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63d Congress j
2d Session

SENATE

(

j D ocument

\ No. 335

BANKING AND CURRENCY BILL

COMPARATIVE PRINT
SHOWING

H. R. 7837
AN ACT TO PROVIDE FOR THE ESTABLISHMENT OF FEDERAL RESERVE BANKS, TO
FURNISH AN ELASTIC CURRENCY, TO AFFORD MEANS OF REDISCOUNTING COM­
MERCIAL PAPER, TO ESTABLISH A MORE EFFECTIVE SUPERVISION OF
BANKING IN THE UNITED STATES, AND FOR OTHER PURPOSES

AS PASSED BY THE HOUSE, AS PASSED BY THE SENATE,




AND AS AGREED TO IN CONFERENCE

WASHINGTON
GOVERNMENT PRINTING OFFICE
1913

SUBMITTED BY MR. OWEN,

In t h e S e n a te o f t h e U n ite d S ta te s, December 18, 1918.
Ordered, That there be printed as a Senate document, in document type and in three parallel columns, a
comparative print of the banking and currency bill (H. R. 78.37), “ An act to provide for the establishment of
Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to
establish a more effective supervision of banking in the United States, and for other purposes,” showing the
bill as passed by the House, the bill aa passed by the Senate, and the bill as agreed to in conference, and that
5,000 additional copies be printed for the use of the Senate document room.
Attest:
James M. Bakes, Secretary.




(2)

63d CONGKESS,
2d Session.

HR73.
. . 87
IN THE SENATE OF THE UNITED STATES.

[The part printed in small capitals shows the new matter proposed; the part inclosed in heavy brackets £ ]
shows matter proposed to be omitted.]

AN ACT TO PROVIDE FOR THE ESTABLISHMENT OF FEDERAL RESERVE BANKS, TO FURNISH
AN ELASTIC CURRENCY, TO AFFORD MEANS OF REDISCOUNTING COMMERCIAL PAPER,
TO ESTABLISH A MORE EFFECTIVE SUPERVISION OF BANKING IN THE UNITED STATES
AND FOR OTHER

SECTION
HOUSE B ILL .

1.

PASSED B Y SENATE.

Be it enacted by the Senate and
Be it enacted by the Senate and
House o f Representatives o f the United House o f Representatives o f the
States o f America in Congress assem­ United States o f America in Con­
bled, That the short title of this Act gress assembled, That the short title
shall be the “ Federal Reserve Act.” of this Act shall be the “ Federal Re­
serve Act.”
Wherever the word “ bank ” is used
in this A ct, the word shall be held to
*
include State bank, banking associa­
tion, and trust company, except where
national banks or Federal reserve
banks are specifically referred to.
The terms “ national bank” and* nationa I
*
banking association ’ ’
used in this Act shall be held
to be synonymous and interchange­
able. The term “ member bank”
shall be held to mean any national
bank, State banlc, or bank or trust
company which has become a member
o f one of the reserve banks created by
mis Act. The term “ board” shall be
held to mean Federal Reserve Board;
the term “ district” shall be held to
mean Federal reserve district; the
term “ reserve bank ” shall be held to
mean Federal reserve bank.

SECTION

Be it enacted by the Senate and
House of Representatives of the
United States of America in Con­
gress assembled, That the short title
oi this Act shall be the u Federal Re­
serve A ct.”
Wherever the word “ bank ” is used
in this A ct, the word shall be held to
include State bank, banking associa­
tion, and trust company, except where
national banks or Federal reserve
banks are specifically referred to.
The terms “ national bank” and
‘ ‘ national banking
association ’ 7
used in this Act shall be held to be
synonymous and interchangeable.
The term u member bank” shall be
held to mean any national bank,
State bank, or banlc or trust company
which has become a member of one of
the reserve banks created by this Act.
The term “ board” shall be held to
mean Federal Reserve Board; the
term “ district ” shall be held to mean
Federal reserve district; the term
“ reserve bank ” shall be held to mean
Federal reserve bank.

2.

FEDERAL RESERVE DISTRICTS.

FEDERAL RESERVE DISTRICTS.

S e c . 2. That within ninety days
after the passage of this Act, or as
soon thereafter as practicable, the
Secretary of the Treasury, the Sec­
retary of Agriculture, and the Comp­
troller of the Currency,

soon feheyeafoe*8 as practicable,
the Secretary of the Treasury, the




CONFERENCE AGREEMENT.

FEDERAL RESERVE DISTRICTS.

S ec . 2. As soon as practicable, the
Secretary o f the Treasury, lan d not
less than two other members o f the
Gem fteeUe?—
e£tfee-€***HFeneyj and Federal Reserve Board, hereinafter
(3)

4

SECTION

given district. The districts thus
created may be readjusted and new
districts may from time to time be
created by the Federal Reserve
Board hereinafter established, act­
ing upon a joint application made
by not less than ten member banks
desiring to be organized into a new
district. The districts thus consti­
tuted shall be known as Federal
reserve districts and shall be desig­
nated by number according to the
pleasure of the organization com­
mittee, and no Federal reserve dis­
trict shall be abolished, nor the
location of a Federal reserve bank
changed, except upon the applica­
tion of three-fourths of the member
banks of such district.
The organization committee shall,
in accordance with regulations to
be established by itself, proceed to
organize in each of the reserve cities
designated as hereinbefore speci­
fied a Federal reserve bank. Each
such Federal reserve bank shall in­
clude in its title the name of the
city in which it is situated, as “ Fed­
eral Reserve Bank of Chicago,” and
so forth. The total number of re-




CONFERENCE A G R EEM EN T.

P ASSED B Y SENATE.

HOUSE B ILL.

acting as
“ The Reserve Bank Organization
Committee,” shall designate from
among the reserve and central re­
serve cities now authorized by law a
number of such cities to be known
as Federal reserve cities, and shall
divide the continental United States
into districts, each district to con­
tain one of such Federal reserve
cities: Provided, That the districts
shall be apportioned with due re­
gard to the convenience and
2
customary course of business
of the community and shall
not necessarily coincide with the
area of such State or States as may
be wholly or in part included in any

2—C o n t i n u e d .

P

not less than two other members o f the
rovided for, to be assigned by the
Federal Reserve Board, hereinafter
'resident,J t h e s e c r e t a r y o f a g ­
rovided for, to be assigned by the r i c u l t u r e AND THE COMPTROLLER
'resident, acting as “ The Reserve o f t h e c u r r e n c y , acting as “ The
Bank Organization Committee,” Reserve Bank Organization Commit­
shall designate feom-among- the-Fe- tee,” shall designate not less than eight

P

ftttfehofked-by-Iftw-a number-o f sneh
not less than eight nor more than
twelve cities to be known as Federal
reserve cities, and shall divide the
continental United States, including
Alaska, into districts, each district
to contain one, and only one, of such
Federal reserve cities.
The determi­
nation o f said organization committee
shall not be subject to review except
by the Federal Reserve Board when
organized: Provided, That the dis­
tricts shall be apportioned with
due regard to the convenience
and customary course of business
e f- the- c o m m im k y and shall not

nor more than twelve cities to be known
as Federal reserve cities, and shall
divide the continental United States,
fyncluding'J e x c l u d in g Alaska, into
districts, each district to contain
£one, and J only on ef. 1 o f such Fed­
eral reserve cities.
The
determination o f said organization
committee shall not be subject to re­
view except by the Federal Reserve
Board when organized: Provided,
That the districts shall be appor­
tioned with due regard to the conven­
ience and customary course o f business
and shall not necessarily be cotermi­
nous with any State or States. The
o f -—
such be ' coterminous with any districts thus created may be read­
State or States fts ma y -be-w h e lly - e F justed and new districts may from
m pftft incmdod in ftny""gi\ cn—
diS- time to time be created by the Federal
teiefc. The districts thus created Reserve Board,
m a y be readjusted and new districts
m a y from time to time be created
by the Federal Reserve Board

not
to exceed twelve in all. The Such not to exceed twelve in all. Such dis­
districts febas—
eensf ifoated shall be tricts shall be known as Federal re­
c
known as Federal reserve districts serve districts and may be designated
and shftU may be designated by by number.
number

dis^iefc. A majority o f the organi­
A majority o f the or­
zation committee shall constitute a ganization committee shall constitute
quorum loith authority to act.
a quorum with authority to act.
ril “ vvvTUCCIluv

W T 11 ' " T u I U
tJ

1 1 8 l)\J

as “ FedeFal--Riosorve -Bank- e f -€ h i-

SECTION

P ASSED B Y SENATE.

HOUSE B ILL .

serve cities designated by the or;anization committee shall be not
ess than twelve, and the organiza­
tion committee shall be authorized
to employ counsel and expert aid,
to take testimony, to send for per­
sons and papers, to administer
oaths, and to make such investiga­
tions as may be deemed necessary
by the said committee for the
3
purpose of determining the
reserve cities to be desig­
nated and organizing the reserve
districts hereinbefore provided.
Every national bank located with­
in a given district shall be required
to subscribe to the capital stock of
the Federal reserve bank of that
district a sum equal to twenty per
centum of the capital stock of such
national bank fully paid in and un­
impaired, one-fourtn of such sub­
scription to be paid in cash and onefourth within sixty days after said
subscription is made. The remain­
der of the subscription or any part
thereof shall become a liability of
the member bank, subject to call
and payment thereof whenever nec­
essary to meet the obligations of the
Federal reserve bank under such
terms and in accordance with such
regulations as the board of directors
of said Federal reserve bank may
prescribe: Provided, That no

f




2—C o n t i n u e d .
CONFERENCE AGREEM ENT.

be-nefe-lesg-thftn twelve-and- the ef-

ir 7 ir \ /v

_

K
r /\
vuiutoui» uT T i r l A r l
viwu;

f l f t T T£1 __

u lt jo '

_ c m i / j ____ f l n k n A i t T / \ r ^
_

T tT V U T — Cfcltn'

Cytl

WtTt7il

t

“xfif

a

Said organization committee shall
be authorized to employ counsel and
expert aid, to take testimony, to send
for personl<and papers, to administer
oaths, and to make such investigation
as may be deemed necessary by the
said committee in determining the
reserve districts and in deter­
mining the cities within such districts
where such Federal reserve banks
shall be severally located. The said
committee shall supervise the organi­
zation, in each o f the cities designated,
o f a Federal reserve bank, which shall
include in its title the name o f the city
in which it is situated, as “ Federal
Reserve Bank o f Chicago.”
Under regulations to be prescribed
by the organization committee, every
national banking association in the
United States is hereby required and
every eligible bank in the United
States and every trust company
within the District of Columbia in­
corporated under an Act o f Congress
approved October first, eighteen hun­
ted and ninety-one, is hereby
authorized to signify in writing,

Said organization committee shall
be authorized to employ counsel and
expert aid, to take testimony, to send
for persons and papers, to administer
oaths, and to make such investigation
as may be deemed necessary by the
said committee in determining the
reserve districts and in £ determining]
d e s ig n a t in g the cities within such
districts where such Federal reserve
banks shall be severally located. The
said committee shall supervise the or­
ganization £ , ] m each o f the cities des­
ignated £ , ] o f a Federal reserve bank,
which shall include in its title the name
of the city in which it is situated, as
‘ ‘ Federal Reserve Bank o f Chicago”
Under regulations to be prescribed
by the organization committee, every
national banking association in the
United $£ate$£,] is hereby required,
and every eligible bank in the United
States and every trust company within
the District o f Columbia ^incorpo­
rated under an Act of Congress ap­
proved October first, eighteen hunrdred and ninety one^J, is hereby
authorized to signify in writing,

6

SECTION

2—C o n t i n u e c

P ASSED B Y SENATE.

CONFERENCE AGREEM ENT.

within sixty days after the passage oj
this Act, its acceptance o f the terms arm
provisions h e r e o fW h e n a Federal
reserve bank shall have been organized,
every national banking association
within that district shall be required
and every eligible bank may be per­
mitted to subscribe to the capital stock
thereof in a sum equal to six per cen­
tum o f the paid-up capital stock and
surplus o f such bank, one-sixth of
the subscription to be payable on
call o f the organization committee
or o f the Federal Reserve Board,
one-sixth within three months and
one-sixth within six months there­
after, and the remainder o f the sub­
scription, or any part thereof\ shall
be subject to call when deemed
necessary by the Federal Re­
serve Board, said payments to be in
gold or gold certificates.

HOUSE BTLIfc

within sixty days after the passage o f
this Act, its acceptance o f the terms and
provisions hereof. [ When a Federal
reserve bank shall have been organ­
ized,J W h e n t h e o r g a n iz a t io n

The shareholders o f every Federal
reserve bank shall be held individually
responsible, equally and ratably, and
not one fo r another, fo r all contracts,
debts, and engagements o f such bank
to the extent o f the amount o f their
subscriptions to such stock at the par
value thereof in addition to the
amount subscribed, whether such sub­
scriptions have been paid up in
whole or in part, under the provisions
o f this Act.
Any national bank failing to sig­
nify its acceptance o f the terms o f this
Act within the sixty days aforesaid
shall cease to act as a reserve agent,
upon thirty days notice, to be given
within the discretion o f the said or­
ganization committee or o f the Fed­
eral Reserve Board.
Should any national banking asso­
ciation in the United States now
organized fa il, within one year after
the passage o f this Act, to become a
member bank under the provisions
hereinbefore stated, or fa il to comply
with any o f the provisions o f this Act
applicable thereto, all o f the rights,
privileges, and franchises o f such
association granted to it under
the national-bank Act, or under
the provisions o f this Act, shall
be thereby forfeited. A ny nonS D—63-2—vol 25----- 9




COMMITTEE SHALL HAVE DESIG­
NATED THE CITIES IN WHICH FED­
ERAL RESERVE BANKS ARE TO BE
ORGANIZED, AND FIXED THE GEO­
GRAPHICAL LIMITS OF THE FED­
ERAL r e s e r v e
d i s t r i c t s , every

national banking association within
that district shall be required, J[and
every eligible bank may be per­
mitted^ WITHIN THIRTY DAYS AFTER
NOTICE

FROM

THE ORGANIZATION

to subscribe, to the
capital stock J^thereofJi o f s u c h
F ed eral reserve
bank
in a
sum equal to six per centum
o f the paid-up capital stock and
surplus o f such bank, one-sixth o f
the subscription to be payable on
call o f the organization committee
or o f the Federal Reserve Board,
one-sixth within three months and
one-sixth within six months there­
after, and the remainder o f the sub­
scription, or any part thereof, shall
be subject to call when deemed
necessary by the Federal Re­
serve Board, said payments to be in
gold or gold certificates.
✓
The shareholders o f every Federal
reserve bank shall be held iridividually
responsible, equally and ratably, and
not one for another, for all contracts,
debts, and engagements o f such bank
to the extent o f the amount o f their
subscriptions to such stock at the par
value thereof in addition to the
amount subscribed, whether such sub­
scriptions have been paid up in
whole or in part, under the provisions
o f this A ct
Any national bank failing to sig­
nify its acceptan ce o f the terms o f this
Act within the sixty days aforesaid,
shall cease to act as a reserve agent,
upbn thirty days’ notice, to be given
within the discretion of the said or­
ganization committee or o f the Fed­
eral Reserve Board.
Should any national banking asso­
ciation in the United States now or­
ganized fail within one year after
the passage of this Act to become a
member bank funder the provisions
hereinbefore stated, J or fail to comply
with any o f the provisions o f this Act
applicable thereto, all o f the rights,
pnvileges, and franchises o f such
association granted to it under the
national-bank Act, or under the pro­
visions o f this Act, shall be thereby
forfeited. Any noncompliance with
c o m m it t e e ,

7
SECTION
[OUSE B IL L .




2—C o n t i n u e d .

P ASSED B Y SENATE.

#

compliance with or violation oj
this
Act
shall,
however,
tie
determined.
and
adjudged
by
any court o f the United States
o f competent jurisdiction in a suit
brought fo r that purpose in the dis­
trict or territory in which such bank
is located, under direction o f the
Federal Reserve Board, by the Comp­
troller o f the Currency in his own
name before the association shall be
declared dissolved. hi cases o f such
noncompliance or violation, other
than the failure to become a member
bank under the provisions o f this
A ctf every director who participated
in or assented to the same shall be
held liable in Ids personal or indi­
vidual capacity for dll damages which
said bank, its shareholders, or any
other person shall have sustained in
consequen ce o f such violation.
Such dissolution shall not take
away or impair any remedy against
such corporation, its stockholders or
officers, for any liability or penalty
which shall have been previously
incurred.
Should the subscriptions by banks
to the stock o f said Federal reserve
banks or any one or more of them be,
in the judgment of the organization
committee, insufficient to provide the
amount of capital required therefor,
then and in that event the said organi­
zation committee may, under condi­
tions and regulations to be prescribed
by it, offer to public subscription at
par such an amount of stock in said
Federal reserve banks, or any one
or more of them, as said committee
shall determine, subject to the same
conditions as to payment in and
stock liability as provided for member
banks.
No individual, copartnership, or
corporation other than a member
bank of its district shall be permitted
to subscribe for or to hold, at any time
more than $10,000 par value of stock
in any Federal reserve bank. Such
stock shall be known as public stock
and may be transferred on the books
of the Federal reserve bank by the
chairman of the board of directors of
such bank,
Should the total subscriptions by
banks and the public to the stock of
said Federal reserve banks, or any
one or more of them, be, in the judg­
ment of the organization committee,
insufficient to provide the amount of
capital required therefor, then and in
that event the said organization com­
mittee shall allot to the United States
such an amount of said stock as said

CONFERENCE AGREEM ENT.

or violation of this Act shall, how­
ever,
be determined and ad­
judged by any court o f the
United
States
of
competent
jurisdiction in a suit brought fo r that
purpose in the District or Territory
in which such bank is located, under
direction o f the Federal Reserve
Board,' by the Comptroller o f the Cur­
rency in his own
name before the association shall be
declared dissolved. In cases o f such
noncontpliance or violation, other
than the failure to become a member
bank under the provisions o f this
Act, every director who participated
in or assented to the same shall be
held liable in his personal or indi­
vidual capacity for all damages which
said bank, its shareholders, or any
other person shall have sustained in
consequence o f such violation.
Such dissolution shall not take
away or impair any remedy against
such corporation, its stockholders or
officers, fo r any liability or penalty
which shall have been previously
incurred.
Should the subscriptions by banks
to the stock o f said Federal reserve
banks or any one or more o f them be,
in the judgment of the organization
committee, insufficient to provide the
amount o f capital required therefor,
then and m that event the said organi­
zation committee may, under condi­
tions and regulations to be prescribed
by it, offer to public subscription at
par such an amount o f stock in said
Federal reserve banks, or any one
or more of them, as said committee
shall determine, subject to the same
conditions as to payment £ in J and
stocle liability as provided for member
banks.
_
No individual, copartnership, or
corporation other than a member
ba/nk of its district shall be permitted
to subscribe for or to hold at any time
more than £$10,000J $25,000 par
value o f stock in any Federal reserve
bank. Such stock shall be known as
public stock and may be transferred
on the books o f the Federal reserve
bank by the chairman o f the board
of directors o f such bank.
Should the total subscriptions by
banks and the public to the stock o f
said Federal reserve banks, or any
one or more o f them, be, in the judg­
ment. o f the organization committee,
insufficient to provide the amount o f
capital required therefor, then and in
that event the said organization com­
mittee shall allot to the United States
such an amount o f said stock as said

HOUSE B IL L .

PASSED B Y SENATE.

committee shill determine. Said
United States stoclc shall be paid for
at par out of any money in the
Treasury not otherwise appropriated,
and shall be held by the Secretary of
the Treasury and disposed of for the
benefit of the United States in such
manner, at such times, and at such
price, not less than par, as the Secre­
tary of the Treasury shall determine.
Stock not held by member banks
shall not be entitled to voting power
in the hands o f its holders, but the
voting power thereon shall be vested
in and be exercised solely by the class
C directors o f the Federal reserve
bank in which said stock may be held,
and who shall be designated as “ voting
trustees
The voting power on said
public stock shall be limited to one vote
for each $15,000 par value thereof'
,
fractional amounts not to be consid­
ered. The voting trustees shall exer­
cise the same powers as member banks
in voting for class A and class B
directors.
The Federal Reserve Board is
hereby empowered to adopt and pro­
mulgate rules and regulations gov­
erning the transfers o f said stock and
the exercise o f the voting power thereon.
Fed­
No Federal reserve bank shall com­
eral reserve bank shall commence mence business with a paid-up-and
business with a paid-up and unim­ unimpaired subscribed capital less in
paired capital less in amount than amount than $5^- 00^
0 000 $8,000,000.
$5,000,000.
The organization o f reserve districts
and Federal reserve cities shall not
be construed as changing the present
status o f reserve cities and central
reserve cities, except in so fa r as this
Act changes the amount o f reserves
that may be carried with approved
reserve agents located therein.
The organization com­
The
mittee shall have power to appoint organization committee shall have
such assistants and incur such ex­ power to appoint such assistants
penses in carrying out the provi­ and incur such expenses in carrying
sions of this Act as it shall deem nec­ out the provisions of this Act as
essary, and such expenses shall be it shall deem necessary, and such
payable by the Treasurer of the expenses shall be payable by the
United States upon voucher ap­ Treasurer of the United States upon
proved by the Secretary of the voucher approved by the Secretary
Treasury, and the sum of $100,000, of the Treasury, and the sum of
or so much thereof as may be neces­ $100,000, or so much thereof as may
sary, is hereby appropriated, out of be necessary, is hereby appropriated,
any moneys in the Treasury not out of any moneys in the Treasury
otherwise appropriated, for the pay­ not otherwise appropriated, for the
ment of such expenses.
payment of such expenses.




CONFERENCE AGREEM ENT.

committee shall determine.
Said
United States stock shall be paid fo r
at par out o f any money in the
Treasury not otherwise appropriated,
and shall be held bu the Secretary o f
the Treasury and disposed o f fo r the
benefit of the United States in such
manner, at such times, and at such
price, not less than par, as the Secre­
tary o f the Treasury shall determine.
Stock not held by member banks
shall not be entitled to voting power
[ m the hands of its holders, but the
voting power thereon shall be vested
in and be exercised solely by the class
C directors of the Federal reserve
bank in which said stock may be held,
and who shall be designated as “ voting
trustees.” The voting power on said
public stock shall be limited to one vote
for each $15,000 par value thereof,
fractional amounts not to be consid­
ered. The voting trustees shall exer­
cise the same powers as member banks
in voting fo r class A and class B
directors] .
The Federal Reserve Board is
hereby empowered to adopt and pro­
mulgate rules and regulations govern»
ing the transfers of said stock la n d the
exercise of the voting power thereon\.
No Federal reserve bank shall com­
mence business with a subscribed
capital less [ m amount J than
l$3,000,0002 $4,000,000. The or­
ganization of reserve districts and
Federal reserve cities shall not be
construed as changing the present
status o f reserve cities and central
reserve cities, except in so far as this
Act changes the amount of reserves
that may be carried with approved
reserve aqents located therein.
The
organization committee shall have
power to appoint such assistants
and incur such expenses in carrying
out the provisions of this Act as
it shall deem necessary, and such
expenses shall be payable by the
Treasurer o f the United States upon
voucher approved by the Secretary
of the Treasury, and the sum o f
$100,000, or so much thereof as may
be necessary, is hereby appropriated,
out o f any moneys in the Treasury
not otherwise appropriated, fo r the
payment o f such expenses.

9

SECTION

3.

HOTJSE B ILL .

P ASSED B Y SENATE.

STOCK ISSUES.

STOCK ISSUES BRANCH OFFICES.

S e c . 3. That the capital
stock of each Federal reserve
bank shall be divided into shares of
$100 each. The outstanding capi­
tal stock shall be increased from
time to time as member banks in­
crease their capital stock or as addi­
tional banks become members, and
shall be decreased as member banks
reduce their capital stock or cease
to be members. Each Federal re­
serve' bank may establish branch
offices under regulations of the Fed­
eral Reserve Board at points within
the Federal reserve district in which
it is located: Provided, That the
total number of such branches shall
not exceed one for each $500,000 of
the capital stock of said Federal
reserve bank.

r-eapitftl
Each
Federal reserve bank may shall es­
tablish branch offices nnde^-^e^ela-

CONFERENCE AGREEM ENT.
BRA N C R 0 FFICBS

4

within the Federal reserve district in
which it is located and also in the
district o f any Federal reserve banlc
which may have been suspended, such
branches to be established and con­
ducted at places and under regula­
tions approved by the Federal Re­
serve Board.

SECTION
FEDERAL RESERVE BANKS.

S ec. 8. Each Federal reserve banlc
shall establish branch banks within
the Federal reserve district in which
it is located and may do so in the dis­
trict o f any Federal reserve bank
which may have been suspended.
Such branches shall be operated by a
board o f directors under rules and
regulations approved by the Federal
Reserve Board. Directors o f branch
banlcs shall possess the same qualifica­
tions as directors o f the Federal reserve
banks. Four o f said directors shall
be selected by the reserve bank and
three by the Federal Reserve Board,
and they shall hold office during the
pleasure, respectively, o f the parent
ba?ik and the Federal Reserve Board.
The reserve bank shall designate one
o f the directors as manager.

4.

FEDERAL RESERVE BANKS.

S e c . 4. The national banks in
Sec. 4. When the organization
each Federal reserve district uniting committee shall have established
to form the Federal reserve bank Federal reserve districts as provided
therein, hereinbefore provided for, in section two o f this Act, a
shall under their seals, make an certificate
shall be filed with
organization certificate, which shall the Comptroller o f the Currency
specifically state the name of such showing the geographical limits of
Federal reserve bank so organized, such districts and the Federal re­
the territorial extent of the district serve city designated in each o f such
over which the operations of said districts. The Comptroller o f the
Federal reserve bank are to be car­ Currency shall thereupon cause to
ried on, the city and State in which be forwarded to each national bank
said bank is to be located, the located in each district, and to such
amount of capital stock and the other banks declared to be eligible
number of shares into which the by the organization committee which
same is divided, the names and may apply therefor, an application
places of doing business of each of blank in form to be approved by




Section 3 was stricken out and the follow­
ing inserted:

federal reser ve b a n k s *

S ec. 4- When the organization
committee shall have established
Federal reserve districts as provided
in section two of this Act, a
certificate shall be filed with
the Comptroller o f the Currency
showing the geographical limits o f
such districts and the Federal re­
serve city designated in each o f such
districts. The Comptroller o f the
Currency shall thereupon cause to
be forwarded to each national bank
located in each district, and to such
other banks declared to be eligible
by the organization committee which
may apply therefor, an application
blank in form to be approved by

10

S ECT ION 4— Continued.
HOUSE 8 ILL.

PASSED B Y SENATE.

CONFERENCE AGREEM ENT.

the makers of said certificate and
the number of shares held by
5
each of them, and the fact
that the certificate is made
to enable such banks to avail them­
selves of the advantages of this Act.

the organization committee, which
blank shall contain a resolution to
be adopted by the board o f directors
o f each bank executing such appli­
cation, authorizing a subscription
to the capital stock o f the Federal
reserve bank organizing in that dis­
trict in accordance with the provi­
sions of this A ct
When the minimum amount of
capital stock prescribed by this Act
fo r the organization o f any Federal
reserve bank shall have been sub­
scribed and allotted the organization
committee shall designate any Jive
banks of those whose applications
have been received, to execute a cer­
tificate o f organization, and there­
upon the banks so designated shall,
under their seals, make an organi­
zation certificate which shall specifi­
cally state the name of such Fed­
eral reserve bank, the territorial ex­
tent o f the district over which the
operations o f such Federal reserve
bank are to be carried on, the
city and State in which said bank
is to be located, the amount of capi­
tal stock and the number o f shares
into which the same is divided,
the name and place o f doing busi­
ness o f each bank executing such
certificate, and o f all banks which
have subscribed to the capital stock
o f such Federal reserve bank and
the number o f shares subscribed by
each, and the fact that the certificate
is made to enable those banks exe­
cuting same, and all banks which
have subscribed or may thereafter
subscribe to the capital stock o f such
Federal reserve bank, to avail themselves o f the advantages o f this Act.
The said organization certificate
shall be acknowledged before a judge
o f some court o f record or notary
public; and shall be, together with the
acknowledgment thereof, authenticated
by the seal o f such court or notary,
transmitted to the Comptroller o f the
Currency, who shall file, record, and
carefully preserve the same in his
office.
Upon the filing o f such certificate
with the Comptroller o f the Currency
as aforesaid, the said Federal reserve
bank shall become a body corporate
and as such, and in the name desig­
nated in such organization certificate,
shall have powerFirst. To adopt and use a corpo­
rate seal.

the organization committee, which
blank shall contain a resolution to
be adopted by the board o f directors
o f each bank executing such appli­
cation, authorizing a subscription
to the capital stock o f the Federal
reserve bank organizing in that dis­
trict in accordance with the provi­
sions o f this Act.
When the minimum amount of
capital stock prescribed by this Act
for the organization oi any Federal
reserve bank shall have been sub­
scribed and allotted, the organization
committee shall designate any five
banks of those whose applications
have been received, to execute a cer­
tificate o f organization, and there­
upon the banks so designated shall,
under their seals, make an organi­
zation certificate which shall specifi­
cally state the name of such Fed­
eral reserve bank, the territorial ex­
tent of the district over which the
operations oi such Federal reserve
bank are to be carried on, the
city and State in which said bank
is to be located, the amount oi capi­
tal stock and the number o f shares
into which the same is divided,
the name and place oi doing busi­
ness oi each bank executing such
certificate, and oi all banks which
have subscribed to the capital stock
oi such Federal reserve bank and
the number oi shares subscribed by
each, and the iact that the certificate
is made to enable those banks exe­
cuting same, and all banks which
have subscribed or may thereaiter
subscribe to the capital stock oi such
Federal reserve bank, to avail them­
selves oi the advantages oi this Act.
The said. organization certificate
shall be acknowledged beiore a judge
oi some court oi record or notary
public; and shall be, together with the
acknowledgment thereoi, authenticated
by the seal oi such court, or notary,
transmitted to the Comptroller oi the
Currency, who shall file, record and
careiully preserve the same in his
office.
Upon the filing oi such certificate
with the Comptroller oi the Currency
as aioresaid, the said Federal reserve
bank shall become a body corporate
and as such, and in the name desig­
nated in such organization certificate,
shall have power—
First. To adopt and use a corpo­
rate seal.

The said organization certificate
shall be acknowledged before a
judge of some court of record or
notary public; and shall be, together
with tne acknowledgment thereof,
authenticated by the seal of such
court, or notary, transmitted to the
Comptroller of the Currency, who
shall file, record, and carefully pre­
serve the same in his office.
Upon
the fifing of such certificate with the
Comptroller of the Currency as
aforesaid, the said Federal reserve
bank so formed shall become a body
corporate, and as such, and in the
name designated in such organiza­
tion certificate, shall have power to
perform all those acts an to enjoy




11

s 3 CTI ON 4— Continue
HOUSE B ILL .

PASSED B Y SENATE.

Second. To have succession fo r a
all those privileges and to exercise
all those powers described in section period o f twenty yearsfrom, its organi­
fifty-one hundred and thirty-six, zation unless it is sooner dissolved hy
Revised Statutes, save in so far as an Act o f Congress, or unless its
the same shall be limited by the pro­ franchise becomes forfeited hy some
visions of this Act. The Feci oral violation o f law.
reserve bank so incorporated shall
Third. To make contracts.
have succession for a period of
Fourth. To sue and he sued, com­
twenty years from its organization, plain and defend, in any court of law
unless sooner dissolved by Act of or equity.
Congress.
Fifth. To appoint hy its hoard o f
directors, elected as hereinafter pro­
videdj such officers as are not other­
wise proinded fo r in this Act, to define
their duties, require honds o f them
and fix the penalty thereof, to dismiss
such officers or any o f them as may he
appointed hy them at pleasure, and to
appoint others to fill their places.

CONFERENCE AGREEMENT.

Second,. To have succession fo r <
g
period o f twenty yearsfrom its organi­
zation unless it is sooner dissolved by
an Act o f Congress, or unless iU
ranchise becomes forfeited by some
violation o f law.
Third. Tomake contracts.
Fourth. To sue and he sued, complain and, defend, in any court o f law
or equity.
Fifth. To appoint hy its hoard of
directors, |[elected as hereinafter pro­
vided, J such officers a n d e m p l o y e e s
as are not otherwise provided fo r in
this Act, to define their duties, require
bonds o f them and fix the penalty
thereof\a n d to dismiss a t p l e a s u r e
such officers or ^any o f them as may
be appointed by them at pleasure, aria
to appoint others to fill their places'!
EMPI.OYEES.

Sixth. To prescribe hy its hoard o f
directors hy-laws not inconsistent
with law, regulating' the manner in
which its general business may he con­
ductedI, and the privileges granted to
it hy law may be exercised and en­
joyed.
Seventh. To exercise by its board
o f directors} or duly authorized officers
or agents, all powers specifically
granted by the provisions o f this Act
and such incidental powers as shall
he necessary to carry on the business
o f hanking within the limitations
prescribed by this Act.
Eighth. Upon deposit with the
Treasurer o f the United States of any
bonds o f the United States in the man­
ner provided hy existing law relating
to national hanks, to receive from the
Comptroller o f the Currency circulat­
ing notes in blank, registered and
countersigned as provided by law,
equal in amount to the par value of
the honds so deposited, such notes to
be issued under the same conditions
and provisions o f law which relate to
the issue of circulating notes o f na­
tional hanks secured by bonds o f the
United States hearing the circulating
privilege, except that the issue o f
such notes shall not be limited to the
amount of the capital stock o f such
Federal reserve bank.
But no Federal reserve bank shall
transact any business except such as
is incidental and necessarily pre­
liminary to its organization until it
has been authorized by the Comp­
troller o f the Currency to commence
business under the provisions o f this
Act.
Every Federal reserve bank shall
Every Federal reserve bank shall
be conducted under the oversight be conducted under the oversight
and control of a board of directors, supervision and control of a board
whose powers shall be the same as
those conferred upon the boards of



Sixth. To prescribe by its board of
directors, by-laws not inconsistent
with law, regulating the manner in
which its general business may be con­
ducted, and the privileges granted to
it by law may be exercised and en­
joyed.
Seventh. To exercise by its hoard
o f directors, or duly authorized officers
or agents, all powers specifically
granted by the provisions o f this Act
and such incidental powers as shall
be necessary to carry on the business
o f banking within the limitations pre­
scribed, by this Act.
Eighth. Upon deposit with the
Treasurer o f the United States o f any
bonds o f the United States in the man­
ner provided by existing law relating
to national banks, to receive from the
Comptroller o f the Currency circulat­
ing notes in blank, registered and
countersigned as provided hy law,
equal in amount to the par value o f
the bonds so deposited, such notes to
be issued under the same conditions
and provisions o f law a s relate to
the issue o f circulating notes o f na­
tional banks secured by bonds o f the
United States bearing the circulating
privilege, except that the issue o f such
notes shall not be limited to the capital
stock o f such Federal reserve hank.
But no Federal reserve hank shall
transact any business except such as
is incidental and necessarily pre­
liminary to its organization until it
has been authorized by the Comp­
troller o f the Currency to commence
business under the provisions o f this
Act.
Every Federal reserve bank shall
he conducted under the supervision
and control o f a hoard o f directors.

12

SECTION
HOUSE B IL L

4— Cont i nued.

P ASSED B Y SENATE.

CONFERENCE AGREEM ENT.

directors of national banking asso­
ciations under existing law, not in­
consistent with the provisions of
this Act.

Such boards of directors
shall be constituted and elected as
hereinafter specified and shall
6
consist of nine members, hold­
ing office for three years,
and divided into three classes, desig­
nated as classes A, B, and C.
Class A shall consist of three
members, who shall be chosen by
and be representative of the stock­
holding banks.
Class B shall consist of three
members, who shall be representa­
tive of the general public interests
of the reserve district.

The board o f directors shall 'per­
form the duties usually appertaining
to the office of directors of banking as­
sociations and all such duties as are
prescribed by law.
Said board shall administer the af­
fairs o f said bank fairly and impar­
tially and without discrimination in
favor o f or against any 'member bank
or banks a,nd shall, subject to the pro­
visions of law and the orders o f the
Federal Reserve Board, extend to each
member bank such discounts, ad­
vancements, and accommodations as
may be safely and reasonably made
with due regard fo r the claims and de­
mands of other member banks.
Such board of directors shall
be eenskkttfced— and eleeted selected
as hereinafter specified and shall
consist of nine members, holding
office for three years, and divided
into three classes, designated as
classes A, B, and C.
Class A shall consist of three
members, who shall be chosen by
and be representative of the stock­
holding banks.
Class B shall consist of three
members, who shall- bo-repyesenfea-

their election shall be actively en­
gaged in their district in commerce,
in agriculture, or in some other indus­
trial pursuit.
Class C shall consist of three
Class C shall consist of three
members, who shall be designated members, who shall be designated
by the Federal Reserve Board.
by the Federal Reserve Board.
When the necessary subscriptions to
the capital stock have been obtained
fo r the organization o f any Federal
Directors of class A shall be chosen reserve bank, the Federal Reserve
in the following manner:
Board shall appoint the class C direc­
tors herein provided fo r and shall
designate one o f such, directors as
chairman o f the board to be selected.
Pending designation o f such chair­
man the organization committee shall,
as provided in this section, exercise
the powers and duties appertaining
to the office o f chairman in the organi­
zation o f such Federal reserve bank




No Senator or Representative in
Congress shall be a member of the
Federal Reserve Board, a director of
a Federal Reserve Bank, or an officer
or director o f any member bank.
No director o f class B or o f doss C
shall be an officer, director, employee,
or stockholder o f any bank•

The board o f directors shall per­
form the duties usually appertaining
to the office o f directors o f banking as­
sociations and all such duties as are
prescribed h jjaw .
Said board shall administer the af­
fairs of said bank fairly and impar­
tially and without discrimination in
favor o f or against any member bank
or banks and shall, subject to the pro­
visions o f law and the orders o f the
Federal Heserve Board, extend to each
member bank such discounts, advance­
ments[ , J and accommodations as
may be safely and reasonably made
with due regard fo r the claims and de­
mands of other member banks.
Such board o f directors shall be se­
lected as hereinafter specified and shall
consist o f nine members, holding office
or three years, and divided into three
lasses, designated as classes A , B,
and C
Class A shall consist o f three
members, who shall be chosen by
and be representative o f the stock­
holding banks.
Class B shall consist o f three
members, who at the time o f their
election shall be actively engaged in
their district in commerce, [ m ] agri­
culture[ , ] or
some other indus­
trial pursuit.
Class C shall consist o f three
members£m who shall be designated
,Jj
by the Federal Reserve Board.
When the necessary subscriptions to
the capital stock have been obtained
for the organization o f any Federal
reserve bank, the Federal Reserve
Board shall appoint the class C direc­
tors £ herein provided fo r 3 and shall
designate one o f such directors as
chairman o f the board to be selected.
Pending t h e designation o f such
chairman, the organization committee
shall£ , as provided in this section, J ex­
ercise the powers and duties appertain­
ing to the office o f chairman m the or­
ganization o f such Federal reserve
bank.
No Senator or Representative in
Congress shall be a member o f the
Federal Reserve Boardj[, J o r a n o f ­
f i c e r o r a director of a Federal Re­
serve Bankfi, or an officer, or director
o f any member bank'J.
No director o f class B [ o r o f class
C] shall be an officer, director £ , J ob

13

S E C T I O N 4— Continued.
HOUSE B IL L .

PASSED B Y SENATE.

CONFERENCE AGREEM ENT.

employee£ , or stockholder3 o f any
bank.
N O DIRECTOR OF CLASS C SH ALL
BE

AN

PLO YEE

OFFICER,
OR

D IRECTO R,

STOCKHOLDER

EM ­

OF A N Y

BANK.

Directors of class A and class B
shall be chosen in the following
manner:
^
It shall be the duty of the chair­
man of the board of directors of the
Federal reserve bank of the district
in which each such bank is situated
to classify the member banks of the
said district into three general
groups or divisions. Each such
group shall contain as nearly as
may be one-third of the aggregate
number of said member banks of
the said district and shall consist,
as nearly as may be, of banks of
similar capitalization. The said
roups shall be designated by numer at the pleasure of the chairman
of the board of directors of the Fed­
eral reserve bank.

f

At a regularly called directors’
meeting of each member bank in the
Federal reserve district aforesaid,
the board of directois of such mem­
ber bank shall elect by ballot one
of its own members as a district
reserve elector and shall certify his
name to the chairman of the board
of directors of the Federal
7
reserve bank of the district.
The said chairman shall es­
tablish lists of the district reserve
electors, class A, thus named by
banks in each of the aforesaid three
groups and shall transmit one list,
to each such elector in each group.




chairman of the board of directors
of the Federal reserve bank of the
district in which eaeh-sueh the bank
is situated to or, pending the ap­
pointment o f such chairman, the or­
ganization committee shall classify the
member banks of the said district
into three general groups or divi­
sions. Each suefegroup shall contain,
as nearly as may be, one-third of the
aggregate number of said the mem­
ber banks of the said district, and
shall consist, as nearly as may be,
of banks of similar capitalization.
The said groups shall be designated

Directors o f class A and class B
shall be chosen in the following
manner:
The chairman o f the board o f di­
rectors o f the Federal reserve banlc o f
the district in which the banlc is situ­
ated or, pending the appointment
o f such chairman, the organization
committee shall classify the mem­
ber banks o f the district into three gen­
eral groups or divisions. Each group
shall contain as nearly as may be
one-third o f the aggregate number o f
the member banks o f the district and
shall consist, as nearly as may be, o f
banks o f similar capitalization. The
groups shall be designated by number
by the chairman.

ef-fehe-¥ede-Fal-^ese-H¥e-bafife.
At a regularly called efeeefce^s2
At a regularly called meeting o f the
meeting o f the board o f directors of board o f directors o f each member bank
each member bank in the Federal in the district it shall elect by ballot a
district reserve elector and shall certify
resewe
his name to the chairman o f the board
it shall elect by ballot one-e l-its of directors o f the Federal reserve
ewft-mombe-rs-fts a district reserve bank o f the district.
elector and shall certify his name
to the chairman of the board of
directors of the Federal reserve
bank of the district.
The said
The chairman
chairman shall establish lists of the shall JEestablish'J m a k e lists o f the
district reserve electors? class- A? district reserve electors thus named by
thus named by banks in each of the banks in each o f the aforesaid three
aforesaid three groups and shall groups and shall transmit one list to
transmit one list to each s«eh each elector in each group.
elector in each group. Eve^y
EACH M EM BER B A N K SHALL B E PER­
M ITTE D TO N O M IN A T E l'O TH E C H A IR ­
M AN O N E CANDIDATE FOR DIRECTOR
OF CLASS A A N D O N E C A N D ID A TE FOR
DIRECTOR OF CLASS B .

TH E CA N D I­

DATES SO N O M IN A TED SH ALL BE
LISTED B Y TH E CH A IR M A N , INDICAT­
IN G BY

W HOM

N O M IN A T E D , AN D A

COPY OF SAID LIST SH AL L ,
FIFT E E N

DAYS AFTER ITS

W IT H IN
COMPLE­

T IO N , BE FU R N ISH E D B Y TH E CH AIR ­
M AN TO EACH ELECTOR.

14

s EC T I O N

4 — Cont i nue

PASSED B Y

HOUSE BILL*

firsfe— bftU
efc*-— and— shall—

sa id- \ isf—fe —fck eleefee+’s—
c e
e—

by-h

CONFERENCE AGREEMENT.

SENATE.

it

ek

—Eaeh-eleefcer-shftH-a&'Ottee

eeleefc-attd-eertify-te-fche-^ftid-ebairma H-lf efB~ameftg-the-th:Fee-pe+ sens

bn b m ife
fced-fce-h

is-ebe iee-for- Fe4-

e-Htfcl-reHe'F¥e--di+,eete-F?~el-H9s-A^-aii4

the—name—reeeiv-mg—
the—
grea fees &
i«Hftbe-F-ef-“9«eh—
vefees-shftH-be—
deelared-by—
febe-ebai-Fffian-as-Fede m \
reserve-di+eefce-Fy-elass-A:-—In-ease

ef-a-fcie~vefce-fcbe-baUefcing-9haU-eenifme— the—
in— manne r-fe ere inbelere
p Feseribed-ttntil-ene-eaftdidate-re-

ee i^es-ffi e? e—
vetes—
than— ither—
e
ef
the-ether9r
speefci^e—
gre«p9-afc--fche--9ame--fcH»e

and- m-the-same-mame-F-p-Feseribed
#o- —
f direeters—
e#~ela99--A,—exeept
tb a t-th e y —
mtist— e -g e le e te d -fr e m -a
b
Iisfc-ef-fiftme94tiriii9hedr ene--by-efteh
in— e —
n ease— e—
b the9e—
e#~effieer9-er
d ir e e te r 9—
e#-an y—
bftfik-e-F— a n k in g
b
asseeiatiefh-

Every elector shall, within fifteen
days of the receipt of the said list,
select and certify to the said chair­
man from among the names on the
list pertaining to his group, trans­
mitted to him by the chairman, one
name, not his own, as representing
his choice for Federal reserve di­
rector, class A. The name receiv­
ing the greatest number of votes,
not less than a majority, shall be
designated by saia chairman as
Federal reserve director for the
group to which he belongs. In case
no candidate shall receive a ma­
jority of all votes cast in any group,
the chairman aforesaid shall estab­
lish an eligible list, consisting of
the three names receiving the great­
est number of votes on the first
ballot, and shall transmit said list
to the electors in each of the groups
of banks established by him. Each
elector shall at once select and
certify to the said chairman from
among the three persons submitted
to him his choice for Federal reserve
director, class A, and the name re­
ceiving the greatest number of such
votes shall be declared by the chair­
man as Federal reserve director,
class A. In case of a tie vote the
balloting shall continue in the man­
ner hereinbefore prescribed until
one candidate receives more votes
than either of the others.
8
Directors of class B shall
be chosen by the electors of
the respective groups at the same

S D—
63-2— 25--- 10
vol



Every elector shall, within fifteen
days after the receipt of the said list,
certify to the chairman his first, sec­
ond, and other choices o f a director of
class A and class B , respectively,
upon a preferential ballot, on a form
furnished by the chairman o f the
board o f directors of the Federal re­
serve bank o f the district. Each
elector shall make a cross opposite the
name of the first, second, and other
choices for a director of class A and
for a director of class B , but shall not
vote more than one choice for any one
candidate.
Any candidate having a majority
o f all votes cast in the column of
first choice shall be declared elected.
I f no candidate have a majority
o f all the votes in the first column,
then there shall be added together
the votes cast by the electors for
such candidates in the second col­
umn to the votes cast fo r the sev­
eral candidates in the first column.
I f any candidate then have a majority
of the electors voting, by adding
together the first and second choices,
he shall be declared elected. If no
candidate have a majority of electors
voting when the first and second
choices shall have been added, then
the votes cast in the third column for
other choices shall be added together
in like manner, and the candidate
then having the highest number of
votes shall be declared elected. An
immediate report o f election shall be
declared.

Every elector shall, within fifteen.
days after the receipt of the saia list,
certify to the chairman his first, sec­
ond, and other choices o f cl director oj
class A and class B, respectively,
upon a preferential ballot, on a form
furnished by the chairman of the
board o f directors o f the Federal re­
serve bank o f the district. Each
elector shall make a cross opposite the
name o f the first, second, and other
choices for a director o f class A and
for a director of class B, but shall not
vote more than one choice fo r any one
candidate.
Any candidate having a majority
of all votes cast in the column of
first choice shall be declared elected.
I f no candidate have a majority of
all the votes in the first column, then
there shall be added together the votes
cast by the electors for such candidates
in the second column £ Jo] a n d the votes
cast fo r the several candidates in the
first column. I f any candidate then
have a majority of the electors voting,
by adding together thefirst and second
choices, he shall be declared elected.
I f no candidate have a majority of
electors voting when the first and
second choices shall have been added,
then the votes cast in the third column
for other choices shall be added to­
gether in like manner, and the candi­
date then having the highest number of
votes shall be declared elected. An
immediate report of election shall be
declared.

15

S E C T I O N 4— Continued.
HOUSE BILL*

time and in the same manner pre­
scribed for directors of class A, ex­
cept that they must be selected from
a list of names furnished, one by
each member bank, and such names
shall in no case be those of officers
or directors of any bank or banking
association. They shall not accept
office as such during the term of their
service as directors of the Federal
reserve bank. They shall be fairly
representative of the commercial,
agricultural, or industrial interests
of their respective districts. The
Federal Reserve Board shall have
power at its discretion to remove
any director of class B in any Fed­
eral reserve bank, if it should appear
at any time that such director does
not fairly represent the commercial,
agricultural, or industrial interests
of his district.
Three directors belonging to class
C shall be chosen directly by the
Federal Reserve Board, and shall be
residents of the district for which
they are selected, one of whom shall
be designated by said board as chair­
man ol the board of directors of the
Federal reserve bank of the district
to which he is appointed and shall
be designated as “ Federal reserve
agent.” He shall be a person of
tested banking experience; and in
addition to his duties as chairman
of the board of directors of the Fed­
eral reserve bank of the district to
which he is appointed, he shall be
required to maintain under regula­
tions to be established by the Fed­
eral Reserve Board a local
9
office of said board, which
shall be situated on the
premises of the Federal reserve bank
of the district. He shall make reg­
ular reports to the Federal Reserve
Board, and shall act as its official
representative for the performance
of the functions conferred upon it by
this Act. He shall receive an an­
nual compensation to be fixed by
the Federal Reserve Board and paid
monthly by the Federal reserve
bank to which he is designated.




P A SSE D B Y SENATE.

CONFERENCE AGREEMENT*

Tfaoy-shall- nef aeeeptr efc

hrteresfcs-ef-his-disfc c
rief.
Three directors belonging to class
C shall be ehesen appointed directly
by the Federal Reserve Board, and
shall fee have beenfor at least two years
residents of the district for which
they are selected appointed, one of
whom shall be designated by said
board as chairman of the board of
directors of the Federal reserve
bank of the district to which he is
appointed and shall be designated
by said board as “ Federal reserve
agent.” He shall bo a person of
tested banking experience; and in
addition to his duties as chairman
of the board of directors of the
Federal reserve bank of the district
to which he is appointed, he shall
be required to maintain under regu­
lations to be established by the
Federal Reserve Board a local
office of said board, which shall be
situated on the premises of the
Federal reserve bank of the dis­
trict. He shall make regular re­
ports to the Federal Reserve Board,
and shall act as its official repre­
sentative for the performance of
the functions conferred upon it by
this Act. He shall receive an an­
nual compensation to be fixed bv
the Federal Reserve Board and paicl
monthly by the Federal reserve
bank to which he is designated.

One of the directors of class C who
shall be a person of tested banking
experience shal be appointed by
the Federal Reserve Board as dep­
uty chairman and deputy Federal
reserve agent to exercise the powers of
the chairman of the board and Federal reserve agent in case of the ab­
sence or disability of his principal.

[ Three directors belonging to class]J
shall be ap­
pointed £ directlyJ by the Federal
Reserve Boardfc, and% t h e y shall
have been for at least two years
residents of the district for which
they are appointed, one of whom
shall be designated by said board as
chairman of the board of directors
of the Federal reserve bank [o f the
district to which he is appointed^
and £shaU be designated by saw,
boardJ as uFederal reserve agent ”
He shall be a person of tested banking
experience; and in addition to his
duties as chairman of the board of di­
rectors of the Federal reserve bankTof
the district to which he is appointed, J
he shall be required to maintain under
regulations to be established by the
Federal Reserve Board a local office of
said boards, which shall be situatedj
on the premises of the Federal reserve
bank[ of the district^. He shall make
regular reports to the Federal Reserve
Board, and shall act as its official
representative for the performance of
the functions conferred upon it by
this Act. He shall receive an an­
nual compensation to be fixed by
the Federal Reserve Board and paid
monthly by the Federal reserve bank
to which he is designated. One of
the directors of class O, who shall be
a person of tested banking experience,
shall be appointed by the Federal
Reserve Board as deputy chairman
and deputy Federal reserve agent to
exercise the powers of the chairman
of the board and Federal reserve agent
in case of absence or disability of his
principal.
C la ss C d ir e c t o r s

16

SEC1JON
HOUSE B ILL.

PASSED

4— Continued
BY

SEN ATE.

CONFERENCE AGREEM ENT.

Directors of Federal reserve banks
Directors of Federal reserve banks
Directors o f Federal reserve banks
shall receive, in addition to any shall receive, in addition to any shall receive, in addition to any
compensation otherwise provided, a compensation otherwise provided, compensation otherwise provided,
reasonable allowance for necessary a reasonable allowance for neces­ a reasonable allowance fo r neces­
expenses in attending meetings of sary expenses in attending meet­ sary expenses in attenaing meettheir respective boards, which ings of their respective boards, ings o f their respective boards,
amount shall be paid by the re­ which amount shall be paid which amount shall
be
paid
spective Federal reserve banks. by the respective Federal reserve by the respective Federal reserve
Any compensation that may be banks. Any compensation that banks. Any compensation that may
provided by boards of directors of may be provided by boards of di­ be provided by boards o f directors of
Federal reserve banks for members rectors of Federal reserve banks for Federal reserve banks fo r [ members
of such boards shall be subject to members of such boards shall be o f such boards'J d i r e c t o r s , o f f i ­
review by the Federal Reserve subject to review and subsequent c e r s o r e m p l o y e e s shall be sub­
Board.
readjustment at any time by the Fed­ ject to preview and subsequent read­
eral Reserve Board.
justment at any time by] t h e a p ­
proval
of
the Federal Reserve
Board.
The Reserve Bank Organization
The Reserve Bank Organization
The Reserve Bank Organization
Committee may, in organizing Fed­ Committee may, in organizing Fed­ Committee may, in organizing Federal
eral reserve banks for the first time, eral reserve banks for the first time, reserve banks £ fo r the first timeJ,
call such meetings of bank directors call such meetings of bank directors call such meetings of bank directors
in the several districts as may be in the several districts as may be in the several districts as may be
necessary to carry out the purposes necessary to carry out the purposes necessary to carry out the purposes
of this Act and may exercise the of this Act, and may exercise the o f this A ct, ana may exercise the
functions herein conferred upon the functions herein conferred upon the functions herein conferred upon the
chairman of the board of directors chairman of the board of directors chairman o f the board o f directors
of each Federal reserve bank pend­ of each Federal reserve bank pend­ of each Federal reserve bank pend­
ing the complete organization of ing the complete organization of ing the complete organization o f
such bank.
such bank.
such bank.
At the first meeting of the full
At the first meeting of the
At the first meeting o f the fu ll
full board of directors of each board of directors of each Federal board o f directors o f each Federal
Federal reserve bank after organi­ reserve bank after organization it reserve bank, Rafter organization,] it
zation it shall be the duty of shall be the duty of the directors of shall be the duty o f the directors o f
10
the directors of classes A and classes A andB and C, respectively, classes A , [a n d ] B and C, respect­
B and C, respectively, to to designate one of the members of ively, to designate one o f the members o f
designate one of the members of each class whose term of office shall each class whose term o f office shall
each class whose term of office shall expire in one year from the first of expire in one year from the first of
expire in one year from the first of January nearest to date of such January nearest to date o f such
January nearest to date of such meeting, one whose term of office meeting, one whose term o f office
meeting, one whose term of office shall expire at the end of two years shall expire at the end o f two years
shall expire at the end of two years from said date, and Qne whose term from said date, and one whose term
from said date, and one whose term of office shall expire at the end of o f office shall expire at the end o f
of office shall expire at the end of three years from said date. There­ three years from said date. There­
three years from said date. There­ after every director of a Federal re­ after every director o f a Federal
after every director of a Federal serve bank chosen as herein­ reserve bank chosen as herein­
reserve bank chosen as hereinbefore before provided shall hold office before provided shall hold office
-b
provided shall hold office for a term for a term of three years $ «fc-the
of three years; but the chairman of
the board of directors of each Fed­
eral reserve bank designated by the
Federal Reserve Board, as herein­
before described, shall be removable
at the pleasure of the said board
without notice, and his successor
shall hold office during the unex­
r li
ir
pired term of the director in whose vtIT vvv vT IT
for
place he was appointed. Vacancies pointed. Vacancies that may occur ■ a term o f three years. Va­
that may occur in the several m the several classes of directors of cancies that may occur in the
classes oi directors of Federal re­ Federal reserve banks may be filled several classes o f directors o f Federal
serve banks may be filled in the in the manner provided for the reserve banks may be filled in the
manner provided for the original original selection of such directors, manner provided fo r the original
selection of such directors, such such appointees to hold office for selection o f such directors, such ap­
appointees to hold office for the the unexpired terms of their pred­ pointees to hold office for the unex­
pired terms o f their predecessors.
unexpired terms of their prede­ ecessors.
cessor.




17

SECTION

PASSED B Y SENATE.

HOUSE B ILL.
INCREASE

AND DECREASE

5.

OF

CAPI­

T A L.

S e c . 5. That shares of the capital
stock of Federal reserve banks shall
not be transferable, nor be hyothecated In case a member
ank increases its capital, it shall
thereupon subscribe for an addi­
tional amount of capital stock of
the Federal reserve bank of its dis­
trict equal to twenty per centum of
the bank’s own increase of
11
capital, one-half of said sub­
scription to be paid in cash
in the manner hereinbefore provided
for original subscription, and onehalf to become a liability o the
member bank according to the
terms of the original subscription.

A bank applying for stock in a Fed­
eral reserve bank at any time after
the formation of the latter must
subscribe for an amount of the capi­
tal of said Federal reserve bank
equal to twenty per centum of the
capital stock of said subscribing
bank, paying therefor its par value
in accordance with the terms pre­
scribed by section two of this Act

STOCK

ISSUES;

INCREASE

AND

CONFERENCE AGREEM ENT.
DE­

CREASE OF CAPITAL.

S e c . 5. That-sha^es The capital
stock of each* Federal reserve bank
shall be divided into shares of $100
each. The outstanding capital stock
shall be increased from time to time as
member banks increase their capital
stock and surplus or as additional
banks become members, and may be
decreased as member banks reduce
their capital stock or surplus or cease
to be members.
Shares of the capital
stock of Federal reserve banks
owned by member banks shall not be
transferable, nor be hypothecated
hypothecable. In case a member
bank ine^'eases increase its capital
stock or surplus, it shall thereupon
subscribe for an additional amount
of capital stock of the Federal re­
serve bank of its district equal to
twenty- six per centum of the
banka
s—own said increase ef-eapifcal, one-half of said subscription
to be paid in-easb in the man­
ner hereinbefore provided for orig­
inal subscriptioi^, and one-half te

e*i£«i4--sttbse*4pfcieft subject to call
of the Federal Reserve Board. A
tank applying for stock in a Federal
reserve bank at any time after the
thereof must subscribe for an amount
of the capital stock of said the
Federal reserve bank equal to
twenty six per centum of the paidup capital stock and surplus oi said
subse^ibiftg applicant bank, paying
therefor its par value m-aeee^danee

twe-ef-feh is-Aefc plus one-half of one
per centum a month from the period
of the last dividend.
When the capi­
tal stock of any Federal reserve
When the capital stock of any Fed­ bank has shall have been increased
eral reserve bank has been increased either on account of the increase of
either on account of the increase of capital stock of member banks or on
capital stock of member banks or on account of the increase in the num­
account of the increase in the num­ ber of member banks, the board of
exeetrte
ber of member banks, the board of directors shall make-and—
directors shall make and execute a cause to be executed a certificate to
certificate to the Comptroller of the the Comptroller of the Currency
Currency showing said increase in showing said the increase in capital
capital, the amount paid in, and by stock, the amount paid in, ana by
whom paid. In case a member whom paid. In case a member
bank reduces its capital stock it bank reduces its capital stock it
shal surrender a proportionate shall surrender a proportionate
amount of its holdings in the capital amount of its holdings in the capital




ISSUES;

INCREASE

CREASE

STOCK

OF CAPITAL.

AND

D E­

S e c . 5. The capital stock o f each
Federal reserve bank shall be divided
into shares o f $100 each. The out­
standing capital stock shall be in­
creased from time to time as member
banks increase their capital stock and
surplus or as additional banks be­
come members, and may be decreased
as member banks reduce their capital
stock or surplus or cease to be mem­
bers.
Shares o f the capital stock o f Fed­
eral reserve banks owned by member
banks shall not be [ 'transferable
nor be hypothecable] t r a n s f e r r e d
OR
HYP O TH E CATE D .
Case J
w h en
a member bank ^increase J
i n c r e a s e s its capital stock or sur­
plus, it shall thereupon subscribe
fo r an additional amount o f capital
stock o f the Federal reserve bank o f
its district equal to six per centum
o f the said increase, one-half o f
said subscription to be paid
in
the
manner
hereinbefore
provided for original subscription,
and one-half subject to call o f the

Federal Reserve Board. A bank
applying fo r stock in a Federal re­
serve bank at any time after the
organization thereof must subscribe
fo r an amount o f the capital stock o f
the Federal reserve bank equal to six
per centum o f the paid-up capital
stock and surplus o f said applicant
bank, paying therefor its par value
plus one-half o f one per centum a
month from the period o f the last

dividend. When the capital stock
o f any Federal reserve bank shall have
been increased either on account o f the
increase o f capital stock o f member
banks or on account o f the increase
in the number o f member banks, the
board of directors shall cause to be
executed a certificate to the Comptroller
o f the Currency showing the increase
in capital stock, the amount paid in,
and by whom paid. £ In case J w h e n
a member bank reduces its capital stock
it shall surrender a proportionate
amount of its holdings m the capital

18

SECTION

5 — Conti nued.

HOUSE B ILL .

PASSED B Y SENATE.

CONFEBENCE AGP EE ME NT.

of said Federal reserve bank, and in
case a member bank goes into volun­
tary liquidation it shall surrender
all of its holdings of the capital
stock of said Federal reserve bank.
In either case the shares surrendered
shall be canceled and such member
bank shall receive in payment
therefor, under regulations to be
prescribed by the Federal Reserve
JBoard, a sum equal to its cash paid
subscriptions on the shares surren­
dered.

of said Federal reserve bank, and in
case a member bank goes into volun­
tary liquidation it shall surrender
all of its holdings of the capital stock
of said Federal reserve bank and be
released front its stock subscription
not previously called.
In eitluT ease the shares sur­
rendered shall be canceled and
such member bank shall receive
in payment therefor, under regula­
tions to bo prescribed by the Federal
Reserve Board, a sum equal to its
cash paid subscriptions on the
shares surrendered and one-half of
one per centum a month from the
period of the last dividend, not to
exceed the book value thereof, less any
liability of such member bank to the
Federal reserve bank.

of said Federal reserve bank, and.
case J w h e n a member bank £goes
into voluntary liquidation] v o l u n ­
t a r i l y l i q u i d a t e s it shall surrender
all o f its holdings of the capital stock of
said Federal reserve bank and be re­
leased. from its stock subscription not
previously called. In either case the
shares surrendered shall be canceled
and HsucJiJ t h e member bank shall
receive in payment therefor,under regu­
lations to be prescribed by the Federal
Reserve Board, a sum equal to its
cash-paid subscriptions on the
shares surrendered and one-half of
one per centum a month from the
period of the last dividend, not to
exceed the book value thereof\less any
liability o f such member bank to the
Federal reserve bank•

SECTION
S e c . 6. That if any mem­
ber bank shall become in­
solvent and a receiver be appointed,
the stock held by it in said Federal
reserve bank shall be canceled and
the balance, after deducting from
the amount of its cash paid sub­
scriptions all debts due by such in­
solvent bank to said Federal reserve
bank, shall be paid to the receiver of
the insolvent bank.

6.

12

baftk I f any member bank shall be
declared insolvent and a receiver ap­
pointed therefor, the stock held by itm
said Federal reserve bank shall be can­
celed, and all cash-paid subscriptions
on said stock, with one-half o f one per
centum, per month from the period of
last dividend, not to exceed the book
value thereofshall be first applied to
all debts of the insolvent member bank
to the Federal reserve banlc, and the
balance, i f any, shall be paid to the
Whenever the receiver of the insolvent bank. When­
capital stock of a Federal reserve ever the capital stock of a Federal
bank is reduced, either on account reserve bank is reduced, either on
of a reduction in capital stock of any account of a reduction in capital
member bank or of the liquidation stock of any member bank or of the
or insolvency of any such member liquidation or insolvency of aiay
bank, the board of directors shall sueh-ffieffibe* such bank, the board
directors
shall
make -and
make and execute a certificate to of
the Comptroller of the Currency 6X6011^6 cause to be executed a
showing such reduction of capital certificate to the Comptroller
stock a ad the amount repaid to such of the Currency showing such re­
duction of capital stock and the
bank.
amount repaid to such bank.




S e c . 6 . If any member bank shall be
declared insolvent and a receiver ap­
pointed therefor, the stock held by it m
said Federal reserve bank shall be can­
ce led W IT H O U T IM P A IR M EN T O F ITS
l i a b i l i t y , and all cash-paid subscrip­
tions on said stock, with one-half of one
per centum per month from the period
o f last dividend, not to exceed the book
value thereof, shall be first applied to
all debts of the insolvent member bank
to the Federal reserve bank, and the
balance, if any, shall be paid to the
receiver of the insolvent bank. When­
ever the capital stock of a Federal
reserve bank is reduced, either on
account of a reduction in capital
stock of any member bank or of the
liquidation or insolvency of such
bank, the board of directors shall
cause to be executed a certi­
ficate
to
the Comptroller
of
the Currency showing such re­
duction of capital stock and the
amount repaid to cuch bank.

19

SECTION
HOUSI BILLr
D IVISION OF E AR N IN G S
S e c . 7 . That after the payment of
all necessary expenses and taxes of a
Federal reserve bank, the member
banks shall be entitled to receive an
annual dividend of five per centum
on the paid-in capital stock, which
dividend shall be cumulative. Onehalf of the net earnings, after the
afoi «waid dividend claims have been
fully met, shall be paid into a sur­
plus fund until such fund shall
amount, to twenty per centum of
the paid-in capital stock of such
bank, and of the remaining one-half
sixty per centum shall be paid to
the United States and forty per
centum to the member banks in
the ratio of their average
13
balances with the Federal re­
serve bank for the preceding
year. Whenever and so long as the
surplus fund of a Federal reserve
bank amounts to twenty per centum
of the paid-in capital stock and the
member banks shall have received
the dividends at the rate of five per
centum per annum hereinbefore
provided for, sixty per centum of all
excess earnings shall be paid to the
United States and forty per centum
to the member banks in proportion
to their annual average balances
with such Federal reserve bank;




7.

PASSED B Y SENATE.

CONFERENCE AGREEM ENT.

D IV ISIO N OF E A R N IN G S.

e f After all necessary expenses and
taxes of a Federal reserve bank
have been paid or provided fo r, the
member-bftftbs stockholders shall be
entitled to receive an annual divi­
dend of five six per centum on the
paid-in capital stock, which divi­
dend shall be cumulative. Onehalf of the net earnings, after the
aforesaid dividend claims have been
fully met, shall be paid into a sur­
plus fund until such fund shall
amount to fcwenfcyforty per centum
of the paid-in capital stock of such
bank, and of the remaining onehalf s i fifty per centum shall be
paid to the United States ftad-fo-rty

chise tax, and fifty per centum shall
be paid to the united States, as a
trustee fo r the benefit o f depositors
in all failed member banks in the
United States, and failed member
trust companies in the District o f
Columbia, the money to be kept in and
losses from failures to be paid from it
as a depositors’ insurance fund under
a division o f the Treasury to be con­
stituted and managed under such reg­
ulations as may be prescribed by the
Secretary o f the Treasury. Whenever
the Secretary erf the Treasury, out of
said fund, shall pay any amounts due
to depositors o f failed member banks,
the Secretary o f the Treasury shall be
subrogated to all the rights of said de­
positors, and in the settlement o f the
affairs of any such bank all dividends
that would have been due to such de­
positors shall be paid to the Secretary
of the Treasury, and the same shall be
ty him paid into and, become a part
oj said depositors’ insurance fund.

DIVISION O F EARNINGS.

S ec . 7. After all necessary ex­
penses o f a Federal reserve bank have
been paid or provided for, the stock­
holders shall be entitled to receive an
annual dividend o f six per centum on
the paid-in capital stock, which divi­
dend shall be cumulative. £ One-half
o f the net earnings, after J A f t e r the
aforesaid dividend claims have been
fu lly met, f^shall be paid into a sur­
plus fund until such fund shod
amount to forty per centum o f the
paid-in capital stock o f such bank,
and o f the remaining one-half fifty
per centum] a l l t h e n e t e a r n i n g s
shall be paid to the United States

as a franchise tax, f^and fifty per
centum shall be paid to the United
States, as a trustee for the benefit o f
depositors in all failed member banks
in the United States, and failed mem­
ber trust companies in the District o f
Columbia, the money to be kept in and
losses from failures to be paid from
it as a depositors' insurance fund
under a division of the Treasury to
be constituted ana managed under
such regulations as may be prescribed
by the Secretary of the Treasury.
Whenever the Secretary o f the Treas­
ury, out o f said fund, shall pay any
amounts due to depositors o f failed
member banks, the Secretary o f the
Treasury shall be subrogated to all
the rights o f said depositors and in
the settlement of the affairs of any
such bank all dividends that would
have been due to such depositors
shall be paid to the Secretary of
the Treasury, and the same shall be
by him paid into and become a part
o f said depositors1 insurance fu n d i
EXCEPT

THAT

O N E -H A L F

OF

SUCH

N E T E A R N IN G S SH ALL BE P AID INTO
A

SURPLUS

AMOUNT

TO

F UND

OF THE P A ID -IN
SUCU B A N K .

U N T IL

FORTY

PER

IT SH AL L
C E N TU M

CA PITA L STOCK OF

20

SECTION
HOUSE B ILL .

aU
earnings derived by the United
States from Federal reserve banks
shall constitute a sinking fund to be
held for the reduction of the out­
standing bonded indebtedness of the
United States, said reduction to be
accomplished under regulations to
be prescribed by the Secretary of
the Treasury. Should a Federal
reserve bank be dissolved or go into

7— C o n t i n u e d .

PASSED B Y SENATE.

CONFERENCE AGREEM ENT.

CAUJ The net earnings derived by
AU net earnings
derived by the United States from the United States from Federal re­
Federal reserve banks shall eensfci- serve banks shall, in the discretion of
the Secretary, be used to supplement
the gold reserve held against out­
standing United States notes, or shall
be applied to the reduction o f the out­
standing bonded indebtedness of the
reduction of the outstanding bonded United States under regulations to be
indebtedness of the United States prescribed by the Secretary of the Treas­
ury. Should a Federalreserve bank be

, in the discretion of the Secretary, be
vsed to supplement the gold reserve
held against outstanding United
States notes, or shall be applied to the

under regulations to be prescribed
bv the Secretary of the Treasury.
Should a Federal reserve bank be
liquidation, the surplus fund of said dissolved or go into liquidation, fcbe dissolved or go into liquidation, any
bank, after the payment of all debts
surplus remaining, after thepayment of
and dividend requirements as here­ plus remaining, after the payment aUaebts, dividendreguiremenisashereinbefore provided for, shall be paid of all debts, and dividend require­ inbefore provided, and the par value
to and become the property of the ments as hereinbefore provided, of the stock, shall be paid to and beUnited States.
le**? and the par value of the stock, come the property of the United States
shall be paid to and become the and shaU be similarly applied.
property of the United States and

shall be similarly applied.
Every Federal reserve bank in­
corporated under the terms of this
Act and the capital stock therein
held bv member banks shall be ex­
empt from Federal, State, and local
taxation, except in respect to taxes
upon real estate.

Every Federal reserve bank incor­
£ Every! Federal reserve f^bankrj
porated under the terms of this Act b a n k s ^incorporated under the
and, the capita! stock and surplus terms of this ActJ, i n c l u d i n g
therein, held-by- member-banks and the capital stock and surplus therein,
the income derived therefrom shall be and the income derived therefrom
exempt from Federal, State, and shall be exempt from Federal, State,
local taxation, except in respect to and local taxation, except [m respei i
taxes upon real estate.
t o ] taxes upon real estate.

SECTION

8.

The Senate proposed to eliminate this
section of the House bill.
S e c . 8. That any national bank­
ing association heretofore organized
may upon application at any
14
time within one year after the
passage of this Act, and with
the approval of the Comptroller of
the Currency, be granted, as herein
provided, all the rights, and be sub­
ject to all the liabilities, of national
banking associations organized sub­
sequent to the passage of this Act:
Provided, That such application on
the part of such associations shall
be authorized by the consent in
writing of stockholders owning not
less than a majority of the capital
stock of the association. Any na­
tional banking association now or­
ganized which shall not, within one
year after the passage of this Act,
become a national banking associa­
tion under the provisions herein­
before stated, or which shall fail lo
comply with any of the provisions
of tnis Act applicable thereto, shall
be dissolved; but such dissolution
shall not take away or impair any
remedy against such corporation, its
stockholders or officers, for any lia­
bility or penalty which shall have
previously been incurred.




21

SECTION
HOUSE BILL.

9.

P ASSED B Y SENATE

CONFERENCE AGREEMENT.

S e c . 9 8. That a**? section fiftyS e c . 8. £ That section J S e c tio n
one hundred and fifty fou r, United fifty-one hundred and fifty-four,
States Revised Statutes, be amended United States Revised Statutes, fcta ]
to read as follow s:
is h e r e b y amended to read as fol­
lows:
“ Any bank e-F-fearftking-asseeiakien
Any bank incorporated by spe­
incorporated by special law of any cial law o f any State or o f theState or of the United States, or United States [ , j or organized under
organized under the general laws the general laws o f any State or o f
of any State or o f the United the United States £ , ] and having an
States, and having an unimpaired unimpaired capital sufficient to entitle
capital sufficient to entitle it to it to become a national banking as­
become a national banking asso­ sociation under the provisions o f the
ciation under the provisions of existing laws may, by the vote o f the
existing laws, may, by the eon- shareholders owning not less than
sent.id "Wnfcmg vote of the share­ fifty-one per centum o f the capital
holders owning not less than stock o f such bank or banking associa­
fifty-one per centum of the capital tion, with the approval o f the Comp­
stock of such bank or banking troller o f the Currency, be converted
association, and with the approved into a national banking association,
of the Comptroller of the Cur- with any name approved by the
The rencyy-bcceme be converted into a Comptroller o f the Currency:
directors thereof may continue to national banking association, unde?
be the directors of the association so
organized until others are elected or name approved by the Comptroller
appointed in accordance with the o f the Currency: Provided, however,
Provided, however, That said
provisions of the law.
That said conversion shall not be conversion shall not be in contraven­
in contravention o f the State law. In tion o f the State law. In such case
such case the articles o f association and the articles o f association and organi­
organization certificate may be executed zation certificate may be executed by a
by a majority ofthe directors o f the banlc majority o f the directors o f the bank
or banking institution, ana the cer­ or banking institution, and the cer­
tificate shall declare that the owners tificate shall declare that the owners
o f fifty-one per centum o f the capital o f fifty-one per centum o f the capital
stock have authorized the directors to stock have authorized the directors to
make such certificate and to change or make such certificate and to change or
convert the banlc or banlcing institu­ convert the bank or banking institu­
tion into a national association. A tion into a national association. A
majority o f the di?'ectors, after execut­ majority o f the directors, after execut­
ing the articles o f association and the ing the articles o f association and the
organization certificate, shall have organization certificate, shall have
power to execute all other papers and power to execute all other papers and
to do whatever may be required to to do whatever may be required to
make its organization perfect and make its organization perfect and
complete as a national association. complete as a national association.
The shares o f any such bank may The shares o f any such bank may
continue to be fo r the same amount continue to be fo r the same amount
each as they were before the conver­ each as they toere before the conver­
sion, and the directors
may sion, and the directors may continue
continue to be the directors of the to be directors of the association until
association se-e^gam^ed until others others are elected or appointed in ac­
are elected or appointed in accord­ cordance with the provisions o f the
ance with the provisions of the statutes of the United States. When
law statutes o f the United States. the comptroller has given to such
When the When the comptroller has given to bank or banking association a cer­
comptroller has given to such bank such bank or banking association tificate that the provisions of this Act
or banking association a certificate a certificate that the provisions of have been complied with, such bank
that the provisions of this Act have this Act have been complied with, or banking association, and all its
been complied with, such bank or such bank or banking association, stockholders. officers, and employees,
banking association, and all its and all its stockholders, officers, and shall have the same powers and privi­
stockholders, officers, and employ­ employees, shall have the same leges, and shall be subject to the same
ees, shall have the same powers and powers and privileges, and shall be duties, liabilities, and regulations, in
privileges, and shall be subject to subject to the same duties, liabili­ all respects, as shall have been prethe same duties, liabilities, and regu­ ties, and regulations, in all respects, scribea by the Federal R e se r v e Act
lations, in all respects, as shall have as shall have been prescribed by this and by the national banking Act for
been prescribed by this Act or by the the Federal reserve Act e-p and by the associations originally organized as
national banking Act for associa­ national banking Act for associa­ national banking associations.
tions originally organized as na­ tions originally organized as national
banking associations
tional banking associations.

S e c . 9 . That any bank or banking
association incorporated by special
law of any State or of the united
States, or organized under the gen­
eral laws of any State or the United
States, and having an unimpaired
capital sufficient to entitle it to be­
come a national banking association
under the provisions of existing
laws, may, by the consent in writing
of the shareholders owning not less
than fifty-one per centum of the
capital stock of such bank or
15
banking association, and with
the approval of the Comp­
troller of the Currency, become a
national banking association under
its former name or by any name ap­
proved by the comptroller.




22

SECTION

10.

HOUSE B ILL.

PASSED B Y SENATE.

CONFERENCE AGREEM EN T.

STATE B A N K S AS M EM BERS.

STATE B A N K S AS M EM BERS.

STATE B A N K S AS M EM BERS.

Sec. 10. That from and after the
ass
any bank or
E age of this Act or trust com­
anking association
pany incorporated by special law
of any State, or organized under
the general laws of any State or the
United States, may make applica­
tion
to the Federal Reserve Board
hereinafter created for the right to
subscribe to the stock of the Fed­
eral reserve bank organized or to
be organized within the Federal re­
serve district where the applicant is
located.
The Federal Reserve
Board, under such rules and
16
regulations as it may permit
such applying bank to be­
come a stockholder in the Federal
reserve bank of the district in
which such applying bank is lo­
cated. Whenever the Federal Re­
serve Board shall permit such ap­
plying bank to become a stock­
holder in the Federal reserve bank
of the district in which the apply­
ing bank is located, stock shall be
issued and paid for under the rules
and regulations in this Act provided
for national banks which become
stockholders in Federal reserve
banks.
It shall be the duty of the Fed­
eral Reserve Board to establish by­
laws for the general government of
its conduct in acting upon applica­
tions made by the State banks and
banking associations and trust com­
panies hereinbefore referred to for
stock ownership in Federal reserve
hanks. Such by-laws shall require
applying bank not organized un­
der Federal law to comply with the
reserve requirements and submit to
the inspection and regulation pro­
vided for in this and other laws re­
lating to national banks.

No such
applying bank shall be admitted
to membership in a Federal reserve
bank unless it possesses a paid-up
unimpaired capital sufficient to en­
title it to become a national bank­
ing association in the place where
it is situated, under the provisions
of the national banking Act, and
8 D—63 2—voi 25


-11

S e c . 9. Any bank incorporated by
special law o f any State, or organized
under the general laws o f any State
incorporated by special or o f the United States, may make
law of any State, or organized under application to the reserve bank or­
the general la*ws of any State or ganization committee, pending or­
of the United States, may make ganization, and thereafter to the
application to the reserve bank Federal Reserve Board fo r the right
organization
committee, pending to subscribe to the stock o f the Federal
organization, and thereafter to the reserve bank: organized or to be or­
ganized within the Federal reserve dis­
Federal Reserve Board
aftep-emfcted for the right to sub­ trict where the applicant is located.
scribe to the stock of the Federal
reserve bank organized or to be
organized within the Federal re­
serve district where the applicant is
located.
The organization committee or the
The organization commit­
tee or the Federal Reserve Board, un­ Federal Reserve Board, under such
der such rules and regulations as it rules and regulations as it may pre­
may prescribe, subject to the provi­ scribe, subject to the provisions of
sions of this section, shall may per­ this section, may permit the apply­
mit sueh the applying bank to be­ ing bank to become a stockholder in
come a stockholder in the Federal the Federal reserve bank o f the dis­
reserve bank of the district in which trict in which the applying bank is
sueh the applying bank is located. located. Whenever the organization
W h en ever the organization commit­ committee or the Federal Reserve
tee or the Federal Reserve Board Board shall permit the applying bank
shall permit sueh the applying bank to become a stockholder m the Fed­
to become a stockholder in the Fed­ eral reserve banlc o f the district, stock
eral reserve bank of the district m shall be issued and paid for under ihe
wh leh-fche.apply mg bank is-loeated, rules and regulations in this Act pro­
stock shall be issued and paid for videdfo r national banks which become
under the rules and regulations in stockholders in Federal reserve banks.
this Act provided for national banks
which become stockholders in Fed­
eral reserve banks.
The
organization committee or the Federal organization committee or the Federal
Reserve Board fce shall establish by­ Reserve Board shall establish by-laws
laws for the general government of fo r the general government o f its con­
its conduct in acting upon applica­ duct in acting upon applications made
tions made by the State banks and by the State banks and banking asso­
banking associations and trust com­ ciations and trust companies fo r stock
panies he-Fembef
ed-te for ownership in Federal reserve banks.
stock ownership in Federal reserve Such by-laws shall require applying
banks. Such by-laws shall require banks not organized under Federal
applying banks not organized under law to comply with the reserve and
Federal law to comply with the re­ capital requirements and to submit to
serve and capital requirements and the examination and regulations pre­
to submit to the Hispeefcion examina­ scribed by the organization committee
tion and
or by the Federal Reserve Board.
Sec.

9.

fche-pftssap

the organization committee or by the
Federal Reserve Board.
No sueh applying bank
shall be admitted to membership
in a Federal reserve bank unless it
possesses a paid-up unimpaired cap­
ital sufficient to entitle it to become
a national banking association in the
place where it is situated, under the
provisions of the national banking

No applying bank
shall be admitted to membership in a
Federal reserve bank unless it pos­
sesses a paid-up unimpaired capital
sufficient to entitle it to become a
national banking association in the
place where it is situated, under the
provisions o f the national banking
Act.

23

SECTION

10— Continued.
CONFERENCE AGREEMENT.

PASSED B Y SENATE.

HOUSE B IL L .

conforms to the provisions herein
prescribed for national banking as­
and—fe -the— egulae
f
sociations of similar capitalization eap&aligftfcioa—
he-Fedefal-Reserve Beafd.
and to the regulations of the Federal fciens-ef-fc
Reserve Board.
Any bank becoming a member o f
a Federal reserve bank under the
provisions o f this section shall, in
addition to the regulations and re­
strictions hereinbefore provided, be
required to conform to the provisions
o f law imposed on the national banks
respecting the limitation o f liability
which may be incurred by any person,
firm, or corporation to such banks, the
prohibition against making purchase
o f or loans on stock o f such banks,
and the withdrawal or impairment o f
capital, or the payment o f unearned
dividends, and to such rules and regu­
lations as the Federal Reserve Board
may, in pursuance thereof, prescribe.
Such banks, and the officers,
agents, and
employees thereof,
shall also be subject to the provisions
o f and to the penalties prescribed
by sections fifty-one hundred and
ninety-eight, fifty-two hundred, fiftytwo hundred arid one, and fifty-two
hundred and eight andfifty-two hun­
dred and nine o f the Revised Statutes.
The member banks shall also be
required to make reports o f the con­
ditions and o f the payments o f divi­
dends to the comptroller, as provided
in sections fifty-two hundred and
eleven and fifty-two hundred and
twelve o f the Revised Statutes, and
shall be subject to the penalties pre­
scribed by section fifty-two hundred
and thirteen fo r the failure to make
such report

A ny bank becoming a member o f
a Federal reserve bank under the
provisions o f this section shall, in
addition to the regulations and re­
strictions hereinbefore provided, be
required to conform to the provisions
oflaw imposed on the national banks
respecting the limitation o f liability
which may be incurred by any person,
-firm, or corporation to such banks, the
prohibition against making purchase
o f or loans on stock o f such, banks,
and the withdrawal or impairment o f
capital, or the payment o f unearned
dividends, and to such rules and regu­
lations as the Federal Reserve Board
may, in pursuance thereof, prescribe.
Such banks, and the officers, agents,
and employees thereof, shall also be
subject to the provisions o f and to the
penalties prescribed by sections fiftyone hundred and ninety-eight, fiftytwo hundred, jifty-two hundred and
one, and fifty-two hundred and
eight, and fifty-two hundred and
nine o f the Revised Statutes. The
member banks shall also be required
to make reports o f the conditiom
and o f the payments o f dividends
to the comptroller, as p ro v id ed
in sections fifty-two hundred and
eleven and fifty-two hundred and
twelve o f the Revised Statutes, and
shall be subject to the penalties pre­
scribed by section fifty-two hundred
and thirteen fo r the failure to make
such report.

If at any time it shall appear to
If at any time it shall ap­
pear to the Federal Reserve the Federal Reserve Boara that a
Board that a banking association or banking association or trust com­
trust company organized under the pany organized under the laws of
laws of any State or of the United any State or of the United States
States has failed to comply with the and having become a member bank
provisions of this section or the regu­ has failed to comply with the pro­
lations of the Federal Reserve visions of this section or the regula­
Board, it shall be within the power tions of the Federal Reserve Board,
of the said board to require such it shall be within the power of the
banking association or trust com­ said board, after hearing, to require
pany to surrender its stock in the such banking association or trust
Federal reserve bank in which it company to surrender its stock in
holds stock upon receiving from the Federal reserve bank; ie-wkieh
-t fc h
! iQ Q fr v n ly
A
1
A vt
l
such Federal reserve bank the cash- ID llv tv/lo aDUviC lip U lI T u r d V1 TUg%/'i - U Uilll
paid subscriptions to the said stock such surrender the Federal reserve
bank shall pay the cash-paid sub­
scriptions to the said stock in- euryen fc funds with interest at the rate o f
one-half o f one per centum per month,
computed from the last dividend, i f
earned, not to exceed the book value

I f at any time it shall apeear to
the Federal Reserve Board that a
£ banking association or trust com­
pany organized under the laws o f any
State or o f the United States and having
become a ] member bank has failed to
comply with the provisions o f this
section or the regulations o f the Fed­
eral Reserve Board, it slum be within
the power o f the said board, after hear­
ing, to require such £ banking associa­
tion or trust company] b a n k to sur­
render its stock in the Federal reserve
bank; upon such surrender the Federal
reserve bank shall pay the cash-paid
subscriptions to the said stock with
interest at the rate o f one-half o f one
per centum per month, computed
from the last dividend, i f earned, not
to exceed the book value {hereof\ less
any liability to said Federal reserve
bank, except the subscription liability

17




a

h a a

tt

v

vi

t

24

SECTION
HOT) S I B IL L

in current funds, and said Federal
reserve bank shall upon notice from
the Federal Reserve Board be re­
quired to suspend said banking as­
sociation or trust company from fur­
ther privileges of membership, and
shall within thirty days of such no­
tice cancel and retire its stock and
make payment therefor in the man­
ner herein provided.

1 0 — Conti nued.
CONFEBENCE AGREEM ENT.

P ASSED B Y SENATE.

thereof, less any liability to said not previously called, which shall be
Federal reserve bank, except the sub­ canceled, ana said Federal reserve
scription liability not previously bank shall, upon notice from the
called, which shall be canceled\ Federal Reserve Board, be required
and said Federal reserve bank to suspend said £ banking association
shall,
upon
notice
from the or trust company ] b a n k from further
Federal Reserve Board, be re­ privileges o f membership, and shall
quired to suspend said banking as­ within thirty days o f such notice
sociation or trust company from cancel and retire its stock and make
further privileges of membership, payment therefor in the manner
and shall within thirty days of such herein provided.
notice cancel and retire its stock
and make payment therefor in
the manner herein provided.

The
The
Federal Reserve Board may restore Federal Reserve Board may restore
membership upon due proof o f com­ membership upon due j>roof o f compliance with the conditions imposed pliance with the conditions imposed
by this section.
oy this section.

SECTION

11.

FEDERAL RESERVE BOARD.

FEDERAL RESERVE BOARD.

FEDERAL RESER VE BOARD.

S e c . 11. That there shall be cre­
ated a Federal Reserve Board,
which shall consist of seven mem­
bers, including the Secretary of the
Treasury, the Secretary of Agricul­
ture, and the Comptroller of the
Currency, who shall be members ex
officio, and four members appointed
by the President of the United
States, by and with the advice and
consent of the Senate. In selecting
the four appointive members of the
Federal Reserve Board, not
18
more than one of whom shall
be selected from any one
Federal reserve district, the Presi­
dent shall have due regard to a fair
representation of different geograph­
ical divisions of the country. The
four members of the Federal Re­
serve Board appointed by the Presi­
dent and confirmed as# aforesaid
shall devote their entire time to the
business of the Federal Reserve
Board and shall each receive an an­
nual salary of $10,000, together with
an allowance for actual necessary
traveling expenses, and the Comp­
troller of the Currency, as ex officio
member of said Federal Reserve
Board, shall, in addition to the sal­
ary now paid him as comptroller, re­
ceive the sum of $5,000 annually for
his services as a member of said
board. Of the four members thus
appointed by the President not more

Sirr. XT 1V J lltV Ullvl U■ Hwll hft
fa fiill— v
ULU. J1 10* L U
BU
U
eyeafeed-a A Federal Reserve Board*
is hereby created which shall consist
of seven members, including the
Secretary of the Treasury, the-See-

S e c . 10. A Federal Reserve Board
is hereby created which shall consist
of seven members, including the Sec­
retary of the Treasury a n d t h e Com p­
t r o l l e r o f t h e C u r r e n c y , who
shall be £ a member m e m b e r s ex
officio, and [ s i x J f i v e members ap­
pointed by the President of the
United States, by and with the ad­
vice and consent of the Senate. In
selecting the £siz J f i v e appointive
members of the Federal Reserve Board,
not more than one of whom shall be
selected from any one Federal reserve
district, the President shall have due
regard to a fair representation of the
different c o m m e r c ia l, i n d u s t r i a l
a n d geographical divisions of the
country. The £ s i x ] f i v e members of
tb°, Federal Reserve Board appointed
by the President and confirmed as
aforesaid shall devote their entire time
to the business of the Federal Reserve
Board and shall each receive an
annual salary of $12,000, p a y a b l e
m o n t h l y , together with actual neces­
sary traveling expenses a n d t h e




shall^ be members a member ex
officio, and feu* six members apointed by the President of the
Fnited States, by and with the ad­
vice and consent of the Senate. In
selecting the fe w six appointive
members of the Federal Reserve
Board, not more than one of whom
shall be selected from any one Fed­
eral reserve district, the President
shall have due regard to a fair rep­
resentation of the different geo­
graphical divisions of the country.
The feu*-si# members of the Federal
Reserve Board appointed by the
President and confirmed as aforesaid
shall devote their entire time to the
business of the Federal Reserve
Board and shall each receive an an­
nual salary of $40^000 $12,000, to­
gether with aft-allewftnee- fo-f actual C o m p t r o l l e r o f t h e C u r r e n c y ,
necessary traveling expenses^—
and AS EX OFFICIO MEMBER OF THE FED­
f V i A i ^ / \ y v i r v f e v /\ l I A i t
tJ U
T lltJ* U ^ K v P n l I I ^I1 V ffclf ERAL R e s e r v e B o a r d , s h a l l , i n
1 t)U v/V
U j i i fG

t

a

I ? a l ia h t t a
ll> v 3 C r V v

ij
v< rl
l>v/lllTUj

c n n l ]
i
a / i H r t 1 /m i
OlIlCtT^- i l l ftu ti ttlT v ll

> nit rvi
a »._ rnnA1 X £_ V r _
|
L_ _ i _ _
kf
T^trrf!TJt)T\7TTt5i ■*-"TtstJv t r c
trrt“
sttu t

A4
k jj

OOP fl nnnfl 1 1 * -- ■ *
T
» 1£1_
C/~ mrInao rt i
v
w il l l l irei I V
i TT ri3~OUTTitJvt3 tv

ADDITION TO THE SALARY NOW PAID
h im a s C o m p t r o l l e r o f t h e C u r ­
r e n c y , RECEIVE THE SUM OF $7,000
ANNUALLY FOR ms SERVICES AS A
MEMBER OF SAID BOARD.

25

SECTION

11 — C o n t i n u e d .
CONFERENCE AGREEM EN T

PASSED B Y SENATE.

HOUSE B ILL .

than two shall be of the same polit­
The members o f said board, the
ical party, and at at least one of Secretary o f the Treasury, the A s­
whom shall be a person experienced sistant Secretary o f the Treasury, and
in banking. One shall be desig­ the Comptroller o f the Currency shall
nated by the President to serve for be ineligible during the time they are
two, one for four, one for six, and in office and fo r two years thereafter
one for eight years, respectively, to hold any office, position, or employ­
and thereafter each member so ap­ ment conferred by any member bank.
pointed shall serve for a term of
eight years unless sooner removed
for cause by the President.
Of
Of the fe w
the four persons thus appointed, six members thus appointed by the
one shall be designated by the Presi­
dent as manager and one as vice
manager of the Federal Reserve at least1e^ -e^ whom too^shajS be**!
Board. The manager of the Fed­
ersons experienced in bank­
eral Reserve Board, subject to the ing or finance. One shall be desig­
supervision of the Secretary of the nated by the President to serve for
Treasury and Federal Reserve two one, one for fe w two, one for
Board, shall be the active execu­ sm three, and one for eight--yeara
tive officer of the Federal Reserve fou r, one fo r five, and one fo r six
Board.
years, yespeefeivelyy and thereafter
each member so appointed shall*
serve for a term of eight six years
unless sooner removed for cause by
the President. Of the fe w six per­
sons thus appointed, one shall be
designated by the President as man­
age** governor and one as vice manaei2governor of the Federal Reserve
►
oard. The manage? governor of
the Federal Reserve Board, subject
to the its supervision ef-the-See**e-

f

The members o f said hoard, the
Secretary o f the Treasury, the A s­
sistant £m
Secretary'J S e c r e t a r ie s o f
the Treasury, and the Comptroller o f
the Currency shall be ineligible dur­
ing the time they are in office and
fo r two years thereafter to hold any
office, position, or employment [ con­
ferred by J i n any member bank.
O f the
[ s i x ] f i v e members thus appointed

by the President at least two shall be
persons experienced in banking or
finance. One shall be designated by
the President to serve fo r \jone, one
/ o r j two, £one fo r three^ one fo r
four, one for (['five, s i x fcaraO one
fo r
j EIGHT, AND ONE FOR TEN
years, and thereafter each member so
appointed shall serve fo r a term o f
[ s t x ] t e n years unless sooner re­
moved fo r cause by the President.
O f the [ s i x ] f i v e persons thus apointed, one shall be designated by the
'resident as governor arid one as vice
governor o f the Federal Reserve Board.
The governor o f the Federal Reserve
Board, subject to its supervision shall
be the active executive officer.

?

executive officer ef-the ■
Fede ral-Re-

19

The Federal Reserve Board
shall have power to levy
semiannually upon the Federal re­
serve banks, in proportion to their
capital stock, an assessment suffi­
cient to pay its estimated expenses
for the naif year succeeding the
levying of such assessment, together
with any deficit carried forward
from the preceding half year.




The Secretary o f the
Treasury may assign offices in the
Department o f the Treasury fo r the
use o f the Federal Reserve Board.
Each member o f the Federal Reserve
Board shall within fifteen days after
notice o f appointment make and sub­
scribe to the oath o f office.
The Federal Reserve Board shall
have power to levy semiannually
upon the Federal reserve banks,
in proportion to their capital stock
and surplus, an assessment sufficient
to pay its estimated expenses and
salaries o f its members and employees
for the half year succeeding the
levying of such assessment, together
with any deficit carried forward
from the preceding half year.

The Secretary o f the
Treasury may assign offices in the
Department o f the Treasury fo r the
use o f the Federal Reserve Board.
Each member o f the Federal Reserve
Board shall within fifteen days after
notice o f appointment make and sub­
scribe to the oath o f office.
The Federal Reserve Board' shall
have power to levy semiannually
upon the Federal reserve banks,
in proportion to their capital stock
ana surplus, mi assessment sufficient
to pay its estimated expenses and t h e
salaries o f its members and employees
fo r the half year succeeding the
levying o f such assessment, together
with any deficit carried forward
from the preceding half year.

26

SECTION

1 1— C o n t i n u e d ,

HOUSE B IL L .

PASSED B Y SENATE.

CONFERENCE AGREEM EN T.

The first meeting of the Federal
Reserve Board shall be held in
Washington, District of Columbia,
as soon as may be after the passage
of this Act, at a date to be fixed by
the Reserve Bank Organization
Committee. The Secretary of the
Treasury shall be ex officio chair­
man of the Federal Reserve Board.
No member of the Federal Reserve
Board shall be an officer or director
of any bank or banking institution
or Federal reserve bank nor hold
stock in any bank or banking insti­
tution; and before entering upon his
duties as a member of the Federal
Reserve Board he shall certify under
oath to the Secretary of the Treas­
ury that he has complied with this
requirement. Whenever a vacancy
shall occur, other than by expira­
tion of term, among the four mem­
bers of the Federal Reserve Board
appointed by the President, as
above provided, a successor shall
be appointed by the President, with
the advice and consent of the Sen­
ate, to fill such vacancy, and when
appointed shall hold office for the
unexpired term of the member
whose place he is selected to fill.

The first meeting of the Federal
Reserve Board shall be held in
Washington, District of Columbia,
as soon as may be after the passage
of this Act, at a date to be fixed by
the Reserve Bank Organization
Committee. The Secretary of the
Treasury shall be ex officio chairman
of the Federal Reserve Board. No
member of the Federal Reserve
Board shall be an officer or director
of any bank, e¥ banking institution,
trust company, or Federal reserve
bank nor hold stock in any bank, e*8
banking institution, or trust com­
pany; and before entering upon his
duties as a member of the Federal
Reserve Board he shall certify under
oath to the Secretary of the Treas­
ury that he has complied with this
requirement. Whenever a vacancy
shall occur, other than by expira­
tion of term, among the fe w six
members of the Federal Reserve
Board appointed by the President,
as above provided, a successor shall
be appointed by the President, with
the advice and consent of the Senate,
to fill such vacancy, and when ap­
pointed he shall hold office for the
unexpired term of the member whose
place he is selected to fill.

The first meeting o f the Federal
Reserve Board shall he held in
Washington, District o f Columbia,
as soon as may he after the passage
o f this A ct, at a date to he fixed by
the Reserve Bank Organization
Committee. The Secretary o f the
Treasury shall be ex officio chairman
o f the Federal Reserve Board. No
member o f the Federal Reserve
Board shall be an officer or director
o f any bank, hanking institution,
trust company, or Federal reserve
bank nor hold stock in any bank,
ba/nking institution, or trust com­
pany; and before entering upon his
duties as a member o f the Federal
Reserve Board he shall certify under
oath to the Secretary o f the Treas­
ury that he has compiled with this
requirement. Whenever a vacancy
shall occur, other than by expira­
tion o f term, among the [ s i x ] f i v e
members o f the Federal Reserve Board
appointed by the President, as above
provided, a successor shall be ap­
pointed by the President, with the
advice and consent o f the Senate, to
fill such vacancy, and when ap­
pointed he shall hold office fo r the
unexpired term o f the member whose
place he is selected to fill.
The President shall have power
to fill all vacancies that may happen
on the Federal Reserve Board during
the recess o f the Senate, by granting
commissions which shall exp in [a t
the end o f ] t h ir t y d a y s a f t e r the
next session of the Senate c o n v e n e s .
Nothing in this Act contained shall
he construed as taking away any
powers heretofore vested by law in the
Secretary o f the Treasury which re­
late to the supervision, management£ , J
and control o f the Treasury Depart­
ment and bureaus under such depart­
ment, and wherever any power vested
by this Act in the Federal Reserve
Board or the Federal reserve agent
appears to conflict with the powers o f
the Secretary o f the Treasury, such
powers shall be exercised subject to
the supervision and control o f the
Secretary.
The Federal Reserve Board shall
annually make a fu ll report o f its
operations to the Speaker o f the
House o f Representatives, who shall
cause the same to be printed fo r the
information o f the Congress.

The President shall have power
to fill all vacancies that may happen
on the Federal Reserve Board during
the recess o f the Senate, by granting
commissions which shall expire at the
end o f the next session o f the Senate.
Nothing in this Act contained shall
he construed as talcing away any
powers heretofore vested hy law in the
Secretary o f the Treasury which re­
late to the supervision, management,
and control o f the Treasury Depart­
ment and bureaus under such depart­
ment, and wherever any power vested
hy this Act in the Federal Reserve
Board or the Federal reserve agent
appears to conflict with the powers o f
the Secretary o f the Treasury, such
powers shall he exercised subject to
the supervision and control o f the
Secretary.

The Federal Reserve Board shall
annually make a report of its
20
fiscal operation to the Speaker
of the House of Repre­
sentatives, who shall cause the
same to be printed for the infor­
mation of the Congress.




The Federal Reserve Board shall
annually make a fu ll report of its
SseaJ- operations to the Speaker of
the House of Representatives, who
shall cause the same to be printed
for the information of the Congress.

27

SECTION
HOUSE B ILL .

Section
three hundred
and
twenty-four of the Revised Statutes
of the United States shall be
amended so as to read as follows:

1 1— C o n t i n u e d .

P ASSED B Y SENATE.

Section three hundred
and
Section three hundred and twentytwenty-four of the Revised Statutes fou r o f the Revised Statutes o f the
of the United States shall be United States shall he amended so
amended so as to read as follows:
as to read as follow s:

There
uThere shall be in the Department
of the Treasury a bureau charged, shall he in the Department o f the
except as in this Act otherwise Treasury a bureau charged with the
provided, with the execution of execution of all laws passed hy Con­
all laws passed by Congress relating gress relating to the issue and regula­
to the issue and regulation of cur­ tion o f national currency secured hy
rency issued by or through banking United States honds and, under the
associations, the chief officer of general supervision o f the Federal
which bureau shall be called the Reserve Board, o f all Federal reserve
Comptroller of the Currency, and notes, the chief officer o f which bureau
shall perform his duties under the shall he called trie Comptroller of the
general direction of the Secretary Currency and shall perform his duties
of the Treasury, acting as the under the general directions f the
chairman of the Federal Reserve Secretary of the Treasury
Board:” Provided, however, That
nothing herein contained shall be
construed to affect any power now
vested by law in the Comptroller
of the Currency or the Secretary
of the Treasury.




CONFERENCE AGREEM ENT.

There shall he in the
Department o f the Treasury a bureau
charged with the execution o f dll laws
passed hy Congress relating to the
issue arid regulation o f national
currency secured by United States
honds and, under the general super­
vision o f the Federal Keserve Board,
o f all Federal reserve notes, the chief
officer o f which bureau shall be
called the Comptroller o f the Cur­
rency and shall perform his duties
under the general directions o f the
Secretary ojf the Treasury.

28

SECTION
HOUSE B ILL.

12.

P ASSED B Y SENATE.

Sec.
11.
The Federal
S e c . 12. That the Federal Re­
serve Board hereinbefore estab­
lished shall be authorized and em­ lished shall be authorized and em­
powered:
powered:
(a) To examine at its discretion
(a) To examine at its discretion
the accounts, books, and affairs of the accounts, books, and affairs of
each Federal reserve bank and to each Federal reserve bank and of
require such statements and reports each member bank and to require
as it may deem necessary. The such statements and reports as it
said board shall publish once each may deem necessary. The said
week a statement showing the con­ board shall publish once each week
dition of each Federal reserve a statement showing the condition
bank and a consolidated of each Federal reserve bank and a
21
statement for alJ Federal consolidated statement for all Fed­
Such state­
reserve banks. Such state­ eral reserve banks.
ments shall show in detail the as­ ments shall show in detail the
sets and liabilities of such Federal assets and liabilities of s«eh the
reserve banks, single and com­ Federal reserve banks, single and
bined, and shall furnish full infor­ combined, and shall furnish full
mation regarding the character of information regarding the charac­
fal money held as
the lawful money held as reserve ter of the lawand the amount, nature, and ma­ reserve and the amount, nature,
turities of the paper owned by and maturities of the paper and
other investments owned or held by
Federal reserve banks.
Federal reserve banks.
(b) To permit or require—
in-time
(b) To permit or require, in time
of emergency, Federal reserve banks ef-eme^geney^ Federal reserve banks
to rediscount the discounted prime to rediscount the discounted p*4me
paper of other Federalreservebanks, gaper^ of other Federal reserve
at least five members of the Federal
Reserve Board being present when
-aet iett-is- fcakef
such action is taken and all present ettfc-w-ke
p ese«fc~ee«sett£ ieg— bhe—
fee—
+econsenting to the requirement. The all— >
exercise of this compulsory redis­ quk-emettfc— The--e^ei‘eise—
e
is
—by
count power by the Federal Reserve
Board shall be subject to an interest Bhe-^edeml-Rese^¥e*44ea-Fd-shail4>e
charge to the accommodated bank SHbjeet-^o-afi-iftfce-Fesfe-ehft^e-te-the
of not less than one nor greater than
-—
three-pe?
three per centum above the higher eee—fte-n—£+eafeei2 than—
of the rates prevailing in the dis­ ee«
Hjbe^e-'fch-e— *£he*5 e#—fche
h
—
*s
ftfce9-p-Fe¥aiHn^-in-fche-disfc-Fiefcs- \mtricts immediately affected.
mediately-a fleeted at rates of interest
to be fixed each week or oftener by the
Federal Reserve Board.
(c) To suspend for a period not (c) To suspend for a period not
exceeding thirty days (and to renew exceeding thirty days, (and from
such suspension for periods not to time to time to renew such suspension
exceed fifteen days) any and every for periods not fee--exceed exceeding
reserve requirement specified in this fifteen days), any afid-eve-Fy reserve
act: Provided, That it shall estab­ requirement- specified in this Act:
lish a graduated tax upon the Provided, That it shall establish a
amounts by which the reserve re­ graduated tax upon the amounts by
quirements of this act may be per­ which the reserve requirements of
mitted to fall below the level herein­ this Act may be permitted to fall
after specified, such tax to be below the level hereinafter speciuniform in its application to
22
all banks; but said board




CONFERENCE AGREEM ENT.

Sec. 11. The
Federal Reserve
Board shall be authorized and em­
powered:
(a)
To examine at its discretion
the accounts,
and affairs o f
each Federal reserve bank and o f
each member bank and to require
such statements and reports as it
may deem necessary.
The said
board shall publish once each week
a statement showing the condition
o f each Federal reserve bank and a
consolidated statement for all Federal
resewe banks. Such statements shall
show in detail the assets and liabilities
o f the Federal reserve banks, single
and combined, and shall furnish
full information regarding the char­
acter o f the money held as reserve
and the amount, nature^ , ] and matur­
ities of the paper and other invest­
ments owned or held by Federal
reserve banks.
(b)

To permit, or, o n

t h e a f f ir m a ­

VOTE OF AT LEAST FIVE MEM­
BERS o f t h e r e s e r v e b o a r d , t o re­

t iv e

quire Federal reserve banks
count the discounted paper
Federal reserve banks at
interest to be fixed f^each
oftener] by the Federal
hoard.

to redis­
of other
rates o f
week or
Reserve

(c)
To suspend for a period not
exceeding thirty days, and from
time to time to renew such suspension
for periods not exceeding fifteen days,
any reserve requirement specified in
this Act: Provided, That it shall extablish a graduated tax upon the
amounts by which the reserve re­
quirements o f this Act may be per­
mitted to fall below the level herein­
after specified.

29

SECTION

PASSED B Y SENATE

HOUSE B ILL .

•shall not suspend the reserve re­
quirements with reference to Fed­
eral reserve notes.
-

12 — C o n t i n u e d .

fee&^d— sk.il! —ftefc-----suspend— the

epe«ee----- to----- Federal----- rese-Fve
ftefces.
And
provided
further,
That when the gold reserve held
against Federal reserve notes falls
below forty per centum, the Federal
Reserve Board shall establish a grad­
uated tax o f not more than one per
centum upon such deficiency until the
reserves fall to thirty-two and one-half
per centum, and when said reserve
falls below thirty-two and one-half
per centum, a tax at the rate increas­
ingly o f not less than one and onehalf per centum upon each two and
one-half per centum or fraction thereof
that such reserve falls below thirtytwo and one-half per centum. The
tax shall be paid by the reserve banlc,
but the reserve bank shall add an
amount equal to said tax to the rates
o f interest and discount fixed by the
Federal Reserve Board.

(d) To supervise and regulate the
issue and retirement of Federal re­
serve notes and to prescribe the
form and tenor of such notes.

(d)

supervise and regulate through the
bureau under the charge o f the Comp­
troller o f the Currency the issue and
retirement o f Federal reserve notes,
and to prescribe rules and regulations
under which such notes may be de­
livered by the comptroller to the Fed­
eral reserve agents applying therefor.

(e) To add to the number of cities
classified as reserve and central re­
serve cities under existing law in
which national banldng associations
are subject to the reserve require­
ments set forth in section twenty of
this act; or to reclassify existing
reserve and central reserve cities
and to designate the banks therein
situated as country banks at its
discretion.

(e) To add to the number of cities
classified as reserve and central re­
serve cities under existing law in
which national banking associations
are subject to the reserve require­
ments set forth in section twenty of
this Act; or to reclassify existing re­
serve and central reserve cities a»d

And provided further.
That when the gold reserve held
against Federal reserve notes falls
below forty per centum, the Federal
Reserve Board shall establish a grad­
uated tax o f not more than one per
centum p e r a n n u m upon such defi­
ciency until the reserves fall to thirtytwo and one-half per centum, and
when said reserve falls below thirtytwo and one-half per centum, a tax
at the rate increasingly o f not less
than one and one-half per centum
per
a n n u m upon each two and
one-half per centum or fraction thereof
that such reserve falls below thirtytwo and one-half per centum. The
tax shall be paid by the reserve banlc,
but the reserve bank shall add an
amount equal to said tax to the rates
o f interest and discount fixed by the
Federal Reserve Board.

(d) To
supervise and regulate through the
bureau under the charge o f the Comp­
troller o f the Currency the issue and
retirement o f Federal reserve notes,
and to prescribe rules and regulations
under which such notes may be de­
livered by the comptroller to the Fed­
eral reserve agents applying therefor.
(e)
To add to the number o f cities
classified as reserve and central re­
serve cities under existing law in
which national banking associations
are subject to the reserve require­
ments set forth in section twenty o f
this A ct; or to reclassify existing re­
serve and central reserve cities or to
terminate their designation as such.

e+et+eft or to terminate their designa­
tion as such.

(f) To suspend the officials of
(f)
Federal reserve banks and, for Federal—*f ..
cause stated in writing with oppor­
tunity of hearing, require the re­
moval of said officials for incom­
petency, dereliction of duty, fraud,
or deceit, such removal to be subject
to approval by the President of the
United States.




CONFERENCE AGREEM ENT.

_ _____

___7 __ _

/in 11CA Of I f A fl
1 r\ _ to i f
_
m i f U rwv
v ttlt“
ou tu rn
i l l *YT T TtTljtjJ "W Ttrt UU

i
-QQ
^ fft
a tn lfi
4 -a
ln /iA tv i
T UiTTUTctl *71 O ct Ttft7Ttru T J B l v I T llW I lI
ctS

3-President
To suspend or
remove any officer or director o f any
Federal reserve bank, the cause o f such
removal to be forthwith communicated
in writing by the Federal Reserve
Board to the removed officer or direc­
tor and to said bank.

(/)
To suspend or remove any
officer or director o f any Federal
reserve bank, the cause o f such
removal to be forthwith communicated
in writing by the Federal Reserve
Board to the removed officer or direc­
tor and to said bank.

30

SECTION

12 — C o n t i n u e d .

P ASSED B Y SENATE.

HOUSE B ILL.

(g) To require the writing off of
doubtful or worthless assets upon
the books and balance sheets of
Federal reserve banks.
(h) To suspend, for cause relating
to violation of any of the provisions
of this act, the operations of any
Federal reserve bank and appoint a
receiver therefor.

CONFERENCE AGREEM ENT

(g) To require the writing off of
(g) To require the writing off of
doubtful or worthless assets upon doubtful or worthless assets upon
the books and balance sheets of Fed­ the books and balance sheets o f Fed­
eral reserve banks.
eral reserve banks.
(h) lb suspend, fo r £ cause relating
(h) To suspend, for cause relating
to violation of any of the provisions t o ] t h e violation of any o f the provi­
of this Act. the operations of any sions o f this Act, the operations o f any
Federal reserve bank and appeiftfc-a Federal reserve bank, £ and J t o take
'Feeeive+’-the-pefe* take possession possession thereof, £ and J administer
thereof ami administer the same dur­ the same during the period o f suspension, a n d , w h e n d e e m e d a d ­
ing the period o f suspension .
v is a b l e ,

(i) To perform the duties, func­
tions, or services specified or im­
plied in this Act.

_

—63-2—vol 25-




-12

to

o r g a n iz e

SUCH BANK.

l iq u id a t e

or

re­

(i)
To require bonds o f Federal re- (i) To require bonds o f Federal re­
serve agents, perform the duties, serve agents, t o m a k e r e g u l a t io n s
functions, or services specified or im­ FOR THE SAFEGUARDING OF ALL
plied in this Act, and to make all COLLATERAL, BONDS, FEDERAL RE­
rules and regulations necessary to en­ SERVE NOTES, MONEY OR PROPERTY
able said boa/rd effectively to perform OF ANY KIND DEPOSITED IN THE
HANDS OF SUCH AGENTS, AND SAID
the same.
b o a r d s h a l l perform the duties,
functions, or services specified [o r
implied] in this Act, and £fa>] make
all rules and regulations necessary to
enable said board effectively to perform
the same.
(j) To exercise general supervision
(j) To exercise general supervision
over said Federal reserve banks.
over said Federal reserve banks.
£ (k) To authorize member banks to
(k) To authorize member banks to
use, as reserves, Federal reserve notes, use, as reserves, Federal reserve notes,
or bank notes based on United States or bank notes based on United States
bonds, to the extent that said board bonds, to the extent that said board
may find necessary. ]
may find necessary.
(h To grant by special permit to
£ (I) 3 (k ) To grant by special permit
national banlcs applying therefor, to national banks applying therefor,
when not in contravention o f State or when not in contravention o f State or
local law, the right to act as trustee, local law. the right to act as trusteef
executor, administrator, or registrar o f executor, administrator, or registrar o f
stocks ami bonds under such rules and stocks and bonds under such rules arid
regulations as the said board may regulations as the said board may
prescribe.
prescribe.
(m) To employ such attorneys, ex­
£ (m) J ( l ) T o employ such attorneys,
perts, assistants, clerks, or other em­ experts, assistants, clerks, or other em­
ployees as may be deemed necessary ployees as may be deemed necessary
to properly conduct the business of to £ properly] conduct the business o f
such board, and to accomplish the [such ] t h e board[, and to accomplish
purposes o f this Act. All salaries, the purposes of this A ct]. All salaallowances, and expenses o f those r ie s [, allowances,and expenses o f those
employed to be fixed in advance hy employed f o j a n d f e e s s h a l l be
said board and to be paid in the same fixed in advance by said board and
manner as the salaries o f the members [t o ] s h a l l he paid in the same man­
o f mid board. All such attorneys, ner as the salaries o f the members o f
experts, assistants, clerks, and other said hoard. All such attorneys, ex­
employee,y to be appointed without perts, assistants, clerks, and other
regard to the provisions o f the Act of employees [ t o ] s h a l l be appointed
Januanj sixth, eighteen hundred and without regard to the provisions o f the
eighty-three ( Twenty-second Revised Act o f January [s ix th ] s i x t e e n t h ,
Statutes, four hundred and three), eighteen hundred and eighty-three
and amendments thereto, or any rule {[Twenty-second Revised Statutes,]
or regulation made in pursuance VOLUME TWENTY - TWO, UNITED
thereof: Provided, That nothing here­ STATES s t a t u t e s a t l a r g e , p a g e
in shall prevent the President from fou r hundred and three), and amend­
flacing said employees in the class­ ments thereto, or any rule or regula­
ified service.
tion made in pursuance thereof: Pro­
vided, That nothing herein shall pre­
vent the President from placing said
employees in the classified service.

31

SECTION
HOUSE B ILL.

23

FEDERAL ADVISORY COUNCIL.

Sec . 13. There is hereby created
a Federal Advisory Council, which
shall consist of as many members
as there are Federal reserve dis­
tricts. Each Federal reserve bank
by its board of directors shall annu­
ally select from its own Federal re­
serve district one member of said
council, who shall receive no com­
pensation for his services, but may
be reimbursed for actual necessary
expenses.

The meetings of said
advisory council shall be held at
Washington, District of Columbia,
at least four times each year, and
oftener if called by the Federal
Reserve Board. The council may
select its own officers and adopt its
own methods of procedure, and a
majority of its members shall con­
stitute a quorum for the transaction
of business. Vacancies in the coun­
cil shall be filled by the respective
reserve banks, and members se­
lected to fill vacancies shall serve
for the unexpired term.

The Federal Advisory Council
shall have power (1) to meet and
confer directly with the Federal
Reserve Board on general business
conditions; (2) to make oral or
written representations concerning
matters within the jurisdiction of
said board; (3) to call for complete
information and to make recom­
mendations in regard to discount
rates, rediscount business, note is­
sues, reserve conditions in the va­
rious districts, the purchase and
sale of gold or securities by reserve
banks, open-market operations, by
said bank:s, and the general affairs
of the reserve banking system.




13.

PASSED B Y SENATE.

CONFERENCE AGREEM ENT.

FEDERAL ADVISORY COUNCIL.

FEDERAL ADVISORY COUNCIL.

Sec . 13 12. There is hereby cre­
ated a Federal Advisory Council,
which shall consist of as many
members as there are Federal re­
serve districts. Each Federal re­
serve bank by its board of directors
shall annually select from its own
Federal reserve district one member
of said council, who shall receive

S e c . 12. There is hereby created a
Federal Advisory Council, which
shall consist o f as many members as
there are Federal reserve districts.
Each Federal reserve banlc by its
board of directors shall annually
select from its own Federal reserve
district one member o f said council,
who shall receive such compensation
and allowances as may be fixed by
his board o f directors subject to the
approval of the Federal Reserve
Board.

tion and allowances as may he fixed
by his board o f directors subject to the
approval o f the Federal Reserve
Board.
The meetings of said ad­
visory council shall be held at Wash­
ington, District of Columbia, at least
four times each year, and oftener if
called by the Federal Reserve
Board. The council may in addi­
tion to the meetings above provided for
hold such other meetings in Washing­
ton, District of Columbia, or else­
where, as it may deem necessary, may
select its own officers and adopt its
own methods of procedure, and a
majority of its members shall con­
stitute a quorum for the transaction
of business. Vacancies in the coun­
cil shall be filled by the respective
reserve banks, and members selected
to fill vacancies shall serve for the
unexpired term.
The Federal Advisory Council
shall have power, by itself or through
its officers, (1) to meefe nd confer
-^
directly with the Federal Reserve
Board on general business condi­
tions; (2) to make oral or written
representations concerning matters
within the jurisdiction of said
board; (3) to call for eemplete
information and to make recom­
mendations in regard to dis­
count rates, rediscount business,
note issues, reserve conditions in
the various districts, the purchase
and sale of gold or securities by
reserve banks, open-market opera­
tions by said banks, and the general
affairs of the reserve banking sys­
tem.

The meetings o f said ad­
visory council shall be held at Wash­
ington, District of Columbia, at least
four times each year, and oftener i f
called by the Federal Reserve
Board. The council may in addi­
tion to the meetings above provided for
hold such other meetings in Washing­
ton7 District o f Columbia, or else­
where, as it may deem necessary, may
select its own officers and adopt its
own methods of procedure, and a
majority of its members shall con­
stitute a quorum fo r the transaction
o f business. Vacancies in the coun­
cil shall be filled by the respective
reserve banks, and members selected
to fill vacancies, shall serve fo r the
unexpired term .
The Federal Advisory Council
shall have power, by itself or through
its officers, (1) to confer directly with
the Federal Reserve Board on general
business conditions; (2) to make oral
or written representations concerning
matters within the jurisdiction o f said
board; (3) to call for information and
to make recommendations in regard to
discount rates, rediscount business,
note issues, reserve conditions in the
various districts, the purchase and
sale of gold or securities by reserve
banks, open-market operations by
said banks, and the general affairs
o f the reserve banking system.

32

SECTION
HOUSE BILL,

24

REDISCOUNTS.

14

PASSED B Y SENATE.
f t f l B f S 9 0 UNTS POWERS

OF

FEDERAL

RESERVE BAN KS.

Sec . 14. That any Federal reserve
Sec . 14 IS. That-aey Any Fed­
bank may receive from any member eral reserve bank may receive from
bank deposits of current funds in any of its member bank hanks, and
lawful money, national bank notes, from the United States, deposits of
Federal reserve notes, or checks current funds in lawful money,
and drafts upon solvent banks, pay­ national-bank notes, Federal re­
able upon presentation; or, solely serve notes, or checks and drafts
for exchange purposes, may receive upon solvent banks of the Federal
from other Federal reserve banks reserve system, payable upon pres­
deposits of current funds in lawful entation; or, solely for exchange
money, national bank notes, or purposes, may receive from other
checks and drafts upon solvent Federal reserve banks deposits of
banks, payable upon presentation. current funds in lawful money,
national-bank notes, or checks and
drafts upon solvent member or other
Federal reserve banks, payable upon
presentation.
Upon the indorsement of any
Upon the indorsement of any of
member bank any Federal reserve its member bask hanks, with a
bank may discount notes and bills waiver of demand notice and protest
of exchange arising out of com­ hy such hank any Federal reserve
mercial transactions; that is, notes bank may discount notes, drafts,
and bills of exchange issued or and bills of exchange arising out of
drawn for agricultural, industrial, or actual commercial transactions; that
commercial purposes, or the proceeds is, notes, drafts, and bills of ex­
of which have been used, or may change issued or drawn for agri­
be used, for such purposes, the Fed­ cultural, industrial, or commercial
eral Reserve Board to have the right purposes, or the proceeds of which
to determine or define the charac­ nave been used, or may are to
ter of the paper thus eligible for be used, for such purposes, the
discount, within the meaning of this Federal Reserve Board to have
Act; nothing herein contained shall the right to determine or define
be construed to prohibit such notes the character of the paper thus
and bills of exchange, secured by eligible for discount, within the
staple agricultural products, or other meaning of this Act-*—nothing
goods, wares, or merchandise from herein. Nothing in this Act con­
being eligible for such discount; but tained shall be construed to pro­
such definition shall not include hibit such notes, drafts, and bills of
notes or bills issued or drawn for exchange, secured by staple agri­
the purpose of carrying or tracing cultural products, or other goods,
in stocks, bonds, or other invest­ wares, or merchandise from being
ment securities. Notes and bills eligible for such discount; but sucn
admitted to discount under the definition shall not include notes,
terms of this paragraph must have drafts, or bills covering merely in­
a maturity of not more than ninety vestments or issued or drawn for the
days.
purpose of carrying or trading in
stocks, bonds, or other investment
securities, except bonds and notes of
the Government of the United States.
Notes, drafts, and bills admitted to
discount under the terms of this
paragraph must have a maturity
at the time of discount of not more
than ninety days: Provided, That
notes, drafts\ and hills drawn or
issued fo r agricultural purposes or
hased on live stock' and having a ma­
turity not exceeding six months may
he discounted in an amount to he
limited to a percentage o f the capital
o f the Federal reserve hank, to he as­
certained and fixed hy the Federal
Reserve Board.



CONFERENCE A G R E E M E N !
PO WERS OF FEDERAL RESER VM
BANKS.

Sec. IS. Any Federal reserve hank
may receive from any o f its member
hanks, and from the United States,
deposits of current funds in lawful
money, national-bank notes, Federal
reserve notes, or checks and drafts
upon solvent member banks £ o / the
Federal reserve system J, payable upon
presentation; or, solely for exchange
purposes, may receive from other Fed­
eral reserve banks deposits o f current
funds in lawful money, national-bank
notes, or checks and drafts upon
solvent member or other Federal re­
serve banks, payable upon presenta­
tion.
Upon the indorsement o f any o f
its member banks, with a waiver o f
demand, notice and protest by such
bank, any Federal reserve bank may
discount notes, drafts, and hills o f
exchange arising out o f actual com­
mercial transactions; that is, notes,
drafts, and bills o f exchange issued or
drawn for agricultural, industrial,
or commercial purposes, or the pro­
ceeds of which have been used,
or are to be used, for such
purposes, the Federal Reserve Board
to have the right to determine or
define the character o f the paper
thus eligible for discount, within the
meaning o f this Act. Nothing in
this Act contained shall be construed
to prohibit such notes, drafts, and
bills of exchange, secured by staple
agricultural products, or other goods,
wares, or merchandise from being
eligible fo r such discount; but such
definition shall not include notes,
drafts, or bills covering merely invest­
ments or issued or drawn fo r the
purpose o f carrying or trading in
stocks, bonds, or other investment
securities, except bonds and notes o f
the Government o f the United States.
Notes, drafts, and bills admitted to
discount under the terms o f this
paragraph must have a maturity
at the time o f discount of^ not more
than ninety days: Provided, That
notes, drafts, and bills drawn or
issued, for agricultural purposes or
based on live stock and having a ma­
turity not exceeding six months may
be discounted in an amount to he
limited, to a percentage of the capital
o f the Federal reserve hank, to he as­
certained and fixed hy the Federal
Reserve Board.

33

SECTION

14 — C o n t i n u e d .

PASSED B Y SENATE.

HOUSE B ILL.

Upon the indorsement of
any member bank any Fed­
eral reserve bank may discount the
paper of the classes hereinbefore de­
scribed having a maturity of more
than ninety and not more than one
hundred and twenty days, when its
own cash reserve exceeds thirtybtetal-eutstandthree and one-third per cent of its
exeiusive-ef
total outstanding demand liabilities
exclusive of its outstanding Federal
reserve notes by an amount to be
fixed by the Federal Reserve Board;
but not more than fifty per cent of
the total paper so discounted for any pape^-se-diseeunfced-le-Fmember bank shall have a maturity bajBb-shall-hftve-ft-ffifttoity-el-Hie-Fe
of more than ninety days.
Upon—the—*nderseffient--e£-ftny;
Upon the indorsement of any
member bank any Federal reserve member—bank—any Any Federal
bank may discount acceptances of reserve bank may discount accept­
such banks which are based on the ances of—sm b—banks which are
exportation or importation of goods based on the expeFtatien-e*2impor­
and which mature in not more than tation or exportation or domestic
six months and bear the signature shipment of goods and which ffl&fewe
of at least one member bank in ad­ in liave a maturity at time of discount
dition to that of the acceptor. The of not more than six three months,
amount so discounted shall at no and bea?-the~signatee-el indorsed
time exceed one-half the capital by at least one member bank in-addi.
stock of the bank for which the re­ fcien-te-fehafc-el-the-aeeepfce*1 The
amount o f acceptances so discounted
discounts are made.
shall at no time exceed one-half the
paid-up capital stock and surplus
of the bank for which the rediscounts
are made.
The aggregate of such notes and
The aggregate of such notes and
bills bearing the signature or in­ bills bearing the signature or in­
dorsement of any one person, com­ dorsement of any one person, com­
pany, firm, or corporation redis­ pany, firm, or corporation redis­
counted for any one bank shall at counted for any one bank shall at
no time exceed ten per centum of no time exceed ten per centum of
the unimpaired capital and surplus the unimpaired capital and surplus
of said bank; but this restriction of said bank; but this restriction
shall not apply to the discount of shall not apply to the discount of
bills of exchange drawn in good bills of exchange drawn in good
faith against actually existing faith against actually existing val­
values.
ues.
26
Any national bank may,
Any national bank may—at-its
at its discretion, accept dise-petiee? accept drafts or bills of
drafts or bills of exchange drawn exchange drawn upon it having-set
ci
r
ifk n
o nm
^
upon it having not more than six n t t/M' t ^ u n t t ir rTV Am nv Tn u n lT s__r li t t cft rf r t iy»nr\
TT
fT '" iu
x
ll
months sight to run and growing and growing out of transactions
out of transactions involving the involving the importation, e* expor­
importation or exportation of goods; tation, or domestic shipment of goods
but no bank shall accept such bills having not more than six months
to an amount equal at any time in sight to run; but no bank shall ac­
the aggregate to more than one-half cept such bills to an amount equal
the face value of its paid-up and un­ at any time in the aggregate to
impaired capital.
more than one-half the-feee-vatoe
ef its paid-up and—en impaired
capital stock and surplus.

CONFERENCE AGREEM EN T

25

yyi

Section fifty-two hundred and
two of the Revised Statutes of the
United States is hereby amended so
as to read as follows: No associa


ia

Section fifty-two hundred and
two of the Revised Statutes of the
United States is hereby amended
so as to read as follows: No

Any Federal reserve bank may dis­
count acceptances which are based on
the importation or exportation o f
goods and which have a maturity at
time o f discount o f not more than three
months, and indorsed by at least
one member bank. The amount o f
acceptances so discounted shall at no
time exceed one-half the paid-up capi­
tal stock and surplus o f the bank fo r
which the rediscounts are made.

The aggregate o f such notes and
bills bearing the signature or indorse­
ment o f any one person, company,
firm, or corporation rediscounted fo r
any one bank shall at no time exceed
ten per centum o f the unimpaired
capital and surplus o f said bank; but
this restriction shall not apply to the
discount o f bills o f exchange drawn
in good faith against actually existing
values.
Any £ national^ member bank
may accept drafts or bills of exchange
drawn upon it and growing out o f
transactions involving the importa£ion£, J o r exportation£, or domestic
shipment"J of goods having not more
than six months sight to run; but no
bank shall accept such bills to an
amount equal at any time in the
aggregate to more than one-half its
paid-up capital stock and surplus.

Section fifty-two hundred and
two o f the Revised Statutes o f the
United States is hereby amended
so as to read as follows: No

84

SECTION

1 4 - Continued.

PASSED B Y SENATE

HOUSE BILL.

tion shall at any time be indebted association shall at any time be in­
or in any way liable, to an amount debted, or in any way liable, to an
exceeding the amount of its capital amount exceeding the amount of its
stock at such time actually paid in capital stock at such time actually
aid in and remaining undiminished
and remaining un diminished by
y losses or otherwise, except on
losses or otherwise, except on ac­
count of demands of the nature fol­ account of demands of the nature
following:
lowing:
First. Notes of circulation.
First. Notes of circulation.
Second. Moneys deposited with
Second. Moneys deposited with
or collected by the association.
or collected by the association.
Third. Bills of exchange or drafts
Third. Bills of exchange or drafts
drawn against money actually on drawn against money actually on
deposit to the credit of the associa­ deposit to the credit of the associa­
tion, or due thereto.
tion, or due thereto.
Fourth. Liabilities to the stock­
Fourth. Liabilities to the stock­
holders of the association for divi­ holders of the association for divi­
dends and reserve profits.
dends and reserve profits.
Fifth. Liabilities incurred under
Fifth. Liabilities incurred under
the provisions of sections two, five, the provisions of
and fourteen of the Federal reserve
this Act.
Act.
The Federal Reserve Board may
authorize the reserve bank of the
district to discount the direct obliutions of member banks, secured
1y the pledge and deposit 0/ satis­
factory securities; but in no case
shall the amount so loaned by a
Federal reserve bank exceed threefourths' of the actual value o f the
securities so pledged.
The rediscount by any F'ederal
reserve bank of any bills receivable
ami o f domestic and foreign bills
o f exchange and acceptances shall
be subject to such restrictions} limi­
tations, arid regulations as may
be imposed by the Federal Reserve
Board.

E

SECTION
27

OPEN-MARKET OPERATIONS.

S e c . 15. That any Federal reserve
bank may, under rules and regula­
tions prescribed by the Federal Re­
serve Board, purchase and sell in
the open market, either from or to
domestic or foreign banks, firms,
corporations, or individuals, prime
bankers’ bills, and bills of exchange
of the kinds and maturities by this
Act made eligible for rediscount,
and cable transfers.

Every Federal reserve bank shall
have power (a) to deal in gold coin
and bullion both at home and
abroad, to make loans thereon,
and to contract for loans of gold
coin or bullion, giving therefor,




CONFERENCE AGREEM ENT

national banking association shall at
any time be indebted, or in any way
liable, to an amount exceeding the
amount o f its capital stock at such
time actually paid in and remaining
undiminished by losses or otherwise,
except on account o f demands o f the
nature following:
First. Notes o f circulation.
Second. Moneys deposited with or
collected by the association.
Third. Bills o f exchange or drafts
drawn against money actually on
deposit to the credit o f the association,
or due thereto.
Fourth. Liabilities to the stock­
holders o f the association fo r divi­
dends and reserve profits.
Fifth. Liabilities incurred under
the provisions offth is J t h e F e d e r a l
R e s e r v e Act.
t Th e Federal Reserve Board may
authorize the reserve bank o f the
district to discount the direct obliga­
tions o f member banks, secured by
the pledge and deposit o f satisfactory
securities; but in no case shall the
amount so loaned by a Federal re­
serve bank exceed three-fourths o f the
actual value o f the securities so
pledged.J
The rediscount by any Federal
reserve bank o f any bills receivable
and o f domestic and foreign bills
o f exchange, and o f acceptances
AUTHORIZED BY THIS ACT, shall
be subject to such restrictions, limi­
tations, and regulations as may be
imposedbythe Federal Reserve Board.

15.

OPEN-MARKET OPERATIONS.

O PEN -M ARKET OPERA TIONS

S e c . 4e 14 . That—
any Any Fed­
eral reserve bank may, under rules
and regulations prescribed by the
Federal Reserve Board, purchase
and sell in the open market, at
home or abroad, either from or to
domestic or foreign banks, firms,
corporations, or individuals,
cable transfers and banket's’ bills
acceptances and bills of exchange of
the kinds and maturities by this
Act made eligible for rediscount*
ftftd-e&kle-fc-Pftnsfe^FS with or without
the indorsement o f a member bank.
Every Federal reserve bank shall
have power: (a) to deal in gold coin
and bullion both at home and or
abroad, to make loans thereon, ex­
change Federal reserve notes fo r gold,
gold coin, or gold certificates, and to

S e c . 1 4 . Any Federal reserve bank
may, under rules and regulations
prescribed by the Federal Reserve
Board, purchase and sell in the open
market, at home or abroad, either
from or to domestic or foreign banks,
firms, corporations, or individuals,
cable transfers and bankers1 accep­
tances and bills o f exchange o f the
kinds and maturities by this Act
made eligible for rediscount, with or
without the indorsement o f a member
bank.

Every Federal reserve bank shall
have power: (a) to deal in gold coin
and bullion at home or abroad, to
make loans thereon, exchange Fed­
eral reserve notes fo r gold, gold
coin, or gold certificates, and to con-

35

SECTION
HOUSE B ILL.

15 — Continued.

PASSED B Y SENATE.

contract for loans of gold coin or
bullion, giving therefor, when nec­
essary, acceptable security, includ­
ing the hypothecation of United
States bonus or other securities which,
Federal reserve banks are authorized
United States bonds; (b) to invest to hold; (b) to iwestrin buy and sell,
in United States bonds, and bonds at home or abroad, bonds ami notes of
issued hy any State, county, dis­ the United States bends, and bends
*38ned- hy--any---State—eeunty^-dlstrict, or municipality;
tf
F~-m«nieip&l ifcy bills, notes,
revenue bonds, and warrants with
a maturity from date of pur­
chase of not exceeding six months,
issued in anticipation of the col­
lection of taxes or in anticipation
of ike receipt of assured revenues by
any State, county, district. political
suodimsion, or municipality in the
continental United States, such pur­
chases to be made in accordance with
rules and regulations prescribed by
the Federal R esale Board;
(c) to pur­
(c) to
chase from member banks and to purchase from member banks and
sell, with or without its indorse­ to sell, with or without its indorse­
ment, bills of exchange arising out ment, bills of exchange arising out
of commercial transactions, as here­ of commercial transactions, as hereinbefore defined, payable in for­ inbef o re * of hied-payable-in-foFc ign
!
eign countries; but such bills of
ex-eeeding—
ninety
exchange must have not exceeding m«9t—ha?¥e—net—
f ln - r lY
)
4’>
h
ninety days to run and must bear ttlty5rt3“ x t i l l cUllu d llxTlijtJ UUtti u l- £T . A . - Q 1
the signature of two or more re­ naWFe-el-fcwe^F-mei-e-respensifele
sponsible parties, of which the last p:H-t fes,-ef-whieh-»the-4ftst~skaH-be
-member-banfe: (d) to esshall be that of a member bank; fcka
(d) to establish each week, or as ta b lish. eaeb—week;—e*—as—m«eb
much oftener as required, subject efte**e-F-as-FequiFed^/mm time to time,
to review and determination of the subject to review and determina­
Federal Reserve Board, a rati4 of tion of the Federal Reserve Board,
discount to be charged by such ft-mte rates of discount to be charged
bank for each class of paper, which by Httek the. Federal reserve bank for
shall be fixed with a view of accom­ each class of paper, which shall be
modating the commerce of the fixed with a view of accommodating
the commerce ef-the-eenntFy and
country; and
(e) with the business; and (e) to establish ac­
28
consent of the Federal Re­ counts with other Federal reserve
serve Board, to open and banks fo r exchange purposes and,
maintain banking accounts in for­ with the consent ot the Federal
eign countries and establish agen­ Reserve Board, to open and main­
cies in such countries wheresoever tain banking accounts in foreign
it may deem best for the purpose countries, appoint correspondents,
of purchasing, selling, and collect­ and establish agencies in such coun­
ing foreign bills of exchange, and to tries wheresoever it may deem best
buy and sell with or without its for the purpose of purchasing,
indorsement, through such corre­ selling, and collecting £e**eig»
spondents or agencies, prime for­ bills of exchange, ana to buy
eign bills of exchange arising out of and sell with or without its
commercial transactions which have- indorsement, through such corre­
not exceeding ninety days to run spondents or agencies, pFkne-fe*5
and which bear the signature of eign bills of exchange arising out of
actual
commercial
transactions
two or more responsible parties.
which have not exceeding more
than ninety days to run and which
bear the signature of two or more
responsible parties.

when necessary, acceptable security,
including the hypothecation of




CONFERENCE AGREEM ENT.

tract for loans o f gold coin or bul­
lion, giving therefor, when neces­
sary, acceptable security, including
the hypothecation o f United States
bonds or other securities which Fed­
eral reserve banks are authorized
to hold; (b) to buy and sell, at
home or abroad, bonds and notes of
the United States, and bills, notes,
revenue bonds, and warrants with
a maturity from date o f purchase
of not exceeding six months, issued
in anticipation o f the collection
o f taxes or in anticipation o f the
receipt o f assured revenues by any
State, county, district, political sub­
division, or municipality in the
continental United States, in c l u d in g
IRRIGATION, DRAINAGE AND RECLA­
MATION d is t r ic t s , such purchases

to be made in accordance with rules
and regulations prescribed by the
Federal Reserve Board;
(c) to
purchase from member banks and to
sell, with or without its indorsement,
bills o f exchange arising out o f com­
mercial transactions, as hereinbefore

defined; (d) to establish from time to
time, subject to review and determina­
tion o f the Federal Remew Board,
rates of discount to be charged by the
Federal reserve bank fo r each class
o f paper, which shall be fixed with a
vie w of accommodating commerce and

business; (e) to establish accounts
'with other Federal reserve banks for
exchange purposes and, with the con­
sent o f the Federal Reserve Board, to
open and maintain banking accounts
in foreign countries, appoint corre­
spondents, and establish agencies in
such countries loheresoever it may
deem best for the purpose of pur­
chasing, selling, and collecting bills
o f exchange, and to buy and
sell unth or without its indorse­
ment, through such correspondents or
agencies, bills of exchange arising out
of actual commercial transactions
which have not more than ninety days
to run and which bear the signature o f
two or more responsible parties.

86

SECTION

16.

HOtTSE B ILL .

PASSED B Y SENATE.

CONFERENCE AGREEM ENT.

GOVERNMENT DEPOSITS.

GOVERNMENT DEPOSITS.

G VERNM
O
ENTDEPOSITS.

S e c . 16. That all moneys now
held in the general fund of the
Treasury except the five per centum
fund for the redemption of outstand­
ing national-bank notes shall, upon
the direction of the Secretary of the
Treasury, within twelve months
after tlie passage of this Act, be
deposited in Federal reserve banks,
which banks shall act as fiscal agents
of the United States; and thereafter
the revenues of the Government
shall be regularly deposited in such
banks, and disbursements shall be
made by checks drawn against such
deposits.

The Secretary of the Treasury
shall, subject to the approval of the
Federal Reserve Board, from time
to time, apportion the funds of the
Government among the said Federal
reserve banks, distributing them, as
far
as
practicable,
equitably
between different sections, and
may, at their joint discretion, charge
interest thereon and fix, from
29
month to month, a rate
which shall be regularly paid
by the banks holding such deposits :
Provided, That no Federal reserve
bank shall pay interest upon any
deposits except those of the United
States.
No Federal reserve bank shall
receive or credit deposits except
from the Government of the United
States, its own member banks, and,
to the extent permitted by this Act ,
from other Federal reseive banks.
All domestic transactions of the
Federal reserve banks involving
loans made by such banks, redis­
count operations or the creation of
deposit accounts shall be confined to
the Government and the depositing
and Federal reserve banks, with the
exception of the purchase or sale of
Government or State securities or
of gold coin or bullion.




Sec. 15. The moneys held in the
Se c.
15. Thafc- all The moneys
new held in the general fund of the general fund o f the Treasury, except
Treasury, except the five per centum the five per centum fund fo r the re­
fund for the redemption of out­ demption o f outstanding nationalstanding national-bank notes and bank notes and the funds provided in
the fund$ provided in this Act fo r this Act fo r the redemption oj Federal
the redemption o f Federal reserve reserve notes may, upon the direction
notes shall may, upon the direction o f the Secretary o f the Treasury, be
of the Secretary of the Treasury, deposited in Federal reserve banks,
which banks, when required by the
be deposited in Secretary of the Treasury, shall act as
Federal reserve banks, which banks fiscal agents o f the United States;
shall, -when required by the Secretary and the revenues of the Government or
of the Treasury, shall act as fiscal any part thereof may be deposited in
agents of the United States; and such banks, and disbursements may
fche-rea&e* the revenues of the Gov­ be made by checks drawn against such
ernment or any part thereof shall deposits.
may be regularly deposited in such
banks, and disbursements shall may
be made by checks drawn against
such deposits.
No public funds of the Philippine
No public funds of the Philippine
Islands, or o f the postal savings, or Islands, or of the postal savings, or
any Government funds, shall be de­ any Government funds, shall be de­
posited in the continental United posited in the continental United
States in any bank not belonging to States in any bank not belonging to
the system established by this Act: the system established by this A ct:
Provided, however, That nothing in Provided, however, That nothing in
this Act shall be construed to deny this Act shall be construed to deny
the right o f the Secretary o f the the right of the Secretary of the
Treasury to use member banks as Treasury to use member banks as
depositories.
depositories.

Stefce-9ee*H4fcieshef*-e£-geW-eeift-ep
UttTT t v R 0

HOD S I BILL.
NOTE ISSUES,

Sec . 17. That Federal reserve
notes, to be issued at the discretion
of the Federal Reserve Board for
the purpose of making advances to
Federal reserve banks as hereinafter
set forth and for no other purpose,
are hereby authorized. The said
notes shall be obligations of the
United States and shall be receiva­
ble for all taxes, customs, and other
public dues. They shall be re­
deemed in gold or lawful money on
demand at the Treasury Depart­
ment of the United States, in the
city of Washington, District of
Columbia, or at any Federal reserve
bank.

30

Any Federal reserve bank
may, upon vote of its direc­
tors, make application to the local
Federal reserve agent for such
amount of the Federal reserve notes
hereinbefore provided for as it may
deem best. Such application shall
be accompanied with a tender to the
local Federal reserve agent of col­
lateral in amount equal to the sum
of the Federal reserve notes thus ap­
plied for and issued pursuant to
such application. The collateral se­
curity thus offered shall be notes and
bills accepted for rediscount under
the provisions of section 14 of this
Act, and the Federal reserve agent
shall each day notify the Federal
Reserve Board of issues and with­
drawals of notes to and bv the Fed­
eral reserve bank to which he is ac­
credited. The said Federal Reserve
Board shall be authorized at any
time to call upon a Federal reserve
bank for additional security to pro
tect the Federal reserve notes issued
to it.




PASSED B Y SENATE.
note

is s u e s .

S e c . i % 16. Thafc Federal reserve
notes, to be issued at the discretion
of the Federal Reserve Board for
the purpose of making advances to
Federal reserve banks through the
Federal reserve agents as herein­
after set forth and for no other
purpose,
are
hereby
author­
ized The said notes shall be obli­
gations of the United States and
shall be receivable by all national
and 'member banks and Federal re­
serve banks and for all taxes, cus­
toms, and other public dues.
They shall be redeemed in gold e?
towfal-HSfteifrey on demand at the
Treasury Department of the United
States, in the city of Washington
District of Columbia, or in gold or
lawful money at any Federal reserve
bank.
Any Federal reserve bank may*
make
application to the local Federal re­
serve agent for such amount of the
Federal reserve notes hereinbefore
provided for as it may deem—
besfc
require. Such application shall be
accompanied with a tender to the
local 1 ederal reserve agent of col­
lateral in amount equal to the sum
of the Federal reserve notes thus
applied for and issued pursuant to
such application. The collateral
security thus offered shall be notes
and bills accepted for rediscount
under the provisions of section
IS of this act, and the Federal re­
serve agent shall each day notify
the Federal Reserve Board of aU
issues and withdrawals of Federal
reserve notes to and by the Federal
reserve bank to which he is accred­
ited. The said Federal Reserve
Board shall be authorized at any
time to call upon a Federal reserve
bank for additional security to pro­
tect the Federal reserve notes issued
to it.

CONFERENCE AGREEM ENT.
NOTE ISSUES.

Sec. 16. Federal reserve notes, to
be issued at the discretion o f the
Federal Reserve Board fo r the
purpose o f making advances to
Federal reserve banlcs through the
Federal reserve agents as herein­
after set forth and fo r no other
purpose,
are
hereby
author­
ized. The said notes shall be obli­
gations o f the United States and
shall be receivable by all national
and member banks and Federal
reserve banlcs and fo r all taxes}
customs, and other public dues.
They shall be redeemed in gold on
demand at the Treasury Department
o f the United States, in the city o f
Washington, District o f Columbia,
or in gold or lawful money at any
Federal reserve bank.
Any Federal reserve bank may
make application to the local Fed­
eral reserve agent fo r such amount
o f the Federal reserve notes herein­
before provided for as it may
require. Such application shall be
accompanied with a tender to the
local Federal reserve agent o f col­
lateral in amount equal to the sum
o f the Federal reserve notes thus
applied for and issued pursuant to
such application.
The collateral
security thus offered shall be notes
and bills, accepted fo r rediscount
under the j)rovisions o f section
13 o f this A ct, and the Federal re­
serve agent shall each day notify
the Federal Reserve Board o f all
issues and withdrawals o f Federal
reserve notes to and by the Federal
reserve bank to which he is accred­
ited. The said Federal Reserve Board
f^shaU be authorized^ m a y at any
time O J call upon a Federal reserve
bank for additional security to pro­
tect the Federal reserve notes issued
to it.

38

SECTION
HOUSE B IL L ,

1 7 — Conti nued.

PASSED B Y SENATE.

CONFERENCE AGREEM EN T.

s* ^+'ese:P¥eHftefce9-ftS-p-Feseftfced;~bttfc
aw-B^de^al-rese^ve-baftfe-se-tts 'mg
ftttv-p^t-ef^ttek-Fesewe-fce-^edeem
eefces—
-BhaU—
imffiedifttely—
s ^ i d —F e s e w e -a e e e u f t f e -a n - a m eHHfe e f
-

Whenever any Federal reserve
bank shall pay out or disburse Fed­
eral reserve notes issued to it as
hereinbefore provided, it shall seg­
regate in its own vaults and shall
carry to a special reserve account on
its books gold or lawful money
equal in amount to thirty-three and
one-third per centum of the reserve
notes so paid out by it, such reserve
to be used for the redemption of said
reserve notes as presented; but any
Federal reserve Dank so using any
part of such reserve to redeem
notes shall immediately carry
31
to said reserve account an
amount of gold or lawful
money sufficient to make said re­
serve equal to thirty-three and onethird per centum of its outstanding
Federal reserve notes.
Notes so
paid out shall bear upon their faces
a distinctive letter and serial num­
ber, which shall be assigned by the
Federal Reserve Board to each Fed­
eral reserve bank. Whenever Fed­
eral reserve notes issued through
one Federal reserve bank shall be re­
ceived by another Federal reserve
bank they shall be returned for re­
demption to the Federal reserve
bank through which they were orig­
inally issued, or shall be charged off
against Government deposits and
returned to the Treasury of the
United States, or shall be presented
to the said Treasury for redemption.

ne^esr
Every Federal reserve bank shall
maintain reserves in gold or lawful
money o f not less than thirtyfive per
centum against its deposits and, its
Federal reserve notes in actual circu­
lation, but the amount o f gold in the
Federal reserve bank together with the
am ount deposited by it with the Treas­
ury, shall be at least equal to forty
per centum o f the Federal reserve
notes issued to said bank and in ac­
tual circulation and not offset by gold
or lawful money deposited with the
Federal reserve agent.

Notes so paid
out shall bear upon their faces a dis­
tinctive letter and serial number,
which shall be assigned by the Fed­
eral Reserve Board to each Federal
reserve bank. Whenever Federal
reserve notes issued through one
Federal reserve bank shall be re­
ceived by another Federal reserve
bank they shall be promptly returned
for credit or redemption to the Fed­
eral reserve bank through which
they were originally issuedr e¥ shall
-

Every Federal reserve bank shall
maintain reserves in gold or lawful
money o f not less than thirty-five per
centum against its deposits and r e ­
serves

FORTY

IN GOLD OF NOT LESS THAN
PER CENTUM AGAINST its

Federal reserve notes in actual circu­
lation, [ but the amount o f gold in the
Federal reserve bank together with the
amount deposited by it with the Treas­
ury, shall be at least equal to forty
per centum o f the Federal reserve
notes issued to said bank and in
actual circulation]J and not offset by
gold or lawful money deposited with
the Federal reserve agent.

Notes so paic
out shall bear upon their faces a dis­
tinctive letter and serial number,
which shall be assigned by the Fed­
eral Reserve Board to each Federal
reserve bank.
Whenever Federal
reserve notes issued through one
Federal reserve bank shall be re­
ceived by another Federal reserve
bank they shall be promptly returned
-for credit or redemption to the Fed­
eral reserve bank through which
they were originally issued.

l /\ n
TcacitcpuTt7n;

No Federal reserve bank shall pay
out notes issued through another
under penalty of a tax of ten per
centum upon the face value of notes
S D—63-2—voi 25------13




No Federal reserve
No Federal reserve
bank shall pay out notes issued bank shall pay out notes issued
through anotner under penalty of a through another under penalty o f a
tax of ten per centum upon the face tax o f ten per centum upon the face

39

SECTION
HOUSE B IL L ,

so paid out. Notes presented for
redemption at the Treasury of the
United States shall be paid and re­
turned to the Federal reserve banks
through which they were originally
issued, and Federal reserve notes
received by the Treasury otherwise
than for redemption snail be ex­
changed for lawful money out of the
five per centum redemption fund
hereinafter provided and returned
as hereinbefore provided to the re­
serve bank through which they
were originally issued.

17 — C o n t i n u e d

PASSED B Y SENATE.

value of notes so paid out. Notes
presented for redemption at the
Treasury of the United States shall
be paid out o f the redemption fund
and returned to the Federal reserve
banks through which they were
originally issued, and thereupon such
Federal reserve banlc shall, upon de­
mand o f the Secretary o f the Treas­
ury, reimburse such redemption fund
in lawful money or, i f such Federal
reserve notes have been redeemed by
the Treasurer in gold or gold certifi­
cates, then such funds shall be reim­
bursed to the extent deemed necessary
by the Secretary o f the Treasury in
gold or gold certificates, and such
Federal reserve bank shall, so long as
any o f its Federal reserve notes re­
main outstanding, maintain with the
Treasurer in gold an amount suffi­
cient in the judgment o f the Secretary
to provide fo r all redemptions to be
made by the Treasurer. Federal re­
serve notes received by the Treas­
ury, otherwise than for redemption,
shaU may be exchanged for lawfed
money gold out of the fi¥e--pey
een
fcfcfift redemption fund hereinafter
provided and returned as-he*einbofore pres ided to the reserve bank
through which they were originally
issued, or they may be returned to
such bank fo r the credit o f the United
States. Federal reserve notes unfit
fo r circulation shall be returned by
the Federal reserve agents to the
Comptroller o f the Currency fo r can­
cellation and destruction.
The Federal Reserve Board shall
The Federal Reserve Board shall
have power, in its discretion, to re­
quire Federal reserve banks quire eadh Federal reserve banks
32
to maintain on deposit in the bank to maintain on deposit in the
Treasury of the United Treasury of the United States a sum
a e
States a sum m gold equal to five in gold ey a l-fe-five -per- centum ef
n
per centum of such amount of Fed­ sufficient % the judgment o f the Secre­
eral reserve notes as may be issued tary o f the Treasury fo r the redemp­
to them under the provisions of this tion o f such -amount -ef the Federal
Act; but such five per centum shall reserve notes as -may- be issued to
be counted and included as part of
the thirty-three and one-third per Aefc such bank, but in no event less than
centum reserve hereinbefore re­ five per centum; but such five -pe*
eentum deposit o f gold shall be count­
quired.
ed and included as part of the thir­
ty-three and one-third per centum
reserve hereinbefore required.




CONFERENCE AGREEM ENT.

value o f notes so paid out. Notes
presented fo r redemption at the
Treasury o f the United States shall
be paid out o f the redemption fund
and returned to the Federal reserve
banks through which they were
originally issued, and thereupon such
Federal reserve bank shall, upon de­
mand o f the Secretary o f the Treas­
ury, reimburse such redemption fund
in lawful money or, i f such Federal
reserve notes have been redeemed by
the Treasurer in gold or gold certifi­
cates, then such funds shall be reim­
bursed to the extent deemed necessary
by the Secretary o f the Treasury in
gold or gold certificates, and such
Federal reserve bank shall, so long as
any’ o f its Federal reserve notes re­
main outstanding, maintain with the
Treasurer in gold an amount suffi­
cient in the judgment o f the Secretary
to provide fo r all redemptions to be
made by the Treasurer. Federal re­
serve notes received by the Treasury,
otherwise than fo r redemption, may
be exchanged fo r gold out o f the re­
demption fund hereinafter provided
and returned to the reserve bank
through which they were originally
issued, or they may be returned to
such bank fo r the credit o f the United
States. Federal reserve notes unfit
fo r circulation shall be returned by
the Federal reserve agents to the
Comptroller o f the Currency fo r can­
cellation and destruction.
The Federal Reserve Board shall
require each Federal reserve bank to
maintain on deposit in the Treasury
o f the United States a sum in gota
sufficient in the judgment o f the Secre­
tary o f the Treasury for the redemp­
tion o f the Federal reserve notes
issued to such bank but in no event
less than five per centum; but such
deposit o f gold shall be count­

ed and included as part o f the [ ; thir­
ty-three and one-third'j f o r t y per
centum reserve hereinbefore required.

40

SECTION
HOUSE B IL L

17— Continued.

PASSED B Y SENATE

The said board shall also
The
have the right to grant in whole or said board shall ake have the right,
in part or to reject entirely the ap- acting through the Federal reserve
lication of any Federal reserve agent, to grant in whole or in part or
ank for Federal reserve notes; but to reject entirely the application of
to the extent and in the amount that any Federal reserve bank for Fed­
such application may be granted eral reserve notes; but to the extent
the Federal Reserve Board shall,
through its local Federal reserve cation may be granted the Federal
agent, deposit Federal reserve notes Reserve Board shall, through its
with the bank so applying, and such local Federal reserve agent, depesit
bank shall be charged with the supply Federal reserve notes with to
amount of such notes and shall pay the banks bank so applying, and such
such rate of interest on said amount bank shall be charged with the
as may be established by the Fed­ amount of such notes and shall pay
eral Reserve Board, which rate shall such rate of interest on said amount
not be less than one-half of one per as may be established by the Fed­
centum per annum, and the amount eral Reserve Board,
of such Federal reserve notes so
issued to any such bank shall, upon
and the amount
delivery, become a first and para­ of such* Federal reserve notes so
mount lien on all the assets of such issued to any such bank shall,
bank.
upon delivery, together with such
notes o f such Federal reserve bank
as may be issued under section
eighteen o f this Act upon security
o f United States two per centum
Government bondsf become a first
and paramount lien on all the assets
of such bank.
Any Federal reserve bank may at
Any Federal reserve bank may at
any time reduce its liability for out­ any time reduce its liability for out­
standing Federal reserve notes by standing Federal reserve notes by
the deposit of Federal reserve notes, the- depesifc f depositing, with the
-o
whether issued to such bank or to Federal reserve agent, its Federal re­
some other reserve bank, or lawful serve notes, whether-issued- to sueh
money of the United States,
33
or gold bullion,with any Fed- o f — lawful - meney- e f --the—
United
e m reserve agent or with the
9 ^ gold bullion,
Treasurer of the United States, and
such reduction shall be accompanied
by a corresponding reduction in the
required reserve fund of lawful
money set apart for the redemption
of said notes and by the release of a
jTtTXZ
corresponding amount of the col­
nofees -and— the-F
byelease-el
lateral security deposited with the a -ee Frespondmg-amount of -the- eel1
A J
TT7
h
local Federal reserve agent.
lUVUTcDl1 D w d r lO J
voIiJvU IT IU11 WIC
local-Federal-FescFve-ftgenfe,gold cer­
tificates, or lawful money o f the United
States. Federal reserve notes so de­
posited shaU not be reissued, except
upon compliance with the conditions
o f an original issue.
The Federal reserve agent shall
hold such gold, gold certificates, or
lawful money available exclusively
for exchange fo r the outstanding Fed­
eral reserve notes when offered by the
reserve bank o f which he is a director.
Upon the request o f the Secretary o f

E




CONFERENCE AGREEM ENT

The
board shall have the right, acting
through, the Federal reserve agent, to
grant in whole or in part or to reject
entirely the application o f any Fed­
eral reserve bank fo r Federal reserve
notes; but to the extent that such ap­
plication may be granted the Federal
Reserve Board shall, through its local
Federal reserve agent, supply Fed­
eral reserve notes to the bank so ap­
plying, and such bank shall be
charged with the amount o f such
notes and shall pay such rate o f in­
terest on said amount as may be
established by the Federal Reserve
Board, and the amount o f such
Federal reserve notes so issued to
any such bank shall, upon delivery.
together with such notes o f such Federal
reserve bank as may be issued under
section eighteen o f this Act upon se­
curity o f United States two per cen­
tum Government bonds, become a first
and paramount lien on all the assets
o f such bank.

Any Federal reserve bank may
at any time reduce its liability
fo r outstanding Federal reserve notes
by depositing j with the Federal re­
serve agent, its Federal reserve notes,
gold, gold certificates, or lawful money

o f the United States. Federal re­
serve notes so deposited shaU not be
reissued, except upon compliance
with the conditions o f an original
issue.
The Federal reserve agent shall
hold such gold, gold certificates, or
lawful money available exclusively
fo r exchange fo r the outstanding Fed­
eral reserve notes when offered by the
reserve bank o f which he vs a director.
Upon the request o f the Secretary o f

41

SECTION
HOUSE B IL L .

Any Federal reserve bank may
at its discretion withdraw collateral
deposited with the local Federal
reserve agent for the protection of
Federal reserve notes deposited
with it and shall at the same time
substitute other collateral of equal
value approved by the Federal
reserve agent under regulations to
be prescnbed by the Federal Re­
serve Board.




17— Continued.

P ASSED B Y SENATE.

the Treasury the Federal Reserve
Board shall require the Federal re­
serve agent to transmit so much o f
said gold to the Treasury o f the
United States as may be required
fo r the exclusive purpose o f the re­
demption o f such notes.
Any Federal reserve bank may at
its discretion withdraw collateral
deposited with the local Federal re­
serve agent for the protection of its
Federal reserve notes deposited with
it and shall at the same time sub­
stitute therefor other like collateral
of equal vftlue amount appyeved-by
with the approval o f the Federal re­
serve agent under regulations to be
prescribed by the Federal Reserve
Board.
In order to furnish suitable notes
for circulation as Federal reserve
notes, the Comptroller o f the Currency
shall, under the direction o f the Sec­
retary o f the Treasury, cause plates
and dies to be engraved in the best
manner to guard against counterfeits
and fraudulent alterations, and shall
have printed therefrom and numbered
such quantities o f such notes o f the
denominations o f $1, $2, $5, $10,
$20, $50, $100, as may be required
to supply the Federal reserve banks.
Such notes shall be in form and tenor
as directed by the Secretary o f the
Treasury under the provisions o f this
Act and shall bear the distinctive
numbers o f the several Federal re­
serve banks through which they are
issued.
When such notes have been pre­
pared, they shall be deposited in the
Treasury, or in the subtreasury or
mint o f the United States nearest the
place o f business o f each Federal re­
serve 'bank, and shall be held fo r the
use o f such bank subject to the order
o f the Comptroller o f the Currency
for their delivery, as provided by
this Act.
The plates and dies to be procured
by the Comptroller o f the Currency
fo r the printing o f such circulating
notes shall remain under his control
and direction, and the expenses neces­
sarily incurred in executing the laws
relating to the procuring o f such notes,
and all other expenses incidental to
their issue and retirement, shall be
paid by the Federal reserve banks,
and the Federal Reserve Board shall
include in its estimate o f expenses
levied against the Federal reserve
banks a sufficient amount to cover
the expenses herein provided for.

CONFERENCE AGREEM EN T.

the Treasury the Federal Reserve
Board shall require the Federal re­
serve agent to transmit so much of
said gold to the Treasury o f the United
States as may be required fo r the
exclusive purpose o f the redemption
o f such notes.
Any Federal reserve bank may at
its discretion unthdraw collateral de­
posited with the local Federal reserve
agent for the protection o f its Federal
reserve notes deposited with it and
shall at the same time substitute
therefor other like collateral o f equal
amount with the approval o f the
Federal reserve agent under regula­
tions to be prescribed by the Federal
Reserve Board.
In order to furnish suitable notes
for circulation as Federal reserve
notes, the Comptroller o f the Currency
shall, under the direction o f the Sec­
retary o f the Treasury, cause plates
and dies to be engraved in the best
manner to quard against counterfeits
and fraudulent alterations, and shall
have printed therefrom and numbered
such quantities o f such notes o f the
denominations of £$1, $2,2 $5, $10,
$20, $50, $100, as may be required
to supply the Federal reserve banks.
Such notes shall be inform and tenor
as directed by the Secretary o f the
Treasury under the provisions o f this
Act and shall bear the distinctive
numbers o f the several Federal re­
serve banks through which they are
issued.
When such notes have been pre­
pared, they shaU be deposited in the
Treasury, or in the subtreasury or
mint o f the United States nearest the
place o f business o f each Federal re­
serve bank and shall be held for
the use o f such bank subject to the
order o f the Comptroller o f the
Currency for their delivery, as pro­
vided by this Act.
The plates and dies to be procured
by the Comptroller o f the Currency
for the printing o f such circulating
notes shaU remain under his control
and direction, and the expenses neces­
sarily incurred in executing the laws
relating to the procuring o f such notes,
and all other expenses incidental to
their issue and retirement, shaU be
paid by the Federal reserve banksr
,
and the Federal Reserve Board shaU
include in its estimate of expenses
levied against ^the Federal reserve
banks a sufficient amount to cover
the expenses herein provided for.

42

SECTION

17 — C o n t i n u e d .

PASSED B Y SENATE.

CONFERENCE AGREEM EN T.

The examination o f plates, dies,
bed pieces, and so forth, and regula­
tions relating to such examination o f
plates, dies, and so forth, o f nationalbank notes provided fo r in section
fifty-one hundred and seventy-four,
Revised Statutes, is hereby extended
to include Federal reserve notes herein
provided for.
Any appropriation heretofore made
out o f the general funds o f the Treas­
ury fo r engraving plates and dies, the
purchase o f distinctive paper, or to
cover any other expense in connection
with the printing o f national-bank
notes or notes provided fo r by the
Act o f May thirtieth, nineteen hun­
dred and eight, and any distinctive
paper that may be on hand at the
time o f the passage o f this Act may
be used in the discretion o f the
Secretary fo r the purposes o f this
A ct, and should the appropria­
tions heretofore made be insuffi­
cient to meet the requirements o f
this Act in addition to circulating
notes provided fo r by existing law,
the Secretary is hereby authorized to
use so much o f any funds in the
Treasury not otherwise appropriated
fo r the jmrpose o f furnishing the notes
aforesaid: Provided, however, That
nothing in this section contained shall
be construed as exempting national
banlcs or Federal reserve banks from
their liability to reimburse the United
States fo r any expenses incurred in
printing and issuing circulating notes.

The examination of plates, dies,
bed pieces, and so forth, and regula­
tions relating to such examination of
plates, dies, and so forth, of nationalbank notes provided for in section
fifty-one hundred and seventy-four
Revised Statutes, is hereby extended
to include[F ederal reservejnotes here­
in provided for.
A ny appropriation heretofore made
out of the general funds of the Treas­
ury for engraving plates and dies, the
purchase of distinctive paper, or to
cover any other expense m connection
with the printing of national-bank
notes or notes provided for by the
Act of May thirtieth, nineteen hun­
dred and eight, and any distinctive
paper that may be on hand at the
time of the passage of this Act may
be used in the discretion of the
Secretary for the purposes of this
Act, and should the appropria­
tions heretofore made be insuffi­
cient to meet the requirements o f
this Act in addition to circulating
notes provided for by existing law,
the Secretary is hereby authorized to
use so much of any funds in the
Treasury not otherwise appropriated
for the jmrpose of furnishing the notes
aforesaid: Provided, however, That
nothing in this section contained shall
be construed as exempting national
banks or Federal reserve banks from
their liability to reimburse the United
States for any expenses incurred in
printing and issuing circulating notes.

HOUSE B IL L .

If shall-be4 hedttfcy evory-Fede
-ef
w /\ n i f

f

-%
w

UvSHUy (IU Ullll UilU V TvIlUTlQXUilTgO 1W"
V

exchange- o? -collection? eheeks-and

It shall be the duty of every Fed­
eral reserve bank to receive on de­
posit, at par and without charge for
exchange or collection, checks and
drafts drawn upon any of its
depositors or by any of its depos­
itors upon any other depositor and
checks and drafts drawn by any




Every Federal reserve bank shall
receive on deposit from member banks
or from Federal reserve banlcs checks
and drafts drawn upon any o f its
depositors, and when remitted by
a Federal reserve bank, checks and
drafts drawn by any depositor in any
other Federal reserve bank or

Every Federal reserve bank shall
receive on deposit a t p a r from member
banks or from Federal reserve banks
ckecks and drafts drawn upon any of
its depositors, and when remittea by
a Federal reserve bank, checks and
drafts drawn by any depositor in any
other Federal reserve bank or

43

SECTION
HOUSE B ILL .

17— Continued.

P ASSED B Y SENATE.

depositor in any other Federal re­ member bank upon funds to the
serve bank upon funds to the credit credit o f said depositor in said
of said depositor in said reserve reserve bank or member bank.
bank last mentioned, nothing herein Nothing herein contained shall be
sontained to be construed as pro­ construed as prohibiting a member
hibiting member banks from mak­ bank from making reasonable charges
ing reasonable charges to cover fo r checks and drafts so debited to its
actual expenses incurred in col­ account, or fo r collecting and remit­
lecting and remitting funds for ting funds, or fo r exchange sold to its
their patrons.
patrons. The Federal Reserve Board
may, by rule, fix the charges to be
collected by the member banks from
its patrons whose checks are cleared
through the Federal reserve bank and
the charge which may be imposed fo r
the service o f clearing or collection
rendered by the Federal reserve bank.
The Federal Re­
serve Board shall make and pro­
mulgate from time to time regula­
tions governing the transfer of
funds at par among Federal
reserve banks, and may at
34
its discretion exercise the
functions of a clearing house
for such Federal reserve banks, or
may designate a Federal reserve
bank to exercise such functions,
and may also require each such
bank to exercise the functions of a
clearing house for its member banks.

The Federal Reserve Board shall
make and promulgate from time to
time regulations governing the
transfer of funds afc-paa? and charges
therefor among Federal reserve
banks and their branches, and may
at its discretion exercise the func­
tions of a clearing house for such
Federal reserve banks, or may des­
ignate a Federal reserve bank to
exercise such functions, and may
also require each such bank to exer­
cise the functions of a clearing house
for its member banks.

SECTION
Sec . 18. That so much of the
provisions of section fifty-one hun­
dred and fifty-nine of the Revised
Statutes of tne United States, and
section four of the Act of June
twentieth, eighteen hundred and
seventy-four, and section eight of
the Act of July twelfth, eighteen
hundred and eighty-two, and of
any other provisions of existing
statutes, as require that before any
national banking association shall
be authorized to commence bank­
ing business it shall transfer and
deliver to the Treasurer of the
United States a stated amount of
United States registered bonds be,
and the same is hereby, repealed.




CONFERENCE AGREEM EN T.

member bank upon funds to the
credit o f said depositor in said
reserve bank or member bank.
Nothing herein contained shall be con­
strued as prohibiting a member bank
from £ making reasonable charges
fo r checks and drafts so debited to its
account, or / o r ] c h a r g in g it s a c ­
t u a l e x p e n s e in c u r r e d in collect­
ing and remitting funds, or fo r
exchange sold to its patrons. The
Federal Reserve Board [ m a y ] s h a l l ,
by rule, fix the charges to be col­
lected by the member banks from
its patrons whose checks are cleared
through the Federal reserve bank and
the charge which may be imposed fo r
the service o f clearing or collection
rendered by the Federal reserve bank.
The Federal Reserve Board shall
make and -promulgate from time to
time regulations governing the trans­
fer o f funds ahd charges therefor
among Federal reserve banks and
their branches, and may at its dis­
cretion exercise the functions o f a
clearing house fo r such Federal
reserve banks, or may designate a
Federal reserve bank to exercise such
functions, and may also require each
such bank to exercise the functions of
a clearing housefo r its member banks.

18.

S e c . 48 17. That so much of the
provisions of section fifty-one hun­
dred and fifty-nine of the Revised
Statutes of the United States, and
section four of the Act of June
twentieth, eighteen hundred and
seventy-four, and section eight of
the Act of July twelfth, eighteen
hundred and eighty-two, and of
any other provisions of existing
statutes as require that before
any national banking associa­
tion shall be authorized to com­
mence banking business it shall
transfer and deliver to the Treasurer
of the United States a stated
amount of United States registered
bonds be, and the same is hereby,
repealed.

S ec.17. [ That s o ] So much o f the
provisions o f section fifty-one hundred
and fifty-nine o f the rtevised Statutes
o f the United States, and section fou r
o f the Act o f June twentieth, eight­
een hundred and seventy-four, and
section eight o f the Act o f July
twelfth, eighteen
hundred
and
eighty-two, and o f any other pro­
visions o f existing statutes as re­
quire that before any national
banking association shall be author­
ized to commence banking business it
shall transfer and deliver to the
Treasurer o f the United States a
stated amount o f United States regis­
tered bonds, £be, and the samejj is
hereby, repealed.

44

SECTION
HOUSE B ILL .
REFUNDING BONDS.

1 9.

PASSED B Y SENATE.
T im T a T tU T V T \ tn
^/
xszircrifiiiriu uunu
om
t

w ttv q

CONFERENCE AGREEM ENT.
REFUNDING BONDS.

Section 18 stricken out and the following
substituted:
S e c . 18. A fter two years from the
S e c . 19. That upon application
Sec. 18. A ny member bank desir­
the Secretary of the Treasury shall ing to retire the whole or any passage o f this A ct, and at any time
exchange the two per centum bonds part o f its circulating notes may during a period o f twenty years there­
of the United States bearing the file with the Treasurer o f the United after, any member bank desiring to
circulation privilege deposited by States an application to sell fo r its retire the whole or any part o f its cir­
any national banking association account, at par and interest, United culating notes, may file with the Treas­
with the Treasurer of the United States bonds securing circulation to urer o f the United States an applica­
tion to sell fo r its account, at par and
States as security for circulating be retired.
accrued interest, United States bonds
notes for three per centum bonds 01
securing circulation to be retired.
the United States without the cir­
The Treasurer shall, at the end o f
culation privilege, payable after
The Treasurer shall, at the end o f
twenty years from date of issue, each quarterly period, furnish the each quarterly period, furnish the
and exempt from Federal, State, Federal Reserve Board with a list o f Federal Reserve Board with a list o f
and municipal taxation both such applications, and the Federal such applications, and the Federal
35
as to income and principal. Reserve Board may, in its discretion, Reserve Board may, in its discretion,
No national bank shall, in require the Federal reserve banks to require the Federal reserve banks to
any one year, present two per cen­ purchase such bonds from the banks purchase such bonds from the banks
tum bonds for exchange in the whose applications have been filed whose applications have been filed
manner hereinbefore provided to with the Treasurer at least ten days with the Treasurer at least ten days
an amount exceeding five per cen­ before the end o f any quarterly period before the end of any quarterly period
tum of the total amount of bonds at which the Federal Reserve Board at which the Federal Reserve Board
on deposit with the Treasurer by may direct the purchase to be made. may direct the purchase to he made:
said bank for circulation purposes. Upon notice from the Treasurer of Provided, That Federal reserve
Should any national bank fail in the amount o f bonds so sold fo r its banks shall not be permitted to pur­
any one year to so exchange its full account, each member bank shall chase an amount to exceed $25,000,quota of two per centum bonds duly assign and transfer, in writing, 000 o f such bonds in any one year,
under the terms of this Act, the such bonds to the Federal reservebank and which amount shall include bonds
Secretary of the Treasury may per­ purchasing the same, and such Fed­ acquired under section fou r o f this
mit any other national bank or eral reserve bank shall thereupon de­ Act by the Federal reserve bank.
banks to exchange bonds in excess posit lawful money with the Treasurer Provided further, That the Federal
of the five per centum aforesaid in o f the United States fo r the purchase Reserve Board shall allot to each
an amount equal to the deficiency price o f such bonds, and the Treasurer Federal reserve bank such propor­
caused by the failure of any one or shall pay to the member bank selling tion o f such bonds as the capital and
more banks to make exchange in such bonds any balance due after de­ surplus o f such bank shall bear to the
any one year, allotment to be made ducting a sufficient sum to redeem its aggregate capital and surplus o f all
to applying banks in proportion to outstanding notes secured by such the Federal reserve banks.
their holdmgs of bonds. At the bonds, which notes shaTl be canceled
Upon notice from the Treasurer of
expiration of twenty years from and permanently retired when re­ the amount o f bonds so sold fo r its
the passage of this Act every holder deemed.
account, each member bank shall
of United States two per centum
duly assign and transfer, in writing,
bonds then outstanding shall re­
such bonds to the Federal reserve
ceive payment at par and accrued
bank purchasing the same, and such
interest. After twenty years from
Federal reserve bank shall, there­
the date of the passage of this Act
upon, deposit lawful money with the
national-bank notes still remaining
Treasurer o f the united States fo r the
outstanding shall be recalled and
purchase price erf such bonds, and the
redeemed by the national banking
Treasurer shall pay to the member
associations issuing the same within
bank selling such bonds any balance
a period and under regulations to
due after deducting a sufficient sum
be prescribed by the Federal Re­
to redeem its outstanding notes se­
serve Board, and notes still remain­
cured by such bonds, which notes
ing in circulation at the end of such
shall be cancelled and permanently
period shall be secured by an equal
retired when redeemed.
amount of lawful money to be de­
The Federal reserve banks pur­
The Federal reserve banks pur­
posited in the Treasury of the chasing such bonds shall be required chasing such bonds shall be permitted
United States by the banking to take out an amount o f circulating to take out an amount o f circulating
associations originally issuing such notes equal to the amount o f national- notes equal to the par value o f such
notes. Meanwhile every national bank notes outstanding against such bonds.
bank may continue to apply bonds.
for and receive circulating
Upon the deposit with the Treasurer
Upon the deposit with the Treas­
36
notes from the Comptroller o f the United States bands so pur­ urer o f the United States o f bonds
of the Currency based upon chased, or any bonds with the circu- so purchased, or any bonds with the




45

SECTION

19— Continued.

HOUSE B ILL .

P ASSED B Y SENATE.

CONFERENCE AGREEM ENT.

the deposit of two per centum
bonds or of any other bonds bearing
the circulation privilege; but no
national bank shall be permitted
to issue other circulating notes ex­
cept such as are secured as in this
section provided or to issue or to
make use of any substitute for such
circulating notes in the form of
clearing-house loan certificates, cash­
ier’s checks, or other obligation.

lating privilege acquired under section
four of this Act, any Federal reserve
lank making such deposit in the man­
ner provided by existing law shall ie
entitled to receive from the Comp­
troller of the Currency circulating
notes in blank, registered and coun­
tersigned as provided by law, equal in
amount to the par value of the bonds so
deposited. Such notes shall be the
obligations of the Federal reserve
bank procuring same, and shall be in
form prescribed by the Secretary of the
Treasury, and to the same tenor and
effect as national-barik notes now pro­
vided by law. They shall be issued
and redeemed under the same terms
and conditions as national-banTc notes.
United States bonds bought by a
Federal reserve bank against which
there are no outstanding nationalbank notes may be exchanged at the
Treasury for one-year gold notes bear­
ing three per centum interest. In
case of such exchange for one-year
notes the reserve bank snail be bound
to pay such notes and to receive in
payment thereof new three per centum,
one-year Treasury gold notes year by
year for the period of twenty years.

circulating privilege acquired under
section four of this Act, any Federal
reserve bank making such deposit in
the manner provided by existing law,
shall be entitled to receive from the
Comptroller of the Currency circulat­
ing notes in blank, registered and
countersigned as provided by law,
equal in amount to the par value of
the bonds so deposited. Such notes
shall be the obligations of the Federal
reserve banlc procuring the same, and
shall be in form prescribed by the
Secretary of the Treasury, and to the
same tenor and effect as nationalbank notes now provided by law.
They shall be issued and redeemed
under the same terms and conditions
as national-bank notes except that
they shall not be limited to the amount
of the capital stock of the Federal
reserve bank issuing them.
Upon application of any Federal
reserve bank, approved by the Fed­
eral Reserve Board, the Secretary of
the Treasury may issue, in exchange
for United States two per centum gold
bonds bearing the circulation privi­
lege, but against which no circulation
is outstanding, one year gold notes of
the United States without the circu­
lation privilege, to an amount not to
exceed one-half of the two per centum
bonds so tendered for exchange, and
thirty year three per centum gold bonds
without the circulation privilege for
the remainder of the two per centum
bonds so tendered, provided, that at
the time of such exchange the Federal
reserve bank obtaining such one year
gold notes shall enter into an obliga­
tion with the Secretary of the Treas­
ury binding itself to purchase from
the United States for gold at the ma­
turity of such one year notes, an
amount equal to those delivered in
exchange for such bonds, i f so re­
quested by the Secretary, and at each
maturity o f one year notes so pur­
chased by such Federal reserve bank,
to purchase from the United States
such an amount of one year notes as
the Secretary may tender to such bank,
not to exceed the amount issued to
such bank in the first instance, in
exchange for the two per centum
United States gold bonds; said obli­
gation to purchase at maturity such
notes shall continue in force for a
period not to exceed thirty years.
For the purpose o f making the ex­
change herein provided for, the Sec­
retary o f the Treasury is authorized
to issue at par Treasury notes in
coupon or registered form as he may




46

SECTION
HOUSE BILL*

19 — C o n t i n u e d .

P ASSED B Y SENATE.

CONFERENCE AGREEM EN T.

prescribe in denominations o f one
hundred dollars, or any multiple
thereof, bearing interest at the rate
o f three per centum per annum,
payable quarterly,—such Treasury
notes to be payable not more than
one year from the date o f their
issue in gold coin of the present
standard value, and to be exempt as
to principal and interest from the
payment of all taxes and duties of the
United States except as provided by
this Act, as well as from taxes in any
form by or under State, municipal
or local authorities. And for the
same purpose, the Secretary is au­
thorized and empowered to issue
United States goldoonds at par, bear­
ing three per centum interest payable
thirty years from date o f issue, such
bonds to be of the same general tenor
and effect and to be issued under the
same general terms and conditions as
the United States three per centum
bonds without the circulation privi­
lege now issued and outstanding.
Upon application o f any Federal
reserve bank, approved by the Federal
Reserve Board, the Secretary may
' issue at par such three per centum
bonds in exchange for the one year
gold notes herein provided for.

SECTION
BANK RESERVES.

20.

BANK RESERVES.

S ec. 19. Demand liabilities within
the meaning of this Act shall comprise
all liabilities maturing or payable
within thirty days, and time deposits
shall comprise all deposits payable
after thirty days, and all savings ac­
counts and certificates of deposit
which are subject to not less than
thirty days9 notice before payment.
S e c . 20. That from and after the
date when the Secretary of the
Treasury shall have officially an­
nounced, in such manner as he may
elect, the fact that a Federal reserve
bank has been established in any
designated district, every banking
association within said district
which shall have subscribed for
stock in such Federal reserve bank
shall be required to establish and
maintain reserves as follows:
(a) If a country bank as defined
by existing law, it shall hold and
maintain a reserve equal to twelve
per centum of the aggregate amount
of its deposits, not including savings

S I)—
63-2—voI 25----14




BANK RESERVES.

S e c . 19. Demand Jliabilities'J d e ­

When the Secretary of the Treasury
shall have officially announced, in
such manner as he may elect, the estab­
lishment of a Federal reserve bank in
any district, every subscribing mem­
ber bank shall establish and maintain
reserves as follows:

within the meaning of this Act
shaU comprise alienabilities maturing
o r ] d e p o s it s payable witTiin thirty
days, and time deposits shall comprise
all deposits payable after thirty days,
and all savings accounts and certifi­
cates of deposit which are subject to
not less than thirty days9notice before
payment.
When the Secretary of the Treasury
shall have officially announced, in
such manner as he may elect, the estab­
lishment of a Federal reserve bank in
any district, every subscribing mem­
ber banlc shall establish and maintain
reserves as follows:

(a) A bank not in a reserve or cen­
tral reserve city as now or hereafter
defined shall hold and maintain re­
serves equal to twelve per centum of
the aggregate amount of its demand

(a)
A bank not in a reserve or cen­
tral reserve city as now or hereafter
defined shall hold and maintain re­
serves equal to twelve per centum of
the aggregate amount of its demand

p o s it s

47
SECTION
HOUSE B ILL .

deposits hereinafter provided for.
Five-twelfths of such reserve shall
consist of money which national
banks may under existing law count
as legal reserve, held actually in the
bank’s own vaults; and for a period
of fourteen months from the date
aforesaid at least three-twelfths and
thereafter at least five-twelfths of
such reserve shall consist of a
37
credit balance with the Fed­
eral reserve bank of its dis­
trict. The remainder of the twelve
per centum reserve hereinbefore

20 — Co nt i nue d.

PASSED B Y SENATE.

liabilities and jive per centum of its ^liabilities^ d e p o s i t s and five per
time deposits, as follows:
centum of its time deposits, asfollows:
In its vaults for a period of twentyIn its vaults for a period of\twentyfour months after said date four- four'J t h i r t y - s i x months after said
twelfths thereof
date ^four-twelfths^ f i v e - t w e l f t h s
thereof a n d p e r m a n e n t l y t h e r e ­
a f t e r FOUR-TWELFTHS.

In the Federal reserve bank of its
district, for a period of six months
after said date, two-twelfths, and for
each succeeding six months an addi­
tional one-twelfth, until five-twelfths
have been so deposited, which shall be
the amount permanently required.

For a period of twenty-four months
required may, for a period of thirtysix months from and after the date after said date the balance of the re­
fixed by the Secretary of the Treas- serves may be held in its own vaults,
m y as hereinbefore provided, con­ or in the Federal reserve bank, or in
sist of balances due from national banks in reserve or central reserve
banks in reserve or central reserve cities as now defined by law.
cities as now defined by law. From
After said twenty-four months7 pe­
and after a date thirty-six months
subsequent to the date fixed by the riod said reserves, other than those
Secretary of the Treasury as herein­ hereinbefore required to be held in the
before provided the said remainder reserve bank, shall be held in the
of the twelve per centum reserve vaults of the member bank or in the
required of each country bank shall Federal reserve bank, or in both, at
consist either in whole or in part of its option.
reserve money in the bank’s own
vaults or of credit balance with the
Federal reserve bank of its district .
(b)
If a reserve city bank as de­ {b) A bank in a reserve cityyas now
fined by existing law, it shall hold or hereafter defined, shall hold and
and maintain, for a period of sixt}^ maintain reserves equal to fifteen per
days. from the date fixed by the centum of the aggregate amount of its
Secretary of the Treasury as heiein- demand Liabilities and five per centum
before provided, a reserve equal to of its time deposits, as follows:
twenty per centum of the aggregate
amount of its deposits, not including
In its vaults six-fifteenths thereof.
savings deposits hereinafter pro­
vided for, and permanently there­
after eighteen per centum. At least
one-half of such reserve shall consist
of money which national banks may
In the Federal reserve bank of its
under existing law count as legal district for a period of six months
reserve, held actually in the bank’s after the date aforesaid at least threeown vaults.
After sixty days fifteenths’, and j or each succeeding six
from the date aforesaid, and for a months an additional one-fifteenth,
period of one year, at least three- until six-fifteenths have been so de­
eighteenths and permanently there­ posited, which shall be the amount
after at least five-eighteenths of permanently required.
such reserve shall consist of a credit
balance with the Federal
38
reserve bank of its district.
The remainder of the reserve
in this paragraph required may, for
a period of thirty-six months from
and after the date fixed by the Sec­
retary of the Treasury as herein­
before provided, consist of balances
due from national banks in central
reserve cities as now defined by law.




CONFERENCE AGREEM ENT.

In the Federal reserve bank of its
district,for a period off[sixJl t w e l v e
months after said date, two-twelfthsy
and for each succeeding six months
an additional one-twelfth, until fivetwelfths have been so deposited, which
shall be the amount permanently
required.
For a period of [ twenty-fourJ
t h i r t y - s i x months after said date
the balance of the reserves may be
held in its own vaults, or in the
Federal reserve bank, or in n a t i o n a l
banks in reserve or central reserve
cities as now defined by law.
After said [ twenty-four] t h i r t y s i x months1 period said reserves,
other than those hereinbefore required
to be held in the v a u l t s o f t h e
m e m b e r b a n k a n d in t h e F e d e r a l

reserve bank, shall be held in the
vaults of the member bank or in the
Federal reserve bank, or in both, at
[ i f e ] t h e option o f t h e m e m b e r
BANK.

Q ) A bank in a reserve city, as now
>
or hereafter defined, shall hold and
maintain reserves equal to fifteen per
centum of the aggregate amount of its
demand [ liabilities J d e p o s i t s and
five per centum of its time deposits, as
follows:
In its vaults f o r a p e r i o d o f
THIRTY-SIX MONTHS AFTER SAID
d a t e six-fifteenths thereof, a n d p e r ­
m a n e n t l y THEREAFTER FIVE-FIF­
TEENTHS

In the Federal reserve bank of its
district for a period of [ s i # ]
t w e l v e months after the aate afore­
said at least three-fifteenths, and
for each succeeding six months an
additional one-fifteenth, until sixfifteenths have been so deposited,
which shall be the amount per­
manently required.
FOR A PERIOD OF THIRTY-SIX
MONTHS AFTER SAID DATE THE BAL­
ANCE OF THE RESERVE MAY BE HELD
IN ITS OWN VAULTS, OR IN THE
F e d e r a l r e s e r v e b a n k , o r in
NATIONAL BANKS IN RESERVE OR
CENTRAL RESERVE CITIES AS NOW
DEFINED BY LAW.

48

SECTION
HOUSE B IL L

2 0 — Continued

PASSED B Y SENATE.

CONFERENCE AGREEM ENT

After said twenty-four months'
From and after a date thirty-six
After said £ twenty-fourJ t h i r t y months subsequent to the date period all of said reserves, except s i x months1 period all of said re­
fixed by the Secretary of the Treas­ those hereinbefore required to be held serves, except those hereinbefore reury as hereinbefore provided, the 'permanently in the Federal reserve quired to be held permanently in the
said remainder of the eighteen per bank, shall be held in its vaults or in VAULTS OF THE MEMBER BANK AND
centum reserve required of each the Federal reserve banlc, or in both, in t h e Federal reserve bank, shall
be held in its vaults or in the Federal
reserve city bank shall consist at its option.
reserve bank, or in both, at [itej
either in whole or in part of reserve
money in the bank’s own vaults or
THE option OF THE MEMBER BANK.
of credit balance with the Federal
reserve bank of its district.
A bank in a central reserve city, (c)
(c)
If a central reserve city bank (c)
A bank in a central reserve city,
as defined by existing law, it shall as now or hereafter defined, shall as now or hereafter defined, shall
hold and maintain for a period of hold and maintain a reserve equal to hold and maintain a reserve equal to
sixty days from the date fixed by eighteen per centum of the aggregate eighteen per centum of the aggregate
the Secretary of the Treasury as amount of its demand liabilities and amount of its demand £ liabilities J
hereinbefore provided a reserve five per centum of its time deposits, as d e p o s i t s and five per centum of its
time deposits, as follows:
equal to twenty per centum of the follows:
In its vaults six-eighteenths thereof.
In its vaults six-eighteenths thereof
aggregate amount of its deposits,
In the Federal reserve banlc for a
In the Federal reserve bank^for a
not including savings deposits here­
inafter provided for, and perma­ period of six months after the date period of six months after the date
nently thereafter eighteen per cen­ aforesaid at least three-eighteenths, aforesaid at least three-eighteenths,
tum. At least one-half of such re­ and permanently thereafter six- and permanently thereafter sixeighteenths^ s e v e n - e i g h t e e n t h s .
serve shall consist of money which eighteenths.
The balance of said reserves sha]l
The balance of said reserves shall
national banks may under existing
law count as legal reserve, held be held in its own vaults or in the Fed­ be held in its own vaults or in the Fed­
eral reserve bank, at its option.
actually in the bank’s own vaults. eral reserve banlc at its option.
Any Federal reserve bank may
Any Federal reserve bank may
After sixty days from the date afore­
said, and thereafter for a period of receive from,, the member banks as receive from the 'member banks as
one year, at least three-eighteenths reserves, not exceeding one half reserves, not exceeding one-half of
and permanently thereafter at least of each installment, eligible paper each installment, eligible paper as
five-eighteenths of such reserve shall as described in section fourteen prop­ described in section fourteen propconsist of a credit balance with the erly indorsed and Ucceptable to the said erhj indorsed and acceptable to the
said reserve bank.
Federal reserve bank of its dis­ reserve bank.
trict. The remainder of the
39
eighteen per centum reserve
required of each central re­
serve city bank shall consist either
in whole or in part of reserve money
actually held in its own vaults or
of credit balance with the Federal
reserve bank of its district.




If a State bank or trust company is
required by the law of its State to
keep its reserves either in its own
vaults or with another State bank or
trust company, such reserve deposits
so kept in such State bank or trust
company shall be construed, within
the meaning of this section, as if they
were reserve deposits in a national
bank in a reserve or central reserve
city for a period of three years after
the Secretary of the Treasury shall
have officially announced the estab­
lishment of a Federal reserve bank in
the district in which such State bank
or trust company is situate. Except
as thus provided no member bank
shall keep on deposit with any non­
member bank a sum in excess of ten
per centum of its ovm paid-up capital
and surplus. No member bank shall
act as the medium or agent of a non­
member bank in applying for or
receiving discounts from a Federal

I f a State bank or trust company is
required by the law of its State to
keep its reserves either in its own
vaults or with another State bank or
trust company, such reserve deposits
so kept in such State bank or trust
company shall be construed, within
the meaning of this section, as i f they
were reserve deposits in a national
bank in a reserve or central reserve
city for a period of three years after
the Secretary of the Treasury shall
have officially announced the estab­
lishment of a Federal reserve bank in
the district in which such State bank
or trust company is situate. Except
as thus provided, no member bank
shall keep on deposit with any nonmember bank a sum in excess of ten
per centum of its own paid-up capital
and surplus. No member bank shall
act as the medium or agent of a non­
member bank in applying for or
receiving discounts from a Federal

49

SECTION
HOUSE B IL L .

2 0 — Continued.

P ASSED B Y SENATE.

CONFERENCE AGREEM ENT.

reserve bank under the provisions oj reserve bank under the provisions of
this Act.
this Act EXCEPT BY PERMISSION OF
THE FEDERAL RESERVE BOARD.

The reserve carried by a member
bank with a Federal reserve bank
may, under the regulations and sub­
ject to such penalties as may be
prescribed by the Federal Reserve
Board, be checked against and with­
drawn by such member bank for
the purpose of meeting existing lia­
bilities: Provided, however, That no
bank shall at any time make new
loans or shall pay any dividends un­
less and until the total reserve re­
quired by law is fully restored.

The reserve carried by a mem­
ber bank with a Federal reserve
bank may, under the regulations and
subject to such penalties as may be
prescribed by the Federal Reserve
Board, be checked against and with­
drawn by such member bank for
the purpose of meeting existing lia­
bilities:' Provided, however, That no
bank shall at any time make new
loans or shall pay any dividends un­
less and until the total reserve re­
quired, by law is fully restored.
IN e s t im a t in g t h e r e s e r v e s
REQUIRED BY THIS ACT, THE NET
BALANCE OF AMOUNTS DUE TO AND
FROM OTHER BANKS SHALL BE
TAKEN AS THE BASIS FOR ASCER­
TAINING THE DEPOSITS AGAINST
WHICH RESERVES SHALL BE DETER­
MINED. B A L A N C E S IN RESERVE
BANKS DUF. TO MEMBER BANKS
SHALL, TO THE EXTENT HEREIN
PROVIDED, BE COUNTED AS RE­
SERVES.
£ United StatesJ n a t i o n a l banks

United States banks located in
Alaska or outside the Continental
United States may remain nonmember
banks, and shall in that event main­
tain reserves and comply with all the
conditions now provided by law regu­
lating them; or said banks, except in
the Philippine Islands, may, with the
consent of the Reserve Board, become
member banks of any one of the re­
serve districts, and shall, in that
event, take stock, maintain reserves,
and be subject to all the other pro­
visions of this Act.

SECTION
S e c . 21. That so much of sections
two and three of the Act of June
twentieth, eighteen hundred and
seventy-four, entitled “ An Act fix­
ing the amount of United States
notes, providing for a redistribu­
tion of the national bank currency,
and for other^purposes,” as provides
that the fund deposited by any
national banking association with
the Treasurer of the United States
for the redemption of its notes shall
be counted as a part of its lawful
reserve as provided in the Act afore­
said, be, and the same is hereby,
repealed. And from and after the
passage of this Act such fund of
five per centum shall in no case be
counted by any national banking
association as a part of its lawful
reserve.




located in Alaska or outside the con­
tinental United States may remain
nonmember banks, and shall in that
event maintain reserves and comply
with all the conditions now provided
by law regulating them; or said banks,
except in the Philippine Islands, may,
with the consent of the Reserve Board,
become member banks of any one of
the reserve districts, and shall, in that
event, take stock, maintain reserves,
and- be subject to all the other pro­
visions of this Act.

21.

S ec. 20. So much of sections two
S e c . Si 20. That-se So much of
sections two and three of the Act of and three of the Act of June twen­
June twentieth, eighteen hundred tieth, eighteen hundred and seventyand seventy-four, entitled “ An Act four, entitled “ An Act fixing the
fixing the amount of United States amount of United States notes, pro­
notes, providing for a redistribution viding for a redistribution of the
of the national-bank currency, and national bank currency and for
for other purposes/1 as provides other purposes,'1 as provides that
that the fund* deposited by any na­ the fund deposited by any national
tional banking association with the banking association unth the Treas­
Treasurer of the United States for urer of the United States for the
the redemption of its notes shall be redemption of its notes shall be
counted as a part of its lawful re­ counted as a part of its lawful re­
serve as provided in the Act afore­ serve as provided in the Act afore­
said, be, and the same is hereby, re­ said is hereby repealed. And from
pealed. And from and after the and after the passage of this Act such
passage of this Act such fund of fund of five per centum shall in no
live per centum shall in no case be case be counted by any national bank­
counted by any national banking ing association as a part of its lawful
association as a part of its lawful reserve.
reserve.

50

SECTION
HOUSE BILL*

22.

PASSED B Y SENATE.

CONFERENCE AGREEM EN T

The Senate amendment proposed to elimi­
nate this section.
S e c . 22. That every Federal re­
serve bank shall at all times have
on hand in its own vaults, in gold
or lawful money, a sum equal to
not less than thirty-three and onethird per centum of its outstanding
demand liabilities.
The Federal Reserve Board may
notify any Federal reserve bank
whose lawful reserve shall be below
the amount required to be kept on
hand, to make good such reserve;
and if such bank shall fail for thirty
days thereafter so to make good its
lawful reserve, the Federal Reserve
Board may appoint a receiver to
wind up the business of said bank.

Q W T /V
n
n l I
oA"TTv K W I QlX W a - Q .I I _ o1 TY> A Q 1-10 T To
w nIlIt oh C l rc— f ihtco iinn A
arrrt

SECTION
40

BANK EXAMINATIONS.

BANK EXAMINATIONS.

S e c . 23. That the examination of
the affairs of every national banking
association authorized by existing
law shall take place at least twice in
each calendar year and as much
oftener as the Federal Reserve
Board shall consider necessary in
order to furnish a full and complete
knowledge of its condition. The
Secretary of the Treasury may,
however, at any time direct the
holding of a special examination.
The person assigned to the making
of such examination of the affairs of
any national banking association
shall have power to call together a
quorum of the directors of such asso­
ciation, who shall, under oath, state
to such examiner the character and
circumstances of such of its loans or
discounts as he may designate: and
from and after the passage of this
Act all bank examiners shall receive
fixed salaries, the amount whereof
shall be determined by the Federal
Reserve Board and annually re­
ported to Congress. But the ex­
pense of the examinations herein
provided for shall be assessed by the
Federal Reserve Board upon the
associations examined in propor­
tion to asseis or resources held by
such associations upon a date during
the year in which such examinations
are held to be established by the
Fedcr al Reserve Board. The Comp­
troller of the Currency shall so ar­
range the duties of national-bank
examiners that no two successive
examinations of any association




23•
BANK EXAMINATIONS.

Sec. 2S 21. That-fche-examinfttieH
• /N y - f K a

tfn *
»

a t

A T fA tm

v l C l i v t l J iT c lltT o t / I u T t j T T

n flf tA n n l

k n t^ lr .

1 l c « D T U n c t I R7ct 111V

iftg-asseeiafcien-anfche^ised-ky-exisfciftS-law Every member bank shall
take-place be examined by the Comp-

troller of the Currency at least twice
in each calendar year and as much
oftener as the Federal Reserve
Board shall consider necessary.*-in
lr y v /\ T T f I a

rl

/ y /\

l l l l U V r iU u ^ C

rv f

v r

_i i

Tt

Seeyefca^y—e (—eke—
TreasH^py

The
Federal Reserve Board may authorize
examinations by the State authori­
ties to be accepted in the case of
State banks and trust companies
and may— how ever at any time

direct the holding of a special ex­
amination. The person assigned
to the making o£-s*ich the exam­
ination e£-the—
affairs of any »atienal—
banking—
asseeiatien member
bank shall have power to call to­
gether a quorum of the directors of
such asseeiatien bank, who shall,
under oath, state to such examiner
the character and circumstances of
such of its loans or discounts as he

The Federal Reserve
Board shallfix the salaries of all banlc
examiners and annually—repeated
make report thereof to Congress.
Bttfc
-fche The expense of the exami­
nations herein provided for shall be
assessed by authority of the Federal
Reserve Board upon the asseei-

Section 21 was stricken out and the fol­
lowing inserted:
S ec. 21. [
t i o n fifty-two

That section] S e c ­
hundred and forty ,
United States Revised Statutes, fb e J
is amended to read as follows:
The Comptroller o f the Currency,
with the approval of the Secretary of
the Treasury, shall appoint examiners
'who shall examine every member banlc
at least twice in each calendar year
a/nd oftener i f considered necessary:
Provided, however, That the Federal
Reserve Board may authorize exam­
ination by the State authorities to be
accepted in the case o f State banks
and trust companies and may at any
time direct the holding o f a special
\
examination of State banks or trust
companies that are stockholders in
amj Federal reserve bank. The
examiner making the examination of
any national bank, or o f any other
member bank, shall have power to
make a thorough examination o f all
the affairs o f the bank and in doing
so he shall have power to administer
oaths and to examine any o f the
officers and agents thereof under
oath and shall make a full and de­
tailed report o f the condition o f said
bank to the Comptroller of the Cur­
rency.
The Federal Reserve Board, upon
the recommendation o f the Comp­
troller o f the Currency, shall fix the
salaries o f all bank examiners and
make report thereof to Congress.
The expense o f the examinations herein
provided for shall be assessed by the

51

SECTION

23 — C o n t i n u e d .

HOUSE B ILL.

PASSED B Y SENATE.

CONFERENCE AGREEM ENT.

shall be made by the same examiner.

aliens banks examined in proportion
to assets or resources held by such

Comptroller o f the Currency upon
the banks examined in proportion to
assets or resources h ddpy the banks
upon the dates o f examination o f the
various banks.

ftsseeiafcieas banks upon a-date-du*-

Q K Q I 1 __K n i v ^ a I t a k x t - f h A
Q v m A
u * v ll »jllttix Ul> 111U1VU U V u llv S tlllU v-5
3

41

In addition to the exam­
inations made and conducted
by the Comptroller of the Currency,
every Federal reserve bank may,
with the approval of the Federal
Reserve Board, arrange for special
or periodical examination of the
member banks within its district.
Such examination shall be so con­
ducted as to inform the Federal
reserve bank under whose auspices
it is carried on of the condition of
its member banks and of the lines
of credit which are being extended
by them. Every Federal reserve
bank shall at all times furnish to
the Federal Reserve Board such
information as may be demanded
bj the latter concerning the con­
dition of any national banking asso­
ciation located within the district
of the said Federal reserve bank.

The Federal Reserve Board shall
as often as it deems best, and in
any case not less frequently than
four times each year, order an
examination of national banking
associations in reserve cities. Such
examinations shall show in detail
the total amount of loans made by
each bank on demand, on time, and
the different classes of collateral
held to protect the various loans,
and the lines of credit winch are
being extended by them. The Fed­
eral Reserve Board shall, at least
once each year, order an examina­
tion of each Federal reserve bank,
and upon joint application of ten
member banks the Federal Reserve
Board shall order a special exam­
ination and report of the conditon
of any Federal reserve bank.



amines the dates when the various
banks are examined.
In addition to the examinations
In addition to the examinations
made and conducted by the Comp­ made and conducted by the Comp­
troller of the Currency, every Fed­ troller o f the Currency , every Federal
eral reserve bank may, with the reserve bank may, with the approval
approval of the Federal reserve o f the Federal reserve agent or the
agent or of the Federal Reserve Federal Reserve Board, provide fo r
Board, a^ange provide for special special examination o f member banks
er—
pe*4ed*eal examination of the mithin its district The expense o f
member banks within its district. such examinations shall be borne by
Such examination shall be so con­ the bank examined. Such examinerducted as to inform the Federal re­ tions shall be so conducted as to inform
serve bank under whose auspices it the Federal reserve banlc o f the condi­
is carried on of the condition of its tion o f its member banks and o f the
member banks and of the lines of lines o f credit which are being ex­
credit which are being extended by tended by them. Every Federal rethem. Every Federal reserve bank serve bank shall at all times furnish
shall at all times furnish to the Fed­ to the Federal Reserve Board such in­
eral Reserve Board such informa­ formation as may be demanded con­
tion as may be demanded by the cerning the condition o f any member
latter concerning the condition of bank within the district o f the said
O Tl X
T XlOlfliUIlUH Uc®nKTng^"ttBSt7U icttJlUll t\
Vw n l n y i
*
c Qcirvni d f i /m
\
i l l IV
Federal reserve bank.
leeated member bank within the dis­
No bank* shall be subject to any
trict of the said Federal reserve visitatorial powers other than such as
bank.
are authorized by law, or vested in
No bank shall be subject to any the courts o f justice or such as shall
visitorial powers other than such as be or shall have been exercised or di­
are authorized by law, or vested in the rected by Congress, or by either House
courts o f justice, or such as shall be thereof or by any committee o f Congress
or shaU have been exercised or directed o r o f either House duly auth orized.
by Congress, or either House thereof
or any committee thereof
The Federal Reserve Board shall,
at least once each year, order an ex­
amination o f each Federal reserve
bank, and upon joint application o f
ten member banks the Federal Reserve
Board shall order a special examina­
n yyi i
QnQ I I a
tl f h
rs.
ttrrtx xttotv iv I J d
nccTT a i r o n
i n t L v cct 1 1 tn tJ
tion and report o f the condition o f any
Federal reserve bank.
i,A t
fV r l A H
urtntt- i7ii__ ictuiYi)I'tpnxi) A i n fuT v i tctntt ... ult"
un .Tttnt^ i
/i l t f
n A n fc
A
nTtreTtjiiO vraoBCT 1 uUiillW i r n l h ltJltt fW
Tn;i*i M / \
a

a

a

a

Fines-o ^ i - ’edit-^-hieh-a-Fe-be

tended-by-themr The Federal Re­
serve Board shall, at least once each
year, order an examination of each
Federal reserve bank, and upon joint
apphcation of ten member banks
the Federal Reserve Board shall
order a special examination and
report of the condition of any Fed­
eral reserve bank.

52

SECTION

2 4.

PASSED B Y SENATE.

HOUSE B IL L

CONFERENCE AGREEM ENT.

S ec . £4 22.
No
S e c . 22 . No member bank or any offi­
member bank or any officer, director, cer, director, or employee thereof shall
or employee thereof shall hereafter hereafter make any loan or grant any
make any loan or grant any gratuity gratuity to any b a n k examiner£ ofsuch
to any examiner of such bank. bankJl> Any bank officer, director, or
Any bank officer, directory or em­ employee violating this provision shall
ployee effendiftg—
againsfe violating be deemed guilty o f a misdemeanor and
this provision shall be deemed guilty shall be imprisoned not exceeding
of a misdemeanor and shall be im­ one year orfined not more than $5,000,
prisoned not exceeding one year or or both; and m a y b e fined a fu r­
fined not more than $5,000, or both; ther sum equal to the money so loaned
and fined a further sum equal to the or gratuity given. Any examiner
money so loaned or gratuity given^ accepting a loan or gratuity from any
bank examined by him or from an
officer, director, or employee thereof
rV i r 1 - I l l r A V
ITttttJ y - Q n f i - 4 - l r T xTKUWJpv;ff tttjC ii i A A t p A r l
Utt
shall be deemed guilty o f a misde­
n I' ti 11 l 7 o n “Arp Aft n n <tIIU X - t “a q a K
rvi i fiLiJ i
y> _ ! tx
r TtTTTTy sy r £
Jv 1
meanor and shall be imprisoned not
exceeding one year or fined not more
Any examiner An}r examiner accepting a loan or
accepting a loan or gratuity from gratuity from any bank examined
any bank examined by him shall be by him or from an officer, director, or
deemed guilty of a misdemeanor and employee thereof shall be deemed
guilty of a misdemeanor and shall
be imprisoned not exceeding one year
shall be fined not more than $5,000, or fined not more than $5,000, or than $5,000, or both; and m a y b e fined
and a further sum equal to the both ; and fined a further sum equal a further sum equal to the money so
money so loaned or gratuity given; to the money so loaned or gratuity loaned or gratuity given; and shallfor­
and snail forever thereafter be dis­ given; and shall forever thereafter ever thereafter be disqualified from
qualified from holding office as a be disqualified from holding office holding office as a national-banlc ex­
national-bank examiner. No na- as a national-bank examiner. No aminer. No national-bank examiner
tional-bank examiner shall perform national-bank examiner shall per­ shall perform any other service for
any other service for compensation form any other service for compen­ compensation while holding such office
while holding such office.
sation while holding such office fo r for any bank or officer, director, or
any bank or officer, directory or em­ employee thereof.
ployee thereof.
Ne-effiee-P-OT-d
F-e#-*-mt ienal
eenefte*i ry$

Sec . 24. That no national
bank shall hereafter make
any loan or grant any gratuity to
any examiner of such bank. Any
bank offending against this provi­
sion shall be deemed guilty of a mis­
demeanor and shall be fined not
more than $5,000, and a further
sum equal to the money so loaned
or gratuity given; and the officer or
officers of a bank making such loan
or granting such gratuity shall be
likewise deemed guilty oi a misde­
meanor and each shall be fined not
to exceed $5,000.
42

ef— any— fee— (efche?—
TV ! I

1 / M I ___ r t f l f f r

£

r / \ v> a i » «

nttOT tUlIj

utirvjii’tQ
C^
e?—

_

v/T

flW Il I v 1 “ i t

-----a

C
.

ci n

1/*v_ u v t r n \ A y \ ^
\
«ryJiruu
y

— mf c h — - Fespeefe— t e

e a te le-fc m fts fe -F S -e -F -m e -F t^ a ^ e s-m a d e

Other than the usual salary or di­
Other than the usual salary or di­
No officer or director of a national
bank shall receive or be beneficiary, rectors fee paid to any officer, di­ rector's fee paid to any officer, di­
either directly or indirectly, of any rector, or employee of a member bank rector, or employee o f a member bank
fee (other than a legitimate fee paid and other than a reasonable fee paid and other than a reasonable fee paid
an attorney at law for legal serv­ by said bank to such officer, director, by said bank to such officer, director,
ices), commission, gift, or other or employee for services rendered to or employee fo r services rendered to
consideration for or on account of such bank, no officer, directory em­ such hanky no officer, director, em­
any loan, purchase, sale, payment, ployee, or attorney of a member bank ployee, or attorney o f a member bank
exchange, or transaction with re­ shall be a beneficiary of or receive, shall be a beneficiary o f or receive,
spect to stocks, bonds, or other directly or indirectly, any fe e, com­ directly or indirectly, any fe e , com­
investment securities or notes, bills mission, gift, or other consideration mission, gift, or other consideration
of exchange, acceptances, bankers' fo r or in connection with any trans­ fo r or in connection with any trans­
bills, cable transfers, or mortgages action or business of the bank. No action or business o f the bank. No
made by or on behalf of a examiner, public or private, shall dis­ examiner, public or private, shall dis­
43
national bank of which he is close the names of borrowers or the close the names o f borrowers or the
collateral fo r loans of a member bank collateral for loans o f a member bank
such officer or director.




53

SECTION
HOUSE B IL L

24 — C o n t i n u e d .

P ASSED B Y SENATE,

CONFERENCE AGREEM ENT.

to other than the proper officers of such to other than the proper officers o f such
bank without first having obtained the bank without first having obtained the
express permission in writing from express permission in writing from
the Comptroller o f the Currency, or the Comptroller o f the Currency, or
from the board o f directors o f such from the Board o f Directors o f such
bank. except when ordered to do so by a bank, except when ordered to do so by a
court o f competent jurisdiction, or by court o f competent jurisdiction, or by
direction o f the Congress o f the United direction o f the Congress o f the United
States, or either House thereof, or any States, or o f either House thereof, or
committee thereof.
any committee o f c o n g r e s s o r o f
e i t h e r h o u s e £ th ereof] d u l y a u ­
t h o r iz e d .

Any
person violating any provision of
this section shall be punished by a
fine of not exceeding $5,000 or by
imprisonment not exceeding five
years, or both such fine and impris­
onment, in the discretion of the
court having jurisdiction.
Except so far as already provided
in existing laws this provision shall
not take effect until six months after
the passage of this Act.

Any person vio­
lating any provision of this section
shall be punished by a fine of not
exceeding $5,000 or by imprison­
ment not exceeding five-ycftfs one
year, or both sueh—
/i / m i n f

U11C wuTTJ

U n tr iytA*

uuJT i n y

T f

{ /if i a m

JU1 rouTUuIv/11 •

Except so far as already provided
in existing laws this provision shall
not take effect until sis-menfehs sixty
days after the passage of this Act.

SECTION

Except [s o fa r J as [ alreadyt pro­
J
vided in existing laws, this provision
shall not take effect until sixty days
after the passage o f this Act.

25.

S e c . 25. That from and after the
passage of this Act the stockholders
of every national banking associa­ stocSw)ldl*s of every national bank­
tion shall be held individually re­ ing association shall be held indi­
sponsible for all contracts, debts, vidually responsible for all contracts,
and engagements of such associa­ debts, and engagements of such asso­
tion, each to the amount of his ciation, each to the amount of his
stock therein, at the par value stock therein, at the par value
thereof in addition to the amount thereof in addition to the amount
invested in such stock. The stock­ invested in such stock. The stock­
holders in any national banking holders in any national banking
association who shall have trans­ association who shall have trans­
ferred their shares or registered the ferred their shares or registered the
transfer thereof within sixty days transfer thereof within sixty days
next before the date of the failure next before the date of the failure of
of such association to meet its such association to meet its obliga­
obligations shall be liable to the tions, or with knowledge o f such im­
same extent as if they had made no pending failure, shall be liable to
such transfer; but this provision the same extent as if they had
shall not be construed to affect in made no such transfer, to the extent
any way any recourse which such that the subsequent transferee fails to
shareholders might otherwise have meet such liability; but this provi­
against those in whose names such sion shall not be construed to affect
shares are registered at the time of in any way any recourse which such
shareholders might otherwise have
such failure.
against those in whose names such
shares are registered at the time of
such failure.
Section fifty-one hun­
dred and fifty-one, Revised Statutes
of the United States, is hereby re­
enacted except in so far as modified
Utr feh ]fl Qfi/i f. 1/M lU CU JUT o i l I “ 3vt3CTUllf
by this section.




Any person vio­
lating any provision o f this section
shall be punished by a fine o f not
exceeding $5,000 or by imprisonment
not exceeding one year, or both.

S e c . 23. The stockholders o f every
national banking association shall be
held individually responsible fo r all
contracts, debts, and engagements o f
such association, each to the amount
o f his stock therein, at the par value
thereof in addition to the amount
invested in such stock. The stock­
holders in any national banking as­
sociation who shall have transferred
their shares or registered the trans­
fer thereof within sixty days next be­
fore the date o f the failure o f such as­
sociation to meet its obligations, or
with knowledge o f such impending
failure, shaTl be liable to the same ex­
tent as i f they had made no such trans­
fer, to the extent that the subsequent
transferee fails to meet such liability;
but this provision shall not be con­
strued to affect in tiny way any re­
course which such shareholders might
otherwise have against those in whose
names such shares are registered at
the time o f such failure.

54

SECTION

26.

HOUSE BILL.

44

P A SSED B Y SENATE.

LOANS ON FARM LANDS.

LOANS ON FARM LANDS.

S ec . Q 24- T bat--any A ny na­
&
Sec . 26. That any national bank­
ing association not situated in a re­ tional banking association not sit­
serve city or central reserve city uated in a yesofve-oifcy 0¥ central
may make loans secured by im- reserve city may make loans secured
>roved and unencumbered farm by improved and unencumbered
and, but no such loan shall be made farm land, situated within its Fed­
for a longer time than twelve eral reserve district, but no such loan
months, nor for an amount exceed­ shall be made for a longer time than
ing fifty per centum of the actual twel ve-months five years, nor for an
value of the property offered as se­ amount exceeding fifty per centum
curity; and such property shall be of the actual value of the property
situated within the Federal reserve offered as
district in which the bank is located.
Any such bank may make such
loans in an aggregate sum equal to
Any such bank
twenty-five per centum of its capi­ may make such loans in an aggre­
tal and surplus.
gate sum equal to twenty-five per
centum of its capital ana surplus,
or to one-third o f its time deposits,
and such banks may continue here­
after as heretofore to receive time
deposits and to pay interest on the
same.
The Federal Reserve Board shall
The Federal Reserve Board shall
have power from time to time to add have power from time to time to add
to the list of cities in which national to the list, of cities in which national
banks shall not be permitted to banks shall not be permitted to
make loans secured upon real estate make loans secured upon real estate
in the manner described in this sec­ in the manner described in this
tion.
section.

f

S D — 6 3 -2 — vol 25-------15




CONFERENCE AGREEMENT.
LOANS ON FAR M LANDS.

S e c ; 24. Any national banking as­
sociation not situatedin a [reserve city
o r ] centralreserve city may makeloans
secured by improved and unencum­
bered farm land, situated within its
Federal reserve district, but no such
loan shall be made fo r a longer time
than five years, nor fo r an amount
exceeding fifty per centum o f the actual
value o f the property offered as secur­
ity. Any such bartJc may make such
loans in an aggregate sum equal to
twenty-five per centum o f its capital
and surplus or

to one-third o f its
time deposits and such banks may
continue hereafter as heretofore to
receive time deposits and to pay in­
terest on the same.
The Federal Reserve Board shall
have power from time to time to add
to the list o f cities in which national
banks shalt not be permitted to make
loans secured upon real estate in the
manner described in this section.

55

SECTION

27.

The Senate eliminated this section and th e H ouse conferees agreed.
HOUSE B ILL .
SAYINGS DEPARTMENT.

S ec . 27. That any national banking association may, subsequent to a date one year after the organization

of the Federal Reserve Board, make application to the Comptroller of the Currency for permission to open a
savings department. Such application shall set forth that the directors of said national Ibank have by a ma­
jority vote apportioned a specified percentage of their paid-in capital and surplus to said savings de45
partment ana to that end have segregated specified assets for the uses of said department, or that cash
capital for the said savings department has been obtained by subscription to additional issues of the
capital stock of said national bank: Provided, That the capital thus set apart for the uses of the proposed sav­
ings department aforesaid shall in no case be less than $15,000, or than a sum equal to twenty per centum of
the paid-up capital and surplus of the said national bank.
In making the application aforesaid any national banking association may further apply for power to
act as trustee for mortgage loans subject to the conditions ana limitations herein prescribed or to be estab­
lished as hereinafter provided.
Whenever the Comptroller of the Currency shall have approved any such application as hereinbefore pro­
vided, he shall so inform the applying bank, and thereafter it shall be authorized to receive savings deposits
as so defined^ and the organization and business conducted or possessed by said bank at the time of making
said application, except such as has been specifically segregated for the savings department, and subsequent
expansions thereof shall be known as the commercial department of the said bank. The said departments
shall, to all intents and purposes, be separate and distinct institutions save and except
46
as hereinafter expressly provided. The capital, surplus, deposits, securities, investments, and other
property, effects, and assets of each of said departments snail, in no event, be mingled with those
of the other department, or used, either in whole or in part, to pay any of the deposits of the other department
until all of the deposits of its own department have been fully paid and satisfied. National banks may in­
crease or diminish their capital stock in the manner now provided by law, but whenever such general increase
or reduction of the capital stock of any national bank operating upon the provisions of this section shall be
made such increase or reduction shall be apportioned between the commercial and savings departments of the
said bank as its board of directors shall prescribe, notice of such increase or reduction, and of the apportionment
thereof, being forthwith given to the Comptroller of the Currency; and any such national bank may increase
or diminish the capital already apportioned to either its savings or commercial department to an extent not
inconsistent with the provisions of this section, notifying the Comptroller of the Currency as hereinbefore pro­
vided. The savings department for which authority has been solicited and granted shall have control of the
cash or assets apportioned to it as hereinbefore provided, and shall be organized under rules and regulations
to be prescribed by the Comptroller of the Currency.
47
Both the savings and commercial departments so created shall, however, be under the control and
direction of a single board of directors and of the general officers of said bank.
All business transacted by the commercial department of any such national bank shall be in every respect
subject to the limitations and requirements provided in the national banking Act as modified by this Act,
and such business shall henceforward be known as commercial business.
The savings department of each such national bank shall be authorized to accumulate and loan the funds
of its depositors, to receive deposits of current funds, to purchase securities authorized by the Federal Reserve
Board, to loan any funds in its possession upon real estate or other authorized security, and to collect the same
with interest, and to declare and pay dividends or interest upon its deposits. The Federal Reserve Board is
hereby authorized to exempt the savings departments of national banking associations from any and every
restriction upon classes or kinds of business laid down in the national banking Act, and it shall be the duty
of the said board within one year after its organization to prepare and publish rules and regulations for the
conduct of business by such savings departments. The said regulations shall require every national
48
bank which shall conduct a savings department and a commercial department to segregate in its own
vaults the cash and assets belonging to such departments respectively and shall prescribe the general
forms of separate books of account to be used by each such department for its exclusive and individual use.
The regulations aforesaid shall further specify the period of notice for the withdrawal of deposits made in the said
savings department and shall forbid the acceptance of deposits by one department of such national bank from
the other department of such bank. The Federal Reserve Board shall make and publish at its discretion lists
of securities, paper, bonds, and other forms of investment, which the savings departments of national banks
shall be authorized to buy or loan upon; and said lists need not be uniform throughout the United States, but
shall be adapted to the conditions ox business in different sections of the country.
It shall be the duty of every national bank to maintain, with respect to all deposit liabilities of its savings
department, a reserve in money which may under existing law be counted as reserve, equal to not less than five
per centum of the total deposit liabilities of such department, and every national bank authorized to
49
maintain a sayings department is hereby exempted from the reserve requirements of the national banking
Act and of this Act in respect to the said deposit liabilities of its savings department, except as in this
section provided. Every regulation made in pursuance of this section shall be duly published, ana also posted
in every member bank having a savings department.
Every officer, director, or employee of any member bank who shall knowingly or willfully violate any of
the provisions of this section, or any of the regulations of the Federal Reserve Board, or of the Comptroller
of me Currency, made under and by virtue of tne provisions of this section shall be guilty of a felony, and on
conviction thereof shall be punished by a fine not exceeding $5,000 or by imprisonment not exceeding two
years, or both, in the discretion of the court.



56

SECTION

28.

HOUSE B ILL .

P ASSED B Y SENATE

CONFERENCE AGREEM ENT.

FOREIGN BRANCHES.

FOREIGN BRANCHES.

FOREIGN BRA NCHES.

S ec . 28. That any national bank­
ing association possessing a capital
of $1,000,000 or more may file appli­
cation with the Federal Reserve
Board, upon such conditions and
under such circumstances as may be
prescribed by the said board, for the
purpose of securing authority to es­
tablish branches in foreign countries
for the furtherance of the foreign
commerce of the United States and
to act, if required to do so, as fiscal
agents of the United States. Such
application shall specify, in addi­
tion to the name and capital
50
of the banking association
filing it, the foreign country
or countries or the dependencies of
the United States where the banking
operations proposed are to be car­
ried on and the amount of capital
set aside by the said banking associ­
ation filing such application for the
conduct of its foreign business at
the branches proposed by it to be
established in foreign countries.
The Federal Reserve Board shall
have power to approve or to reject
such application, if in its judgment,
the amount of capital proposed to
be set aside for the conduct of for­
eign business is inadequate or if for
other reasons the granting of such
application is deemed inexpedient.

Sec . 88 25. That Any national
banking association possessing a
capital and surplus of $1,000,000 or
more may file application with the
Federal Reserve board, upon such
conditions and under such e ifetan
sfcanees regulations as may be pre­
scribed by the said board, for the
purpose of securing authority to
establish branches in foreign coun­
tries or dependencies o f the United
States for the furtherance of the
foreign commerce of the United
States and to act, if required to do
so, as fiscal agents of the United
States.
Such application shall
specify, in addition to the name and
capital of the banking association

Sec. 25. A ny national banking assodation possessing a capital and sur­
plus o f $1,000,000 or more may file
application with the Federal Reserve
Board, upon such conditions and un­
der such regulations as may be pre­
scribed by the said board, fo r the pur­
pose o f securing authority to establish
branches in foreign countries or de­
pendencies o f the United States fo r
the furtherance o f the foreign com­
merce o f the United States, and to act,
i f required to do so, as fiscal agents o f

Every national banking associa­
tion which shall receive authority
to establish branches in foreign
countries shall be required at all
times to furnish information con­
cerning the condition of such
branches to the Comptroller of the
Currency upon demand, and the
Federal Reserve Board may order
special examinations of the said
foreign branches at such time or
times as it may deem best. Every
such national banking association
shall conduct the accounts of each
foreign branch independently of the
accounts of other foreign branches
established by it and of its home
office, and shall at the end of each
fiscal period transfer to its general
ledger the profit or loss accruing at
each such branch as a separate
item.




United-Sfcates place or places where
the banking operations proposed are
to be carried on and the amount of
capital set aside by the said banking
association filing such application for
the conduct of its foreign business
at the branches proposed by it to
be established in
ies
such place or places. The Federal
Reserve Board shall have power to
approve or to reject such applica­
tion if, in its judgment, the amount
of capital proposed to be set aside
for the conduct of foreign business
is inadequate or if for other reasons
the granting of such application is
deemed inexpedient.
Every national banking associa­
tion which shall receive authority
to establish foreign branches in feiign--eeuntoies shall be required at
all times to furnish information
concerning the condition of such
branches to the Comptroller of the
Currency upon demand, and the
Federal Reserve Board may order
special examinations of the said
foreign branches at such time or
times as it may deem best. Every
such national banking association
shall conduct the accounts of each
foreign branch independently of the
accounts of other foreign branches
established by it and of its home
office, and shall at the end of each
fiscal period transfer to its general
ledger the profit or loss accruing at
each sueh branch as a separate
item.

the United States. Such application
shall specify, in addition to the name
and capital o f the banlcing association
filing it, the place or places where the
banking operations proposed are to be
carried on, and the amount o f capital
set aside f[bythe said banking associa­
tion filing such applicationJ fo r the
conduct o f its foreign business j^at the
branches proposed by it to be estab­
lished in such place or places J. The
Federal Reserve Board shall have
power to approve or to reject such
application if, in its judgment, the
amount o f capital proposed to be set
aside fo r the conduct o f foreign busi­
ness is inadequate, or i f fo r other rea»
sons the granting o f such application
is deemed inexpedient.

Every national banking associa­
tion which shall receive authority to
establish foreign branches shall be re­
quired at all times tofurnish informer
tion concerning the condition o f such
branches to the Comptroller o f the
Currency upon demand, ana the
Federal Reserve Board may order
special examinations of the said
foreign branches at such time or
times as it may deem best. Every
such national banking association
shall conduct the accounts o f each
foreign branch independently o f the
accounts o f other foreign branches
established by it and o f its home office,
and shall at the end o f each fiscal
period transfer to its general Ledger
the profit or loss accruing at each
branch as a separate item.

57

SECTION

29.

HOUSE B IL L .

P ASSED B Y SENATE.

CONFERENCE AGREEM ENT.

S ec . 29. That all provisions
of law inconsistent with or
superseded by any of the provisions
of this Act be, and the same are
hereby, repealed: Provided, That
nothing in this Act contained shall
be construed to repeal the parity
provision or provisions contained
m an Act approved March four­
teenth, nineteen hundred, entitled
“ An Act to define and fix the
standard of value, to maintain the
parity of all forms of money issued
or coined by the United States, to
refund the public debt, and for
other purposes.”

S e c . £9 26.
aU A ll provi­
sions of law inconsistent with or
superseded by any of the provisions

Sec. 26. A ll provisions o f law
inconsistent with or superseded by
any o f the provisions o f this Act
are to that extent and to that extent only hereby repealed: Provided,
Nothing in this Act contained shall be
construed to repeal the parity provi­
sion or provisions contained in an
Act approved March fourteenth, nine­
teen hundred, entitled “ A n Act to
define and fix the standard o f value,
to maintain the parity o f all form s
o f money issued or coined by the
United States, to refund the public
debt, and fo r other purposes,” and
the Secretary o f the Treasury may
for^such purposes, or*] t h e p u r p o s e

51




are to that extent and to that extent only
hereby* repealed: Pf evidedy
nothings Nothing in this Act con­
tained shall be construed to repeal
the parity provision or provisions
contained in an Act approved March
fourteenth, nineteen hundred, enti­
tled “ An Act to define and fix the
standard of value, to maintain the
parity of all forms of money issued or
coined by the United States, to re­
fund the public debt, and for other
purposes,” and the Secretary o f the
Treasury may fo r such purposes, or
1o strengthen the gold reserve, borrow
gold on the security o f United States
bonds or fo r one-year notes bearing
interest at a rate o f not to exceed
three per centum per annum, or sell
the same i f necessary to obtain gold.
When the funds o f the Treasury on
hand justify, he may purchase and
retire such outstanding bonds and
notes.

NEW

OF MAINTAINING SUCH PARITY AND

to strengthen the gold reserve, borrow
gold on the security o f United States
bonds AUTHORIZED BY SECTION TWO
OF THE ACT LAST REFERRED TO Or for
one-year g o l d notesbearinginterest at
a rate o f not to exceed three per cen­
tum per annum, or sell the same i f
necessary to obtain gold. When the
funds o f the Treasury on hand justify,
he may purchase and retire such out­
standing bonds and notes.

SECTIONS.

S ec . 27. The provisions o f the Act
o f May thirtieth, nineteen hundred
and eightt authorizing national cur­
rency associations, the issue o f addi­
tional national-bank circulation, and
creating a National Monetary Com­
mission, which expires by limitation
under the terms o f such Act on the
thirtieth day o f June, nineteen hun­
dred and fourteen, are hereby extended
to June thirtieth, nineteen hundred
and fifteen, and sections fifty-one
hundred and fifty-three, fifty-one
hundred and seventy-two, fifty-one
hundred and ninety-one, and fiftytwo hundred and fourteen o f the
Revised Statutes o f the United
States, which were amended by the
Act o f May twentieth, nineteen
hundred and eight, are hereby re­
enacted to read as such sections read
prior to May twentieth, nineteen
hundred and eight, subject to such
amendments or modifications as are
prescribed in this ad: Provided,
however, That section nine of said
Act is hereby amended- so as to change
so much oi the tax rates fixed in said
section by making the portion appli­
cable thereto read as follows:

S e c . 27. The provisions o f the Act
o f May thirtieth, nineteen hundred
and eight, authorizing national cur­
rency associations, the issue o f addi­
tional national-bank circulation, and
creating a National Monetary Com­
mission, which expires by limitation
under the terms o f such Act on the
thirtieth day o f June, nineteen hun­
dred andfourteen, are hereby extended
to June thirtieth, nineteen hundred
and fifteen, and sections fifty-one
hundred and. fifty-three, fifty-one
hundred and seventy-two, fifty-one
hundred and ninety-one, and fiftytwo hundred and fourteen o f the
Revised Statutes o f the United
States, which were amended by the
Act o f May £ twentieth] t h i r t i e t h ,
nineteen hundred and eight, are hereby
reenacted, to read as such sections
read prior to May ^twentieth"!
t h i r t i e t h , nineteen hundred and
eight, subject to such amendments
or modifications as are prescribed in
this A ct: Provided, however, That
section nine oj J^saidJ t h e Act f i r s t
REFERRED TO IN THIS SECTION %
$

hereby amended so as to change [so
much of J the tax rates fixed in said
[ s e d i o n J a c t by making the portion
applicable thereto read as follows:

58

NEW
HOT? S I B IL L

S E C T I O N S — Conti nued.
PASSED B Y SENATE.

“ National banking associations
having circulating notes secured other­
wise than by bonds of the United
States, shall pay for the first three
months a tax at the rate oi three per
centum per annum upon the average
amount oi such oi their notes in cir­
culation as are based upon the deposit
of such securities, and aiterwards an
additional tax rate oi one-half of one
per centum per annum for each month
until a tax of six per centum per
annum is reached, and thereafter
such tax oi six per centum per annum
upon the average amount oi such
notes.9
'
S ec . 28. Section fifty-one hundred
and iorty-three oi the Revised Statutes
is hereby amended and reenacted to
read as iollows: “ Any association
jormed under this title m a y b y the
vote oi shareholders owning twothirds oi its capital stock, reduce its
capital to any sum not below the
amount required, by this title to
authorize the iormation oi associa­
tions; but no such reduction shall be
allowable which will reduce the capi­
tal of the association below the amount
required for its outstanding circula­
tion., nor shall any reduction be made
until the amount oi the proposed re­
duction has been reported to the Comp­
troller oi the•Currency and such re­
duction has been approved by the
said Comptroller oi the Currency arid
by the Federal Reserve Board, or by
the organization committee pending
the organization oi the Federal Re­
serve Board9
1
S ec. 29. I f any clause, sentence,
paragraph, or part of this Act shall
for any reason be adjudged by any
court o f competent jurisdiction to be
invalid, such judgment shall not
affect, impair, or invalidate the re­
mainder o f this A ct, but shall be con­
fined in its operation to the clause,
sentence, paragraph, or part thereof
directly involved in the controversy in
which such judgment shall have been
rendered.

SECTION
S e c . 30. That the right to amend,
alter, or repeal this Act is hereby
expressly reserved.
Passed the House of Represent­
atives September 18, 1913.
Attest:
SOUTH TRIMBLE,
Cleric.




E“ 3 National banking associations
having circulating notes secured otherwise than by bonds of the United
States, shall pay for the first three
months a tax at the rate oi three per
centum per annum upon the average
amount oi such oi their notes in cir­
culation as are based upon the deposit
oi such securities, and afterwards an
additional tax rate oi one-half of one
per centum per annum for each month
until a tax of six per centum per
annum is reached, and thereafter
such tax of six per centum per annum
upon the average amount of such
notes
S e c . 28. Section fiity-one hundred
and forty-three oi the Revised Statutes
is hereby amended and reenacted to
read as iollows: [ ' ‘ "JAny 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
this title to
authorize the formation of associa­
tions; but no such reduction shall be
allowable which will reduce the capi­
tal of the association below the amount
required for its outstanding circula­
tion, nor shall any reduction be made
until the amount oi the proposed re­
duction has been reported to the Comp­
troller oi the Currency and such re­
duction has been approved by the
said Comptroller of the Currency and
by the Federal Reserve Board, or by
the organization committee pending
the organization oi the Federal Re­
serve Board.ji>
'l
S e c . 29. If any clause, sentence,
paragraph, or part o f this Act shall
fo r any reason be adjudged by any
court o f competent jurisdiction to be
invalid, such judgment shall not
affect, impair, or Invalidate the re­
mainder o f this Act, but shall be con­
fined in its operation to the clause,
sentence, paragraph, or part thereof
directly involved in the controversy in
which such judgment shall have been
rendered.

30.

S e c . 30.
the The right
to amend, alter, or repeal this Act
is hereby expressly reserved.

o

CONFERENCE AGREEM ENT.

S ec . SO. The right to amend, alter,
or repeal this Act is hereby expressly
reserved.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102