalid, and



REPORT OF THE COMPTROLLER OF THE CURRENCY.

129

CAPITAL STOCK. See Shareholders; Transfer of stock—Continued.
preliminary subscriptions to such increase can not be enforced.
Winters
v. Armstrong; Armstrong v. Stanage; Samey. Wood, 37 Fed. Rep., 508.
9. Such a subscription is impliedly conditioned on the subscription of the
whole amount of the proposed increase and on the compliance by the
corporation with all the requirements of the statute necessary to make
the increase stock valid, and in case of noncompliance with such requirements there is a failure of consideration. Ib.
10. In an action by the receiver of a national bank to enforce subscriptions to
a proposed increase of its capital stock, an allegation that the bank,
subsequent to defendants' subscriptions, and with their knowledge,
represented to the public by means of circulars, letter heads, etc., that
its capital stock had been so increased and that defendants allowed their
names to remain " upon the list of those subscribing for and entitled to
such new or increase of stock," but without alleging that the public
gave credit to the bank on the faith that the defendants were part
owners of such increase of stock, or that they allowed themselves to be
held out as actual stockholders, does not show that they are estopped
to plead the failure of the bank to comply with the statutory requirements in perfecting such increase. Ib.
11. The receiver stands in the shoes of the bank, and can assert no rights
against the subscribers which the bank could not have asserted. Ib.
12. A subscriber who has made payments on his subscription to the proposed
increase, believing that the statutory requirements would be complied
with, is entitled to have the amount thereof allowed as acclaim against
the assets of the bank in the receiver's hands. Ib.
13. Where one subscribes for shares in tne increase of the capital of a national
banking association in a certain amount, such subscription being paid
in full and the entry made on the stock book of the bank, he becomes a
shareholder, although no stock certificate is issued. Pacific National
Bank v. Eaton, 141 U. S., 227.
14. And the certificate of the Comptroller of the Currency approving the
amount of increase that has been paid in, which amount includes what
was paid by the dissenting subscriber, will be conclusive upon such
subscriber. Ib.
15. But if such subscriber has assented to or ratified the change he will be
held a shareholder. Delano v. Butler, 118 U. S., 634.
16. When the previous proceedings looking to an increase in the capital stock
of a national bank have been regular and all that are requisite, and a
stockholder subscribes to his proportionate part of the increase and pays
his subscription, the law does not attach to the subscription a condition
that it is to be void if the whole increase authorized be not subscribed,
although there may be cases in which equity would interfere to protect
him in case of a material deficiency. Aspinwall v. Butler, 133 U. S., 595.
17. The Comptroller of the Currency has power by law to assent to an increase
in the capital stock of a national bank less than that originally voted
by the directors, but equal to the amount actually subscribed and paid
for by the shareholders under that vote. Ib.
18. Where one subscribes for shares in an increase of capital stock of a national
bank and pays for the same, without waiting to see whether the whole
amount of the increase is taken, he is bound by such subscription and
payment, though the amount of the increase is afterwards reduced by
the bank and the Comptroller of the Currency. Butler v. Eaton, 141
U.S., 240.
19. The conditions imposed by Rev,. St., sec. 5142, as to the validity of increase
of national-bank capital were intended to secure actual cash payment
of subscriptions and to prevent watering stock, not to invalidate bona
fide subscriptions actually made and paid. Aspinwall v. Butler, 133
U.S., 595.
20. Stockholder in national bank who, with knowledge of its insolvent con-'
dition and of all material facts, subscribes for increased stock to same
amount as his original stock, and amount of proposed increase is afterwards reduced, can not question validity of proceedings for such increase
to annul such subscription and payment. Delano v.Butler, 118 U.S.,
634; Pacific National Bank v. Eaton, 141 ib., 227; Tliayer v. Butler, ib.,
234; Butter v.Eaton, ib.,240.
CUR 99
9



130

REPORT OF THE COMPTROLLER OF THE CURRENCY.

CAPITAL STOCK. See Shareholders; Transfer of stock—Continned.
21. There can be no increase of the capital of a national bank until the Comptroller of the Currency approves thereof and issues his certificate, as
provided by section 13 of the act of Congress providing for the organization of national banks. Charleston v. People's National Bank, 5 South
Carolina, 103; 1 N B. C.,898.
22. The stockholders of the C. National Bank voted to increase its capital
$300,000, and M. subscribed and paid for 23 shares of the proposed
increase. Only $150,000 of such proposed increase was ever paid for,
and the directors applied to the Comptroller of the Currency to approve
the increase to the amount of $150,000, which was refused. Afterwards
the stockholders voted an increase of $150,000, and applied for approval
thereof, which was refused; but later the Comptroller, on his own
motion, on the eve of the bank's insolvency, approved this increase. M.
sued the bank and its receiver to recover the amount paid by him under
his subscription to the first proposed increase. Held, that the Comptroller's refusal to approve the first increase to the extent of $150,000
nullified the vote for the increase and M.'s subscription to the stock,
leaving him in the position of a creditor of the bank for the amount paid
in, and the subsequent proceedings, ho not having participated therein,
could not reanimate his contract of subscription. Matthews v. Columbia
National Bank of Tacoma et al., 77 Fed. Rep., 37$.
23. Under the national banking law (Rev. St., §5142) and the amendment of
May 1,1886 (24 Stat., 18), the action of the Comptroller of the Currency
in approving of an increase in the capital of a national bank, and certifying that the amount thereof has been paid in, is conclusive, and the
validity of the increase can not be assailed in a collateral proceeding
such as an action to enforce the liability of the stockholders. Latimer
v. Bard et ah, 76 Fed. Rep., 536.
24. Where the capital of a national bank has been increased, and defendants
have received their additional stock, and for several years held themselves out as stockholders, they can not, when the bank becomes insolvent and they are assessed to pay its indebtedness, deny their liability
upon the ground that the increase of capital was fraudulent, and that
they could not ha.ve discovered the fraud with ordinary care. More
diligence was required of them, and they are estopped by their laches.
Upton v. Tribilcock, 91 U. S., 45, and Sanger v. Upton, ib., 64, folloived. Ib.
25. The officers, in taking the necessary steps for such increase, act as the
agents of the stockholders^ and such stockholders can not set up the
fraud of the officers concerning the increase to defeat the claims of
innocent creditors. Ib.
26. Under the United States statutes national banks have the abstract power
to increase their capital to such a limit as may be approved by the Comptroller of the Currency, and where stockholders have assented to an
increase they can not set up any defects or irregularities in the exercise
of the power as a defense in an action to enforce their liability. Chubb
v. Upton, 05 U. S., 665; Veederv. Mudgett, 95 N. Y. ,295, followed. Scovill v. Tllayer, 105 U. S., 143, and Implement Co. v. Stevenson, 13 C. C. A.,
661, 66 Fed., 633, distinguished.
Ib.
27. A national bank reducing its capital can not retain, as a surplus or for any
other purpose, any portion of the money which it received for retired
stock, and haying refused to permit shares thus retired to be transferred
on its books, is liable for the value of the shares to the holder. Seeley v.
New York National Exchange Bank, 78 N. Y., 608; 4 Abb. New Cases, 61;
2 N.B. C.,340.
28. The capital of a national bank having become impaired by the nonpayment
of the interest on some paper among its assets to the amount of $71,000,
in order to avoid an assessment by the Comptroller the stockholders
reduced its capital stock and carried the bills and notes to the account of
suspended or " bad debts," which were not thereafter included as assets,
although retained in its custody. Some years afterwards the bank realized $75,000 from collaterals pledged for the security of that paper. In
a suit by a stockholder to recover his share of the amount realized proportioned to the amount of stock surrendered, held, that he could not
recover. McCann v. First National Bank of Jeffersonville, 112 Ind., 3541
3 N. B.C., 4U


REPORT OF THE COMPTROLLER OF THE CURRENCY.

131

CAPITAL STOCK. See Shareholders; Transfer of stock—Continued.
29. Under Comp. Laws, sees. 3589, 4515, relating to the rescission of contracts
procured through fraud, one induced to purchase bank stock by fraudulent representations as to its value may rescind the purchase and recover
his notes given therefor against a holder of the notes having notice of
the fraud. Taylor v. National Bank (S. D.), 62 N. W., 99.
30. The State legislature may authorize the sale under execution of nationalbank stock. In re Braden's Estate, 30 A., 746; Appeal of Wood, ib.
31. A certificate of stock in a national bank, though in due form, may be
shown aliunde to have been issued to the apparent stockholder solely as
collateral security for money loaned. Williams v. American National
Bank of Arkansas City, Kans., et al., 85 Fed. Rep., 376.
32. It is no defense to an action against a national bank for money had and
received that the collateral security it gave to plaintiff was issued without authority of law. Ib.
33. The certificate of the Comptroller of the Currency, approving an increase
of the capital stock of a national bank, is conclusive of the existence of
the facts authorizing such certificate, and a subscriber to the stock can
not question its validity. Tillinghast v. Bailey et al., 86 Fed. Hep., 46.
34. Subscribers to a duly authorized increased issue of stock by a national
bank, who accept certificates therefor, vote the stock by proxy, and take
dividends thereon, can not question the validity of such stock as against
the receiver after the bank has become insolvent. Ib.
35. The certificate of the Comptroller of the Currency that the capital stock of
a bank has been increased to a certain amount is conclusive of the sufficiency of the facts and the regularity of the proceedings requisite to an
increase, and can not be questioned in any collateral proceeding. Columbia National Bank of Tacoma et al. v. Matthews, 85 Fed. Rep., 934.
36. One who subscribes to a proposed increase of stock with knowledge that
the stockholders had by a resolution authorized the officers, with the
approval of the Comptroller, to increase the capital stock in any multiple of $50,000 up to $300,000, as the subscriptions shall be paid in, is
estopped from questioning the regularity of the rjroceedings after the
certificate of the Comptroller to such an increase is obtained. Ib.
37. A stockholder wiio, by power of attorney, has authorized another to vote
his stock nt any and all stockholders' meetings " i n the same manner as
I should do were I there personally present," is estopped by the vote of
his proxy as respects any irregularity in the proceedings or calls of the
meeting, which he could have waived if personally present. 79 Fed,.
Rep., 558, reversed. Ib,
38. The action of the Comptroller in issuing a certificate approving an increase
of the capital stock of a national bank is not subject to collateral attack,
and a suit by a subscriber to such stock against a receiver of the bank,
after its insolvency, for the recovery of his subscription, on the ground
that such increase was illegal and the Comptroller's certificate void, is
such an attack. Brown v. Tillinghast, C. C, 93 Fed. Rep.,326.
39. Under a resolution of the stockholders of a national bank proposing to
increase the capital stock from $200,000 to $500,000, and authorizing the
president and cashier whenever $50,000 should be subscribed and paid to
certify the same to the Comptroller, subscriptions to such increase, when
paid and approved by the Comptroller in the amount of $50,000, or any
multiple thereof not exceeding $300,000, were valid and binding on the
subscribers. Ib.
40. Where a subscription to a part of an increase of the capital stock of a
national bank has become binding by the terms of the original resolution authorizing the increase, the subscriber is not affected by the subsequent action of the shareholders in limiting the amount of such increase
to a part only of that originally authorized, when the increase to the
amount so limited has been approved by the Comptroller, and whether
or not the action so limiting the increase was legally taken can not render his subscription illegal or revocable. Ib.
CASHIER.

See Officers.

CERTIFICATE OF DEPOSIT :

1. National-banking associations may issue certificates of deposits. Riddle v.
First National Bank, 27 Fed. Rep., 503.



132

REPORT OF THE COMPTROLLER OF THE CURRENCY.

CERTIFICATE OP DEPOSIT—Continued.

2. Certificates of deposit in the ordinary form issued by a national bank to
depositors and payable to order are not post notes within the prohibition of sec. 5183, Rev. St. Ib.
3. A certificate of deposit, payable to the order of the depositor on the return
of the certificate, is not due or suable until demand made and return of
the certificate. Ib.
4. Certain persons, directors of a savings and of a national bank, procured
money from the former on notes made by a third person to them for the
payment of stock of the national bank issued in the name of such third
person for their benefit. These persons were behind in their accounts
with the national bank, and the savings bank allowed them to overdraw
their accounts with it to a large amount, which was used in settling
their accounts with the national bank. Thereafter the savings bank
delivered the notes and the check to the national bank, which issued to
it a certificate of deposit for an amount covering the whole amount represented by them. Held, that this certificate of deposit was without
consideration and void, and any loss accruing to the savings bank by
virtue of the transactions was due to the fraud or incompetency of its
own officers. Murray v. Pauly, 56 Fed. Rep., 962.
5. A certificate of deposit is evidence of so high and satisfactory a character
as to the sum deposited, that to escape its effect the maker must overcome it by clear and satisfactory evidence. Where the testimony, aside
from the certificate, is balanced as to the amount deposited, the certificate will turn the scale. The First National Bank of Lacon v. Myers,
83111,507.
6. A certificate of deposit issued by a national bank, payable to the order of
the depositor on return of the certificate properly indorsed and understood between the bank and the depositor not to be payable until a future
day agreed upon, is not in violation of the national-banking act. Hunt,
Appellant, 141 Mass., 515; 3 N. B. C., 474.
7. Suit against a bank upon a stolen certificate of deposit given by the defendant to the plaintiff, reciting that he had deposited in said bank a certain
number of dollars, payable to his order in current funds on the return
of the certificate properly indorsed. Held, that the instrument should
be regarded as the promissory note of the bank, assignable under the
statute, but that it was not negotiable as an inland bill of exchange,
being made payable, not in money, but " i n current funds." The
National State Bank of Lafayette v. Ring el, 51 Ind., 393.
8. Held, therefore, that the payee could recover on said stolen certificate without giving a bond to indemnify the bank against a subsequent claim
thereunder by another person. Ib.
9. A person depositing money in a bank accepted from the cashier a certificate
of deposit, which made no mention of interest, but with a verbal agreement that interest should be paid. The cashier at the same time indorsed
a memorandum of the rate of interest on the stub from which the certificate was taken. Held, that the stub should be read with the certificate,
as evidence of the entire contract. Thomson v. Beal, 48 Fed. Rep., 014.
10. A bank, on receiving certain notes as a special deposit, issued a certificate
for the amount of the notes, made out a printed form, from which the
words "in current funds" were erased, and the words " i n certain
notes" substituted. The certificate was marked "Special deposit."
Having been transferred, this certificate was sent by the ho'der to the
bank for payment. The notes had not then been collected, and the
cashier was directed to return the certificate, but, as the signature was
torn, he was instructed to prepare and transmit a duplicate. In doing
so he carelessly omitted to change the printed form by erasing " in current funds" and substituting "in certain notes." Held, that there was
no ground for a claim that the second certificate was given in payment
of the first, that it was only a substitute for it, and that the receiver of
the bank was only required to surrender to the holder the notes constituting the special deposit, for which the original was issued. Niblack
v. Cosier, 74 Fed. Rep., 1000.
11. Knowledge by a member of a firm of the true consideration of a certificate
of deposit, which the firm discounted with a bank, and which had been
negligently altered in making out a duplicate, held, to be the knowledge
of the bank, where such member was also its cashier, and, as such, acted
as the sole representative of the bank in discounting the certificate. Ib.




REPORT OF THE COMPTROLLER OF THE CURRENCY.

183

CERTIFICATE OF DEPOSIT—Continued.

12. The defendants unlawfully detained a certificate of deposit of the value of
$2,000 from the plaintiff. Held, that the plaintiff was entitled to recover
damages for such detention equal to legal interest on the value of the
certificate from the date of the demand therefor and refusal to the recovery, and this without any evidence that the plaintiff would have converted said certificate into money and put it to use, other than his right
to do so and the defendants' illegal prevention of the exercise of such
right. Sleppy v. Bank of Commerce and others, 17 Fed. .Rep., 712.
CERTIFICATION OF CHECKS.

See Collections.

1. A national banking association may "certify" a check.
Merchant's
National Bank v. State National Bank, 10 Wall., 604.
2. The certification of a check by a bank is, in effect, merely an acceptance
and creates no trust in favor of the holder of the check and gives no lien
on any particular portion of the assets of the bank. People v. St. Nicholas Bank, 28 N. Y. St., 4,07; 58 N. Y. St., 712.
3. A certified check has a distinctive character as a species of commercial
paper, the certification constituting a new contract between the holder
and the certifying bank. The funds of the drawer are, in legal contemplation, withdrawn from his credit and appropriated to the payment of
the check, and the bank becomes the debtor of the holder as for money
had and received. National Commercial Bank v. Miller <Sc Co., 77 Ala.,
168.
4. Where the defendant has a right of election, on account of a tort committed, either to sue for the tort, or, waiving the tort, to sue for money
had and received, the relation of debtor and creditor does not exist until
he elects to sue for the money; and his creditors can not defeat his election by garnishment against the wrongdoer. But this principle does not
apply "where the garnishees, having received a check from the defendant,
with authority to collect for deposit and use, have had the check certified by the bank on which it is drawn, before the service of the garnishment; being authorized to have it certified, and the relation of the
parties being thereby changed, they are liable to the defendant for the
amount of the check, as for money had and received, and that liability
may be reached by garnishment. Ib.
5. A broker received coupon railroad mortgage bonds to cover future margins
of a customer and pledged them to a bank as collateral security for any
indebtedness he might owe it. Afterwards the bank advanced money
and certified checks on the faith of these bonds, when broker did not have
money on deposit equal in amount to the checks. Held, under sec. 5208,
that although the certifications were unlawful the checks certified were
good and valid obligations against the bank. Thompson v. St. Nicholas
National Bank, 146 U. S., 240.
6. In an action by a bona fide holder of a check drawn on defendant, a
national bank, and certified by its cashier. Held, that the defendant
was liable, although the drawer had no funds in the bank when the
check was certified. Cooke v. The State National Bank of Boston, 52
N. Y.,96; IN B.C., 698.
7. Where a postdated check is certified by the cashier of the bank on which
it is drawn to be "good," by indorsement thereon before the day of its
date, the instrument, upon its very face, communicates facts and information to persons receiving the same that the cashier, in making such
certification, was not acting within the known limits of his j>ower, and
that he was clearly exceeding them. The Clarke National Bank v. The
Bank of Albion, impleaded, etc.,52 Barb., 592.
8. It appearing, on the face of such paper, that it was certified by the cashier
before its payment could have been legally demanded, and before it
could be presumed that the drawer had made a deposit for its payment,
this is, in the law, full notice to a purchaser. 1b.
9. To enable a holder of such check to recover of the bank upon it, it must
appear that he became the owner and holder in good faith for a full and
fair consideration in the usual course of business, and without notice of
the cashier's want of power to make the certification. He must have
parted with something of value upon the strength and in cosideration
of the transfer of the paper. Ib.
10. If he parted with nothing before the check was dishonored, he stands in
privity with his immediate indorsers, and is affected by all that will
affect them. Ib.




134

REPORT OF THE COMPTROLLER OF THE CURRENCY,

See Collections—Continued.
11. Crediting the indorsers with the avails of the check on the books of the
holder is in no sense a paying over. The holder, upon receiving notice
of dishonor, has an undoubted right to erase such credit, and to restore
it only at the special instance of the indorsers from whom he received
the check. Ib.
12. The receipt of a certified check is not, of itself, payment. Such a check
does not cease to be commercial paper and become money. Certifying
a check to be "good " is nothing more than a promise by the bank upon
which it is drawn to pay it when presented, as in the case of the acceptance of the bill of exchange. If an accepted bill be protested for nonpayment, and the drawer duly notified thereof, he is bound to pay the
bill, with damages and costs. The same is the law with regard to a certified check. Bickford v. First National Bank of Chicago, 42 III., 288.
13. As the acceptance of a bill of exchange does not discharge the drawer, so
neither should the acceptance of a check, manifested by the word
" good" placed upon it by the bank, discharge the drawer. They rest
on the same principles. In this respect there is no difference between
an uncertified and a certified check; the dishonor of either must make
the drawer liable. Ib.
14. There is this difference, however, between a certified and an uncertified
check: In case of the former, the amount of the check is supposed to be
at once charged up against the drawer, and thus placed beyond his control, while the holder of an uncertified check may be anticipated by
a'nother, who also holds a check on which he may draw the money. The
certificate is ar> unconditional promise on the part of the bank to pay
the check on demand. The object in certifying the check is to give it a
currency value and to enable the holder to use it as money. Ib.
15. Although it be the fact that certified checks pass from hand to hand as
cash, still they are not cash or currency, in the legal sense of those
terms, and they do not lose, on that account, any of their characteristics
as bills of exchange, and therefore, when dishonored, the holder has a
right to look to the drawer for payment. Ib.
16. In this case a check was drawn and certified and deposited in a bank after
10 o'clock a. m., and before 8 o'clock p. m., on a certain day, where it
remained until the next morning, when it was taken, in the usual course
of business, to the bank on which it was drawn. The bank was closed
and continued so. The check was protested for nonpayment and due
notice given. This was sufficient diligence to hold the drawer. Ib.
17. The holder of a certified check has the right to hold the drawee and
acceptor, as well as the drawer. So, where the acceptor has failed and
made an assignment, the holder waives none of his rights against the
drawer by giving notice to the assignee of the acceptor not to pay over
any money to the drawer out of assets which might come to his hands
in that capacity. Ib.
18. A certificate of a bank that a check is good is equivalent to an acceptance;
it implies that a check is drawn upon sufficient funds in the hands of the
drawee; that they have been set apart for its satisfaction, and that they
shall be so applied whenever the check is presented for payment. Merchants9 National Bank v. State National Bank, 10 Wall., 604; IN. B.C., 47.
19. National banks have the power to certify checks, and this power may be
exercised by the cashier without special authorization. The directors
may limit his exercise of this power as they deem proper, but such limitation will not affect a person ignorant thereof who deals with the cashier
in relation to matters apparently within the scope of his power. Ib.
20. A bank, knowing that the county treasurer of the county had not sufficient
county funds in his hands to balance his official accounts, consented to
give him a fictitious credit in order to enable him to impose upon the
county commissioners, who were about to examine his accounts. They
accordingly gave him a "cashier's check" for $16,571.61, which he
indorsed and took to the commissioners. They received it, but refused
to discharge him or his bondsmen, and placed the check and such funds
as he had in cash in a box and delivered them to his bondsmen. The
latter deposited the money and the check in another bank in the same
place, which bank brought suit against the bank which issued the check
to recover upon it. Held, 1, that the circumstances under which the
check was issued were a plain fraud upon the law, and also upon the
county commissioners; 2, that their receipt of it and turning it over to

CERTIFICATION OF CHECKS.




REPORT OF THE COMPTROLLER OF THE CURRENCY.
CERTIFICATION OF CHECKS.

21.

22.

23.

24.

25.
26.
27.

28.

29.

135

See Collections—Continued.

the sureties was a single act, intended to assist the sureties in protecting
themselves, and was inconsistent with the idea of releasing them from
their obligations. Thompson v. Sioux Falls National Bank, 150 U. S,, 231,
Though the drawer of a check, before delivering it, has it certified, he will
not be relieved from liability thereon, the bank having failed before
payment thereof, though presented in due season. Randolph National
Bank v. Hornbloicer et ah, 35 N. E., 850; 160 Mass., 401.
Where the drawer of a check, before delivering it to the payee, has it certified as good by the bank upon which it is drawn, and the payee presents it in good season for payment, and gives due notice to the drawer
of its nonpayment, and the bank had failed at the time of presentment
for payment, the drawer will not be discharged from liability on the
check. Cincinnati Oyster and Fish Co. v. National Lafayette Bank, 36
N. E.,833.
As a general rule the certification of a check in the hands of the payee, the
body of which is unaltered, releases the drawer from further liability
and creates a direct liability from the bank to the payee, while as between
the bank and the drawer it operates as a payment, to that extent on his
account; and although prior to its being certified the check may be countermanded by the drawer, after its certification it has passed beyond
his control and he no longer has power to countermand its payment.
Meridian National Bank of Indianapolis v. First National Bank ofShelbyville, 34 N. E., 60S; 7 Ind. Ap., 322.
The indorsement of a check by the person to whom it was actually issued
and by whom the drawer intended the money should be received, is an
effectual indorsement to pass title to the check to a bank cashing the
same; and the indorsement is not, as to such bank, invalidated by reason
of the payee acting under an assumed and fictitious name when he was
not impersonating any other individual. Ib.
A bank, cashing in good faith a check so drawn and indorsed, may collect
the amount thereof of the bank which has certified the same. Ib.
The acceptance or certification of a ba,nk check does not warrant the signatures of the indorsers to be genuine. Fi?'st National Bank v. Northwestern National Bank (III.), 38 N. E., 739.
The certification by a bank of a note made payable at such bank, where
the maker keeps an account, is an absolute promise by the bank to pay
such note, not as the debt of another but as its own obligation, entitling
the holder to suspend any remedy against the maker and relax steps to
charge an mdorser, and can not be rescinded by the bank because made
under a misapprehension of fact as to the sufficiency of the maker's
account to meet the note. Riverside Bank v. First National Bank of
Shenandoah, 74 Fed. Rep., 276.
The payment of a note by the bank at which it is made payable, although
made under misapprehension of the state of the maker's account with
the bank, concludes the bank as against the holder of the paper who
has surrendered it, and the payment can not be recovered back of the
holder. Ib.
A bank certifying a check without funds is not liable except to a bona fide
holder. Bowen v. Needles National Bank, 87 Fed. Rep., 430.

CHECKS: See Certification of checks; Collections.
1. A check is, substantially, an inland bill of exchange, and the rules applicable to such bills are alike applicable to checks. Bickford v. First
National Bank of Chicago, 42 III., 238.
2. The check of a depositor upon his banker, delivered to another for value,
transfers to that other the title to so much of the deposit as the check
calls for, which may again be transferred by delivery, and when presented at the bank the banker becomes the holder of the money to the
use of the owner of the check, and is bound to account to him for that
amount, provided the drawer has funds to that amount on deposit subject to his check at the time it is presented. These checks are received
and passed and deposited with bankers as cash, subject, of course, to be
made good if not paid on presentation. This is the legal effect of an
ordinary uncertified check. Ib.
3. In order to fix the liability of the drawer of an inland bill of exchange or
check in case of nonpayment, the holder should present the bill or check
to the person or bank on which it is drawn, within business hours of the



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

CHECKS. See Certification of checks; Collections—Continued.
day next succeeding the receipt of the paper, and give notice of the dishonor to the drawer. Ib.
4. In the case of a deposit of a check drawn upon itself, the bank becomes at
once the debtor of the depositor, and the title to the deposit passes to the
bank. Oddie et al. v. The National City Bank of New York, 45 N. Y., 735.
5. Where a depositor draws his check on his banker, who has funds to an
equal or greater sum than his check, it operates to transfer the sum
named to the payee, who may sue for and recover the amount from the
bank, and a transfer of the check carries with it the title to the amount
named in the check to each successive holder. The Union National
Bank v, The Oceana County Bank, 80 III., 212.
6. After a check has passed into the hands of a bona fide holder it is not in
the power of the drawer to countermand the order of payment. Ib.
7. An instrument drawn by a depositor on a bank in the following form,
after giving the date and the name of the bank, " Pay to A. and B., for
account of C. & Co., ten hundred and eighteen 23-100 dollars," and
signed by the depositor, is a valid bank check, and will operate to
transfer to the payees an amount of the drawers' funds on deposit
equal to the sum named on its face. The words *' for account of C.
& Co." do not change its character as a check. A bill or note, without
at all affecting its character as such, may state the transaction out of
which it arose or the consideration for which it was given. The Ridgely
National Bank v. Patton & Hamilton, 109 III., 4-79.
8. A bank check payable to attorneys on account of a debt due from the
drawers to the clients of the attorneys vests the legal title in the payee
named as trustees for the clients, and a suit thereon against the bank is
properly brought in the names of the payees. Ib.
9. A debtor gave his check on a bank for the amount of his indebtedness,
payable to the attorneys of the creditor, which the bank refused to
pay, alleging an agreement of the debtor to apply his deposits on other
indebtedness. It was held that the bringing of an action by the creditor
against his debtor did not estop him from bringing an action on the
check in the name of his attorneys, the payees, against the bank. Ib.
10. M., who kept an account with theM. andM. Bank of Troy, deposited with
that bank a check given for value, drawn by defendant, payable to the
order of M., and indorsed by him in blank. Said bank credited the
amount of the check in M/s bank passbook, which was returned to him,
and on the same day it mailed the check to plaintiff, its correspondent
in New York, and its creditor, to be credited on account, and it was so
credited. M. stopped payment of the check, and when plaintiff caused
payment to be demanded of the drawee it was refused. Notice of presentation and protest was given to defendant, who subsequently paid
the amount to M. In an action upon the check, held, that upon the
deposit the M. and M. bank became the owner of the check, and as such
could and did give a perfect title to its transferee, and that plaintiff was
entitled to recover. The Metropolitan National Bank of New York v.
Lloyd, 90 N. Y., 530.
11. The implied contract between a bank and its depositors is that it will £>ay
the deposits when and in such sums as are demanded, the depositor having the election to make the whole payable at one time by demanding
the whole, or in installments by demanding portions; and whenever a
demand is made by presentation of a genuine" check in the hands of a
person entitled to receive the amount thereof for a portion of the amount
on deposit, and payment is refused, a cause of action immediately arises,
and the statute of limitations begins to run as against the installment so
due and payable. Vietsv. The Union National Bank of Troy, 101, N. Y.,
563.
12. While a check drawn by a depositor against a general bank account does
not operate as an assignment of so much of the account, it authorizes
the payee, or one to whom he has indorsed and delivered it, to make a
demand, and a refusal of the bank to pay on presentation gives the
drawer aright of action, in case he has funds in bank to meet the check,
and the refusal was without his authority. Ib.
13. It is not enough to make an equitable assignment of money on deposit in
bank that a check be drawn therefor; but where the money was deposited as the money of the holder of the check, though in the drawer's
name, and that fact is communicated to the bank before any other right



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137

CHECKS. See Certification of checks; Collections—Continued.
has accrued to the fund, the same becomes in equity the property of the
holder of the check, and he may recover it from the bank. Van Allen
v. The American National Bank, 3 Lans., 517.
14. The holder of a check on a bank can not sue the bank for refusal to pay
it on presentation, though the drawer have sufficient on deposit to meet
it. Creveling et al. v. Bloomsbury National Bank, 46 N. J., 255.
15. The implied engagement on the part of a banker to pay the checks of his
depositor does not inure to the benefit of the holder of a check so as to
enable him to enforce payment thereon against the bank prior to acceptance, and in the absence of assent by the banker the giving of the check
does not operate as a transfer or assignment of the debt created by the
making of the deposit. First National Bank of Union Mills v. Clark,
134 N. Y., 868.
16. Where it is shown to be out of a bank's course of business to receive for
collection checks drawn on it by its depositors, and a check on it drawn
by one of its depositors in favor of another is presented by the latter
and the amount thereof is credited on his pass book as a deposit, and
the check is placed on the file of paid and canceled checks, and afterwards the amount of the check is also entered to his credit and charged
against the drawer on the books of the bank, these facts constitute a
payment of the check, and the amount of it can not be withheld by the
bank on discovering that the check was an unauthorized overdraft and
the drawer was insolvent. City National Bank of Selma v. Burns, 68
Ala., 600.
17. A charge is erroneous and properly refused which affirms, as matter of
law, that if the drawer and payee of a check are customers of the bank
on which it is drawn, the presentation of the check by the payee to the
bank and the noting or entry of it by the bank on his pass book as a
deposit do not operate as a payment of the check, and that if within a
reasonable time the bank ascertains that the check is an unauthorized
overdraft and offers to return it there is no liability to the depositor. Ib.
18. In such case no presumption arises that the bank received the check merely
for collection and in the capacity of agent for the holder; but a presumption of payment of the check does arise and the onus of overcoming that
presumption rests upon the bank, and it can only be removed by evidence
that such was not the intention of the parties, derived from the course
of business with the depositor or from contemporaneous acts or declarations. Ib.
19. If a holder of a check, with full knowledge that the drawer is without
funds in the bank to meet it, and has no just reason to believe that the
check will be honored in the absence of funds, he is wanting in good
faith if he demands and receives payment, especially if it is known to
him that the drawer is insolvent and the bank is ignorant of the insolvency. Ib.
20. In such case, fraud being imputed to the holder of the check, knowledge
of the want of funds must be clearly traced to him. It can not be
inferred from the relations existing between him and the drawer,
however intimate, unless connected with inculpatory facts or circumstances. Ib.
21. A check, drawn and delivered to the person to whose order it is payable,
does not, without acceptance by the drawee, operate as an assignment
of the sum in his hands for which it is given. It may be revoked by
the drawer at any time before acceptance, and is revoked by his death;
and there being no privity, expressed or implied, between the payee and
the drawee, the former can maintain no action on it against the latter.
National Commercial Bank v. Miller & Co., 77 Ala., 168.
22. When a bank receives from a customer a check on another bank for the
special purpose of collection, the title does not pass by the special indorsement for that purpose, nor does the receiving bank owe the amount until
the check is collected. But where the customer has a deposit account
with the bankers, on which he is accustomed to deposit checks payable
to himself, which are entered on his pass book, and to draw against such
deposits, an indorsement of the words "For deposit" on a check so
deposited "is,in the absence of a different understanding, presumptive
of more than a mere agency or authority to collect," it is a request and
direction to deposit the sum to the credit of the customer, and gives to
the bankers authority, not only to collect, but to use the check in such



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

CHECKS. See Certification of checks; Collections—Continued.
manner as, in their judgment and discretion, having reference to the
conditions and necessities of their business, may make it most available
to their protection, and they may have it certified by the bank on which
it is drawn. Ib.
23. When checks on another bank are handed by a depositor to the receiving
teller of a bank and are by the teller credited on the depositor's pass book,
they are only received for collection, and if not paid on presentation may
be returned and the credit in the pass book canceled. National Gold
Bank and Trust Company v. McDonald, 51 Cal., 64*
24. If a customer of a bank hands the receiving teller a check drawn by another
person upon the same bank, and at the same time hands him his pass
book, and the teller receives the check and enters a credit for the amount
in the pass book, but no entry is made on the books of the bank, and
nothing else is said or done, and the drawer has no funds in the bank,
the check may be returned to the depositor and the credit in the pass
book canceled. Ib.
25. In such case a finding by the court that the check was received as a cash
deposit is erroneous. Ib.
26. The fact that the cashier of a bank upon which a check is drawn takes the
check and places it upon the "canceling fork" does not constitute such
ah acceptance as will prevent him from declining to pay and returning
the same upon learning that the drawer has not sufficient funds, or if
the check is not in proper form. The National Bank of Rockville v. The
Second National Bank of Lafayette, 69 Ind., 479,
27. Where the larceny of a bank check is charged, the question of its value is
for the jury, and it is error to instruct them that a check drawn on a
bank where the maker has funds sufficient to meet it is presumptively
of some value. Burrows v. State, 37 N. E., 271.
28. The act of Congress of March 3,1869 (Rev. St., sec. 520$), making it unlawful for national banks to certify checks unless the drawer has at the
time an amount of funds on deposit equal to the amount specified in the
check, does not invalidate an oral acceptance of a check, or promise to
pay a check, there being at the time sufficient funds of the drawer in
possession to meet it. First National Bank v. Merchants' National Bank,
7 W. Va., 544; 1 N. B. C, 915.
29. A check drawn on a national bank was presented for acceptance, whereupon the bank promised to pay it as soon as it received information that
a certain draft left with it for collection was paid. The draft was paid
and the bank informed. Held, That the acceptance was good and binding on the bank. Ib.
30. The refusal of the bank to pay a check upon presentation gives the drawer
a right of action in case he has funds in the bank to meet the check,
and the refusal to pay was without authority. Brooke v. Tradesmen's
National Bank, 22 N. Y. St., 633; 68 Hun., 129.
31. The measure of damages will be the amount of actual loss the party has
sustained, which may fairly and reasonably be considered as naturally
arising from the breach of the contract, according to the usual course of
things. Ib.
32. The ordinary amount of damages in such case would be the amount of
check, interests, and costs. Ib.
33. The immediate entering of a judgment against the drawer, and the seizure
of his business by the sheriff, in consequence of the failure of the bank to
pay the check, is not an injury for which the bank would be liable. Ib.
34. The term ''protest," as applied to inland bills of exchange, includes only
the steps essential to charge the drawer and indorser. Wood River Bank
v. First National Bank of Omaha, 55 N. W., 239; 36 Neb., 744.
35. Bank checks in the country are regarded as inland bills of exchange, for
the purpose of presentment and demand and notice of dishonor, and do
not require a formal protest in order to charge the indorsers. Ib.
36. They are a-so due upon presentation and not entitled to days of grace. Ib.
37. A check operates as an equitable assignment pro tanto from the time it is
drawn and delivered, as between the drawer and the payee or holder.
Hulings v. Hidings Lumber Company et al,, 18 S. E., 620; 38 W. Va., 351,
38. A general assignment for the benefit of creditors does not defeat the check
holder, although the check be not presented to the bank for payment
until after such assignment. Ib.



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139

CHECKS. See Certification of checks; Collections—Continued.
39. In the absence of proof to the contrary, it will be presumed that the name
of the payee appearing in a check was written in when the check was
signed. Fifth National Bank v. Central National Bank {Sup.), 31
N. Y. S., 54L
40. Evidence of a custom of passing checks payable to a person "or bearer"
by delivery only does not affect the operation of Code, sec. 1761, requiring such checks to be construed as payable to a person "or order."
First National Bank y. Nelson {Ala.), 16 So., 707.
41. Where a person deposits in bank money held by him in a fiduciary capacity,
mixing it with his own moneys, and afterwards draws checks against
his account, such checks will be applied first to the moneys belonging
to the drawer; and in such case the rule that checks will be applied to
the deposits in the order in which the deposits were made does not apply.
Heidelbach v. National Park Bank {Sup.), 33 N. F. S., 794.
42. Where a bank, in consequence of an error, fails to pay a depositor's check
when presented, but discovers the error and pays the check five days
later, the depositor can recover only nominal damages against the bank.
Burroughs v. Tradesmen's National Bank {Sup.), 33 N. Y. S., 864.
43. A tender of bank checks payable in sixty and ninety days is not a tender
of payment. Cady v. Case- {Wash.), 39 P., 375.
44. A check, unless objected to, is a sufficient tender. Wright v. Robinson et
al., 32 N. Y. S.,463.
45. The crediting by a bank of the amount of a check to the account of a
depositor indebted to it does not make the bank a bona fide holder for
value of the check. First National Bank v. Nelson {Ala.), 16 So., 707.
46. The indorser of an ordinary check is released from liability thereon where
the indorsee might have presented the check for payment within twentyfour hours, but sent the same by a circuitous route, so that it was not
presented until five days, when payment was refused. 55 N. W., 1064; 37
Nebr.,500, affirmed; First National Bank v.Miller (Nebr.),62N. W., 195.
47. The indorsement of a bank draft by the payee to the order of a fictitious
person in good faith, and believing him to be real, is not in law an
indorsement to bearer, such not being the intention of the indorser; and
the indorsement of the name of the fictitious indorsee by a third person
without authority is a forgery, and does not protect the bank in payment
of the draft. Chism v. First National Bank (Tenn. Sup.), 36 S. W., 387.
48. A bank can not refuse to cash a check, although it knows that the check
was drawn in payment of a bet made in violation of a law on the result
of an election; and the fact that a check was so cashed is not ground on
which the drawer can recover the amount from the bank. McCord v.
California National Bank {Cal.), 31 P., 51.
49. The giving of a check by a bank depositor for the full amount of the
deposit does not operate as an assignment to the holder of the check, so
as to enable him to enforce payment thereon against the bank prior to
its acceptance of the check. First National Bank v. Clark {N. Y. App.),
32N.E.,38.
50. Title to a check payable to H. B., intended for N. B., can not be obtained
under indorsement by H. B., made fraudulently, though the indorsee
be deceived and pay value. Sioux Valley State Bank v. Drovers' National
Bank, 58 III. App., 395.
51. Where a bank discounts a draft in advance of its acceptance, it is not a
bona fide holder for value unless it has funds in its hands which it
releases or fails to withhold from the drawer because of the acceptance.
First National Bank v. Wills Creek Coal Co. {Mich.), 68 N. W., 232.
52. The holder of a check can not sue the bank on which it is drawn until
such check is accepted by the bank. Commercial National Bank v. First
National Bank {N. C.),24 S. E., 524.
53. A stipulation, stamped on the face of a check, that it will not be paid to a
certain company or its agents, is valid. Ib.
54. A draft was drawn payable to the order of the drawer, and by it indorsed
specially to the defendant corporation, and by defendant indorsed in
blank, and cashed by the plaintiff bank for another corporation, whose
indorsement was written above the indorsement of the defendant. Held,
that the position of the indorsements was not notice to plaintiff that
defendant was an accommodation indorser. Marshall National Bank v.
O'Neal {Tex. Civ. App.), 34 S. W., 344.



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

CHECKS. See Certification of checks; collections—Continued.
55. Where the payee of a check deposited the same with a bank for collection,
and said bank sent it for collection to defendant, and defendant received
from the bank upon which the check was drawn a draft in payment
thereof, defendant is not liable to the payee for the conversion of said
draft, in the absence of a demand therefor, and neither a telegram sent
to defendant by the drawer of the check, instructing defendant to hold
the draft, nor an inquiry by the bank upon which the check was drawn
as to whether defendant could hold the draft, is a sufficient demand on
behalf of said payee. 26 N. Y. S.,1035 affirmed: Castle v. Corn Exch.
Bank (N. Y. App.), 42 N. E., 518.
56. The holders of a draft before maturity are not bound by the acts of indorsers
^,
after the transfer. Bloch v. Creditors (La.), 16 So., 267; St. Louis
*
National Bank v. Bloch. Ib.
57. The payee of a forged check who indorses it and receives full value therefor guarantees its genuineness; and as to him the indorsee is under no
obligation to discover that it is forged, and may recover back the money
so paid. Birmingham National Bank v. Bradley (Ala.), 15 So., 440.
58. Bank checks are due on presentation, and are not entitled to days of grace.
Wood River Bank v. First National Bank (Nebr.), 55 N. W., 239.
59. Where the indorsee of a draft accepts the drawee's check in payment,
instead of cash, and neglects to present it for payment or certification
until the next day, and the check is dishonored in consequence of the
delay, and the draft has to be protested for nonpayment, the drawer cannot be held liable. Merchants' National Bank of the City of New York v.
Samuel et al., 20 Fed. Rep., 664.
60. Plaintiff accepted in good faith a check in which the indorsement of the
payee's name was a forgery, and after indorsing the same delivered it to
defendant bank for collection. Defendant collected the check and paid
the money to plaintiff, but on subsequently discovering the forgery paid
back such amount to the bank on which the check was drawn without
notifying plaintiff of the forgery or that it had paid back the sum collected. Held, that any fund belonging to plaintiff subsequently coming
into possession of defendant could be legally applied to the reimbursement of the latter for the amount advanced on the check, plaintiff being
chargeable with notice of the forgery. Green v. Pur cell National Bank
{Indian Ter.),37 S. W., 50.
61. A regular customer of a bank sent to it a check with an unrestricted
indorsement, and directed it to be placed to his credit. The check was
received and credited and the customer so advised. On the day of
receipt the bank sent the check to its correspondent for collection, paid a
check drawn by the customer from a part of the proceeds of the credit,
and closed its doors as insolvent. Held, that the check was not deposited
for collection, but as cash for immediate use. Williams v. Cox (Tenn.
Sup.), 37 S. W.,282.
62. Where a bank accepts a check on another bank as cash, giving therefor
a sum of money, a certificate of deposit, and the balance in a credit to
the account of a third person, such transaction creates merely the relation of debtor and creditor between the bank and its customer, and the
latter can not, on the insolvency of the bank, follow up the check, or its
proceeds, as his property. Friberg v. Cox (Tenn. Sup.), 37 S. W., 283.
63. Where a check drawn on another bank is deposited in an insolvent bank
without any special instructions, and it is not placed to the customer's
credit, and immediately thereafter the receiving bank fails, and the
check goes into the hands of the bank examiner and is afterwards collected, the proceeds are the property of the customer, and not of the
bank. Showalter v. Cox (Tenn. Sup.), 37 S. W., 286.
64. The holder of a check can not sue the bank on which it is drawn, unless
it has been accepted by the bank. Pickle v. People's National Bank
(Pickle v. Muse), 12 S. W., 919; 88 Tenn., 380.
65. A Philadelphia bank, indebted to a New York bank for collections made,
sent its cashier's check on another New York bank, with which it had
a sufficient deposit for the amount, which check was duly paid through
the clearing house. Held, that the transaction constituted a complete
appropriation of the fund to the creditor bank, and its ownership was
not affected by its restoring the money to the paying bank on its
demand, made on the same day, on learning of the suspension of the
drawer of the check, in accordance with the rules of the clearinghouse,
for the protection of the paying bank in case the payment should




REPORT OF THE COMPTROLLER OF THE CURRENCY.

141

CHECKS.

See Certification of checks; collections—Continued.
prove to have been illegal.—National Union Bank v. Earle (C. C), 93
Fed. Rep., 330.
66. The several payments and remittances made to the Chemical Bank by the
Capital Bank before its insolvency were not made in contemplation of
insolvency, or with a view to prefer the Chemical Bank. These checks
and remittances were not casual, but were plainly made under a
general agreement that remittances were to be made by mail, and that
their proceeds were not to be returned to the Capital Bank, but were to
be credited to its constantly overdrawn account; and when letters containing them were deposited in the post-office, such mailing was a
delivery to the Chemical Bank, whose property therein was not destroyed
or impaired by the insolvency of the Capital Bank, taking place after
the mailing' and before the delivery of the letters containing the
remittances.—McDonald, receiver, v. Chemical National Bank, 174
U. S., 610.

CIRCULATION:

1. The circulating notes of a national banking association are valid though
they do not bear the imprint of the seal of the Treasury. Such imprint
was intended to be simply evidence of the contract, and forms no part
of the contract itself. United States v. Bennett, 17 Blatch., 357.
2. The State can not tax the circulating notes of national banking associations. Home v. Greene, 52 Miss., 452.
3. The State, until forbidden by Congress, has the power to tax national-bank
bills. Lilly v. The Board of Commissioners of Cumberland County, 69
N. C., 300.
4. The circulating notes of national banks, known as " national currency,"
are not exempt from taxation by a State. Board of Commissioners of
Montgomery County v. Elston, 32 Ind., 27; 1. N. B. C, 425.
5. The power of a State to tax the circulation of the national banks depends
upon whether such circulation is for the use of the United States Government or for private profit. Congress can protect the circulation of
those banks by forbidding the States to tax it. Until this is done the
States have a right to tax it. Ruffln v. Board of Commissioners, 69
N. C, 498; IN. B. C.,806.
6. The tax of 10 per cent imposed by the act of July 13, 1866 (14 Stat. at
Large, 146, sec. 9), on the circulation of State banks used for currency
and paid out by the national or State banks is not repugnant to the Constitution, either on the ground that the tax is a direct tax, which must
be apportioned among the several States, or that the act impairs franchises granted by the State. Veazie Bank v. Fenno, S Wall., 533; 1
N. B. C, 22.
7. Congress having undertaken, in the exercise of undisputed constitutional
power, to provide a currency for the whole country, may constitutionally
secure the benefit of it to the people by appropriate legislation, and to
that end may restrain by suitable enactments the circulation of any
notes not issued under its own authority. Ib.
8. The provision of section 3413 of the national-bank act, that *' every national
banking association, State bank or banker, or association, shall pay a tax
of 10 per cent on the amount of notes of any town, city, or municipal
corporation paid out by them " is constitutional, even where its effect is
to tax an instrumentality of a State. Merchants' National Bank of Little
Rock v. United States, 101 U. S., 1; 2 N. B. C., 100.
9. The circulating notes of national banking associations are included in the
phrase " United States currency " when used in a penal statute. State
v. Gasting, 23 La. Ann., 1609.
COLLATERAL SECURITIES:

1. A national banking association may take stock of a corporation as collateral security for a loan. Shoemaker v. The National Mechanics' Bank,
2 Abb. U. S., 416; IN B. C, 169.
2. And it may take for such purpose the stock of another national banking
association. National Bank v. Case, 99 U. S., 628.
3. A national banking association may take a pledge of personal chattels as
security for a loan. Pittsburg Locomotive and Car Works v. State
National Bank of Keokuk, 2 Cent. L. J., 692; 1 N. B. C, 315.
4. A national banking association may take as collateral security for a loan a
warehouse receipt for merchandise. Cleveland, Broivn & Co. v. Shoe man, 40 Ohio St., 176.


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REPORT OF THE COMPTROLLER OF THE CURRENCY.

COLLATERAL SECURITIES—Continued.

5. Where stockholder borrows money from bank and gives as security certificate of his shares of its stock, he is not entitled to recover when, on
nonpayment of loan, the bank sold his stock and applied proceeds to his
credit. First National Bank of Xenia v. Stewart, 107 U. S., 676.
6. Creditor of insolvent bank has the right to prove and have dividends upon
his entire claim, irrespective of collateral security he may hold. Peoples
v. Remington, 121 N. Y., 328.
7. A pledgee of stock in a private corporation holding the certificates as collateral security, and having had the transfer duly entered on the books
of the corporation, is liable to creditors as the owner thereof on the subsequent insolvency and dissolution of the corporation, and this liability
is governed by the law in force when their debts were created (Rev.
Code, 1867, sec. 1760), although it had been repealed or abrogated before
the stock was transferred to him. National Commercial Bank v.
McDonnell, 92 Ala., 387.
8. It is the duty of a receiver, if a secured debt is so reduced by dividends
that the security will more than pay it, to redeem the security for the
benefit of his trust. West v. Bank of Rutland, 19 Vt., 403; Miller's
Estate, 82; Penn. St., 113; Bates v. Paddock, 7 W. Rep., 222.
9. A sale of shares of stock pledged as collateral security, without notice to
the pledgor, is not a conversion, when it appears that the stock was
knocked down to a nominal purchaser without his knowledge or consent,
and that the (certificates, though changed into his name, were never
delivered to him, but were retained by the pledgee until after a subsequent sale pursuant to notice. Terry v. Birmingham National Bank, 93
Ala., 599.
10. For an unauthorized sale of stock pledged as collateral security amounting to a conversion, the pledgor is entitled to recover, as damages, the
market value of the stock at the time of the sale, with interest to the
day of the trial; and the jury may, in their discretion, allow the highest
market value at any time between the sale and the trial. Ib.
11. This suit was brought to recover the value of certain bonds, which, it is
claimed, had been left at the bank as collateral security for money which
the bank might, from time to time, advance the plaintiff. The plaintiff
testified that on July 1, 1868, he went to the bank to obtain a loan upon
this security; that the bonds could not be found, but that he received
the money. The defendant requested the court to instruct the jury that
' ' if the bonds were not found by the bank when the note of July 1 was
. offered and were not afterwards found, the jury are not authorized to
find that they were taken and held as collateral security for the note of
July 1." Held, that this instruction was properly refused. Dearborn v.
The Union National Bank of Brunswick, 61 Me., 369.
12. A bank is bound to take only ordinary care of United States bonds pledged
to it as collateral security for the payment of a note discounted by the
bank. Jenkins v. National Village Bank of Bowdoinham, 58 Me.,275.
13. A writing, executed by the cashier, acknowledging the receipts by the
bank, " t o be returned to him on the payment of his note in four months,
dated May 9, 1866," is not a contract which increases the common-law
liability of the bank, even if the cashier had the authority to do so. Ib.
14. Securities taken by sureties for their indemnity inure to the benefit of the
creditor. Thornton v. National Exchange Bank, 71 Mo., 221; 3 N. B. C,
513.
15. Creditors holding collateral security are liable for negligence in realizing
thereon. National Bank of Jefferson v. Bruhn et al. 64 Tex., 571.
16. In an action fry a pledgee upon the debt secured by the pledge he is not #
required to account for nonnegotiable securities pledged to him by
defendant, in the absence of any allegation or proof that he has lost or
misappropriated them. Marberry v. Farmers and Mechanics' National
Bank, 26 S. W.,215.
17. The cashier of a bank has no authority to assign collaterals belonging to
himself, which were given to secure a loan to another person for the
cashier's benefit. Merchants' National Bank v. Demere, 19 S. E., 38.
18. One who borrows money from a bank for the cashier thereof, on collaterals
belonging to the cashier, is not entitled to credit for amount of such
collaterals after they have been wrongfully withdrawn and converted
by the cashier. Ib.
19. When shares of stock in a private corporation are pledged as collateral
security for a debt, and default is made in the payment of the debt at



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143

COLLATERAL SECURITIES—Continued.

20.

21.

22.

23.

24.

25.

26.

27.

28.
29.

maturity, the pledgee may file a bill in equity to foreclose the pledge by
a sale under the order of the court, or he may exercise the implied power
to sell without resorting to judicial jyroceedings; but if he elects to pursue the latter remedy, the sale must be at public auction, in the absence
of a special agreement, and reasonable notice must be given to the pledgor;
and if he sells privately, without notice, becoming himself the purchaser,
the relation between him and the pledgor is not thereby dissolved.
Sharp v. National Bank of Birmingham, 87 Ala., 64.4.
If the pledgor, when notified of the irregular or unauthorized sale, accepts
its benefits, giving his note for the balance of his debt remaining unpaid,
tnis is presumptively a ratification of the sale, and he can not afterwards
impeach it; but if he acted in ignorance of the fact that the pledgee
himself was the purchaser, and did not intend to make an absolute and
unconditional ratification without regard to the facts attending the sale,
he may disaffirm it within a reasonable time after discovering that the
pledgee was the purchaser. Ib.
If a part owner of certificates of stock pledges them, with the consent of
the other owner, as collateral security for his own debt, and they are
converted by the pledgee, the pledgor is entitled to recover as if he were
the sole owner, the pledgee being estopped from denying his absolute
ownership. Ib.
Rev. St., sec. 5242, which declares all deposits, all transfers of deposits,
and all payments of money made by a national bank after an act of
insolvency, or in contemplation thereof, to be null and void, does not
render illegal the retention of a balance standing to the credit of an
insolvent national bank with a correspondent on the day of its failure
which has been pledged for the purpose of securing loans made by the
correspondent to the insolvent bank. Bell v. Hanover National Bank,
57 Fed. Rep., 821.
Where a deposit with a correspondent has, long prior to the commission
of the act of insolvency by a national bank, been pledged as collateral
to secure the payment of loans made to the insolvent by its correspondent, neither the subsequent insolvency of the bank, nor the appointment of the receiver, destroys the lien of the correspondent, or its rights
to dispose of the pledge to satisfy the debt secured. Ib.
Creditors of an insolvent national bank can not be required, in proving
their claims, to allow credit for any collections made after the date of
the declared insolvency from collateral securities held by them. Chemical National Bank v. Armstrong, 59 Fed. Rep., 872.
Rev. St. U. S., sec. 5242, which prohibits all transfers by any national
banking association made after the commission of an act of insolvency,
or in contemplation thereof, with a view to the preference of one creditor over another, is directed to a preference, not to the giving of security when a debt is created; and if the transaction be free from fraud in
fact, and is intended merely to adequately protect a loan made at the
time, the creditor can retain property transferred to secure such loan
until the debt is paid, though the debtor is insolvent, and the creditor
has reason at the time to believe that to be the fact. Armstrong v.
Chemical National Bank, 41 Fed. Rep., 234.
The plaintiff, a judgment creditor of the defendant, had the steamboat
Kinta seized. The defendant had pledged it to the Third National Bank
of New York, but remained in possession for his own account, and never
completed the pledge by an actual delivery to the pledgee. The act of
pledge was drawn up in the common-law form, and was intended to
operate as a chattel mortgage. It contains, as to the form of the act,
the essentials of an act of pledge. Citizens' Bank of Louisiana v.
Janin (Third National Bank of New York, Intervene?*), 15 So., 4'?1, 46
La. Ann.
The Third National Bank, as pledgee, claimed the proceeds of the sale.
The property, when it was seized, was in the possession of the subtenant.
It is not proved that the plaintiff colluded with the defendant and
thereby gained an improper advantage. Pledge is not made perfect by
the consent of the parties. It requires absolute possession. The alleged
pledgee never was in possession during the tenure of the defendant. Ib.
It (the Third National) could not obtain possession through the agency
of the sublessee, who held possession for his lessor, the defendant. Ib.
A pledge can not be made perfect by the sublessee's delivery of possession
without the consent of his lessor. Ib.




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REPORT OF THE COMPTROLLER OF THE CURRENCY.

COLLATERAL SECURITIES—Continued.

80. The obligation of the lessor to account for the property, and whatever
revenues were realized therefrom, binding between him and his creditor, the Third National Bank—the property not having been delivered—
did not aifect his other creditors, who could seize the property in his
possession, or in that oi: his sublessee, who held possession for his
lessor. Ib.
31. In an action by a bank on a promissory note, it appeared that the defendant delivered as security the promissory note of S., to which was annexed
as collateral security a certificate of corporate stock in the name of S.;
that defendant, with the consent of S., agreed that the bank might sell
the stock and take in place of the note of S. the note of the purchaser,
secured by the same stock reissued in the name of the purchaser; and
that the bank sold the stock and took in payment notes secured by the
stock, payable to itself, with which notes defendant had no connection,
and over which he had no control. Held, that as the bank had converted
the stock to its own use, defendant's note must be credited with the
value of the stock at the time of conversion. Paulyv. Wilson, 57 Fed.
Rep., 548.
32. Plaintiff had in his possession collateral security for a debt due from a
third party, who also owed the defendant. Held, that an agreement by
the parties in interest that any sum received on such collateral security
in addition to the indebtedness first secured thereby should be applied
on the debt due from defendant operated as an equitable assignment to
defendant of such surplus, if any there should be. Second National
Bank v. Sproat, 56 N. W., 254.
33. A clearing-house committee, created by the agreement of several banks,
which receives deposits from such banks of securities at a fixed ratio on
their capital stock, and issues certificates therefor to be used in paying
balances, becomes an owner, for value, of the securities. Philler v. Patterson (Pa. Sup.), 32 A., 26.
34. The fact that a transfer of a bill of lading to a bank as security was,- after
its doors were closed for the day, for the purpose of deposit and check
does not affect its right as against the vendor who stops the goods in
transit, though, before its doors are again opened, it learns of the insolvency of the vendee. First National Bank v. Schmidt (Colo. App.), 40
P., 479.
35. As against the right of a vendor to stop goods in transitu, a bank to which
the vendee has transferred the bill of lading as security is a holder for
value, even though the transfer was for a preexisting debt, and not for
a loan made on the promise of such transfer. Ib.
36. Where the debt for which a note was pledged is paid pending an action on
the note by the pledgee, the latter may continue the action, subject to
all equitable defenses, holding the proceeds as trustee for the pledgor.
First National Bank v. Mann (Tenn.), 27 S. W., 1015.
37. The transferee of a note before maturity as collateral security for a loan
made in good faith is a bona fide holder to the extent of the loan. Pearce
& Miller Engineering Company v. Brouer (City Ct. N. Y.), 31 N. Y. S.,
195.
38. Where the holder of an indorsed note has exchanged collateral, held to
secure such note, without the indorser's consent, the measure of the
indorser's damages is the difference between the value of the collateral
originally held and that for which it is exchanged, at the time of the
exchange. Nelson v. First National Bank of Killingly, 69 Fed. Rep., 798.
39. The fact that a creditor's claim is secured by mortgage or otherwise does
not affect his right to prove for the full amount of the claim, nor does
the fact that he has realized part thereof out of the collateral since the
date of the receivership; but in the latter case he is entitled to dividends
only until the balance of his debt is satisfied. New York Security &
Trust Co. et al. v. Lombard Inv. Co. of Kans. et al., 73 Fed. Rep., 537.
40. The acceptance by a payee, as collateral of the note of a third party secured
by mortgage payable after maturity of the original note, does not establish an extension of the time of payment of the original note to the date
when the collateral note becomes payable, in the absence of evidence of
an express agreement therefor. Fisher v. Denver National Bank (Colo.
Sup.), 45 P., 440.
41. One holding collaterals as security for a debt due at a certain time, and
authorized by his contract to sell on maturity of the debt, need net



REPORT OF THE COMPTROLLER OF THE CURRENCY.

145

COLLATERAL SECURITIES—Continued.

42.

43.

44.

45.

46.

47.

demand payment before selling. Franklin National Bank v. Newcombe
(Sup.), 37 N. Y. S.,271.
One having collaterals as security for a note, which, by the terms of his
contract he was at any time after maturity of the note at liberty to sell
at private or public sale, with or without notice, can not be held liable
by reason of selling them when the market was in poor condition, they
having been sold two weeks after maturity of the note, at public sale,
after notice. Franklin National Bank v. Newcombe (Sup.), 87 N. Y. S., 271.
A person having notes in his possession as collateral security for a debt is
bound, so far as the general owner of the notes is concerned, to use reasonable diligence to protect the security so held, and see that it is not
outlawed. Northwestern National Bank v. J. Thompson <& Sons Manufg
Co.(C.C.A.),7lF.,113.
Where a debtor assigns to different persons assets as collateral security for
their claims, after such claims are satisfied, from whatever source, if
any balance from such assets remain, they are bound to return such
balance to the debtor or to his representative. Whittaker v. Amwell,
National Bank (N. J. Ch.), 29 A., 203.
The maker of a note held by plaintiff gave to one J., who was accommodation indorser thereof, a second note, indorsed by defendant, to secure
J. against loss by reason of his indorsement, and J. transferred the collateral note to plaintiff. Held, that plaintiff could sue on the collateral
note, though J. had paid nothing on account of his liability as indorser,
a creditor being entitled to all collaterals given by the principal debtor
to his sureties. Merchants & Manufacturer^ National Bank v. Cummings (Sup.), 29 N Y. S., 782.
A judgment creditor realized the amount of his demand from collateral
security. The debtor notified him that the amount due was disputed,
and required him not to apply the collateral to its payment until the
amount was determined. The plaintiff, notwithstanding, applied the
funds and satisfied the judgment of record. Held, that the defendant
was entitled to have the entry of satisfaction struck off and be admitted
to defend. Guthrie v. Reid, 107 Penn. St., 251; 3 N. B. C., 751.
A court has no power to order or authorize the receiver of a national bank
to sell at private sale securities held by the bank as pledgee. In re
Earle, 92 Fed. Rep., 22.

COLLECTIONS: See Checks; Certified checks.
1. Where the holder of a bill of exchange, payable at a distant place, deposits
it with a local bank for collection, he thereby assents to the course of
business of banks to collect through correspondents, and the correspondent of the local bank to which the bill is forwarded becomes his
agent and is responsible to him directly for negligence in failing to
present the bill for payment within the proper time. Guelich v. The
National State Bank of Burlington, 56 Iowa, Jfilf..
2. The payee of a check deposited it for collection with bank A on the same
day it was made. The bank presented it for payment the next day
shortly before 11 o'clock, and the drawee's check on bank B, only a few
blocks distant, was taken in payment. The drawee became a bankrupt
at 1 o'clock. Several checks given after this, one by the drawee on bank
B, were paid before 1 o'clock. Before 3 o'clock bank A presented the
check in question for payment, which was refused; whereupon it immediately went to the drawee, and, after recovering the original check,
protested it. Held, that the drawer of the check wTas not liable thereon.
Anderson v. Gill,29 A.,527.
3. Where the payee of a check makes a demand on the drawee and receives
something other than cash in payment, he can not, by making a second
demand, tho:igh within the time allowed for presenting a check, undo
the first, and render the drawer liable on the bankruptcy of the
drawee. Ib.
4. Two bills of exchange, belonging to the plaintiff at Chicago, were* indorsed
for collection to a bank at Atchison, Kans., and by said Atchison bank
to a bank at Kansas City, Mo., and by the latter to defendant, a bank at
Hutchinson, Kans. Held, that they remain the property of plaintiff, all
the indorsements being restrictive. First National Bank of Chicago v.
Reno County Bank, 1 McCrary, 491.

CUR

99

10




14G

REPORT OF THE COMPTROLLER OF THE CURRENCY.

COLLECTIONS: See Checks; Certified checks.—Continued.
5. An indorsement on a bill of exchange directing the drawee to pay to
another " on account of " the indorser, or ' ' for collection,"4s a restrictive
indorsement, the effect of which is to restrict the further negotiability
of the bill, and to give notice that the indorser does not thereby give
title to the bill or to its proceeds when collected. Ib.
6. Although there may be no privity between the owner of the bill and the
last indorsee, yet, if the latter collects the bill, he is bound to pay the proceeds to the owner, and the latter may recover in assumpsit on the
ground that the defendant has property in his possession which belongs
to the plaintiff and refuses to pay the same over. Ib.
7. A bank receiving an indorsed note before maturity for collection is required
to take the proper steps to fix the liability of the indorser. West v. St.
Paul National Bank, 56 N. W.,54; 64 Minn., 466.
8. In an action by the owner of the note for neglect of that duty, resulting
in the discharge of the indorser, the question of the solvency of the
maker is material as affecting the measure of damages. 1b.
9. Insolvency may be shown prima facie by proof of general reputation.
Proof of insolvency within a reasonable time after the maturity of the
note held admissible. Ib.
10. A bank receiving for collection, from a correspondent, checks drawn upon
it by a customer, with instructions to protest in case of nonpayment, is
required, in case payment is refused for want of funds, to give notice to
the bank from which they were received not later than the next day
after dishonor; and when they are held for two days in order to enable
the drawer to provide funds for payment thereof a jury will be warranted in finding that the bank intended to accept them and become
liable thereon. Wood River Bank v. First National Bank of Omaha,
55 N.W.,239.
11. The indorsement of a draft to a bank " for collection," accompanied by a
credit of the amount to the indorser's account, does not "transfer title to
the bank, and correspondent of the bank who collects draft for it is
responsible therefor to indorser. Tyson v. Western National Bank of
Baltimore, 26 All. Rep.,520.
12. The Winters National Bank sent to the Fidelity Bank a note of $2,000 for
collection and indorsed " Pay Fidelity National Bank, Cincinnati, Ohio,
or order, for collection for account of the Winters National Bank, Dayton, Ohio, J. C. Keber, cashier." The Fidelity Bank forwarded it to
the Drovers and Mechanics' Bank, which received payment thereof at
maturity. Before the Fidelity Bank received notice and remittance of
the $2,000 it become insolvent and went into the hands of a receiver,
who took the $2,000 and credited the Winters Bank therewith. Held,
that the Fidelity Bank did not own the note, and the Winters Bank was
entitled to the full $2,000 as against the Fidelity Bank's receiver. In re
Armstrong, 83 Fed. Hep., 405.
13. Plaintiff sent to F. bank'a draft indorsed "For collection," accompanied
with instructions to " collect and credit proceeds." F. bank sent the
draft to the defendant and the latter collected it, received the proceeds,
and credited them to tho F. bank, in accordance with the usual course
of business between the F. bank and the defendant, and notified the F.
bank of the credit. The F. bank suspended business before crediting
plaintiff with the proceeds, but after they had been collected and after
it had received notice of the credit. After the suspension of the F. bank
the receiver appointed over its affairs credited plaintiff with the £jroceeds of the draft on the books of the bank. Held, that the indorsement
" For collection " was notice to the defendant of the qualified title to the
F. bank, and defendant could not acquire any better title to the draft or
the proceeds than that of the F. bank, and could not, as against the
plaintiff, apply the proceeds to an account owing the defendant from
the F. bank, and that the defendant could only defeat an action brought
to recover the proceeds in its hands by showing that the draft or its proceeds belonged to the F. bank. First National Bank of CireleviUe v.
Bank of Monroe, 33 Fed. Rep., 4O8.
14. Held, further, that the relation of principal and agent continue between
the plaintiff and the F. bank so long as the latter did not assume the
relation of primary debtor to the plaintiff for the proceeds of the draft;
that the plaintiff not having been credited with the proceeds by the F.
bank, the relation between them remained that of principal and agent,
and not debtor and creditor; and that the F. bank, not having credited



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147

COLLECTIONS. See Checks; Certified checks—Continued.
the plaintiff with the proceeds while it was a going concern, could not,
by doing so subsequently, change the existing relation. 15.
15. Held, in an action brought by the plaintiff against the defendant to recover
the proceeds of the draft, the defendant, not having remitted the proceeds to the F, bank, was liable to the plaintiff for the amount. Ib.
1G. Plaintiffs sent to a certain bank a bill of exchange indorsed to said bank
for collection. At the time the bank received the bill of exchange it was
insolvent to the knowledge of the managing officer, and on that day, or
following morning, it failed Prior to the failure it indorsed the bill of
exchange to defendant bank, which collected it and kept the proceeds,
crediting the insolvent bank, which was indebted to it, with the amount
thereof. Held, that the first bank acquired no title because of its fraud
in not disclosing its insolvency, and defendant had no better title, as
plaintiffs' indorsement showed that the bank was merely plaintiffs' agent
to collect the proceeds. Peck et ah v First National Bank, 43 Fed.
Rep,, 856.
17. Plaintiff sent to defendant's bank paper indorsed "For collection and'
immediate return " to plaintiff, and the paper was collected and the proceeds mingled with other moneys of the bank, instead of forwarded to
plaintiff. The bill contained an uncontroverted allegation that defendant's bank, at all times subsequent to the collection and at the time of
defendant's appointment as receiver, had on hand cash to a greater
amount than that due plaintiff. The bill asked to have the balance due
plaintiff paid in full, on the ground that the bank by receiving the paper
for collection and immediate return became a trustee, and that either
its entire property or the money in its vaults became impressed with
the trust. Held, that if the mingling of the funds was a breach of trust
it was a conversion, and plaintiff became a simple contract creditor,
with no preference at law. Philadelphia National Bank v. Doivd, 88
Fed. Rep,, 172.
18. It was immaterial whether or not the bank stood in a fiduciary capacity to
plaintiff, as the facts stated in the bill showed that the money collected
could not be traced into any specific investment or fund, but had been
indistinguishably mingled with the general assets. Ib.
19. By agreement and custom the Fidelity Bank received drafts from its correspondent bank at E., and credited them to it as cash, with the understanding that any draft which was unpaid should be charged back to
the correspondent. The latter forwarded drafts, which were credited
to it but were not collected before the Fidelity Bank failed. The drafts
were paid after the appointment of a receiver and the moneys actually
came into Ms hands. The drafts were indorsed payable to the Fidelity
Bank '' for collection " for the bank at E. Held, that as the drafts were,
when received, credited as cash to the bank at E., which had the right at
once to draw against them, the indorsement for collection did not affect
the result, and the bank had only the rights of a general creditor. First
National Bank of Elkhart v. Armstrong, 89 Fed. Rep., 231.
20. A draft sent to a bank specially indorsed for collection was paid by the
drawee by check, which the bank collected through the clearing house.
A memorandum was placed with the bank's cash, to indicate that tho
proceeds of the draft was the property of the sender. The bank was
closed the next morning, and the receiver credited such proceeds to the
sender of the draft on the books of the bank. Held, that the fund was
not so mingled that it could not be traced and identified, and that the
sender could recover the same. First National Bank of Montgomery v.
Armstrong, 86 Fed. Rep., 59.
21. Checks and drafts sent from one bank to another were indorsed " for collection," and credited " subject to payment," according to the dealings
between the banks. Part of them were paid to the receiver of the latter
bank after its failure, and the balance were credited to it by the payors.
Held, that the amount paid the receiver should be accounted for as a
trust fund but the balance as a general debt. First National Bank of
Wellston v. Armstrong, 4-2 Fed. Rep., 193.
22. The claimant bank sent to the F. bank a sight draft, drawn on a third party,
indorsed " p a y " F. bank, or order, "for collection for'" claimant bank.
It was the practice for the F. bank in its dealings with claimant to credit
the latter on the day of receipt for all drafts, checks, etc., sent for collection that were payable at sight or on demand, and the balance thus
created was subject to be drawn on; but if the paper was not paid it was




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REPORT OF THE COMPTROLLER OF THE CURRENCY.

COLLECTIONS. See Checks; Certified checks—Continued.
charged back to claimant. On receipt of the draft the F. bank notified
claimant that it has been credited, " subject to payment;" but the credit
was not drawn against nor were advances made on the faith of it.
Claimant merely kept a memorandum of its transmission for collection.
The F. bank sent the draft to its reserve agent, indorsed, for collection,
and the amount of it was counted as a part of the F. bank's reserve fund,
though this fact was not known to claimant. Held, that the indorsement being restrictive, the F. bank acquired no title to it, and that upon
the insolvency of the F. bank, before notification of the collection of
the draft, the claimant was entitled to the proceeds of it in the hands
of the collecting agent. Fifth National Bank v. Armstrong, Farmers'
National Bank et al., Interpleaders, 40 Fed. Rep., 46.
23. A bank which had received a draft for collection sent it to its correspondent
bank at the residence of the drawee, and the draft was paid to such correspondent. There were no mutual accounts between the two banks,
but it was the custom of the correspondent to remit the proceeds of collections at stated periods. Held, that until this remittance was made,
or the principal bank had given the original owner of the draft credit
for the avails, the original owner of the draft, as the owner of the proceeds thereof, was entitled to recover them from the correspondent bank.
National Exchange Bank of Dallas v. Beal, 50 Fed. Rep., 355.
24. Though the correspondent was the agent of the first bank, and payment to
it was to that extent a payment to the principal, yet until the proceeds
were actually remitted to such principal and mingled with its general
funds, or were so credited, the owner of the draft had the option to
decline to consider it his debtor and to claim the proceeds in the hands
of the agent. Ib.
25. Where the principal fails, and a receiver is appointed, he takes the proceeds of the draft, when remitted to him, subject to the same right of
reclamation by the owner that the latter had as against the agent. Ib.
26. Where, in such a case, there are mutual accounts between the two banks,
the right of the agent to set off the amount of the collection against the
principal's indebtedness to it can not be adjudicated in a suit in equity
between the owner of the draft and the principal without making such
agent a party. I b.
27. Checks deposited in a bank by its customers for collection do not at once
become the property of the bank; the bank continues to be the agent of
the customer until the collection of the check, which remains, in the
meantime, the property of the depositor. Balbaeh et al.v.Frelinghuysen,
Receiver, etc., 15 Fed. Rep., 675.
28. The rule is different where such checks are deposited to make good an
overdrawn account of the customer or when the amount deposited by
check is immediately drawn against; in that case the bank may hold
the deposit until the overdraft is made good from other sources. 1b.
29. The indorsement by the customer of a check, deposited for collection, is
only intended to put the paper in such shape that the bank may collect
it, and not to thereby pass the title to the bank. Ib.
30. The practice which has grown up among banks to credit deposits of checks
at once to the account of the depositor, and to allow him to draw against
them before the collection, is a mere gratuitous privilege, which does
not grow into a binding legal usage. Ib.
31. A, who for several years had kept an account with the Marine National
Bank of New York, on May 5, 1884, deposited a sight draft, dated that
day, and drawn by him on a corporation of Boston, Mass., which was
indebted to him in the amount of the draft. The bank was insolvent at
the time, but the draft was forwarded to its collection agent at Boston,
and paid May 7, after the bank had failed and closed its doors. On several previous occasions A had deposited similar drafts, and been credited therewith as cash, and they were treated by him as cash deposits.
On the occasion in question the bank credited plaintiff with the draft as
a cash item. Held, that the draft was not the property of A when paid
by the drawee, and that he was not entitled to recover the amount
thereof from the receiver. St. Louis & S. F, Ry. Co. v. Johnston,
Receiver, etc., ^7 Fed. Rep., 21$.
32. When a sight bill is credited by a bank to a customer as a cash item, with
the latter s assent, the transaction is equivalent to a discount of the bill
by the bank. Ib.
33. Where a check of a depositor is accepted by a correspondent bank in pay


REPORT OF THE COMPTROLLER OP THE CURRENCY.
COLLECTIONS. See Checks; Certified checks—Con tinned.
inent of a draft for collection, which charges the same to the drawee
and credits the drawer without separating the amount from its general
fund, it holds the money as agent for the drawer, who, after insolvency,
becomes a mere general creditor, notwithstanding the State constitution provides that '' depositors who have not stipulated for interest shall
for such deposits be entitled in case of insolvency to preference of payment over all other creditors." Anheuser-Busch Brewing Association
v. Clayton, 56 Fed. Rep., 759.
34. A bank in Ohio contracted with a bank in Pennsylvania to collect for it at
par, at all points west of Pennsylvania, and remit the 1st, 11th, and 21st
of each month. In executing this agreement the Pennsylvania bank
stamped upon the paper forwarded for collection, with a stamp prepared
for it by the Ohio bank, an indorsement " Pay to " the Ohio bank, " or
order, for collection for" the Pennsylvania bank. The Ohio bank
failed, having in its hands or in the hands of other banks to which it
had been sent for collection proceeds of paper sent it by the Pennsylvania bank for collection. A receiver being appointed, the Pennsylvania
bank brought this action to recover such proceeds. Held, first, that
the relation between the banks as to uncollected paper was that of
principal and agent, and that the mere fact that the subagent of the
Ohio bank had collected the money due on such paper was not a commingling of those collections with the general funds of the Ohio bank,
and did not operate to relieve them from the trust obligation created by
the agency, or create any difficulty in specially tracing them. Commercial Bank of Pennsylvania v. Armstrong, 148 U. S., 50.
35. Second, that if the Ohio bank was indebted to its subagent, and the collections when made were entered in their books as a credit to such indebtedness, they were thereby reduced to possession and passed into the general funds of the Ohio bank. Ib.
36. Third, that by the terms of the agreement the relation of debtor and creditor was created when the collections were fully made, the funds being
on general deposit with the Ohio bank, with the right in that bank to
their use until the time of remittance should arrive. Ib.
37. A bank received two drafts indorsed to it for collection, on account of the
drawers, against two of its depositors. After acceptance by the latter
the bank charged to each depositor's account the amount of the draft
accepted by him. Before remitting to the drawers the bank assigned,
having on hand cash sufficient to pay such drafts. Held, that the
drawers were not entitled to a preference as to the funds on hand at
the time the bank failed, where the assignee holds nothing which he or
such drawers can identify with the drafts or trace as a payment of them.
Freiberg v. Stoddard, 28 Atl. Rep., 1111.
38. A national bank collected a note for plaintiff by accepting a draft for the
amount on another party, which it forwarded to its correspondent for
collection, and at the same time sent plaintiff a draft on the same correspondent as a remittance of the proceeds of his note. The correspondent received the money on the draft, sent it for collection, but before
plaintiff's draft was paid by the correspondent the bank failed. Held,
that the bank was only agent for plaintiff, and that the money derived
from his note was a trust fund, which did not become a part of the
bank's assets. Foster v. Rincker, 85 P., 470.
39. B forwarded to bank a draft for collection. On July 22,1893, bank made
collection, and the same day forwarded its draft on New York. On
July 26 bank failed, and a receiver was appointed. Draft was presented
after the failure and payment refused. B brought suit to secure a preference in payment. Held, that when a draft is forwarded to a bank for
collection, in the absence of instructions to the contrary, it is with the
understanding that upon collection the title to the proceeds shall vest
in the collecting bank, and that said bank shall remit to its correspondent the equivalent of such proceeds by the system of exchanges established by the universal custom among banks, and when this has been
done no preference can arise. Bowman et al. v. Clark et al.,38 P., 211.
40. Where one deposits a draft with a national bank and the bank sends it to
an agent for collection, who collects it, and the bank fails before receiving the avails, having been insolvent at the time of the deposit, the
depositor may rescind the transaction for fraud and recover the avails
from the agent. Craigie v. Smith, 14 Abb. N. C, 409; 3 N. B. C, 679.



150

REPORT OF THE COMPTROLLER OF THE CURRENCY.

COLLECTIONS. See Checks; Certified checks—Continued.
41. Plaintiff sent a draft to a bank for collection. The bank collected it and
then passed into the hands of a receiver without remitting. The bank
had previously made similar collections for plaintiff, the proceeds of
which were always remitted to him promptly and never credited to him
as a deposit. Held, that plaintiff was entitled to be paid the entire proceeds of the draft out of the bank assets in the receiver's hands, since
the bank was his trustee and not his debtor. Hunt v. Townsend, 26
S. W.,310.
42. Under an agreement between plaintiff bank and the H. bank that the
latter should collect notes and checks forwarded it by plaintiff for a
commission and remit daily, the relation of principal and agent as to
any paper ceased on collection, and the relation of creditor and debtor
as to cash immediately arose. First National Bank of Richmond v.
Davis, 19 S. E., 280.
43. On failure of the H. bank, it being shown that its cashier had no knowledge of its insolvency till the failure, it is not chargeable as for a conversion of funds of plaintiff which it has mingled with its own funds,
since, in the absence of such knowledge on the cashier's part, the contract, with its necessary implication as to the disposition to be made of
plaintiff's money on collection, remained in force till the failure. Ib.
44. Where plaintiff and defendant banks for several years had acted as agents
for each other in the collection of checks, notes, and drafts, and where
plaintiff sent defendant a note "for collection and credit" which on
maturity was paid by a check and credit was immediately given on the
books, but defendant failed and the check passed into the hands of a
receiver. Held, that in view of the course of dealing the two banks
stood in the relation of debtor and creditor with respect to the amount
of the check, and it became part of the assets of the bank.
Franklin
County National Bank v. Beat, 49 Fed.. Rep., 606.
45. Whether the title to a check deposited with a bank passes to the bank
before collection, so as to immediately create the relation of debtor and
creditor between it and the depositor is a question of fact, depending
upon the circumstances and course of dealing in each particular case.
City of Somerville v. Beal, 49 Fed. Rep., 790.
46. Where a bank, in accordance with its custom, credited checks deposited by
a customer at the close of each day's business, retaining the right to
subsequently charge off the same if returned unpaid from the clearing
house, and the bank became insolvent on a succeeding day, title in the
checks passed to the bank so as to create the relation of debtor and
creditor. Ib.
47. Where a national bank collected all papers sent to it by complainant under
an arrangement which constituted the bank the agent of complainant,
the latter can recover, on the ground of a trust, from a receiver of the
bank such portion only of the proceeds of its paper sent to the bank as
it shows has passed into the receiver's hands, either in its original or
some substituted form. Commercial National Bank v. Armstrong, 39
Fed. Rep., 684.
48. Where checks and drafts sent from one bank to another indorsed " For collection- and credited " subject to payment" according to the dealings
between the banks, and part of them were paid to the receiver of the
latter bank after its failure and the balance were credited to it by the
payors, the amount paid the receiver should be accounted for as a trust
fund, but the balance as a general debt. First National Bank v. Armstrong, 42Fed. Rep., 193.
49. Negotiable paper with restrictive indorsement credited by agent on date
of receipt "subject to payment," although account is subject to be
drawn upon, title is not transferred, and upon the insolvency of the
agent before receiving notice of the collection of the item, the owner is
entitled to the proceeds in the hands of the collecting agent. Fifth
National Bank v. Armstrong, 40 Fed. Rep., 46.
50. The drawers of a draft deposited with a bank for collection, and by it forwarded to a correspondent bank, are entitled to the amount as against
the receiver of the forwarding bank, which was insolvent, and known
to be so by its officers when it received the draft, and suspended payment before the proceeds were withdrawn from the collecting bank.
Importers and Traders' National Bank v. Peters et al., 123 N. Y., 272.
51. When a bank which has received a draft for collection sends it to another



REPORT OF THE COMPTROLLER OF THE CURRENCY.

151

COLLECTIONS. See Checks ; Certified, checks—Continued.
bank for that purpose, and on being advised that the latter bank has
collected, the draft credits the depositor and then becomes insolvent
without having received the money from the collecting bank, the depositor remains the owner of the draft, and is entitled to its proceeds from
the collecting bank against the receiver and the creditors of the insolvent bank. Armstrong v. National Bank of Boyertoivn, 11 S. W., 411;
Manufacturers' National Bank v. Continental Bank ct aL, 20 N W.,198.
52. A bank which collects a draft sent to it by another bank for that purpose,
with directions to remit the proceeds to a third bank for the owner's
account, does not thereby become a trustee, so that the fund can be
followed into the hands of a receiver, although it had become mixed
with the other cash of the bank before his appointment; especially when
it appears that the business was carried on, and money paid out, for
several days after the collection was probably made. Merchants and
Farmers' Bank v. Austin et aL, 48 Fed. Rep., 25.
53. Where bank sends paper to another bank for collection and credit on general account, the custom being to enter credit only when paper is collected, the relation being that of principal and agent until collection
and receipt of money by tho second bank, and if latter sends to another
bank, which collects, but does not remit until latter bank has failed, the
former can recover the proceeds from the receiver thereof. Beal v.
National Exchange Bank of Dallas, 55 Fed. Rep., 894.
54. A bank which, upon a draft being deposited with it for collection, refuses
to accept it as a deposit, but advances a small amount to the payee on
her check, and charges her therewith on its books as an overdraft, and
sends it for collection to its correspondent, and, upon receiving notice
of its collection, credits the payee's account therewith, is the payee's
agent; and the proceeds constitute a trust fund, which the payee is
entitled to recover from the receiver. Henderson v. O'Connor (Col.),
89 P., 786.
55. Where a bank received a draft as agent for plaintiff, of which fact the
indorsement was a notice to other banks, it did not thereby become
indebted to x)lamtii£ for the amount thereof till after collection and possession of the proceeds, either actually or by settlement with the parties ;
and defendant bank, to which the draft had been sent by the first bank
for collection, could not escape liability to plaintiff by making payment
to the first bank, or giving the credit to it on the account between the
banks after the first bank had stopped payment. Old National Bank v.
German American National Bank, 15 S. Ct., 221.
56. A bank which has received a check for collection is not made liable to the
drawee for its amount by tho fact that, upon protest of the check for nonpayment, it has accepted from the maker thereof a check upon another
bank, payable to the order of its cashier, the drawee of the first check
being absent from the city, which latter check is also protested for nonpayment. Citizens' Bank v. Houston (Ky.), 82 S. IF., 397.
57. Where a draft upon a nonresident drawee is deposited for collection wifcli a
local bank, and by it transmitted to another bank for collection, according to custom, the local bank is not responsible for loss occasioned by
the default of the latter bank, since such latter bank is the agent of the
depositor. 58 III. Apr)., 61, affirmed; Waterloo Milling CO.Y. Kuenster
{III. Sup.), 41 N. E.\ 906.
58. Where a bank, on collecting drafts for another bank, transmits bank drafts
to such bank, which credits the depositor with the amount of such drafts,
and then collects only part of the drafts on account of the failure of the
other bank, it has a right of action against the depositor for the deficit. Ib.
59. Where a check properly indorsed was sent by due course of mail for collection to the bank on which it was drawn, the drawer having sufficient
funds on deposit to pay the check, and was returned unpaid through the
negligent mistake of an employee of the bank, it constituted a refusal to
pay. Atlanta National Bank v. Davis (Ga.), 28 S. E.,190.
80. A bank wilich, as collecting agent of another bank, collects at the subtreasury a pension draft on which the payee's name has been forged
after her death, indorsing the draft as collecting agent, and remits the
proceeds, without knowledge of the forgery, is notliable to the United
States for the amount so collected. Onondaga Co. Sdv. Banky. United
States (C. C. A.), 64 F., 703. distinguished; United States v. American
Exchange National Bank (D, C ) , 70 F., 282.



152

REPORT OF THE COMPTROLLER OF THE CURRENCY.

COLLECTIONS. See Checks ; Certified checks—Continued.
61. Where a mortgage is sent to a bank for collection, with direction to remit,
the relation of creditor and debtor is not established between the sender
and the bank, where the latter fails to remit, and therefore, on the
insolvency of the bank, a trust will be imposed on its assets in favor of
the sender as against general creditors of the bank. Wallace v. Stone
{Mich.), 65 N. W., 113.
62. Where the owner of a check, which had been collected without her authority by a bank, accepted, with knowledge of the facts, part of the proceeds of the collection, and a note for the balance of her claim arising
out of the transaction, she thereby ratified the collection, and the bank
was, hence, not liable to her. Hughes v. Neal Loan & Banking Co.
(Ga.).23 8. E.,823.
63. A bank holding a note for collection from one not a depositor, and which
receives payment thereof by charging to the account of a depositor
having sufficient to his credit to meet it, does not become thereby a
debtor of the owner of the note, but holds the amount of the collection in
trust for him; such trust being impressed on all the funds of the bank,
which may be followed though they pass into the hands of a receiver.
People v. Merchants' Bank (Sup.), 36 N. Y. S., 989; In re Friend. Ib.
64. Where a note was placed in a bank for collection, with instructions to collect when due and apply the proceeds to the depositor's paper, and a
person voluntarily selected by the bank to present the note at the place
named for payment and receive payment thereon, collected the note, the
bank was liable for the proceeds to the owner. First National Bank
v. Craig (Kan. App.), 42 P., 830.
65. Where a bank in the State receives for collection a draft payable at another
bank within the State, but transmits the draft to a foreign bank in the
course of collection, which in turn transmits it to the bank at which it
is payable, the last-named bank is responsible for its negligence in collection only to the foreign bank. First National Bank v. Mansfield
Savings Bank, 10 Ohio Cir. Ct. R., 233.
66. Where a bank receives a draft for collection, and transmits it in the course
of business to another bank, the cashier of the latter bank has no implied
authority to agree to defend in behalf of his bank an action against the
first bank by the drawer of the draft for negligence in collection. Ib.
67. In an action by the drawer to recover the proceeds of a draft collected by
a bank the fact that the bank has credited such proceeds to the account
of another bank from which the draft was received, is no defense where
the indorsement thereon showed that the sending bank held it for collection only, the money being subject to the order of the real owner,
unless actually paid over to the sending bank before notice of the revocation of its agency. Boykin v. Bank of Fayetteville (N. C.), 24 S. E., 357.
68. That a check deposited with a bank for collection was unrestrictedly
indorsed to the bank, and credit therefor given the depositor, does not
pass the title to the bank where, on nonpayment of the check, its amount
was to be charged up to the depositor so as to prevent its recovery by
the depositor from a receiver appointed for the bank. Armour Packing
Co. v. Davis (N. C.),24 S. E., 365.
69. The owners of a draft on a bank indorsed it to the K. bank for collection,
and it was sent by the latter bank to the clearing house, in due course,
with other checks and drafts. The K. bank was closed before the balance against it on the clearing-house settlement was adjusted, and thereupon the clearing house called upon the drawee, also one of its members,
to pay to it the amount of the draft. Held, that the payment being to
a stranger to the draft, who had no interest in the proceeds nor authority to act as agent for the owners, it was no defense to an action by the
owners against the drawee for the amount of the draft.—Crane v. Fourth
St. National Bank (Pa. Sup.), 34 A., 296.
70. A bank which has a draft for collection will not be excused for negligence
in sending it direct to the drawee, instead of through a third person, if
it would have been collected had it been sent at the time it was sent to
a third person, though, had the bank delayed sending it as long as it
might have without negligence, it would not have reached its destination in time to be collected. First National Bank v. City National Bank
(Tex. Civ. App.), 34 S. W., 458.
71. A bank having a draft of $2,000 for collection will not be held liable for
negligence in sending it direct to the drawee bank, instead of through a



REPORT OF THE COMPTROLLER OF THE CURRENCY.

15S

COLLECTIONS. See Checks; Certified checks—Continued.
third person, where, at 1 o'clock en the day on which it reached its destination, the drawee bank required $1,000 to insure its ability to meet
local checks which might be presented that day after the hour, and was
furnished that amount by another bank for that purpose, to prevent a
general run on local banks. Ib.
72. A bank which receives checks to be transmitted to another place for collection without compensation fully discharges its duty by sending them
in due season to a solvent and competent correspondent, with proper
instructions for their collection, and is not liable for any loss occasioned
by the negligence of such correspondent. Anderson v. Alton National
Bank, 59 III. App., 587.
73. "When a bank indorses commercial paper "for collection" and forwards
the same to another bank for collection and remittance, the collecting
bank, though it acts only as agent for the remitting bank, and has no
mutual account with it, is not required to keep the moneys collected
separate from all other moneys in its possession, and to remit the identical money, nor is the payer of such paper required to see that the
identical money is remitted. First National Bank of Richmond v. Wilmington and W. R. Co., 77 Fed. Rep., Ifil.
74. Transfer of a note to a bank for collection gives it such ownership thereof
that it can sue the maker thereon. First National Bank v. Hughes
(Cal.),46 P.,272.
75. That the correspondent has credited the account of the remitting bank
with the proceeds of the collection does not preclude the owner from
recovering such proceeds of the correspondent upon the insolvency of
the remitting bank. Branch v. United States National Bank (Neb.), 70
N.W.,34.
76. The owner of negotiable paper placed it with a Boston bank to be transmitted to its New York correspondent for collection for the account of
the owner, and the Boston bank so instructed the New York bank. Held,
that the New York bank became the agent of the owner of the paper
and was liable to him for negligence in making the collection. Kelley
v.Phoenix National Bank (Sup!), 45 N. Y.S.,533.
77. Defendant bank received for collection a draft drawn on plaintiff, payable
at another bank where he had funds and had left instructions to meet
it. Defendant negligently failed to present the draft until the failure
of the bank at which it was payable, so that plaintiff became discharged
from liability thereon. Held, that plaintiff could not recover back the
amount of the draft paid by him to defendant with knowledge of the
facts, although he made the payment under protest and to save his
credit. Harvey v. Girard National Bank (Pa.), 13 A.,202.
78. Collecting commercial paper is part of the regular business of banking,
and a national bank will be liable for negligence in collecting a draft
the same as any other bank or agent. Mound City Paint & Color Co. v.
Commercial National Bank, 9 P., 709; 4 Utah, 353.
79. Where the owner of a note sends it to a bank for collection only, and the
maker's check is drawn on that bank for the amount thereof, and is
delivered to it, and the note is thereupon canceled and surrendered, and
the check is charged to the account of the maker, which was good for
the amount, there is a collection of the amount from the general fund
of the bank and a special appropriation of that amount to the payment
of the note, and as between the owner of the note and the receiver of
the bank the title to the money dedicated to the payment of the note
remains in the owner. Arnot v. Bingham, 9 N. Y. S., OS; 55 Hun., 553.
CONSTITUTIONALITY:

1. Congress has the constitutional power to incorporate banks. McCulloch
v. Maryland, 4> Wheat., 316; Osborne v. Bank of the United States, 9
Wheat., 738.
2. Congress has power to clothe national banking associations, as to their
contracts and dealings with the world, with any special immunities and
privileges exempting them, in their trade and intercourse with others,
from the laws and remedies applicable in like cases to other citizens.
The Chesapeake Bank v. The First National Bank of Baltimore, 40 Md.,
269.
3. Thus, the provision of the banking law that no attachment, injunction, or
execution shall issue against a national banking association before final



154

REPORT OF THE COMPTROLLER OF THE CURRENCY.

CONSTITUTIONALITY—Continued.

4.

5.
6.

7.

8.

9.

judgment in any suit, action, or proceeding in a State court is constitutional. Ib.
Congress having, in the exercise of undisputed constitutional powers,
undertaken to provide a currency for the whole country, may secure the
benefit of it to the people by appropriate legislation. Veazie Bank v.
Fenno, 8 Wall., 533.
Congress has the power to divest the United States courts of their jurisdiction of suits by or against national banking associations. National
Bank of Jefferson v. Fare et al.,25 Fed. Rep., 209.
National banking associations, being instruments designed to aid the
Government in the administration of a branch of the public service.
can not be controlled by the States, except in so far as Congress may see
proper to permit. Fanners and Mechanics* Bank v. Dearing, 91 U. S . ®9
A State law prohibiting the establishment of banking companies in the
State without the authority of the legislature was not intended to apply
to banking corporations created by authority of Congress, since such
corporations may be legally established in the State without the consent
of the legislature. Stetson v. City of Bangor, 56 Me., 2?'^.
National banking corporations, organized under the acts of Congress providing for their creation, are agencies or instruments of the General
Government, designed to aid in the administration of an important
branch of the public service, and are an appropriate constitutional
means to that end. Pollard v. The State ex rel. Zuber, 65 Ala., 628.
The national banking act is an enabling act for associations organized
under it, and one can not rightfully exercise any powers except those
expressly granted, or such incidental powers as are necessary to carry
on the business for which it was established. Logan County National
Bankv. Townsend, 139 U. S., 67. •

CONSTRUCTION OF LAW:

1. The Federal courts, when called upon to construe the general commercial
law of Indiana in respect to a question which is a new one in the Federal
courts, should give weight to the Indiana decisions, although they are
not absolutely bound thereby. The Farmers'* National Bank of Valparaiso, Tad., v. Sutton Manufacturing Company, 52 Fed. Rep,, 191.
2. The intention of the legislature, clearly expressed in a constitutional enactment, should not be defeated by too rigid adherence to the letter of the
statute, or by technical rules of construction. Any construction should
be disregarded which leads to absurd consequences. Gates v. First
National Bank of Montgomery, 100 U. S., 239; 2 N. B. C, 35.
3. The Federal courts are not bound by decisions of State courts upon questions of general commercial law. Ib.
4. In a statute which contains invalid or unconstitutional provisions, that
which is unaffected by those provisions, or which can stand without
them, must remain. I* the valid and invalid are capable of separation,
f
only the latter are to be disregarded. Supervisors of Albany v. Stanley,
12 Fed. Rep., S2.
5. Where the State and Federal courts have concurrent jurisdiction, a State
statute of limitation may be pleaded as effectively in a Federal court as
it could be in a State court; and in such cases the Federal courts will
follow the decisions of the local State tribunals and will administer the
same justice which the State courts would administer, between the
same parties. Price, Receiver of Venango National Bank, v. Yaies, 19
Alb. L. J., 295; 2 N. B. C, 20lh
6. Repeals by implication are not favored by the courts, and in the absence of
express words of repeal it is the duty of the court to give effect to a
prior statute, if it can be done, unless the repugnancy between the two
is so absolute and palpable as to be recognized at once. United States
y. Cooke Co. National Bank, 25 Int. Rev. Record, 266; 2 N.B. C.,128.
7. It is the peculiar province of the supreme court of the State to determine
the meaning of the statutes of such State, and with such determination
courts of the United States will hesitate to place upon a State statute
any construction which will bring such statute in conflict with a statute
of the United States, and therefore render it void. Davenport National
Bank v. Miitlebuscher, Collector, et al., 15 Fed. Rep., 225.
8. The punctuation of a statute is not made to be relied on, and must be disregarded if it requires a construction which is repugnant to a sense of
 justice. United States v. Voorhees, 9 Fed. Rep., 143.


REPORT OF THE COMPTROLLER OF THE CURRENCY.

155

CONSTRUCTION OF LAW—Continued.

9. Where Congress has enacted a law covering a particular case, such law
must prevail in the Federal courts though it differs from the State law.
Stephens v. Bernays, 42 Fed. Rep., 488.
10. Among the assets of an insolvent national bank were three mortgages
which were sought to be impeached by the assignees of the mortgagor
as having been given in violation of the insolvency law of the State.
Plaintiff, receiver of the bank, claimed that the State law was inoperative upon the assets of a national bank, and was ineffectual to divest
him of the title acquired by the mortgages. Held, that the mortgages
were governed by the State law, and the bank took them with all the
limitations imposed by the laws of the State upon them.
Witters,
Receiver, etc., v. Bowles et al., 32 Fed. Rep., 758.
11. As the Supreme Court of the United States has decided that it has authority to reexamine the judgment of a State court as to the power of
national banks under the act of Congress, a State court should follow
its decisions on the question. First National Bank of Aberdeen v.
Andrews et al.; Young v. Same, 34 P., 913; 7 Wash., 261.
12. By the provisions of Rev. Stat. U. S., § 5134, subd. 2, requiring an association formed for the purpose of conducting a national bank to designate
in its organization certificate '' the place where its operations of discount
and deposits are to be carried on," the town or city is meant, and not
the office or building. 61 III. App., 33, affirmed. McCcnnick v. Market
National Bank (III. Sup.), 44 N E., 381.
CONVERSION:

1. Where a State bank has been converted into a national banking association
it may enforce all contracts made with it while a State corporation.
City National Bank v. Phelps, 97 N. Y., 442. And it is liable, after the conversion, for all the obligations of the old institution. Coffeyy. The National Bank of Missouri, 46 Mo., 140; Kelsey v.
The National Bank of Crawford, 69 Penn. St., 426.
3. A national banking association, organized as the successor of a State bank,
may take and hold the assets of the bank whose place it takes, though
there was not in form a conversion from a State to a national corporation, but the organization of a new corporation. Bank v. Mclntyre, 40
Ohio St., 528.
4. And such association will be liable to the depositors of the former bank.
Bans v. Exchange Bank, 79 Mo., 182.
5. A State law authorizing national banking associations which have been
converted from State banks to use the name of the original corporation
for the purpose of prosecuting and defending suits is not in conflict with
the national banking law, and therefore proceedings based upon a judgment obtained before the conversion m a y b e instituted by "such'association in its former corporate name. Thomas v. Farmers' Bank of
Maryland, 46 Md., 43.
6. The conversion of a State "bank into a national bank, with a change of
name, under the national-bank act does not affect its identity or its right
to sue upon liabilities incurred to it by its former name. Michihan
Insurance Bank v. Eldred, 143 U. S., 292.
7. No authority other than that conferred by act of Congress is necessary to
enable any State bank to become a national banking association. Casey
v. Galli, 94 U. S., 673.
8. When a State bank is converted into a national banking association all of
the directors at the time will continue to be directors of the association
until others are appointed or elected, though some of them may not have
joined in the execution of the articles of association and organization
certificate. Lockwood v. The American National Bank, 9 R. I., 308.
9. But even were the oath required, a majority of all who v %re directors at
the time of the conversion, and not merely a majority of those who take
the oath, are necessary to constitute a quorum. Ib.
10. A national bank, changed from a State bank, may maintain an action 011
a continuing guaranty for loans held by it before the change—for loans
both before and after tlie change. City National Bank of Poughkeevsie
v. Phelps, 97 N. Y., 44; j9 Am. Rep., 513; 3 N. B. C, 627.
11. A State bank paid its president money to reimburse him for money which
he falsely represented he had paid to its creditor. The State bank was
afterwards changed to a national bank, and the creditor recovered judg


15Q

REPORT OF THE COMPTROLLER OF THE CURRENCY.

CONVERSION—Continued.

12.

13.

14.
15.
16.

17.

18.

ment against it for his debt. Held, that it could maintain an action
against the president for money had and received, although the State
statute provided that the State bank should be continued a body corporate for three years for the purpose of prosecuting and defending
suits, closing its concerns, and conveying its property. Atlantic National
Bank v. Harris, 118 Mass., 147; 2 N. B. C, 454.
The provisions in the Statute in New York of April 11,1859 (Laws of 1859,
chap. 236), as to the redemption of circulating notes issued by a State
bank, and the release of the bank if the notes should not be presented
within six years, do not apply to a State bank converted into a national
bank under the act of March 9, 1865, and not " closing the business of
banking." Metropolitan National Bank v. Claggett, 141 U. S., 520.
The conversion of a State bank in New York into a national bank, under
the act of the legislature of that State of March 9, 1865 (N. Y. Laws of
1865, chap. 97), did not destroy its identity or its corporate existence, nor
discharge it as a national bank from its liability to holders of its outstanding circulation, issued in accordance with State laws. Ib.
No authority from a State is necessary to enable a State bank to become a
national bank. Casey v. Galli, 94 U. S., 673; 1 N. B. C, 142.
The conversion of a State bank into a national bank, under the act of Congress of June 3d, 1864, did not work an annihilation or dissolution, but
only a change of the bank. Maynard v. Bank, 1 Brewster, 483.
Such change does not adeem a residuary legacy in certain snares of the
bank, limited upon a life estate in such shares, which is to become an
absolute one in case the bank should pay off or refund its stock by reason
of the expiration of its charter or from any other cause. The change is
not equivalent in law to a paying off in fact, and the residuary legatee is
entitled to the stock, on the death of the legatee, for life. Ib.
A State statute authorizing the State banking institutions to become banking associations under the laws of the United States, and providing for
the surrender and extinction of their State charter, and ' ' that said bank,
etc., may continue to use its corporate name for the purpose of protecting
and defending suits instituted by or against it, and of enabling it to close
its affairs, but not for the purpose of continuing under the lawsof this
State its business," etc., is not in conflict with the national banking act.
Thomas v. Farmers' Bank of Maryland, 46 Md., 43; 2 N. B. C, 248.
A national bank which, being authorized by the owner of notes in its possession to sell them to a third party, purchases them itself and converts
them to its own use, is liable to their owner for their value, as for a conversion, even though it was not within its power to sell them as the
owner's agent. First National Bank v. Anderson, 172 U. S., 573,

COSTS.

1. A receiver of a national bank, bringing suit against stockholders in a circuit court in another jurisdiction, is not exempted by Rev. St.,§ 1001,
from being required by the court to give security for costs. Platt v.
Adriance, 90 Fed. Rep., 772.
2. Under Rev. St.,§ 1001, as constructed in Bank v. Mixter, 5 Sup. Ct. 944,
114 U. S. 463, no security need be given by a receiver of an insolvent
national bank on an appeal taken by direction of the Comptroller of
the Currency. Robinson v. Southern National Bank, 94 Fed, Rep., 22.
CRIMINAL LAW. See False entries; Indictment.
1. The willful misapplication of the moneys and funds of a national banking
association, made an offense by sec. 5209, Rev. St., must be for the use
or benefit of the party charged, or of some person or company other than
the association. - United States v. Britton, 107 U. S., 655.
2. It is not necessary that the officer should personally misapply the funds of
the association. He will be guilty as a principal offender though he
merely procures or causes the misapplication. United States v. Fish,
24 Fed. Rep., 585.
3. A loan in bad faith, with intent to defraud the association, is a willful
misapx3lication within the meaning of the statute. Ib.
4. It is no defense to a charge of embezzlement, abstraction, or misapplication of the funds of a national banking association that the funds were
used with the knowledge and consent of the president and some of the
directors. The intent to defraud is to be conclusively presumed from
the commission of the offense. United States v, Taintor, 11 Blatch., 374.



REPORT OF THE COMPTROLLER OF THE CURRENCY.

1ST

CRIMINAL LAW. See False entries ; Indictment—Continued.
5. If, with intent to defraud the association, an officer allows a firm in which
he is a member to overdraw its account, he will be guilty of misapplying
the funds of the association. In the matter of Van Campen, 2 Ben., 419.
6. Allowing the withdrawal of the deposit of one indebted to the association
can not be charged as a misapplication of the money of the association.
United States v. Britton, 108 U. S., 193.
7. It is not a willful misapplication of the moneys of the association within
the meaning of sec. 5209, Rev. St., for a president who is insolvent to procure the discounting by the association of his note not well secured. Ib.
8. To constitute the offense of a willful misapplication of the moneys, funds,
or credits of the association within sec. 5209, Rev. St., it is not necessary
that the person charged with the offense should have been previously in
the actual possession of such moneys, funds, and credits under or by
virtue of any trust, duty, or employment committed to him. Nor is it
necessary to the commission of this offense that the officer making the
willful misapplication should derive any personal benefit therefrom.
When the funds or assets of the bank are unlawfully taken from its
possession, and afterwards willfully misapplied by converting them to
the use of any person other than the bank, with intent to injure and
defraud, the offense as described in the statute is committed. United
States v. Harper, 33 Fed. Rep., 471.
9. This criminal act may be done directly and personally, or it may be done
indirectly through the agency of another. If the officer charged with
it has such control, direction, and power of management, by virtue of
his relation to the bank, as to direct an application of its funds in such
manner and under such circumstances as to constitute the offense of
willful misapplication, and actually makes such direction or causes
such misapplication to be made, he is equally as guilty as if it was done
by his own hands. Ib.
10. The officers of a national banking association may be prosecuted under
State statutes for fraudulent conversion of the property of individuals
deposited with and in the custody of the association. Commonwealth v.
Tenney, 97 Mass., 50; State v. Tuller, 34 Conn., 280.
11. As the national banking law makes the embezzlement, abstraction, or
willful misapplication of the funds of a national banking association
merely a misdemeanor, a person who procures such an offense to be
committed can not be punished under a State statute which provides
that a person who procures a felony to be committed may be indicted
and convicted of a substantive felony. Commonwealth v. Fellon, 101
Mass., 204.
12. It is not a conspiracy against United States, under sec. 5440, Rev. St., nor
a willful misapplication of money of bank, under sec. 5209, for president
and director of bank to cause shares of its stock to be purchased with its
money and held on trust. United States v. Britton, 108 U. S., 192.
13. It is not a willful misapplication of bank money by the president, under
sec. 5209, for him to procure the discount by bank for his own benefit
of an unsecured note on which both maker and indorser are insolvent
to his knowledge. Ib., 193.
14. Nor is president liable for a criminal violation of that section solely by
reason of permitting a depositor who is largely indebted to bank to
withdraw his deposits without first paying such indebtedness. Ib.
15. The procuring by two or more directors of the declaration of a dividend
at a time when there are no net profits to pay it is not a willful misappropriation of money of bank within sec. 5204, Rev. St. Ib., 199.
16. Where the president, charged as a trustee with the administration of the
funds of the bank in his hands, converts them to his own use without
authority for so doing, he embezzles and abstracts them within the
meaning of sec. 5209, Rev. St. In the matter of Van Campen, 2 Ben., 419.
17. To constitute the offense of willful abstraction by an officer, defined by the
statute, it is necessary that the money or funds of the association should
be withdrawn by the officer or by his direction; that such taking or withdrawing should be without the knowledge or consent of the bank, or of
its board of directors; that the money or funds so taken or withdrawn
should be converted to the officer's own use or for the benefit and
advantage of some person other than the association, and that this
should be done with intent to injure and defraud the association. Ib.;
United States v. Harper, 33 Fed. Rep., 471.



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

CRIMINAL LAW. See False entries; Indictment—Continued.
18. An officer of a national banking association can not be punished under
State laws for embezzling the funds of the association. Commonwealth
ex rel. Torreyv. Ketner, 92 Penn, St., 372; Commonivealth v. Felton, 101
Mass. ,204.
19. But where the offense committed by an officer is properly a larceny of the
funds, and not an embezzlement, he may be indicted under a State law.
Commonwealth v. Barry, 116 Mass.,1.
20. The word "embezzle," as found in the United States Rev. St.,is used to
describe a crime which a person has an opportunity to commit by reason
of some office or employment, and which may include some breach of
confidence or trust. United States v. Conant, 9 Cent. L.J., 129; 2
N. B. C, 148.
21. Section 1025 of the Eev.St. provides: " N o indictment * * * shall be
deemed insufficient * * * in a matter of form only." Held, that anything that forms a part of the description of the crime is not a '' matter
of foim." Ib.
22. Embezzlement, abstraction, and willful misapplication of the moneys,
funds, etc., of a national bank, as described in Rev.St., sec.5209, constitute three separate crimes or offenses, which, under Rev. Stat., sec.
1024. may be joined in one indictment, but must be stated in separate
counts. United States v. Cadwallader, 59 Fed. Rep., 677.
23. The exercise of official discretion in good faith, without fraud, for the
advantage or the supposed advantage of the association, is not punishable; but if official action be taken in bad faith, for personal advantage
and with fraudulent intent, it is punishable. United States v. Fish, 24
Fed.Rep.,585.
24. It is competent for a State by penal enactments to protect its citizens in
their dealings with national banking associations located within the
State. State v. Tidier, 34 Conn., 280.
25. And an officer maybe punished under State laws for making false entries
in the books of the association with intent to defraud it. Luberg v.
Commonwealth, 94 Penn. St., 85.
26. Purchase of stock in violation of sec. 5201, Rev. St., made with intent to
defraud, and by officers named in sec. 5209, is not punishable under latter section. United States v. Britton, 107 U. S., 655.
27. Rev. St., sec. 5209, relating to national banks, provides that officers or
agents thereof who willfully misapply any of its moneys, or who make
any false entry or reports with intent to injure or defraud it, or to
deceive any officer of a bank, or any agent appointed to examine its
affairs, and "every person" who, with like intent, aids or abets any
officer or agent in any violation of the section, shall be guilty, etc.
Held, that persons not officers or agents of a national bank may be aiders and abettors of the president of the bank in viola/tion of such statute.
Coffin v. United States, 15 S. Ct., 394.
28. Acts eighteenth general assembly, chap. 153, sees. 1 and 2, making it a
felony for " any officer" of a bank to receive deposits with knowledge
that the bank is insolvent, apply to officers of national as well as other
banks. State v. Fields {Iowa), 62 N. W., 653.
29. Acts eighteenth general assembly, chap. 153, sees. 1 and 2, making it a
felony for " any officer" of a bank t;o receive deposits with knowledge
that the bank is insolvent, are not void, in so far as they apply to nationalbank officers, as an attempt to control and regulate the operations of
national banks. Ib.
30. An indictment under Rev. St., sec. 5209, for willfully misapplying the
moneys, funds, and credits of a national bank of which defendant was
president, as well as a director and agent, must supplement the allegation of willful misapplication by allegations showing how the misapplication was made, and that it was an unlawful one. BaicJielor v.
United States, 15 S. Ct. 446.
31. If much the larger number of the jury are for conviction, a dissenting
juror should consider whether a doubt in his own mind is a reasonable
one which makes no impression upon the minds of others equally honest
and equally intelligent with himself, who have heard the same evidence
with an equal desire to arrive at the truth, and under the sanction of
the same oath. On the other hand, if a majority are for acquittal, the
minority ought to seriously ask themselves whether they may not reasonably, and ought not to, doubt the correctness of a judgment which is



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159

CRIMINAL LAW. See False entries; Indictments—Continued.
not concurred in by most of those with whom they are associated, and
to distrust the weight and sufficiency of that evidence which fails to
carry conviction to the minds of their fellows. United States v. Allis,
73 Fed. Rep., 165.
82. An indictment under Rev. St., 1889, sec. 3581. charging a bank officer with
receiving a deposit-imo wing that the bank was insolvent, is not defective
because each count concludes with the words " did take, steal, and carry
away." State v. Sattley (Mo. Sup,), 83 S. W.,U.
33. Rev. St., 1889, § 3581, providing that any bank officer who shall receive or
assent to the reception of a deposit, or who shall create or assent to the
creation of any indebtedness by the bank, knowing that it is in a, failing
condition, shall be guilty of larceny, and punished, etc., sufficiently prescribes the nature of the crime, as required by Const., art. 12, § 27. Ib.
84. The receiving of a deposit, and issuing of a certificate therefor, creates
' ; an indebtedness," within Rev. St., 1889, § 8581, making it u crime for
any bank officer to create or assent to the creation of any indebtedness
by the bank, knowing its insolvency, etc. Ib.
35. On the trial of a bank officer for receiving deposits knowing that the bank
was insolvent, evidence that depositors demanded their money, and of
the refusal of the bank employees to pay them, is admissible,"whether
or not defendant personally heard the demands, to show the failure of
the bank to meet its obligations in the ordinary course of business. Ib.
88. If a bank employee, by authority of his superior officer given before the
latter had knowledge that the bank was insolvent, receives a deposit
after its insolvency, such officer, unless he revoked the authority after
he became aware of the condition of the bank, will be liable to prosecution under Rev. St., 1889, § 3581, making it a crime for a bank officer to
assent to the receipt of a deposit knowing that the bank is in failing
circumstances. Ib.
87. An ; instruction, in the language of the statute, that the failure of the bank
' i s prima facie evidence of knowledge on the part of its cashier that
the same was in failing circumstances," coupled with a statement that
'' prima facie evidence is such that raises such a degree of probability
in its favor that it must prevail unless it be rebutted or the contrary
proved," is not erroneous. Ib.
38. Where an indictment under Rev. Stat., 1889, §3581, contains a count for
receiving a deposit knowing that the bank is insolvent, and another
count for assenting to the creation of an indebtedness by the bank with
such knowledge, and the evidence shows but one transaction, which
consisted in receiving a deposit and issuing a certificate therefor, a
general verdict of guilty, without specifying on which count, is sufficient. Ib.
89. Two or more persons, partners as bankers, may jointly commit the crime
of receiving deposits with knowledge that they and the hiiiili. are insolvent. Slate v. Smith (Minn.), 64 N. W., 1022,
40. On trial of an indictment of a banker for receiving deposits when insolvent, it was proper to charge that, though the deposit was received by
defendant's son after defendant bad instructed him to refuse deposits,
if defendant, on learning that the deposit was so received, placed it among*
the funds of the bank, he " knowingly accepted and received;5 it within
the statute. State v. Eifert (Iowa), 65 N. W., 309,
41. Where there has been no administration on the estate of a deceased insolvent who had fraudulently conveyed his property in his lifetime, a
simple contract creditor is not debarred from tiling a bill against the
fraudulent grantee to subject the property fraudulently conveyed to the
satisfaction of his claim. Merchants' National Bank v. McGee (Ala.),
19 So., 356.
42. One who has an interest in a company for the benefit of which the president of a national bank criminally misapplies its funds may be guilty as
an aider and abettor in such misapplication, although tho president has
no interest in or relation to him or to said company, and although he
has no interest in the bank, or with the president thereof, of any land.
Stale v. Teahan, 50 Conn., 9,-\ distinguished; Coffin v. United States, 16
S.Ct.,943.
43. It is not necessary to the guilt of aiders and abettors who are not officers
of the bank that they should have a common purpose with the principal to subserve joint interests with him by the misapplication of the
bank's funds. Ib.




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REPORT OF THE COMPTROLLER OF THE CURRENCY.

CRIMINAL LAW. See False entries; Indictment—Continued.
44. Persons who have no official relation to a national bank may be indicted,
under Rev. Stat., § 5209, as aiders and abettors of some officer of the bank
in criminal misapx>lication of its funds, or in the making of false entries
in its books. Ib.
45. If a violation of the statute is committed by an officer of the bank and by
an outsider, the officer must be prosecuted as the principal, and the
other can only be prosecuted, under the terms of the statute, as an aider
and abettor. Ib.
46. An indictment charging the aiding and abetting of an officer of a national
bank in making false entries, etc., is not defective because it charges
the principal offender with having made the false entry with intent to
injure and defraud the bank, and also with intent to deceive agents
appointed to examine the bank's affairs, whereas it merely charges the
aider and abettor with an intent to deceive such agents: for it is immaterial that the principal offender may have had several intents, if both
principal and aider and abettor were actuated by the criminal intent to
deceive such agents. Ib.
47. An indictment for aiding and abetting one H., the president of a bank, in
the criminal misapplication of its funds, charged that, on a specified
date, the said H. misapplied a named sum, by causing the same to be
paid out on the checks of a company having no moneys in the bank.
The aiding and abetting clause charged that the accused did '' on [specifying the same date] aid and abet said H., as aforesaid, to wrongfully,"
etc., misapply the moneys of the bank, " to wit," specifying an identical
sum. Held (overruling a contention that the words "said" and " as
aforesaid" did not refer to the same moneys previously charged to have
been misapplied by the president), that the language sufficiently connected the acts charged against the aider and abettor with the offense
stated against the principal. Ib.
48. An indictment for violating the national banking laws averred that the
bank in question had been "heretofore" created and organized under
the laws of the United States. Held, that even if it were assumed that
the word should have been " therefore" in order to make it certain
that the bank had been incorporated prior to the finding of the indictment, the result was only an imperfect statement of what the law implies
to be true after verdict. Ib.
49. On the trial of persons charged with aiding and abetting the president of
a national bank in criminally misapplying its funds and making false
entries in its books, the court charged that if the jury were satisfied that
the president did knowingly and purposely make, or cause to be made,
the false entries as charged, they could not find the defendants guilty as
aiders and abettors, unless they were satisfied that defendants, "with
like intent, unlawfully and knowingly did or said something showing
their consent to, and participation in, the unlawful and criminal acts"
of the said president,'' and contributing to their execution." Held, that
this language was not open to the objection that the expression "unlawful and criminal acts" might have been understood as relating to
unlawful and criminal acts of the president generally. Ib.
50. Under Rev. Stat., § 3581, making it a crime for any bank officer to '' receive
or assent" to the reception of any deposit of money, knowing the bank
to be insolvent, a conviction can not be had on an indictment charging
merely that defendant4' did receive " the deposit, on proof of an'' assent"
to th reception of the deposit. Stale v. Wells (Mo, Sup.),35 S. W., 615.
51. An indictment against its president for defrauding a national bank,
described the bank as the "National Granite State Bank," " carrying on
a national banking business at the city of Exeter." The evidence
showed that the authorized name of the bank was the " National Granite
State Bank of Exeter." Held, that the variance was immaterial. Putnam v. United States, 162 U. S. 687.
52. Conversations with a person took place in August, 1893. In December,
1893, he testified to them before the grand jury which found the indictment in this case. On the trial of this case his evidence before the grand
jury was offered to refresh his memory as to those conversations. Held,
that that evidence was not contemporaneous with the conversations, and
would not support a reasonable probability that the memory of the witness, if impaired at the time of the trial, was not equally so when his
testimony was committed to writing; and that the evidence was therefore inadmissable for the purpose offered. Ib.




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161

CRIMINAL LAW. See False entries; Indictment—Continued.
53. On the trial of a national-bank president for defrauding a bank, a witness
for the Government was asked, on cross-examination, as to the amount
of stock held by the president. This being objected to, the question was
ruled out as not proper on cross-examination, the Government " n o t
having opened up affirmatively the ownership of the stock." Held, that,
as the order in which evidence shall be produced is within the discretion of the trial court, and as the matter sought to be elicited on the
cross-examination for the accused was not offered by him at any subsequent stage of the trial, no prejudicial error was committed" by the
ruling. Ib.
54. When an offense against the provisions of Rev. Stat., section 5209, is begun
in one State and completed in another, the United States court in the
latter State has jurisdiction over the j>rosecution of the offender. Ib.
55. The proof of guilt in this case was sufficient to warrant the court in leaving to the jury to decide the question of the guilt of the accused. Ib.
56. The sentence on both counts having been distinct as to each, the entire
amount of punishment imposed will be undergone, although the conviction and sentence as to the second count are set aside. Ib.
57. Coffin v. United States, 156, U. S., 432, affirmed on the following points:
(1) That the offense of aiding or abetting an officer of a national bank
in committing one or more of the offenses set forth in Rev. Stat., section
5202, may be committed by persons who are not officers or agents of the
bank, and consequently it is not necessary to aver in an indictment
against such an aider or abettor that he was an officer of the bank or
occupied any specific relation to it when committing the offense; (2)
that the plain and unmistakable statement of the indictment in that
case and this, as a whole, is that the acts charged against Haughey
were done by him as president of the bank, and that the aiding and
abetting was also done by assisting him in the official capacity in which
alone it is charged he misapplied funds. Coffin v. United States,
162 U.S., 664.
58. Instructions requested may be properly refused when fully covered by
the general charge of the court. Ib.
59. When the charge, as a whole, correctly conveys to the jury the rule by
which they are to determine, from all the evidence, the question of
intent, there is no error in refusing the request of the defendant to single out the absence of one of the several possible motives for the commission of the offense, and instruct the jury as to the weight to be given
to this particular fact independent of the other proof in the case. Ib.
60. The refusal to give, when requested, a correct legal proposition does not
constitute error, unless there be evidence rendering the legal theory
applicable to the case. Ib.
61. When it is impossible to determine whether there was evidence tending
to show a state of facts adequate to make a refused instruction pertinent,
and there is nothing else in the bill of exceptions to which the stated
principle could apply, there is no error in refusing it. Several other
exceptions are examined and held to be without merit. Ib.
62. A bank president, not acting in good faith, has no right to permit overdrafts when he does not believe, and has no reasonable ground to believe,
that the moneys can be repaid; and, if coupled with such wrongful act,
the proof establishes that he intended by the transaction to injure and
defraud the bank, the wrongful act becomes a crime. Ib.
63. When the principal offender in the commission of the offense, made criminal by Rev. Stat., section 5209, and the aider and abettor were both
actuated by the criminal intent specified in the statute, it is immaterial
that the principal offender should be further charged in the indictment
with having had other intents. Ib.
64. The first clause of section 5209 of the Revised Statutes provides for three
distinct offenses: First, embezzlement; second, abstraction; and, third,
willful misapplication of the moneys, funds, or credits of the bank by
any president, director, cashier, teller, clerk, or agent of any association organized as a national banking association. United States v. Lee,
12 Fed. Rep. ,816.
65. It was the intention of Congress to make criminal the misapplication and
conversion of the funds of national banking associations without regard
to whether or not the party so misapplying received any of the funds
or other advantage, directly or indirectly. Ib.
CUR
11
 99


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REPORT OF THE COMPTROLLER OF THE CURRENCY.

CRIMINAL LAW: See False entries; Indictment—Continued.
66. If it appears that the funds of the banking association have been abstracted
or willfully misapplied by defendant, he is precluded from denying that
it was done with unlawful intent. Ib.
67. It is not a necessary ingredient of the offense of making a false entry in a
report under Rev. St., § 5209, that the report shall be one of those mentioned in sections 5211, 5212, or one which the bank is bound by law to
make. It is sufficient if the report is one made in the due course of
business. United States v. Potter, 56 Fed. Rep., 83, 97, disapproved;
United States v. Booker, 80 Fed. Rep., 376.
68. When it is made to appear to the court during the trial of a criminal case
that, either by reason of facts existing when the jurors were sworn, but
not then disclosed and known to the court, or by reason of outside
influences brought to bear on the jury pending the trial, the jurors, or
any of them, are subject to such bias or prejudice as not to stand
impartial between the Government and the accused, the jury may be
discharged and the defendant put on trial by another jury; and* the
defendant is not thereby twice put in jeopardy, within the meaning of
the fifth amendment to the Constitution of the United States. Simmons
v. United States, lift U. S., 148.
69. The judge presiding at a trial, civil or criminal, in any court of the United
States may express his opinion to the jury upon the questions of fact
which he submits to their determination. Ib.
70. An indictment on Rev. Stat.,sec. 5209, is sufficient which avers that the
defendant was president of the national banking association; that by
virtue of his office he received and took into his possession certain bonds
(described), the property of the association, and that, with intent to
injure and defraud the association, he embezzled the bonds and converted them to his own use. Claasen v. United States, 11±2 U. S., 14-0.
71. In a criminal case a general judgment upon an indictment containing several counts and a verdict of guilty on each count can not be reversed on
error if any count is good and is sufficient to support the judgment. Ib.
72. Upon writ of error no error in law can be reviewed which does not appear
upon the record, or by bill of exceptions made part of the record:
Ib.
73. Under sec. 5 of the act of March 3,1801, entitled "An act to establish circuit courts of appeals, and to define and regulate in certain cases tfye
jurisdiction of the courts of the United States, and for other purposes,"
a writ of error may, even before July 1, 1891, issue from this court to a
circuit court in the case of a conviction of a crime under sec. 5209 of
the Revised Statutes where the conviction occurred May 28,1890, but a
sentence of imprisonment in a penitentiary was imposed March 18,1891.
In re Claasen, 140 U. S., 200.
74. A crime is "infamous " under that act where it is punishable by imprisonment in a State prison or penitentiary, whether the accused is or is not
sentenced or put to hard labor. Ib.
75. Such writ of error is a matter of right, and under sec. 999 of the Revised
Statutes the citation may be signed by a justice of this court as an
authority for the issuing of the writ under sec. 1004. Ib.
76. At the time of the conviction no writ of error from this court in the case was
provided for by statute, nor was any bill of exceptions, with a view to a
writ of error, provided for by statute or rule, and therefore a mandamus
will not lie to the judge who presided at the trial to compel him to settle
a bill of exceptions which was presented to him for settlement after the
sentence, nor can the minutes of the trial, as settled by the judge by consent, and signed by him, and printed and filed in July, 1890, and on
which a motion for a new trial was heard in October, 1890, be treated
by this court, on the return to the writ of error, as a bill of exceptions
properly forming part of the record. Ib.
77. A criminal court in the southern district of New York, sitting as a circuit
court therein, under sec. 613 of the Revised Statutes, and composed of
the three judges named in that section, to hear a motion for a new trial
and an arrest of judgment in a criminal case previously tried by a jury
before one of them, is a legally constituted tribunal. Ib.
78. A justice of this court on allowing such writ and signing a citation had
authority also to grant a supersedeas and. stay of execution. Ib.
79. Upon a plea of guilty to three indictments found under section 5209, Ilev.
St., U. S., one for the misapplication of funds of a national bank by the
accused while cashier thereof, one for false entries to conceal such mis


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163

CRIMINAL LAW: See False entries; Indictment—Continued.
application, and the third for making a false statement with intent to
deceive the examining officers, the district court pronounced sentence
.upon the accused as follows: " That the prisoner be confined at hard
labor in the State prison of the State of New Jersey for the term of
live years upon each of the three indictments above named, said terms
not to run concurrently, and from and after the expiration of said
terms until the costs of this prosecution shall have been paid." Held,
that the words " said terms not to run concurrently " are uncertain and
incapable of application, and therefore void: and that the sentences
commenced at once and ran concurrently. United States v. Patterson,
Keeper, etc., 29 Fed. Rep., 775.
80. The judgment of the district and circuit courts of the United States in
criminal cases is final, and can not be reviewed by writ of error; but if
a judgment, or any part thereof, is void, either because the court that
renders it is not competent to do so for want of jurisdiction, or because
it is rendered under a law clearly unconstitutional, or because it is senseless and without meaning, and can not be corrected, or for any other
cause, the party imprisoned by virtue of such judgment may be discharged on habeas corpus. Ib.
81. On a habeas corpus the decision should be made upon the actual status
of the case at the time of the decision, and not according to the state
of things when the writ was allowed. When, at the time the writ of
habeas corpus for the discharge of a prisoner, under three sentences of
five years, each running concurrently, was allowed, the first term of five
years had not expired by lapse, although at least one of the sentences
had been satisfied by means of remissions for good conduct. Held, that
the five years having entirely elapsed since the allowance of the writ,
the question of the applicability of the remission for good conduct to all
the sentences may be waived, and the prisoner discharged. Ib.
82. When an officer of a national bank, indicted under Rev. St., § 5209, for
making false entries in a report of the condition of such bank in respect
to amounts of overdrafts and of loans and discounts, has testified that
certain overdrafts, in respect to which the depositors had consulted the
bank officers and obtained permission to overdraw, were treated by the
officers and directors of the bank as temporary loans, and were reported
by him among loans, and not among overdrafts, in the belief that they
might properly be so reported, it is error to charge the jury that the
defendant was required by law to place, under the heading'' Overdrafts "
in the report, all sums drawn out by depositors in excess of their deposits,
and that the transfer of any such sums to the heading '' Loans and discounts" was the making of a false entry, since such charge takes from
the jury the right to consider, upon the question of intent, the explanation given by the defendant, while, if they believed such explanation, and
that the defendant acted in good faith, the entries were not false within
the meaning of the statute. Mr. Justice Harlan dissenting. Graves v.
United States, 165 U. S.,323.
83. Where a transaction by a national-bank officer with intent to defraud is
entered on a deposit slip, entry of the contents of suck slip upon the
books of the bank by him, or by his direction, is making a " false entry "
within Rev. St., § 5209. Agnew v. United States, 165 TJ. S., 36.
84. On trial of the president of a bank for conversion of its funds, the cashier
who has testified as a witness for defendant may be asked, on crossexamination, whether he did not resign because of transactions of the
defendant similar to that charged in the indictment. Ib.
85. The evidence showed that defendant, president of a national bank, without authority of the directors, purchased $20,000 bonds, of little value,
at a great discount, and had them placed in the assets of the bank, and
to his credit at face value, giving his written guaranty for the principal
and interest, which, by reason of his financial condition, was almost
worthless. Held, that it was not error to refuse to charge that, from
the guaranty, the jury might find that there was no intent to defraud
the bank. Ib.
86. A charge to the effect that if defendant, a bank president, purchased bonds
which were worthless, or of but little value, placed them among the
assets of the bank at a greatly exaggerated value, and had such exaggerated value placed to his own credit, these facts create a presumption
of an intent to defraud the bank, which "throws the burden of proof



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BEPORT OF THE COMPTROLLER OF THE CURRENCY.

CRIMINAL LAW: See False entries; Indictment—Continued.
upon the defendant," and that evidence to oveicome the presumption
*' must be sufficiently strong to satisfy you beyond a reasonable doubt
that there was no such guilty intent," is not error, where the character
of such evidence and the nature of a reasonable doubt are sufficiently
explained in other portions of the charge. Ib.
87. A charge that if the defendant "either embezzled or willfully misapplied "
the funds or credits of the bank, " whereby, as a necessary, natural, or
legitimate consequence, its capital was reduced, or placed beyond the
control of the directors, or its ability to meet its engagements or obligations, or to continue its business, was lessened or destroyed, the intent
to injure or defraud the bank may be presumed," is correct. Ib.
88. It is not reversible error to refuse to charge that, if defendant used the
proceeds of a check belonging to the bank, and which he had caused to
be placed to his credit, in the payment of a debt of the bank, the jury
must find that he did not fraudulently embezzle the amount, especially
where defendant's explanation of the transaction is unsatisfactory. Ib.
89. Evidence of the commercial rating of a president of a bank at the time of
an alleged conversion by him of its funds, by purchasing for the bank,
without authority, and having placed to his credit, worthless bonds,
which he had guaranteed, and the testimony of the cashier of another
bank as to whether, at the time of transaction, he considered defendant's guaranty for such an amount good, are irrelevant. Ib.
90. Under rule 11 of the circuit court of appeals (21 C. C. A., cxi, and 78 Fed.
Rep., cxi), requiring the assignment of errors to quote the full substance
of evidence alleged to have been erroneously admitted or rejected, and to
set out the part of the charge referred to totidem verbis, assignments
that " t h e court erred in permitting evidence as shown in bills of exceptions numbers two and three," which errors can only be ascertained by
a careful reading of a voluminous record, and that " t h e court erred in
its charge," etc., referring to marked lines and numbers in the written
opinion for instructions erroneously given and refused, will not be considered. Gallot v. United States, 87 Fed. Rep., 446.
91. The death of the principal before indictment is no obstacle to the prosecution and punishment of one charged with aiding and abetting an
officer, clerk, or agent of a national bank to abstract, misapply, or
embezzle the funds thereof, in violation of Rev. St., § 5209, which makes
such offense a misdemeanor. Ib.
92. A juror who says he has an impression or opinion as to guilt or innocence
of defendant, formed fronl newspapers and rumors, that it would require
evidence to remove it, but that it would yield to evidence, and that he
can and will give the defendant a fair and impartial trial according to
the evidence that may be adduced before him, is competent. Ib.
93. Where an indictment contains many counts, all alike, except as to amounts
of money and dates of misapplication, it is sufficient to read one count
in full to the jury, explain the difference, and state the amount and
date charged in each of the other counts. Ib.
94. One indictment in thirty-six counts charged defendant with aiding in the
abstraction of thirty-six specified amounts of money, at thirty-six specified dates. Another indictment charged him with aiding in the misapplication of the same amounts, upon the same dates. The two were
tried together, and the jury returned a verdict of "guilty as charged."
Held, that the verdict was definite, certain, responsive to the issues, and
not a double conviction, the sentence imposed by the court being imprisonment for a less term than the maximum under any one count. Ib.
95. An indictment under Rev. St., § 5209, against officers of a national bank
and a depositor, charged willful misapplication of the funds of the bank,
with intent to injure and defraud the bank. On the trial it appeared
that the depositor made and deposited fictitious checks, which were
credited to his account. Held, that it was necessary to show that some
portion of the funds were withdrawn from the possession or control of
the bank, or a conversion in some form was made thereof, so that the
bank would be deprived of the benefit thereof. Dow et al. v. United

States, 82 Fed. Rep., 90£.
96. In such a case, a statement by the court to the jury that under a State
statute it is made a misdemeanor to draw a check on a bank where
there are no funds to meet it, tends to mislead the jury, and constitute
error. Ib.




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165

CRIMINAL LAW: See False entries; Indictment—Continued.
97. The mere fact of payment by the officers of a national "bank of a check
which creates an overdraft does not necessarily constitute a fraudulent
misapplication of the funds of the bank. Ib.
98. Under such an indictment, where the issues involve the intent with which
* certain acts were done, the trial court is justified in giving a reasonably
wide latitude to the introduction of evidence tending to show the relations of the parties, the mode in which the business was carried on,
and the knowledge which the officers had of the character of the operations carried on by the depositor. Ib.
99. If, in an indictment under Rev. St., § 5209, it is the purpose of the Government to charge the making of false entries in the books of the bank
because of the receiving and crediting of checks drawn thereon by
parties who had no funds there, the indictment should set forth a
description of the checks, with an averment of the reasons why they
were to be deemed false or valueless. Ib.
100. If an overdraft is made and allowed under circumstances justifying it, or
even under circumstances making it a fraud upon the bank, the entry
of the transaction just as it occurred on the books of the bank is not a
false entry, under Rev. St., § 5209. Ib.
101. Where an indictment consists of numerous counts, the trial court may, in
the exercise of sound judicial discretion, require the Government to
elect certain counts upon which it will ask conviction; but where the
counts are all for transactions connected together, or of the same class,
their joinder is proper under Rev. St., § 1024, and the exercise of the
court's discretion will not be disturbed, except in a clear case of improvidence or abuse. Gardes v. United States; Giraultv. Same, 87 Fed. Rep.,
172.
102. Where, during the trial, a juror becomes disqualified, and the court
adjudges a mistrial, a plea of former jeopardy is not good on a second
trial, even though all parties were willing to proceed with eleven
jurors. Ib.
103. Where defendants have been arraigned, and have waived reading of the
indictment, they may not subsequently complain if the whole indictment is not read at the trial, but such parts of it are read, and such
explanations made of the other parts, as may give the jury the clearest
comprehension of it. Ib.
104. Where the jury find accused guilty upon all counts of tin indictment,
"Guilty as charged," without specifying the counts, is a proper form of
verdict. Ib.
•
105. Where the verdict is sustained by one good count in the indictment, it
must stand, even if all the other counts are bad. Ib.
106. Where, after mistrial, and before a new trial, amendments are made to
purely formal parts of certain counts of an indictment, and the defendants are not rearraigned, even if the irregularity is material, it can
affect only the counts so amended, and the error is cured by arrest of
judgment on such counts. Ib.
107. Where the statute under which a prisoner is sentenced provides for imprisonment, but not at hard labor, the words " at hard labor " should not be
inserted in the sentence, even if hard labor is a part of the discipline of
the prison at which the sentence is to be served. Ib.
108. In a prosecution against a national-bank president for unlawfully certifying checks, it is not error to instruct the jury that the presumption is
that he had knowledge of the condition of the account upon which the
checks were drawn, where the same instruction cautions them that such
* , presumption may be rebutted by evidence that the defendant did not in
fact have such knowledge. Spurr v. United States, 87 Fed. Rep., 701.
109. In order to convict a national-bank officer of wrongfully certifying
checks, it is not necessary to show that he had actual knowledge that
the account against which the checks were drawn was not sufficient; it
is enough if he willfully refrained from investigation, in order to avoid
knowledge. Ib.
110. Upon the trial of the president of a national bank for certifying checks
without funds, evidence of speculations by the cashier with funds of
the bank, with defendant's knowledge, is admissible for its bearing upon
the right of the latter to rely upon the former's representations as to the
state of the customer's accounts. Ib.



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

CRIMINAL LAW. See False entries; Indictment—Continued.
111. The period of time within which collateral transactions offered to show
a guilty intent must have occurred is largely discretionary with the
court. Ib.
112. Upon the trial of a national-bank officer for official misconduct, evidence
as to the defendant's reputation for honesty and integrity shouM be limited to such reputation down to the time of the failure of the bank. Ib.
113. In general, where no attempt has been made to impeach the defendant's
testimony, he may not add to the weight of his evidence by evidence of
his general reputation for truthfulness. Ib.
114. A x>lea of former jeox3ardy set up certain prior proceedings had in the same
court under the same indictment. Counsel for the Government having
objected thereto, the court treated his objection as a demurrer to its
sufficiency in law, and thereupon overruled the plea. The trial then
went on, without objection by defendant to the subsequent proceedings.
Held, that there was no error in thus proceeding with the cause without
first setting down the plea for trial, as the only question arising thereon
was one of law, which was finally disposed of by the former ruling.
United States v. Peters, 87 Fed. Rep.,985.
115. Rev. St., § 1025, forbidding the court to quash an indictment for defect of
form, makes it unnecessary, in criminal indictments, to repeat an averment contained in the first count, where subsequent counts refer back
to the first, and are thereby rendered sufficiently explicit in stating the
offense. Ib.
116. An indictment charged the making of false entries in the books of a
national bank for the purpose of showing that on a certain date a county
treasurer deposited $10,000 "special,"' which was drawn out again a few
days later. Evidence was offered by the Government to prove that no
such deposit was made, and the treasurer himself was called by it, and
testified that he had some recollection of having deposited a large sum
about the time in question. Thereupon his books were produced, and
after he had testified that he believed them to be correct, he was permitted to testify as to the entries therein on the dates referred to. By
these entries it did not appear that $10,000 had been either deposited in
bank or drawn from the cash on hand. The treasurer, however, then
reiterated his former statement, and was even more positive that he had
made the deposit. Held that, in view thereof, there was no prejudicial
error in admitting his testimony as to the book entries. Ib.
117. If money is left with a national bank in a sack, with the express understanding that it is not fb be mingled with the bank's funds, but the
identical bills or coins are to be returned in the same condition, and
this is done to make a showing of money to a bank examiner, as if it
were the money of the bank, then the entry thereof on the books of the
bank as money deposited is a false entry. Ib.
118. If the jury be charged that a false entry on the books of a national bank
alone gives rise to the presumption, not only that the entry was made
with criminal intent, but also with knowledge of its falsity, but elsewhere in the charge it was said that a false entry must be known to be
false, and designed and intended to deceive, the charge is not erroneous. Ib.
119. Where the court has several times stated to the jury that the indictment
charges the making of false entries in the books of the bank, with intent
to deceive the bank examiner, and the making of false reports,with intent
to deceive the Comptroller, it is not misleading to thereafter say that
defendant is guilty if he made such false entries and report '' with the
intent mentioned in the statute," although the statute mentions several
other intents. - Ib.
120. A depositor may knowingly overdraw his account, and be innocent of any
unlawful purpose: but if he does so for considerable amounts, without
the knowledge and consent of the proper officials, and with a fraudulent
intent that the moneys of the bank shall be applied to their payment
by the teller without the knowledge or consent of the proper officials,
he is guilty. United States v. Kenney, C. C , 90 Fed. Rep., 257.
121. An intent to injure or defraud a national bank, within the meaning of
Kev. St., § 5209, does not necessarily involve malice or ill will towards
the bank. It is sufficient that the unlawful intent is such as, if carried
into execution, will necessarily or naturally injure or defraud the bank.
Ib.



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167

CRIMINAL LAW. See False entries; Indictment—Continued.
122. If, at the time defendant drew checks upon a national bank, he knew or
had reason to believe that they were to be fraudulently paid by the
teller out of the funds of the bank, and not from any funds to which
defendant could legitimately resort, he had a guilty intent; and it is
immaterial that he intended finally to recompense the bank, through
successful operations in stocks or otherwise. Ib.
128. If there was a^fraudulent understanding between defendant and the paying teller that checks drawn by defendant in favor of a firm of stock
brokers were to be paid out of funds of the bank, when defendant had
no funds or only insufficient funds to his credit, and that such debts
were not to be charged in his account, but were to be fraudulently concealed until he should make deposits sufficient to meet them, defendant
had a guilty intent to injure or defraud the bank. Ib.
124. An averment in an indictment under Rev. St., § 5209, for embezzlement
by an officer of a national bank, that the money embezzled was lawful
legal-tender money of the United States, is surplusage and need not
be proved. Porter v. United States, C. C, 91 Fed. Rep., 494.
125. In a prosecution of an officer for making false entries in the books of a
national bank and in the report made to the Comptroller, with intent
to deceive the bank's directors and any agent of the Comptroller, proof
that the entries made were false, and known to bo so by defendant;
that they were made in the books, and afterwards carried into a report
made by the bank to the Comptroller, and were calculated to deceive
the agent of the Comptroller, raises a presumption that such was the
intention in making them, though snch presumption is not conclusive.
United States v. Youtsey, C. C.,01 Fed. Rep., SGJf.
126. To constitute embezzlement by an officer of funds of a national bank,
within the meaning of Rev. St., § 5209, with intent to defraud the bank,
there must be an unlawful conversion by the officer to his own use of
funcls intrusted to him, with intent to injure or defraud the bank, while
abstraction or misapplication consists of the conversion, with a like
intent, of funds not especially intrusted to his care. Ib.
127. Under the provisions of Rev. St., § 5209, making it a crime for an officer,'
clerk, or agent of a national bank to make any false entry in any book,
report, or statement of the association, with intent to defraud or to
deceive any officer of the bank, or any agent appointed to examine the
affairs of the bank, an officer is chargeable for a false entry made by a
clerk under his direction, the same as though he had made it in person.
Ib.
128. Where defendant, as cashier of a national bank, discounted certain notes,
credited the proceeds to the makers, procured the credit to be transferred to himself, and with it paid certain other notes then held by the
bank, thus effecting a substitution of securities, the fact that he knew
the makers of the notes taken up to be solvent, and. the makers of the
new notes to be insolvent, and the collateral security deposited therewith to be insufficient in value to pay them, raises a presumption that
he intended by the transaction to injure or defraud the bank, though
such presumption is not conclusive. Ib.
DEPOSITS:

1. The relation of banker and depositor is that of debtor and creditor.
Deposits on general account belong to the bank and are part of its general fund. The bank becomes a debtor to the depositor to the amount
thereof, and the debt can only be discharged by payment to the depositor or pursuant to his order. The JEtna National Bank v. The Fourth
National Bank, 46 N. Y., 82.
2. The contract has none of the elements of a trust. For a breach on the part
of the bank of the obligation resulting from the relation between the
parties the depositor alone can sue. Ib.
3. General deposits in a commercial bank on account of the depositor, without being complicated by any other transaction than that of the depositing and withdrawing of the moneys, transfers the ownership of the
money to the bank; and the relationship with reference thereto, as
between the bank and the depositor, is simply that of debtor and creditor. Collins y. State, 15 So., 214.
4. A deposit made in the usual course of business vests in the bank, and can
not be recovered by the depositor on the ground of fraud, though the



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

DEPOSITS—Continued.
bank was insolvent and failed on the next day, and though the deposit
was made in reliance on representations of the president that the bank
was all right, unless the officers of the bank knew of its insolvency at
the time of the deposit. New York Breweries Co. v. Higgins, 29 N. Y. S.,
416.
5. A trustee who deposits in a bank and causes to be credited to his private
account money of the trust fund without giving notice that it is not his
private property or making any special agreement in regard to it,
thereby converts it to his own use; so that the bank, in the absence of
any notice that it is not his private property, may apply it as such.
School District v. First National Bank, 102 Mass., 174.
6. Where an agent deposits in a bank, to his own account, the proceeds of
property sold by him for his principal under instructions thus to keep it,
a trust is imposed upon the deposit in favor of the principal, and his
right thereto is not affected by the fact that the agent at the same time
deposits other moneys belonging to himself; nor is it affected by the fact
that the agent, instead of depositing the identical moneys received by
him on account of his principal, substitutes other moneys therefor. Van
Allen v. The American National Bank, 52 N. Y., 1.
7. Where an agent or trustee has deposited money belonging to his principal
or beneficiary in a bank to which he is himself indebted, and the bank,
without his authority and in ignorance of the true ownershij) of the
fund, has applied it on the debt, the owner is not debarred from recovering it from the bank if it can be identified. Burtnett, adnvr., v. The
First National Bank, 38 Mich., 630.
8. A bank is not chargeable with interest on sums deposited to the credit of
customers to be drawn against by check until payment be demanded,
unless upon special contract. Parkersburg National Bank v. Als.y 5
W. Va., SO.
9. Unlike checks, cash deposited by customers with the bank ceases to be the
property of the depositor, and becomes the property of the bank, creating
at once the relationship of debtor and creditor. Balbach et al. v. Frelinghuysen, Receiver, etc., 15 Fed. Rep., 675.
10. Plaintiff made a certain payment to defendant bank, and received in
exchange a note signed by a firm composed of the officers of the bank,
and the business of which was transacted in. the bank's office. He subsequently gave a check to his wife, which was also exchanged at the
bank office for a similar note. Plaintiff and his wife could both read
and write, and had transacted considerable business with the banks.
Plaintiff retained the notes for two years, and upon the failure of the
firm began suit to re-form the notes and change them into certificates
of deposit of the bank on the ground that he intended to deposit his
money with the bank. Held, that plaintiff was not entitled to a decree.
Murphy v. First National Bank (Ioiva), 63 N. W., 702.
11. Where several deposits in bank have been made on the same account, and
the title to one of the deposits is disputed, checks drawn on the account
will be first applied to the deposits not in dispute. Ilauptmann v. First
National Bank (Sup.), 31 N. Y. S., 364.
12. Testimony that the cashier of a bank failed to enter deposits on its books
is not admissible as against the depositor to show that the deposits were
made with the cashier in his individual capacity. UHerbette v. Pittsfield
National Bank (Mass.), 38 N. E., 368.
13. An envelope, on which the sums paid into and drawn out of a bank by a
depositor are entered by the cashier, is admissible against the bank to
show the state of his account. Ib.
14. A national bank, not designated as a depository of public moneys, which
receives, under the permissive authority of law and the regulations of the
Post-Office Department, deposits of money made by postmasters in their
official capacity, thereby assumes a fiduciary relation to the Government, and becomes a bailee of the Government, so as to become directly
responsible to it for any moneys which it knowingly or negligently
allows the postmaster to withdraw by private check, or othe± trse appropriate to his own use; and where, after the removal of the postmaster,
he deposits a sum to make good a shortage in his balance, the bank can
not apply it in discharge of a debt due it from him personally. United
States v. National Bank of Asheville et al.. 73 Fed. Rep., 379.
15. By reason of this trust relation, equitv has jurisdiction of a bill by the Gov-




REPORT OF THE COMPTROLLER OF THE CURRENCY.

169

DEPOSITS—Continued.

16.

17.

18.

19.

20.

21.

22.

23.

24.

25.

26.

eminent to require an account and settlement of the moneys so deposited
with it; and this remedy is not affected by the fact of a cumulative
remedy at law against the postmaster on his official bond. Ib.
Where a bank knows that money deposited with it to the general credit of
a depositor is held in trust by such depositor, the bank has no right to
apply such deposit to the payment of a note due to it from the depositor;
57 111. App., 107, reversed. Clemmer v. Drovers' National Bank (III.
Sup.), 41 N. E., 728.
An indictment under a statute declaring it an offense if an officer of a bank
shall receive a deposit, " knowing, or having good reason to believe, the
establishment to be insolvent," is not sufficient where it does not allege
the insolvency, but merely follows the words of the statute, as there
would be no offense if the bank was not insolvent, though the officer
believed it was. State v. Bardwell (Miss.), 18 So., 877.
Where one mails to a bank money and checks for deposit, but the bank
refuses to acknowledge receipt thereof, and persistently denies such
receipt, the relation of depositor and depositee is not created. Millerv.
Western National Bank (Pa. Sup.), 38 A., 684.
Where a bank positively and repeatedly denies one's right to make any
claim upon it in respect of currency and checks mailed by him to it for
deposit, the depositor need not make demand before bringing suit on
account of such deposit. Ib.
On trial on an indictment under Comp. St. 1895, §§ 637, 638, for receiving
a deposit in an insolvent bank, defendant offered to show that the dejjosit
was made by a customer whose account was at the time overdrawn in
an amount larger than the deposit. Held, that the evidence was admissible as tending to show that the deposit was made and accepted as an
application on the depositor's indebtedness to the bank. Nichols v.
State (Neb.), 65 N. W., 774.
When a customer of a bank who has overdrawn his account makes a
deposit, the presumption is, in the absence of evidence, that the deposit
was general, and was made and received toward the payment of the
overdraft. Ib.
A bank depositor, on rumors of its insolvency, went to withdraw his
deposits, but was informed by the vice-president and director that the
bank was perfectly solvent, and that " we have got all the money you
want. You need never have any fears of this bank as long as I am in
it." Such depositor, relying on such representations, permitted his
deposit to remain. It was in fact insolvent when the representations
were made. Held, that such vice-president and director was personally
liable to such depositor for the money lost by the failure of the bank.
Townsend v. Williams (N. C.), 23 S. E., 461.
A person deposited money with a bank, taking from it a deposit slip in the
form used for general deposits. Upon such slips were the words,
"Security for signing bond to be held by bank." Subsequently the
depositor, in order to change the security so the $700 would be available
for one purpose and $800 for another, drew an ordinary check, which
was marked " Paid." and a certificate of deposit for $800 made out, to be
held by the surety, and $700 to secure other bondsmen. The firstnamed certificate was afterwards paid by the bank. The depositor testified that the deposit was a special one. Held, a general deposit and
not a trust fund in the hands of a receiver. Dearborn v. Washington
Sav. Bank (Wash.), 42 P., 1107; Wat son v. Sheafe,ib.
A deposit made in a bank at a time when the officers knew that it was
insolvent can not be recovered from the assignee unless it can be identified and traced into his hands. In re Commercial Bank (Ct. Insolv.) 2
Ohio N. P., 170.
In an action by a bank to recover money advanced on a draft, for goods
sold, deposited with it by the vendor, where it claims that the deposit
was made for collection, and the depositor that it was a sale, it is proper
to instruct that if it was a sale the bank could not recover, though
there is evidence that the vendee, after the deposit, paid part of the price
for which the draft was drawn directly to the vendor. Bank of Guntersville v. Webb (Ala.), 19 So., 14.
An instruction that if an illiterate depositor, to whom a bank cashier
fraudulently gave a deposit slip showing a deposit of a draft for collection instead of as a discount, " within a reasonable time, and on his first




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REPORT OF THE COMPTROLLER OF THE CURRENCY.

DEPOSITS—Continued.

opportunity," repudiates the transaction as shown by the slip, would
make no difference, is not objectionable as leaving to the jury the question of reasonable time. Ib.
27 Where a bank cashier, in receiving from an illiterate person a draft sold to
the bank, fraudulently makes out his deposit slip for him so as to show
a deposit for collection, and the depositor subsequently, on discovering
the fraud, repudiates the transaction as a deposit for collection, and, on
an issue as to whether the transaction was a purchase or a deposit for
collection, the bank admits that the slip was a receipt for the draft, and
the depositor claims that it was one for the proceeds, it is proper to
refuse to instruct for the bank that the retention of the slip by the
depositor after repudiation, and using it as evidence of its demand
against the bank, rendered it binding on him. Ib.
28. Where a bank cashier, in receiving from an illiterate person a draft sold
to the bank, fraudulently makes out his deposit slip for him so as to
show a deposit for collection, it is error to admit evidence that the bank
required the cashier to pay the draft on failure to collect it, on the issue
as to whether the "bank was liable as purchaser or as receiver for collection only. Ib.
29. On an issue as to whether the delivery of a draft to a bank was a purchase
or a deposit for collection, the depositor may testify to his illiteracy to
explain his accepting the deposit slip; and, having on cross-examination
given the name of the person who first informed him of its contents, he
may testify when and where the information was given. Ib.
80. One who draws a check on a bank in which he has sufficient funds for its
payment, not encumbered by an earlier lien in favor of the bank, may
sue such bank for damages on its refusal to pay the check to the drawee.
Mt. Sterling National Bank v. Green (Ky.), 35 S. W.,911.
31. A bank may properly refuse to honor the check of a depositor who is
indebted to it on a past-due note for an amount greater than the sum
on deposit. Ib.
32. The duty which a bank holding a note owes to an endorser thereon, to
appropriate a deposit in the bank to payment of the note, exists only
where the maker of the note, at its maturity, has a deposit sufficient to
pay it, and not previously appropriated to any other purpose, and does
not apply to a deposit made after the maturity of the note, or to a
deposit by a prior indorser, though he be in fact the principal debtor,
and the maker be an accommodation maker. First National Bank v.
Peltz (Pa. Sup.),35 A.,218.
33. Decedent deposited bonds and coupons with a bank, and took a writing,
signed by the cashier, acknowledging their receipt, and that they were
" t o be sold, and the proceeds placed to her credit." Held, that a delivery of the receipt, with an indorsement thereon, signed by decedent,
requesting the cashier to " let" plaintiff " have the amount of the within
bill" and with the intention to pass title thereto, constituted a valid
gift of the money due from the bank. Crook v. First National Bank
T\Vis.),52 N. W.,1131.
34. A deposit slip issued by a banker, acknowledging the receipt of the amount
of money therein named, is intended merely to furnish evidence, as
between the depositor and the bank, that on a given day there was
deposited a given sum, and not that such sum remains on deposit, and
hence the delivery of a deposit slip to a third person by the depositor
does not operate as an assignment of the deposit. First National Bank
v. Clark (N. Y. Ajjp.), 32 N. E., 38.
35. A conversation between a bank depositor and a third person, to whom he
had delivered the deposit slip, and in whose favor he had drawn a check
for the amount, in which he stated that the deposit would not be available for ten days, and that he wanted the check discounted immediately,
which was accordingly done, and the money paid him by such third
person, does not, as a matter of law, operate as an assignment of the
deposit to such third person; and a finding by the jury that it did not
will not be disturbed on appeal. Ib.
36. Designating a national bank as a depository of public moneys does not
constitute it an agent of the G-overnment, or render the Government
liable for moneys lost by a failure of such bank. Branch v. The United
States, 1 N. B.C., 363.
37. Such bank does not become a custodian of public moneys deposited with



REPORT OF THE COMPTROLLER OF THE CURRENCY.

171

DEPOSITS—Continued.

38.

39.

40.

41.

42.

43.
44.

45.

48.
47.

it, but it becomes a debtor to the United States the same as it does to
other depositors for individual deposits. Ib.
Certain moneys coming into the possession of the clerk of a Federal court
pending a litigation were by him deposited in a national bank which
had been designated as a depository of public moneys. The bank
failed. Held, that the United States were not liable for the money so
deposited. Ib.
Defendant, who had money on deposit in a national bank, when demanding payment thereof, was induced by an officer of the bank to sign a
promissory note, which was represented to him to be a receipt for the
money. He was unable to read English. Held, that he was not liable
to the bank upon the note. Resh v. First National Bank of Allentown,
93 Penn. St., 397; 3 N.B. C.,72Jh
Plaintiff, who was unable to read, deposited money in a national bank and
took a certificate of deposit therefor, which the officers of the bank represented was fi certificate of the bank. It was, on its face, the certificate
of a private banking firm, composed of some of the officers of the bank.
Held, that the bank was liable for the amount of the deposit. Zeigler
v. First National Bank of Allentown, 93 Penn. St., 393; 39 Am. Rep., 758;
3 N. B.C., 721.
Where the officers of a bank, when they received a deposit which they
applied to the payment of a debt due from the depositor to the bank,
knew or had reason to believe that the deposit contained moneys belonging to others, for whom the depositor was but the agent or factor, the
persons who were in equity the owners of the money were entitled to
recover it from the bank. Union Stock Yards National Bank v. Moore
et al., 79 Fed. Rep., 705.
A postmaster at Lewiston, Idaho, with intent to defraud the Government,
and without receiving any money, issued post-office orders upon the
postmaster at Pueblo in favor of the Stockgrowers' Bank. He mailed
the orders to the bank with a letter purporting to be written by one
Wilson, and directed the bank to draw the money and hold it subject
to said Wilson's order. The bank, without knowledge of the fraud,
obtained the money as directed, but in doing so acted as a principal
without disclosing their agency in the matter. The Lewiston postmaster, under the name of Wilson, subsequently drew the greater part
of the money from the bank, and suit was afterwards brought against
it by the United States to recover the money so obtained on the order.
Held, that the bank was liable. United Stales v. Stockgrowers' National
Bank of Pueblo, 30 Fed. Rep., 912.
Money deposited in a bank without stipulation as to place of payment is
payable to the depositor at the bank. Me Bee v. Pur cell National Bank
(Indian Ter.), 37 S. W., 55.
Where, after the maturity of a promissory note held by a bank, and due
protest and notice thereof, the maker makes a general deposit in the
bank of an amount sufficient to pay the note, this does not of itself, as
between the bank and an indorser, operate as a payment. In the absence
of any expressed agreement or directions it is optional with the bank
whether or not to apply the money in payment; it is under no legal
obligation so to do. The National Bank of Newbiirgh, respondent, v.
Daniel Smith, appellant, GG N. Y.,271.
The mere discounting of paper, and placing the amount thereof to the
credit of a depositor who already has a large balance to his credit, does
not make the bank a purchaser for value so as to protect it against infirmities in the paper. Entering the amount of the discount to the credit of
the depositor simply creates the relation, between the bank and the
depositor, of debtor and creditor; and as long as that relation remains
and the deposit is not drawn out the bank has simply promised to pay
the depositor, has parted with no value, and is not entitled to the protection of a bona fide holder of paper. Ib.
A trust can not be implied from a mere deposit in a, bank by one person of
his own money in the name of another. Beaver v. Beaver (N. Y.), 22
N. E., 940; 117 N. Y.,If21.
Although the relation between a bank and its depositor is that merely of
debtor and creditor, yet the fund does not change its character from the
fact that the money has been deposited in bank to the credit of the
depositor. If the money in his hands was impressed with a trust in




172

REPORT OF THE COMPTROLLER OF THE CURRENCY.

DEPOSITS—Continued.

48.

49.

50.
51.

52.

53.

54.

55.

favor of another the deposit will remain subject to the same trust.
Third National Banky. Stillwater Gas Co., 30 N. W.,440; 80 Minn., 75.
A firm made an assignment, parts of its assets consisting of a sum on
deposit in defendant bank. The assignee made demand for the deposit,
which was refused, and he brought suit. After the demand, but before
suit, a note against the assignors, held by the bank at the date of the
assignment, matured. Held, that it could not be set off in the suit by
the assignee. Chipman v. Ninth National Bank (Pa.), 13 A., 707.
Where a national bank receives State fundd subject to check and to withdrawal on seven days' notice, giving security therefor, and agreeing to
pay interest on daily balances, the transaction is a deposit and not a
loan. State of Nebraska v. First National Bank of Orleans, 88 Fed.
Rep., 947.
It is within the power of a national bank to give bond to secure State
funds deposited with it, and sureties on such bond are bound thereby.
State of Nebraska v. First National Bank of Orleans. 1b.
Checks delivered to a bank by a depositor for collection and deposit at a
time when the bank was insolvent, as must have been known by its
officers, and which had not been collected when the bank closed its
doors, remain the property of the depositor, and may be recovered by
him from the receiver. Richardson v. Denegre, 93 Fed. Rep., 572.
A fund deposited with a national bank, which it agreed to hold for the
special purpose of paying certain bonds of a school district, and which
it could not legally receive as an ordinary deposit or mingle with its
own funds, constituted a trust fund, recoverable by the district from
its receiver, though it was in fact mingled with the funds of the bank,
where a sufficient amount of cash remained on hand at the time the
bank suspended business, and came into the hands of the receiver.
Merchants'" National Bank v. School Dist. No. 8, of Meagher County,
Mont., 94 Fed. Rep., 705.
Neither a bank nor its receiver can deny the receipt ol money deposited
with the bank as a trust fund on the ground that no money was actually deposited, where it received and accepted credit for the amount
with a correspondent, and received the money thereon in due course of
business. Ib.
One who made a general deposit in a bank can not recover such deposit
from a receiver, on the grounds that the bank was insolvent and known
to be so by its officers when the deposit was made, and that the fraud
authorized him to rescind the contract, unless the money deposited can
be identified in the hands of the receiver, or it appears that the funds
coming into his hands were increased by that amount. Quin v. Earle,
95 Fed. Rep., 728.
To constitute fraud on the part of a bank in receiving a deposit when
insolvent, which will authorize the depositor to rescind the contract
and recover the deposit from a receiver subsequently appointed, the
officers must have known or believed the bank to be insolvent at the
time the deposit was received, and. the fact that they knew it to be in
an embarrassed condition is insufficient to establish the fraud. Ib.

DEPUTY COMPTROLLER:

1. A certificate signed by the Deputy Comptroller of the Currency a s ' ' Acting
Comptroller of the Currency " is a sufficient certificate by the Conrptroller of the Currency within the requirements of Rev. St.. par. 5154.
Keyser v. Hitz, 133 U. S., 138.
2. The Deputy Comptroller of the Currency being authorized by law to act
for the Comptroller in certain contingencies, the courts will presume,
in the absence of any showing to the contrary, that the deputy, in acting for the Comptroller in any particular instance, has acted lawfully.
Young v. Wempe et ah, 46 Fed. Rep., 354.
DIRECTORS: See Officers.
DISTRICT ATTORNEY:

1. For services performed by the district attorney in bringing a suit against
a national bank, and obtaining a forfeiture of its charter, he Is not



REPORT OF THE COMPTROLLER OF THE CURRENCY.

173

DISTRICT ATTORNEY—Continued.

entitled to more than $10, the fees prescribed by section 824, there being
no other law in the United States giving a compensation to a district
attorney for such services. Bashaw v. United Slates, 47 Fed.Rep., 40.
2. The 50th (now 153d) section of the act providing that suits under it in
which officers of the United States are parties shall be conducted by the
district attorney of the district is directory only. Kennedy Y. Gibson, 8
Wall., 498.
3. District attorney can not recover compensation for services in conducting
suit arising out of the provisions of the national-banking law in which
the United States or any of its agents or officers are parties. Gibson v.
Peters, Receiver, ISO U. S., 342.
4. The expenses of a receivership can not be held to include compensation of
district attorney for conducting a suit in which the receiver is party,
and he can not receive any compensation for services so rendered or
offered to be rendered. Ib.
DIVIDENDS:

1. Equity has jurisdiction of a suit by the receiver of an insolvent national
bank against all its shareholders to recover dividends unlawfully paid
to them out of the capital at times when the bank had earned no net
profits, and was in fact insolvent, it being in effect a suit to execute a
trust, to undo a fraud, and to prevent a multiplicity of suits. Hayden
v. Thompson et aL, 71 Fed. Rep., 60.
2. A bill by the receiver to recover the dividends illegally paid may be brought
without an express order from the Comptroller of the Currency. Ib.
3. It can not be urged as a defense to such suit that the remedies provided by
the national-banking act are exclusive, the right to recover diverted trust
funds not being dependent on statute. Ib.
4. The fact that some of the defendants participated in but one or two of the
sixteen dividends on which the suit was based, that others participated
in more, and others in all the dividends, does not render the bill multifarious. Ib.
5. The national courts, sitting in equity, act or refuse to act in analogy to the
statute of limitations of the States in which they are sitting. Ib.
6. A stockholder in an insolvent bank who receives a dividend from funds
properly belonging to the creditors holds it under an implied and not an
express trust in favor of the creditors, and hence limitations run in his
favor against an action to recover the dividend. Ib.
7. The rule that the time limited for beginning an action for fraud shall not
commence to run while defendant conceals it does not apply when the
concealment is by a third person. Ib.
8. In the absence of fraud, the cause of action to recover the dividend wrongfully paid arose when the payment was made, and not upon the appointment of the receiver and. the discovery that the other assets of the bank
were insufficient to pay its debts. Ib.
9. A bank has a right to accumulate a surplus before declaring dividends on
its stock. Reynolds v. Bank of Mt. Vernon (Sup.), 39 N. Y.S.,623.
10. Where complainant has a decree in equity that defendant pay her dividends on stock held by her, and defendant has against complainant an
unsatisfied judgment at law for an assessment on said stock, the court,
on motion, will order the amounts to be paid under the decree applied
on the judgment, though the judgment was at a former term and complainant intends to appeal therefrom. SowlesY. Witters et al., 40 Fed.
Rep., 413.
11. Liquidation dividends of a national bank belong to the holder of the shares,
whether those shares be recorded upon the books of the bank or not, and
must be paid to the holder of such shares on demand. Bath Sav. Inst.
Y. Sagadahoc National Bank Me., 36 A., 996.
12. A receiver of an insolvent national bank may maintain a suit in equity in
any district against all the stockholders within the court's jurisdiction
to recover back unearned dividends received by them, and unlawfully
paid from the bank's capital when insolvent, on the ground that it is a
suit to follow trust funds. Hayden y. Brown 94 Fed. Rep., 15.
13. A secured creditor of an insolvent national bank may prove and receive
dividends upon the face of his claim as it stood at the time of the declaration of insolvency, without crediting either his collaterals or collections
made therefrom after such declaration, subject always to the proviso



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

DIVIDENDS—Continued.

that dividends must cease when, from them and from collaterals realized, the claim has been paid in full. Merrill v. National Bank, 173
U. S., 131.
14. The receiver of an insolvent national bank may recover from a stockholder dividends declared and paid after the bank became insolvent
where necessary to meet the demands of creditors. Hayden v. Williams,
96 Fed. Rep., 279.
15. The receiver of a national bank can not recover a dividend paid to a stockholder not at all out of profits, but entirely out of capital, when the
stockholder receiving such dividend acted in good faith, believing the
same to be paid out of profits, and when the bank, at the time such dividend was declared and paid, was not insolvent. McDonald. Receiver, v.
Williams, 174 TJ. S., 307.
ESTOPPEL:

1. Where one sued by a national bank is accustomed to deal with it as such
and does so deal with it in respect to the matter in suit, he is estopped
from denying its incorporation. National Bank of Fairhaven v. The
Phoenix Warehousing Company, 6 Hun., 71.
2. A director is not, by reason of his position, estopped from setting up the
defense of usury in an action brought against him by the association.
Bank of Cadiz v. Slemons, 34 Ohio St., 142.
3. Where a national-banking association has entered into a contract which
it is not authorized to make, a party who has enjoyed the benefit of
such contract can not question its validity. Casey v. La Societe de
Credit Mobilier, 2 Woods, 77; German National Bank v. Meadowcroft,
95 III., 124.
4. Where officer of a bank guaranteed payment in name of bank and sold the
note, the bank by retention and enjoyment of the proceeds is estopped
to deny officer's act. People's Bank v. National Bank, 101 U. $., 181.
5. The organization of a national bank under the national banking act may
be put in issue "by a party who has not estopped himself. But a party
who has accepted as payee a promissory note payable at a banking institution which the parties to the note style a national bank, and has sold
and transferred the note to such banking institution, can not be allowed
to raise that issue by merely averring want of knowledge or information
sufficient to form a belief as to whether the institution is a body corporate, etc. Huffaker v. National Bank of Monticello, 12 Bush, 287; 1
N. B. C.,504.
6. If upon inquiry by the surety, the cashier, knowing that he is a surety,
inform him that the note is paid, intending that he should rely upon
his statement, and the surety does so, and in consequence changes his
position by giving up securities, or indorsing other notes for the principal, or the like, the bank will be estopped to deny that such note is
paid. Cochecho National Bank v. Haskell et al., 51 N. H., 116.
7. A stockholder of a private corporation, when sued by its creditors, is
estopped from denying the legal existence of the corporation, or insisting that its charter has been forfeited by noncompliance with statutory
provisions for which a forfeiture might be judicially declared. National
Commercial Bank v. McDonnell, 92 Ala., 387.
8. Where an officer of a bank loaned money for his individual benefit upon
pretended collateral security of the bank. Held, that his bank was
estopped to deny the loan and is liable therefor, as the lender dealt with
him solely in his official capacity. Stewart v. Armstrong, 56 Fed. Rep.,
167.
9. Vice-president of bank, also manager of a commercial house, substituted
as collateral notes to order of his house, and indorsed by them without
consideration. Held, that, as against holders of collateral, the house
was estopped to deny that these notes were properly pledged as security
for a loan to his bank. Ib.
10. The estoppel upon his bank exists only in favor of lender. Hence, his
house has no remedy against it for any liability enforced by the lender
on account of its indorsed notes so pledged. Ib.
11. A shareholder who has held himself out to the world as such is estopped
to deny that the association was legally incorporated. Casey v. Oalli,
94 U. S., 673; Wheelock v. Kost, 77 III, 296.



REPORT OF THE COMPTROLLER OF THE CURRENCY.

175

ESTOPPEL—Continued.

12. A person who received dividends on shares of stock standing in his name
on the books of a national bank is estopped from denying his liability on
the ground that he returned the same by check to an officer of the bank.
He is presumed to be the owner of the stock when his name appears
upon the books of the bank, and the burden of proof is upon him to show
that he is not in fact the owner. Finn v. Brown, 142 U. S.,56.
13. A shareholder against whom suit is brought to recover the assessment made
upon him by the Comptroller will not be permitted to deny the existence of the association, or that it was legally incorporated. Casey v.
Galli, 94 U. S:, 673,
14. In such suit stockholder is estopped to deny existence or validity of corporation. Ib.
15. The legality of the appointment of the receiver can not be questioned by
the debtors of the bank when sued by him. The bank may move to have
the appointment set aside, but the debtors can not. Cadle v. Baker, 20
Wall, 650; Platt v. Beebe, 57 N. F., 339.
16. A corporation which received and used the proceeds of a discount of notes
by its president is estopped to deny his authority to discount the paper.
German National Bank v. Louisville Butchers' Hide and Talloiv Co.
(Ky.),29 S. W., 882.
17. Where the cashier, intrusted by its directors with its entire management,
has been accustomed in having paper rediscounted to guarantee its payment, the bank will be estopped from denying his authority to so guarantee it. First National Bank v. Stone (Mich.), 64 N. W., 487.
18. Where the president of a bank procures advancements to be miido 1.) ;i i\ ltJtive by the bank, promising to become liable therefor, and not t'> recvivo
payment of any part of the amount which such relative owes k'm individually until the bank was paid, he is estopped to claim the b'oaof.i 01 ii
priority given his debt in a mortgage executed by such relative * >< r iluit
v
due the bank, and whatever benefit accrues to him under such mo *^>";:gc
is subordinate to the claim of the bank. Brown v. J'liriner.i <iii:l Mnchants1 National Bank (Tex. Civ. App.), 31 S. IV., 216.
19. A bank which causes property owned by it to be conveyed by a deed regular in form to a worthless corporation, organized by its own directors,
and then loans such corporation money, takes its notes and discounts
them with strangers, by representing them as prime paper and on the
strength of such corporation's apparent ownership of such property, is
thereafter estopped, as against the holders of the notes, to assert that the
conveyance was ultra vires. Butler el al.y. Coekrill, 73 Fed. Hep., 945.
20. The holder of part of the bonds of an insolvent corporation is not estopped
to set up the invalidity or want of consideration of other of the bonds
not in the hands of innocent holders. Farmers <& Merchants' National
Bank v. Waco Electric Railway & Light Co. (Tex. Civ. App.), 36 S. W.,
131; Metropolitan Trust Co. v..Farmers & Merchants' National Bank, ib.
21. In order to constitute a ratification of an unauthorized act, the act relied
on as such ratification must be performed with knowledge of the material facts in the absence of circumstances creating an equitable estoppel.
Columbia National Bank Y.Rice (Neb.), 67 N. W., 165.
22. The fact that the bank stamped the original note "Paid," instead of
" Renewed," in the belief that the forged signature of the surety on the
renewal note was genuine, does not estop it from enforcing its claim
against the surety on the original note, though the surety, seeing the
latter in the hands of the principal, believed it had been paid, and signed
other notes of the principal as surety, to his damage.
Lyndonvitte
National Bank v. Fletcher (VI.), 34 A.,38.
23. After a party has recovered judgment against a corporation, as such, and
obtained the appointment of a receiver therefor, he can not in the same
suit deny its corporate entity and seek to hold the stockholders thereof
liable as partners. First National Bank v. Dovetail Body & Gear Co.
(Lnd.Sup.), 42 N.E.,924.
24. A bank which received a letter from another bank asking in regard to the
character and financial standing of a certain person, without any intimation as to the making of a loan, is not estopped, as against a loan subsequently made by the inquiring bank, to claim a chattel mortgage lien
on the man's property, because, in its answer, it merely stated the man's
character and assets above his indebtedness, without stating that he was



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

ESTOPPEL—Continued.

indebted to it. First National Bank v. Marshall & Ilsley Bank (Mich.),
65 N. W.,604.
25. Statements of a mortgagor, made for the purpose of obtaining credit for a
corporation of which he was a member, that he had sold to it the mortgaged property, would not conclude the mortgagee, unless it had knowledge thereof at the time, and kept silent. Ib.
26. One who has demanded a certain amount as a balance due on a trade is not
estopped from suing for a greater amount, and may explain the demand.
First National Bank v. Lynch (Tex. Ctv.App.), 25 S. W., 10 42.
27. A partner who is made known by his fellow-partner to a third person, in
order to obtain credit, can not afterwards claim to be a dormant partner
as to such person, so as to relieve him from the necessity of giving notice
upon retiring from the partnership. M-ihno National Bank v. Carter
(Tex. Civ. App.), 20 S. W., 836.
28. The fact that a party to a contract which is void as against public policy
has received the benefits therefrom does not estop him when sued
thereon from setting up such defense. Brown v. First National Bank
(Lid. Sup.), 37 N. E., 158.
29. The maker of a note payable at Tuscaloosa Fence Factory is; estopped in a
suit thereon by an innocent purchaser for value to deny the existence of
such a place. Brown v. First National Bank (Ala.), 15 So.,4-35.
30. A wife, jointly with another person, signed a note to her husband's order,
and delivered it to him to have discounted, and with the proceeds pay a
debt of his. The husband applied to a bank official, who had notice that
the note was made without consideration, but did not have notice that
the proceeds were to be ax>plied for the husband's benefit, and the official
offered to discount it by a check to the wife's order, which the husband
accepted, and afterwards procured his wife to indorse and deliver to
him, she knowing that it was the proceeds of her note. Held, that the
wife was estopped from setting up against the bank that she was a mere
surety on the note. Hackettstown National Bank v. Ming. (N. J. Ch.),
27 A., 920.
31. H., being indebted to a national bank for a considerable sum, for which
the bank held certain corporate stock as collateral security, in writing
authorized the president and directors of the bank to sell at their discretion all the stock and apply the proceeds of the sale upon his indebtedness. Thereafter, after giving H. amx>le notice of an intention to sell,
the stock was sold and transferred to three of the directors of the bank,
at a price above the market value, and the amount received from the
sale applied upon the indebtedness of H. H. received an itemized statement of the proceeds of the sale and of its application upon his indebtedness, to all of which he made no objection. Five years thereafter H.
commenced an action against the bank for the purpose of obtaining a
decree redeeming the stock, and for an accounting. Held, that the
action could not be maintained: First, because by his silence he was
estopped; and second, because of delay in bringing suit.
Haywardv.
Eliot National Bank, 96 U. S., 611; 2 N. B. C, 1.
32. A national bank purchased the stock of a dealer in wall paper at a sale
under an execution in its favor, and afterwards organized a corporation
to take and dispose of this stock, such corporation being managed by
the officers of the bank, and controlled by it. In order to dispose of the
stock with advantage, new stock was purchased on credit, the bank,
through its cashier, informing the seller, upon inquiry, of the relation
between the bank and the corporation, and that the bank would see
that the bills were paid if the goods were sold. Held, that whether or
not it was within the powers of the bank to purchase new stock to help
the sale of that brought on execution sale, the bank having received
and appropriated the proceeds of the goods purchased, was estopx>ed to
set up in a suit for the price a want of power to make the purchase.
American National Bank v. National Wall Paper Co., 71\ Fed. Rep., 85.
33. A national bank which returns its capital for taxation is not thereby
estopped from setting up that the same was not subject to taxation, and
refusing to pay the tax. Brown v. French, 80 Fed. Rep., 166.
34. The judgment in an action is conclusive in a subsequent action between
the same parties upon the same cause as to all questions which might
have been presented and determined in the first suit; but in a subsequent action between the same parties upon a different cause it is con


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177

ESTOPPEL—Continued.

elusive only upon such questions as were actually litigated and determined in the first suit. Lawrence v. Stearns, 79 Fed. Rep., 878.
35. One who has been prosecuted to judgment upon a cause of action based
on the negligent act of another, who has been called in to defend and
has defended the suit, may sue such other party for indemnity, and
rest his case upon the former adjudication, it being shown that it was in
consequence of such negligence that the former judgment passed. Ib.
36. The cashier of a bank does not act as its agent or representative in answering an inquiry addressed to him by another bank as to the business
standing of a third person; and the bank is not bound or estopped by
statements so made by him, his act being one not relating to the business of his bank, but simply one of customary courtesy rendered
without consideration. First National Bank of Manistee. Mich., et al.,
v. Marshall and Ilsley Bank of Milwaukee, Wis., 83 Fed. Rep., 725.
37. The failure of the officers of a bank, in answering a general inquiry from
another bank as to the character and standing of a customer, to disclose
the fact that the customer was indebted to their bank, and that it held
liens on certain of his property, will not estop it to assert such liens as
against a mortgage subsequently taken by the inquiring bank in the
absence of any fraudulent intent. Ib.
38. Subscribers to the capital stock of a national bank previously organized
and carrying on business, who accepted certificates of stock representing a portion of the original capital stock, obtained by the bank in some
manner from the former holders, are estopped, after the lapse of five
years, during which they retained the stock, received two dividends,
and paid one assessment thereon, to deny that they are stockholders, in
a suit by the receiver, on the bank's insolvency, to collect a further
assessment, on the ground that they supposed they were purchasing a
part of an issue of increased stock which the bank had voted to issue,
but the issuance of which had not then been authorized by the Comptroller. Rand v. Columbia National Bank, 94 Fed. Rep., 349; samev.
Tillinghast, Id.
39. Less than two years having elapsed from the payment of the first dividend to the filing of this bill, and the other creditors of the bank not
having been harmed by the delay, no presumption of laches is raised,
nor can an estoppel properly be held to have arisen. Merrill v. National
Bank, 173 U. 8., 181.
40. The investment by the First National Bank of Concord, New Hampshire,
of a part of its surplus funds in the stock of the Indianapolis National
Bank, of Indianapolis, Ind., was an act which it had no power or
authority in law to do, and which is plainly against the meaning and
policy of the statutes of the United States and can not be countenanced;
and the Concord corporation is not liable to the receiver of the Indianapolis corporation for an assessment irpon the stock so purchased,
made under an order of the Comptroller of the Currency to enforce the
individual liability of all stockholders to the extent of the assessment.
The doctrine of estoppel does not apply to this case. First National
Bank of Concord v. Hawkins, 174 U. S., 364.
EVIDENCE:

1. The certificate of the Comptroller of the Currency that an association has
complied with all the provisions required to be complied with before
commencing the business of banking is admissible in evidence upon a
plea of nul tiel corporation; and such certificate, together with proof
that the association has been acting as a national banking association
for a long time, is amply sufficient evidence to establish, at least prima
facie, the existence of the corporation. Mix v. The National Bank of
Bloomington, 91 III., 20; Merchants' National Bank of Bangor v.
Glendon, 120 Mass., 97.
2. The certificate of the Comptroller of the Currency duly made is sufficient
evidence of the appointment of the receiver in an action brought by him.
Platt v. Beebe, 57 N. F., 889; 1 N. B. C., 725.
3. And in a suit against the association or its shareholders such certificate of
the Comptroller is conclusive as to the completeness of the organization.
Casey v. Oalli, 94 U. S., 073.
CUR 99
12



178

REPORT OF THE COMPTROLLER OF THE CURRENCY.

EVIDENCE—Continued.

4. Under the national banking act, a copy of the certificate of organization
of a United States national bank, which is certified by the Comptroller
of the Currency and authenticated by his seal of office, is competent
evidence in a State court. Tapleyy. Martin, 116 Mass., 275; 1 N. B.
C, 611.
5. In an action by " The West River National Bank of Jamaica, Vermont.-'
Held, that the certificate of the Comptroller of the Currency of the existence of a corporation under the name of '' The West River National
Bank of Jamaica," described as located in the town of Jamaica, Vermont, was admissible under the general issue for the purpose of proving the plaintiff's corporate existence. Thatcher v. West River National
Bank, 19 Mich., 106; 1 N. B. C, 622.
6. It is no objection to the admission in evidence of the certificate of the
organization of a national bank that the notary before whom it was
acknowledged was one of the shareholders of the bank. The Comptroller's certificate of compliance with the act of Congress removes any
objection which might otherwise have been made to the evidence on
which he acted. Ib.
7. A certificate signed by the Deputy Comptroller of the Currency as "Acting
Comptroller of the Currency " is a sufficient certificate by the Comptroller of the Currency within the requirements of Rev. St., sec. 5154.
Aspinwall v. Butler, 133 U. 8., 595.
8. A letter from the Comptroller directing the receiver to institute suit, if
not objected to at the time, is sufficient evidence that the Comptroller
has decided that the enforcement of the individual liability of the
shareholders is necessary. Bowden v. Johnson, 107 U. S., 251.
9. In an action by a national bank, plaintiff may prove that it is a corporation de facto by parol evidence ; that it is carrying on a general banking business as a national bank, authorized by the general laws of the
United States, under the name by which it has sued, the court taking
judicial notice of such laws. YaJcima National Bank v. Knipe, 33 P.,
834; 0 Wash., 348.
10. In accordance with the provisions of the Minnesota statute (Gen. St,, 1878,
c. 26, § 8 ; Gen. St,, 1894, § 2275), making the certificate of protest of a bill
or note of any notary public of that or another State evidence of the
fact therein certified, such a certificate is competent evidence, in a Federal court sitting in Minnesota, of the presentment, demand, dishonor,
or notice of dishonor of a note drawn in Minnesota and payable and
protested in Connecticut. Nelson v. First National Bank of Killingley,
69 Fed. Rep., 798.
11. A letter written in the ordinary course of business by a clerk in the office
of one sought to be charged as indorser of a note, acknowledging the
receipt of notice of the protest thereof, is competent evidence of the
sending of the notice. Ip.
12. Upon the question of the value of stock in a corporation which has been
placed in the hands of a receiver, under a statute of the State creating
it, in proceedings for its dissolution as insolvent, the opinions of competent witnesses as to the value of the stock are admissible, as is also
evidence of the amount and value of the assets and liabilities of the
corporation at different times between the appointment of a receiver
and the sale of the assets in accordance with the statutory requirements. Ib.
13. Upon the same question it is also admissible to prove the amounts realized
at the sales made of the property of the corporation by the receiver,
under the order of the court, in the regular course of the insolvency
proceedings, though taking place at a time remote from that to which
the inquiry as to the value of the stock relates. Ib.
14. A witness ought not to be permitted to give an opinion as to the value of
an article when it does not appear that he has acquired any correct
information from which to form an opinion, or that he has formed any
opinion whatever. Ib.
15. When evidence which may have been irrelevant, or otherwise open to an
objection seasonably taken, has been admitted without objection, the
witness being examined and cross-examined by the respective parties,
it is not error to deny a motion to strike out such evidence, made after
its tendency and effect have been disclosed. Farmers and Traders'
National Bank of Covington, Ky., v. Greene et ah, 74 Fed. Rep., 439.



REPORT OF THE COMPTROLLER OF THE CURRENCY.

179

EVIDENCE—Continued.

10. When the books of a bank are offered in evidence by one party to a suit,
the other party is entitled to avail himself of any part of the evidence
contained therein, such as the state of a particular account. Blanchard
v. Commercial Bank of Tacoma, 75 Fed. Rep,, 249.
17. In an action to recover a sum alleged to have been loaned to a bank, the
receiver thereof claimed that the loan was to the president of the bank
personally. He also contended that the bank's books should not be considered as evidence that the loan was to the bank because they were not
properly kept, and he offered to show by expert testimony what would
have been the proper method of entering the transaction if the loan had
been made to the bank. Held, that this evidence was properly excluded,
as it did not appear that there was any such ambiguity in the account
as to require expert evidence in relation thereto. Ib.
18. Where a jury is waived and the court makes special and general findings,
an appellate court is not required to weigh the evidence and determine
the preponderence thereof, but will only consider whether the pleadings
and special findings are adequate to support the judgment. Walker v.
Miller, 8 C. C. A., 331; 59 Fed. Rep., 870, followed.
19. On an issue as to whether the deposits of plaintiffs1 testator in defendant
bank were interest bearing, evidence of the value of the use of money
in vincinity of the bank, and that testator received interest on similar
deposits in other banks, and that one bank offered him 5 per cent on any
money that he might deposit, is admissible in rebuttal of defendant's
evidence that the agreement between the parties, by which testator's
account should be interest bearing, was abrogated by a subsequent
agreement that it should not bear interest. Merwin, J., dissenting.
McLoghlin v. National Mohawk Valley Bank (Sup.), 20 N Y. S., 171.
20. An instruction that a party alleging fraud must prove it by a preponderance of the evidence, so clear that it leaves the mind well satisfied that
the charge is true, requires too high a degree of proof, since it is sufficient if the jury believe a material fact in issue, from the evidence, even
if the proofs do not generate a belief which entirely satisfied the mind.
Hutchinson National Bank v. Crow. 56 III. App., 558.
21. The certificate of organization of a national bank, issued by the Comptroller of the Currency, is competent evidence of the incorporation of the
bank. National Bank of Commerce v. Galland (Wash.), 4& -?*•» 35.
22. Where the cashier of a bank, who assumed to be acting as such, applied
to another bank in the usual course of business to discount a note produced by him, payable to himself, and regularly indorsed by him in
both his individual and*omcial capacity, neither the fact that he appeared
to be the payee and first indorser and his bank the second indorser, nor
that the avails of the note were received by him personally, was conclusive evidence that the indorsement of his bank was unauthorized or
for his own accommodation. Merchants' National Bank v. McNeir
(Minn.), 53 N. W.,178.
23. In an action by a bona fide holder on bonds of a school district, purporting
to have been issued in satisfaction of a judgment against the district,
as authorized by acts 17th Gen. Assem., c. 182, the defense was that
such bonds had been fraudulently issued after the judgment had been
already satisfied by a prior issue of bonds. Held, that, after a showing
that a diligent search had been ineffectually made for the records of the
district authorizing the first issue of bonds, and after the then secretary
of the district identified one of such bonds as having been issued in payment of the judgment in question, and had partly described the others,
such bonds purporting on their face to have been issued by the officers
of the district, and having been afterwards found to be valid obligations
of the district by a court of competent jurisdiction, were themselves
properly admitted in evidence. First National Bank v. District Tp. of
Boon (Iowa), 58 N. W.,301.
24. Depositing in the post-office a letter properly addressed, with postage prepaid, is prima facie evidence that the sendee received it. Ripley
National Bank v. Latimer, 2 Mo. App. Rep'r, 967.
25. In an action to recover the amount paid to the payee and indorser of a
check, on the ground that the amount of the check had been raised,
where experts had testified that writing could be removed by acids without leaving any trace, and there was evidence that the name of the payee



180

REPORT OF THE COMPTROLLER OF THE CURRENCY

EVIDENCE—Continued.

and amount in the check in question had been altered, but none that the
check had been subjected to acids, experienced cashiers were properlyallowed to testify as to the genuineness of the check, though not shown
to be experts as to the effect of acids on writing. Birmingham National
Bank v. Bradley {Ala.), 19 So., 791.
26. On an issue whether a check had been raised in amount, it was error to
admit in evidence a check which bore evident signs of having been
altered, as a result of experiments with acids which had been made
thereon, for the purpose of showing that an alteration could not be made
without detection. Ib.
27. The testimony on another trial of an officer of a corporation with relation to
previous corporate acts can not be proved as an admission binding upon
the corporation. Columbia National Bank v. Bice (Neb.), 67 N. W., 165.
28. Proof of false statements knowingly made by the purchaser of goods,
whereby he is shown to be possessed of a large amount of property over
and above his liabilities, is admissible under an allegation that, being
insolvent, he knowingly concealed his insolvency from the vendor.
First National Bank v. McKinney (Neb.), 66 N. W.,280.
29. In an action on a note dated on Sunday the burden is on plaintiff to show
that it was in fact executed on a day which was not Sunday. Hauerwas
v. Goodloe (Ala.), 13 So., 567.
30. In an action by a bank on a note dated on Sunday its " discount register "
is not admissible in evidence to show that the note in suit was a renewal
of a note which matured on Sunday, and that the renewal note was
made on a certain week day after its date and dated back to the date of
the maturity of the first note, according to the custom of the bank. Ib.
31. In an action by a bank on a note dated on Sunday it is not error to admit
evidence that the note is in the handwriting of the bank's cashier, and
that he was not in the employ of the bank until after the date of the
note, and that the note is a renewal note, and dates back. Ib.
32. Where defendant, in a suit by a mortgagee against the mortgagor for the
mortgaged property, claims payment of the debt the burden is on him
of proving such payment. First National Bank v. Hellyer (Kan.), 37
P., 130.
33. The testimony of a witness in another case may be proven by anyone who
heard it, and the reporter's notes are not the only or best evidence.
German National Bank v. Leonard (Neb.), 59 N. W., 107.
34. The testimony of a witness in an action to which he was not a party may
be proved in a subsequent action to which he is a party as an admission. Ib.
35. Parol evidence is admissible to show that the word " accounts/' as used in
an assignment, for the purpose of security, of the " good and collectible
accounts " of the assignor, covered not only such accounts as showed an
unconditional liability on the part of the debtor at the date of the assignment, but also partially executed contracts and consignment contracts
which called for payment in the future and on conditions to be performed. Preston National Bank v. Emerson (Mich.), 60 N. W., 981.
36. As against bona fide purchasers of a note signed in blank on the back
thereof by a third person before delivery to the payee, parol evidence is
not admissible to show that such person signed as accommodation
indorser, and not as joint maker, as presumed bv law. Salisbury v.
First National Bank (Neb.), 56 N. W., 727.
37. In an action by one bank against another on a note, and for money loaned,
where defendant asserts that plaintiff bought the note, proof of the
negotiations for the loan, and that defendant received its proceeds, is not
incompetent as varying the written instrument. First National Bank
v. California National Bank (Cal.), 35 P., 639.
38. Where the genuineness of the signatures of certain letters alleged to have
been written by plaintiff were in question, and she admitted her signature to a certificate of stock, it was not error to send the stock book to
the jury for a comparison of signatures. Rose v. Winnsboro National
Bank (S. C), 19 S. E., 487.
39. An unsigned entry on a deed is inadmissible to show the time it was filed
for record. First National Bank v. Cody (Ga.), 19 S. E. 831.
40. Parol evidence is admissible to show that a note, though in the possession
of the payee, was delivered with the understanding that it would not be



REPORT OF THE COMPTROLLER OF THE CURRENCY.

181

EVIDENCE—Continued.

41.

42.

43.

44.

45.

46.
47.
48.

49.

50.
51.

binding upon the makers unless signed by other persons. Merchants'
National Bank v. McAnuliy {Tex. Civ. App.), 31 S. M7., 1091,
In an action for malicious prosecution of an attachment it is not error to
refuse to permit plaintiff to testify whether defendant had any motive
in procuring the issuance of the attachment other than an honest desire
to collect a debt, and to limit him to a statement of the facts. Hamer
v. First National Bank ( Utah), 33 P., 941.
In an action by a national bank against a maker of a promissory note the
fact that the note is made payable at the plaintiff bank is not conclusive
evidence that such bank is a corporation. Hungerford National Bank
v. Van Nostrand, 106 Mass., 559; 1 N. B. C, 5S9.
Under the acts of Congress authorizing questions arising on a trial or
hearing before two judges in the circuit court, and upon which they
are divided in opinion, to be certified to the Supreme Court of the United
States for decision, each question certified must be one of law and not
of fact, nor of mixed law and fact, and it must be a distinct point or
proposition clearly stated, and not the whole case nor the question
whether upon the evidence the judgment should be for one party or for
the other. Williamsport National Bank v. Knapp, 119 U. S., 357; 3 N.
B. C, 184.
An indorser on certain notes made a compromise with the indorsee by
which he gave his notes for a part of the amount due, he to be released
from liability on the original notes upon payment of the compromise
notes at maturity. Held, that evidence that money with which he made
part payment on the compromise notes was borrowed by him was not
admissible on an issue as to whether the indorsee, after accepting such
payments, was estopped to hold him liable on the original notes.
Humphreys v. Third National Bank of Cincinnati, 75 Fed. Rep., 852.
An indorsee of a note agreed to receive, in compromise of an indorser's
liability thereon, secured notes for a less amount, the indorsee to have
the right, if the compromise notes were not paid when due, to sue the
indorser for the balance remaining due on the original notes, after applying thereon the partial payments made on the compromise notes, and
the proceeds of the security given therefor. Held, that the indorsee did
not, by receiving part payments on the compromise notes after their
maturity, waive the right to sue the indorser on the original notes. 66
Fed. Rep., 872, affirmed. Ib.
Nor did he waive his right to proceed on the original note by failing to
tender back the compromise notes or the security given therefor. Ib.
Where the facts do not appear on the face of the judgment, oral evidence
is admissible to show how credits thereon came to be allowed and what
they were allowed for. Ib.
Where it is not shown that a certain collection made by a receiver of an
insolvent national bank was forwarded by a correspondent of the bank,
nor included in the list of items sent, it is not sufficiently traced; and
this though the receiver testifies that the item was collected for the forwarding bank. Richardson v. Louisville Banking Co., 94 Fed. Rep., 4.42.
A bill by the receiver of the bank to set aside a preferential transfer of
notes, in violation of Rev. St. § 5242, is not sustained by proof that the
notes were put into the transferee's hands for payment by him, and
that, instead of paying them, he wrongfully kept them. Alabama Iron
and Railway Co>. v. Austin, 94 Fed. Rep., 897.
Where an order dismissing a law case is pleaded in bar in an equity suit,
and no proof is offered except the order itself, defendant can not show
the nature of the law case by affidavit after trial. Ib.
In a suit between the receiver of a national bank and a stockholder, the
books of the bank are evidence to establish acts of the corporation and
its financial condition at a particular time, though not as to dealings
between the corporation and the defendant. Hay den v. Williams, 96
Fed. Rep., 279,

EXECUTION:

1. A judgment against a national bank in the hands of a receiver only establishes the validity of the claim; the plaintiff can have no execution on
such judgment, but must wait pro rata distribution. Bank of Bethel v.
Pahquioque Bank, 14 Wall., 383.



182

REPORT OF THE COMPTROLLER OF THE CURRENCY.

EXEC UTION—Continued.

2. A sheriff in Texas lias no power to levy upon or sell land lying outside his
county, and his deed, describing by metes and bounds land purporting
to have been levied on and sold, part of which lies outside his county, is
void as to such part. Short v. Hepburn, 75 Fed. Hep., 113.
3. The imperfect description of property in a notice of sheriff's sale under
execution will not necessarily vitiate the sale where the description is
sufficiently certain so that no one is deceived as to the identity of the
property sold. Grundy County National Bank v. Ridison, 61 III.
App., 388.
4. Where judgment has been rendered in a State court against a national
bank, and upon the execution issuing thereon a return of nulla bona
has been made by the sheriff of the county where the bank is located,
and the bank has ceased to discharge its functions as a fiscal agent of
the United States, and is disposing of its assets which can not be reached
by levy and sale under the common-law execution among its stockholders, thereby endangering the safety of those assets and the judgment
debt of the creditor, equity will relieve by the grant of injunction and
the appointment of a receiver. Merchants and Planters' National Bank
v. Trustees of Masonic Hall, 2 N. B. C, 220.
5. A bill by a judgment creditor for discovery, showing that when the execution was returned unsatisfied and w^hen the bill was filed there was
property, within the knowledge of the creditor, subject to levy on execution, fails to show that the legal remedy has been exhausted, and is
demurrable. Merchants'' National Bank of Chicago efal. v. Sabin et al.,
34 Fed. Rep., 492.
6. That a national bank for which no receiver has yet been appointed is in
charge of an examiner appointed by the Comptroller to investigate its
affairs does not exempt its tangible assets from execution upon final,
judgment. Kiinball v. Dunn, 89 Fed. Rep., 782.
EXPIRATION OF CORPORATE EXISTENCE:

Under the act of Congress, July 12, 1882, extending for the purpose of liquidation the franchises of such national banking associations as do not
extend the periods of their charters, and making applicable to them the
statute relating to liquidation of banking associations, such an association may continue to elect officers and directors for the purpose of effecting liquidation. But after the expiration of the term of its charter the
stock of such an association is not transferable so as to give the transferee the right to share in the election of directors, and such transferee,
not being a stockholder, is ineligible as a director under Rev. Stat., sec.
5145. Richards v. Attleboro National Bank, 148 Mass., 187; 3 N. B. C,
495.
EXTENSION OF CORPORATE EXISTENCE:

1. The identity of a national bank is not affected by the extension of its term
of existence. Trustees of First Presbyterian Church v. National State
Bank, 29 A., 320.
2. The committee provided for by the fifth section of act of Congress of July
12, 1882, to appraise the national-bank shares of shareholders who do
not assent to amendments to the articles of association, may correct a
mistake made by them in their approval within thirty days therefrom.
First National Bank of Clarion v. Brennemaris Executors, 114 Penn,
St., 315; 3 N. B. C, 755.
FALSE ENTRIES:

1. The only remedy for the making of a false return to the auditor, by the
cashier of a bank, of the resources and liabilities of the bank, for the
purposes of taxation, is afforded by revised statutes of Ohio, section
2679, which provides that the auditor may examine the books of the
bank, and any officer or agent of it under oath, and make out the statement; and any officer of the bank may be fined not exceeding $100 for
failing to make the statement, or for willfully making a false one.
Miller v. First National Bank, 21 N. E., 860.
2. Any entry on the books of the bank which is intentionally made to represent what is not true or what does not exist, with intent either to deceive
its officers or defraud the association, is a false entry within the meaning
of the statute. United States v. Harper, 33 Fed. Rep., 471.



REPORT OF THE COMPTROLLER OF THE CURRENCY,

183

FALSE ENTRIES—Continued.

3. It may be made personally or by direction. Ib.
4. The erasure of figures already written in the books of a national bank and
the substitution of other figures which falsify the state of the account
constitute a " false entry" within the meaning of sec. 5209, Rev. St., by
which it is declared to be a misdemeanor to make any " false entry in
any book, report, or statement of the association, with intent to injure
or defraud," etc. United States v. Crecelius, 34 Fed. Rep., 80.
5. Where false entries are made by a clerk at the direction of the president,
the latter is a principal. In the matter of Van Campen, 2 Ben., 419;
United States y. Fish, &Vf Fed, Rep., 585.
6. A report of condition of a national bank, whether called for by the Comptroller of the Currency or not, which is a report in the usual form made
by an officer of the bank in his official capacity, if it contains a false
entry made with intent to deceive, is within Rev. St., sec. 5209, which
declares such false entries to be a misdemeanor. United States v.
Hughitt, 45 Fed. Rep., 47.
7. Where false entries were made by a bookkeeper in a statement requested
by a national-bank examiner, purporting to give the balance due to depositors, which statement it wTas the duty of the examiner to make and not
the bookkeeper, an indictment for making " false entries in a statement
of the association " will not be sustained. United States v. Ege, 49 Fed.
Rep., 852.
8. In an indictment of an officer of a national bank under sec. 5209, Rev. St.,
for making false entries in a report to the Comptroller of the Currency,
it is no defense that such entries were made by a clerk and verified by
the officer without actual knowledge of their truth, since it was his duty
to inform himself. United States v. Allen, 47 Fed, Rep., 696.
9. A "false entry " in a report by a national-bank officer or a director to Comptroller of the Currency within the meaning of sec. 5209 is not merely an
incorrect entry made through inadvertent negligence or mistake, but is
an entry known to the maker to be untrue and incorrect and by him
intentionally entered while so knowing its false and untrue character.
United States v. Graves, 53 Fed. Rep., 634.
10. In determining whether a certain false entry, made by a national-bank
officer in a report to the Comptroller, was made with intent to deceive
or defraud, etc., within the meaning of the statute, the jury are authorized to infer the intent if the natural and legitimate result of such false
entry would be to deceive any other officer or officers of the bank or any
agent appointed to examine into its affairs. Ib.
11. In determining whether defendant made a *' false entry " within the meaning of the statute when he included in such reports as "Loans and discounts " of the bank amounts which were being carried on the books of
the bank as "overdrafts," the jury will not consider whether other
national banks followed the same practice; but the jury, in determining
whether such entry, if a "false entry," was made with intent to deceive
and defraud, may consider whatever knowledge defendant is shown to
have had as to practice of any other national bank in this respect. Ib.
12. It is not necessary to complete the offense of making a "false entry " in a
report to the Comptroller of the Currency of the condition of a national
bank, with intent to deceive or defraud, that any person shall have been
in fact actually deceived or defrauded, for the making of such a "false
entry " with the intent to deceive or defraud is sufficient. Ib.
13. Under sec. 5209 of the national-bank act it is an indictable offense to make
a false entry in a report to the Comptroller of the Currency, or to aid
and abet the making of such an entry. United States v. French et al.,
57 Fed. Rep., 882.
14. It is not a "false entry " to enter under heading of "Loans and discounts"
items which, on books of the bank and for convenience of its officers,
have been temporarily withdrawn from that heading, and which are,
from day to day, carried on the books of the bank under heading of "Suspended loans " while awaiting action of directors as to same being withdrawn from character of loans and entered up as a loss on profit and
loss account. United States v. Graves, 53 Fed. Rep., 634.
15. The president and assistant cashier of a national bank are indictable as
principals, under Rev. St., sec. 5209, for making a false entry in a report,
although neither of them actually signed or attested the report. Cochran
v. United States, 15 S. Ct., 628.



184

REPORT OF THE COMPTROLLER OF THE CURRENCY.

FALSE ENTRIES—Continued.

16. The assistant cashier of a bank is indictable under Rev. St., sec. 5209, for
making a false entry in a report to the Comptroller, although he is not
one of the officers authorized by section 5211 to make such a report; for
he may be regarded as within the category of " clerk or agent," within
the terms of section 5209. Ib.
17. An indictment under Rev. St., sec. 5209, for making a false entry in a
report to the Comptroller need not allege that such report was made by
the banking association, or that it was actually verified by the oath or
affirmation of the president or cashier, or attested by the directors, as
required by section 5211; but it is sufficient to aver that defendant made
such false* entry " i n a certain report of the condition of the First
National Bank, * * * made to the Comptroller of the Currency in
accordance with the provisions" of Rev. St., sec. 5211. Ib.
18. The jury are warranted in finding that false entries were made with guilty
intent from the testimony of defendant that the said entries were made
under his direction, with the knowledge that they were not transactions of the day on which they were entered in the books of the bank.
United States v. Folsom, 38 P., 70.
19. The "false entry'' in the books or reports of a bank, which is punishable
under Rev. St., sec. 5209, is an entry that is knowingly and intentionally
false when made. It is not the purpose of the statute to punish an
officer who, through honest mistake, makes an entry in the books or
reports of the bank which he believes to be true, when it is in fact false.
United States v. Allis, 73 Fed. Rep., 165.
20. If a president or cashier makes a false entry in a report of the condition
of the bank to the Comptroller of the Currency, the jury are authorized
to presume, from the false entry itself, in the absence of any explanation or of any other testimony, that he knew it to be false. This presumption results from the fact that it is the duty of the officer who verifies the report to know the condition of the bank, and if the report is
false there is a prima facie presumption that he knew it. Ib.
21. A false entry, either in the books of the bank or in a report of its condition,
is punishable only when the jury find that it was made by the defendant,
or by his direction, with the intent either (1) to injure or defraud the
bank, or some other corporation, or some firm or person; or (2) to deceive
some officer of the bank; or (3) to deceive some agent appointed or thereafter to be appointed to examine the affairs of the bank. If any one of
these intents is present the offense is complete. 76.
22. Where an entry in the books or in a report of the bank's condition is in fact
false, the jury are authorized to infer, from the false entry itself, an intent
of the defendant to injure or defraud the bank, or some other corporation or individual, or to deceive some officer of the association, or an
agent appointed to examine into the condition of the bank, if such would
be the natural and probable consequence of the false entry. Ib.
23. A false entry made in the books or reports of a bank by a clerk, bookkeeper, or other subordinate employee, by the command or direction of
the president of the bank, is a false entry made by the president, and
he is liable to punishment for it if he gives the direction knowing the
entry to be false, or with the intent to defraud, deceive, etc. Ib.
24. If a false entry in the books or reports is made with a criminal intent, it is
no defense that another false entry is also made, which offsets the former
entry, with a like intent; but changes of this character are not as strong
evidence of an intent to injure or defraud the bank, or to deceive its
officers or examiners, as false entries which enable the officer making
them to withdraw the funds of the bank without consideration. Ib.
25. Every overdraft, whether made by previous arrangement or not, whether
secured or not, and whether drawing interest or not, is a loan, and is
required by the law and the rules prescribed by the Comptroller to be
listed and reported as an overdraft. It is, therefore, no defense to a
charge of false entries in respect to overdrafts that they had been
arranged for or secured, or that interest was to be paid upon them by
agreement, if such false entries were made with a criminal intent; but
in determining the intent the jury may consider the testimony of defendant that he considered the overdrafts as loans. Ib.
26. If the president of a bank makes or causes to be made false entries in its
books, or in reports to the Comptroller, with the intent to deceive or
defraud, etc., it is no defense that he struggled to save the bank from



REPORT OF THE COMPTROLLER OF THE CURRENCY. 185
FALSE ENTRIES—Continued.

27.

28.

29.

30.
31.

32.

failure and to provide money to pay its depositors by sacrificing his own
property and borrowing money from others. Ib,
Rev. St., § 5209, making embezzlement, abstraction, or willful misapplication of the property of a national-banking association by an officer or agent
a misdemeanor, applies to an agent in liquidation appointed by the stockholders. United States v. Jewett, 84 Fed, Rep,, 142.
Averments in an indictment that the defendant was appointed agent in
liquidation for a national-banking association, and accepted that office,
are not inconsistent with further averments that he afterwards acted as
president, clerk, and director of the association. Ib.
An indictment against a defendant for the embezzlement and abstraction
of the property of -a national banking association is not demurrable
because it charges the receipt of the property by him in different capacities, both as an officer and as an agent of the association. Ib.
An averment in an indictment against an officer and agent of a national banking association that the defendant ' ; did steal, abstract, take, and carry
away" property of the association, does not charge two offenses. Ib,
An allegation that defendant, an officer and agent of a national banking
association, did secretly, in a manner and by particulars to the jurors
unknown, willfully, unlawfully, and fraudulently convert to his own
use, and misapply, from said association to himself, certain funds, sufficiently charges the offense of ; ' willful misapplication " of property, under
Rev. St., § 5.209. Ib.
Under Rev. St., § 5209, prohibiting " every * * * cashier * * * of
any " national bank from making ' ' any false entry in any * * * report * * * with intent to injure or defraud," etc., and prescribing a
like penalty for ''every person who, with like intent, aids or abets any
officer," etc., the intent is a material ingredient under each clause; and
therefore an indictment which, after duly charging the act and intent
in respect to the cashier, merely charges another person with aiding
and abetting him to make said false entries ' ' in manner and form as
aforesaid," is open to demurrer. United States v. Berry et ah, 85 Fed,
Rep., 208,

FORFEITURE OF CHARTER:

1. Forfeiture of the privileges and powers of a national bank must be deter
mined by a suit brought by the Comptroller of the Currency and until
determined it may do business, and no person, by a conspiracy to evade
its regulations, may escape liability for borrowed money loaned by it
upon personal security in the manner authorized. Stephens v. Monongahela National Bank, 88 Penrt. St., 157; 32 Am. Bejy,, 488; 2 N. B, C,
898,
2. Under Rev. St., sec. 5239, providing that if the directors of a national bank
shall violate any of the provisions of the title relating to the organization and management of banks, the franchises of the bank shall be forfeited, such violation, however, to be determined by a proper court of
the United States in a suit therefor by the Comptroller, and that in case
of such violation every director participating therein shall be personally
liable for all damages which the bank, its shareholders, or any other
person shall have sustained in consequence thereof, the Comptroller can
not authorize the receiver to bring suit, under sec. 5234, to enforce such
personal liability, until it has been adjudged by a proper court that such
acts have been done as authorize a forfeiture of the charter. Welles v.
Graves, 41 Fed. Rep., 459.
S, The forfeiture of the rights, privileges, and franchises of a bank authorized
by Rev. St., sec. 5239, for violation by its directors of the provisions
of the banking act, comes within sec. 1047, limiting suits for any penalty or forfeiture accruing under the laws of the United States to five
years. Ib.
4. The right to maintain an action under Rev. St., sec. 5239, to recover from
a bank director the damages sustained by his bank in consequence of
excessive loans made by him while serving in the capacity of director,
is not affected by the fact that the Comptroller has or has not procured a forfeiture of the bank's charter. Stephens v. Overstolz, 4% Fed,
Rep., 771.
5. In an information charging that "the banking association and the directors
thereof did knowingly permit," etc., the allegation that the association,




186

REPORT OF THE COMPTROLLER OF THE CURRENCY.

FORFEITURE OF CHARTER—Continued.

aside from the directors, x>ermitted the doing of the alleged acts, tenders
an immaterial issue, and should be stricken out on motion. Trenholm,
Comptroller, v. Commercial National Bank, 38 Fed. Rep., 323.
6. As the section only refers to acts done by the directors, or by the executive
officers with the knowledge of the directors, an information, seeking a
forfeiture, which charges that the association did the act is insufficient. Ib,
7. It seems that to maintain a suit by the receiver of a national bank to enforce
the liability of its directors, arising under the provisions of Rev. St.,
§ 5239, it must appear that a forfeiture of the charter of the bank has
been adjudged by a court of the United States, at the suit of the Comptroller of the Currency, as provided in that section. Welles v. Graves,
41 Fed. Rep., 459, reaffirmed. Hayclen v. Thompson, 17 C. C. A., 592; 71
Fed. Rep., GO, distinguished. Stephens v. Overstolz, 43 Fed. Rep., 771,
disapproved. Gerner v. Thomson et al., 74 Fed. Rep., 125.
FORGERIES :

1. A depositor owes a duty to the bank to make an examination of his pass
book and vouchers within a reasonable time; and if loss would result
to the bank from his failure to do so lie can not recover for forged checks
paid by the bank and charged to his account. First National Bank v.
Allen, 14 So., 335.
2. Where the examination is committed to a clerk or agent who has himself
committed the forgeries, his concealment of such forgeries will not relieve
the depositor from the consequences of the failure to discover the fraud
and notify the bank. Ib.
3. But if the omission of the depositor to discharge such duty has resulted in
no Injury to the bank, the depositor may recover. Ib.
4. Where, however, forgeries by the same person are committed after the
depositor is chargeable with knowledge of the fact, the failure of the
depositor to give the bank notice may estop him to dispute the genuineness of such checks. Ib.
5. Plaintiff bank paid defendant bank money on a forged order, made payable
at plaintiff bank, bearing the general indorsement of the payee and of
defendant, the latter being *' For collection." The person by whom the
order purported to be drawn was a customer of plaintiff, and had directed
it to pay orders drawn by him. The forgery was not discovered for four
weeks. Held, that an answer alleging that at the time of the payment
the payee had property from which the order could have been collected,
but that before the discovery of the forgery the payee had departed with
his properly, was not sufficient to prevent recovery of the money paid
defendant, as it did not show how long the payee and the property
remained within reach, and therefore failed to show loss to defendant by
unreasonable delay of plaintiff in discovering the forgery and notifying
defendant. Indiana National Bank v. First National Bank, 36 N E., 382%
6. In an action against a bank by a depositor to recover the amount of checks
drawn by plaintiff, but alleged to have been paid by defendant on indorsements of the payees' names forged by plaintiff's cashier, part of whose
duty was to nil in the body of checks for plaintiff to sign, pay bills, and
keep the accounts, it appeared that the money on the checks in question
had been obtained by plaintiff's cashier, but there was no evidence that
any payees had been named in them, the canceled checks having been
destroyed by the cashier. Held, that plaintiff could not recover, as it
would not be presumed that the cashier committed forgery in addition
to the embezzlement, when he could have avoided forgery by making
the checks payable to " c a s h " or "bearer," in which event defendant
would not be liable. National Board, of Marine Underwriters v.
National Bank of the Republic, 29 N. Y. S.,*698.
7. Defendant bank received a check drawn on plaintiff for collection. After
plaintiff had remitted to defendant and defendant had paid the holder
of the check, it was discovered that the payee's name was forged. Held,
that delay of plaintiff in notifying defendant of the forgery did not
relieve defendant from liability, where the only evidence of injury from
the delay was that of defendant's cashier, who said: "If more seasonable notice had been given the forger would have been arrested earlier,
and more favorable results might have arisen." Third National Bank
v. Merchants' National Bank, 27 N. F. &, 1070,



REPORT OF THE COMPTROLLER OF THE CURRENCY.

187

FORGERIES—Continued.

8. In an action by a bank which has paid to another bank a check drawn on
the former bank and transferred to the latter by a forged indorsement,
it is immaterial whether the signature of the drawer of the check is
genuine, since both parties are estopped to deny its genuineness. First
National Bank v. Northwestern National Bank {III.), 38 N. E\, 739.
9. The defendant, as collecting agent of the Bellaire Bank of Ohio, collected
at the subtreasury, New York, a pension draft on which the payee's
name was forged after her death. The defendant, in making the collection, indorsed the draft as collecting agent of the Bellaira Bank, as
appeared by the terms of its indorsement, and on collection at once paid
over the money to the principal, without notice of the forgery, before
this action was commenced. Held, that the defendant was not liable.
The case of Onondaga Co. Sav. Bank, 12 C. O. A., 407; 64 Fed. Rep., 703,
distinguished. United States v. American Exchange National Bank, 70
Fed. Rep., 232.
10. Defendants, who were note brokers at Omaha, and who had done business
as such with the plaintiff bank in Iowa, sent to plaintiff by mail a list
of commercial paper offered for sale, including a note described as made
by seven persons jointly to the order of one B., and indorsed by B, and
another. The list sent plaintiff was headed by defendants' business card
as brokers, and it contained sundry items of information about the parties to the note, purporting to be the result of inquiries as to their solvency and standing, and indicating that the same were good. Plaintiff
purchased the note, and, by defendants' directions, remitted the sum
paid therefor to a bank in Chicago. Defendants received from such
sum only their commission for selling the note, the balance being paid
to B., for whom they sold it. It afterwards proved that all the signatures on the notes, except that of B., were forgeries, and that B., although
at the time of the sale of the note reported to be solvent, was in fact
insolvent and wholly worthless. Plaintiff sued defendants to recover
the amount paid for the note on an alleged warranty of genuineness.
Held, that there was nothing in the note or in the circumstances of the
transaction between plaintiff and defendants to justify an assumption
that defendants had any interest in or ownership of the note, but, on
the contrary, that the plaintiff bank must have known that it was taking title as the indorsee of B., and that defendants were acting as brokers only, and, accordingly, that defendants, having acted only as agents
of a disclosed principal, could not be held personally liable for the note.
Monticello Bank v. Bostwick et al., 71 Fed. Rep., GUI.
11. The forgery of the maker's name to a renewal note, dielivered by the payee
to the holder of the original note, does not discharge the maker from
liability on such original note, as the giving of a forged note in lieu of
it does not operate as payment. Second National Bank v. Wentzel (Pa.
Sup.) 24-A., 1087.
12. In an action on a note by a bank against the indorser^. who alleges his signature to be a forgery, evidence by the cashier and teller of the bank
that the indorser had admitted the genuineness of his signature on
another note, not in evidence, and that such other signature was precisely the same as the signature to the note in suit, is not competent for
the purpose of estopping the indorser from denying such signature. Ib.
13. Testimony by the teller of the bank that the indorser had admitted his
signature to a note for which the one in suit was given as a renewal is
properly stricken out as irrelevant, where the teller subsequently
acknowledges that the indorser's admission related to another note, not
connected with the one in suit. Ib.
14. Evidence by defendant, on cross-examination, denying that he had received
the proceeds of other notes, not in suit, which had been indorsed by
him, and which had been negotiated by the maker, who also negotiated
the one in suit, can not be contradicted by plaintiff in rebuttal, since
such cross-examination related to an irrelevant matter. Ib.
15. In an action against an indorser on a renewal note, who was released from
liability on the original note because it was not protested for nonpayment, it is error to charge that there may be a recovery if the indorsement on the first note was genuine, notwithstanding the indorsement
on the renewal note was a forgery; but the jury having found for the
indorser, plaintiff can not complain of such instruction. Ib.



188

REPORT OF THE COMPTROLLER OF THE CURRENCY.

FORGERIES—Continued.

16. An admission by the indorser of a note as to the genuineness of his signature, made to the holder after it had discounted the same, does not
estop him from denying the genuineness of the alleged indorsement on
a renewal note given by the maker, the indorser having been released
from liability on the original note by reason of its nonprotest for nonpayment. Ib.
17. A bank, which holds a note made by two persons as principal and surety,
in accepting, in good faith, at maturity, a renewal note to which the
name of the surety was forged by the principal, is not bound to know
the handwriting of the surety, and is, hence, not guilty of negligence,
entitling the surety to a discharge from liability on the original note, in
failing to compare the surety's signatures on the two notes, respectively,
with reference to ascertaining the genuineness of that on the renewal
note. Lyndonville National Bank v. Fletcher (Vt.), 34 A.. 38.
18. The right of the United States Government to recover money paid on a
check on the Treasury, under a forged indorsement, is conditioned on
promptness in giving notice to the person to whom the check was paid.
United Stales v. Clinton National Bank, 28 Fed. Rep., 357.
19. A bank clerk, whose duty it was to prepare exchange for the cashier's signature, so drew a draft for $25 to his own order that the amount could
be readily altered, and, after procuring the cashier's signature by pretending that he wished to make a remittance of that amount, altered the
draft so that it presented the aj)pearance of a genuine draft for $2,500,
and thereafter indorsed it, and procured it to be discounted. Held, that
the forgery by the clerk, and not the negligence of the bank, was the
proximate cause of the loss, and the bank was not liable therefor.
Exchange National Bank of Spokane v. Bank of Little Bock, 58 Fed,
Rep., IJfO.
20. The bank was not liable on the ground that the forger was its confidential
employee, because in this transaction he acted as a purchaser and not as
an employee, and because the purchase of the draft was complete, and
he was the owner of it when the forgery was committed. Ib.
GUARANTY:

1. A personal guaranty, given by stockholders and directors to another bank
in consideration of loans, discounts, or other advances to be made, for
the repayment of any indebtedness thus created, imposes a liability on
the guarantors when acted on by the guaranty, though no notice of the
acceptance of the guaranty was given, for the contract shows a personal
interest of the guarantors in the advances constituting a consideration
moving to them. Doud et al. v. National Park Bank, 54 Fed. Rep., 846.
2. Receivers were appointed for an insolvent investment company, incorporated under the laws of Missouri, whose liabilities consisted mainly of
guaranties, in various forms, indorsed on bonds, secured by real estate
mortgages, executed by borrowers to the company, and subsequently
sold and transferred by it to investors with the guaranties mentioned.
Held, that the rights of such investors were governed by the State statute relating to assignments for benefit of creditors, which provides that
the assignment shall be '' for all the creditors of the assignor in proportion to their respective claims" (Rev. St. Mo. 1889, § 424); that, in the
d!stribution of the property of such company, all claims should be allowed
which, at the time of the appointment of the receivers, (1) furnished a
present cause of action against the guarantor, or (2) constituted direct
obligations on its part, whether due or to become due, or (3) which,
though not then matured, or not constituting direct obligations, thereafter matured or would mature, or become direct obligations, before
any order of distribution was made; and that all claims should be
rejected (1) which arose on guaranties of collection, as distinguished
from guaranties of payment, where no proceedings had been taken by
the holder to collect from the maker or from the mortgaged premises, or
(2) which were not matured, and in respect to which there had been no
default of interest, or (3) in which by agreement between the holder
and maker, without the assent of the guarantor, the time of payment of
the principal obligation had been extended. New York Security <&
Trust Co. et al. v. Lombard Inv. Co. of Kansas et al., 73 Fed. Rep., 537.
3. A claim against a guarantor of payment matures, so as to become a direct
obligation, not only on the date the guaranteed debt becomes due, but



REPORT OF THE COMPTROLLER OF THE CURRENCY.

189

GUARANTY—Continued.

on default in payment of interest or other preliminary obligation, when,
by the terms of the contract, such default is made to precipitate maturity of the debt. Ib.
4. Receivers were appointed for an insolvent investment company, which
had sold and transferred obligations secured by mortgage, with guaranties of payment thereof, but with a provision that, in case of default,
it should have two years within which to collect and pay over the
amount of the debt. Held, that claims arising on these guaranties were
provable against the receivers where default had occurred and the two
years had expired, whether these two events had occurred both before
the appointment of the receivers, or one before and one after such
appointment, or both after the appointment; and, further, that such
claims were provable after default, although the two years should not
expire before the order of distribution. Ib.
5. A guaranty of collection of an obligation secured by mortgage which is
transferred by the guarantor is an undertaking to pay the debt on condition 'that the person to whom the guaranty is given shall diligently
proceed against the principal debtor and the mortgage security, and, in
default of such diligence, the guarantor is released. Ib.
6. An investment company selling and transferring an obligation secured by
mortgage agreed, by indorsement thereon, "first, to guarantee the payment of the coupons attached hereto at the maturity thereof; second,
to collect at its own expense, and to pay over the principal hereof at
maturity, provided the same is paid by the maker; third, in event of
default being made by the maker, to collect at its own expense and to
pay over the principal hereof within two years from maturity of the
same," with interest at 6 per cent per annum. Held, that this was a
guaranty, not of collection merely, but of payment. Ib.
7. Payment of interest in advance on a note is not of itself evidence of an
agreement for the extension of time of payment sufficient to release a
surety from liability. American National Bank v. Love, 62 Mo. App.,
378.
8. Where one of several sureties, after all have signed, but before the debt
has been paid, obtained a mortgage from the principal as indemnity, it
inures to the benefit of his cosureties. Farmers & Traders' National
Bank v. Snodgrass (Or.), 45 P., 758.
9. Where one purchased negotiable paper from the president of a bank with
a guaranty of payment executed by him apparently in behalf of the
bank, on his representation that the paper belonged to the bank, and
the transaction occurred in the banking house where the president was
apparently engaged in performing his duties as such, the bank was
liable on the guaranty. City National Bank v. Thomas (Neb.), 65
N. W., 895.
10. Where a promissory note is transferred, and the collection of it is guaranteed by the payee in the following form, to wit: " This note is transferred, and the collection of the same guaranteed to the holder hereof,"
the makers can make any defence to a suit commenced by an assignee
that could have been made to a suit if commenced by the payee, notwithstanding the assignee may take the note before due and without
knowledge of any infirmity in the note. Omaha National Bank v.
Walker et al., 5 Fed. Rep., 899.
11. A contract by a national bank to indemnify one for loss incurred as surety
on an attachment bond is not void on the ground of public policy, the
loss having occurred, though the bond is not given for the benefit of the
bank. Seeber v. Commercial National Bank of Ogden, 77 Fed. Rep., 957.
12. The vice-president of a national bank, upon making a transfer for value of
certain notes belonging to the bank (the bank being the correspondent
of the transferee), executed this guaranty: " I n accordance with your
telegram, I herewith hand you ten notes of $5,000 each." "We debit your
account,$50,000." "This bank hereby guarantees the payment of the
principal sum and interest of said notes." This was done in behalf of
the bank, and the notes were also endorsed by the same individual as
vice-president of the bank. It was done with the knowledge and consent
of the president and cashier of the bank, but without authority of the
directors, as a board, or the majority of its members individually. Held,
that the bank was liable on the guaranty. People's Bank of Belleville v.
Manufacturers' National Bank of Chicago, 101 U. S., 181; 2 N.B. C, 97.



190

REPORT OF THE COMPTROLLER OF THE CURRENCY.

GUARANTY—Continued.

13. F. owed H. & Co., on account, about $22,000. He settled this in part by a
cash payment and in part by a transfer of promissory notes payable to
himself, the payment of two of which, for $5,000 each, was guaranteed
by him in writing. H. <e Co. transferred these notes to a bank as colf
lateral to their own note for about $13,000. They then became insolvent
and assigned all their estate to P., as assignee, for distribution among
their creditors. The bank sued F. on his guaranty. He set up in defence
that his indebtedness to H. & Co. grew out of dealings in options in
grain and other commodities to be settled on the basis of "differences,"
and that it was invalidated by the statutes of Illinois, where the transactions took place. The court held that he could not maintain the statutory defence as against a bona fide holder of the guaranteed notes, and
gave judgment against him. Execution on this judgment being returned
unsatisfied, a bill was filed on behalf of the bank to obtain a discovery
of his property and the appointment of a receiver, to which F., and the
maker of the notes, and R., with others, were made defendants. P., the
assignee of H. & Co., was, on his own application, subsequently made a
defendant. An injunction issued, restraining each of the defendants
from disposing of any notes in his possession due to F. Subsequently
to these proceedings, F. assigned to R. the two notes which H. <e Co. had
f
transferred to the bank. P., as assignee of H. & Co., filed a cross-bill in
the equity suit, showing that the judgment in favor of the bank was
in excess of the balance due the bank by H. & Co. II. filed an answer and
a cross-hill in that suit, setting up his claim to the said notes, and maintaining that the judgment in favor of the bank was invalid, as being
in conflict with the statutes of Illinois. Held, (1) that the liability of
F. upon the guaranty was, as between the bank and him, fixed by the
judgment in the action at law; (2) that all the bank could equitably
claim in this suit was the amount actually due it from H. &. Co., which
was considerably less than the amount of the face of the notes; (3) that
the transfer and guaranty of the notes to H. &. Co. were void under the
Illinois statutes, and passed no title to them or their assignee; (4) that
R. was the equitable owner of the notes, and was entitled to receive
them on payment to the bank of the amount of the indebtedness of H, &
Co. to it; (5) that the assignment to R. having been made in good faith
and for a valuable consideration, he was a person interested in the object
to be attained by the proceedings within the intent of the statute. When,
by filing a replication to a plea in equity, issue is taken upon the plea, the
facts, if proven, will avail the defendant only so far as in law and equity
they ought to avail him. Pearce v. Rice, 11$ U. S., 28.
14. A national bank went into voluntary liquidation in September, 1873.
Before that it had become liable to a State bank as guarantor on sundry
notes made by a third person, and which were discounted for it by the
State bank. In August, 1874, transactions took place between the maker
of the notes and the State bank and the person who acted as the president
of the national bank whereby the maker was released from further liability on the notes, but such acting president attempted to continue by
agreement the liability of the national bank as guarantor. In a suit
begun in October, 1876, a judgment on the guaranty was obtained in May,
1880, by the State bank against the national bank. In a suit brought by
a creditor against the national bank and its stockholders to enforce their
statutory liability for its debts, the court, on an application made in June,
1887, enquired into the liability of the stockholders to have the claim of
the State bank enforced as against them in view of the transactions of
August, 1874, and disallowed that claim. Held, (1) it was proper to
reexamine the claim; (2) the judgment against the bank was not binding
on the stockholders, in the sense that it could not be reexamined; (3) the
guaranty of the bank was released as to the stockholders by the release
of the maker of the notes; (4) the rights of the stockholders could not be
affected by the acts of the president done after the bank had gone into
liquidation. Schrader v. Manufacturers' National Bank of Chicago, 133
U. S., Jan. 20, 1890, page 67.
15. A written promise and guaranty of the payment of a promissory note,
"with all legal or other expenses of or for collection," executed by the
indorser before the maturity of the note, covers reasonable attorney's
fees incurred in the collection of the debt. McGhee v. Importers and
Traders' National Bank, 93 Ala., 192.



REPORT OF THE COMPTROLLER OF THE CURRENCY.

191

GUARANTY—Continued.

16. When a promissory note is indorsed to A. B.with the word "cashier"
added, it is presumptively the property of the bank of which he is the
cashier, as shown by parol evidence, and the bank may sue on it without
indorsement by him and without making him a party. Ib.
17. The act of Congress authorizing the organization of national banks confers upon them no authority, either in express terms or by implication,
to guarantee the payment of debts contracted by a third person, and
solely for his benefit; and acts of this nature, whether executed by the
cashier or the board of directors, are necessarily ultra vires. Commercial National Bank et al. v. Pirie et al.y 82 Fed. Rep,,799.
18. The presentation by a merchant seeking to. purchase goods of a written
guaranty, by a national bank, of payment for any goods he may purchase, even if it implies a representation that the bank is financially
sound, is not of itself a fraudulent representation, such as will justify a
rescission, since the seller is chargeable with knowledge that in law such
a guaranty by a national bank is ultra vires and void. Ib.
19. Whether goods are bought with a preconceived fraudulent intent not to
pay for them is a question for the jury if there is evidence tending to
show such an intent, but not of so conclusive a character as to convince
all reasonable minds that such must have been his purpose. Ib.
20. To vest a mortgagee of chattels with the rights oi an innocent purchaser,
a preexisting debt alone is not sufficient., but, if any considerable sum of
money is paid at the time of the execution of the mortgage, and as part
of its consideration, then the mortgagee may be an innocent purchaser
as to the full amount of his loan. Ib.
21. An action for wrongful conversion against one who has sold goods in his
possession is not maintainable where defendant had a valid lien upon
the property; so that his refusal to surrender it upon demand was not a
tort. Ib.
22. An agreement by a national bank to guarantee the payment of a debt of
a third party solely for his benefit is ultra vires. Bowen v. Needles
National Bank, 87 Fed. Rep., 430.
23. A promise by a bank to pay any checks that may be drawn upon it by a
certain person is not a certification of such checks but a guaranty. Ib.
24. A national bank has no power to lend its credit to any person or corporation, or to become guarantor of the obligations of another, except in the
case of the transfer of promissory notes discounted, which 1is in the
ordinary course of banking. Bowen v. Needles National Bank , 94 Fed.
Rep., 925.
INCREASE OF CAPITAL STOCK.

See Capital stock.

INDICTMENT: See False entries.
1. An indictment under act of July 12, 1882, amending sec. 5208, making it a
misdemeanor to " certify any check " drawn by a person not then having
on deposit sufficient money to meet same, need not allege delivery of
check by bank after certification. United States v. Potter, 56 Fed.
Rep., 83.
2. When indictment alleges certification as accomplished, authentication will
not be presumed as an essential part thereof, and hence it is unnecessary to
allege absence of required credit or deposit at time of authentication. Ib.
3. The indictment in charging, in the language of sec. 5208, that' the drawer
of the check had not on deposit, at the time it wTas certified, " an amount
of money equal to that specified " in the check is sufficient. Ih.
4. The indictment does not charge two offenses in the same count, because it
alleges therein that the check was certified ' ; before the amount thereof
had been entered to the credit of the drawer on the books of the bank,*'
and also at a time when the drawer did n o t ' ' have on deposit an amount
of money equal to " the amount of the check. Ib.
5. An indictment against the president for " aiding and abetting " cashier in
certifying check under prohibition can not be sustained. Ib.
6. An indictment charging defendants with aiding and abetting a director in
a willful misapplication of the money of an association must state facts
to show that there has been such misapplication committed by the
director. United States v. Warner, 26 Fed. Rep., 616.
7. An indictment against the president of a national bank alleging that he
" unlawfully and willfully and with intent to injure and defraud the
said association for the use, benefit, and advantage of himself did misapply certain of the money and funds of the association which he * * *
 then and there, with the intent aforesaid, paid and caused to be paid"


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REPORT OF THE COMPTROLLER OF THE CURRENCY.

INDICTMENT: See False entries—Continued.
to certain persons named, was bad for failure to allege the fact that
made such payment unlawful or criminal. United States v. Eno, 56
Fed. Rep., 218.
8. It is not essential that such indictment should allege that the acts charged
were done without the knowledge and assent of the directors of the
association. Ib.
9. In indictment under Rev. St., sec. 5209, for willfully misapplying the funds
of a national bank, it is not necessary to charge that the funds had been
previously intrusted to defendant, since such act may be done by an
officer or agent of the association without his having previously received
the funds into his manual possession. United States v. Northivay, 129
U. &., 327.
10. In indictment charging president of a bank with aiding and abetting its
cashier in the misapplication of its funds, it is not necessary to aver that
he then and there knew that the person so aided and abetted was the
cashier. Ib.
11. A form of indictment which sufficiently describes and identifies the crime
of abstracting the funds of a national bank created by Rev., St. sec. 5209,
sufficiently states the character and capacity of the bank. Ib,
12. An indictment for willfully misapplying funds of a national bank (Rev.
St., sec. 5209), charging in general words fraudulent misapplication and
intent to defraud the bank, arid describing specifically funds misapplied
and the manner of misapplication, need not negative every possible
theory consistent with an honest purpose in the disposition of the funds
specified. Evans v. United States, 14 S. Ct., 934; Ib., 939.
13. An indictment charging directors of a national banking association with
making false entries in a report of condition to the Comptroller of the
Currency can not be sustained under sec. 5209. United States v. Potter,
,56 Fed. Rep., 83.
14. The use in an indictment, under sec. 5209, of the words " then and there,"
in alleging that the defendant was president or director of such bank
and made alleged false entries, is not uncertain or repugnant merely
because in one place they may refer to the whole of a day and in another
to only one instant of the day. Ib.
15. The omission of the signs for dollars and cents in the recital of alleged
false entries in reports and misnomer of reports are immaterial where
reports are set out by their tenor in the indictment. Ib.
16. It is not necessary to allege specifically in such indictment that the reports
were transmitted to the Comptroller of the Currency or that they were
published. Ib.
17. Allegations that the false entries were made with intent to "injure and
defraud the said association and certain persons to the grand jurors
unknown " are sufficient. Ib.
.18. An indictment against the president of a national bank, under sec. 5209,
for making false entries in the books of the bank, charging that it was
done "with intent to defraud said association and certain persons to the
grand jurors unknown," is sufficient so far as concerns the allegations
of intent. United States v. Potter, 56 Fed. Rep., 97.
19. When indictment alleges that the false entries indicated that there was
then in the paying teller's department of the bank certain amount in
gold, legal tenders, and gold certificates, when in fact such amount was
not there, it is not necessary that it should further allege that such
amount was not then in other departments of the bank. Ib.
20. In addition to the entries themselves, the indictment need set out the
context only when it so modifies the entries as to be in presumption of
law a part of them. Ib.
21. The fact that the note teller's and paying teller's books, in which the
president is charged with making the false entries, are usually kept by
those officers without interference by the president does not invalidate
indictment thereon. Ib.
22. Counts charging false entries by the president in reports of condition of
the bank, which allege that reports were made in conformity to the law,
and then set them out by their tenor, are bad for their failure to allege
specifically that the reports were verified and attested by the cashier. Ib.
23. Where the entry whose tenor is set forth contains the words " See schedule," it is not a valid objection to the indictment that these words are
not explained. United States v, French et al., 57 Fed. Rep,, 382,



REPORT OF THE COMPTROLLER OF THE CURRENCY.

193

INDICTMENT: See False entries—Continued.
24. It is sufficient if the indictment allege the substance of the reports in
question without setting them out in full. Ib.
25. An allegation in an indictment under sec. 5209 that defendant "did make
a certain false entry in a certain report of the association" will not be
construed to mean that the entry was made after the report was completed and was, in fact, an alteration. Ib.
26. The preparation and completion of the report, the making of the false
entry therein, its verification, attestation, and delivery to the Comptroller may be considered as simultaneous, and there is no repugnance
in failing to allege that any or all of these things occurred in consecutive
order. Ib.
27. Though the counts in an indictment under this section for aiding and abetting the cashier in making such false entries described defendant as
" being then and there a director" of the bank in question, it can not
be held that they charge him in aiding and abetting in his official
capacity. 1 b.
28. Counts in such indictment which charge defendants with procuring and
counseling the false entry before the fact are valid, for such acts are
covered by the clause of the section extending the penalty to anyone who
" abets " an officer or agent in the acts prohibited. Ib.
29. Indictment against president for false entry on books, held sufficient in
form and averments. United States v. Britton, 107 U. S., 60S.
30. Indictment against president for fraudulent purchase of stock of the bank
is bad if it fails to state for whose use purchase was made, or if it states.
that it was for use of the bank, or if it does not aver that it was not
made to prevent loss on previous debt. Ib.
31. Indictment for perjury against officer for false statement under sec. 5211,
Hev. St., is bad if, prior to act of 1881, chapter 82, his oath verifying
report was taken before notary appointed by a State. United States v.
Curtis, 107 U. S., 671.
32. An indictment of persons for aiding and abetting a president of a national
bank in misapplying its funds and making false entries in its books,
with intent to defraud it, in violation of Rev. St., sec. 5209, need not
specifically set out the act or acts by which the aiding and abetting were
consummated. Coffin v. United States, 15 S. Ct., 394.
33. An indictment of H. and other persons for violation of Rev. St., sec. 5209,
averred that '' said H., then and there being president" of a certain
national bank, " b y virtue of his said office as president, aforesaid,"
"misapplied the funds," with intent to defraud, etc., and that such other
persons did unlawfully, feloniously, '"knowingly," and with intent to
defraud, aid and abet the "said H., as aforesaid." Held, that the indictment averred that the aiders and abettors knew that H. was president
of the bank at the time it is averred the acts were committed. Ib.
34. Such indictment charged that H. did misapply the moneys of the bank
with intent to convert a certain sum to the use of a specified company
by causing it to be paid out of the moneys of the bank on a check drawn
on the bank by such company, which check was then and there cashed
and paid out of the bank's funds, which sum, and no part thereof, was
such company entitled to withdraw from the bank, because it had nofunds therein, and that said company was then and there insolvent, as
H. well knew, whereby said sum became lost to the bank. Held, that
the indictment averred the actual conversion of the sum misapplied. Ib.
35. Where an indictment under Rev. St., sec. 5209, against a president of anational bank and others, for misapplying the funds of the bank, aversthat such funds were misapplied with intent to convert the same to the
use of a certain company, " a n d to other persons to the grand jury
unknown," the Government need not prove want of knowledge in the
grand jury as to such persons; and, in the absence of evidence on the
subject, the verity of the averment will be presumed. Ib.
36. No person, other than a witness undergoing examination and the Government attorney, can be present at the sessions of a grand jury; and an
indictment should be quashed where an expert witness remained in the
jury room while another witness was being examined and j)ut questions
to him. United States v. Edgerton. 80 Fed, Hep., 374.
37. An indictment should be quashed when it appears that defendant was compelled by subpoena to attend before the grand jury, and give material
testimony, without knowing that his own conduct was under investigation. Ib.


99
13


194

REPORT OF THE COMPTROLLER OF THE CURRENCY.

INJUNCTION:

1. Section 5242, Rev. St., providing that no injunctions shall issue from a
State court against a national bank before final judgment, does not
deprive the Federal court of power to issue such injunction or to continue after removal of the case an injunction previously granted by a
State court. Howerv. Weiss Malting and Elevator Co. et ah, 55 Fed.
Rep., 856.
2. State courts have no power to grant before final judgment an injunction
prohibiting a national bank from disposing of securities in its possession. Freeman Manufacturing Company v. National Bank of Republic,
35N.E.,865.
«
3. The provisions of the national-bank act, forbidding such injunctions, were
not repealed by St. U. S. 1882, c. 290, sec. 4, or St. U. S. 1887, c. 373, sec.
4, or St. U. S. 1888, c. 866, sec. 4. 1b.
4. A bill which seeks to restrain the sale by a bank of property pledged as
collateral security to a note discounted by it, on the ground that t h e .
president of the bank secretly agreed that ho would see to the payment
of the note without sale of the collateral, does not state a case for equitable relief, since such agreement, being against the interest of the bank,
should not be enforced for the benefit of a party to it. Breyfogle et ah
v. Walsh et ah, 71 Fed. Rep,, 898.
5. A decree dismissing an injunction because wrongfully sued out is conclusive as to the wrongful suing out when offered in evidence in an action
for damages against the surety on a bond, the undertaking of which is
that the principal will pay all damages which may be adjudged by reason of the injunction, although the surety may not have been a party to
the injunction and there may have been no damages adjudged against
the principal. Bunt v. Rheum, 3 N. W., 667; 52 Iowa, 619, distinguished.
Shenandoah National Banfc v. Read (Ioiua), 53 N. W., 96.
6. A prayer for injunction to preserve property from sale pending litigation can not be made a ground of equity jurisdiction when the property
had teen sold when the bill was filed, which fact complainants knew,
or might have known. Cecil National Bank v. Thurber (C. C. A.), 59
F., 913.
7. A bank recovered judgment at law by default on a note made by a wife to
the order of her husband, and subsequently the wife obtained an order
opening the judgment, with unrestricted leave to plead. She pleaded
that she occupied the position of surety on the note and was a married
woman, and also that it was a contract made with her husband and
therefore void at law. The bank then filed a bill in equity for an injunction against setting up these defenses at law. On the trial of the issues
thus raised the defense of suretyship was not sustained. Held, that the
bank was in effect compelled to come into equity by defendant pleading
that the contract was between husband and wife, and that, having established its case there on the merits, defendant should not be permitted to
litigate it again in the law courts. Hackettstown National Bank v. Ming
(N. J. Ch.), 27 A., 920.
8. When a valid judgment has been obtained in a State court against a
national bank and the lien thereof has attached to its property, before
the appointment of a receiver, Rev. St., §720, applies to prohibit the
issue of an injunction by a Federal court, at the suit of the receiver, to
restrain the enforcement of such judgment. Baker v. Ault et ah, 78
Feb. Rep., 39Jh
9. A Federal court will enjoin a sale of the real estate of a national bank to
enforce x>ayment of taxes illegally assessed against its capital stock, under
a law which would make the sale a cloud on its title though the State
law gives an action at law to recover back taxes illegally exacted. Brown
v. French, 80 Fed. Rep., 166.
10. On injunction to restrain the enforcement of a judgment on a note against
the maker, it appeared that the payee, before maturity, transferred it to
a bank as collateral; that the maker, in ignorance of the fact, paid it to
the payee, without receiving the note, upon his representation that he
had forgotten to bring it. After maturity, the bank, pursuant to an
agreement with a person who knew that it was up as collateral, obtained
judgment on it, and assigned the judgment and all other collateral
paper to him on his paying the principal debt. Among the collaterals
were notes, on which this person was a surety for a greater amount than
the principal debt. Held, that equity required the bank to resort first



REPORT OF THE COMPTROLLER OF THE CURRENCY.

195

INJUNCTION—Continued.

to the other collaterals which it held, and this equity was not changed
by reducing the note to judgment, and that the assignee got no greater
rights than the bank had, and therefore could not collect the judgment,
whether the transaction be considered as a purchase by him or as a
part payment of his own obligation. Barhorst et ux. v. Armstrong et
al., 42 Fed. Rep., 2.
INSOLVENT BANKS: See Preferred claims; Receiver.
1. A return of nulla bona upon an execution issued against the property of a
national bank is proof of its insolvency. Wheelock v. Kost, 77 III., 106.
2. The creditors of an insolvent national banking association in the hands
of a receiver are entitled to interest on their claims during the period
of administration. National Barak of Commonwealth v."Mechanics'
National Bank, 94 U. S., 437; White v. Knox, 111 U. S., 784.
3. A subscriber who has made payments on his subscription to the proposed
increase, believing that the statutory requirements would be complied
with, is entitled to have.the amount thereof allowed as a claim against
the assets of the bank in the receiver's hands. Armstrong v. Sianage,
87 Fed. Rep., 568.
4. The directors of a national bank voted to increase the capital stock " t o
$1,000,000,'' and that the stockholders ''have the right to take new stock
at par to an equal amount to that then held by them." No subscription
books were opened, and the plaintiff did not subscribe for any of the
new stock, but'paid the bank a sum equal to the amount of stock then
held by her, taking a receipt therefor "on account of subscription to
new stock.'' The new stock subscribed for and paid in did not amount
to enough to make the capital stock $1,000,000, and the directors then
voted that the capital stock be increased by the sum paid in. The
Comptroller of the Currency was notified that the capital stock of the
bank had been increased to that extent, and he issued a certificate
authorizing the bank to carry on business with that amount of capital
stock. The amount paid in, as above, was used by the bank in its general business, and lost within a month after the certificate was issued,
the bank having suspended. The plaintiff demanded back the amount
paid in by her. Held, that she was entitled to recover it, with interest
from the date of her demand. Eaton v. Pacific National Bank, 144
Mass., 260; 8 N B. C, 488.
5. A national bank determined to increase its capital stock from $300,000 to
$500,000. The new stock subscriptions amounted to only $130,060. The
bank advertised an increase to $430,030. This was never authorized by
vote of the stockholders, nor certified to or approved by the Comptroller
of the Currency. The plaintiff subscribed and paid $2,000 for so much
of the originally proposed increase. Held, that plaintiff did not become
a stockholder, and when the bank became insolvent was entitled to
judgment against the receiver for the amount so paid. Schierenberg v.
Stephens, 82 Mo. App.,814; 8 N. B. C., 528.
6. Rev. St., sees. 5234 and 5.239, prescribing the method of enforcing the
liability of the directors of national banks for violation of the banking
law, are exclusive of other remedies, and a creditor of an insolvent
bank, for which a receiver has been appointed, can not sue its directors
for the purpose of making them personally liable for the mismanagement of the bank. National Exchange Banlcv. Peters et al., 44 Fed.
Rep., 18.
7. A national bank does not lose its corporate existence by mere default in
paying its notes and the appointment of a receiver. Bank of Bethel v.
Pahquioque Bank, 14 Wall., 8S3.
8. Such associations may be sued, though a receiver has been appointed and
is administering its concerns. Ib.
9. A creditor of an insolvent national bank, who establishes his debt by suit
and judgment after refusal of Comptroller to allow it, s is entitled to
share in dividends on debt and interest so established as of day of failure
of bank, not for subsequent interest. White y. Knox, 111 U. S.9 784.
10. The personal property of an insolvent bank in hands of a receiver is
exempt from State taxation. Rosenblatt v. Johnston, 104 U. S., 4^2.
11. A creditor of a national bank is entitled to interest on the amount of his
dividend from the time it was declared by a receiver of the bank until
paid. ArmstrongT, American Exchange National Bank, 188 U. S., 4^8.



196

REPORT OF THE COMPTROLLER OF THE CURRENCY.

INSOLVENT BANKS: See Preferred claims; Receiver—Continued.
12. In estimating the dividends to be paid out of the assets of an insolvent
association, the value of the claims at the time when the insolvency is
declared is to be taken as the basis of distribution. White v. K?wx, 111
U. 8., 784.
13. A creditor will not have a lien upon the funds of the association because
checks given in settlement of balances were fraudulent and were given
at a time when the bank was hopelessly insolvent and its officers were
contemplating flight. Citizens' National Bank v. Dowel, 35 Fed.
Rep., 340.
14. A suit against a national bank to enforce the collection of a demand is
abated by a decree dissolving the corporation and forfeiting its rights
and franchises. National Bank v. Colby, 21 Wall., 609; 1 N. B. C , 109.
15. The claims of depositors in a suspended national bank are, when proved to
the satisfaction of the Comptroller of the Currency, on the same footing
as if they were reduced to judgments. National Bank of Commonwealth
v. Mechanic's National Bank, 94 U. S. 437; 1 N. B. C. 133.
16. National banks are not subject to the bankrupt act, and bankruptcy courts
have no jurisdiction as against such associations. If insolvent, they can
be wound up only in the mode provided by the national banking act.
In re Manufacturers'' National Bank, 5 Bissell, 499; 1 N. B. C., 192.
17. The plaintiff, a citizen of New York, claiming title by assignment to the
bonds deposited with the Treasurer of the United States to secure the circulation of a national bank, filed a bill setting forth that the Comptroller
of the Currency and the Treasurer refused to recognize his right to the
bonds or their proceeds; that the Comptroller had appointed one K., a
citizen of New York, receiver of the said bank, and intended to sell the
said bonds and to pay the proceeds, after redeeming the circulation of
the bank, to the general creditors of the bank, or to K. as such receiver,
and that K. claimed as such receiver an interest adverse to the plaintiff
in said bonds. The bill made the Comptroller, the Treasurer, and K.
parties defendant, and prayed a decree establishing the plaintiff's title
and requiring the Comptroller and the Treasurer to deliver to the plaintiff the surplus of the bonds after redeeming the notes of the bank, and
annulling the appointment of K. as receiver. K. demurred to the bill
for lack of equity. Held, that the demurrer must be sustained. Van
Antwerp v. Hidburd, 8 Blatchford, 282; 1 N. B. C, 219.
18. Per Woodruff, J. (1) The plaintiff could not question the validity of K.'s
appointment as receiver; (2) that, as the court \50uld not grant the relief
as to the Comptroller and Treasurer, it could not as to K.; (3) that, as
under the national banking act the proceeds of the bonds could never
come into the possession of K., he had no concern in the suit; (4) that
the allegation that plaintiff was informed and believed that K. claimed
an interest in the bonds adverse to the plaintiff was not sufficient to
sustain the bill. Ib.
19. Per Hall, J. The residuary interest of the bank in the bonds was a part
of the assets of the bank, to which K., as receiver, was entitled, unless
the plaintiff's claim thereto was good, and that therefore the bill presented a question of property between plaintiff and K., but that, as
plaintiff and K. were residents of the same State, the circuit court had
not jurisdiction. Ib.
20. Where a national bank is declared in default by the Comptroller of the
Currency, and a receiver is appointed, and a sufficient fund is realized
from its assets to pay all claims against it and leave a surplus, the Comptroller should allow interest on the claims during the period of administration before appropriating the surplus to the stockholders of the
bank. Chemical National Bank v. Bailey, 12 Blatchford, 48O;
l.N.B.C,
260.
21. An action of assumpsit to recover such interest will not lie against the
Comptroller of the Currency or the receiver of the bank, but will lie
against the bank. Ib.
22. Where a bank has by reason of its own default been placed in the hands
of a receiver, a demand of payment by a depositor is no longer a necessary condition precedent to a right of action for the deposit, and the
deposit bears interest from the time of such default. Ib.
23. The receiver of a national bank holds the same title to the assets of the
bank that the bank itself held; and he has no greater rights in enforcing their recovery than the bank itself would have had. Casey v. La
Societe de Credit MobiVler de Paris, 2 Woods, 77; 1 N, B. C., 285.




REPORT OF THE COMPTROLLER OP THE CURRENCY.

197

INSOLVENT BANKS: See Preferred claims; Receiver—Continued.
24. Insolvent debtors of an insolvent national bank assign, giving preferences
in favor of the bank. Quaere, whether the debt preferred shall carry
interest. Held, that where there is nothing in the language of the assignment, or in tho circumstances under which the debt was created, to
negative the presumption that the debt should bear interest, and nothing
in the conduct of the receiver of the national bank to estop him from
claiming interest, in such a case interest must be paid. Bain et al.
v. Peters, U Fed, Rep., 307.
25. The question whether a savings bank should be paid in full by an insolvent
national bank, pursuant to the State law (Laws 1ST. Y. 1882, chap. 409,
sec. 282; Bank v. Davis, 26 N. Y. Supp., 200; 73 Hun., 357), or pro rata,
as provided by the Rev. St., sees. 5236, 5242. Held, upon a motion to
remand, to be a controversy "arising under the laws of the United
States." Auburn Savings Bank v. Hayes, 61 Fed. Rep., 911.
26. The receipt by a bank of the proceeds of a fraudulent sale of stock belonging to it, and the subsequent appointment of a receiver, give its creditors no such right in the proceeds as will prevent the purchaser from
rescinding the sale and requiring restitution. Merrill v. Florida Land
and Improvement Co., 60 Fed. Rep., 17
27. When a bank has become hopelessly insolvent, and its president knows
that it is so, it is a fraud to receive deposits of checks from an innocent
depositor, ignorant of its condition, and he can reclaim them or their
proceeds; and the pleadings in this case are so framed as to give the
plaintiff in error the benefit of this principle. St. Louis and San Francisco Railway Co. v. Johnston, 133 U. S., 566.
28. Sureties on indebtedness of insolvent bank are not entitled to prove any
claim against it by reason of the enforcement of their liability as such.
Stewart v. Armstrong, 56 Fed. Rep., 167.
29. Where an indorser pays a note to a bank and takes a receipt containing an
order for a surrender of the note on return of the receipt, the relation
between the bank and the indorser is not that of debtor and creditor,
but is a fiduciary relation, entitling the indorser, on the bank becoming
insolvent without applying the money on the note or procuring its surrender, to have the assets in the hands of its receiver applied in payment
thereof. Massey v. Fisher, 62 Fed. Rep., 958.
30. The fact that the money was not marked, and by a mingling with other funds
of the bank lost its identity, does not affect the right to recovery in full, if
it can be traced to the vaults of the bank and it appears that a sum equivalent to it remained continuously therein until removed by the receiver. 1 b.
31. The appointment of a receiver for an insolvent national bank under act of
Congress of June 30,1876, sec. 1, which authorizes the Comptroller, when
satisfied of the insolvency of a banking association, to appoint a receiver,
•'who shall proceed to close up such association and enforce the personal
liability of the shareholders," does not dissolve the corporation. Chemical National Bank v. Hartford Deposit Company (III. Sup.), 4-1N. E., 225.
32. One induced to subscribe for certificates alleged to represent an increase
of the capital stock of a national bank at a time when no increase had
been authorized, on false representations of the cashier as to the bank's
condition, it being in fact insolvent at the time, is entitled to a judgment
against the bank and. its receiver for the purchase money paid. Newbegin v. Newton National Bank {C. C. A.), 66 Fed. Rep., 701.
33. A contract between two national banks that the proceeds of paper, discounted by one for the other, should not be drawn on in advance of the
maturity of such paper, is not affected by the subsequent fraud of the
bank obtaining the discount in reporting such proceeds to the Comptroller of the Currency as part of its cash reserve. Fisher v. Tradesmen's
National Bank (C. C. A.), 64 Fed. Rep., 706.
34. A contract by which one bank pledges any of its property in the hands of
another bank, as collateral to notes discounted for and guaranteed by it,
authorizes the discounting bank to hold a deposit balance, standing to
the credit of the borrowing bank at the time of its insolvency, as collateral to any liability, then or at maturity of the discounted notes, until
the amount of the lien has been ascertained. Fisher v. Continental
National Bank (C. C. A.), 64 Fed. Rep., 707.
35. A statement by the president of a bank, for the purpose of procuring from
another bank a discount of paper, that such former bank is in good con


198

REPORT OF THE COMPTROLLER OF THE CURRENCY.

INSOLVENT BANKS: See Preferred claims; Receiver—Continued.
dition, when in fact it is hopelessly insolvent in consequence of the president's own malversation, is a fraud, and entitles the discounting bank to
recover back the proceeds of the discount. Fisher v. United States
National Bank (C. C. A.), 64 Fed. Rep., 710.
86. The fact that an insolvent national bank has gone into voluntary liquidation does not absolve it from liability to be garnished.
Birmingham
National Bank v. Mayer (Ala.), 16 So., 520.
37. Rev. Stat., sec. 5242, which invalidates all transfers of the notes, bonds, or
bills of exchange of a national bank after the commission of an act of
insolvency with a view to the preference of one creditor over another,
does not prohibit a bank which has in good faith accepted the draft of a
national bank the day before the latter's insolvency, and afterwards
paid the same, from applying the proceeds of collections made by it on
paper in its hands belonging to the insolvent bank to the payment of
the draft, since its lien on such collection runs from the date of the
acceptance. In re Armstrong, 41 Fed. Rep., 881.
38. Sections 5151 and 5289, Revised Statutes, exclude banking associations from
none of the remedies for the collection of debts, claims, and dues for the
bank or its creditors provided by the general rules and principles of law
and equity, but they impose upon shareholders and directors additional
liabilities and subject them to proper remedies for their enforcement.
Hay den v. Thompson, 67 Fed, Rep., 27o.
39. In the State of Nebraska a suit to recover from an innocent shareholder of
an insolvent national bank an unearned dividend which he has received
in good faith without notice of any fact that would lead a reasonably
prudent man to learn that the dividend was not earned is barred in four
years from its receipt. Ib.
40. The fact that trustees holding lands in trust for a national bank formally
and regularly execute a deed thereof to a third party itself raises a presumption that the deed was made pursuant to a regular resolution of
the bank's board of directors, and the deed must be held sufficient to convey the legal title where there is nothing to rebut the presumption.
Bailer et at., v. Cockrill, 73 Fed. Rep., 945.
41. A bank for which certain mill property was held in trust caused the same
to be coiweyed to a corporation, organized among its own officers and
directors, with a view to loaning to such corporation money wherewith
to repair and operate the mills and make them salable. The bank directors who subscribed for stock in the mill corporation had a secret agreement with the bank that, after a sale of the property was effected", the
proceeds should be first applied to repay the amount of their subscriptions. The money was loaned accordingly, the bank taking the mill
company's notes, and discounting them with innocent third parties. No
sale was effected, and the bank and mill company failed, and all their
property went into the hands of the bank's receiver. Thereafter the mill
company gave to such subscribers its own notes, secured by mortgage,
for the amounts paid on the stock, and the notes were then transferred
to alleged innocent purchasers. Held, that these notes were without
consideration, that this was a futile attempt to divert the property of an
insolvent corporation from its creditors to its stockholders, and that the
proceeds of the receiver's sale of the mill property must be equally distributed among the holders of the notes given by it to the bank for the
borrowed money, the receiver taking for the bank's creditors the proportion applicable to such of the notes as were retained by the bank. Ib.
42. A depositor who receives an ordinary certificate of deposit, and whose
money is mingled with the other funds of a bank, is not entitled, on the
insolvency of the bank, to any preference over other creditors, even
though the banker promised him to keep his money separate from the
other funds. Bay or v. American Trust and Savings Bank (III. Sup.), 41
N.E.,622.
43. On the insolvency of a bank which has collected notes sent to it for collection, and failed to remit the proceeds, a trust will be imposed on the
assets of the bank in favor of the person sending them, as against the
general creditors of the bank, if it is proven that the moneys collected
were deposited in the bank and commingled with other funds of the
bank, or if they went into property represented by the assets in the
hands of the assignee of the bank. Winstandley v. Second National
Bank (Ind. App,), 41 N. E., 956.



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199

INSOLVENT BANKS: See Preferred claims; Receiver—Continued.
44. The California' * Bank Commissioners' Act " (St. 1877-78, p. 740, as amended
by St. 1886-87, p. 90) provides in section 11 that if the commissioners
shall find that any bank has violated its charter or law, or is conducting
business in an unsafe manner, they shall require it to discontinue such
practices; and in case of refusal, or whenever it shall appear to the
commissioners unsafe for the bank to continue business, they shall notify
the attorney-general, who may commence suit to enjoin the transaction
of business by such bank; and, upon the hearing of such suit, the court
may issue the injunction, and direct the commissioners to take such proceedings against the bank as may be decided on by its creditors. The
section also empowers the commissioners to supervise the affairs of banks
in processof liquidation, limit the number of their officers and employees,
and requires reports to the commissioners by such banks. Held, that a
• court in which proceedings are instituted by the attorney-general against
a, bank pursuant to such statute has no jurisdiction to appoint a receiver
of the property of the bank in such proceedings, though the bank commissioners and the creditors of the bank consent, and though there are
provisions in the Code of Civil Procedure authorizing the appointment
of receivers in other proceedings. Murray v. American Surety Co. of
New York (C. C. A.), 70 Fed. Rep., 3/+1.
45. Where plaintiff sent a note and mortgage to a bank with directions to collect the same and ' • forward draft " for the amount, ie?s its collection fee,
the money received by the bank in payment thereof was not impressed
with a trust in plaintiff's favor so as to entitle her to recover the whole
amount as a preferred claim from a receiver appointed for the bank after
the collection was made, though said bank was insolvent at th 3 time it
received said note and mortgage. Mud though payment was made by the
mortgagor with a check drawn on tlio bank. Saylcs v. Cox (Tenn.), 82
S. W., 626.
46. Where, between suspension by a bank and commencement of an action
for and resulting in its dissolution and appointment of a receiver, one
liable to it as indorser on notes takes assignments of deposit accounts,
he may offset them against his liability, in an action by the receiver,
unless it be shown that the bank was insolvent at the time of the assignment of the accounts; and this is not shown by the recital in an agreed
statement of facts that, at the commencement of the action to dissolve,
the bank "was insolvent, having suspended its business" on a certain
day. Higginsv. Worthington (Sup.), 85 N. Y. S., 815.
47. Where a check payable to two persons as Government officers is indorsed
by one of them for both, by indorsement showing their official character,
and deposited in a bank to be credited to his individual account, and
thereby becomes mingled with the funds of the bank, the fact that the
check was intrusted to them as officers can not be urged by the "payees
to charge the proceeds as a trust fund in the hands of an assignee in
insolvency of the bank, in an action to which the Government is not
party, and in which the authority of the depositing payee to act for his
copayee is not denied. Meldrum v. Henderson {Colo. App),48 P., 1J{8.
48. A creditor of an insolvent national bank is entitled to prove the whole
amount of the claims against it held by him, without reference to the
collateral held to secure such claims. Armstrong v. Bank, 8 C. C. A.,
155; 59 Fed. Rep., 873; 16 U. S. App.^65, followed. Merrill v. National
Bank of Jacksonville, 75 Fed. Rep., 14.8; 178 U. S. Rep., 181.
49. It seems that an accounting of the assets which have come to the hands
of the receiver in an insolvent national bank can not be decreed in a
suit to which the Comptroller of the Currency is not a party. Ib.
50. In a suit against a receiver of an insolvent national bank to establish the
claim of a creditor and his right to a dividend, the decree should not
direct the payment of a dividend by the receiver, since the assets of such
bank are, under the statutes, entirely within the control and disposition
of the Comptroller of the Currency, but such decree should direct that
the claim of the creditor, as established, be certified to the Comptroller,
to be paid in due course of administration. Ib.
51. Where a railroad company is in the hands of a receiver, though at the
instance of the holders of a mortgage, the court has no power t;o appropriate the corpus of the property to the payment of claims for operating
expenses in preference to the prior mortgage debts, in the absence of a
statute, at the time the mortgage was executed, giving such claims a



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

INSOLVENT BANKS: See Preferred claims; Receiver—Continued.
prior lien on the corpus of the property. Farmers and Merchants'
National Bank v. Waco Electric Railway and Light Co. {Tex. Civ,
App.), 36 S. W., 131; Metropolitan Trust Co. v. Farmers and Merchants'
National Bank, ib.
52. While the N. Bank was in embarrassed circumstances, plaintiff was induced,
by the fraudulent misrepresentations of its cashier, to subscribe, in May,
1890, for 62 shares of a proposed increase of its capital stock, and to pay
in a large sum of money therefor. In the following November the
bank failed, and the plaintiff, who lived at a distance, in another State,
receiving then his first intimation that anything was wrong, proceeded
to make inquiries, and, as a result, instituted proceedings before the
Comptroller of the Currency to have the stock standing in his name
declared void, and himself not a stockholder. These proceedings failing, he took steps in May, J.891, to have a bill filed to rescind his subscription. At the request., however, of parties who were trying to reorganize the bank, he consented to withdraw such suit, and surrender his
stock to be canceled, upon an express agreement that it should be without prejudice to his right to sue the bank for the fraud by which he had
been induced to subscribe and pay his money therefor. Plaintiff did
not participate in the reorganization, and consistently maintained that
he was not a stockholder, and that the bank was liable to him for the
money paid. Upon the reorganization the creditors of the bank accepted
in settlement a payment in cash and certain certificates of indebtedness.
In November, 1891, plaintiff brought this action against the bank to
recover the money paid by him, as a deposit. In December, 1892, the
bank failed again. Held, that the occurrence of the insolvency, of the
bank before the commencement of plaintiff's action did not preclude
him from, rescinding his subscription and recovering back the money
paid for his stock. Newton National Bank v. Newbegin (C. C, A.), 74
Fed. Rep., loo.
53. In an action for an alleged balance, it appeared that defendants McG. and
W. illegally undertook to corner the lard market; that McG. was a
partner in the firm through whom the transactions were carried on, but
that W. was not; that the deal ruined the firm, and that the receiver
for it undertook to effect a settlement; that defendants were personally
liable for a part of the indebtedness by their indorsements on the firm's
notes, and that at the receiver's solicitation they agreed to contribute a
certain sum each on consideration of a release from all creditors; that
the receiver thereupon submitted the firm's proposition to pay 50 per cent
of the indebtedness, in full settlement of all unsecured claims, stating
that the affairs of the firm were in great confusion and that unless the
compromise were effected the matter would "only terminate after long,
vexatious, and fruitless litigation;" that all of the creditors accepted
the payment and signed a release in full. Held, that the transaction
was a valid compromise. (Winslow and Pinney, J J . , dissenting.)
Continental National Bank v. McGeoch (Wis.), 66 N. W., 606.
54. Where, on the issue of a fraudulent preference of a creditor, the verdict
and findings cover all the material, controverted, and issuable facts, a
party can not urge, on appeal, certain transactions in evidence from
which a preference might have been found, where there was no request
for the trial court to submit them to the jury for determination. Ib.
55. Where a corporation borrowed money, and directed its officers to pay over
the same to another creditor, the authority of the officers to pay over
said money terminated by the appointment of a receiver for said corporation. First National Bank v. Dovetail Body and Gear Company {Ind.
Sap.), 42 N. E., 9.U.
56. Remittances made by a national bank to its correspondents, in the ordinary course of business, before the commission of any act of insolvency,
are not void under Rev. St., § 5242, though the bank is in fact insolvent
at the time, and is closed by the bank examiner before the remittances
are actually received by the correspondent banks. Hayden v. Chemical
National Bank, 80 Fed. Rep., 587; 174 U. S. Rep., 610.
57. The Third National Bank in New York was the correspondent of the Albion
bank, a country bank. W., during part of the time in which the transactions in controversy took place, was cashier, and during the remainder
was president of the Albion bank. During all the time W. practically
managed that bank, and his codirectors and other officers had little or



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201

INSOLVENT BANKS: See Preferred claims; Receiver—Continued.
no oversight of its affairs. He was engaged in stock speculations on his
own account in New York, and drew from time to time for his own purposes in favor of K. & Co., his brokers, on the bank balance with the
Third National Bank. K. & Co. from time to time returned to that bank
sums to be credited to the Albion bank. The latter bank eventually
became insolvent, being ruined by fraudulent operations of W., who
disappeared, and was put in the hands of a receiver, who brought suit
against K. & Co. to recover the sums so paid to them by W. out of the
balance to the credit of the bank with the Third National. K. & Co.
claimed to offset the return payments made by them to the Third
National, but the trial court ruled that they were not entitled to do it,
and no question in respect of them was submitted to the jury. Held,
that the defendants were entitled to have it submitted to the jury
whether the other directors and officers of the Albion bank might not
in the exercise of proper and reasonable care have ascertained that
these moneys had been deposited to the credit of the Albion bank, and
whether they would or would not have accepted such derjosits as the
return of the moneys to the bank. Kissam v. Anderson, 145 U. S., 435.
58. The time of commencement of judicial proceedings to avoid a statute bar
may be shown by parol. Witters, Receiver, v. Sowles and others, assignees, 32 Fed. Rep., 765.
59. A case will not be reopened for the introduction of newly discovered evidence where such evidence is merely cumulative and its sources were
well known to the parties at the first hearing. Ib.
60. Proceedings upon a decree will be stayed for the purpose of allowing parties to take and file testimony newly discovered, when such testimony
appears to be material and its materiality was not so direct and apparent that the failure to discover and produce it on the first hearing
amounted to laches. 16.
61. Defendant was heavily indebted to the bank of which he was cashier, and
within four months of the filing of a petition by a creditor to have him
declared an insolvent (under Rev. Laws Vt., sec. 1870) transferred certain securities to the bank with a view to preferring it over his other
creditors. Held, that knowledge on the part of defendant of his insolvency affected the bank of which he was cashier with such knowledge
and made the transfer of such securities void, under Rev. Laws Vt.,
sec. 1860, which provides that a conveyance made by an insolvent, or
one in contemplation of insolvency, within four months before the
filing of a petition of insolvency by or against him, with a view to
giving a preference to certain of his creditors, the latter having knowledge of his insolvency, is void. Witters v. Soioles and others, 32 Fed.
Rep., 762.
62. Other securities were deposited by the cashier with his bank and an equal
amount of his own paper withdrawn. Held, that title to the securities
immediately vested in the bank, and, such deposit taking place more
than four months before the filing of the petition in insolvency, the
transfer did not come within the purview of the statute. Ib.
63. Defendant, being indebted to the bank of which he was cashier, transferred to it on the books of another bank the stock which he held in the
latter, but did not deposit the certificates for such stock in his own bank
and take up his paper held by it until some time later. Held, that the
title of defendant's bank to the stock transferred dated from the deposit
of the certificates with it and not from the transfer on the books of the
other bank. Ib.
64. A national-bank examiner is not an officer or agent of the bank and has
no authority as such to act for the bank and can not bind it by any act
done in its behalf. Ib.
65. In an action against the receiver of a bank for dividends upon a debt for
a deposit in the name of "S., trustee," the mere general statement of S.
that the money deposited was his daughter's, in connection with evi' dence that she owned property of which he had the management and
from which the fund deposited might have been derived, it not being
shown that it was derived therefrom, is not sufficient to enable the
daughter to recover. Sowles et al. v. Witters, 35 Fed. Rep., 463.
66. Where a bank, knowing its insolvency, receives from a customer as cash
a check on a foreign bank and sends the paper to its correspondent, who
credits the check to it as cash, and subsequently pays the proceeds thereof



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REPORT OF THE COMPTROLLER OF THE CURRENCY.

INSOLVENT BANKS: See Preferred claims; Receiver—Continued.
to a receiver appointed for it in the meantime, it is presumed, in an action
by the depositor against the receiver to recover the proceeds, that the
correspondent credited the check to the bank before its failure. Friberg
v. Cox (Tenn. Sup.), 37 8. W., 283.
67. The burden is on one who transferred a draft to a bank prior to its failure,
and who seeks to follow and reclaim the proceeds as against a receiver,
to show that they were not received and mingled with the other funds
of the bank before the failure; and, where they were placed to its credit
by a correspondent on the same day the receiver was appointed, in the
absence of further proof as to the exact time it will be presumed that
the credit was given before the receiver was appointed. Klepper v. Cox
(Term. Sup.), 81 S. W., 284.
68. Money received by a bank and entered to the depositor's general credit as
cash can not be reclaimed after the insolvency of the bank on the ground
that the bank officials had knowledge of the insolvency when they
received the deposit, there being no means of identifying and separating it from the funds on hand when the receiver took charge. Bruner v.
First National Bank (Tenn. Sup.), 37 8. W.9 286.
69. Where a bank, knowing its insolvency, receives a check, which it credits to
the depositor as cash, and then sends to a correspondent, who, after the
failure of said bank, but without notice thereof, credits the check to it
as cash, and subsequently pays over the proceeds to the receiver, the
depositor may recover such proceeds as a preferred claim. Ib.
70. The president of a bank, having embezzled funds of the bank on deposit
with its reserve agent, replaced such funds with money borrowed by
him on the bank's note without the director's knowledge, and such
borrowed money was thereafter drawn out to pay the bank's lawful
debts. Held, that the bank having received the benefit of the loan
through its president, it was affected with his knowledge of the loan,
and hence was liable to the lender as for money had and received to
its use. Ditty v. Dominion National Bank of Bristol Va. (C. C. A.), 75
Fed. Rep., 769.
71. The president of a bank has authority by virtue of his office to make a
valid assignment of a judgment in favor of the bank. Guernsey v.
Black Diamond Coal and Mining Co. (Iowa), 68 N. W., 777.
72. Where a depositor in a bank obtains from it two drafts upon another
bank, paying therefor by checks aganst his deposit, the relation between
the bank and the depositor with respect to such drafts remains that of
debtor and creditor, and is not changed to a fiduciary relation, entitling
the depositor, upon the bank becoming insolvent before the drafts are
paid, to have the assets in the hands of its receiver applied by preference to the payment of such drafts in full. Jewett et al. v. Yardley, 81
Fed. Rep., 920.
73. A stockholder in a national bank is liable to the receiver thereof on a note
given to the bank for capital stock. Hepburn v. Kincannon (Miss.),
21 So., 569.
INTEREST: See Usury; Insolvent banks.
1. The provision in sec. 30 of the act of 1864, " that where, by the law 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 in
any such State under the act," is enabling, and not restrictive; and,
therefore, a national banking association in any State may stipulate for
as high a rate of interest as by the laws of such State a natural person
may, although State banks of issue are restricted to a less rate. Tiffany
v..National Bank of the State of Missouri, 18 Wall., 409.
2. Bank may take the rate of interest allowed by the State to natural persons
generally, and a higher rate where State banks of issue can take it. 1b.
3. But it is not to be inferred, from Tiffany v. National Bank of Missouri, that
whatever by the laws of the State is lawful for natural persons in acquiring title to negotiable paper by discount is lawful for national banks.
National Bankv. Johnson, 104 U.S., 271.
4. May charge rate of interest allowed to natural persons in the State or Territory where bank is located, but can not take more, even on discount of
paper for third party, without it being usury. 1b.
5. The interest which a national banking association may charge is limited to
the rate allowed to the banks of the State generally; and the fact that
a few of the State banks are specially authorized to take a higher rate is




REPORT OF THE COMPTROLLER OF THE CURRENCY.

203

INTEREST: See Usury; Insolvent banks—Continued.
not a warrant for a national banking association to do so. Duncan v.
First National Bank of Mount Pleasant, 11 Bank Mag., 787; 1 N. B. C,
360; First National Bank v. Gruber, 87 Perm. St., 4-08.
6. Where the State law does not limit the rate of interest which may be
charged on loans to corporations, a national banking association located
in that State can not charge more than 7 per cent interest on such loans.
In re Wild, 11 Blatch., 243.
7. Where by the statutes of the State parties are authorized to contract for
any rate of interest, national banking associations in that State may
likewise contract for any rate, and are not limited to 7 per cent. Wines
v. Marmolejo, 60 Cal., 229.
8. Under Rev. St., sec. 5197, authorizing national banks to charge any rate of
interest allowed by the law of the State wherein such bank is organized,
and the statute fixing a legal rate of interest, a national bank in Colorado may charge interest" at any agreed rate. Rockwell v. Farmers'
National Bank, 36 P., 905,
9. As act of 1873 (70 Ohio Laws, 178) repeals the statute fixing the rate of
interest for banks of issue, a national bank may charge interest at 8
per cent under Rev. St., sec. 3181. La Dow v. First National Bank, 37
N.F.,11.
10. The decisions of the United States Supreme Court teach that the statute
referred to is to be liberally construed in favor of national banks, and
even when the language of the statute would restrict them to a less rate
of interest than is allowed to individuals the intendment of the law must
be presumed to have been otherwise. Tiffany v. National Bank of Missouri held that the intent of the law was to put national banks on an
equal footing with State banks; to allow the State banks to charge any
amount of interest and national banks only 8 per cent would violate that
intention; to say that national banks could only charge 7 per cent would
be to say that the State had prescribed no rate of interest. National
Bank of Jeffer son v, Bruhn & Williams, Gj, Tex., 571.
11. Where drafts are from time to time deposited in a bank, some of them
being payable on demand and some on time, an agreement between the
bank and the depositor that credit shall be given for such drafts on the
day after their deposit, the depositor being charged the full legal rate
for any overdraft, does not constitute usury when such agreement is
made in good faith in order to save involved calculations. Timberlake
et ah v. First National Bank, 43 Fed. Rep., 231.
12. Charging a depositor, by agreement, at the end of each month, with interest at the full legal rate on his overdraft, and adding such charge to the
overdraft, does not constitute usury. Ib.
13. Under Code Miss., 1880, which only allows interest on the amount of money
actually lent, a national bank in that State can not deduct interest in
advance. Ib.
14. Under the national banking act, any national bank in Pennsylvania can
charge and take the same rate of interest as any State bank of issue is
authorized to charge. First National Bank of Mount Pleasant v. Tinstman, 36 Legal Intelligence, 228; 2 N. B. C, 182.
15. Interest on dividends should not be allowed in favor of one who voluntarily
delayed presenting his claim until long after the dividends were declared,
although the delay was due to a mistaken belief that he had a right to
pay his claim in full from collaterals in his hands. Chemical National
Bank v. Armstrong, 59 Fed. Rep., 872.
••
16. The refusal of a creditor to accept the receiver's offer to allow part of a
claim without prejudice to a suit for allowance of the remainder, or to
the receiver's right to still further reduee the claim if the court should
hold such reduction proper, bars the creditor's right to interest on subsequent dividends on the part offered to be allowed, although it is subsequently adjudged that the whole of his claim should have been allowed;
but he is entitled to interest on the dividends on the part rejected. Ib.
17. In case of book accounts in favor of depositors, interest begins to run
against an association in liquidation from the date of the suspension of
business. Richmond v. Irons, 121 U. S., 27.
18. There is an established rate of interest in Washington (10 per cent), and
the fact that by special contracts different rates may be collected does
not affect the question, and therefore a national bank may charge that
rate. Yakima National Bank v. Knipe, 83 P., 834; V Wash., 848.



204

REPORT OF THE COMPTROLLER OF THE CURRENCY.

INTEREST: See Usury; Insolvent banks—Continued.
19. The fact that there are several entries in the books of a bank and in the
pass book of a depositor of allowance of interest on his account is not
sufficient to prove a contract by the bank to pay interest while the deposit
should remain, where it is proven that after the entries were made the
officers of the bank, on several occasions, told the depositor that it was
against their rules to pay interest, and that they would not pay it, and
that he aj)parently acquiesced. MoLoghlin v. National Mohawk Valley
' Bank, 139 N. Y. St., 514; 34 N. E. 1095.
20. Rev. St. U. S., sec. 5197, authorizes national banks to take interest at the
rate allowed in the State where the bank is located, and, when no rate
is fixed by the laws of such State, they are authorized to take interest
at a rate not exceeding 7 per cent. Held, that since 1 Hill's Code, sec.
2798, and Sess. Laws 1893, page 29, allow individuals and State banks to
take any rate of interest agreed to in writing by the parties to the contract, national banks have the same privilege. Wolverton v. Exchange
National Bank (Wash.), 39 P., 247.
21. A stockholder in a bank is not entitled to interest from the bank, either
on ordinary dividends declared or on money due him from a reduction
of capital stock, for a period during which the bank was prevented from
paying him the same by attachments of his stock in suits of other parties,
though the money thus belonging to him was during such time mingled
by the bank with its general assets, the bank being ready and willing to
pay over the same but for the attachments. Mustard v. Union National
Ba?ik,29A., 977; 86 Me., 177.
22. An order directing payment of interest by the receiver of a national bank
from date of judicial demand is erroneous, as funds coming into the
hands of a receiver are turned over to the Comptroller, and could not
earn interest, and any payment of interest would necessarily be taken
from some other trust fund; and this particularly where the involved
circumstances of the case made it impossible to pay over the amount
without investigation and an accounting.—Richardson v. Louisville
Banking Co., 94 Fed. Rep., 442.
23. No interest is recoverable against the fund in the hands of the receiver of
an insolvent national bank on recovery in a suit to establish a claim
against the bank, made necessaiy solely by the disallowance of the claim
by the receiver. Merchants' Nat. Bank v". School Dist. No. 8, of Meagher
County, Mont., 94 Fed. Rep., 705.
JURISDICTION: See Actions.

1. In an action against a national bank in a circuit court of the United States,
if all the parties are citizens of the district in which the bank is situated,
and the action does not come under sec. 5209 or sec. 5239, Rev. St., the
circuit court has no jurisdiction. Whittemore v. Amoskeag National
Bank, 134 U. S., 527.
2. The Federal courts have jurisdiction of an action between a national bank
located in one State and a citizen of another State. First National
Bank v. Forest, 40 Fed. Rep., 705.
3. State courts have jurisdiction of suits by and against national banking
associations. Bank of Bethel v. Pahquioque Bank, 14 Wall., 383; Ordway v. Central National Bank, 47 Md., 217, and Claflin v. Houseman,
93 U.S., 130.
4. Where a national banking association is sued in a State court, the suit
must be brought in the city or county in which the bank is located.
Cadle v. Tracy, 11 Blatch., 101.
5. But in a State where the holder may sue without respect to the ownership,
an association may bring suit upon paper so acquired. National Pemberton Bank v. Porter, 125 Mass., 333; Atlas National Bank v. Savery,
127 Mass., 75.
6. The words of restriction to the place where said association is situated
apply to the county and municipal courts, and not to the State courts.
In the State courts of general jurisdiction a national banking association
can bo sued whenever an individual can be for the same cause. Talmage
v. Third National Bank, 27 Hun., 61.
7. A State court can entertain an action brought to recover of ,a national
banking association the i>enalty for taking usury. Ordway v. The
Central National Bank, 47 Md., 217; Hade v. McVay, 31 Ohio St., 231;
Bletz v. Columbia National Bank, 87 Penn. St., 87.
8. State courts have no jurisdiction of the case of an embezzlement of the
 funds of the association by one of its officers. Commonwealth v. Felton.


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JURISDICTION: See Actions—Continued.

9,
10.
11.

12.

13.
14.

15.

16.

17.

18.
19.

20.
21.
22.

23.

101 Mass., 204; Commonwealth ex rel. Torrey v. Reiner, 92, Perm. St.,
372.
The defense of usury may be set up in action brought in a State court.
National Bank of Winter set v. Eyre, 52 Iowa, 114.
A national banking association is for jiirisdictional purposes a citizen of
the State in which it is located. Davis v. Cook, 9 Nev., 134.
The offense of making false entries in the books of a bank, for which
an officer of the bank is liable to punishment under sec. 5209, Rev.
St., since it is not a crime of which the State courts have concurrent
jurisdiction, under sec. 5328. Rev. St., is exclusively cognizable by the
Federal courts. In re Eno, 54 Fed. Rep., GG9.
Under the provisions of the act of August 13, 1888, national banks are
deemed to be, for jurisdictional purposes, citizens of the State wherein
they are located, and they 110 longer possess the right of removal on the
ground that they are Federal corporations. Burnham et al. v. First
National Bank of Leoti, 53 Fed. Rep., 163.
An action for money against a national bank whose corporate existence is
admitted is not a suit arising under the laws of the United States.
Ulster County Savings Institution v. Fourth National Bank, 8 N. Y., 1G2.
The provision that the Federal courts shall not have jurisdiction of an
action on a promissory note or other chose in action by an assignee
thereof, unless the action might have been maintained in such courts if
no assignment or transfer had been made (act August 13,1888) does not
apply to the indorsement and transfer of the payee of notes which were
made to him merely that he might as agent of the maker raise money
for it by negotiating them with third persons. Wachiisctt National
Bank v. Sioux City Stove Works, 5G Fed. Hep., 321.
A suit on the official bond of the cashier of a national bank, conditioned
for a faithful performance of the duties thereof," according to law and
the by-laws" of the bank, involves a Federal question and is maintainable in a Federal court irrespective of the citizenship of the parties.
Walker et al. v. Windsor National Bank, 56 Fed. Rep., 76.
In a suit which is properly brought in a Federal court, because it involves
a Federal question, the court has full jurisdiction of the defendant,
who, though a resident of another district, waives his personal privilege
of being sued in his district by voluntarily appearing. Ib.
The exemption of national banks from suits in State courts in other than
their own county or city, by act of February 18, 1875 (18 St., 316, chap.
80) was a personal privilege which could be waived by appearing to
such suit and not claiming the immunity. First National Bank v. Morgan, 132 U. S., 141.
The provision in act of July 12,1882 (22 St., 163, chap 290, sec. 4), respecting
suits by or against national banks, refers only to suits brought after the
passage of that act. Ib.
This court has jurisdiction to review a judgment in State courts involving
the question whether a national bank is exempted from liability to
account for bonds purchased by it on condition of selling back on demand.
Logan County National Bank v. Townsend, 139 U. S., 67.
When transaction of transfer of national-bank shares does not present a
case arising under national banking act, no Federal question is involved.
Le Sassier v. Kennedy, 123 U. S., 521.
State courts have no jurisdiction of actions to recover penalties imposed by
the national banking act. Missouri River Telegraph Company v. First
National Bank of Sioux City, 74 III, 217; 1 N. B. C, 401.
When a State bank acting under a statute of the State calls in its circulation issued under State laws, and becomes a national bank under the laws
of the United States, and a judgment is recovered in a court of a State
against the national bank upon such outstanding circulation, the defense
of the State statute of limitations having been set up, a Federal question
arises which may give this court jurisdiction in error. Metropolitan
National Bank v. Claggett, 141 U. S., 520.
The act of Congress of July 12, 1882, repealing inconsistent acts and providing that the jurisdiction of suits in which a national bank should be
a party should be the same as if it were a State bank at the same place,
prevents the removal of a cause in which a national bank is a party from
a State to a Federal court on the mere ground that it is a national bank.
Leather Manufacturers' National Bank Y. Cooper, jr., 120 U. S., 778; 3
N. B.C., 208.




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24. Under St. U. S., 1888, chap. 8CG, sec. 4, providing that in actions against
national banks the Federal courts k' shell not have jurisdiction other than
such as they would have in cases between individual citizens of the same
State," an action to compel the directors of a national bank to declare a
dividend may be maintained in a State court. Hiseock v.Lacy (Slip.),
30 N. Y. S., 860; 9 Misc. Rep., 578.
25. The object of this proviso was to deprive the United States courts of jurisdiction of suits by or against national banking associations in all cases
where banks organized under State laws could not likewise sue or be
sued in such courts. Ib.
28. But the proviso does not afreet the right of the receiver of an insolvent
association to sue in a Federal court. Hendee v. Connecticut and P. R.
R. Co., 26 Fed. Rep., 677.
27. Nor would the act of July 12,1882, take from the circuit court jurisdiction
of a suit brought against a director for negligent performance of his
duties; for, as such suits rest upon the requirements of the United
States laws and by-laws made pursuant thereto, it is a case arising under
the laws of the United States. V/itters v. Foster, 28 Fed. Rep., 787.
28. An action between a receiver of an insolvent national bank and a depositor does not present a Federal question under Rev. St.. sec. 5242, avoiding preferences to creditors of such an insolvent bank. Telian v. First
National Bank et al., 39 Fed. Rep., 577.
20. A receiver of an insolvent national bank is an officer of the United States
within the meaning of sec. 503, Rev. St., which gives the district courts
jurisdiction of " all suits at common law brought by the United States,
or any officer thereof authorized by law to sue.*' Stephens v. Bernavs,
41 Fed. Rep., 401.
80. The United States district court has jurisdiction of an action at law
brought by the receiver of a national bank to recover an assessment
made upon a stockholder, and the action may be maintained in such
event against the executor of a deceased stockholder. Ib.
81. The State courts have jurisdiction of an action brought by a shareholder
on behalf of himself and other shareholders to recover of the directors
of an insolvent association damages for injuries resulting from their
negligence and misconduct. JBrinckerhoff v. BostivicJc, 88 N. Y., 52.
82. A State-court has no power to make an order directing the receiver of a
national bank who has been appointed by the Comptroller of the Currency to pay a judgment obtained against the bank before the receiver
was appointed. Ocean National Bank v. Carll, 7 Hun., 237.
83. Neither the Comptroller nor the receiver, by putting in an appearance to
a suit, can subject the United States to the jurisdiction of a court. Case
v. Terrell, 11 Wall., 199.
34. The Federal courts have jurisdiction of suits, by receivers of national
banks to collect the assets thereof without regard to the citizenship of
the plaintiff. Fisher v. Yoder, 53 Fed. Rep., 565.
85. A Federal court is no.t deprived of jurisdiction otherwise vested in it of a
suit against the executors of an estate by the fact, that the estate is in
the possession of a State probate court for purposes of administration,
and the Federal court has jurisdiction to adjudge whether a liability
exists, but can not issue execution to enforce the same. Wickham v.
Hull et al., 60 Fed. Rep., 326.
86. A suit against the receiver of a national bank to compel him to pay out of
the funds in his hands as receiver, moneys claimed by the complainant
in a suit arising under the laws of the United States, and can be
removed into the Federal court. Hot Springs Independent School District, etc., v. First National Bank of Hot Springs, 61 Fed. Rep., 417.
37. The tenth subdivision of sec. 629, Rev. St., which confers upon the circuit
court of the United States jurisdiction of all suits by or against any
national-banking association established in the district for which the
court is held, has been repealed by the proviso to sec. 4 of the act of
July 12,1882. National Bank of Jefferson v. Fare et al., 25 Fed. Rep., 200.
38. A Federal court has jurisdiction of an action brought by the receivers of
an insolvent national bank in the name of the bank, to realize its assets,
irrespective of the citizenship of the parties. Linn County National
Bank v. Crawford (C. C), 69 F., 532.
39. A suit against a receiver appointed by a Federal court for a cause arising
out of his management of the property committed to his charge is one
arising under the laws of the United States and may be removed from




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207

JURISDICTION: Sec Actions—Continued.

a State to a Federal court without regard to the citizenship of the
parties or the nature of the controversy. Jewett v. Whitcomb ct al.,
69 Fed. Rep., 418.
40. It seems that where a State statute creates a right in favor of creditors,
and provides a remedy for the enforcement thereof, this remedy, whether
at law or in equity, must be adopted by the Federal courts. If the
State statute does not create the right, but only redeclares a right existing in the absence of statute, then the form of remedy in the Federal
courts is determined by principles which differentiate legal and equitable
jurisdiction. First National Bank of Sioux Cityv. Peavy, 69 Fed. Rep. ,455.
41. The California " bank commissioners' a c t " (St. 1877-78, p. 740, as amended
by St. 1886-87, p. 90) provides in section 11 that if the commissioners shall
find that any bank has violated its charter or law, or is conducting business in an unsafe manner, they shall require it to discontinue such practices; and in case of refusal, or whenever it shall appear to the commissioners unsafe for the bank to continue business, they shall notify the
attorney-general, who may commence suit to enjoin the transaction of
business by such bank; and, upon the hearing of such suit, the court may
issue the injunction and direct the commissioners to take such proceedings
against the bank as may be decided on by its creditors. The section also
empowers the commissioners to supervise the affairs of banks in process
of liquidation, limit the number of their officers and employees, and
require reports to the commissioners by such banks. Held, that a court
in which proceedings are instituted by the attorney-general against a
bank, pursuant to such statute, has no jurisdiction to appoint a receiver
of the property of the bank in such proceedings, though tlie bank commissioners and the creditors of the bank consent, and though there are
provisions in the Code of Civil Procedure authorizing the appointment
of receivers in other proceedings. Murray v. American Surety Co. of
Neiv York, 70 Fed. Rep., 841.
42. The exercise by a court, in purely statutorj r proceedings, of a power not
authorized by the statute is null and void, and may be collaterally
attacked. Ib.
43. The Federal courts have jurisdiction of actions brought by the receiver of an
insolvent national bank to realize its assets, irrespective of the citizenship
of the parties; and it i s immaterial to such j urisdiction whether the action
is brought in the receiver's own name, as receiver, or by him in the name of
the bank. Linn County National Bank v. Crawford, 69Fed. Rep., 53;?.
44. A suit brought in a State court can be removed to a Federal court on the
ground of diverse citizenship only when the defendant is a nonresident of
the State in which it is brought. Thurber v. Miller, 14 G. G. A., 432, 67
Fed. Rep., 371, followed. Wichita National Bank et al. v. Smith, 72 Fed.
Rep., 568.
45. A national bank can not remove a suit upon the ground that it is a Federal
corporation. Ib.
48. A cause can not be removed upon the ground that it involves a Federal
question unless that fact appears from the plaintiff's complaint. Ib.
47. Where a judgment recovered in a State court against a county is assigned
to a citizen of another State, the assignee may sue thereon in the proper
Federal court, although the original judgment is still in force. The
assignee has a right to have judicially determined its right to enforce
payment of the indebtedness; and the action is not to be considered as
brought merely to vex defendant. First National Bank of Buchanan
County v. Deuel County, 74 Fed. Rep., 373.
48. The United States circuit court has jurisdiction of a suit brought by the
statutory receiver of a national bank, without reference to the citizenship of the parties. Short et al. v. Hepburn, 75 Fed. Rep., 113.
49. It is within the discretion of the court to have the jury retire during arguments as to the admissibility of evidence. Birmingham National Bank
v. Bradley (Ala.), 19 So., 791.
50. The fact that the State supreme court, in affirming a judgment, decided
against an immunity from liability expressly claimed under the laws of
the United States, does not give jurisdiction to the Federal Supreme
Court, if such immunity was not claimed in the trial court. Chemical
National Bank y. City Bank, 16 S. Ct., 417.
51. A receiver of a national bank, appointed by the ComptrolJ er of the Currency,
is an officer of the United States, and entitled to sue in the Federal courts,
by virtue of Rev. St., §629. Thompson v. Pool (C. G.), 70 F., 725,
 circuit court of appeals has no jurisdiction to review a judgment ren52. The


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REPORT OF THE COMPTROLLER OF THE CURRENCY.

JURISDICTION: See Actions—Continued.

dered before act March 3, 1891, creating that court, was passed. United
States v. National Exchange Bank (C. C. A.), 53 F., 9.
53. Held, that the plaintiff, a national bank, had the right to bring suit, in the
United States circuit court of the district where the bank was located,
upon two notes indorsed to it by the payee, who was also a citizen of the
State and resident of the district. Commercial Bank of Cleveland v.
Simmons, 1 N. B. C, 294.
54. That a national bank does not sue by virtue of any right conferred by the j udiciary act, but by virtue of the right conferred upon it by the act of 1864,
authorizing' and creating it, and which constitutes its charier; that, having
no right to sue under the judiciary act, the limitation in the 11th section
as to suits on indorsed notes and choses in action does not apply. Ib.
55. The circuit court has no jurisdiction of a suit by a private person to restrain,
interfere with, or control the Treasurer of the United States or the Comptroller of the Currency in the discharge of their duties in respect to bonds
deposited with the Treasurer to secure the redemption of circulating notes
of a national bank. The provisions of sections 56 and 57 of the nationalbanking act explained. Van Antwerp v. Hulburd, 7 Blatchford, 426.
56. State courts have jurisdiction of suits brought by national banks, it not
having been taken away by section 57 of the national-banking act.
First National Bank of Montpelier v. Hubbard and, others, 49 Vermont, 1.
57. A national bank can not be sue! in the Federal court outside of the district
where it is located. Service on the cashier when found within another
district does not give jurisdiction. Main, assignee, v. Second National
Bank of Chicago, 6 Bissell, 26.
58. National banks may, by reason of their character as such, sue in the
Federal courts. First National Bank of Omaha v. County of Douglas,
IN B. C.;267.
59. A district court of the United States may order the receiver of a national
bank to compromise doubtful debts under section 50 of the nationalbanking act (13 Stat. at Large, 115), which authorizes receivers to compromise such debts "on the order of a court of record of competent
jurisdiction." Petition of Plait, 1 Benedict, 534.
60. A banking association organized under act of Congress of 1864, chapter 106,
can be sued in a State court only in the city or county where it is located.
Crocker v. Marine National Bank of New York, 101 Massachusetts, 240;
1 N. B. C, 575.
61. National banks, like any other corporations, and the receivers of them,
may sue and be sued in the State courts of their domicile. Adams v.
Daunts, 29 La. Ann., 315; 1 N. B. C, 510.
62. The receiver of a national bank is amenable to the jurisdiction of a State
court in a parish other than that in which the bank was located and in
which he has his domicile. Ib.
63. In an action by a national bank of New York against a national bank of
West Virginia, held, that the defendant was not deprived of the right
to demand a removal of the cause from the State court to a Federal
court. National banks are "citizens" of the State in which they are
organized and located. Chatham National Bank of New York v. Merchants'' National Bank of West Virginia, appellant, 4 Thompson & Cook,
196; IN. B. C., 769.
64. Defendant served a notice of appearance on December 15, but did not
file a petition for the removal of the cause from a State to the Federal
court until January 7, the petition stating that defendant then entered
its appearance and had not done so before. Held, a valid compliance
with the Fedsral statute requiring the defendant " a t the time of
entering his appearance in the State court" to file his petition. Ib.
65. Section 7 of the act creating the circuit court of appeals (26 Stat., 828)
gives no jurisdiction of an appeal from an interlocutory order dismissing a restraining order and denying an injunction. Robinson v. City of
Wilmington et al., 60 Fed. Rep., 469.
66. The act of July 12, 1882, to enable national banks to extend their corporate existence, placed national and other banks, as to their right to
sue in the Federal courts, on the same footing, and consequently a
national bank can not, in virtue of a mere corporate right, sue in such
court. Union National Bank of Cincinnati v. Miller, Treasurer of
Hamilton County, Ohio, 15 Fed. Rep., 703.
67. But national banks may, like other banks and citizens, sue in such courts,
whenever the subject-matter of litigation involves some element of
 Federal jurisdiction. Thus a suit by a national bank against a county


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209

JURISDICTION: See Actions—Continued.

treasurer to enjoin the collection of a personal tax upon its property,
alleged to be made in violation of the act of Congress permitting the
State to tax national banks, presents a case arising under a law of Congress, and is therefore maintainable in a Federal court. Ib.
68. The power given the Federal courts to order the production of books and
papers (Rev. St., sec. 724) includes power to grant an inspection before
trial, with permission to make copies. Exchange National Bank of
Atchison v. Washita Cattle Co., 61 Fed. Rep., 190.
69. A national bank is not authorized to sue in any circuit court of the United
States without regard to citizenship. It is to be regarded, for the purpose of jurisdiction, as a citizen of the State in which it is established
or located. St. Louis National Bank v. Allen et al., 5 Fed. Hep., 551.
70. An action to enforce a right conferred by section 5219 of the Revised
Statutes, regarding the taxation of property in the shares of national
banking associations, is a suit arising ''under the laws of the United
States" within the meaning of the act of March 8, 1875. Stanley v.
Board of Supervisors of Albany Co., 6 Fed. Rep., SGI.
71. A suit by or against a corporation created by an act of Congress is a suit
arising under the laws of the United States within the meaning of section 2 of the removal act of 1875, and may be removed from a State
court. Cruikshank v. Fourth National Bank, 16 Fed. Rep., 888.
72. State courts have jurisdiction of suits against national banks to recover
money paid as usury. Dow v. Irasburgh National Bank of Orleans, 50
Vt., 112; 28 Am. Rep., $3; 2 N. B. C., 421.
73. To give this court jurisdiction on appeal from a State supreme court under
the national banking act, the "title, right, privilege, or immunity
specially set up or claimed " must be claimed by the plaintiff in error
for himself, and not for a third person in whose title he has no interest.
Miller v. National Bank of Lancaster, 106 U. S.,5^2; 3 N. B. C.,52.
74. Defendant, a bookkeeper in a national bank, without authority filled a
draft signed in blank by the assistant cashier, issued it, and fraudulently
changed his book entries to cover the crime. Field, on an indictment
for forgery, that the crime was within the jurisdiction of the State
courts. Hoke v. People, 122 III , 511; 3 N. B. C., 372.
75. A State court has jurisdiction of an action on contract brought by a resident of the State against a national lank located in another State, and
except as against a national bank which has committed or is contemplating an act of insolvency. Robinson v. National Bank of Neiv Berne,
58 Hon\ Pr., 306; 2 N. B. C., 309.
76. An attachment can issue against a national bank from a State court. Ib.
77. In an action or debt on sec. 5198, U. S. Rev. Stat., to recover twice tjie
amount of interest, at the rate of 9 per cent, received by a national bank
in Pennsylvania, upon the discount of notes, where plaintiffs had judgment for §2,150.88, held, that this amount was insufficient to give jurisdiction to the Supreme Court of the United States.
Williamsport
National Bank v. Knapp, 119 U. S., 357; 3 N. B. C, 18Jh
78. A Federal court has jurisdiction of a creditor's bill between citizens of different States, though based upon the judgment of a State court, and
notwithstanding the existence of statutory legal remedies in the State
courts. First National Bank of Chicago v. Steinway et al. ,77 Fed. Rep., 661.
79. Under the provision in the judiciary act of 1887-88 that *' the provisions
of this section" shall not affect the jurisdiction of the circuit courts in
cases for "winding up the affairs" of any national bank, the circuit
courts have at least concurrent jurisdiction (whether exclusive or not
is not decided) with the State courts in cases of that kind, without
regard to the citizenship of the parties. Lake National Bank v. Wolfeborough Savings Bank et al.9 78.Fed. Rep., 517.
80. A State court appointed a receiver of a national bank, but he never
obtained possession of its property. The original complainant discontinued, and the defendant filed a motion to dismiss, but no formal order
of dismissal was entered. Held, that the pendency of the suit in that
condition was no bar to a subsequent suit between the same parties in
a Federal court for the appointment of a receiver, etc. Ib.
81. A national bank, sued in a State court, can not enforce the removal of the
cause to the Federal court on the ground that the latter has exclusive
jurisdiction. Peitilon v. Noble, 7 Biss., W); 2 N. B. C, 120.
82. The district court of the United States has jurisdiction of a bill in equity filed
CUR
14
 99


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REPORT OF THE COMPTROLLER OF THE CURRENCY.

JURISDICTION: See Actions—Continued.

by a national bank. Fifth National Bank of Pittsburgh v. Pittsburgh
and Castle Shannon Railroad Company, 1 Fed. Rep., 100; 2 N. B. C, 100.
83. Stockholders have no standing in court to interfere for the protection of
their company until the board of directors of the company have neglected or refused an application to take the proper steps to protect the
interests of the company, lb.
84. The Federal courts have jurisdiction over all suits by and against national
banks, irrespective of subject-matter. Joining merely nominal or personal parties has no effect either to confer or exclude the jurisdiction;
but trustees, executors, and the like are not formal parties within the
meaning of the rule where in fact interested in the litigation. Accordingly, where two or three persons claiming a certain fund which was in
the custody of a national bank brought their bill in equity against the
bank and a third claimant, and the bank exhibited its cross-bill, praying
that the parties might interplead, held, to confer jurisdiction. Foss v.
First National Bank of Denver, 3 Fed. Rep., 185; 2 N. B. C.,104.
85. Banks organized under the acts of Congress as national banks are not entitled, by force of such acts to have any suit or proceeding in the State
court wherein they are parties defendant removed to the Federal court.
Wilder v. Union National Bank, 12 Chicago Legal News, 84; 2 N. B. C., 124.
86. To author i:e a removal on the ground that the controversy involves a
question arising under Constitution and laws of the United States it
must fully appear from all the record that a Federal question is presented. So, where, in a petition for removal to the Federal court, the
defendant states that certain laws of the State of Illinois infringe upon
or violate the tenth section of Article Two of the Constitution of the
United States, but fails to state in what respect, or how the rights,
either of the plaintiff or defendants, are affected by the operation of
those laws, the record does not show sufficiently that it is a case coming
within the Federal jurisdiction. Ib.
87. If the record presents a Federal question, that aright of action or defense
arises under the Constitution and laws of the United States, the citizenship of the parties has nothing to do with it. 16.
83. National banks are not authorized to institute suits in the Federal courts
out of the districts where they are established when the amount in controversy does not exceed $500. St. Louis National Bank v. Brinkman,
1 Fed. Rep., 1,5; 2 N. B. C, HI.
89. State courts have no jurisdiction of the offense of embezzlement of the
funds of a national bank. People v. Fonda, 62 Mich., 401; 3 N. B. G., 501.
90. A Federal court has jurisdiction of a suit to enjoin State taxing officers
from enforcing collection of a tax upon shares of stock in a national
bank where the protection sought is based upon the ground that the
State statute under which such officers are proceeding in making their
assessment is in violation of the fourteenth amendment to the Constitution and of Rev. St., § 5.219. Third National Bank of Pittsburg v. Mylin,
Auditor-General, el al., 76 Fed. Rep., 385.
91. A receiver of a national bank, appointed by the Comptroller of the Currency, when sued in a State court on a claim of less than $500-, has no
power to remove the case to a Federal court. Hallam v. Tillinghast,
75 Fed. Rep., 840.
92. A national bank located in one State may bring suit against a citizen of
another State in the circuit court of the United States for the district
wherein the defendant resides by reason alone of diverse citizenship.
Petri v. Commercial National Bank of Chicago, 142 U. S., 644*
93. This court; has jurisdiction of an appeal from a decree of a circuit court
requiring stockholders in an insolvent national bank to pay a given percentage on their stock which the Comptroller of the Currency had ordered
collected and such further sums as may be necessary to pay the debts of
the bank. Germania National Bank v. Case, 131 U. S>, CXLIV App,
94. A bill in equity was filed in a State court by a creditor of a partnership to
reach its entire property. The prayer of the bill was that judgments
confessed by the firm in favor of various defendants, some of whom
were citizens of the same State with the plaintiff, might be set aside for
fraud. On the allegations of the bill there was but a single controversy,
as to all of the defendants. One of the defendants, who was a citizen of a
different State from the plaintiff, removed the entire cause into a circuit
court of the United States. After a final decree for the plaintiff, and
on an appeal therefrom, this court held that the case was not removable
 under section 2 of the act of March 3,1875,18 Stat., 470, and reversed the


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decree and remanded the case to the circuit court with a direction to
remand it to the State court, the costs of this court to be paid by the
petitioner for removal. Graves v. (Jorbin; First National Bank of Chicago v. Corbin, 132 11. S., 571.
95. The E. Co., being indebted to the plaintiff, executed to it three promissory
notes, and pledged certain chattels to secure their payment. Subsequently the E. Co. confessed judgment in a State court in favor of the S.
bank, then in the hands of a receiver. The receiver caused an execution
issued from the State court to be levied on the same chattels which had
been pledged to plaintiff. Plaintiff then filed a bill in equity in the S-ate
court against the bank and its receiver, the E. Co., and the sheriff, to
restrain the sale of the chattels and determine the rights of the parties.
The receiver applied to remove this suit to the Federal court. Held, that
the subject-matter of the controversy, the pledged chattels, was within
the jurisdiction and control of the State court, and therefore beyond
the jurisdiction of the Federal court, either original or by removal.
Kelly, Maus & Co. v. Sioux National Bank el al, SI Fed. Rep., 3,
96. The Federal courts have no jurisdiction of a suit in equity against a
national-bank receiver, appointed by the Comptroller, unless the amount
• in controversy exceeds $2,000. Sniitlison y. Ilubbell el al., SI Fed. Rep., 5D3.
97. In a suit by a creditor of an insolvent national bank, in behalf of himself
and all other creditors, to enjoin the receiver and the Comptroller from
paying dividends on an alleged fraudulent claim which has been allowed
by them, the jurisdictional amount is to be determined solely by the
amount of complainant's own claim, and not by the aggregate of all the
claims of those whom he assumes to represent or by the amount of the
dividends, payment of which is sought to be enjoined, Ib.
98. Under section 4 of the act of Congress of July 12,1882, a national bank can
not remove a suit against it from the State court upon the sole ground
that it is a corporation organi2:ed under a law of the United States, and
that therefore the suit is one arising under the laws ! the United States.
of
Cooper v. Leather Manufacturers' National Bank, i :0 Feb. Rep., 161.
99. When a complainant invokes the protection of a law of the United States
the Federal courts have jurisdiction when it is apparent that the case
depends upon a construction of that law. Richards el a!, v. Incorporated
Town of Rock Rapids, 31 Fed. Hep., 505.
100. A party does not waive the right of removal by remaining in the State
court and contesting the case on the merits, if the State court, upon due
application, wrongfully refused to order a removal of the cause. Ib.
101. The right of removal is not defeated or lost if the petition therefor is filed
in the State court after motion made, the decision of which does not
affect the merits of the controversy. lh.
102. Section 5219, Rev. St. U. S., provides that shares in the national banks may
be subjected to the imposition of a State tax, but the same shall not be
at a greater rate than is assessed upon other moneyed capital in the hands
of individual citizens of such State. Under this section, before the assesmen t of the shares in a national bank can be held invalid, it must be
shown that there is in fact a higher burden of taxation imposed upon
money thus invested than is imposed upon other moneyed capital, and it
is insufficient to show merely that the State laws provide a different mode
or manner of taxing moneyed capital invested in savings banks or other
corporations. Ib.
103. Sections 818-820, Code, Iowa, providing for the taxation of the shares oi
national banks, and chapter 60 of the Laws of 1874, providing for the
organization of savings banks, and enacting that the shares of stock
therein are taxable, but that deposits are not, are not in contravention
of section 5219, Revised Statutes of the United States, there being no discrimination against national banks or the capital therein invested. Ib.
104. The owners of shares in national banks are, under section 5219, Rev. St.
U. S., entitled to the right of deduction given to taxpayers under section
814 of the Code of Iowa, which provides that from the gross amount of
money and credits held by one liable to taxation may be deducted all
debts due and owing. Ib.
105. Act Con., March 8, 18S7, sec. 4, declares that national-banking associations are, for the purpose of all actions by or aga'nst them, at lav/ or
in equity, to be deemed citizens of the States in which they are respectively located, but " t h e provisions of this section shall not be held to
affect the jurisdiction of the courts of the United States in cases com menced by the United States or by direction of any officer thereof, or


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REPORT OF THE COMPTROLLER OF THE CURRENCY.

JURISDICTION: See Actions—Continued.

cases for winding up the affairs of any such bank." Held, that a
receiver of a national bank may still maintain a suit in the United
States circuit court, without reference to the citizenship of the parties
or to the amount involved, to recover a claim due the bank.
Armstrong
v. Trauhnan et al., 36 Fed, Rep., 275.
108. This court has jurisdiction to review a judgment of the highest court of a
State holding a national bank liable, under statute of the State, as a
shareholder in a State savings bank, when the answer sets up that the
stock of the savings bank was issued to it without authority of law and
the motion for a new trial and the specifications of error, which were
the basis of appeal from the trial court to the supreme court of the State,
assert such want of power under the laws of the United States. California Bankv. Kennedy, 167 U. S., 362.
107. A suit to recover property acquired by the removing defendant, as receiver
of a national bank, by authority of the laws of the United States, arises
under the laws of the United States, within the meaning of the removal
act of 1888 (25 St. U. S., 434). Howies v. Witters et al., 43 Fed. Rep., 700.
108. Said act provides that the petition for removal shall be filed at or before
the time the defendant is required to plead. A rule of the chancery
court provided that the subpoena, should require defendant's appearance
on the first day of a stated term, and that he should answer within forty
days from the return-day or the day fixed for entering appearance. A
subpoena required the defendant to answer on the first day of the April
term, but the suit was not entered until the last day of court. The next
stated term began on the second Tuesday in September. Held, that a
petition for removal filed September 4 was in apt time. Ib.
109. The State courts have jurisdiction of an action brought against the officers
of a national bank to recover damages on accountof alleged deceit practiced by such officers in making a false report of the condition of the
bank. Barnes v. Sivift (Super. Ct. Sin.), 3 Ohio N. P., 291.
110. The assets of an insolvent national bank are not brought under the control or protection of the Federal courts by being taken into custody by a
receiver appointed by the Comptroller of the Currency, nor by their
transfer from the receiver to an agent of the shareholders appointed pursuant to the act of Congress to wind up the affairs of the bank. Snohomish County v. Puget Sound National Bank (C. C.),81 Fed. Rep., 518.
111. Unless it voluntarily appears, a foreign corporation can not be made a
party defendant to a suit in a Federal court by one of its creditors, who
seeks the appointment of a receiver, an accounting, and to enforce the
individual liability of stockholders who are within the jurisdiction of
the court. Elkhart National Bank v. Northwestern Guaranty Loan Company et al., 87 Fed. Rep., 252.
112. The corporation and all its stockholders are necessary parties defendant to
a creditor's suit for the appointment of a receiver, an accounting, and
to enforce the personal liability of stockholders, and, if the corporation
can not be brought in, the suit must be d