Full text of Currency Bill : Comparative Print, H.R. 7837

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63d Congress )

2d Session

SENATE

f

j D ocument
j No. 264

CURRENCY BILL

COMPARATIVE PRINT
SHOWING THE CHANGES SUGGESTED B Y THE MODIFIED AMENDMENT SUBMITTED
TO THE SENATE BY MR. OWEN, ALSO THE CHANGES SUGGESTED BY
THE AMENDMENTS INTENDED TO BE PROPOSED
BY MR. HITCHCOCK TO

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




WASHINGTON
GOVERNMENT PRINTING OFFICE
1913

SUBMITTED BY MR. OWEN.
I n t h e S e n a t e o f t h e U n i t e d S t a t e s , December 9, 1918.
Ordered, That there be printed as a Senate document, in document type and in parallel columns, a com­
parative print of the banking and currency bill (H. R. 7837), “ An act to provide for the establishment of Fedreal 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
House bill and the changes suggested by the amendment submitted to the Senate by Mr. Owen; also the
changes suggested by the amendments intended to be proposed by Mr. Hitchcock, and that 5,000 additional
copies be printed for the use of the Senate document room, not to exceed the $500 limit of cost.
Attest:
Jam es M. B a k e r , Secretary.




H. R. 7837.

63 d CONGRESS,
1s t S e s s io n .

m THE

SENATE OF THE UNITED STATES.

[The figures indented indicate the page of the bill in print showing proposed changes.]

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.

SECTION

1.

HOUSE B ILL.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

Be it enacted by the Senate and
House o f Representatives of the United
States of America in Congress assem­
bled, That the short title of this Act
shall be the “ Federal Reserve A c t ”

Be it enacted by the Senate and
House of Representatives of the
United States of America in Congress assembled, That the short title
of this Act shall be the “ Federal Re­
serve Act.”
Wherever the word “ bank” is used
in this Act, 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
2
to.
The terms “ national bank”
and “ national 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 bank, or bank 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.

Be it enacted by the Senate and
House of Representatives of the
United States of America in Congress
assembled, That the short title of
this Act shall be the “ Federal Re­
serve Act.”

SECTION
FEDERAL RESERVE DISTRICTS.

The terms “ national bank99 and
“ national banking association” used
in this Act shall be held to be synony­
mous and interchangeable. The term
ilmember bank” shall be held to mean
any national bank, State bank,
2
or trust company which has
become a member o f one o f the
reserve banks created by this A ct The
term uboard” shall be held to mean
Federal Reserve Board; the term “ dis­
trict” shall be held to mean Federal re­
serve district; the term “ reserve bank”
shall be held to mean Federal reserve
bank.

2.

FEDERAL r e s e r v e d is t r ic t s .

FEDERAL RESERVE DISTRICTS.
The Hitchcock amendment proposes to
strike out all of section 2 of the House bill
and insert the following:

S e c . 2. That within ninety days
after the passage of this Act, or as
soon thereafter as practicable, the




S e c . 2. That within ninety days
alter the- passage-o f-this A etj op-as
As soon thereafter as practicable,

Sec. 2. That the Federal Reserve
Board, hereinafter provided for, shall,
as soon as practicable after their ap-

4

COMPARISON OF CURRENCY BILL.
SECTION

2—C o n t i n u e d .

HOUSE B ILL.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

Secretary of the Treasury, the Sec­
retary of Agriculture, and the Comp­
troller of the Currency,

the Secretary of the Treasury, the
Secretary ■of- Agfieulture,- and -the
Comptroller -of---the - C uffeneyyand
not less than two other members o f the
Federal Reserve Board, hereinafter
rovided fo r, to be assigned by the
>resident, acting as “ The Reserve
Bank Organization Committee, ”
shall designate ff om-ameng-the-reservo--and-ceRtFat-rcser¥C okies now
a*itkerk ed -by4aw-a number-ef-sueh
not less than eight nor more than
twelve cities to be known as Federal
reserve cities, and shall divide the
continent al United States, including
Alaska, into districts, each district
to contain one, and only one, of such
Federal reserve cities. The determi­
nation of said organization committee
shall not be subject to review except by
the Federal Reserve Board when
3
organized: Provided, That
the districts shall be appor­
tioned with due regard to the con­
venience and customary course of
business of the community and shall
not necessarily eeineidc with—the
area-of -sueh be coterminous with any
State or States ■
in part.included-in- any givon- di»
triet. The districts thus created
may be readjusted and new districts
may from time to time be created
by the Federal Reserve Board here.
—
---- ; ---- —
x--- “
joint application-made by-not-less
than-ten member-banks dcsiring-te

pointment and confirmation, desig­
nate from among the reserve and cen­
tral reserve cities now established a
number o f such cities to be termed
Federal reserve cities, and shall divide
the continental United States into dis­
tricts, each district to embrace one o f
such Federal reserve cities:
5
Provided, That the districts
shall be formed with due
regard to the convenience and custom­
ary course of financial and commer­
cial business in each district, and
need not necessarily coincide with
State or county boundaries. The dis­
tricts thus established shall be Tcnown
as Federal reserve districts, and each
o f them shall be designated by the
name o f the Federal reserve city located
therein.

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

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 ‘ kFed­
eral Reserve Bank of Chicago." and
so forth. The totai number of re-




f

to exceed twelve in all. The Such
districts thus-constitut-ed shall be
known as Federal reserve districts
and sha-H- mag be designated by
number

-the—app-lieatien—e#—three-

disv-Het.

A majority o f the organi­
zation committee shall constitute a
quf^nim^with^ author it ij to act. ^ ^

The Federal Reserve Board
shaM, as soon as practicable after the
w--itself--preeeed~to said districts have been established,
—i~H—eaeh—of the—reserve proceed to organize, conformable to
the provisions of this act, %n each Fed­
eral reserve city designated as afore­
said, a Federal reserve bank, which
shall be Icnoum by the name of the city
in which it is established, as,for exam­
h!—
—
t>(-"Chi ■ ple, u Federal Reserve Banlc of Chi­
e&ge™•
—
forth-— The—tetal cago.” Four Federal reserve cities.

5

COMPARISON OF CURRENCY BILL.
SECTION
HOUSE B ILL.

serve cities designated by the orjanization 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.

2—C o n t i n u e d .

OWEN AMENDMENT.

number— ef—reserve— cities

S

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-fourth 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




to~employ-counf3cl~ftnd--C3Epei->t-ftid7
to take testimonyy-to send for pefoathsj- and-fce--make--stteh-m-vestigatiens--as~may--b e“-deemed--necessary

Every—national—bank—loeated
withm-argiven- distriet shal-1 be re-qtt»red-4o--subseribo~to~the~eftpital

eubseriptionmade^— The - remainder- ef- the- sub ■
scriptieR- or-a ny-part- thereof- shatl
bceomc~ft-4iarb ility" Of-thc-mcmber
bank-, -subject to eall and-payment
thereof ■whenever necessary to moot
the obligations of- the- Federal..re­
serve bank under sueh tcrms- and in
aceordanee-with-sueh-regulations-as
the—beard—ef—directors—ef—said
Federal—reserve—bank—may—prescrib^Provided, Tfaat-no

Said organization committee shall
be authorized to employ counsel and
expert aid, to take testimony, to send
for versons and papers, to administer
oaths, and to make such investigation
as may be deemed necessary by
5
the said committee in determin­
ing the reserve districts and in
determining the cities within such dis­
tricts where such Federal reserve banks
shall be severally located. The said
committee shall supervise the organi­
zation, in each o f the cities designated,
of 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, including the trust
companies engaged in commercial
banking within the District of Colum­
bia, is hereby required and every eligi­
ble bank is hereby authorized to signify
in writing, within sixty days after
the passage o f this act, its acceptance

HITCHCOCK AMENDMENT.

and appurtenant to themfour Federal
reserve districts, and no more, shall in
the first instance be designated and
established as such by the Federal
Reserve Board: Provided, That after
Federal reserve banks have been or­
ganized and in operation for a period
of two years in said four Federal
reserve cities, the Federal Reserve
Board may, in its discretion, from
time to time, designate not to exceed in
all eight additional Federal reserve
cities, with the requisite Federal
reserve districts appurtenant thereto,
and for that purpose may alter and
change the limits and areas of existing
Federal reserve districts. There shall
be allotted to every national bank
within a Federal reserve dis6
trict, of the capital stock o f the
Federal reserve bank o f such
district, a sum equal to six per centum
o f the fully paid-up capital stock and
surplus of such national bank, which
stock so allotted shall be underwritten
by said bank and for a period o f sixty
days after allotment be offered for sub­
scription at par to the public at large,
but no more than one hundred shares
shall be allowed to be subscribed for or
held by any person, firm, or corpora­
tion and all of the allotted stock not
subscribed for and taken by the public
shall immediately be subscribed for
and taken by the national bank to
which the same was in the first in­
stance allotted. The preparation,
allotment, subscription to, and sale o f
stock shall be under the control o f the
board, which in case of oversubscrip­
tion shall give preference to the
smaller subscriptions. The national
banks shall in the first instance act as
agents of the Federal Reserve Board to
take subscriptions from the general
public and receive payment therefor
which shall be held subject to the order
of the board.

6

COMPARISON OF CURRENCY BILL.
SECTION
HOUSE B ILL.




2—C o n t i n u e d .

OWEN AMENDMENT.

o f the terms and 'provisions hereof.
When a Federal reserve hank shall
have been organized, every national
banking association within that dis­
trict shall be required and every eligi­
ble bank may be permitted to subscribe
to the capital stock thereof in a sum
equal to six per centum of the paid-up
capital stock and surplus of such bank,
one-sixth of
the subscription to be
payable on call of the organization
committee or of the Federal Reserve
Board, one-sixth within three months
and one-sixth within six months thereafter, and the remainder of ih° subscription, or any part thereof, shall
be subject to call when deemed
6
necessary by the Federal Re­
serve Board, said payments to
be in gold or gold certificates.
The shareholders of every Federal
reserve bank shall be held individually
responsible, equally and ratably, and
not one for another, for all contracts,
debts, and engagements of such bank
to the extent of the. amount of 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
of this Act.
Any national bank failing to sig­
nify its acceptance of the terms of this
Act vAthin the sixty days aforesaid
shall cease to act as a reserve agent,
upon thirty daysJ notice, to be given
within the discretion of the said or­
ganization committee or of the Fed­
eral Reserve Board.
Should any national banking asso­
ciation in the United States or trust
company engaged in commercial bank­
ing in the District of Columbia now
organized fail within one year after
the passage of this Act to become a
member bank under the provisions
hereinbefore stated, or fail to comply
with any of the provisions of this Act
applicable thereto, all of the rights,
privileges, and franchises of such
association granted to it under the
national-bank Act, or under the pro­
visions of this Act, shall, mthin the
discretion of the Federal Reserve
Board, be thereby forfeited. Any
noncompliance with or violation of
this Act, shall, however, be
7
determined and adjudged by
any court of the United States
of competent jurisdiction in a suit
brought for that purpose in the Dis­
trict or Territory in which such bank
is located, under direction of the
Federal Reserve Board, by the Comp­
troller of thr Currency in his own

HITCHCOCK AMENDMENT.

That said stock subscription shall be paid for in gold coin
or gold certificates as follows: Onethird at the time of subscription, onethird within thirty days, and onethird within sixty days thereafter.

7

COMPARISON OF CURRENCY BILL.
SECTION
HOUSE B ILL.

S r>—63-2—vol 25------2



2—C o n t i n u e d .

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

name before the association shall be
declared dissolved. In cases of such
noncompliance or violation, other
than the failure to become a member
bank under the provisions of 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 of 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 of said Federal reserve
banlcs 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 com­
mittee shall determine, subject
rpjle Hitchcock amendment proposes to
to the same commons as to strike out all of section 2 of the House bill.
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
committee shall determine. Said
United States stock shall be paid for
at par out of any money in the
Treasury not otherwise avvrovriated.
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.

COMPARISON OF CURRENCY BILL.
SECTION

2—C o n t i n u e d .

HOUSE BILL.

OWEN AMENDMENT.

Federa! reserve bank shall commence
business with a paid-up and unim­
paired capital less in amount than
$5,000,000.

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 he exercised solely by the class
V directors o f the Federal reserve
bank in which said stock may
9
hr held, and who shall be des­
ignated as uvoting trustees.'’
The voting power on said public
stock shall he limited to one vote fo r
each $lo/)00 par value thereof, frac­
tional amounts not to be considered.
The voting trustees shall exercise the
same powers as member banks in
voting for class A and class B
directors.
The Federal Resent Board is
hereby empowered to adopt and promulgate rules and regulations gov­
erning the transfers o f sa id stock and
the exercise o f the voti ng power thereon.
No Federal roserve bank shall com­
mence business with a y akl.up a»d
ttftimpaifed subscribed capital less in
amount than $5t009-,0Q0 $3,000,000.
The organization o f reserve districts
and Federal reserve cities shall not
be construed as changing the present
status o f reserve cities a/nd, central
reserve cities, except in so fa r as this
Act changes the amount o f reserves
that may be carried with approwd
resei've aaents 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, (teem necessary, and such
expenses shall be payable by the
Treasurer of the United States upon
voucher approved by the Secretary
of the Treasury, and the sum of
$ 100,000, or so much thereof as may
be necessary, is hereby appro10
printed, out of any moneys in
the Treasury not otherwise
appropriated, for the payment of
such expenses.

The organization com­
mittee shall have power to appoint
such assistants and incur such ex­
penses in carrying out the provi­
sions of this Act as it shall deem nec­
essary, and such expenses shall be
nable by the Treasurer of the
nited States upon voucher ap­
proved by the Secretary of the
Treasury, and the sum of $100,000,
or so much thereof as may be neces­
sary, is hereby appropriated, out of
any moneys in the Treasury not
otherwise appropriated, for the pay­
ment of such expenses.

e




8

HITCHCOCK AMENDMENT.

The board is hereby empowered to
appoint such assistants, to subpoena,
swear, and examine witnesses, to em­
ploy counsel and experts, and to incur
such expenses as may be necessaryfo r
establishing, organizing, and putting
in operation the Federal re7
serve banks and designating
the. Federal reserve cities and
reserve districts provided fo r in (his
A ct, and such expenses shall be paid
by the Treasurer o f the United States
upon vouchers approved by the Secre­
tary o f the Treasury, and the mm o f
$100,000, or so much thereof as may
be necessary, is hereby appropriatea,
out o f any money in trie Treasury not
otherwise appropriated, fo r the pay­
ment o f such expenses. Five mem­
bers o f the reserve board shall consti­
tute a quorum with power to do busi­
ness.

COMPARISON OF CURRENCY BILL.
SECTION

9

3.

HOUSE BILL.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

STOCK ISSUES.

STOCK ISe efiflT BRANCH OFFICES.

STOCK ISSUES.

The Hitchcock amendment proposes to
strike out all of section 3 of the House bill
and insert the following:

4

S ec . 3. That the capital
stock of each i ederal 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 ! ed­
eral Reserve Board at points within
the Fed era1reserve 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 i ederal
reserv e bank.

S ec . 3. -T hat the- capital stock-ef
eaeh Federal rescu e bank shall be
divided in to.shares ef -$-KK) --eaeh-:
The-oiitstandiRg capital-steek-shalt
be^ ncreased -frem-time-to -tkne-as
meinbef-baeks-iftereftse-their-cftpi-tal
stock or as additional banks beee-me
members, and shall be- decreased as
member- baftks-redttee--their capital
stock or cease-to-be-membegs-. Each
Federal reserve bank may shall es­
tablish branch offices u »4er-regulations of- the Federal Reserve Board
at points within the-Fedoral reserve
distriet-ift-which it-is4oeated-;-^ ovided, That the total-number of
stteh branches shall- net exceed- one
for-- eaeh-.IdQQyQOQ.-ef- the capital
stoek- o£ said-Fcderal- roserve- bank
unthin the Federal reserve district in
which it is located and also in the
district o f any Federal reserve bank
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
FE D ER A L R E SE R V E

B A N K S.

S ec . 4. The national banks in
each Federal reserve district uniting
to form the Federal reserve bank
therein, hereinbefore provided for,
shall under their seals, make an
organization certificate, which shall
specifically state the name of such
I ederal reserve bank so organized,
the territorial extent of the district
over which the operations of said
Federal reserve bank are to be car­
ried on, the city and State in which
said bank is to be located, the
amount of capital stock and the
number of shares into which the
same is divided, the names and
places of doing business of each of




FEDERAL R E SE R V E

Sec. S. The capital stock o f each
Federal reserve bank shall be di­
vided into shares o f $100 each, and
shall be without voting power. The
Federal Reserve Boara shall have
power to prescribe regulations for
the transfer of said stock.
8
With the consent and approval
of the board, reserve banks
may establish such branch offices,
within their respective districts, as
they deem necessary to conform to the
convenience and established course of
business.

4.
BANKS.

FE D ER A L R ESER VE

BANKS.

The Owen amendment proposes to strike
out all of section 4 down to the words
“ Every Federal Reserve Bank,” and insert
the following:

The Hitchcock amendment proposes to
strike out all of section 4 and insert the
following:

12

Sec. 4- When the Federal Reserve
Board has established Federal reserve
districts, as prescribed in section two
o f this Act, the governor or vice gov­
ernor of such board shall, under his
hand and seal, execute a certificate des­
ignating the territorial limits o f such
districts and the Federal reserve city in
each district, and shall file such certifi­
cate with the Secretary of the Treasury.

Sec. 4- When the organi­
zation committee shall have
established Federal reserve districts
as provided in section two o f this
Act, a certificate shall be filed with
the Comptroller of the Currency
showing the geographical limits of
such districts and the Fedeml re­
serve city designated in each o f such
districts. The Comptroller of 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

COMPARISON OF CURRENCY BILL.
S ECTION

4—C o n t i n u e d.

HOUSE BILL.

OWEN AMENDMENT.

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 of directors
of earn bank executing such appli­
cation, authorizing a subscription
to the capital stock of the Federal
reserve bank organizing in that dis­
trict in accordance with the provi­
sions of tMs Act.
When the minimum amount of
capital stock prescribed by this Act
for the organization of 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 of 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 of such Federal reserve
bank are to be carried on, the city
and State in which said hank
is to be located, the amount of
capital stock and the number
of share* into which the same is
divided, the name and place of doing
business of each bank executing such
certificate, and of all banks which
have subscribed to the capital stock
of such Federal reserve bank and
the number of 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 of such
Federal reserve bonk, to avail them­
selves of the advantages of this Act.
The said organization certificate
shall be acknowledged before a judge
of some court of record or notary
public; and shall be, together with the
acknowledgm eni thereof, authenticated
by the seal of such court, or notary,
transmitted to the (bmptroller of the
Currency, who shall file, record and
carefully preserve the same in his
office.
Upon the filing of such certificate
with the Com ptroller of the Currency
as aforesaid, the said Federal reserve
bank shall become a body corporate
owl as such, and in the name desig­
nated in such organization certificate,
shall ha/ve 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 the 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 filing 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
reform all those acts and to enjoy




HITCHCOCK AMENDMENT.

When such certificate has been exe­
cuted and filed, as aforesaid, the board
shall avoot to each and every national
bank stock in the reserve banks as
prescribed in section two of this Act,
and when, conformable to section
two of this Act, an amount of such
stock has been subscribed for in any
Federal reserve district equal to
$6,000,000, and one-third o f
15
such subscription has been paid
in, the board shall, by its gov­
ernor or vice governor, under his hand
and seal, issue a certificate in writing
specifying the name and location o f
the reserve bank in such district, the
territorial limits of the district, the
amount of the capital stock sub­
scribed, and the amount paid in on
such subscription, and the name and
amount of stock taken by each sub­
scriber. Such certificate shall be ac­
knowledged before the clerk of a court
of record, or a notary public, and
shall be filed with the Secretary of the
Treasury.

Upon the filing o f such certificate
with the Secretary of the Treasury as
aforesaid, the said reserve bank so
formed 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.

11

COMPARISON OF CURRENCY BILL.
SECTION
HOUSE BILL.

4— Continued.

OWEN AMENDMENT.

all those privileges and to exercise
Second. To have succession for a
all those powers described in section period of twenty years from its organi­
fifty-one hundred and thirty-six. zation unless it is sooner dissolved by
Revised Statutes, save in so far as an Act of Congress, or unless its
the same shall be limited by the pro­ franchise becomes forfeited by some
visions of this Act. The Federal
violation of law.
reserve bank so incorporated shall 14
Third. To make contracts.
have succession for a period of
Fourth. To sue and be sued,
twenty years from its organization, complain and defend, in any court of
unless sooner dissolved by Act of law or equity.
Congress.
Fifth. To appoint by its board of
directors, elected as hereinafter pro­
vided, such officers as are not other­
wise provided for in this Act, to define
their duties, require bonds of them
and fix the penalty thereof, to dismiss
s uch officers or any of them as may be
appointed by them at pleasure, and to
appoint others to fill their places.
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 board
of directors, or duly authorized officers
or agents, all powers specifically
granted by the provisions of this Act
and such incidental powers as shall
be necessary to carry on the business
of banking within the limitations
prescribed by this Act.
Eighth. Upon deposit with the
Treasurer of the United States of any
bonds of the United States in the man­
ner provided by existing law relating
to national banks, to receive from the
Comptroller of the Currency circulat­
ing ne>tes in blank, registered and
cemntersigned as provided by law,
equal in amount to the par value of
the bemds so deposited, such notes to
be issued under the same con15
ditions and provisions of law
which relate to the issue of cir­
culating notes of national banks se­
cured by bonds of the United States
bearing the circulating privilege.
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 of the Currency to commence
business under the provisions of this
Act.
Every Federal reserve bank shall
Every Federal reserve bank shall
be conducted under the oversight be conducted under the evetsigM
and control of a board of directors, supervision and control of a board
whose powers shall be the same as of direct or?
those conferred upon the boards of




HITCHCOCK AMENDMENT.

Second. To have succession fo r a
period o f twenty years from its organ­
ization unless it is sooner dissolved by
an Act 0* Congress, or untess its
franchise becomes forfeited by some
violation of law.
Third. To make contracts.
Fourth. To sue and be sued, com­
plain and defend, in any court o f law
and equity asfully as natural persons.
Fifth. To appoint by its board of
directors, elected as hereinafter pro­
vided, such officers as are not
16
otherwise provided for in this
Act, to define their duties, re­
quire bonds of them and fix the
penalty thereof, to dismiss such offi­
cer's or any of them as may be ap­
pointed by them at pleasure, and to
appoint others to fill their places.
Sixth. To prescribe by its board of
directors by-laws not inconsistent
with law regulating the manner in
which its general business may be
conducted and the privileges granted
to it by law may be exercised and
enjoyed.
Seventh. To exercise by its board
of directors, or duly authorized offi­
cers 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
of banking within the limitations pre­
scribed by this A ct.

No Federal reserve bank shall
transact any backing business, ex­
cept such as pertains to the perfection
of its organization and management,
until two-thirds of its stock sub­
scribed for has been paid in as pre­
scribed in section two of this Act.
Every Federal reserve bank shall
be conducted., managed, and con­
trolled by a board of nine directors,
five of whom shall be appointed by
the Federal Reserve Board, and shall

12

COMPARISON OF CURRENCY BILL.
SECTION
HOUSE BILL.

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.

Class C shall consist of three
members, who shall be designated
by the Federal Reserve Board.

Direc tors of class A 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




4— Continued.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

thc--boftFds“of“-dii!eeteFs-of- national- be known as directors “ A ,” and four
of whom shall be known as directors
l\B,” and who shall be selected and
appointed by the member banks as
The board of directors shall per­ follows:
form the duties usually appertaining
to the office of directors of bankin g as­
sociations and all such duties as are
prescribed by law.
Said board shall administer the af­
fairs of said bank fairly and impar­
tially and without discrimination in
favor of or against any member bank
or banks and shall, subject to the pro­
visions of law and the orders of 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 for the claims and de­
mands of other member banks.
16
Such board of directors
shall be eeftstiteted— and
eleeted selected as hereinafter speci­
fied and shall consist of nine mem­
bers, holding office for three years,
and divided into three classes, des­
ignated as (‘lasses 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
at the time of
their electio7b shall be actively en­
gaged in their district, respectively,
in commerce, in agriculture, and in
some other pursuit.
(lass 0 shall consist of three
members, who shall be designated
by the Federal Reserve Board.
No director of class B or of class 0
shall be an officer, director, employee,
or stockh older of any bank.
Directors of (‘lass A and class B
shall be chosen in the following
manner:
It—sttaH-be -the- dttty- of- the The
chairman of the board of directors
of the Federal reserve bank of the
district in which eaeh-sueh the bank
is situated to shall classify the mem­
ber banks of the sa*d district into
three general groups or divisions.
Each m ek group shall contain as
nearly as may be one-third of the
aggregate number of smd the mem­
ber banks of the said- district and
shall consist, as nearly as
17
may be, of banks of similar
capitalization.
The
said:
groups shall be designated by num­
ber at-the-pleasure-ef by the chair­
man A

13

COMPARISON OF CURRENCY BILL.
SECTION 4— Continued.
HOUSE BILL.

OWEN AMENDMENT.

At a regularly called directors’
meeting of each member bank in the
Federal reserve district aforesaid,
the board of directors 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.

At a regularly called direetersmeeting of the board of directors of
each member bank in the Federalreserve district aforesaid, the board




HITCHCOCK: AMENDMENT.

e f - d i rce t e r s - o f -sMeh - m em b o r -.b an k

it 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 reserve
bank of the district. The said
chairman shall establish 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 m ah
elector in each groups. Every
elector shall/ within fifteen days-ef
the-reeeipt- of- the said-.list,-select
and certify to the said -chairman
from- among-the- namcs-on the-list
pertaining- to- his group- transmitted- t o -him by the chairman, one
name, net-his-ewn, as representing
his- ehoiee-for-F odcral reserve d ipecter,-class- A":— The name- receiv­
ing the greatest number o f -votes,not less- tfaan- a majority, shall-be
designated-by-said-chairmanas-Federal- roserve.director for- the group
to -whieh he-be-lengs.--In case ne-eandidate shaH-rccci vc a majority-ef -all
The Hitchcock amendment proposes to
vetcs- cast in- any-group, the chair strike out all of section 4 of the Mouse bill.
gible list,-c o n sisting ef the- three

18

names..receiving the great •
eat number of votes-on -the

m it-said-lis tte -the-eleetors in-eaeh
ef the groups-e f- banks.established
by-him -—Eaeh doctor shall at enee
select-and eertify-te-thc said -chair­
man from among thc-three persons
submitted to him-his-ehoiee-fer-Fed ■
eral-resei-ve-direetory class A, and
the—name—receiving—the—greatest
nnmber-of- sueh -vetes- shaH- be- de­
clared by the chairman as Federal
reserve -director, -elass A-— In- case
of a"-tie-vote- the- balloting shall con
tinue-in the -manner hereinbefore
prescri bed-unti l -one candidate re
coives me r e -votes than- either of
the others.
ehosen by -the electors of the re
spcctive-grenps at the same time
and-in-the same-manner prescribed
for directors of - elass- A,—e&eept
that-they- must- be-seleeted-from-a
l ist of names furnished, one-by each
member-banky-and snehnames shall
in no case be these of officers or
directors of- any bank or banking
association.

COMPARISON OF CURRENCY BILL.
S

14

I C T I O N 4 — C o n t i n u e d.

HOUSE BILL.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

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 said 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
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.

Every elector shall, within fifteen
days after the receipt of the said list,
certify to the chairman his first, sec­
ond, and other choices upon the list,
upon a preferential ballot, on a form
furnished by the chairman of the
board of directors of the Federal re­
serve bank of 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.
19
Any candidate having a ma­
jority of all votes cast in the
column of first choice shall be de­
clared 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 to the votes cast for 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 of election shall be
declared.

As soon as practicable after a re­
serve bank has been incorporated as
above provided the board shall
17
notify the member banks in
said Federal reserve district
to elect four directors within a certain
date to be named in the notification.
Said board shall supply to each mem­
ber bank a blank for the purpose of
recording the vote of said member
bank. Each member bank shall vote
for four i(B n directors upon the
blank so forwarded, shall certify that
they are the choice of the board of di­
rectors of said member bank, which
certificate shall be signed by the ofiicers of said bank and forwarded to
the board within the time which said
board shall limit. Said board shall
canvass the ballots so received from
said member banks and forward a
certificate of the result to each of said
member banks. The candidate for
director receiving the largest number
of votes shall be elected for four years;
the candidate for director receiving
the second largest number of votes
shall hold office for three years; the
candidate for director receiving the
third largest number of votes shall hold
office for two years; the candidate for
director receiving the fourth largest
number of votes shall hold officefor one
year. During each subsequent year
the election shall be held in the same
manner except that each bank shall vote
for only one director unless in case
of vacancies, when the number to be.
elected shall be certified by the board
to each member bank, and in such
cases a plurality vote shall elect.
18
No person shall be qualified
to hold the office of director
“ A ” or director UB ” while he is an
officer, director, stockholder, or em­
ployee of any other bank or of any
trust company, and no person shall
be appointed or elected director who is
not at the time of his appointment or
election an actual and bona fide resi­
dent of the Federal reserve district
for which he is appointed or elected.
The Federal Reserve Board shall

They shall not -aecept of ­
They shall not accept
office as such during the term of their fice as sueh during -the term of their
service as directors of the Federal serviee-as-directors.of- the--Federal
reserve bank. They shall be fairly reserve bank.— They-shall-be fairly
representative of the commercial, representative of-the commercial j
agricultural* or industrial interests agricultural, or iftdttstriat -interests
of their respective districts. The of their respective districts.— The
Federal Reserve Board shall have F-cderal-Roscrvc~Board--shall- havo
power at its discretion to remove power at-its discretion: to remove
any director of class B in any Fed­ afty^direetor of-ela9s -B-ii^afty--Fcderal reserve bank, if it should appear erai Reserve bank-, if it should apat any time that such director does pcar--at -afty-timc that such directed



15

COMPARISON OF CURRENCY BILL.
S E C T I O N 4 — C o n t i n u e d.
HOUSE BILL.

OWEN AMENDMENT.

not fairly represent the commercial, (4oef^m>t—fiHriy- repreaeftt—the-eemagricultural, or industrial interests mereiftl, agricultural, or industrial
of his district.
interests-of-hi-s-dis^rie^T
Three directors belonging to class
Three directors belonging to class
C shall be chosen directly by the C shall be chose** appointed directly
Federal Reserve Board, and shall be
by the Federal Reserve
residents of the district for which 20
Board, and shall be have
they are selected, one of whom shall
been for at least two years
be designated by said board as chair- residents of the district for which
man of the board of directors of the they are selected appointed, one of
Federal reserve bank of the district whom shall be designated by said
to which he is appointed and shall board as chairman of the board of
be designated as “ Federal reserve directors of the Federal reserve
agent.” He shall be a person of bank of the district to which he is
tested banking experience; and in appointed and shall be designated
addition to his duties as chairman by said board as u Federal reserve
of the board of directors of the Fed- agent.” He shall be a person of
eral reserve bank of the district to tested banking experience; and in
which he is appointed, he shall be addition to his duties as chairman
required to maintain under regula- of the board of directors of the
tions to be established by the Fed- Federal reserve bank of the district
eraJ Reserve Board a local to which he is appointed, he shall
9
office of said board, which he required to maintain under regushall be situated on the la tions to be established by the
premises of the Federal reserve bank Federal Reserve Board a local
of the district. He shall make reg- office of said board, which shall be
ular reports to the Federal Reserve situated on the premises of the
Board, and shall act as its official Federal reserve bank of the disrepresentative for the performance trict. He shall make regular reof the functions conferred upon it by ports to the Federal Reserve Board,
this Act. He shall receive an an- and shall act as its official reprenual compensation to be fixed by sentative for the performance of
the Federal Reserve Board and paid the functions conferred upon it by
monthly by the Federal reserve this Act. He shall receive an anbank to which he is designated.
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 0 , who
shall be a person of tested banking
experience, shall be appointed by
the Federal Reserve Beard as dep­
uty chairman and deputy Federal
reserve agent to exercise the powers of
the chairman of the board and Fed­
eral reserve agent in case of the ab­
sence or disability of his principal.
Directors of Federal reserve banks
Directors of Federal reserve b anks
shall receive, in addition to any shall receive, in addition to any
compensation otherwise provided, a
compensation otherwise proreasonable allowance for necessary 21
vided, a reasonable allowance
expenses in attending meetings of
for necessary expenses in attheir respective boards, which tending meetings of their respective
amount shall be paid by the re- boards, which amount shall be paid
spective Federal reserve banks, by the respective Federal reserve
Any compensation that may be banks. Any compensation that
provided by boards of directors of may be provided by boards of diFederal reserve banks for members rectors of Federal reserve banks for
of such boards shall be subject to members of such boards shall be
review by the Federal Reserve subject to review and subsequent
Board.
readjustment at any time b}^ the i ederal Reserve Board.




HITCHCOCK AMENDMENT.

designate and appoint one o f said
directors UA ” as chairman o f the
board of directors, who shall be known
as u Federal reserve agent ” Direc­
tors “ A ” shall hold their offices for
four years, except the Federal reserve
agent, who shall hold his office at the
fleasure of the aboard. O f the direc­
tors u A ” first selected one shall hold
office for one year, one for two years,
one for three years, and one for the
full term of four years, as designated
by the board. Directors uB ” shall
hold their offices for four years except
that as to the first election one shall
be elected for one year, one fo r two
years, one for three years, and one
for four years.

The salaries of the directors shall
be fixed by the board, and shall be
payable from the revenues o f the
Federal reserve bank o f which they
are directors. The board o f directors
shall have authority to fix the salaries
and wages of all the employees o f
their bank.

COMPARISON OF CURRENCY BILL.
SECTION

4 — Continued.

HOUSE BILL.

OWEN AMENDMENT.

The Reserve Bank Organization
Committee may, in organizing Fed­
eral reserve banks for the first time,
call such meetings of bank directors
in the several districts as may be
necessary to carry out the purposes
of this Act and may exercise the
functions herein conferred upon the
chairman of the board of directors
of each Federal reserve bank pend­
ing the complete organization of
such bank.
At the first meeting of the
full board of directors of each
Federal reserve bank after organi­
zation it shall be the duty of
10
the directors of (‘lasses A and
B and 0, respectively, to
designate one of the members of
each class whose' term of office shall
expire in one year from the first of
January nearest to date of such
meeting, one whose term of office
shall expire at the end of two years
from said date, and one whose term
of office shall expire at the end of
three years from said date. There­
after every director of a Federal
reserve bank chosen as hereinbefore
provided shall hold office for a term
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
pired term of the director in whose
place he was appointed. Vacancies
that may occur in the several
classes of directors of Federal re­
serve banks may be filled in the
manner provided for the original
selection of such directors, such
appointees to hold office for the
unexpired terms of their prede­
cessors.

The Reserve Bank Organization
Committee may, in organizing Fed­
eral reserve banks for the first time,
call such meetings of bank directors
in the several districts as may be
necessary to carry out the purposes
of this Act, and may exercise the
functions herein conferred upon the
chairman of the board of directors
of each Federal reserve bank pend­
ing the complete organization of
such bank.
At the first meeting of the full
boa i’d of direct ors of eaeh Federal
reserve bank after organization it
shall be the duty of the directors of
classes A and B and C, respectively,
to designate one of the members of
each class whose term of office shall
expire in one year from the first of
January nearest to date of such
meeting, one whose term of office
shall expire at the end of two years
from said date, and one whose'term
of office shall expire at the end of
three years from said date. There­
after every director of a Federal re­
serve bank chosen as hereinbefore
provided shall hold office for
22
a term of three yearsfbet-the
ekai-rman of the board-ef-di.
f eetera of each FocfcyaJ-gegcr ve bank
designated- by the -Federal Reserve
Beard-, .as hereinbefore dcacribcdj




16

of- the-- said- board, without notieey
ftftd-his -stteeeaaor -ahttll.hoi d office
dttriag -tb e.unexpired term of the
director -m whose place he was ap
pointed. Vacancies that may occur
in the several classes of directors of
Federal reserve banks may be filled
in the manner provided for the
original selection of such directors,
such appointees to hold office for
the unexpired terms of their pred­
ecessors.

HITCHCOCK AMENDMENT.

Vacancies that occur in either
class of directors of reserve banks may
be filled in the manner pro19
vided for the original selection
o f such directors, the men so
selected to hold office for the unexpired
terms of their predecessors.
Upon its own initiative, fo r cause,
or upon written complaint under oath
presented by ten or more member
oanks charging any director o f a re­
serve bank with incompetency, dis­
honesty, or other matter affecting his
efficiency as a director, theboard shall
have the power, after hearing and
proof and pursuant to a written notice
specifying the grounds thereof, to re­
move such director.
The accused
director shall be allowed thirty days
in which to make defense thereto.
Pending the hearing the board may
within its discretion suspend the
accused director.

17

COMPARISON OF CURRENCY BILL.
SECTION
HOUSE BILL.
INCREASE

AND DECREASE OP
CAPITAL.

5.
HITCHCOCK AMENDMENT.

OWEN AMENDMENT.
STOCK

ISSUES;

INCREASE

AND

DE­

CREASE OF CAPITAL.

INCREASE A N P —DB 6 I HBAfiHB OF
CAPITAL.

The Hitchcock amendment proposes to
strike out all of section 5 of the House bill
and insert the folio wine::
*

Sec . 5. That shares of the capital
stock of Federal reserve banks shall
not be transferable, nor be hy­
pothecated.
In case a member
Dank 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 of 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 bv section two of this Act.

When the capital stock of any Fed­
eral reserve bank has been increased
either on account of the increase of
capital stock of member banks or on
account of the increase in the num­
ber of member banks, the board of
directors shall make and execute a
certificate to the Comptroller of the
Currency showing said increase in
capital, the amount paid in, and by
whom paid. In case a member
bank reduces its capital stock it
shall surrender a proportionate




Sec. 5. ¥ha% shades The cat
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:
In case a member
hypothecable.
bank ktegcftaea 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
six per cent uni of t.he bftftk-s
owft said increase ef-eapita4,23
one-half of said subscription
to be paid ift-eash in the man­
ner hereinbefore provided for orig­
inal subscription, and one-half -to
beeome- a.liab*llty- of ■the- mem her
b a ^ -fteeeydi-ftg-te^the terms of the
origi-ftftrl 'm bseription subject to call
of the Federal Reserve Board. A
bank applying for stock in a Federal
reserve rmnk at any time after the

Sec. 5. That the capital stock in
the reserve banks shall be main­
tained as nearly as practicable in an
amount equal to six per centum of
the capital and surplus of the
member banks in said district, and
the board is authorized from
21
time to time to sell to the
public such additional stock
in any reserve bank as may be requirea to maintain this proportion.
The price at which said stock shall
be offered, to the public shall be at
its fair market value, but in no case
below par. Any bank applying for
membership in a reserve bank shall
be required by the board to underwrite, at the price fixed by the board,
such an amount of capital stock in
said reserve bank, equal to six per
centum of the capital and surplus of
such applying bank, as may be al­
lotted to it by the board, and to pur­
chase and pay for such portion of said
allotment as may not be purchased by
the public, as provided for in this act.

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 of said
ft4bserih+ng applicant bank, paying
therefor its par value i*
plus one-futlj oj one
per centum a month from the period
of the last dividend. When the capi­
tal stock of any Federal reserve
bank hm shall have been increased
either on account of the increase of
capital stock of member banks or on
account of the increase in the num­
ber of member banks, the board of
directors shall mabe-and .execute
cause to be executed a certificate to
the Comptroller of the Currency
showing sa?id the increase in capital
stock, the amount paid in, and by
whom paid. In case a member

When the capital stock of any re­
serve bank has been increased, the
board shall certify the same to the
Secretary of the Treasury.

COMPARISON OF CURRENCY BILL.
SECTION
HOUSE B ILL.

18

5— Continue d .

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

amount of its holdings in the capital bank reduces its capital stock it
of said Federal reserve bank, and in shall surrender a proportionate
case a member bank goes into volun­ amount of its holdings m the capital
tary liquidation it shall surrender of said Federal reserve bank, and in
all of its holdings of the capital case a member bank goes into volun­
stock of said Federal reserve bank. tary liquidation it shall surrender
In either case the shares surrendered all of its holdings of the capital stock
shall be canceled and such member of said Federal reserve bank and be
bank shall receive in payment released from its stock subscriptions
therefor, under regulations to be
not
previously called. In
either case the shares sur­
prescribed by the Federal Reserve 24
rendered shall be canceled
Board, a sum equal to its cash paid
subscriptions on the shares surren­ and such member bank shall receive
in payment therefor, under regula­
dered.
tions 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 of such member bank to the
Federal reserve bank.

SECTION

6.
The Hitchcock amendment proposes to
strike out all of section 6 of the House bill
arid insert the following:

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.
12

Sec . 6. That tf-any member-b&nk
eeiverb e-appointed, the- stock held
r v ir
it v .• lA ir l
iA O A m r A
n y v lr
ixy
lx iTi
nixivi i1vun (11I truovr
vU" Uuniiiv
h

shall-becanceled:--and ■the -balanee,
after dcdueting frem-the-amount-ef
its cash -paid subscriptions all debts

Federal -yeseyve bank, shall be paid
te- the receiver of the insolvent
bank If any member bank shall be
declared insolvent and a receiver ap­
pointed therefor, the stock held by it in
said Federal reserve bank shall be can­
celed, and all cash-paid subscriptions
on said stock, w ith one-ha lf of one per
centum per month from the period of
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, i f any, shall be paid to the
Whenever the receiver o f the in solvent 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 any
bank, the board of directors shall s**ek member such bank, the board
make and execute a certificate to
of directors shall w ake- and
the Comptroller of the Currency 25
exeeute cause to be executed a
showing such reduction of capital
certificate to the Comptroller
stock and the amount repaid to such of the Currency showing such re­
bank.
duction of capital stock and the
amount repaid to such bank.




Sec. 6. That in case the Federal
Reserve Board shall decide, after two
years1 operation of the reserve banks
first established, that one or more addi­
tional banks herein authorized should
be established it shall make the neces­
sary change in lines of existing dis­
tricts, designate the new reserve city or
cities, and notify the member banks
affected by such change to associate
themselves with the new reserve bank
or banks and change the deposit of
their reserves accordingly. Stock­
holders in previously established re­
serve banks affected by the change shall
be invited to exchange a portion o f
their stock certificates as indicated Try
the reserve board, and for all stock so
exchanged the reserve board shall di­
rect the transfer to the new reserve
bank or banks from the old reserve
bank or banks o f the corresponding
amount of cash capital in gold.
I f sufficient stock certificates are not
thus exchanged the reserve board may
offer to the general public at par stock
in the newly created district or districts
to an amount necessary to make up the
difference.
As an inducement to make the ex­
change of stock the reserve board may
direct that the stock o f the old reserve
bank or banks so exchanged shall be
entitled to paym ent in cash o f its share
of the accumulated surplus.

19

COMPARISON OF CURRENCY BILL.
SECTION
HOUSE B ILL.
D IV ISIO N

Oi

E A R N IN G S.

7.
HITCHCOCK AMENDMENT.

OWEN AMENDMENT.
DIVISION OF E AR N IN G S.

23

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

The Hitchcock amendment proposes to
strike out all of section 7 of the House bill
and insert the following:

Sec . 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
aforesaid 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;

S ec . 7. That- after- the- payment
of After all necessary expenses and
tetes of a Federal reserve bank
have been paid or provided for, the
member banks 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 twenty forty per centum
of the paid-in capital stock of such
bank, and of the remaining onehalf si-x ty fifty per centum shall be
paid to the United States and forty
per eentmn to the member-banks in

with~4 te--Federal--feserve 4>anh- for
the preceding year. Whenever and
9e4 eng--as-the-suiipj-Hs fund-o f arFed-cral-reser^e-bank’amounts to twenty

hereinbefore provided forpsixty-per
eentum- of a-li- cxeess earnings shall
be paid- to- the United States and
forty p er-eenturn-4e - the..member
banks in proportion to their annual
average-balanecs- with such

Sec. 7. That after the payment o f
all necessary expenses arid taxes, in­
cluding its share of the expenses o f
the Federal Reserve Board, the stock­
holders o f each Federal reserve bank
shall be entitled to receive an annual
dividend o f five per centum on the
paid-in capital stock, which dividend
shall be cumulative. Net earnings
over and above expenses and the
aforesaid dividend shall be applied as
follows: Twenty-five per centum o f
such net earnings to be carried to a
surplus fund until such fund shall
amount to twenty per centum o f the
paid-in capital stock of such reserve
bank, and thirty-seven and one-half
>er centum o f said net earnings shall
e set aside in a trust fund to be
known as the depositors1 insurance
fund and shall be used for the pay­
ment o f the depositors o f insolvent
member banks under rules and regu­
lations made by the board. When,
in the judgment o f the board, there
has been accumulated in such de­
positors’ insurance fund a sufficient
sum fully to insure the payment o f
the depositors o f insolvent
25
member banks, the board shall
have power to suspend the
setting aside and accumulation o f the
said thirty-seven and one-half per
centum o f such earnings, and there­
after such thirty-seven and one-half
per centum (if such earnings shall be
paid to the United States, except that
in the event the depositors’ insurance
fund is depleted by the payment o f
depositors of insolvent member banks
such fund shall be replenished by
again setting aside such thirty-seven
and one-half per centum o f the earn­
ings or so much thereof as, in the
judgm ent o f the board, may be neces­

f

a franchise tax, and fifty per
centum shall be paid to the United
States, as a trustee for the benefit of
depositors in failed national banks,
the money to be kept in and losses from
failures to be paid from it as a de­
positors'' in su ra n ce fund under a divi­
sion of the Treasury to be constituted
and managed u nder such regulations
as may be prescribed by the Secretary
of the Treasury.
All net earnings sary. The remaining net earnings
all
warnings derived by the United derived by the United States from shall be paid to the United States:
States from Federal reserve banks Federal reserve banks shall eensti- Provided, That the amount so paid
shall be applied to the purchase, at
shall constitute a sinking fund to be
held for the reduction of the out­ be applied to the reduction of the par, with accrued interest, o f the two
standing bonded indebtedness of the outstanding bonded indebtedness of per centum bonds o f the United
United States, said reduction to be the United Statesy said-reduction to States, said bonds then to be retired;
accomplished under regulations to be -accomplished under regulations or i f such bonds can not be so pur­
be prescribed by the Secretary of to beprescribed by the Secretary of chased said amount shall be applied
the Treasury. Should a Federal the Treasury. Should a Federal to the purchase o f other interestreserve bank be dissolved or go into reserve bank be dissolved or go into bearing obligations o f the United




COMPARISON OF CURRENCY BILL.
SECTION
HOUSE BILL.

liquidation, the surplus fund of said
bank, after the payment of all debts
and dividend requirements as here­
inbefore provided for, shall be paid
to and become the property of the
United States.
Every Federal reserve bank in­
corporated under the terms of this
Act and the capital stock therein
held by member banks shall be ex­
empt from Federal, State, and local
taxation, except in respect to taxes
upon real ('state.

7— Continued.

OWEN AMENDMENT.

kaftfe any surplus remaining, after
the payment of all debts, a»d divi­
dend requirements as hereinbefore
provided, #0*7 and the par value of
the stock, shall be paid to and be­
come the property of the United
States and shall be similarly applied.
Every Federal reserve bank incor­
porated under the terms of this Act
mtdj the capital stock and sujdus
therein, held-b y -member hanks and
the income derived therefrom shall be
exempt from Federal, State, and
local taxation, except in respect to
taxes upon real estate.

SECTION




HITCHCOCK AMENDMENT.

States, which obligations shall thereupon be retired.

Every Federal reserve bank
incorporated under the terms of
this Act and the capital stock
therein held-ly-member banks and
the itu'ome derived therefrom shall be
exempt from Federal, State, and
local taxation, except in respect to
taxes upon real estate.

8.

The Owen amendment proposes to elimi­
nate 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 he 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 to
comply with any of the provisions
of this 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.

20

The Hitchcock amendment proposes to
strike out all of section 8 and insert the
following:

Sec. 8. That unthin six months
after a imtional bank shall have been
notified by the Federal Reserve Board
of its allotment of stock under section
two of this Act, said national bank
shall hold a meeting of its stock­
holders and decide by a majority vote
whether it will become a member bank
'under the terms of this Act or whether
it will give up its charter as a national
bank. In case the stockholders of
said national bank shall decide that
said national bank shall be27
come a member bank, the offi­
cers of said bank, upon a
blank provided by the board, shall
forward the formal acceptance by said
national bank of the terms of this
Act to the board, properly attested
before a notary public. In case any
riational bank shall fail to forward
its acceptance to the board within six
months from the time said board
7nakes the allotment of stock to said
bank, it shall be deemed to have de­
clined to become a member bank and
shall thereupon have six months
within which to surrender its charter
and abandon its existence as a na­
tional bank. In any case, however,
every imtional bank shall be and is
required to accept the allotment of
stock as provided in section two,
which stock may be freely sold and
disposed of as other assets of the bank:
Provided, however, That any national
bank acting as a reserve agent in a
reserve or central reserve city shall be
required to accept the terms of this
Act unthin six months from the date
of notification of its allotment of stock,
or, upon failure to do so, shall cease
to be a reserve agent for national
banks.

21

COMPARISON OF CURRENCY BILL.
SECTION
HOUSE BILL.
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.
The
directors thereof may continue to
be the directors of the association so
organized until others are elected or
appointed in accordance with the
provisions of the law. When the
comptroller has given to such bank
or banking association a certificate
that the provisions of this Act have
been complied with, such bank or
banking association, and all its
stockholders, officers, and employ­
ees; shall have the same powers and
privileges, and shall be subject to
the sand duties, liabilities, and regu­
lations, in all respects, as shall have
been prescribed by this Act or by the
national banking Act for associa­
tions originally organized as na­
tional banking associations.

OWEN AMENDMENT.

S e c . 10. That from and after the
assage of this Act any bank or
anking association or trust com­
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




HITCHCOCK AMENDMENT.

S e c . 9. That any bank or bank­
S e c . 9 <V. T bat-any Any bank e?
banking association: incorporated by ing association incorporated by spe­
special law of any State or of the cial law of any State or of the
United States, or organized under United States, or organized under
the general laws of any State or of the general laws of any State or the
the United States, and having an United States, and having an un­
unimpaired capital sufficient to impaired capital sufficient to entitle
entitle it to become a national bank­ it to become a national banking
ing association under the provisions association under the provisions of
of existing laws, may, by the-eon- existing laws, may, by the consent
sent m -w iping vote of the share­ in writing of the shareholders own­
ing not less than fifty-one
holders owning not less than fiftyper centum of the capital
one per centum of the capital stock 2X
stock of such bank or bank­
of such bank or banking
2N
association, and with the ing association, and with the ap­
approval of the Comptroller proval of the Comptroller of the
of the Currency, beeeme-a and acting Currency, become a
through a committee, organize a na­
tional banking association with any
name approved by the said comp­
troller, and transfer its business to
national bank­
such national banking association
ing association under its former
name approw d -by the-eomptFoljef'.- name or by any name approved by
Fronded. however, That said acts are the comptroller.
not In contravention of the State or
local lav\ The directors thereof
The directors
may continue to be the directors of thereof may continue to be the
the association so organized until director of the association so or­
others are elected or appointed in ganized until others are elected or
accordance with the provisions of appointed in accordance with the
the law. When the comptroller provisions of the law. When the
has given to such bank or banking comptroller has given to such bank
association a certificate that the or banking association a certificate
provisions of this Act have been that the provisions of this Act have
complied with, such bank or bank­ been complied with, such bank or
ing association, and all its stock­ banking association and all its
holders, officers, and employees stockholders, officers, and employ­
shall have the same powers and ees, shall have the same powers and
privileges, and shall be subject to privileges, and shall be subject to
the same duties, liabilities, and regu­ the same duties, liabilities, and regu­
lations, in all respects as shall have lations, in all respects, as shall have
been prescribed by this Act e* and been prescribed by this Act or by
by the national banking Act for the national banking Act for asso­
associations originally organized as ciations originally organized as
national hanking associations.
national banking associations.

SECTION
STATE B A N K S AS M EM BER S.

9.

10.

STATE BANKS AS M EM BERS.

the passage of this Aet any Any
bank or bankktg-asseeiatioa or trust
company incorporated by special
law of any State, or organized under
the general laws of any State or of
the United States, may make appli­
cation to the reserve bank or29
gamization committee, pending
organization, and thereafter to

STATE B A N K S AS M EM BERS.

S e c . 10. That from and after the
assage of this Act any bank or
anking association or trust com­
pany incorporated by special law
of any State, or organized under the
general laws of any State or the
United States, may make applica-

COMPARISON OF CURRENCY BILL.
SE

CTION

10 — C o n t i n u e d •

HOUSE BILL.

OWEN AMENDMENT.

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 herein­
after- ereated for the right- to sub­
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 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 b y the State banks and
banking associations and trust com­
panies hereinbefore referred to for
stock ownership in Federal reserve
banks. 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
conforms to the provisions herein
prescribed for national banking as­
sociations of similar capitalization
and to the regulations of the Federal
Reserve Board.




22

HITCHCOCK AMENDMENT.

tion to the Federal Reserve Board
hereinafter-created- for the right to
sttbseri be -te- the -stock to become a
member of the Federal reserve bank
organized or to be organized within
the Federal reserve district
29
where the
applicant is
located.
The organization commit­
The Federal Re­
tee or the Federal Reserve Board, un­ serve Board, under such rules and
der such rules and regulations as it regulations as it may prescribe, sub­
may prescribe, subject to the provi­ ject to the provisions of this section
sions of this section, shall may per­ Act, shall permit such applying bank
mit sueh the applying bank to be­ to become a stockholder in member
come a stockholder in the Federal o f the Federal reserve bank of the
reserve bank of the district in which district in which such applying bank
sueh the applying bank is located. is located:— Whenever the Federal
Whenever the organization commit­ Reserve.Board -shall...permit-such
tee or the Federal Reserve Board appIying- banb--to--bccomo -a- stock
shall permit sueh the applying bank holder in the Federal reserve bank
to become a stockholder in the Fed­ ef-the-district in which-the-applying
eral reserve bank of the district
bank is-loeated-j-ateek -shali be issued
which the applying bank is loeatedr
stock shall be issued and paid for regulations.in-this Act provided for
under the rules and regulations in
this Act provided for national banks
which become stockholders in Fed­ in uMch case stock shall be allotted
eral reserve banks.
to it as provided in this Act.
It-shall-be- the- duty-- of-the The
It-shall-be-the duty-of the Federal
organization committee or the Federal Reserve Board to establish by laws
Reserve Board te shall establish by­ for the general government of its
laws for the general government of eenduct-in-acting upon applications
its conduct in acting upon applica­ mad e -b y -the-State-banl^s and bank
tions made b y the State banks and mg associations -and trust- eombanking associations and trust com­ pafties-k ereinbefore- rcforred-to- for
panies hereinbefore-referred" to for stoek ownership in Federal reserve
stock ownership in Federal reserve banks-.— Such by laws shall- require
banks. Such by-laws shall require applying-banks-not organized under
applying banks not organized under Federal - law - to--comply with the
Federal law to comply with the re­ reserve.requirements and submit to
serve and capital requirements and the-inspeetien-and- rc^gulation-pro
to submit to the inspection examina­ vided -for-in - 4his - and other laws
tion and regulati on- provided relating to national -banks.
30
fer in-this and- other-laws re­
lating to na-tiona-l-banks regu­
lations prescribed by the organization
committee or by the Federal Reserve
Board.
No s«eh applying bank
No
shall be admitted to membership such applying bank shall be ad­
in a Federal reserve bank unless it mitted to membership in a Federal
possesses a paid-up unimpaired cap­ reserve bank unless it possesses a
ital sufficient to entitle it to become
paid-up unimpaired capital
a national banking association in the 30
sufficient to entitle it to be­
place where it is situated, under the
come a national banking as­
provisions of the national banking sociation in the place where it is
A ct, and conforms-te-the--pro visions situated, under the provisions of the
herein— prescribed— fer—national- national banking Act, and conforms
banking—associations— ef—similar t-e-the provisions heroin prescribed
capitalisation and..te the regula­ for national banking associations ef
tions of the Federal Reserve-Beard. similar- capitalization and to the
Any bank becoming a -member o f regulations of the-Federal Reserve
a Federal reserve bank under tile Board and it shall thereafter be re-

28

COMPARISON OF CURRENCY BILL.
SECTION
BOUSE BILL.

17

If at any time it shall ap­
pear to the Federal Reserve
Board that a banking association or
trust company organized under the
laws of any State or of the United
States has failed to comply with the
>rovisions of this section or the reguations of the Federal Reserve
Board, it shall be within the power
of the said board to require such
banking association or trust com­
pany to surrender its stock in the
Federal reserve bank in which it
holds stock upon receiving from
such Federal reserve bank the cashpaid subscriptions to the said stock

[

S D—63-2—vol 25-




10 — C o n t i n u e d .

OWEN AMENDMENT.

provisions of this section shall, in
addition to the regulations and re­
strictions hereinbefore provided, be
required to conform to the provisions
of law imposed on the national banks
respecting the limitation of liability
which may be incurred by any person,
firm, or corporation to such banks, the
prohibition against making purchase
of or loans on stock of such banks,
and the withdrawal or impairment of
capital, or the payment of unearned
dividends, and to such rules and regu­
lations as tae 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 and one, and fifty-two
hundred and eight, and fiftytwo hundred and nine of
31
the Revised Statutes. TJie
member banks shall also be
required to make reports of the con­
ditions and of the payments of divi­
dends to the comptroller, as provided
in sections fifty-two hundred and
eleven and fifty-two hundred and
twelve of the Revised Statutes, and
shall be subject to the penalties pre­
scribed by section fifty-two hundred
and thirteen for the failure to make
such report.
If at any time it shall appear to
the Federal Reserve Board that a
banking association or trust com­
pany organized under the laws of
any State or of the United States
and having become a member bank
has failed to comply with the pro­
visions of this section or the regula­
tions ol the Federal Reserve Board,
it shall be within the power of the
said board, after hearing, to require
such banking association or trust
company to surrender its stock in
the Federal reserve bank; *n -whieh
such surrender the Federal reserve
bank shall pay the cash-paid sub­
scriptions to the said stock in-eurgent-funds with interest at the rate of
one-half of one per centum per month,
computed from the last dividend, i f
earned, not to exceed the book value
thereof less any liability to said
Federal reserve bank, except the sub­
scription liability not previously
called, which shall be canceled,

HITCHCOCK AMENDMENT.

quired to make the same reports and
be subject to the same examination
and supervision as national banking
associations and subject also to the
reserve requirements o f this Act.

If at any time it shall appear to
the Federal Reserve Board that a
banking -association or- trust -company-e rganized- uinder--:the-laws--of
any-State-or- of- the - United.States
member bank has failed to comply
with the provisions of this seetton
Act or the regulations of the Federal
Reserve Board, it shall be within the
power of the said board to- require
such banking association of t o ast
company--to- surrender--its 3tock -in
the-Federal-reserve-bank.in-which
it holds stock-upon receivingh em
sueh Federal reserve -bank the -cash
paidr-subscr ip tiona to-the- 3aid- stoekin- eurrent-funds >-and -said- Federal
reserve-bank-shall-upon netiee-from
■
the- -Federal--Reserve Board -be -re­
quired-to suspend said banking as •
soeiation-or- -trust- com pany-from
further- privileges ■■of membership
and shall-within thirty days-of such
notiee-eane ei-and retire its stock
and -make-paymcntr-theref or-in-the
manner -herein -provided? after due

24

COMPARISON OF CURRENCY BILL.
SE C T I O N

10 — C o n t i n u

d

.

HOUSE B ILL.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

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.

and said Federal reserve bank
shall, upon notice from
the
Federal Reserve Board, be re­
quired to suspend said bank­
ing association or trust
32
company from further privi­
leges of membership, and
shall within thirty days of such
notice cancel and retire its stock
and make payment therefor in
the manner herein provided.
The
Federal Reserve Board may restore
membership upon due 'proof of com­
pliance with the conditions imposed
by this section

hearing, to suspend or expel the said
bank from membership.

SECTION

11.

FEDERAL RESER VE BOARD.

FEDER AL R ESER VE BOARD.

The
Federal Reserve Board may
restore membership upon due
proof o f compliance with the condi­
tion imposed by this Act.
31

FEDERAL RE SE RV E BOARD.

The Hitchcock amendment proposes to
strike out all of section 11 of the House bill
and insert the following:

Sec . 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




Sec . 44- 10. That- there- shall.bo
oreatod-a A Federal Reserve Boardy
is hereby created which shall consist
of seven members, including the
Secretary of the Treasury, the Seegetftpy—of—Agriculture,— and—the
Comptroller- of- the-Gurrency, who
shall be members a member ex
officio, and fe w six members ap­
pointed by the President of the
united 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 Vie different geo­
graphical divisions of the country.
The fe w six members of the Federal
Reserve Board appointed by the
President and confirmed as afore­
said shall devote their entire time
to the business of the Federal Re­
serve Board and shall each receive an
annual salary of $10,000, together
with ae- allowancc-for actual nec­
essary traveling expenses, and- the
Gempteotiky-ef-4he Gxm eney, as ox

33

eml—Reserve -Board, shall,
-Hfr-additien to the salary now
paid-.him ■as-"GomptroHep; receive
fee-sttm -ef -1574)00- am ually f ef-his
ser^iees as a member of said beard

Sec. 11. That the President o f the
United States shall appoint, by and
with the advice and consent o f the
Senate, a Federal Reserve Board con­
sisting o f eight members, in addition
to whom the Secretary o f the Treasury
shall be an ex officio member. O f the
eight members appointed in the first
instance, the President shall appoint
one for a term o f one year, one fo r a
term o f two years, one for a term o f
three years, one for a term o f four
years, one for a term o f five years, one
for a term o f six years, one for a term
o f seven years, and one for a term o f
eight years, and thereafter all ap­
pointments shall be made for a term
o f eight years. Not less than one nor
more than three o f said members shall
be appointed from any one Federal
reserve district. Appointments to fill
vacancies in the board shall be
33
for the unexpired term and
may be made by the President
when the Senate is not in session,
which appointments shall expire at
the end o f the next session. In select­
ing members o f the reserve board con­
sideration shall be given to experience
in commerce and banking. The eight
members o f the Federal Reserve Board
thus appointed by the President shall
devote their entire time to the work and
duties o f the board and shall not while
in office be officers, directors, or em­
ployees o f any bank or trust company,

COMPARISON OF CURRENCY BILL.
SE C T I O N

11 — C o n t i n u

OWEN AMENDMENT.

HOUSE B ILL.

than two shall be of the same polit­ and they shall be ineligible during
ical party, and at least one of the time they are in office and fo r two
whom shall be a person experienced years thereafter to hold any appoint­
in banking. One shall be desig­ ive office or employment under the
nated by the President to serve for United States or in the District of
two, one for four, one for six, and Columbia or any Territory o f the
one for eight years, respectively, United States, or of any member
and thereafter each member so ap­ bank o f a reserve bank.
pointed shall serve for a term of
eight years unless sooner removed
for cause by the President.
Of the fe w
Of
the four persons thus appointed, six members thus appointed by the
one shall be designated by the Presi­ President aot morc-4han -two-shall
- and
dent as manager and one as vice be-ef- the- aame.policial party,■
manager of the Federal Reserve at least otte of whom two shall be a
Board. The manager of the Fed­ person persons 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
three, a»d one for eight ■yeara
Board, shall be the active execu­
tive officer of the Federal Reserve four, one for five, and one for six
years, geapeetevolyv and thereafter
Board.
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 maeaa? governor of the Federal Reserve
oard. The manager governor of
the Federal Reserve Board, subject
to the its supervision ef- tho- Score
tary of the Treasury - and Federal
Reserve Board, shall be the active
executive officer ef-the Federal Re ■
sefve-Board.
The Secretary o f the
Treasury may assign offices in the
Department o f the Treasury for the
use o f the Federal Reserve Board.
Each member of the Federal Reserve
Board shall within fifteen days after
notice of appointment make and sub­
scribe to the oath o f office.

25

d .
HITCHCOCK: AMENDMENT.

nor hold stock in any such institu­
tion, and they shall each receive a
salary of $12,000 per year, payable
monthly out o f the Treasury o f the
United States upon the order or war­
rant o f the Secretary o f the Treasury.
The President shall designate, other
than the Secretary o f the Treasury,
one member o f said board as governor
thereof and one member as vicq gov­
ernor thereof who shall act in place o f
the governor during his disability or
absence. The governor shall be the
active executive and presiding officer
o f the board.

f

19

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




The Federal Reserve Board shall
have power to levy semiannually
upon the Federal reserve
34
banks, in proportion to their
capital stock and surplus, an
assessment sufficient to pay its es­
timated expenses and salaries o f its
members and employees for the half
year succeeding the levying of such
assessment, together with any def­
icit carried forward from the pre­
ceding half year.

The Secretary o f the
Treasury shall provide the necessary
office rooms for said board in the
Treasury Department Building, or
the board may select quarters else­
where in the city of Washington i f
sufficient office room can not be found
in said building. The said board shall
hold its office in the city o f Washing­
ton, District o f Columbia. The first
meeting o f the board shall be held as
soon as may be, upon the
34
call o f the Secretary o f the
Treasury, at a time and place
designated by him.
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 suffi­
cient to pay its estimated expenses
and salaries for the half year suc­
ceeding the levying of such assess­
ment, together with any defieit de­
ficiency carried forward from the
preceding half year.

26

COMPARISON OF CURRENCY BILL.
SE C T I O N
HOTJSE BILL.

1 1— Continu

OWEN AMENDMENT.

d.
HITCHCOCK AMENDMENT.

T h e -first-mooting- of-tho- Fcdcral
The first meeting of the Federal
Reserve Board shall be held in R eserve -Beard- shall--be held in
Washington, District of Columbia, Washington- P istriet-ef-Columbia,as soon as may be after the passage as-soon as may-b e-af ter-the passage
of this Act, at a date to be fixed by e f- this -Aety-at- a- date- to -bo- fixed
the Reserve Bank Organization by-the Reserve Bank Organization
Committee. The Secretary of the Committee-— The- Seerctary of- tho
Treasury shall be ex officio chairman Treasury^shall- bo-cx- officio- ehaiaof the Federal Reserve Board. No man-ef.the FederalReserve- Bftard .N e membcr-of -the Federal Reserve
member of the Federal Reserve •
Board shall be an officer or director Beard-shaHr-be-an offieer -or-direetep
of any bank, er banking institution, o f .any bank-or-banking-institution
trust company, op Federal reserve or -Federal reserve bank nor hold
bank nor hold stock in any bank, of stoek-in-any- ba^k-op-banking insti
banking institution, or trust com­ tu tion ;-and- before entering upon
pany; and before entering upon his his duties—as—a member- ef- the
duties as a member of the Federal
Reserve Board he shall certify under certify under o ath to the Secretary
oath to the Secretary of the Treas­ of4he-Treasury4hat-he-has- complied
ury that he has complied with this wi-th- this- roquiromont:— Whenever
requirement. Whenever a vacancy a vacancy sha-lhoceup-othor^han-hy
shall occur, other than by expira­ expiration.of term-, among-the-four
tion of term, among the fe w six members - of- the - Federal —Reserve
members of the Federal Reserve Beard- appointed---by-the President,Board appointed by the President, as-above.providedy a-sueecssor-shait
as above provided, a successor shall be-appointcd by-thc-Prcsidentr-with
be appointed by the President, with the- advlco and-consen-t-ef the,Sen ■
the advice and consent of the Sen­
ate, to fill such vacancy, and when
appointed--shall—hold- office
for-tho-anexpirod-term of the
appointed he shall hold office for the 35
unexpired term of the member whose
member—whose place he is
place he is selected to fill.
35
The President shall have
power to fill all vacancies that
may happen on the Federal Reserve
Board during the recess of the Senate,
by granting commissions which shall
expire at the end of the next session
of the Senate.
Nothing in this Act contained shall
be construed as taking away any
powers heretofore vested by law in the
Secretary of the Treasury which relate to the supervision, management,
and control of the Treasury Depart­
ment and bureaus under such depart­
ment, and wherever any power vested
by tliis Act in the Federal Reserve
Board or the Federal reserve agent
appears to conflict witE the powers of
the Secretary of the Treasury, such
powers shall be exercised subject to
the supervision and control of the
Secretary.
The Federal Reserve Board shall
The Federal Reserve Board shall
The Federal Reserve Board shall
annually make a report of annually make a full report of its annually make a full report of its
20
its fiscal operation to the fiseal operations to the Speaker of fiseai operations to the Speakcr- of
Speaker of the House of the House of Representatives, who the House ef Reprcsontati-veaj who
Representatives, who shall cause shall cause the same to be printed shall- cause the same to- be- printed
the same to be printed for the for the information of the Congress. for-thc information-of the Congress*
information of the Congress,
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.




27

COMPARISON OF CURRENCY BILL.
SE C T I O N

11 — C o n t i n u

d.

HOUSE BILL.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

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

Section
three hundred
and
twenty-four of the Revised Statutes
of the United States shall be
amended so as to read as follows:
—There-shall be in the Department
ef - the- Treasury a- burcaii- chargedexcept as in this Aet-etherwise-pro^ d ed -with the execution of all laws
passed- by- Congress-relating to - the
issue and regulation- of—currency
issued—by— e?— through—banking
associations-the chief officer
36
of -which bureau..shall.. be
eaUedthe-Comptrol ler of-the
Currency,—and-shall perform his
duties -under-the -general - direetion
ef the- Secretary of the Treasuryy
acting—as—the— ehair-man—ef—the
S ederal-Rescrvo Board: ; - Providedy
however-,- That nothing herein con­
tained shall- be -eonstruod -to-affeet
any power now vested by-law in the
Comptroller -of the Currency or the
Sceretary-of -thc-Treasury
There
shall be in the Department of the
Treasury a bureau charged with the
execution of all laws passed by Con­
gress relating to the issue and regula­
tion of national currency secured by
United States bonds and, under the
general supervision of the Federal
Reserve Board, of all Federal reserve
notes, the chief officer o f which bureau
shall be called the Comptroller of the
Currency and shall perform his duties
under the general directions of the
Secretary of the Treasury ”

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

“ There shall be in the Department
of the Treasury a bureau charged,
except as in this Act otherwise
provided, with the execution of
all laws-passed by Congress relating
to the issue and regulation of cur­
rency issued by or through banking
associations, the chief officer of
which bureau shall be called the
Comptroller of the Currency, and
shall perform his duties under the
general direction of the Secretary
of the Treasury, acting as the
chairman of the Federal Reserve
B o a r d 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.



“ There
shall be in the Department of the
Treasury, a bureau charged-,—exeept
as.in.this-Aet-etherwise- providedy
with the execution of all laws passed
by Congress relating to the issue
and regulation of national currency
issued secured by or-through bank­
ing associations- United States bonds
and, under the general supervision of
the Federal Reserve Board, o f all
Federal reserve notes, the chief
officer of which bureau shall be
called the Comptroller of the Cur­
rency, and shall perform his duties
under the general direction of the
Secretary of the Treasury,.acting
as th e -eh a irm aBr of- th e -g e d e r a l- R e scrve -Board-I’ -’ ^rovidedrj—however?
-T hat nothing herein.
Nothing in
this Act contained shall be construed
to affect as talcing away any power
new powers heretofore vested by law
in the Comptroller ef-the Currency
or the Secretary of the Treasury
which relate to the supervision, man­
agement, and control of the Treasury
Department and the bureaus under
such department

COMPARISON OF CURRENCY BILL.
SECTION
HOUSE BILL.

12.

OWEN AMENDMENT.

S e c . 4-3 11. That -the The Federal
Reserve Board hereinbefore- estab­
lished shall be authorized and em­
powered :
(a) To examine at its discretion
the accounts, books, and affairs of
each Federal reserve bank and of
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
of each Federal reserve bank and a
consolidated statement for all Fed­
eral reserve banks.
Such
37
statements shall show in de­
tail the assets and liabilities
of sueh the Federal reserve banks,
single and combined, and shall fur­
nish full information regarding the
character of the lawful money held
as reserve and the amount, nature,
and maturities of the paper and
other investments owned or held by
Federal reserve banks.
(b) To permit or require- in timo
(b) To permit or require, in time
of emergency, Federal reserve banks of-emergeney- Federal reserve banks
to rediscount the discounted prime to rediscount the discounted prkne
paper of other Federal reserve banks, paper of other Federal reserve
at least five members of the Federal banks> at least five members of the
Reserve Board being present when F-odoral- Reacrvo-Board being pres
such action is taken and all present eftt^wheB- 3uch.aetio n is taken and
consenting to the requirement. The all prcsen^eonsenting A>e - the re
exercise of this compulsory redis­ quirement.— The- exercise of thi-s
count power by the Federal Reserve eempulsory rediscount -power by
Board shall be subject to an interest the-Federal- Reserve Board-shall bo
charge to the accommodated bank ottb^eet-to-an interest charge to the
of not less than one nor greater than aeeemmedated bank of not-less than
three per centum above the higher one— —greater—than—three—per
of the rates prevailing in the dis­ eentum -a bove the higher of the
rates-prevailing-in the districts i-m
tricts immediately affected.
mediately affected at rates of interest
to be fixed each week or oftener by the
Federal Reserve Board.

S e c . 12. That the Federal Re­
serve Board hereinbefore estab­
lished shall be authorized and em­
powered :
(a) To examine at its discretion
the accounts, books, and, affairs of
each Federal reserve 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 con­
dition of each Federal reserve
bank and a consolidated
21
statement for all Federal
reserve banks. Such state­
ments shall show in detail the as­
sets and liabilities of such Federal
reserve banks, single and com­
bined, and shall furnish full infor­
mation regarding the character of
the lawful money held as reserve
and the amount, nature, and ma­
turities of the paper owned by
Federal reserve banks.

28

HITCHCOCK AMENDMENT.

S e c . 12. That the Federal
Reserve Board hereinbefore
established shall be authorized and
empowered:
(a) To examine at its discretion
the accounts, books, and affairs of
each Federal reserve bank and of
each member bank and to require
such statements and reports as it
may deem necessary.
The said
board shall publish on6e each week
a statement showing the condition
of each Federal reserve bank and a
consolidated statement for all Fed­
eral reserve banks.
Such state­
ments shall show in detail the assets
and liabilities of such Federal re­
serve banks, single and combined,
and shall furnish full information
regarding the amount and character
of the lawful- money held as reserve
and the amount, nature, and ma­
turities of the paper and other in­
vestments owned or held by Federal
reserve banks.
(b) To permit or require, in time
of emergency, Federal reserve banks
to rediscount the discounted prime
commercial paper of other Federal
reserve banks, at least five six mem­
bers of the Federal Reserve Board
being present when such action is
taken and all present consenting to
the requirement. -The exercise of
this-eom pttlsory.rediscount - power
b y -the-Federal Reserve Board- shall
be -su b le t -te- an -interest-ehargc to
the-aeeommodated-bank-of-no t 1C39
than-one-ner-greater-than three per
centum abeve th e-higher of the
rates-prevai-ling-in-the districts im
In such case the
Federal board shall fix a special re­
discount rate of not more than
37
three per centum in excess of
the discount rate of the accom­
modated reserve bank.
(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
aspe
exceed fifteen days) any and every for periods not to- cxcoed exceeding cxeeed filteen -day s ^ any and every
reserve requirement specified in this fifteen days), any and every reserve reserve requirement-specified in this
act: Provided, That it shall estab­ requirement specified in this Act: Act-: Premded j^ h et^-i^ -shall cstablish 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 quiremonts-of- this A c t m&y-be- per mitted to fall below the level herein­ this Act may be permitted to fall, mitted to fall- below the level here
after specified, such tax to be below the level hereinafter speci­ inafter -speeified-j.-such tax to bo
uniform in its application to fied, such tax to be uniform in its uniform in -its application- to all
22
all banks; but said board application to all Federal reserve banks; but-said board shallrftot sua-




36

COMPARISON OF CURRENCY BILL.
SECTION

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

12 — C o n t i n u e d .

OWEN AMENDMENT.

HOUSE B ILL.

38

29

HITCHCOCK AMENDMENT.

hanks and to member banks,
required to keep the same re-

pend -the rescrve-requiremehts-with

net -suspend—the - reserve—require­
ment s - with referenee—-to Federal
(d)
To supervise and regulate the (d) ¥o-supervise-and reguiate-the
issue and retirement of Federal re­ issue and retirement-of-Federal -re­
serve notes and to prescribe the serve notes and to - prescribe--the
form-and-tener-ef-sueh-no-tesT
form and tenor of sucn notes.

To

supervise and regulate through the
bureau under the charge of the Comptroller of the Currency the issue and
retirement of 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
(e) To add to the number of cities
classified as reserve and central re­ classified as reserve and central re­
serve cities under existing law in serve cities under existing law in
which national banking associations which national banking associations
are subject to the reserve require­ are subject to the reserve require­
ments set forth in section twenty of ments set forth in section twenty of
this act; or to reclassify existing this A ct; or to reclassify existing re­
reserve and central reserve cities serve and central reserve cities and
and to designate the banks therein to designate-the- banks- thorein- sitsituated as country banks at its
cretion or to terminate their designa­
discretion.
tion as such.
(f)
(f) To suspend the officials of
Federal reserve banks and, for Federal—reserve—banks—and^—for
cause stated in writing with oppor­ cause -stated in writing with op
tunity of hearing, require the re­ portunity of heading- -requira -the
moval of said officials for incom­ removal of said "officials for incom
petency, dereliction of duty, fraud, peteney, dereleetien -of duty, fraud-?
or deceit, such removal to be subject or deceit,- such- rem oval-to-be subto approval by the President of the
of -the United States To suspend or
United States.
remove any officer or director of any
Federal reserve bank, the cause of such
removal to be forthwith com39
municated in writing by the
Federal Reserve Board to the
removed officer or director and to said
bank.
(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 the books and balance sheets of Fed­
eral reserve banks.
Federal reserve banks.
(h) To suspend, for cause relating
(h) To suspend, for cause relating
to violation of any of the provisions to violation of any of the provisions
of this act, the operations of any of this Act, the operations of any
Federal reserve bank and appoint a Federal reserve bank and appoint-a
receiver—therefor take possession
receiver therefor.
thereof and administer the same dur­
ing the period of suspension.
(i) To require bonds of Federal re­
(i) To perform the duties, func­
tions, or services specified or im­ serve agents, perform the duties,
functions, or services specified or implied in this act.




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

(e d) To add to the number of
cities classified as reserve and cen­
tral reserve cities under existing
law in which national banking asso­
ciations are subject to the reserve
requirements set forth in section
twenty -of this Act; or to reclassify
existing reserve and central reserve
cities and or to designate the banks
therein - situated- -as country banks
at its -discretion terminate their des­
ignation as such.
(f)-T o- suspend the—officials -of
Federal—reserve—banks—andrj—for
cause stated in writing-with-opportunity of hearing-,- require.the re­
moval -of said ■offieia-Ls-for-ineompe■
teney --derelietien--of—duty 7
38
fraudyor-deceit,-such removal
■
to -be-subj ect to- approval by
the Pres ident-oi-the-Umted-Stfttes-

(g e) To require the writing off of
doubtful or worthless assets upon
the books and balance sheets of
Federal reserve banks.
(h)
To-suspend-, -for eauso relating
to-violation of any of the provisions
of this -Act, -the -operations of--any
Federal- reserve-b ank -and- appoint-a

( / ) To require bonds o f Federal re­
serve agents for the faithful perform­
ance of the duties of their office.

COMPARISON OF CURRENCY BILL.
SECTION

12 — C o n t i n u e d .

OWEN AMENDMENT. .

HOUSE B ILL.

30

HITCHCOCK AMENDMENT.

plied in this Act, and to maJce all
rules and regulations necessary to en­ friens-, or services ■■specified - or.im­
able said board effectively to 'perform plied m -this-Aefc
the same.
(j) To exercise general supervision
over said Federal reserve banks.
(k) To authorize member banks to
use, as reserves, Federal reserve notes,
or bank notes based on United States
bonds, to the extent that said board
may find necessary.
(I) To grant by special permit to
national banks applying therefor,
when not in contravention o f State
law, the right to act as trustee, executor,
administrator, or registrar o f stocks
and bonds under such rules and regu­
lations as the said board may pre­
scribe.

SECTION
23

F E D E R A L A DVISOR Y COUNCIL.

40

13.

FE D ER A L AD V ISO R Y COUNCIL.

S ec . 4-S. 12. There is hereby cre­
S ec . 13. There is hereby created
a Federal Advisory Council, which ated a Federal Advisory Council,
shall consist of as many members which shall consist of as many
as there are Federal reserve dis­ members as there are Federal re­
tricts. Each Federal reserve bank serve districts. Each Federal re­
by its board of directors shall annu­ serve bank by its board of directors
ally select from its own Federal re­ shall annually select from its own
serve district one member of said Federal reserve district one member
council, who shall receive no com- of said council, who shall receive
ensation for his services, but may no -compensation -for - his - seFviees^
e reimbursed for actual necessary but--may bc"reimbnpsed--f or- actual
necessary -expenses such co mpensa­
expenses.
tion and allowances as may be fixed
by his board of directors subject to the
approval of the Federal Reserve
Board.
The meetings of said ad­
The meetings of said
advisory council shall be held at visory council shall be held at Wash­
Washington, District of Columbia, ington, District of Columbia, at least
at least four times each year, and four times each year, and oftener if
oftener if called by the Federal called by the Federal Reserve
Reserve Board. The council may Board. The council may select its
select its own officers and adopt its own officers and adopt its own
own methods of procedure, and a methods of procedure, and a major­
majority of its members shall con­ ity of its members shall constitute
stitute a quorum for the transaction a quorum for the transaction of
of business. Vacancies in the coun­ business. Vacancies in the council
cil shall be filled by the respective shall be filled by the respective
reserve banks, and members se­ reserve banks, and members selected
lected to fill vacancies shall serve to fill vacancies shall serve for the
unexpired term.
for the unexpired term.

E

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




FEDER AL ADVISOR Y COUNCIL.

S ec . 13. There is hereby created
a Federal Advisory Council, which
shall consist of as many members as
there are Federal reserve districts.
Each Federal reserve bank by its
board of directors shall annually
select from its own Federal reserve
district one member of said council,
who shall receive no compensation
fef- his-ser^ieesT-bi-t^- mfty- be-reimbufsed—#03?—&e£ttftl—necessary—ex­
penses such compensation and allow­
ances as may be fixed by the board of
directors subject to the approval o f the
Federal Reserve Board.

The meet­
ings 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
39
council may select its own
officers and adopt its own
methods of procedure, and a ma­
jority of its members shall consti­
tute 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
The Federal Advisorv Council
shall have power, by itself or through shall have power by itself or through
its officers, (1) to meet-and confer its officers (1) to meet and confer,
directly with the Federal Reserve directly with the Federal Reserve
Board on general business condi­ Board on general business condi­
tions ; (2 ) to make oral or written tions; (2) to make oral or written

31

COMPARISON OF CURRENCY BILL.
SECTION

13 — C o n t i n u e d .

HOUSE BILL.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

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 banks, and the general affairs
of the reserve banking system.

representations concerning matters
within the jurisdiction of said board;
(3) to call for complete infor41
mation 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.

representations concerning matters
within the jurisdiction of said board;
(3) to call for complete information
and to make recommendations in
regard to discount rates, rediscount
business, note issues, reserve con­
ditions in the various districts, the
purchase and sale of gold or securi­
ties by reserve banks, open-market
operations by said banks, and the
general affairs of the reserve bank­
ing system.

SECTION
24

REDISCOUNTS.

REDISCOUNTS

POWERS

14.
OF

FE D E RAL

REDISCOUNTS.

R E SE RV E BAN K S.

S e c . M 13. That- aay Any Fed­
S e c . 14. That any Federal reserve
bank may receive from any member eral reserve bank may receive from
bank deposits of current funds in any of its member bank banks, 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, pav- 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 of
Upon the indorsement of any
member bank any Federal reserve its member bank banks, with a
bank may discount notes and bills waiver of demand notice and protest
of exchange arising out of com­ by such bank, 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 have been used, or may are to be
used, for such purposes, the
ter of the paper thus eligible for
Federal Reserve Board to
discount, within the meaning of this 42
A ct; nothing herein contained shall
have the right to determine
be construed to prohibit such notes or define the character of the paper
and bills of exchange, secured by thus eligible for discount, within
staple agricultural products, or other the meaning of this Act-;- Rothing
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 trading 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 such
S D—63-2—vol 25------5



S e c . 14. That any Federal re­
serve bank may receive from any
member bank and from the United
States deposits of current funds in
lawful money, national bank notes,
Federal reserve notes, &¥ and checks
and drafts upon solvent member
banks of the Federal reserve system,
payable upon presentation; e? and,
solely for excnange purposes, may
receive from other Federal reserve
bank deposits of current
40
funds in lawful money, na­
tional bank notes, e? and
checks and drafts upon solvent
member or other Federal reserve
banks, payable upon presentation.
Reserve banks shall not pay interest
on deposits.
Upon the indorsement of any
member bank with a waiver o f de­
mand notice and protest any Federal
reserve bank may discount notes,
drafts, and bills of exchange arising
out of actual commercial transac­
tions; that is, notes, drafts, and
bills of exchange issued or drawn
for agricultural, industrial, or com­
mercial purposes, or the proceeds
of which have been used, or may
be used, for such purposes, the
Federal Reserve Board to have the
right to determine or define the
character of the paper thus eligible
for discount, within the meaning
of this Act; nothing herein con­
tained shall be construed to pro­
hibit such notes, drafts, and bills of
exchange, secured by staple agri­
cultural products, or other goods,
wares, or merchandise from being
eligible for such discount; but such
definition shall not include notes,
drafts, or bills covering merely invest-

32

COMPARISON OF CURRENCY
BILL.
%

SECTION

14 — C o n t i n u e d .

HOUSE BILL.

OWEN AMENDMENT.

admitted to discount under the
terms of this paragraph must have
a maturity of not more than ninety
days.

definition shall not include notes.
drafts, or bills covering merely in­
vestments or issued or drawn for the
purpose of carrying or trading in
stocks, bonds, or other investment
securities, except bonds and notes of
the Government of the United States.

25

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 ai d not more than one
hundred and uventy days, when its
own cash reserve exceeds thirtythree and one-third per cent of its
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
member bank shall have a maturity
of more than ninety days.
Upon the indorsement of any
member bank any Federal reserve
bank may discount acceptances of
such banks which are based on the
exportation or importation of goods
and which mature in not more than
six months and bear the signature
of at least one member bank in ad­
dition to that of the acceptor. The
amount so discounted shall at 110
time exceed one-half the capital
stock of the bank for which the re­
discounts are made.

The aggregate of such notes and
bills bearing the signature or in­
dorsement of any one person, com­
pany, firm, or corporation redis­
counted for any one bank shall at




HITCHCOCK AMENDMENT.

ments or issued or drawn for the
purpose of carrying or trading in
stocks, bonds, or other investment
securities, except bonds and notes of
the Government of the United States
and interest-bearing obligations o f its
dependencies the principal and in­
terest of which have been guaranteed
by the United States.
Notes, drafts, and bills admitted to
Notes and
discount under the terms of this bills admitted to discount under
paragraph must have a maturity the terms of this paragraph must
at the time of discount of not more have a maturity at the time o f dis­
than ninety days.
count of not more than ninety one
hundred and eighty days:
41
Provided, however, That not
more than fifty per centum of
the paper discounted for any member
bank shall have a maturity exceeding
ninety days and in no case shall any
member bank have more than $200,000 o f rediscounts having a maturity
longer than ninety days.
Upon the indorsement of any
&pen- the —indorsement -of—any
member- bank-a ny-Federal- reserve member-bank -any- Federal- reserve
bank may discount the paper of the bank-inay-diseeunt the paper of the
classe8--heroinbefej8e-desepibed--hav- elassos-hcreinbeforo- deseribed- havand not more than one-hundred and and-net-more-thai* one hundred-and
twenty days—whcnita own cash-re­ twenty--days, -when—its- -own - cash
serve exceeds thirty three and one- geser^e— exceeds— thirty ■thr ee-and
th-ird-per-cent-ef its total-eutstand- one- third -percent—of- its- total- outstanding- demand—liabilities- exclu­
its— outstanding—Federal—reserve sive of— -its—outstanding—Federal
notes by an amount-to be -fixed by reserveHftotes-by-an-amount- to-be
the Federal Reserve Board- but not fixe d-by-th e Fcderai-Reser-ve-B eard mere than fifty per eent o£-tho total but- net-more than fifty per ■cent of
»aper-se-diseounted-for any-nienaber the -tetal: -paper so - discounted for
any member--bank-shall -have a ma
than -ninety- days
tu rityof more than-ninety- daysr
43
any -member bank- any
*-any Any Federal re­
Federal reserve bank may discount serve bank may discount accept­
ances of sueh member banks which
based on the experta-tien- er impor­ are based on the exportation or im­
tation or exportation or domestic portation of goods and which m&r
shipment of goods and which mature ture-i-n have a maturity at time of
in have a maturity at time of discount discount of not more than six months
of not more than si* three months, and of acceptances based on domestic
shipments of goods and which have a
maturity at iime of discount of not
more than four months and bear the
amount of acceptances so discounted signature of at least one member
shall at no nine exceed one-half the bank in addition to that of the
paid-up capital stock and surplus
acceptor. The amount so
discounted shall at no time
of the bank for which the rediscounts 42
are made.
exceed one-half the capital
stock 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

33

COMPARISON OF CURRENCY BILL.
SE C T I O N

14 — C o n t i n u e d .

HOUSE BILL.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

no time exceed ten per centum of
the unimpaired capital and surplus
of said bank; but this restriction
shall not apply to the discount of
bills of exchange drawn in good
faith against actually existing
values.
26
Any national bank may,
at its discretion, accept
drafts or bills of exchange drawn
upon it having not more than six
months sight to run and growing
out of transactions involving the
importation or exportation of goods;
but no bank shall accept such bills
to an amount equal at any time in
the aggregate to more than one-half
the face value of its paid-up and un­
impaired capital.

no time exceed ten per centum of
the unimpaired capital and surplus
of said bank; but this restriction
shall not apply to the discount of
bills of exchange drawn in good
faith against actually existing val­
ues.
Any national bank may, at- its
discretion-,- accept drafts or bills of
exchange drawn upon it having not
more than six months sight to run
and growing out of transactions
involving the importation, er expor­
tation, or domestic shipment of goods
having not more than six months
sight to run; but no bank shall ac­
cept such bills to an amount equal
at any time in the aggregate to
more than one-half thc- iace--value
ef its paid-up and—unimpaired
capital stock arid surplus.

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
tion shall at any time be indebted,
or in any way liable, to an amount
exceeding the amount of its capital
stock at such time actually paid in
and remaining undiminished by
losses or otherwise, except on ac­
count of demands of the nature fol­
lowing:
First. Notes of circulation.
Second. Moneys deposited with
or collected by the association. _
Third. Bills of exchange or drafts
drawn against money actually on
deposit to the credit of the associa­
tion, or due thereto.
Fourth. Liabilities to the stock­
holders of the association for divi­
dends and reserve profits.
Fifth. Liabilities incurred under
the provisions of sections two, five,
and fourteen of the Federal reserve
Act.

44

no time exceed ten per centum of
the unimpaired capital and surplus
of said bank; but this restriction
shall not apply to the discount of
bills of exchange drawn in good
faith against actually existing
values.
Any national bank may, at its dis­
cretion, accept drafts or bills of ex­
change drawn upon it having- not
more than sig -months sight to run
and growing out of transactions in­
volving the importation or exporta­
tion o f goods having not more than
six months to run or growing out o f
the domestic shipment o f goods and
having not more than four months to
run; but no bank shall accept such
bills to an amount equal at any
time in the aggregate to more than
one half the faee par value, of its
paid-up and unimpaired capital.
Section-fifty-two hundred and two
of -the—Revised Statutes—ef—the
United States Is-hereby amended-se
as- to- read- as-follows :- No-a ssocia,
tion shall at any time bo-indebted
or in any-way liable, to-an amount
exceeding--thc-amountof -i-ts capital
stock at such tim e-actually paid in
and remaining-undimi-mshed by
losses or otherwise-, except-on ao
count of demands e f the nature fol
IA TTT1 W •
TtrrnngT
43
First:-No tesof-circul ation.
Second. - Moneys deposited
wlth-or-oolleotod-by-the association.
Third. Bills of-e3Eehange-op-drafts
drawn against money- aetuaHy on
deposit to the credit-o f the associa
tion r or due thereto-:
Fourth. L iabilities to the stock ­
holders of the assoeiation for d m dends-and reserve-profits.Fifth. Liabilities incurred under
the -provisions of- sections- two, five,
and ■fourteen of the-Federal reserve
Aetr
The Federal Reserve Board may
authorize the reserve bank of the dis­
trict to discount the direct obligations
of member banks, secured by the pledge
and deposit of satisfactory securities;
but in no case shall the amount so
loaned by a reserve bank exceed threefourths of the actual market value o f
the securities so pledged or one-half
the amount of the paid-up and unim­
paired capital of the member bank.




Section fifty-two hundred
and two of the Revised Stat­
utes of the United States is hereby
amended so as to read as follows: No
association shall at any time be in­
debted, or in any way liable, to an
amount exceeding the amount of its
capital stock at such time actually
aid in and remaining undiminished
y losses or otherwise, except on
account of demands of the nature
following:
First. Notes of circulation.
Second. Moneys deposited with
or collected by the association
Third. Bills of exchange or drafts
drawn against money actually on
deposit to the credit of the associa­
tion, or due thereto.
Fourth. Liabilities to the stock­
holders of the association for divi­
dends and reserve profits.
Fifth. Liabilities incurred under
the provisions of sections two, five?
and -fourteen -ef-the Federal reserve
this Act.
The Federal Reserve Board may
authorize the reserve bank of the
district to discount the direct obli­
gations of member banks, secured
by the pledge and deposit of 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.

84

COMPARISON OF CURRENCY BILL.
SE C T I O N
HOUSE BILL.

14 — C o n t i n u

d

.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

The rediscount by any Federal
reserve bank of any bills receivable
and of domestic and foreign
45
bills of exchange ami accept­
ances shall be subject to such
restrictions, limitations, and regu­
lations as may be imposed by the
Federal Reserve Board.

The rediscount by any Federal re­
serve bank of any bills receivable and
of domestic and foreign bills of ex­
change shall be subject to such regula­
tions as may be imposed by the board.

The discount provisions of this Act
shall be equitably extended to aM of its
member banks by each reserve bank
upon equal terms, and each member
bank shall be entitled as a matter of
right to the rediscount of eligible pa­
per to the full amount of its capital
stock upon the lowest current
44
rate of discount, and no mem­
ber bank shall be permitted to
discount an amount of paper exceed­
ing the amount of its capital stock
except upon payment of a higher rate
of discount, the increase in rate of
discount to be one per centum for
an additional fifty per centum o f dis­
counts or part thereof and two per
centum for all in excess. In no case
shall a Federal reserve bank discount
paper for a member bank in excess of
twice the amount of its capital stock
without special authority by the board.

SECTION
27

O P E N -M A R K E T OPERATIONS.

15.

O P E N -M A R K E T OPERATIONS.

S e c . ±6 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, prime
cable transfers and bankers’ bills
acceptances and bills of exchange of
the kinds and maturities by this
Act made eligible for rediscounty-aed
cable- transfers with or without the
indorsement of a member bank.
Every Federal reserve bank shall
Every Federal reserve bank shall
have power (a) to deal in gold coin have power: (a) to deal in gold coin
and bullion both at home and and bullion both at home and or
abroad, to make loans thereon, abroad, to make loans thereon, ex­
and to contract for loans of gold change Federal reserve notes for gold,
coin or bullion, giving therefor, gold coin, or gold certificates, and to
when necessary, acceptable security, contract for loans of gold coin or
including the hypothecation of bullion, giving therefor, when nec­
essary, acceptable security, includ­
ing the hypothecation of United
States bonds or other securities which
Federal reserve banks are authorized

Sec . 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.




O P E N -M A R K E T OPERATIONS.

Sec . 15. That any Any Federal
reserve bank may, under rules and
regulations prescribed by the Fed­
eral Reserve 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 redis­
count, 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, when neces­
sary, acceptable security, including
the hypothecation of interest-bear­
ing obligations of the United States

COMPARISON OF CURRENCY BILL.
SECTION

35

15 — C o n t i n u e d .

HOUSE B ILL.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

United States bonds; (b) to invest
in United States bonds, and bonds
issued by any State, county, dis­
trict, or municipality;

to hold; (b) to in¥est-in buy and sell
at home or abroad, bonds and notes o f
the United States bonds, and beads
issued by -any -S tate? county7- dis
triet, --or --munieipality bills, notes,
revenue bonds, and warrants
46
with a maturity from date of
purchase of not exceeding six
months, issued in anticipation of the
collection of taxes or in anticipation
of the receipt of assured revenues by
any State, county, district, political
subdivision, or municipality in the
continental United States, such pur­
chases to be made in accordance with
rules and regulations prescribed by
the Federal Reserve Board:
(c) to
to pur­
purchase from member banks and
to sell, with or without its indorse­
ment, bills of exchange arising out
of commercial transactions, as here­
inbefore defined, payable in foreign
eoun tries rbut-such-bills of ■■exchange
must have—not exceeding -ninety
days to run and must bear the signature- of--two~or--moFe- re9poftsibIo
paftiesy-of-whieh-the- last-shali-be

bonds; {b}—to—invest in United
Statea-bonds,—andbonds- issued- by
any—State^— eeuntyj— distriet?— op
municipality (b) to^ buy and sell interest-b earing obligations o f the United
States and o f its dependencies
45
when payment o f principal
and interest is guaranteed by
the United States, and bonds or
warrants of any State, county, or
municipality, or short-time interestbearing obligations issued by foreign
governments, with a maturity from
date of purchase of not exceeding one
year, such purchases to be made in
accordance with rules and regulations
prescribed by the Federal Reserve
Board; (c) to purchase from a mem­
ber banks bank and to sell, with or
without its own indorsement, bills
of exchange arising out of commer­
cial transactions, as hereinbefore
defined-- payable- in foreign - eoun
tries - -but such bills- o f- exchange

(c)
chase from member banks and to
sell, with or without its indorse­
ment, bills of exchange arising out
of commercial transactions, as here­
inbefore defined, payable in for­
eign countries; but such bills of
exchange must have not exceeding
ninety days to run and must bear
the signature of two or more re­
sponsible parties, of which the last
shall be that of a member bank;
(d) to establish each week, or as
much oftener as required, subject
to review and determination of the
Federal Reserve Board, a rate of
discount to be charged by such
bank for each class of paper, which
shall be fixed with a view of accom­
modating the commerce of the
country; and
(e) with the
28
consent of the Federal Re­
serve Board, to open and
maintain banking accounts in for­
eign countries and establish agen­
cies in such countries wheresoever
it may deem best for the purpose
of purchasing, selling, and collect­
ing foreign bills of exchange, and to
buy ana sell with or without its
indorsement, through such corre­
spondents or agencies, prime for­
eign bills of exchange arising out of
commercial transactions which have
not exceeding ninety days to run
and which bear the signature of
two or more responsible parties.




days to -run and must-bear--the.signature- of -two- or - more- responsible
parties- - of- whieh --the- last- shall- bo
that- of-.a—member- .bank; (d) to

tablish eaeh—week;—or—as ~mueh
oftener-as-required /rom time to time, of tenor - as- required publicly from
subject to review and determina­ time to time, subject to review and
tion of the Federal Reserve Board, determination of the Federal Re­
a rate rates of discount to be charged serve Board, a rate of discount to be
by sueh the Federal reserve bank for charged by such bank for each class
each class of paper, which shall be of paper, which shall be fixed with
fixed with a view of accommodating a view of accommodating the com­
the commerce of- the country and merce of the country and promoting
business; and (e) to establish ac­ stability in business; and (e) estab­
counts with other Federal reserve lish accounts with other reserve banks
banks for exchange purposes and, and with the consent of the Federal
with the consent of the Federal Reserve Board, to open and main­
Reserve Board, to open and main­ tain banking accounts in foreign
tain banking accounts in foreign countries and establish agencies in
countries, appoint correspondents, such countries wheresoever it may
and establish agencies in such coun­ deem best for the purpose of pur­
tries wheresoever it may deem best chasing, selling, and collecting for­
for the purpose of purchasing, sell­ eign bills of exchange, letters of
ing, and collecting foreign credit, and travelers’ checks, and to
47
bills of exchange, and to buy buy and sell with or without its in­
and sell with or without its
dorsement, through s u c h
indorsement, through such corre­ 46
correspondents or agencies,
prime- foreign bills of ex­
spondents or agencies, prime- for
e*gn bills of exchange arising out of change arising out of commercial
actual
commercial
transactions transactions which have not ex­
which have not execcding more ceeding ninety days to run and
than ninety days to run and which which bear the signature of two or
bear the signature of two or more more responsible parties.
responsible parties.

COMPARISON OF CURRENCY BILL.
SECTION

36

16.

HOUSE BILL.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

GO VER NM EN T DEPOSITS.

GOVERNM ENT DEPOSITS.

G OVERNM ENT DEPOSITS.

S e c . 16. That all moneys now
Sec. 4-6 15. That-aH The moneys
held in the general fund of the new held in the general fund of the
Treasury except the five per centum Treasury, except the five per centum
fund for the redemption of outstand­ fund for the redemption of out­
ing national-bank notes shall, upon standing national-bank notes and
the direction of the Secretary of the the funds provided in this Act for
Treasury, within twelve months the redemption o f Federal reserve
after the passage of this Act. be notes shall may, upon the direction
deposited in Federal reserve banks, of the Secretary of the Treasury,
which banks shall act as fiscal agents within -twelve months after-the-pasof the United States; and thereafter sage.of this Aet-,- be deposited in
the revenues of the Government Federal reserve banks, which banks
shall be regularly deposited in such shall, when required by the Secretary
banks, and disbursements shall be of the Treasury, shall act as fiscal
made by checks drawn against such agents of the United States; and
deposits.
thereafter the revenues of the Gov­
ernment or any part thereof shall
may be regularly deposited in such
banks, and disbursements shall may
be made by checks drawn against
such deposits.
No public funds o f the Philippine
Islands, or o f the postal savings, or
any Government funds, shall be de­
posited in the continental United
States in any bank not belonging to
the system established by this Act:
Provided, however, That nothing in
this Act shall be construed to
the right o f the Secretary o f the
Treasury to use member banks as
depositories.
The Secretary of the Treasury 48
The— Secretary— of— the
shall, subject to the approval of the
Treasury shall;—subfeet—to
Federal Reserve Board, from time the approval of the Fodcral-R eserve
to time, apportion the funds of the B oardy-from -fcime -to- tj me,- appor
Government among the said Federal tion- the--fcnds- of--the- Govornmont
reserve banks, distributing them, as among—the—said—Federal—reserve
far
as
practicable,
equitably banksj-disti^utlng-themy as far -as
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 month-.a- rate -whieh shall he regu by the banks holding such deposits: la r ly - p a id ■b y - th e - ban k s h o ld in g
Provided, That no Federal reserve su eh - d e p o sits--— P r ovided, T h a t -n o
bank shall pay interest upon any F e d eral - reserve- b a n k -shal l-- p a y - i n deposits except those of the United te rest —up o n—a n y—dep osits—c x e c p t
States.
th e s e -o f t h o -U n lte d -S tate s?

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




receive or- -credit - deposits except
feom-the-Go^ernment-of-the United
Statesy-its-own -member-b anks-r and,
to- the- ext ent - permitted --by - this

S e c . 16. That all moneys now
held in the general fund of the
Treasury except the five percentum fund for the redemption of
outstanding national-bank notes
and the funds provided in this Act
for the redemption o f Federal reserve
notes shall, upon the direction of
the Secretary of the Treasury,
within---twelve- months after- -the
passage-ef -this-Aet- 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 deposits among the
said Federal reserve banks, dietributing-- them- in proportion to
their capital stock as far as practicablej-oquitab-l y-between dlfferent-seotions,-and-may7~at- thelr- j oint--diseretien, charge interest-thereon and
f e --4rem- month--to- monthy- a - rate
whieh- shall - be-rcgularly-paid-.by
the banks - holding- such -deposits-:
Provided-,— That—no— Federal—reserve-bank- shall-pay-inter"
47
est-upon any-depos-its except
those -of--the---United--States
; Provided, That for the purposes ocollection and transfer only the Sec.
reta,ry o f the Treasury may designate
national banks as Government depos­
itories.

No-Federal-reser-ve-bank-shall-reeewe-er-eredit -deposits c^eept-frem
States--its own-member-banks, and
to -the.-extent..permitted—by—this

37

COMPARISON OF CURRENCY BILL.
SE C T I O N
HOUSE B ILL.

16 — C o n t i n u

OWEN AMENDMENT.

from other Federal reserve banks. Aet^—from-..ether Federal - reserve
All domestic transactions of the banks-;— A ll-domestic transactions
Federal reserve banks involving of- the - Federal- -reserve- banks-inloans made by such banks, redis­ volving-leftns-made-by-sueh-bftnksy
count operations or the creation of rediscount- operations -or -the-ereadeposit accounts shall be confined to frion- e f deposit ftceounts-s hall—be
the Government and the depositing confined to-the Government and the
and Federal reserve banks, with the depositing— and— Federal;— reserve
exception of the purchase or sale of banks, with the -exceptio n ef- t he
urehase- og-sale- of- Government- or
Government or State securities or
tate-securities- or-of- gold -cein- or
of gold coin or bullion.
bul lion

SECTION
NO TE ISSUES.




.

HITCHCOCK AMENDMENT.

Aet^—from -other -Federal reserve
banks.— All- domestic- transactions
of the—Federal -reserve- banks In­
volving, loans-made by such banks-,rediscount- operations -eg - the - crea­
ti o n -of deposit accounts shall- be
confined-to- the Government and the
depositing— and— Federal— reserve
banks-,- -w*th..the - exception of- the
p u r e h a s o -o r -sale- o f - G o v e rn m en t- og

State-securitics- or- of--gold--eoin- op
b u l l ie nr

17.

NOTE ISSUES.

Se c .
¥hat 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 here49
inafter set forth and for no
other purpose, are hereby
authorized. The said notes shall be
obligations of the United States and
shall be receivable for all taxes,
customs, and other public dues.
They shall be redeemed in gold or
lawful-money 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.
30
Any Federal reserve bank
Any Federal reserve bank may?
may, upon vote of its direc­ upon vote..of its - direetors-, make
tors, make application to the local application to the local Federal re­
Federal reserve agent for such serve agent for such amount of the
amount of the Federal reserve notes Federal reserve notes hereinbefore
hereinbefore provided for as it may provided for as it may deem- best
deem best. Such application shall require. Such application shall be
be accompanied with a tender to the accompanied with a tender to the
local Federal reserve agent of col­ local Federal reserve agent of col­
lateral in amount equal to the sum lateral in amount equal to the sum
of the Federal reserve notes thus ap­ of the Federal reserve notes thus
plied for and issued pursuant to applied for and issued pursuant to
such application. The collateral se­ such application. The collateral
curity thus offered shall be notes and security thus offered shall be notes
bills accepted for rediscount under and bills accepted for rediscount
the provisions of section 14 of this under the provisions of section 44
Act, and the Federal reserve agent 13 of this act, and the Federal re­
shall each day notify the Federal serve agent shall each day notify
Reserve Board of issues and with­ the Federal Reserve Board of cul
drawals of notes to and by the Fed­ issues and withdrawals of Federal
eral reserve bank to which he is ac­ reserve notes to and b y the Federal
credited. The said Federal Reserve reserve bank to which he is accred­
Board shall be authorized at any ited. The said Federal Reserve
time to call upon a Federal reserve Board shall be authorized at any
bank for additional security to pro­ time to call upon a Federal reserve
tect the Federal reserve notes issued bank for additional security to pro­
to it.
tect the Federal reserve notes issued
to it.
S e c . 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
ublic dues. They shall be reeemed 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.

d

NOTE ISSUES.

S e c . 17. That Federal reserve
notes, to be issued at-the discretion
under authority of the Federal Re­
serve 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 receivable for all taxes,
customs, and other public dues but
shall not be held as reserves by member banks or by a reserve bank.
Thev shall be redeemed in gold eg
lawful- money on demand at the
Treasury Department of the United
States, in the city of Washington,
District of Columbia, or at any
Federal reserve bank.
48
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 require. Such
application shall be accompanied
with a tender to the local Federal
reserve agent of collateral security
in amount equal to the sum of the
Federal reserve notes thus applied
for and issued pursuant to sucn ap­
plication. The collateral security
thus offered shall be notes and bills
accepted for rediscount under the
provisions of seetien-W-ef this Act,
and the Federal reserve agent shall
each day notify the Federal Reserve
Board of all issues and withdrawals
of Federal reserve notes to and by
the Federal reserve bank to which
he is accredited. The said Federal
Reserve Board shall be authorized
at any time to call upon a Federal
reserve bank for additional security
to protect the Federal reserve notes
issued to it.

38

COMPARISON OF CURRENCY BILL.
SE C T I O N
HOUSE B ILL.

17 — C o n t i n u e d .

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

Whenever any Federal reserve
bank shall pay-out-or-disburse-Fed­
eral reserve-notes issued to .it--as
hereinbefore— provided:?— it
50
shall segregate- in its - own

Whenever any Federal- roser-ve
bank-shall ■pay-out-or disburse-Fed­
eral reserve notes issued to -it as
hereinbefore provided,- it shall segregate-in-its-own--vaults- and-shall
earry- t o - a- special- reserve account
on -its -books-gold-or-4awfttl- money
equal-m amount-to-thirty- three-and
one -third- por-eentum of-the-reservo
notes so paid out-by-ity sueh-reserve
to- be-used--for- the redemption of
said- reserve notes-as presentedf-but
any- Fedcral- reserve-frank-so- using
an y -part-of-sueh-reserve-to redeem
notes— ahaH— immediately
49
carry to-said reserve aeeount
an amount -of-gold or-lawful
money—sufficient—to—make—said
reserve equal —to - thirty -three- -and
one-third per ■eontuin—of ■its- out-

epeeial-reserve- account on its books
reserve— gold— or— lawful money
cqual-in amountrto thirty-three and
one-third-per-centum-of the-reserve
notes-so paid -out by it-,-such reserve
to be u ;mh! for -the redcmption -of
said-reserve- notes as presented- but
any Foderal-reserve-eank-so-using
any part of sueh reserve to redeem
notes- -ahaH—immediately carry—fee
sai d -rcserve-aeeount- an- amount-of
m ake said reservc- equal- to- thirtyits — o u tsta n d in g — F e d eral— reserve
n o t es?

Whenever any reserve bank shall pay
Every Federal reserve bank shall oust or disburse Federal reserve notes
Whenever any Federal reserve
bank shall pay out or disburse Fed­ maintain reserves in gold or lawful issued to it as hereinbefore provided,
eral reserve notes issued to it as money of not less than thirtyfive per it shall segregate and turn over to its
hereinbefore provided, it shall seg­ centum against its deposits and its reserve agent gold coin or gold
regate in its own vaults and shall Federal reserve notes in actual circu­ bullion or United States gold certifi­
carry to a special reserve account on lation, but the amount of gold in the cates to the amount of the face value of
its books gold or lawful money Federal reserve bank together with the the notes so outstanding, or, at its
equal in amount to thirty-three and amount deposited by it with the Treas­ option, shall segregate and turn over
one-third per centum of the reserve ury, shall be at least equal to thirty- to the reserve agent gold coin or gold
notes so paid out by it, such reserve three ami one-third per centum of the bullion or United States gold certifi­
to be used for the redemption of said Federal reserve notes issued to said, cates to the amount of forty-five per
reserve notes as presented; but any bank and in actual circulation and centum of suchface value and in addi­
Federal reserve bank so using any not offset by gold or lawful money tion thereto collaterals consisting of
part of such reserve to redeem depemted with the Federal reserve promissory notes ami bills accepted
The Federal Reserve Board for rediscount under the provisions of
notes shall immediately carry agent.
31
to said reserve account an may notify any Federal reserve bank this Act, or refunding notes of th j
amount of gold or lawful whose lawful reserve shall be below United States hereinafter provided
money sufficient to make said re­ the amount required to be maintained for, or both such collaterals and re­
serve equal to thirty-three and one- to make good such reserve; and i f such funding notes equal at their face
third per centum of its outstanding ba nk shall fail for thirty days there­ value to one hundred per centum of
after so to make good its lawful re­ the face value of the notes so outstand­
Federal reserve notes.
serve, the Federal Reserve Board may ing. Such collaterals may be ex­
suspend and take possession of such changed from time to time for other
reserve bank and administer collaterals of like quality and o f equal
51
the same during the period of face value or refunding notes within
suspension.
the limitations aforesaid: Provided,
That whenever and so long as such
reserve shall fall and remain below
forty-five per centum the reserve bank
sh ttl pay a special tax upon the de­
ficiency of reserve at a rate increasing
in proportion to such deficiency, as
follows: For each two and one-half
per centum or fraction thereof that the
reserve falls below forty-five
50
per centum a tax shall be
levied at the rate of one per
centum per annum: Provided fur­
ther, That no additional circulating
nates ‘luitt be issued whenever and so
long as the amount of such reserve
falls below thirty per centum of its




39

COMPARISON OF CURRENCY BILL.
SE C T I O N
HOUSE BILL.

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.

17 — C o n t i n u

OWEN AMENDMENT.

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 issuedy-or-shaH
be-eharged- off agaanst- Government
depoak s-and- ret^med-te the Treas ■
ury of-the llHited Statesyor-shftlt-be
redemption.

No Federal reserve hank shall pay
out notes issued through another
under penalty of a tax of ten per
centum upon the face value of notes
so paid out. Notes presented for
redemption at the Treasury of the
Unitea 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 shall 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.

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 so paid out. Notes
presented for redemption at the
Treasury of the United States shall
be paid out of the redemption fund
and returned to the Federal reserve
banks through which they were
originally issued,-.and. Federal re­
serve notes received by the Treas­
ury, otherwise than for redemption,
shall may be exchanged for lawfol
money gold out of the five— pep
centum redemption fund hereinafter
provided and returned as—herein
before-providod to the reserve bank
through which they were originally
issued, or they may be returned to
such bank for the credit of the United
States. Federal reserve notes unfit
for circulation shall be re52
turned by the Federal reserve
agents to the Comptroller of
the Currency for cancellation and
destruction.
The Federal Reserve Board shall
have-power, in its discretion, to re­
quire each Federal reserve banks
bank to maintain on deposit in the
Treasury of the United States a sum

d.
HITCHCOCK AMENDMENT.

outstanding notes: Provided, That
the amount of such tax paid by the
bank during a fiscal year shall be
charged to the member banks in its
district in proportion to their average
discounts during that year.
Notes
so paid out shall bear upon their
faces a distinctive letter and serial
number, which shall be assigned by
the Federal Reserve Board to each
Federal reserve bank. Whenever
Federal reserve notes issued through
one Federal reserve bank shall be
received by another Federal reserve
bank they shall be returned
promptly for redemption to the
Federal reserve bank through which
they were originally issued, or-3hall
be-eharged -off-agamst Government
deposits and-returncd to-the Treas­
ury ■of- tbe- United - States, or shall*
bo prosentod- t o- the- said-Treasury
for redemption.
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 so paid out.
Notes presented for redemption at
the Treasury of the United States
shall be paid and- returned- to-the
Federal— reserve— banks— through
which they-were-eriginaHy-issuedy
and- Federal- Feaorve--notefr-reoei¥ed
by the Treasury otherwise -than for
redemption-shall- be-ojEeh&nged-for
lawful— money—out— ef—the—five
frer-eentum -redemption fund
51
hereinafter -provided and-retnrned -as--hereinbefore pro.
vided -to-the-reserve-bank-through
which.they -were-e riginaHy- issued
out of the redemption fund and shall
not be reissued except upon compli­
ance with the conditions of an original
issue.

The Federal Reserve Board shall
have power, in its discretion, to re­
have power, in its - discretion,- to
quire Federal reserve banks
require Federal reserve banks to
32
to maintain on deposit in the
shall maintain on deposit in the
Treasury of the United
Treasury of the United States a
States a sum in gold equal to five
sum in gold equal to five per centum
per centum of such amount of Fed­ sufficient in the judgment of the Secre­ of such amount of Federal reserve
eral reserve notes as may be issued tary of the Treasury for the redemp­ notes as may be issued to them and
to them under the provisions of this tion of sneh.amount of the Federal outstanding under the provisions of
A ct; but such five per centum shall reserve notes as-may -be issued to this Act and such additional sums
be counted and included as part of them- under- the-provisions ■of this as the Secretary o f the Treasury may
the thirty-three and one-third per Aet such bank but in no event less than from time to time decide to be neces­
centum reserve hereinbefore re­ five per centum; but such five-por sary, not exceeding in the aggregate
quired.
eentum deposit of gold shall be count- ten per centum, but such five per
S D—63-2—vol ‘25---- 6



COMPARISON OF CURRENCY BILL.
SECTION
HOUSE BILL.

40

17 — C o n t i n u e d .

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

ed and included as part of the thir­
ty-three and *one-third per centum
reserve hereinbefore required.

eentnn* deposit of gold which shall
he segregated and maintained as a
trust fund shall be counted and
included as part of the thi rty-three
and one -third por- eentum reserve
notes.

The
The said board shall also
have the right to grant in whole or said board shall artae have the right,
in part or to reject entirely the ap­ acting through the Federal reserve
plication of any Federal reserve agent, to grant in whole or in part or
bank for Federal reserve notes; blit 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; deposit
bank shall bo charged with the supply Federal reserve notes with to
amount of such notes and shall pay thee&nks hank 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,J
of such Federal reserve notes so not be lcoa than one-half-e f-oneper
issued to any such bank shall, upon centum per annmn- and the amount
of such Federal reserve notes
delivery, become a first and para­
so issued to any such bank
mount lien on all the assets of such 53
shall, upon delivery, become
bank.
a first and paramount lien on all the
assets of such bank.

Any Federal reserve bank may at
any time reduce its liability for out­
standing Federal reserve notes by
the deposit of Federal reserve notes,
whether issued to such bank or to
some other reserve bank, or lawful
money of the United States,
33
or gold bullion, with any Fed­
eral reserve agent or with the
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
corresponding amount of the col­
lateral security deposited with the
local Federal reserve agent.




^
The said board shall afee
hav e the npight-to grant in-whele- or
in-part or-te-rejeet- entirely the ap­
plication of any Federal reserve
bank for Federal reserve notesf -bnt
te-the-extont-and-in the amount that
such applieation- may be-g
r anted
-gra
the Federal "Reserve -Beard- shal4j
thiongh-4 ts-4 eeal- Federal—reserve
agent-, deposit Federal reserve- notes
wi th the bank se-arpplyingyand-sucli,
provided said reserve hank complies
with the requirements of this Act as
to gold reserve and collateral
52
forms to its provisions. The
bank shall be charged with the
amount of such notes and shall pay
sueh-raite-of-interest-on aaid-amennt
as -m&y- be-establishcd--by-thc- Fcd-eral-ReseF¥e-Beftrd--whien rate-3hall
net-be- less-thftB-ene-^ftlf of one per
centum-per annum ,- ftndr the amount

issued to any-sueh bank shall-, which,
upon delivery, shall 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 tune reduce its liability for out­
standing Federal reserve notes by standing Federal reserve notes by
the.deposit- e f depositing, with the the deposit of-F-ederal reservo-netes?
Federal reserve agent, its Federal re­ whether- issued-te-sueh- bank- or- te
serve notes, whether-issued-to-sneh some ether reserve banky er lawful
bank or to some-ether rcserve-bank- money ef
or ggeld
et the
tne- Unitcd-Statesunited ktat-es-er
eia:
or lawful -m oney.of -th e -United
bullion- redeeming the same and de­
States—or gold -bullien-,- with any positing them, with any its Federal
Federal- reserve-agent .-or- with- the reserve agent or with-the-Treasurer
Treasurer of tho*Unitod- States-,-and of- the- United-S tartesr -and-s ueh- resueh reduction ahaH-be-aecompamed dt*etion-shall -he aceompanicd by a
by a corresponding roduet*on-*n-the eorresponding- peduction -in- the-rerequired reserve- -fnnd -e f.-lawful quired-reser-ve-fund
“
of-lawful-money
money set apart for-the-redemptien set-apart f or-the- redemptien-of said
of -said -notes and by-the-release-ef notes and -by -the-release -ef-a-eerrea corresponding amennt of the eel- sponding-a mount- of-the- eelkteral
lateral-sceurity- doposited-with- the seeurity- deposited with -the—leeal
local Federal reserve agent, gold cer­ Federal -reserve agent, who shall fo r­
tificates, or lawful money o f the United ward them to the Treasury for retireStates. Federal reserve notes so de­ ment.
posited shall not he 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 for 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 of

se

41

COMPARISON OF CURRENCY BILL.
SECTION
HOUSE B ILL.

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 prescribed by the Federal Re­
serve Board.




17— Continued.

OWEN AMENDMENT.

the Treasury the Federal Reserve
Board shall require the Federal re­
serve agent to transmit so much
54
of said gold to the Treasury of
the United States as may be
required for the exclusive purpose of
the redemption 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 vafee amount appreved-by
with the approval of 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 of the Sec­
retary of the Treasury, cause plates
and dies to be engraved in the best
manner to guard against counterfeits
and fraudulent alterations, and shall
ha ve printed therefrom ana numbered
such quantities of such notes of the
denominations of $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 of the
Treasury under the provisions of this
Act ami shall bear the distinctive
numbers of 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 of business o f each Federal re­
serve bank and* shall be heldfor
55
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 of the Currency
for the printing of such circulating
notes shall remain under his control
and direction, and the expenses neces­
sarily incurred in executing the laws
relating to the procuring of 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.

HITCHCOCK AMENDMENT.

Any Federal-.reserve -bank may
at-its-discrotion-withdrftw-oollaterat
deposited wif e the loeal-Fcderal re­
serve agent -fo r - the -protection -o f
Federal—reserve—notes—deposited
with it and shall at the-same-time
substitute-other oollateral-ef
53
equal- value approved b y -the
F-odorftl- rescrve- ftgent- ttftder
regulations to be prescribed by the
Federal-Reserve-Board r
In
order to furnish suitable Federal re­
serves notes, the Comptroller o f the Cur­
rency shall, under the direction o f the
Secretary of the Treasury, cause
plates and, dies to be engraved in the
best manner to guard against counter­
feits and fraudulent alterations, and
shall have printed therefrom and num­
bered such quantities o f such notes in
blank of the denominations o f $5, $10,
$20, $50, $100, $500, $1,000, as
may be required to supply the reserve
banks entitled to receive the same.
Such notes shall be in form and tenor
provided for in this Act.

When such notes have been pre­
pared, they shall be deposited in the
Treasury, or in the subtreasury o f
the United States nearest the place
of business of each reserve
54
bank, and shall be held f or the
use of such bank, subject to
the order o f the Federal Reserve
Board for their delivery, as provided
by this Act.
The plates and dies to be procured
by the Comptroller of the Currency
for 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 inci­
dental to their issue and retirement,
shall be paid by the reserve banks,
and the Federal Reserve Board shall
include in its estimate o f expenses
levied- against the reserve banks a
sufficient amount to cover the ex­
penses herein provided for.

COMPARISON OF CURRENCY BILL.
SECTION
HOUSE BILL.

42

17 — C o n t i n u e d .

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

The examination of plates, diesT
bed pieces, and so forth, and regula­
tions relating to such examination o f
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 Federal reserve notes herein
provided for.
Any 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 in con­
nection with the printing of nationalbank notes or notes provided for by the
Act of May thirtieth, nineteen hundred
and eight, and any distinctive paper
that may be on hand at the time of
the passage of this Act may be
55
used, in the discretion of the
Secretary, for the purposes of
this Act; and should the appropria­
tions heretofore made be insufficient
to meet the requirements of this Act,
in addition to circulating notes pro­
vided for by existing law, the Secre­
tary is hereby authorized to use so
much as may be necessary of any
funds in the Treasury not otherwise
appropriated for the purpose of fu r­
nishing the notes aforesaid: Provided,
however, That nothing in this section
contained shall be construed as ex- m
empting national banks or Federal
reserve banks from their liability to
reimburse the United States fo r any
expenses incurred in printing and
issuing circulating notes.
It shall bo the dutyof-every Fed­
It shall bo the ditty el-every Fed
oral reserve bank to feceive on do eral reserve bank to- receive on deposit, at par and without charge for >osit, at par and without eharge
exchange or collection^- chccks and
A w rl /I n
llllU
. Ur
drafts drawn upon any of its do
positors
or by any of its depositors
positors or by any of ke depositors
upon any other depositor and-eheeks upon any other depositor and checks
and-drafts.drawn by any deposit of and drafts drawn by any depositor
kt any other- Fcd oral- reserve bank
upo>
n-funds to the credit of said de­
positor in said reserve bank laot
mentioned-;—nothing—herein—een- mentioned^—nothing—heroin—con­
t&ined to be eonstrued-as prohibit - tained to be construed as prohibit­
ing mcmber-b anka-fre-m maki-ng-rearreasonable charges to- cover-aetual so-nable charges to cover actual exexpenses incurred in -col lecting and
remitting funds for their patrons. mi t ting funds- for their patrons?
Every Federal reserve bank shall
Every Federal reserve bank shall
It shall be the duty of every Fed­
eral reserve bank to receive on de­ receive on deposit from member banks receive on deposit from member banks
posit, at par and without charge for or from Federal reserve banks checks or from reserve banks checks and
exchange or collection, checks and and drafts drawn upon any of its drafts drawn upon any of its de­
drafts drawn upon any of its depositors, and when remitted by positors, and, when remitted by a
depositors or by any of its depos­ a Federal reserve bank, checks and reserve bank, checks and drafts drawn
itors upon any other depositor and drafts drawn by any depositor in any by any depositor in any other reserve
checks and drafts drawn by any other Federal reserve bank or bank or member bank upon funds to




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 Federal reserve notes herein
provided for.
Any 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 in 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 Secre­
tary for the purposes of this
56
Act, and should the appro­
priations heretofore made be
insufficient to meet the requirements
of 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 purpose 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.

43

COMPARISON OF CURRENCY BILL.
SE C T I O N
HOUSE BILL.

17 — C o n t i n u e d .

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

member bank upon funds to the credit o f said depositor in said
depositor in any other Federal re­ 57
the credit o f said depositor in reserve bank or member bank. Noth­
serve bank upon funds to the credit
of said depositor in said reserve said reserve bank or member bank. ing herein contained shall be con­
bank last mentioned, nothing herein Nothing herein contained shall be strued as prohibiting a member bank
contained to be construed as pro­ construed as prohibiting a member from making reasonable charges fo r
hibiting member banks from mak­ bank from making reasonable charges checks and drafts so debited to its ac­
ing reasonable charges to cover fo r checks and drafts so debited to its• count, or for collecting and remitting
actual expenses incurred in col­ account, or for collecting and remit­ funds, or for exchange sold to its
lecting and remitting funds for ting funds, or for exchange sold to its patrons. The Federal Reserve Board
patrons. The Federal Reserve Boa/rd may, by rule, fix reasonable charges to
their patrons.
may, by rule, fix the charges to be be collected by the member banks from
collected by the member banks from patrons whose checks are cleared
its patrons whose checks are cleared through the reserve bank and the
through the Federal reserve bank and charge which may be imposed for the
the charge which may be imposed for
service o f clearing or collection
rendered by the Federal reserve
the service o f clearing or collection 56
rendered by the Federal reserve bank.
bank.
The Federal Reserve Board shall
The Federal Re­
The Federal Reserve
serve Board shall make and pro­ make and promulgate from time to Board shall make and promulgate
mulgate from time to time regula­ time regulations governing the from time to time regulations gov­
tions governing the transfer of transfer of funds arfe-pa# and charges erning the transfer of funds at- pap
funds at par among Federal therefor among Federal reserve among Federal reserve banksT-and
reserve banks, and may at banks and their branches, and may
34
its discretion exercise the at its discretion exercise the func­
functions of a clearing house tions of a clearing house for such
for such Federal reserve banks, or Federal reserve banks, or may des­
may designate a Federal reserve ignate a Federal reserve bank to
bank to exercise such functions, exercise such functions, and may
and may also require each such also require each such bank to exer­ erets e th e-fanetioea- of a clearing­
bank to exercise the functions of a cise the functions of a clearing house house—for i-fes- member -baaaka arid
their branches.
clearing house for its member banks. for its member banks.

SECTION
Sec . 18. That so much of the pro­
visions of section fifty-one hundred
and fifty-nine of the Revised Stat­
utes of theUnited 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 pro­
visions of existing statutes, as re­
quire that before any national bank­
ing association shall be authorized
to commence banking business it
shall transfer and deliver to the
Treasuier of the United States a
stated amount of United States
registered bonds be, and the same
is hereby, repealed.




18.

Sec . 4& 17. That so much of the
Sec . 18. That so much of the
provisions of section fifty-one hun­
rovisions of section fifty-one hundred and fifty-nine of the Revised
red and fifty-nine of the Revised
Statutes of the United States, and Statutes of the United States, and
section four of the Act of June section four of the Act of June
twentieth, eighteen hundred and twentieth, eighteen hundred and
seventy-four, and section eight of seventy-four, and section eight of
the act of July twelfth, eight- the Act of July twelfth, eighteen
58
een hundred and eighty-two, hundred and eighty-two, and of
and of any other provisions any other provisions of existing
of existing statutes as require that statutes, as require that before any
before any national banking asso­ national banking association shall
ciation shall be authorized to com­ be authorized to commence bank­
mence banking business it shall ing business it shall transfer and
transfer and deliver to the Treasurer deliver to the Treasurer of the
of the United States a stated United States a stated amount of
amount of United States registered United States registered bonds be,
bonds be, and the same is hereby, and the same is hereby, repealed.
repealed.

COMPARISON OF CURRENCY BILL.
SECTION
HOUSE BILLR E FU NDING

19.

OWEN AMENDMENT.

ui"rtil'll/invf Duni/Hr

H i a i 3 TT\T 1\ T \ T n --

BONDS.

r \ fi

The Owen amendment proposes to strike
out all of section 19 of the House bill and
insert the following:
S e c . 19. That upon application
the Secretary of the Treasury shall
exchange the two per centum bonds
of the United States bearing the
circulation privilege deposited by
any national banking association
with the Treasurer of the United
States as security for circulating
notes for three per centum bonds of
the United States without the cir­
culation privilege, payable after
twenty years from date of issue,
and exempt from Federal, State,
and municipal taxation both
35
as to income and principal.
No national bank shall, in
any one year, present two per cen­
tum bonds for exchange in the
manner hereinbefore provided to
an amount exceeding five per cen­
tum of the total amount of bonds
on deposit with the Treasure!* by
said bank for circulation purposes.
Should any national bank fail in
any one year to so exchange its full
quota of two per centum bonds
under the terms of this Act, the
Secretary of the Treasury may per­
mit any other national bank or
banks to exchange bonds in excess
of the five per centum aforesaid in
an amount equal to the deficiency
caused by the failure of any one or
more banks to make exchange in
any one year, allotment to be made4
to applying banks in proportion to
their holdings of bonds. At the
expiration of twenty years from
the passage of this Act (‘very holder
of United States two per centum
bonds then outstanding shall re­
ceive payment at par and accrued
interest. After twenty years from
the date of t lie passage of this Act
national-bank notes still remaining
outstanding shall be recalled and
redeemed by the national banking
associations issuing the same wit hin
a period and under regulations to
be prescribed by the Federal R e­
serve Board, and notes still remain­
ing in circulation at the end of such
period shall be secured by an equal
amount of lawful money to be de­
posited in the Treasury of the
United States by the' banking
associations originally issuing such




60

44

Sec. 18. Any member bank
desiring to retire the whole or
any part of its circulating notes may
file with the Treasurer of the United
States an application to sell for its
account, at par and interest, United
States bonds securing circulation to
be retired.
The Treasurer shall, at the end of
each quarterly period, furnish the
Federal Reserve Board with a list of
such applications, and the Federal
Reserve Board may, in its discretion,
require the Federal reserve banks to
purchase such bonds from the banks
whose applications have been fled
with the Treasurer at least ten days
before the end of any quarterly period
at which the Federal Reserve Board
may direct the purchase to be made.
Upon notice from the Treasurer of
the amount of bonds so sold for its
account, each member hank shall
duly assign and transfer, in writing,
such bonds to the Federal reserve bank
purchasing the same, and such Fed­
eral reserve bank shall thereupon de­
posit lawful money with the Treasurer
o f the united States for the purchase
price o f such bonds, and the Treasurer
shall pay to the member bank selling
such bonds any balance due after de­
ducting a sufficient sum to redeem its
outstanding notes secured by such
bonds, which notes shall be canceled
and permanently retired when re­
deemed.
The Federal reserve banks pur­
chasing such bonds shall be required
to take out an amount o f cir61
culafing notes equal to the
amount o f national-bank notes
outstanding against such bonds.
Upon the deposit with the Treasurer
o f the United States bonds so pur­
chased, or any bonds with the circu­
lating privilege acquired under section
four o f this Act, any Federal reserve
bank making such deposit in the man­
ner provided by existing law shall be
entitled to receive from the Comp­
troller o f the Currency circulating
notes in blank, registered and coun­
tersigned as provided by law, equal in
amount to the par value o f the bonds so
deposited. Such notes shall be the
obligations o f the Federal reserve

HITCHCOCK AMENDMENT.
R E FU N D IN G

BONDS.

The Hitchcock amendment proposes to
strike out all of section 19 of the House bill
and insert the following:
S ec . 19. That as soon after the
organization o f the reserve banks as
practicable and under authority from
the Federal Reserve Board each Fed­
eral reserve bank shall purchase at par
and' accrued interest two per centum
bonds o f the United States. The
amount purchased by each reserve
bank shall not be more than fifty per
centum o f its capital in any one year.
The bonds so purchased may be held
by such reserve bank and used fo r de­
posit with its reserve agent as security
for the Federal reserve notes issued, or
they may be exchanged at the Treasury
for one-year Treasury gold notes bear­
ing three per centum interest. In
case o f such exchange the reserve bank
shall be bound at the option of
59
the United States to renew
year by year for twenty years
the three per centum gold notes so
issued. Said one-year three per cen­
tum United States gold notes may be
used to deposit with the reserve agent
as security for the United States re­
serve notes, or be freely purchased by
reserve banks from time to time to
employ idle funds, or sold to protect
the gold supply.
National banks which sell two per
centum bonds to a reserve bank under
this provision shall retire such portion
o f their outstanding national-bank
notes as are secured by the bonds so
sold. The Secretary o f the Treasury
is hereby directed to issue three per
centum one-year gold Treasury notes
year by year to exchange for two per
centum bonds as above provided or to
take the pla ce o f three per centum oneyear gold notes that have been re­
deemed. During the period between
the first and last purchases o f bonds
any national bank may continue to
apply for and receive circulating
notes based upon the deposit o f two
per centum bonds as now provided for
by law. The one-year three per
centum gold Treasury notes above
provided for shall be exempt from
Federal, State, and municipal taxa­
tion both as to income and principal.

COMPARISON OF CURRENCY BILL.
SE C T I O N
HOUSE BILL.

45

19 — C o n t i n u * d.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

notes. Meanwhile every national bank procuring same, and shall be in
bank may continue to apply form prescribed by the Secretary of the
for and receive circulating Treasury, and to the same tenor and
36
notes from the Comptroller effect as national-bank notes now pro­
of the Currency based upon vided by law. They shall be issued
the deposit of two per centum under the same terms and conditions
bonds or of any other bonds bearing as nation al-bank notes. United States
the circulation privilege; but no bonds bought by a Federal reserve
national bank snail be permitted bank against which there are no out­
to issue other circulating notes ex­ standing national-bank notes may be
cept such as are secured as in this exchanged at the Treasury for onesection provided or to issue or to year gohl notes bearing three per
make use of any substitute for such centum interest. In case o f such ex­
circulating notes in the form of change for one-year notes the reserve
clearing-house loan certificates,cash­ bank shall be bound to pay such notes
ier's checks, or other obligation.
and to receive in payment thereof new
three per centum one-year Treasury
gold notes year by year for the period
o f twenty years.

SECTION
B A N K RESERVES.

BANK

20.

RESERVES.

The Owen amendment proposes to strike
out all of section 20 of the House bill and
insert the following:

B A N K R E SE R V ES.

The Hitchcock amendment proposes to
strike out all of section 20 of the House bill
and insert the following:

Sec. 19. Demand liabilities within
the meaning of this Act shall comprise
all liabilities maturing within thirty
days, and time deposits shall com­
prise all deposits payable after thirty
days.
Sec. 20. That when a Federal re­
When the Secretary of the
Sec. 20. That from and after the 65
Treasury shall have officially serve bank has been duly organized
date when the Secretary of the
Treasury shall have officially an­ announced, in such manner as he may and established as provided in this
nounced, in such manner as he may elect, the establishment of a Federal Act in any Federal reserve district
elect, the fact that a Federal reserve reserve bank in any district, every sub­ every member bank of that district
hank has been established in any scribing member bank shall establish shall establish and maintain reserves
asfollows:
designated district, every banking and maintain reserves asfollows:
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 delined (a)
A bank not in a reserve or cen­ {a) A bank not in a reserve or cen­
by existing law, it shall hold and tral reserve city as now or hereafter tral reserve city as now or hereafter de­
maintain a reserve equal to twelve defined shall hold and maintain re­
fined shall hold and maintain
reserves equal to twelve per
per centum of the aggregate amount serves equal to twelve per centum of 63
centum of the aggregate amount
of its deposits, not including savings the aggregate amount of its demand
deposits hereinafter provided for. liabilities and five per centum of its of its net deposits, as follows:
Five-twelfths of such reserve shall time deposits as follows:
consist of money which national
In its va ults for a period of twentyIn its vaults, four-twelfths thereof
banks may under existing law count four months after said date fouras legal reserve, held actually in the twelfths thereof.
bank's own vaults; and for a period
In the Federal reserve bank o f its
In the Federal reserve bank of its
of fourteen months from the date district, for a period of six months district, for a period of six months
aforesaid at least three-twelfths and after said date, two-twelfths, and for after said date, one-twelfth, and for
thereafter at least five-twelfths of each succeeding six months an addi­ each succeeding six months an addi­
such reserve shall consist of a tional one-twelfth, until five-twelfths tional one-twelfth, until four-twelfths
37
credit balance with the Fed­ have been so deposited, which shall be have been so deposited, which shall be
eral reserve bank of its dis~ the amount permanently required.
the amount permanently required




COMPARISON OF CURRENCY BILL.
SECTION
HOUSE B ILL.

20 — C o n t i n u e d .

OWEN AMENDMENT.

trict. The remainder of the twelve
For a period o f twenty-four months
per centum reserve hereinbefore after said date the balance o f the re­
required may, for a period of thirty- serves may be held in its own vaults,
six months from and after the date or in the Federal reserve banlc, or in
fixed by the Secretary of the Treas­ banks in reserve or central reserve
ury as hereinbefore provided, con­ cities as now defined by law.
sist of balances due from national
After said twentyfou r months1pe­
banks in reserve or central reserve riod said reserves, other than those
cities as now defined by law. From hereinbefore required to be held in the
and after a date thirty-six months reserve bank, shall be held in the
subsequent to the date fixed by the vaults o f the member bank or in the
Secretary of the Treasury as herein­ Federal reserve bank, or in both, at
before provided the said remainder its option.
of the twelve per centum reserve
required of each country bank shall
consist either in whole or in part of
reserve money in the bank’s own
vaults or of credit balance with the
Federal reserve bank of its district.
(b) A bank in a reserve city,
(b)
If a reserve city bank as de­66
as
now or hereafter defined,
fined by existing law, it shall hold
and maintain, for a period of sixty shall hold and maintain reserves
days from the date fixed by the equal to fifteen per centum o f the
Secretary of the Treasury as herein­ aggregate amount o f its demand lia­
before provided, a reserve equal to bilities andfive per centum o f its time
twenty per centum of the aggregate deposits, as follows:
In its vaults six-fifteenths thereof'.
amount of its deposits, not including
In the Federal reserve bank o f its
savings deposits hereinafter pro­
district
fo r a period o f six months
vided for, and permanently there­
after eighteen per centum. At least after the date aforesaid at least threeone-half of such reserve shall consist fifteenths, andfo r each succeeding six
of money which national banks may months an additional one-fifteenth,
under existing law count as legal until six-fifteenths have been so de­
reserve, held actually in the bank’s posited, which shall be the amount
own vaults.
After sixty days permanently required.
from the date aforesaid, and for a
period of one year, at least threeeighteenths and permanently there­
after at least five-eighteenths of
such reserve siiaii 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.
From and after a date thirty-six
After said twenty-four months1
months subsequent to the date period all o f said reserves, except
fixed by the Secretary of the Treas- those hereinbefore required to be had
ury as hereinbefore provided, the permanently in the Federal reserve
said remainder of the eighteen per bank, shall be held in its vaults or in
centum reserve required of each the Federal reserve bank, or in both,
reserve city bank shall consist at its option.
either in whole or in part of reserve
money in the bank’s own vaults or
of credit balance with the Federal
reserve bank of its district.




46

HITCHCOCK AMENDMENT.

After said period said reserves,
other than those hereinbefore required
to be held in the reserve bank, may be
held in the vaults o f the member bank
or in the Federal reserve bank, or in
both, at the option o f the member bank.

(b)
A bank in a reserve or a central
reserve city, as now or hereafter de­
fined, shall hold and maintain reserves
equal to fifteen per centum o f the ag­
gregate amount o f its net deposits, as
follows:
In its vaults, five-fifteenths thereof
In the Federal reserve bank o f its
district fo r a period of six months
after the date aforesaid at least onefifteenth, and for each succeeding six
months an additional one-fifteenth,
until six-fifteenths have been so depos­
ited, which shall be the amount per­
manently required.

After said period all o f said re­
serves, except those hereinbefore re­
quired to be held permanently
64
m the Federal reserve bank,
may be held in its own vaults
or in the Federal reserve bank, or in
both, at the option o f the member bank.

COMPARISON OF CURRENCY BILL.
SE C T I O N
HOUSE BILL.

4T

20 — C o n t i n u e d .

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

(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
hold and maintain for a period of hold and maintain a reserve equal to
sixty days from the date fixed bv eighteen per centum of the aggregate
the Secretary of the Treasury as amount o f its demand liabilities and
hereinbefore provided a reserve fi ve per centum of its time deposits, as
equal to twenty per centum of the follows:
aggregate amount of its deposits,
In its vaults six-eighteenths thereof.
not including savings deposits here­
In the Federal reserve bank for a
inafter provided for, and perma­ period of six months after the date
nently thereafter eighteen per cen­ aforesaid at least three-eighteenths,
tum. At least one-half of such re­ and permanently thereafter six- See subsection 6.
serve shall consist of money which eighteenths.
national banks may under existing
The balance of said reserves shall
law count as legal reserve, held be held in its own vaults or in the Fed­
actually in the baiik’s own vaults.
eral reserve bank at its option.
After sixty days from the date afore­ 67
Any Federal reserve bank
said, and thereafter for a period of
may receive from the member
one year, at least three-eighteenths banks as reserves, not exceeding oneand permanently thereafter at least half of each installment, eligible paper
five-eighteenths of such reserve shall as described in section fourteen prop­
consist of a credit balance with the erly indorsed and acceptable to the said
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.
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 ivith 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 officio lly 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 own paid-up capital
and surplus. No member bank shall
extend directly or indirectly the bene­
fits of this system to a nonmember
bank, except upon written permission
of the Federal Reserve Board, under
penalty of suspension.
68
The reserve carried by a
member bank with a Federal
reserve bank may, under the regula­
tions and subject to such penalties as
may be prescribed by the Federal Re­
serve Board, be checked, against and
withdrawn by such member bank for
S D-—63-2—vol 25------7



I f a State bank or trust company is
required by the laws o f its State to keep
its reserves either in its own vaults or
with another State bank or trust com­
pany, such reserve deposits so kept in
such State bank or trust company shall
be construed, within the meaning o f
this section, as i f they were reserve de­
posits in a national bank in a reserve
or central reserve city for a period o f
three years after the establishment o f a
Federal reserve bank in the district in
which such State bank or trust com­
pany is situate.

COMPARISON OF CURRENCY BILL.
SECTION
HOUSE B ILL.

48

20 — C o n t i n u e d .

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

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.
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 oy 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
assage of this Act such fund of
ve per centum shall in no case be
counted by any national banking
association as a part of its lawful
reserve.

Sec.
20. ¥hftt-se So much of
sections two and three of the Act of
June twentieth, eighteen hundred
and seventy-four, entitled “ An Act
fixing the amount of United States
notes, providing for a redistribution
of the national bank currency and
for other purposes,” as provides
that the fund deposited by any na­
tional banking association with the
Treasurer of the United States for
the redemption of its notes shall be
counted as a part of its lawful re­
serve as provided in the Act
69
aforesaid, 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.

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.




21.
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 redistribution
of the national bank currency,
and for other purposes,” as provides
that the fund deposited by any na­
tional banking association with the
Treasurer of the United States for
the redemption of its notes shall be
counted as a part of its lawful re­
serve as provided in the Act afore­
said, be, and the same is hereby, re­
pealed. 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 lawfm
reserve.

22.

S e c . 22. That every Federal re­
See-r-22.- That- evcry- Fcdcral- reservc bank- shall- at all-times have serve bank shall at all times have on
hand in its own vaults, in
eft-hand-ift.its-own-vaults, in gotdy
gold, gold certificates, or law­
of-lawful money, a sum-equal to not 65
ful money, a sum equal to
less-than-thirty- throo-and one-third
peg- ecntum--of- its -outstanding.de­
thifd thirtyfive per centum of its
mand liabilities;

deposits, in addition to the reserve
required against the Federal reserve
notes emitted by such bank. The
term 1‘ net deposits ” wherever used in
this Act shall mean net deposits as
from time to time defined by the
Comptroller of the Currency, subject
to the approval of the Federal Reserve
Board.

COMPARISON OF CURRENCY BILL.
SECTION

49

22 — C o n t i n u e d .

HOUSE BILL.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

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

The-Federal R eserve Beard may
notify any Federal - reserve-.bank
whose lawful reserve -shail-be-below
the amount required to be kept on
hand -to “-make-good such reservefted-if-sueh bank shall fail fer-thirty
days- thereafter so to make-good-its
lawful- resorve> the- Federal Reserve
Board -may appoint a reeelver to
wind up the business of said bank;-

The Federal Reserve Board may
notify any Federal reserve bant
whose lawful reserve shall be below
the amount required to be kept on
hand to make good such reserve;

SECTION
40

BA N K E X A M IN A T IO N S .

23.

B A N K E X A M IN A T IO N S .

S e c . 2321. That the-examination
S e c . 23. That the examination of
the affairs of every national banking of^he-affairs-ef-every-national-bankassociation authorized by existing ing-assoeiatioB:.authorised by exist­
law shall take place at least twice in ing -law Every member bank shall
each calendar year and as much take-plaee be examined by the Comp­
oftener as the Federal Reserve troller o f the Currency at least twice
Board shall consider necessary in in each calendar year and as much
order to furnish a full and complete oftener as the Federal Reserve
knowledge of its condition. The Board shall consider necessaryy-in
Secretary of the Treasury may, order-te-furnish a full and -complete
however, at any time direct the knowledge o f - its- condition.— The
holding of a special examination. Seeretary—ef—the—Treasury. The
The person assigned to the making Federal Reserve Board may authorize
of such examination of the affairs of examinations by the State authorities
any national banking association to be accepted in the case of State
shall have power to call together a banks and trust companies arid mayquorum of the directors of such asso­
hewover- at any time direct
the holding of a special ex­
ciation, who shall, under oath, state 70
to such examiner the character and
amination. The person as­
circumstances of such of its loans or signed to the making of sueh the ex­
discounts as he may designate; and amination of-th e -affairs of any eafrom and after the passage of this tional-bank-ing- association member
Act all bank examiners shall receive bank shall have power to call to­
fixed salaries, the amount whereof gether a quorum of the directors of
shall be determined by the Federal such association bank, who shall,
Reserve Board and annually re- under oath, state to such examiner




days-thereaftter-so to make-good-Its
lawful-reserve-,-the -F ederal-Reserve
Board mav-.appoint -a- reeeiver-te
win d u p -tlie-business- of-said-bank
in the meantime may 'prohibit such
Federal reserve bank from making
additional loans or discounts: Pro­
vided, however, That the Federal Re­
serve Board may in case of emergency
permit the reserve against deposits to
be reduced below the said limit, but
the reserve banlc shall in such case
pay a tax at the rate of one per centum
per annum for every two and one-half
per centum or fraction thereof that
the reserve falls below said thirty-five
per centum, but in no case shall it
be allowed to fall below twenty-five
per centum of its net deposits: Pro­
videdfurther, That the amount
66
of such tax paid by the bank
during a fiscal year shall be
charged to the member banks in the
district in proportion to their average
discounts during that year.

B A N K E X A M IN A T IO N S .

S e c . 23. That the examination of
thr affairs of everynational banking
association—authorized—by- e xist­
ing l aw member bank shall take
place at least twice in each calen­
dar year and as much oftener as
the Federal Reserve Board shall
consider necessary in order to fur­
nish a full and complete knowledge
of its condition. The Seeretary of
the Treasury may > -however,- Fed­
eral Reserve Board may authorize
examinations by the State authori­
ties to be accepted in the case o f State
banks and trust companies and may
at any time direct the holding of a
special examination. The person
assigned to the making of such ex­
amination of the affairs of any
national - banfeing- assoeiation mem­
ber bank shall have power to call
together a quorum of the directors
of such association bank, who shall,
under oath, state to such examiner
the character and circumstances of
such of its loans or discounts as he

50

COMPARISON OF CURRENCY BILL.
SECTION

23 — C o n t i n u e d .

HOUSE B ILL.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

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 assets or resources held by
such associations upon a date during
the year in which such examinations
are held to be established by the
Federal 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
shall be made by the same ex­
aminer.

the character and circumstances of
such of its loans or discounts as he
may

may designate; and from and after
the passage of this Act all bank ex­
aminers shall receive fixed salaries,
the amount whereof shall be not less
than $2,000 nor more than $7,000
per annum and be determined by
the Federal Reserve Board and
annually reported to Congress. But
the expense of the examinations
herein provided for shall be
67
assessed by authority of the
Federal Reserve Board upon
the associations member banks ex­
amined in proportion to assets or
resources held by such associations
member banks upon a date during
the- year in which such- examina­

The Federal Reserve
Board shall fix the salaries of all bank
examiners and annually -.reported
make report thereof to Congress.
But-the The expense of the exami­
nations herein provided for shall be
assessed by authority of the Federal
Reserve Board upon the associ­
ations banks examined in proportion
to assets or resources held by such
associations banks upon ft date-d-eri

the—Fedcral Reserve Board.— The
Comptroller- of- tho Currency- shall
so--arrange- -the--dutles of national
bank-examiners--that no twe-sueecssi-vee-examina ti o ns of..any-associa tion shall be made by- the -sam eextion shall be made by ^tfae-same-e?fc- aminer the dates when the various
ft-m■-mer the dates when the various banks are examined.
banks are examined.
41
1 1n addition to the exam­
In addition to the examinations
In addition to the examinations
inations made and conducted made and conducted by the Comp­ made and conducted by the Comp­
by the Comptroller of the Currency, troller of the Currency, every Fed­ troller of the Currency, every Fed­
every Federal reserve bank may, eral reserve bank may, with the ap­ eral reserve bank may, with the
with the approval of the Federal proval of the Federal reserve agent or approval of the Federal reserve
Reserve Board, arrange for special
of the Federal Reserve Board, agent or o f the Federal Reserve
or periodical examination of the 71
arrange provide for special ef Board, arrange for special or
member banks within its district.
periodical examination of the periodical examination of the mem­
Such examination shall be so con­ member banks within its district. ber banks within its district. Such
ducted as to inform the Federal Such examination shall be so con­ examination shall be so conducted
reserve bank under whose auspices ducted as to inform the Federal re­ as to inform the Federal reserve
it is carried on of the condition of serve bank under whose auspices it bank under whose auspices it is
its member banks and of the lines is carried on of the condition of its carried on of the condition of its
of credit which are being extended member banks and of the lines of member banks and of the lines of
by them. Every Federal reserve credit which are being extended by credit which are being extended by
bank shall at all times furnish to them. Every Federal reserve bank them. Every Federal reserve bank
the Federal Reserve Board such shall at all times furnish to the Fed­ shall at all times furnish to the
information as may be demanded eral Reserve Board such informa- , Federal Reserve Board such infor­
by the latter concerning the con­ tion as may be demanded by the mation as may be demanded by the
dition of any national banking asso­ latter concerning the condition of latter concerning the condition of
ciation located within the district any
any national..banking—association
of the said Federal reserve bank.
located member bank within the dis­ me/mher bank located within the
trict of the said Federal reserve district of the said Federal reserve
bank.
bank.
No bank shall be subject to any
visitorial powers other than such as
are authorized by law, or vested in the
courts ef justice, or such as shall be
or shall have been exercised or directed
by Congress, or either House thereof,
or any committee thereof.
The-Federal-Rcscrvc Board shall
The-Fcdcral---feesei>¥e-Board-9hall
The Federal Reserve Board shall
as-often-as-it-docms best, and in any
as often as it deems best, and in
any case not less frequently than case no t-less-^eq uently■■than- feur case.not leas frequcntly- than -foug
times eaeh-yoar-,- order-an- examina­
four times each year, order an
tion of - national banking asexamination of national banking
se d ations—in reserve cities.
associations in reserve cities. Such tions"i**-Tcser¥e—eities-—-Such- -ex- 68
Such examinations 3haH~shew
examinations shall show in detail
in detail-the-total amount of loans?
the total amount of loans made by



COMPARISON OF CURRENCY BILL.
SECTION

51

23 — C o n t i n u e d .

HOUSE BILL.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

each bank on demand, on time, and
the different classes of collateral
held to protect the various loans,
and the lines of credit which 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 condition
of any Federal reserve bank.

bank on demand, on timey-and the
diffeFent e iasses-ef eellatefal-keid-te
protect- the various- loans-;-and- the

made by.each bank on demand? oh
&mer -and the.different etasses -ei
eoliaterai-held-to protect-t he-¥a?ieus-ieansy and—the lines of credit
whieh-are- being-extended by-them.The Federal Reserve Board shall, at
least once each year, order an ex­
amination of each Federal reserve
bank, and upon joint application of
ten member banks the Federal Re­
serve Board shall order a special ex­
amination and report of the condi­
tion of any Federal reserve bank.

tended-b¥-4hemT The Federal Re­
serve Board shall, at least once each
year, order an examination of each
Federal reserve bank, and upon joint
application of ten member
72
banks the Federal Reserve
Board shall order a special
examination and report of the con­
dition of any Federal reserve bank.

SECTION

24.

Sec. 24. That no national member
S ec . 24. That no national
bank shall hereafter make member bank or any officer, director, bank, or any officer, director, or em­
any loan or grant any gratuity to or employee thereof shall hereafter ployee thereof shall hereafter make
any examiner of such bank. Any make any loan or grant any gratuity any loan or grant any gratuity to any
bank offending against this provi­ to any examiner of such bank. examiner oi such bank. Any bank
sion shall be deemed guilty of a mis­ Any bank officer, director, or em­ offending-against officer, director, or
demeanor and shall be fined not ployee offending--against violating employee thereof violating this pro­
more than $5,000, and a further this provision shall be deemed guilty vision shall be deemed guilty of a
sum equal to the money so loaned of a misdemeanor and shall be im­ misdemeanor and shall be im­
or gratuity given; and the officer or prisoned not exceeding one year or prisoned rv>t exceeding one year or
officers of a bank making such loan fined not more than $5,000, or both; fined not more than $5,000, and-a
or granting such gratuity shall be and fined a further sum equal to the
likewise deemed guilty of a misde­ money so loaned or gratuity given-j
meanor and each shall be fined not
to exceed $5,000.

42

A Q -n k
vcCuii

9halt-be-fined-not-te-e3eeeed-S5,-999T
Any examiner Any 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
shall be fined not more than $5,000, guilty of a misdemeanor and shall
and a further sum equal to the be imprisoned not exceeding one year
money so loaned or gratuity given; or fined not more than $5,000, or
and shall forever thereafter be dis­ both: and fined a further sum equal
qualified from holding office as a to the money so loaned or gratuity
national-bank examiner. No na- given; and shall forever thereafter
tional-bank examiner shall perform be disqualified from holding office
any other service for compensation as a national-bank examiner. No
national-bank examiner shall per­
while holding such office.
form any other service for compen­
sation while holding such office for




any bank or officer, director, or em­
ployee thereof

examiner accepting such a loan or
f y - him shall be deemed guilty of a
misdemeanor and shall be im­
prisoned not exceeding one year or be

fined not more than $5,000, and-a
K a w - y-i i i -rv-i A / ^ 11 a _1
U a w \ a w /\ t1ULTilvl
a1.1111 C'AJClctI IU ^till?
lllvilU j
a il
ruiuTTT

fiiitTcuJrtuf
hpT* AAt I ay*__VvA_

Htr>
H
ISS

69
or

examiner shall perform any other
service for compensation for a bank
within his jurisdiction while holding
such office.

bank-shaii-Feeeive-eF-be-benefieiaFyj
73

of-—any—fee—(othep- than—-a
gift-,—or- othe?-eonsideFation-foi3--or

steeka ,-ix >:^ds7~eF-^hftF-i-n¥estinent

aetien-with-FespBet-te-slroeksj-bendsj
eg—ether—investment—seettfities—Off

52

COMPARISON OF CURRENCY RILL.
SE C T I O N

24 — C o n t i n u

d.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

securities—er—notes^—bills—of—exchange-, acceptances—bankers; bills,
cable -transfers--or--moftg&ges--ma;de
by-or-on-behalf-ef-a national-bank-of
which he -ie -3tteh -oifieer- efr direeterr

n o tes7 b i l l s - o f e x c h an g e ,—a e e e p tan ee s j - b an k eps—b i lts - - c a b le--trans
fe rsT -er- m ortgftges m a d e -b y - o r- o n
b e h a lf o f - a- nati o n a l b a n k o f w h i eh
h e-is -s u e h -o ffieer o r d ire cto r.— A n y
p erso n - v i o la tin g -a ny - p r e v is io n -o f
th is seetio n shal l -b e -p u n ish ed -by - ft
fine - o f - n o t- e x ce e d i n g - $5,000- o r- b y
i m p ris o n m ent n o t e x c e e d in g —fiv e
y e a r s-- or b o th su eh fine -and -im p ris­
o n m e n t,—in -the - d is c r e tio n - of™ th e
e o u r^-h a v in g - j u risd ie tio n .

No officer or director of a national
Other than the usual salary or di­
bank shall receive or be beneficiary, rectors fee paid to any officer, di­
either directly or indirectly, of any rector, or employee o f a member bank
fee (other than a legitimate fee paid and other than a reasonable fee paid
an attorney at law for legal serv­ by said bank to such officer, director,
ices), commission, gift, or other or employee for services rendered to
consideration for or on account of such bank, no officer, director, em­
any loan, purchase, sale, payment, ployee, or attorney o f a member bank
exchange, or transaction with re­ shall be a beneficiary o f or receive,
spect to stocks, bonds, or other directly or indirectly, any fe e, com­
investment securities or notes, bills mission, gift, or other consideration
of exchange, acceptances, bankers’ for or in connection with any trans­
bills, cable transfers, or mortgages action or business o f the bank. No
made by or on behalf of a examiner, public or private, shall dis­
43
national bank of which he is close the names o f borrowers or the
such officer or director.
collateral for loans o f a member bank
to other than the proper officers o f such
bank without first having obtained the
express permission in writing from
the Comptroller o f the Currency, ex­
cept when ordered to do so by a court
o f competent jurisdiction, or by direc­
tion o f the Congress o f the United
States, or either House thereof, or any
committee thereof.
Any person vio­
Any
person violating any provision of lating any provision of this section
this section shall be punished by a shall be punished by a fine of not
fine of not exceeding $5,000 or by exceeding $5,000 or by imprison­
ment not exceeding five-years
imprisonment not exceeding five
one year, or both sueh—fine
years, or both such fine and impris­ 74
and imprisonment in the dis­
onment, in the discretion of the
cretion -of—-the—eourt •having—juris­
court having jurisdiction.
diction:
Except so far as already provided
Except so far as already provided
in existing laws this provision shall in existing laws this provision shall
not take effect until six months after
days after the passage of this Act.
the passage of this Act.

Other than the usual salary or
director's fee paid to any officer,
director, or employee o f a member
bank and other than a reasonable fee
paid to such officer, director, or em­
ployee acting as an attorney at law
for legal services rendered to such
bank, no officer, director, employee, or
attorney o f a member bank shall be a
beneficiary o f or receive, directly or
indirectly, any fee, commission, gift,
or other consideration for or in con­
nection with any transaction or
70
business o f the bank.

HOUSE BILL.

SECTION
Sec . 25. That from and after the
passage of this Act the stockholders
of every national banking associa­
tion shall be held individually re­
sponsible for all contracts, debts,
and engagements of such associa­
tion, each to the amount of his
stock therein, at the par value
thereof in addition to the amount
invested in such stock. The stock-




Any
person violating any provision
o f this section shall be deemed guilty
o f a misdemeanor and punished by
a fine not exceeding $5,000 or by im­
prisonment not exceeding one year, or
both.
Except so far as alieady provided
in existing laws this provision shall
not take effect until six months after
the passage of this Act.

25.

Sec . 36 23. That-frcm-and-after

stockholders of every national bank­
ing association shall be held indi­
vidually responsible for all contracts
debts, and engagements of such asso­
ciation, each to the amount of his
stock therein, at the par value
thereof in addition to the amount
invested in such stock. The stock-

Sec . 25. That from and after the
passage of this Act the stockholders
of every national banking associa­
tion shall be held individually re­
sponsible for all contracts, debts, and
engagements of such association,
each to the amount of his stock
therein, at the par value thereof in
addition to the amount invested in
such stock. The stockholders in

53

COMPARISON OF CURRENCY BILL.
SE C T I O N

25 — C o n t i n u

OWEN AMENDMENT.

H r USE BILL.

hclders in any national banking holders in any national banking
association who shill have trans­ association who shall have trans­
ferred their shires 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 su( h association to meet its such association to meet its obliga­
obligations shall be liable to the tions, or with knowledge of 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.
Seetien-fifty one hun
Section fifty-one hun­
dred and fifty-one, Revised Statutes dred-aed fifty one, Reviacd-Statofees
of the United States, is hereby re­ of- the- Unitcd- States, -is- hereby-fe enacted except in so far as modified enacted-.except-4n-“se-lftF- as--modi-fied-by -this seetioftr
by this section.

SECTION
44

LOANS ON FARM LANDS.

d.

75

HITCHCOCK AMENDMENT.

any national banking association
who shall have transferred their
shares or registered the transfer
thereof within sixty days next be­
fore the date of the failure of such
association to meet its obligations
shall be liable to the same extent as
if they had made no such transfer;
but this provision shall not be con­
strued to affect in any way any re­
course which such shareholders
might otherwise have against those
in whose names such shares are
registered at the time of such failure.

Section fifty-one hundred and fiftyone, Revised Statutes of the United
States, is hereby reenacted except in
so far as modified by this section.

26.

LOANS ON FARM LANDS.

71

LOANS ON FARM L A N D S.

The Hitchcock amendment proposes to
strike out all of section 26 of the House bill
and insert the following:

Sec .
24- Tha t-any Any 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 reserve city or central
may make loans secured by im­ reserve city may make loans secured
proved and unencumbered farm by improved and unencumbered
land, 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 twelve 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 security, and-sueh prop ­
district in which the bank is located. erty ahaJl be - situated-within the
Any such bank may make such Federal-reserve distriet-in-whieh-tho
loans in an aggregate sum equal to bank-is -located. Any such bank
twenty-five per centum of its capi­ may make such loans in an aggre­
gate sum ecjual to twenty-five per
tal and surplus.
centum of its capital and surplus.
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
section.
tion.




S ec. 26. That deposits in national
banks, payable more than thirty days
after they are made, shall be known as
time deposits, and such banks may
continue hereafter as heretofore to re­
ceive time deposits and to pay interest
on the same. All national banks, not
located in central reserve cities, may
make loans, secured by improved, oc­
cupied, and unencumbered farm land
situated within the Federal reserve
district where the loaning bank is lo­
cated to the extent of one-half o f its
value, but no such loan shall be made
for a longer period than five years,
nor shall the aggregate of such loans
by any bank exceed one-third of its
time deposits.
72
After becoming member
banks of any reserve bank,
national banks are hereby authorized
to act as administrators, executors,
to trustees.

COMPARISON OF CURRENCY BILL.
SECTION

54

27.

B oth th e Owen and H itchcock am endm ents propose to elim inate this section entirely.
HOUSE BILL.
SAVINGS DEPARTM EN T.

S ec . 27. That any national banking association may, subsequent to a date one year after the organization
o f 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 Tbank 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 and 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 shall, in no event, be mingled with those
of the other departments, 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 oeen 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 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.
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 banlking associations from any and every
restriction upon classes or kinds of business laid down in the national banking Act, and it shall he 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 of business in different sections of the country.
It shall be the duty of every national bank to maintain, with respect to all deposits 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 savings 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, and also posted
in every member bank having a savings department.
Every officer, director, or emploj^ee 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 the Currency, made under and by virtue of the 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
Digitized for years,
FRASERor both, in the discretion of the court.


55

COMPARISON OF CURRENCY BILL.
SECTION

28.

HOUSE BILL.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

FOREIGN BRANCH ES.

FOREIGN BRANCHES.

FOREIGN BRANCHES.

Sec . 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.

S e c . 3$ 25. The* 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
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 of 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
filing it, the fofeign-eoMfttFy-or-eounifies—e?—the—dependencies

S e c . 38 27. That any Federal
reserve hank or national banking
association possessing a capital of
$1,000^009 $5,000,000 or more may
file application with the Federal Re­
serve Board, upon such conditions
and under such circumstances as may
be prescribed by the said board, for
the purpose of securing authority to
establish branches in foreign coun­
tries or dependencies of the
77
United States for the further­
ance of the foreign commerce
of the United States and to act, if reuired to do so, as fiscal agents of the
Inited States.
Such applications
shall specify, in addition to the name
and capital of the banking associa­
tion filing it, the fo?eign country or
countries or the dependencies of the
Umtcd States 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 busi­
ness at the branches proposed by it
to be established in foreign coun­
tries. 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 con­
duct of foreign business is inade­
quate or if for other reasons the
granting of such application is
deemed inexpedient.

Every national banking associa­
tion wnich 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 ioreign 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.




or places where the banking
operations proposed are to be car­
ried on and the amount of capital
set aside by the said banking asso­
ciation filing such application for
the conduct of its foreign business
at the branches proposed by it to
be established in fefeigfiheeuntrics
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 wnich shall receive authority
to establish foreign branches i-ft-fe-pign countries 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 s**eh branch as a separate
item.

?

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 s u c h
branches to the Comptroller of the
Currency upon demand, and the
Federal Reserve Board may order
special examinations of the said for­
eign branches at such time or times
as it may deem best. Every Fed­
eral reserve bank and every such na­
tional banking association shall
conduct the accounts of each foreign
branch independently of the ac­
counts of other foreign branches es­
tablished by it and of its home
office, and shall at the end
78
of each fiscal period trans­
fer to its general ledger the
rofit or loss accruing at each such
ranch as a separate item.

56

COMPARISON OF CURRENCY BILL.
SECTION

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

Sec. 30 26. T ba^- all A#
provisions of law inconsist­
ent with or superseded by any of
the provisions of this Act fee7-and
■
tbe-sarae- ftfe are to that extent and
to that extent only herebyj repealed:
Provided, Thftt—nefehingT Nothing
in this Act contained shall be con­
strued to repeal the parity provi­
sion or provisions contained in an
Act approved March fourteenth,
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 pur­
poses,” and the Secretary o f the
Treasury may fo r such 'purposes, or
to strengthen the gold reserve, borrow
gold on the security o f United States
bonds or for 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.

S ec . 30 28. Thatrftll All provisions
of law inconsistent with or super­
seded by any of the provisions of
this Act be ,■■and-thc-same-are are to
that extent and to that extent only
hereby repealed: Provided, That
nothing in this Act contained shall
be construed to repeal the parity
provision or provisions contained in
an Act approved March fourteenth,
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.”

HOUSE BILL.

Sec . ‘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.”
51




29.

82

57

COMPARISON OF CURRENCY BILL.
NEW
HOUSE B ILL.

SECTIONS.

OWEN AMENDMENT.

HITCHCOCK AMENDMENT.

S e c . 27. The provisions of the Aet
oi May thirtieth, nineteen hundred
and eighty authorizing national cur­
rency associations, the issue of addi­
tional national-bank circulation, and
creating a National Monetary Com­
mission, which expires by limitation
under the terms of such Act on the
thirtieth day of June, nineteen hun­
dred and fourteen, are hereby extended
to June thirtieth, nineteen hundred
and fifteen, and sections fifty-one
hundred and fifty-three, fifty83
one hundred and seventy-two
fifty-one hundred and ninetyone, arid fifty-two hundred and four­
teen of the Revised Statutes of the
United States, which were amended
by the Act of 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 Act.
S e c 28. If any clause, sentence,
paragraph, or part of this Act shall
jor any reason be adjudged by any
court of competent jurisdiction to be
invalid, such judgment shall not
affect, impair, or invalidate the re­
mainder of 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 shad have been
rendered.

S e c . 29. That the provisions of
the Act of May thirtieth, nineteen
hundred and eight, authorizing na­
tional currency associations, the issue
of additional national-bank circula­
tion, and creating a National Mone­
tary Commission, which expires by
limitation under the terms of such
Act on the thirtieth day of June nine­
teen hundred and fourteen, are hereby
extended to June thirtieth nineteen
hundred and fifteen

,

.

,

,

.

,

SECTION
S ec. 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




30.

S ec. 30 29. Th&t- the The right
to amend, alter, or repeal this Act
is hereby expressly reserved.

Sec . 30. That the right to amend,
alter, or repeal this Act is hereby ex­
pressly reserved.