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H.R. 7837

Sixty-third Congress of the United States of America;At the
Second Session, Begun and
held at the City of W ashington on M onday, the first day of D ecem ber, one- t
housand
nine hundred and thirteen. AN

ACTTo provide
for the establishment of Federal reserve banks, to furnish an elasticcurrency,
to afford means of rediscounting commercial paper, to establish a more
effective su p ervision of b an k in g in th e U n ited S tates, an d for oth er
purposes.

Be it enacted by the Senate and House of Representatives of the United S
tates
of America in Congress assembled, That the short title of this Act shallbe the
“Federal Reserve Act.” Wherever
the word “bank” is used in this Act, the word shall be held toinclude State
bank, banking association, and trust company, except wherenational banks or
Federal reserve banks are specifically referred to. The terms “national
bank” and “national banking association" used in this Act shall be held to
be synonymous and interchangeable. The term “member bank” shall be held to
mean any national bank. State bank, or bankor trust company which has become
a member of one of the reserve banks createdby 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.

FEDERAL RESERVE DISTRICTS.

Sec. 2. As soon as

practicable, the Secretary of the
Treasury, the Secretaryof Agriculture and the Comptroller of the Currency,
acting as “The Reserve Bank Organization Committee,” shall designate not
less than eight nor more than twelve cities to be known as Federal reserve
cities, and shall divide the continental United States, excluding Alaska, into

only one of such Federal reserve cities. The
determination of said organi­ zation committee shall not be subject to review
except by the Federal Reserve Board when organized : Provided, That
the districts shall be apportioned withdue regard to the convenience
and customary course of business and shall notnecessarily be coterminous
districts, each district tocontain

w ith any State or States. The districts thus




time be created
Such districts shall
be known as Federal reserve districts and may be designated by number. A
majority of the organization committee shall constitute a quorum with authority
cre a te d

may be readjusted and new districts may from

tim e to

by the Federal Reserve Board, not to exceed twelve in all.

to act.
Said organization committee shall be authorized to employ counsel and
expert aid, to take testimony, to send for persons and papers, to administer
oaths, and to make such investigation as may be deemed necessary by the said
committee in determining the reserve districts and in designating the cities
within such districts where such Federal reserve banks shall be severally
The said committee shall supervise the organization in each of the
cities designated of a Federal reserve bank, which shall include in its title the
located.

name of the city in which it is situated, as “ Federal Reserve Bank of Chicago.”
Under regulations to be prescribed by the organization committee, every
national banking association in the United States is hereby required, and every
eligible bank in the United States and every trust company within the
District of Columbia, is hereby authorized to signify in writing, within
sixty days after the passage of this Act, its acceptance of the terms and
provisions hereof.

When the organization committee shall have designated

the cities in which Federal reserve banks are to be organized, and fixed the
geographical limits of the Federal reserve districts, every national banking
a ssocia tion

within that district shall be required within thirty days after notice

from the organization committee, to subscribe to the capital stock of such
Federal reserve bank 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

011

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 the subscription, or any part thereof, shall be subject to call
when deemed necessary by the Federal Reserve 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
subscriptions to such stock at the par value thereof in addition to the amount
subscribed, whether such subscriptions have been paid up in whole or inpr
at
under the provisions of this Act.
A n y n ation a l b a n k fa ilin g to sign ify its accep ta n ce of th e term s of th is A ct
w ith in th e s ix ty d a y s a fo r e s a id , s h a ll c e a s e to a c t a s a r e s e rv e a g e n t, u p o n
th irty d a y s’ n o tic e , to b e g iv e n w ith in th e d iscre tio n o f th e s a id o r g a n iz a tio n
committee or of the Federal Reserve
Board. Should any national banking association in the United States
now organized fail w ithin one year after the passage of this A ct to
b ecom e a m em b e r b a n k o r fa il to co m p ly w ith a n y o f th e p ro v isio n s o f th is A ct




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applicable thereto, all of the rights, privileges, and franchises of suchassociation
granted to it under the national-bank Act, or under the pro­ visions of this
Act, shall be thereby forfeited. Any noncompliance withor violation of this Act
shall, however, be determined and adjudged byany court of the United States
of competent jurisdiction in a suit brought forthat purpose in the district or
territory in which such bank is located, underdirection of the Federal Reserve
Board, by the Comptroller of the Currency inhis own name before the association
shall be declared dissolved. In cases ofsuch noncompliance or violation, other
than the failure to become a member bank under the provisions of this Act,
every director who participated in orassented to the same shall be held liable
in his personal or individual capacity for all damages which said bank, its
shareholders, or any other person shallhave 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 shallhave been previously incurred. Should the
subscriptions by banks to the
stock of said Federal reservebanks or any one or more of them be, in the
judgment of the organizationcommittee, insufficient to provide the amount of
capital required therefor, thenand in that event the said organization committee
may, under conditions 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, assaid committee shall determine, subject to the
same conditions as to paymentand stock liability as provided for member banks.
Xo individual, copartnership, or corporation other
than a member bank ofits district shall be permitted to subscribe for or to
hold at any time more than $25,000 par value of stock in any Federal reserve
bank. Such stock shall beknown as public stock and may be transferred on the
books of the Federalreserve bank by the chairman of the board of directors of
such bank. Should the total subscriptions by banks and the public to
the stock ofsaid Federal reserve banks, or any one or more of them, be, in
the judgment ofthe organization committee, insufficient to provide the amount
of capital required therefor, then and in that event the said organization
committee shall allotto the United States such an amount of said stock as said
committee shalldetermine. Said United States stock shall be paid for at par out
of any money in the Treasury not otherwise appropriated, and shall be held
by the Secretaryor the Treasury and disposed of for the benefit of the United
States in suchmanner, at such times, and at such price, not less than par, as
the Secretary ofthe Treasury shall determine. Stock not held by member
banks shall not be entitled to
voting power. The Federal Reserve Board is hereby empowered to
adopt and promulgaterules and regulations governing the transfers of said




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No Federal reserve bank shall commence business with a subscribed
capitalless than $4,000,000. The organization of reserve districts and Federal
reserve cities shall not be construed as changing the present status oi reserve
c i t i e s and central reserve cities, e x c e pt in so far as this Act c h a n g e s
theamount of reserves that may be carried with approved reserve agents
located therein. The organization committee shall have power to appoint such
assistants and incur sucli expenses in carrying out the provisions of this Act ;i it shall deem necessary, and such expenses shall be payable by the Treasurer
ofthe U n i t e d 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
appropriated, out of any moneys in the Treasury not otherwise appropriated,
forthe payment of such expenses.
bank shall establish branch banks

BRANCH OFFICES. Sec.

3. Each Federal reserve

withinthe Federal
reserve district in which it is located and may do so in the districtof any
Federal reserve bank which may have been suspended. Such branches shall
he operated by a board of directors under rules and regulations approved by
the Federal Reserve Board. Directors of branch banks shall possess the same
qualifications as directors of the Federal reserve banks. Four of said directors
shall be selected by the reserve bank and three by the Federal Reserve Board,
and they shall hold office during the pleasure, respectively, of the parent bank
and the Federal Reserve Board. The reserve bank shall designate one of the
directors as manager.

FEDERAL RESERVE BANKS.

Sec, 4. When the organization

committee shall have
established Federalreserve
districts as provided in section two of this Act, a certificate shall be filed
with the Comptroller of the Currency showing the geographical limits of such
districts and the Federal reserve city designated in each of 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 the organization committee, which blank
shall contain a resolution to be adopted by the board of directors of each bank
executing such application, authorizing a subscription to the capital stock of
theFederal reserve bank organizing in that district in accordance
with the provisionsof this Act. When the minimum amount of capital
stock prescribed by this Act for the organization of any Federal reserve bank
shall have been subscribed find allotted, the organization
committee shall designate any five banks of those whose applications have
been received, to execute a certificate of
organization,and thereupon the banks so designated shall, under their seals,
make anorganization certificate which shall specifically state the name of such




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reserve bank, the territorial extent of the district over which the operationsof
such Federal reserve bank are to be carried on, the city and State in whichsaid
bank is to be located, the amount of capital stock and the number of sharesinto
which the same is divided, the name and place of doing business of eachbank
executing such certificate, and of all banks which have subscribed to thecapital
stock of such Federal reserve bank and the number of shares subscribed b y
each, and the fact that the certificate is made to enable those b a n k s executing
sam e, and all banks which have subscribed or may thereafter subscribe
to the capital stock of such Federal reserve bank, to avail themselves of the
advantages
of this Act. The said organization certificate shall be acknowledged before
a judge ofsome court of record or notary public; and shall be, together with
theacknowledgment thereof, authenticated by the seal of such court, or notan
,transmitted to the Comptroller of the Currency, who shall file, record and
carefully preserve the same in his office.
Upon the filing of such certificate with the Comptroller of the Currencyas
aforesaid, the said Federal reserve bank shall become a body corporate andas
such, and in the name designated in such organization certificate, shallhave
power— First.
To adopt and use a corporate seal. Second.
To have succession for a period of twenty years from itsorganization unless it
is sooner dissolved by an Act of Congress, or unless itsfranchise becomes forfeited
by some violation of law. Third. To make contracts.
Fourth. To sue and be sued,
complain and defend, in any court of law orequity. Fifth. To appoint by its
board
of directors, such officers and employees asare not otherwise provided for in
this Act, to define their duties, require bondsof them and fix the penalty thereof,
and to dismiss at pleasure such officers oremployees. Sixth. To prescribe by
its board of
directors, by-laws not inconsistent withlaw, 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 officersor agents, all powers specifically granted by the
provisions of this Act and suchincidental powers as shall be necessary to carry
on the business of banking withinthe limitations prescribed by this Act. Eighth.
Upon deposit with the Treasurer of the
United States of anybonds of the United States in the manner provided by
existing law relating tonational banks, to receive from the Comptroller of the
Currency circulatingnotes in blank, registered and countersigned as provided by
law, equal in amountto the par value of the bonds so deposited, such notes to be
issued under the sameconditions and provisions of law as relate to the issue




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of national banks secured by bonds of the United States bearing the circulating
privilege, except that the issue of such notes shall not be limited to the capital
stock of such Federal reserve bank.
But no Federal reserve bank shall transact any business except such as
is incidental and necessarily preliminary to its organization until it has been
authorized by the Comptroller of the Currency to commence business under the
provisions of this Act.
Every Federal reserve bank shall be conducted under the supervision and
control of a board of directors.
The board of directors shall perform the duties usually appertaining to the
office of directors of banking associations and all such duties as are prescribed
by law.
Said board shall administer the affairs of said bank fairly and impartiallyand
without discrimination in favor of or against any member bank or banksand shall,
subject to the provisions of law and the orders of the Federal ReserveBoard, extend
to each member bank such discounts, advancements andaccommodations as may
be safely and reasonably made with due regard for theclaims and demands of other
member banks. Such board of directors shall
be selected as hereinafter specified and shallconsist of nine members, holding
office for three years, and divided into threeclasses, designated as classes A, B, and
C Class A shall consist of three members,
.
who shall be chosen by and berepresentative of the stock-holding banks. Class
B shall consist of three members, who at the
time of their electionshall be actively engaged in their district in commerce,
agriculture or someother industrial pursuit. Class C shall consist of three members
who shall be designated
by theFederal Reserve Board. When the necessary subscriptions to the capital
stock have been obtained for the organization of any Federal reserve bank, the
Federal Reserve Board shall appoint the class C directors and shall designateone
of such directors as chairman of the board to be selected. Pending thedesignation
of such chairman, the organization committee shall exercise thepowers and duties
appertaining to the office of chairman in the organization of such Federal
reserve bank. No Senator or Representative in Congress shall be a member
of the FederalReserve Board
or an officer or a director of a Federal reserve bank. No director of class B
shall be an officer, director, or employee of any bank. No director of
class C shall be an officer, director, employee, or stockholderof any bank.
Directors of class A and class B shall be chosen in the following manner: The
chairman of
the board of directors of the Federal reserve bank of thedistrict in which
the bank is situated or, pending the appointment of such chairman,
the organization committee shall classify the member banks of




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d istrict into three gen eral g roups o r divisio n s. E ach g rou p sh all co n tain as nearly
as m ay he one-third of the aggregate num ber of the m em ber banks of the district
a n d s h a ll c o n s is t, a s n e a rly a s m a y b e , o f b a n k s o f s im ila r c a p ita liz a tio n . T h e
g ro u p s sh a ll b e d e sig n a te d b y n u m b e r b y th e ch a irm a n . A t a re g u la rly c a lle d
m e e tin g o f th e b o a rd o f d ire c to rs o f e a c h m e m b e r b a n k in th e d is tric t it
s h a ll e le c t b y b a llo t a d is tric t re s e rv e e le c to r a n d s h a ll c e rtify h is n a m e to th e
c h a irm a n o f th e b o a rd o f d ire c to rs o f th e F e d e ra l re se rv e b a n k o f th e d is tric t.
T h e c h a irm a n s h a ll m a k e lis ts o f th e d is tric t re s e rv e e le c t o rs t h u s n a m e d b y
b a n k s in e a c h o f th e a fo re s a id th re e g ro u p s a n d s h a ll tra n s m it o n e lis t to e a c h
elector in each group. E ach m em b er b an k sh all b e perm itted
to n o m in a te to th e ch a irm a n o n e can d id a te fo r d ire cto r o f c la ss A a n d o n e
c a n d id a te fo r d ire c to r o f c la s s B . T h e c a n d id a te s s o n o m in a te d s h a ll b e lis te d
b y th e c h a irm a n , in d ic a tin g b y w h o m n o m in a te d , a n d a c o p y o f s a id lis t s h a ll,
w ith in fifte e n d a y s a fte r its c o m p le tio n , b e fu rn ish e d b y th e c h a irm a n to e a c h
elector. Every elector shall, within fifteen days after
th e r e c e ip t o f th e s a id lis t, c e rtify to t h e c h a ir m a n h is firs t , s e c o n d , a n d
other ch o ice s o f a d ire cto r o f class A an d class B , re sp ectively, u p o n a p re fere n tial
b a llo t , o n a fo rm fu rn is h e d b y t h e c h a ir m a n o f t h e b o a r d o f d ir e c t o r s o f t h e
F e d e ra l re s e rv e b a n k o f th e d is tric t. E a c h e le c to r s h a ll m a k e a c ro s s o p p o s ite
th e n a m e o f th e firs t, s e c o n d , a n d o th e r c h o ic e s fo r a d ire c t o r o f c la s s A a n d
fo r a d ire c to r o f c la s s B , b u t s h a ll n o t v o te m o re t h a n o n e c h o ic e fo r a n v o n e
candidate. Any candidate having a m ajority of all votes cast
in th e c o lu m n o f first ch o ice sh a ll b e d e cla re d e le c te d . If n o ca n d id a te h a v e
a m ajo rity o f all th e v o te s in th e first co lu m n , th e n th e re sh all b e ad d e d to g e th e r
th e v o te s c a s t b y th e e le c to rs fo r s u c h c a n d id a t e s in t h e s e c o n d c o lu m n a n d
th e v o te s c a s t fo r th e s e v e ra l c a n d id a te s in th e firs t c o lu m n . If a n y c a n d id a te
th e n h a v e a m a jo rity o f th e e le c to rs v o tin g , b y a d d in g to g e t h e r th e firs t a n d
s e c o n d c h o ic e s , h e s h a ll b e d e c la re d e le c te d . If n o c a n d id a te h a v e a m a jo rity
o f e le c to rs v o tin g w h e n t h e firs t a n d s e c o n d c h o ic e s s h a ll h a v e b e e n a d d e d ,
th e n th e vo te s cast in th e th ird co lu m n fo r o th er ch o ice s sh all b e a d d ed to g e th er
in lik e m an n er, an d th e c a n d id ate th e n h avin g th e h ig h e st n u m b e r o f vo te s sh all
b e d e c la re d e le c te d . A n im m e d ia te re p o rt o f e le c tio n s h a ll b e d e c la re d . C la s s
C directors shall be appointed by the Federal Reserve
B o a rd . T h e y sh a ll h a v e b e e n fo r a t le a st tw o y e a rs re sid e n ts o f th e d istric t
fo r w h ich th e y are a p p o in te d , o n e o f w h o m sh a ll b e d e sig n ate d b y said b o ard as
c h a irm a n o f th e b o a rd o f d ire cto rs o f th e F e d e ra l re se rv e b a n k a n d a s “F e d e ra l
reserve agent.''H e shall be a person of tested banking experience; and in addition
to h is d u tie s a s ch a irm a n o f th e b o a rd o f d ire c to rs o f th e F e d e ra l re se rv e
b a n k h e s h a ll b e re q u ire d to m a in ta in u n d e r re g u la tio n s to b e e s ta b lis h e d
b y th e F e d e ra l R e s e rv e B o a rd a lo c a l o ffic e o f s a id b o a rd o n th e p re m is e s o f
th e F e d e ra l re se rve b a n k . H e sh a ll m a k e re g u la r re p o rts to th e F e d e ra l R e se rv e
B o a rd , an d sh all a ct as its o fficial re p re se n tative fo r th e p e rfo rm a n ce o f th e




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conferred upon it by this Act. He shall receive an annual compensation to be
fixed by the Federal Reserve Board and paid monthly by the Federalreserve
bank to which he is designated. One of the directors of class C, whoshall be a,
person of tested banking experience, shall be appointed by theFederal Reserve
Board as deputy chairman and deputy Federal reserve agentto exercise the
powers of the chairman of the board and Federal reserve agentin case of absence
or disability of his principal. Directors of Federal
reserve banks shall receive, in addition to any compensation otherwise
provided, a reasonable allowance for necessary expensesin attending meetings
of their respective boards, which amount shall be paidby the respective Federal
reserve banks. Any compensation that may beprovided by boards of directors
of Federal reserve banks for directors, officers or employees shall be subject
to the approval of the Federal Reserve Board. The Reserve Bank Organization
Committee may, in organizing Federalreserve banks, 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 pending
the complete organization of such bank. At the first meeting of the full
board of directors of each Federalreserve bank, it shall be the duty of the
directors of classes A, 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 ofsuch meeting, one whose term of office shall expire
at the end of two yearsfrom said date, and one whose term of office shall expire
at the end of threeyears from said date. Thereafter every director of a Federal
reserve bankchosen as hereinbefore provided shall hold office for a term of three
years.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 suchdirectors, such appointees to hold office for the unexpired terms of their
predecessors.

STOCK ISSUES; INCREASE AND DECREASE OF CAPITAL.

S ec . 5. The

capital stock
of each Federal reserve bank shall be dividedinto shares
of $100 each. The outstanding capital stock shall be increased fromtime to
time as member banks increase their capital stock and surplus or asadditional
banks become members, and may be decreased as member banksreduce their
capital stock or surplus or cease to be members. Shares of thecapital stock of
Federal reserve banks owned by member banks shall not bee transferred or
hypothecated. When a member bank increases its capitalstock or surplus,
it shall thereupon subscribe for an additional amount of capitalstock of the
Federal reserve bank of its district equal to six per centum of thesaid increase,
one-half of said subscription to be paid in the manner hereinbefore
provided for original subscription, and one-half subject to call of the




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Reserve Board. A bank applying for stock in a Federal reserve bank at anytime
after the organization thereof must subscribe for an amount of the capitalstock
of the Federal reserve bank equal to six per centum of the paid-up capital stock
and surplus of said applicant bank, paying therefor its par value plus one-half of
one per centum a month from the period of the last dividend. W henthe capital
stock of any Federal reserve bank shall have been increased eitheron account
of the increase of capital stock of member banks or on account of theincrease in
the number of member banks, the board of directors shall cause tobe executed,
a certificate to the Comptroller of the Currency showing the increasein capital
stock, the amount paid in. and by whom paid. When a memberbank reduces
its capital stock it shall surrender a proportionate amount of its holdings in
the capital of said Federal reserve bank, and when a member bankvoluntarily
liquidates it shall surrender all of its holdings of the capital stockof said Federal
reserve bank and be released from its stock subscription notpreviously called.
In either case the shares surrendered shall be canceledand the member bank
shall receive in payment therefor, under regulations to be prescribed by the
Federal Reserve Board, a sum equal to its cash-paidsubscriptions on the shares
surrendered and one-half of one per centum a monthfrom the period of the last
dividend, not to exceed the book value thereof, lessany liability of such member
bank to the Federal reserve bank.

S ec . 6.

If any member bank

shall be declared insolvent and a receiverappointed therefor, the stock held
by it in said Federal reserve bank shall becanceled, without impairment of its
liability, and all cash-paid subscriptions onsaid stock, with one-half of one per
centum per month from the period oflast dividend, not to exceed the book value
thereof, shall be first applied toall debts of the insolvent member bank to the
Federal reserve bank, and thebalance, if any, shall be paid to the receiver of the
insolvent bank. Wheneverthe capital stock of a Federal reserve bank is reduced,
either on account of areduction in capital stock of any member bank or of the
liquidation or insolvencyof such bank, the board of directors shall cause to lie
executed a certificate tothe Comptroller of the Currency showing such reduction
of capital stock andthe amount repaid to such bank.

DIVISION OF EARNINGS. Sec.

7. After all necessary expenses of
a Federal reserve bank
have beenpaid or provided for, the stockholders shall be entitled to receive
an annualdividend of six per centum on the paid-in capital stock, which dividend
shallbe cumulative. After the aforesaid dividend claims have been fully met, all
the net earnings shall be paid to the United States as a franchise tax, except
that one-half of such net earnings shall be paid into a surplus fund until it "hall
amount to forty per centum of the paid-in capital stock of such bank. The net
earnings derived by the United States from Federal reserve banksshall,
in the discretion of the Secretary, be used to supplement the gold




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held against outstanding United States notes, or shall be applied to thereduction
of the outstanding bonded indebtedness of the United States underregulations
to be prescribed by the Secretary of the Treasury. Should aFederal reserve bank
be dissolved or go into liquidation, any surplus remaining,after the payment
of all debts, dividend requirements as hereinbefore provided,and the par value
of the stock, shall be paid to and become the property of theUnited States and
shall be similarly applied. Federal reserve banks,
including the capital stock and surplus therein,and the income derived
therefrom shall be exempt from Federal, State, andlocal taxation, except taxes upon
real estate. S e c . 8 . Section fifty-one hundred
and fifty-four, United States R e ­ vised Statutes, is hereby amended to read
as follows: Any bank incorporated by special law of any
State or of the UnitedStates or organized under the general laws of any State
or of the United Statesand having an unimpaired capital sufficient to entitle it to
become a nationalbanking association under the provisions of the existing laws
may, by thevote of the shareholders owning not less than fifty-one per centum
of the capitalstock of such bank or banking association, with the approval of the
Comptrollerof the Currency be converted into a national banking association,
with anyname approved by the Comptroller of the Currency: Provided, however,
That said conversion shall not be in contravention of
the State law. In such case the articles of association and organization
certificatemay be executed by a majority of the directors of the bank or banking
institu­ tion, and the certificate shall declare that the owners of fifty-one per
centumof the capital stock have authorized the directors to make such certificate
andto change or convert the bank or banking institution into a national associa­
tion. A majority of the directors, after executing the articles of association and
the organization certificate, shall have power to execute all other papers andto
do whatever may be required to make its organization perfect and complete as
a national association. The shares of any such bank may continue to be forthe
same amount each as they were before the conversion, and the directors may
continue to be directors of the association until others are elected or appointed
in accordance with the provisions of the statutes of the United States. 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 employees, shall have thesame
powers and privileges, and shall be subject to the same duties, liabilities,and
regulations, in all respects, as shall have been prescribed by the FederalReserve
Act and by the national banking Act for associations originally organizedas
national banking associations.

STATE BANKS AS MEMBERS. Sec.

9. Any bank

incorporated by special law of any
State, or organizedunder the
general laws of any State or of the United States, may make
applicationto the reserve bank organization committee, pending organization,




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to the Federal Reserve Board for the right to subscribe to the stock of theFederal
reserve bank organized or to be organized within the Federal reserve,district
where the applicant is located. The organization committee or the Federal
Reserve Board, under such rules and regulations as it may p r e s c r i b e , subject
to the provisions of this section, may permit the applying bank to become a
stockholder in the Federal reserve bank of the district in which the applying
bank is located. Whenever the organization committee or the FederalReserve
Board shall permit the applying bank to become a stockholder in the Federal
reserve bank of the district, stock shall be issued and paid for underthe rules and
regulations in this Act provided for national banks which becomestockholders in
Federal reserve banks. The organization
committee or the Federal Reserve Board shall establish by-laws for the
general government of its conduct in acting upon applicationsmade by the State
banks and banking associations and trust companies for stock ownership in
Federal reserve banks. Such by-laws shall requireapplying banks not organized
under Federal law to comply with the reserve and capital requirements and
to submit to the examination and regulations prescribed by the organization
committee or by the Federal Reserve Board.No applying bank shall be admitted
to membership in a Federal reserve bankunless it possesses a paid-up unimpaired
capital sufficient to entitle it to becomea national banking association in the place
where it is situated, under theprovisions of the national banking Act. Any bank
becoming a member of a Federal reserve
bank under theprovisions of this section shall, in addition to the regulations
and restrictionshereinbefore provided, be required to conform to the provisions
of law im posed on the national banks respecting the lim itation of liability
which may be incurred by any person, firm, or corporation to such banks, the
prohibitionagainst making purchase of or loans on stock of such banks, and the
withdrawalor impairment of capital, or the payment of unearned dividends, and
to suchrules and regulations as the Federal Reserve Board may, in pursuance
thereof,prescribe. Such banks, and the officers, agents, and employees thereof,
shall also
be subject to the provisions of and to the penalties prescribed by sections
fifty-one hundred and ninety-eight, fifty-two hundred, fifty-two hundred and
one, and fifty-two hundred and eight, and fifty-two hundred and nine of the
RevisedStatutes. The member banks shall also be required to make reports of
theconditions and of the payments of dividends 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 prescribed 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
memberbank has failed to comply with the provisions of this section or the
regulationsof the Federal Reserve Board, it shall be within the power of the said




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after hearing, to require such bank to surrender its stock in the Federalreserve
bank; upon such surrender the Federal reserve bank shall pay the cash-paid
subscriptions to the said stock with interest at the rate of one-halfof one per
centum per month, computed from the last dividend, if earned, notto exceed
the book value thereof, less any liability to said Federal reserve bank,except
the subscription liability not previously called, which shall be canceled,and
said Federal reserve bank shall, upon notice from the Federal Reserve Board,
be required to suspend said bank from further privileges 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 Boardmay
restore membership upon due proof of compliance with the conditionsimposed
by this section.

FEDERAL
RESERVE BOARD. S e c .

10. A

Federal Reserve Board is hereby created which shall consistof seven members,
including the Secretary of the Treasury and the Comptrollerof the Currency, who
shall be members ex officio, and five members appointedby the President of the
United States, by and with the advice and consent ofthe Senate. In selecting the
five appointive members of the Federal ReserveBoard, not more than one of whom
shall be selected from any one Federal reservedistrict, the President shall have
due regard to a fair representation of thedifferent commercial, industrial and
geographical divisions of the country.The five members of the Federal Reserve
Board appointed by the Presidentand confirmed as aforesaid shall devote their
entire time to the business of theFederal Reserve Board and shall each receive
an annual salary of $12,000,payable monthly together with actual necessary
traveling expenses, and theComptroller of the Currency, as ex officio member
of the Federal Reserve Board,shall, in addition to the salary now paid him as
Comptroller of the Currency,receive the sum of $7,000 annually for his services
as a member of said board. The members of said board, the Secretary of the
Treasury, the AssistantSecretaries of the Treasury, and the Comptroller
of the Currency shall beineligible during the time they are in office and for two
years thereafter to holdany office, position, or employment in any member bank.
Of the five membersthus appointed by the President at least two shall be persons
experienced inbanking or finance. One shall be designated by the President to
serve for two,one for four, one for six, one for eight, and one for ten years, and
thereafter eachmember so appointed shall serve for a term of ten years unless
sooner removedfor cause by the President. Of the five persons thus appointed,
one shall bedesignated by the President as governor and one as vice governor
of the Federal Reserve Board. The governor of the Federal Reserve Board,
subject to itssupervision, shall be the active executive officer. The Secretary of
the Treasurymay assign offices in the Department of the Treasury for the use
of the FederalReserve Board. Each member of the Federal Reserve Board shall
withinfifteen days after notice of appointment make and subscribe to the oath of




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The Federal Reserve Board shall have power to levy semiannually upon
the Federal reserve banks, in proportion to their capital stock and surplus, an
assessment sufficient to pay its estimated expenses and the salaries of its members
and employees for the half year succeeding the levying of such assessment,together
with any deficit carried forward from the preceding half year. The 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 dateto be fixed by
the Reserve Bank Organization Committee. The Secretary ofthe Treasury shall
be ex officio chairman of the Federal Reserve Board. Nomember of the Federal
Reserve Board shall be an officer or director of any bank,banking institution, trust
company, or Federal reserve bank nor hold stockin any bank, banking institution,
or trust company; and before entering uponhis duties as a member of the Federal
Reserve Board he shall certify underoath to the Secretary of the Treasury that
he has complied with this requirement.Whenever a vacancy shall occur, other
than by expiration of term, among thefive members of the Federal Reserve Board
appointed by the President, as aboveprovided, a successor shall be appointed by
the President, with the advice andconsent of the Senate, to fill such vacancy, and
when appointed he shall holdoffice for the unexpired term of the member whose
place he is selected to fill. The President shall have power to fill all vacancies that
may happen onthe Federal Reserve Board during the recess of the Senate,
by grantingcommissions which shall expire thirty days after the next session of
the Senateconvenes. Nothing in this Act contained shall be construed as taking
away any
powers heretofore vested by law in the Secretary of the Treasury which
relateto the supervision, management, and control of the Treasury Department
and bureaus under such department, and wherever any power vested by this
Actin the Federal Reserve Board or the Federal reserve agent appears to conflict
with 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 annually make a full report of its operations
to the Speaker of the House of Representatives, who shall cause the same
tobe printed for the information of the Congress. Section three hundred and
twenty-four of the Revised Statutes of theUnited
States shall be amended so as to read as follows: There shall be in the
Department of the Treasury a bureau charged with the execution of alllaws
passed by Congress relating to the issue and regulation 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 of 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. S ec . 11. The
Federal Reserve Board shall be authorized and empowered:

(a)

To examine at its discretion the accounts, books and affairs of eachFederal

reserve bank and of each mem ber bank and to require such




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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 Federal reserve banks. Such statements shall
show in detail the assets and liabilities of the Federal reserve banks, single
andcombined, and shall furnish full information regarding the character of the
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, on the affirmative vote of at least five members of the

Reserve Board to require Federal reserve banks to rediscount the discounted
paper of other Federal reserve banks at rates of interest to be fixed by the
Federal Reserve Board.
(c)

To suspend for a period not exceeding thirty days, and from time totime

to renew such suspension for periods not exceeding fifteen days, any reserve
requirement specified in this Act: Provided, That it shall establish a graduated
tax upon the amounts by which the reserve requirements of this Act may be
permitted to fall below the level hereinafter specified: And provided f rther,
u
That w hen the gold reserve held against Federal reserve notes falls below
forty per centum, the Federal Reserve Board shall establish a graduated tax
of not more than one per centum per annum upon such deficiency until the
reserves fall to thirty-two and one-half per cent um, and when said reserve
falls below thirty-two and one-half per centum, a tax at the rate increasingly
of not less than one and one-half per centum per annum upon each two and
one-half per centum or fraction thereof that such reserve falls below thirty-two
and one-half per centum. The tax shall be paid by the reserve bank, but the
reserve bank shall add an amount equal to said tax to the rates of interest and
discount fixed by the Federal Reserve Board.
(d)

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 delivered
by the Comptroller to the Federal reserve agents applying therefor.
(e)

To add to the number of cities classified as reserve and central reserve

cities under existing law in which national banking associations are subject to
the reserve requirements set forth in section twenty of this Act; or to reclassify
existing reserve and central reserve cities or to terminate their designation
as such.
(f)

To suspend or remove any officer or director of any Federal reservebank,

the cause of such removal to be forthwith communicated in writing bythe Federal
Reserve Board to the removed officer or director and to said bank. (g)

To require

the writing off of doubtful or worthless assets upon thebooks and balance
sheets of Federal reserve banks. (h)

To suspend, for the

violation of any of the provisions of this Act, theoperations of any Federal
reserve bank, to take possession thereof, administerthe same during the period
of suspension, and, when deemed advisable, to liquidate or reorganize such




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(i) T o re q u ire b o n d s o f F e d e ra l re s e rv e a g e n t s , t o m a k e r e g u la t io n s fo r
the s a f e g u a r d in g o f a ll c o lla t e r a l, b o n d s , F e d e r a l r e s e r v e n o t e s , m o n e y
o r p ro p e rty

o f a n y k in d d e p o s it e d in t h e h a n d s o f s u c h a g e n t s , a n d s a id

b o a rd sh a ll p e rfo rm t h e d u t ie s , fu n c t io n s , o r s e r v ic e s s p e c ifie d in t h is A c t ,
and m ake all rules a n d re g u la tio n s n e c e s s a ry t o e n a b le s a id b o a rd e ffe c t iv e ly
to perfo rm the sam e. (j) T o e x e rc is e g e n e ra l s u p e rv is io n o v e r s a id
F e d e ra l R e se rv e b a n k s. (k ) T o g r a n t b y s p e c ia l p e r m it t o n a t io n a l b a n k s
a p p ly in g tra n s fe r, w h e n n o t in c o n t r a v e n t io n o f S t a t e o r lo c a l la w , t h e r ig h t
to a c t a s tru ste e , e x e c u t o r , a d m in is t r a t o r , o r r e g is t r a r o f s t o c k s a n d b o n d s
under such rules and regulations as the said board
m ay prescribe. (l) T o e m p lo y s u c h a t t o rn e y s , e x p e rt s , a s s is t a n t s , c le r k s ,
o r o th e r e m p lo y e e s a s m a y b e d e e m e d n e c e s s a r y t o c o n d u c t t h e b u s in e s s o f
th e b o a rd . A ll s a la r ie s a n d f e e s s h a ll b e f ix e d in a d v a n c e b y s a id b o a r d a n d
shall be paid in th e s a m e m a n n e r a s th e s a la rie s o f th e m e m b e rs o f s a id b o a rd .
All such a t t o r n e y s , e x p e r t s , a s s is t a n t s , c le r k s , a n d o t h e r e m p lo y e e s s h a ll b e
appointed w it h o u t r e g a r d t o t h e p r o v is io n s o f t h e A c t o f J a n u a r y s ix t e e n t h ,
eighteen h u n d re d a n d e ig h ty -th re e (v o lu m e tw e n ty -tw o , U n ite d S ta te s S ta tu te s
at L a rg e , p a g e fo u r h u n d re d a n d th re e ), a n d a m e n d m e n ts th e re to , o r a n y ru le
o r r e g u la tio n m a d e in p u rs u a n c e th e r e o f : P ro v id e d , T h a t n o t h in g h e r in s h a ll
p re v e n t th e P re sid e n t fro m p la c in g sa id e m p lo y e e s in th e c la ssifie d se rv ic e .
FED ERAL AD VISO RY
C O U N C I L . S E C . 1 2 . T h e re is h e re b y c re a te d a F e d e ra l A d v is o ry C o u n c il,
which shall c o n s is t o f a s m a n y m e m b e rs a s th e re a re F e d e ra l re s e rv e d is t ric t s .
Each Federal re s e rv e b a n k b y it s b o a r d o f d ir e c t o r s s h a ll a n n u a lly s e le c t fr o m
its ow n Federal R e s e rv e d is tric t o n e m e m b e r o f s a id c o u n c il, w h o s h a ll re c e iv e
su ch co m p e n satio n

a n d a llo w a n c e s a s m a y b e fix e d b y h is b o a r d o f d ir e c t o r s

s u b je c t to th e a p p ro v a l o f t h e F e d e r a l R e s e r v e B o a r d . T h e m e e t in g s o f s a id
a d v is o ry c o u n c il s h a ll b e h e ld a t W a s h in g t o n , D is t r ic t o f C o lu m b ia , a t le a s t
fo u r tim e s e a c h y e a r, a n d o ft e n e r if c a lle d b y t h e F e d e r a l R e s e r v e B o a r d . T h e
c o u n c il m a y in a d d itio n t o t h e m e e t in g s a b o v e p r o v id e d f o r h o ld s u c h o t h e r
m e e tin g s in W a sh in g to n , D is t ric t o f C o lu m b ia , o r e ls e w h e r e , a s it m a y d e e m
n ecessary, m ay select its o w n o ffic e rs a n d a d o p t its o w n m e th o d s o f p ro c e d u re ,
an d a m ajo rity o f its m e m b e rs s h a ll c o n s titu t e a q u o ru m fo r t h e t ra n s a c t io n o f
business. Vacancies in th e c o u n c il s h a ll b e fille d b y th e re sp e c tiv e re s e rv e b a n k s ,
and members selected to fill vacancies, shall serve for the unexpired
term. T h e F e d e ra l A d v is o ry C o u n c il s h a ll h a v e p o w e r, b y it s e lf o r t h ro u g h
its o f fic e r s , (1 ) t o c o n fe r d ir e c t ly w it h t h e F e d e r a l R e s e r v e B o a r d o n g e n e r a l
b u s in e s s c o n d itio n s ; (2 ) to m a k e o ra l o r w rit t e n re p re s e n t a t io n s c o n c e rn in g
m a tte rs w ith in th e ju ris d ic tio n o f s a id b o a rd ; (3 ) to c a ll fo r in fo rm a tio n a n d to
m a k e re c o m m e n d a tio n s in re g a rd to d is c o u n t ra te s, re d is c o u n t b u s in e s s , n o te
is s u e s , r e s e r v e c o n d it io n s in t h e v a r io u s d is t r ic t s , t h e p u r c h a s e a n d s a le o f
gold o r se c u ritie s b y re se rv e b a n k s , o p e n -m a rk e t o p e ra tio n s b y s a id b a n k s, a n d
the general affairs of the reserve banking system .




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POWERS OF FEDERAL RESERVE BANKS. Sec.

13. Any Federal reserve bank may receive from any of its memberbanks, and
from the United States, deposits of current funds in lawful money,national-bank
notes, Federal reserve notes, or checks and drafts upon solventmember banks,
payable upon presentation; or, solely for exchange purposes,may receive from other
Federal reserve banks deposits of current funds inlawful money, national-bank
notes, or checks and drafts upon solvent m em ber or other Federal reserve
banks, payable upon presentation. Upon the indorsement of
any of its member banks, with a waiver of demand,notice and protest by
such bank, any Federal reserve bank may discount notes,drafts, and bills of
exchange arising out of actual commercial transactions; that is, notes, drafts,
and bills of exchange issued or drawn for agricultural, industrial,or commercial
purposes, or the proceeds of which have been used, or are to be used, for such
purposes, the Federal Reserve Board to have the right to determine or define
the character of the paper thus eligible for discount, within the meaning of this
Act. Nothing in this Act contained shall be construed to prohibit such notes,
drafts, and bills of exchange, secured by staple agriculturalproducts, or other
goods, wares, or merchandise from being eligible for such discount; but such
definition shall not include notes, drafts, or bills coveringmerely investments or
issued or drawn for the purpose of carrying or trading in stocks, bonds, or other
investment securities, except bonds and notes of theGovernment of the United
States. Notes, drafts, and bills adm itted to discount under the terms of this
paragraph must have a maturity at the time of discountof not more than ninety
days: Provided, That notes, drafts, and bills drawn or issued for agricultural
purposes or based on live stock and having a maturity notexceeding six months
may be discounted in an amount to be limited to a percentage of the capital of
the Federal reserve bank, to be ascertained and fixed by the Federal Reserve
Board. Any Federal reserve bank may
discount acceptances which are based on the importation or exportation of
goods and which have a maturity at time of discount of not more than three
months, and indorsed by at least one mem­ ber bank. The amount of acceptances
so discounted shall at n0 time exceedone-half the paid up capital stock and surplus
of the bank for which the rediscounts are made. The aggregate of such notes
and bills bearing the
signature or indorsementof any one person, company, firm, or corporation
rediscounted for any one bank shall at no time exceed ten per centum of the
unimpaired capital and surplusof said bank; but this restriction shall not apply
to the discount of bills ofexchange drawn in good faith against actually existing
values. Any member bank may accept drafts or hills of exchange
drawn upon itand growing out of transactions involving the importation or
exportationof goods having not more than six months sight to run; but no bank




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a c c e p t such bills to an amount equal at any time in the aggregate; to more
t h a n one-half its paid-up capital stock and surplus.

Section fifty-two hundred and two of the Revised Statutes of the United
S ta tes is h ereby am en ded so as to read as follow s: N o nation al ban k ing
association shall at any time be indebted, or in any way liable, to an amount
exceeding the am ount of its capital stock at such time actually paid in and
remaining undiminished by losses or otherwise, except on account of demands
of the nature following:
First. Notes of circulation.
Second. Moneys deposited with or collected by the association.
Third. Bills of exchange or drafts drawn against money actually on deposit
to the credit of the association, or due thereto.
Fourth. Liabilities to the stockholders of the association for dividends and
reserve profits.
Fifth. Liabilities incurred under the provisions of the Federal Reserve Act.
The rediscount by any Federal reserve bank of any bills receivable and of
domestic and foreign bills of exchange, and of acceptances authorized by this
Act, shall be subject to such restrictions, limitations, and regulations as may be
imposed by the Federal Reserve Board.
OPEN-MARKET OPERATIONS.

Sec. 14. Any Federal reserve bank may, under rules and regulationsprescribed

by the Federal Reserve Board, purchase and sell in the open market,at home
or abroad, either from or to dom estic or foreign banks, firm s, corporations,
or individuals, cable transfers and bankers’ acceptances and bills of exchange
of the kinds and maturities by this Act made eligible for rediscount, with or
without the indorsement of a member bank.
Every Federal reserve bank shall have power: (a)
To deal in gold coin and bullion at home or abroad, to make loansthereon,
exchange Federal reserve notes for gold, gold coin, or gold certificates,and
to contract for loans of gold coin or bullion, giving therefor, when necessary,
acceptable security, including the hypothecation of United States bonds or
othersecurities which Federal reserve banks are authorized to
hold; (b)
To buy and sell, at home or abroad, bonds and notes of the United
States, and bills, notes, revenue bonds, and warrants with a maturity from
dateof 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,including irrigation, drainage and reclamation districts,
such purchases to bemade in accordance with rules and regulations
prescribed by the FederalReserve Board; (c)
To purchase from member
banks and to sell, with or without its indorsement, bills of
exchange arising out of commercial transactions, ashereinbefore
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(d)

To establish from time to time, subject to review and determination of

the Federal Reserve Board, rates of discount to be charged by the Federalreserve
bank for each class of paper, which shall be fixed with a view ofaccommodating
commerce and business; (e)
To establish
accounts with other Federal reserve banks for exchangepurposes and, with
the consent of the Federal Reserve Board, to open andmaintain banking accounts
in foreign countries, appoint correspondents, and establish agencies in such
countries wheresoever it may deem best for the purposeof purchasing, selling, and
collecting bills of exchange, and to buy and sell withor without its indorsement,
through such correspondents or agencies, bills ofexchange arising out of actual
commercial transactions which have not morethan ninety days to run and which
bear the signature of two or more responsibleparties.

GOVERNMENT DEPOSITS.

Sec. 15.
The moneys held in the
general fund of the Treasury, except the five per centum fund for the
redemption of outstanding national-bank notes and the funds provided in this
Act for the redemption of Federal reserve notes may, upon the direction of the
Secretary of the Treasury, be deposited in Federalreserve banks, which banks,
when required by the Secretary of the Treasury,shall act as fiscal agents of
the United States; and the revenues of the Governmentor any part thereof may
be deposited in such banks, and disbursements may be made by checks drawn
against such deposits. No public funds of the
Philippine Islands, or of the postal savings, or anyGovernment funds, shall
be deposited 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 deny the right of the Secretary of the Treasury to use member
banks as depositories.

NOTE ISSUES.

S ec . 16. Federal

reserve notes,
to be issued at the discretion of the FederalReserve Board for the purpose
of making advances to Federal reserve banksthrough the Federal reserve agents
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 by
all national and member banks and Federal reserve banks and for all taxes,
customs, and other public dues.They shall be redeemed in gold on demand at the
Treasury Department ofthe United States, in the city of Washington, District of
Columbia, or ingold or lawful money at any Federal reserve bank. Any Federal
reserve bank may make application to the local Federal
reserve agent for such amount of the Federal reserve notes hereinbefore
provided for as it may require. Such application shall be accompanied with a
tender tothe local Federal reserve agent of collateral in amount equal to t he
sum of theFederal reserve notes thus applied for and issued pursuant to such




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The collateral security thus offered shall be notes and bills, accepted for rediscount
under the provisions of section thirteen of this Act, and the Federal reserve
agent shall each day notify the Federal Reserve Board of all

issues

and with­

drawals of Federal reserve notes to and by the Federal reserve bank to which
he is accredited. The said Federal Reserve Board may at anytime call upon a
Federal reserve bank for additional security to protect the Federal reservenotes
issued to it. Every
Federal reserve bank shall maintain reserves in gold or lawfulmoney of
not less than thirty-five per centum against its deposits and

re­

serves in gold

of not less than forty per centum against its Federal reserve notes in actual
circulation, and not offset by gold or lawful money de­ posited with the Federal
reserve agent. 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. When­ ever Federal reserve notes issued through
one Federal reserve bank shallbe received by another Federal reserve bank they
shall be promptly returnedfor credit or redemption to the Federal reserve bank
through which they wereoriginally issued. No Federal reserve bank shall pay out
notes issued throughanother under penalty of a tax of ten per centum upon the
face value of notesso paid out. Notes presented for redemption at the Treasury
of the UnitedStates shall be paid out of the redemption fund and returned to the
Federalreserve banks through which they were originally issued, and thereupon
suchFederal reserve bank shall, upon demand of the Secretary of the Treasury,
reimburse such redemption fund in lawful money or. if such Federal reserve
notes have been redeemed by the Treasurer in gold or gold certificates, thensuch
funds shall be reimbursed to the extent deemed necessary by the Secretary of
the Treasury in gold or gold certificates, and such Federal reserve bank shall,
so long as any of its Federal reserve notes remain outstanding, maintain with
the Treasurer in gold an amount sufficient in the judgment of the Secretary to
provide for all redemptions to be made by the Treasurer. Federal reservenotes
received by the Treasury, otherwise than for redemption, may be exchangedfor
gold out of the redemption fund hereinafter provided and returned to thereserve
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 returned by the Federal reserve agents to the Comptroller
of the Currency for cancellation and destruction. The Federal Reserve Board
shall require each Federal reserve bank tomaintain
on deposit in the Treasury of the United States a sum in gold sufficientin
the judgment of the Secretary of the Treasury for the redemption of theFederal
reserve notes issued to such bank, but in no event less than five percentum;
but such deposit of gold shall be counted and included as part of
theforty per centum reserve hereinbefore required. The board shall have the
right,acting through the Federal reserve agent, to grant in whole or in part o r




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reject entirely the application of any Federal reserve bank for Federal reserve
notes: but to the extent that such application m ay be granted the Federal
Reserve Board shall, through its local Federal reserve agent, supply Federal
reserve notes to the bank s o applying, and such bank shall be charged withthe
amount of such notes and shall pay such rate of interest on said amount asmay
be established by the Federal Reserve Board, and the amount of such Federal
reserve notes so issued to any such bank shall, upon delivery, togetherwith such
notes of such Federal reserve bank as may be issued under sectioneighteen of this
Act upon security of United States two per centum Governmentbonds, become a
first and paramount lien on all the assets of such bank. Any Federal reserve
bank may at any time reduce its liability for outstanding Federal reserve
notes by depositing, with the Federal reserve agent,its Federal reserve notes,
gold, gold certificates, or lawful money of the UnitedStates. Federal reserve notes
so deposited shall not be reissued, except upon compliance with the conditions
of an original issue. The Federal reserve agent shall
hold such gold, gold certificates, or lawfulmoney available exclusively for
exchange for the outstanding Federal reservenotes when offered by the reserve
bank of which he is a director. Upon therequest of the Secretary of the Treasury
the Federal Reserve Board shall requirethe Federal reserve agent to transmit so
much of said gold to the Treasury of theUnited States as may he required for the
exclusive purpose of the redemptionof such notes. Any Federal reserve bank may at
its discretion
withdraw collateraldeposited with the local Federal reserve agent for the
protection of its Federal reserve notes deposited with it and shall at the same
time substitute thereforother like collateral of equal amount with the approval
of the Federal reserve 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 of the Currency shall, under the direction of
the Secretary ofthe Treasury, cause plates and dies to be engraved in the best
manner to guardagainst counterfeits and fraudulent alterations, and shall have
printed therefromand numbered such quantities of such notes of the denominations
of 85.$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 and shall bear the distinctive numbers of the
several Federal reserve banks through which they are issued. When such notes
have been prepared, they shall he deposited in the Treasury,
or in the subtreasury or mint of the United States nearest the place of
business of each Federal reserve bank and shall be held for the use of such
bank subject to the order of the Comptroller of 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




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and the expenses necessarily incurred in executing the laws relating to the
procuring of such notes, and all other expenses incidental to their issue and
retirem ent, shall be paid by the Federal reserve banks, and the Federal Reserve
Board shall include in its estimate of expenses levied against the Federal reserve
banks a sufficient amount to cover the expenses herein provided for.
The examination of plates, dies, bed pieces, and so forth, and regulations
relating to such examination of plates, dies, and so forth, of national-bank
notes provided for in section fifty-one hundred and seventy-four
Statutes, is hereby extended to include notes herein provided for.

Revised

Any appropriation heretofore made out of the general funds of the Treasury
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 A ct 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 used in the discretion of the Secretary for the purposes of this Act,
and should the appropriations heretofore made be insufficient to meet the
requirements of this A ct 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.
Every Federal reserve bank shall receive on deposit at par from member
banks or from Federal reserve banks checks and drafts drawn upon any of its
depositors, and when remitted by a Federal reserve bank, checks and drafts drawn
by any depositor in any other Federal reserve bank or member bank upon
funds to the credit of said depositor in said reserve bank or member bank.
Nothing herein contained shall be construed as prohibiting a member bank from
charging its actual expense incurred in collecting and remitting funds,
exchange sold to its patrons.

0r

for

The Federal Reserve Board shall, by rule, fix

the charges to be collected by the member banks from its patrons whose checks
are cleared through the Federal reserve bank and the charge which may be
imposed for the service of clearing or collection rendered by the Federal Reserve
bank.
The Federal Reserve Board shall make and promulgate from time to time
regulations governing the transfer of funds and charges therefor among Federal
reserve banks and their branches, and may at its discretion exercise the functions
of a clearing house for such Federal reserve banks, or may designate a Federal
reserve bank to exercise such functions, and may also requ eachsu ban
ire
ch k
to exercise the functions of a clearing house for its member banks.




22
SEC. 17 .

So m uch of the provisions of section fifty-one hundred and fifty-

nine of the Revised Statutes of the United States, and section four of the Act of
June twentieth, eighteen hundred and seventy-four, and section rightof the Act
of July twelfth, eighteen hundred and eighty-two, and of any otherprovisions of
existing statutes as require that before any national bankingassociation shall be
authorized to commence banking business it shall transfer and deliver to the
Treasurer of the United States a stated amount of UnitedStated registered bonds
is hereby repealed.

REFUNDING BONDS. S ec .

18. After two years
from the passage of this Act, and at any time during' a period of twenty
years thereafter, any member bank desiring to retire the whole or any part of
its circulating notes, may file with the the Treasurer of the United States an
application to sell for its account, at par and accrued 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 bondsfrom the
banks whose applications have been filed with the Treasurer at leastten days
before the end of any quarterly period at which the Federal ReserveBoard may
direct the purchase to be made: Provided, That Federal reservebanks shall not
be permitted to purchase an amount to exceed $25,000,000 ofSuch bonds in any
one year, and which amount shall include bonds acquired under Section four of
this Act by the Federal reserve bank: Provided further.That the Federal Reserve
Board shall allot to each Federal reserve banksuch proportion of such bonds as the
capital and surplus of such bank shall bearto

the

aggregate capital and surplus

of all the Federal reserve banks. Upon notice from the Treasurer of the
amount of bonds so sold for its account,each member bank shall duly assign
and transfer, in writing, such bonds to theFederal reserve bank purchasing the
same, and such Federal reserve bank shall,thereupon, deposit lawful money
with the Treasurer of the United States forthe purchase price of such bonds, and
the Treasurer shall pay to the memberbank selling such bonds any balance due
after deducting a sufficient sum to redeem its outstanding notes secured by such
bonds, which notes shall be canceled andpermanently retired when redeemed. The
Federal reserVe banks purchasing such
bonds shall be permitted totake out an amount of circulating notes equal to
the par value of such bonds. Upon the deposit with the Treasurer of the United
States of bonds so purchased, or any bonds with the circulating privilege
acquired under section four of this Act, any Federal reserve bank making such
deposit in the mannerprovided by existing law, shall be entitled to receive from
the Comptroller ofthe Currency circulating notes in blank, registered and
countersigned asprovided by law, equal in amount to the par value of the bonds




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Such notes shall he the obligations of the Federal reserve bank procuring the
same, and shall be in form prescribed by the Secretary of the Treasury, and to
the same tenor and effect as national-bank notes now provided by law. Theyshall
be issued and redeemed under the same terms and conditions as national-bank
notes except that they shall not be limited to the amount of the capitalstock of the
Federal reserve bank issuing them. Upon application
of any Federal reserve bank, approved by the FederalReserve Board, the
Secretary of the Treasury may issue, in exchange for UnitedStates two per centum
gold bonds bearing the circulation privilege, but against which no circulation
is outstanding, one-year gold notes of the United Stateswithout the circulation
privilege, to an amount not to exceed one-half of the two per centum bonds so
tendered for exchange, and thirty-year three per centum gold bonds without the
circulation privilege for the remainder of the two percentum bonds so tendered :
Provided, That at the time of such exchange the Fed­ eral reserve bank obtaining
such one-year gold notes shall enter into an obligationwith the Secretary of the
Treasury binding itself to purchase from the UnitedStates for gold at the maturity
of such one-year notes, an amount equal to thosedelivered in exchange for such
bonds, if so requested by the Secretary, and ateach maturity of one-year notes
so purchased by such Federal reserve bank, topurchase from the United States
such an amount of one-year notes as the Secretarymay tender to such bank, not
to exceed the amount issued to such bank in thefirst instance, in exchange for the
two per centum United States gold bonds;said obligation to purchase at maturity
such notes shall continue in force for aperiod not to exceed thirty years. For the
purpose of making the exchange
herein provided for, the Secretaryof the Treasury is authorized to issue at par
Treasury notes in coupon or registeredform as he may prescribe in denominations
of one hundred dollars, or any multiplethereof, bearing interest at the rate of three
per centum per annum, payable quar­ terly, such Treasury notes to be payable
not more than one year from the date oftheir issue in gold coin of the present
standard value, and to be exempt as to prin­ cipal and interest from the payment
of all taxes and duties of the United Statesexcept as provided by this Act, as well
as from taxes in any form by or understate,municipal, or local authorities. And
for the same purpose, the Secretary isauthorized and empowered to issue United
States gold bonds at par, bearing threeper centum interest payable thirty years
from date of issue, such bonds to be ofthe same general tenor and effect and to be
issued under the same generalterms and conditions as the United States three
per centum bonds without thecirculation privilege now issued and outstanding.
U pon application of any Federal reserve bank,
approved by the FederalReserve Board, the Secretary may issue at par such
three per centum bonds inexchange for the one-year gold notes herein provided




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BANK RESERVES.

S e c . 19. Demand deposits within the meaning of this Act shall compriseall

deposits payable within thirty days, and time deposits shall comprise alldeposits
payable after thirty days, and all savings accounts and certificates of deposit
which are subject to not less than thirty days’ notice before payment. When the
Secretary of the Treasury shall have officially announced, in such manner
as he may elect, the establishment of a Federal reserve bank in anydistrict, every
subscribing member bank shall establish and maintain reserves as follows: (a)
A bank not
in a reserve or central reserve city as now or hereafter defined shall hold
and maintain reserves equal to twelve per centum of theaggregate amount of its
demand deposits and five per centum of its time deposits,as follows: In its vaults for
a period of
thirty-six months after said date five-twelfths thereof and permanently
thereafter four-twelfths. In the Federal reserve bank
of its district, for a period of twelve months after said date, two-twelfths,
and for each succeeding six months an additionalone-twelfth, until five-twelfths
have been so deposited, which shall be theamount permanently required. For a
period of thirty-six months after
said date the balance of the reservesmay be held in its own vaults, or in the
Federal reserve bank, or in national banks in reserve or central reserve cities
as now defined bylaw. After said thirty-six months’ period said
reserves, other than thosehereinbefore required to be held in the vaults of
the member bank and in the Federal reserve bank, shall be held in the vaults
of the member bank or in the Federal reserve bank, or in both, at the option
of the member bank. (b)

A bank in a reserve city, as now or hereafter

defined, shall hold andmaintain reserves equal to fifteen per centum of the
aggregate amount of itsdemand deposits and five per centum of its time deposits,
as follows: In its vaults for a period of thirty-six months after said
date six-fifteenths thereof, and permanently thereafter five-fifteenths. In
the Federal reserve bank of its district for a period of
twelve months afterthe date aforesaid at least three-fifteenths, and for each
succeeding six monthsan additional one-fifteenth, until six-fifteenths have been
so deposited, which shall be the amount permanently required. For a period of
thirty-six months after said date the balance
of the reservesmay be held in its own vaults, or in the Federal reserve bank,
or in nationalbanks in reserve or central reserve cities as now defined by law.
After said thirty-six months’ period all of said reserves, except
those hereinbefore required to be held permanently in the vaults of the
member bank and in the Federal reserve bank, shall be held in its vaults or in
the Federalreserve bank, or in both, at the option of the member




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(e)

A bank in a central reserve city, as now or hereafter defined, shall

hold and maintain a reserve equal to eighteen per centum of the aggregate
amount of its demand deposits and five per centum of its time deposits, as
follows:
In its vaults six-eighteenths thereof.
In the Federal reserve bank seven-eighteenths.
The balance of said reserves shall be held in its own vaults or in the
Federal reserve bank, at its option.
Any Federal reserve bank may receive from the member banks as reserves,
not exceeding one-half of each installm ent, eligible paper as described in
sectionfourteen properly indorsed and acceptable to the said reserve
bank. If a State bank or trust company is required by the law of its State
to keepits reserves either in its own vaults or with another State bank or trust
company,such reserve deposits so kept in such State bank or trust company
shall beconstrued, within the meaning of this section, as if they were reserve
deposits in a national bank in a reserve or central reserve city for a period of
threeyears after the Secretary of the Treasury shall have officially announced
theestablishment of a Federal reserve bank in the district in which such State
bank or trust company is situate. Except as thus provided, no member bank
shall keep on deposit with any nonmember bank a sum in excess of ten per
centum of its own paid-up capital and surplus. No member bank shall act as
the medium or agent of a nonmember bank in applying for or receiving dis­
counts from a Federal reserve bank under the provisions of this Act except by
permission of the Federal Reserve Board.
The reserve carried by a member bank with a Federal reserve bank may.
under the regulations and subject to such penalties as may be prescribed by
theFederal Reserve Board, be checked against and withdrawn by such member
bank for the purpose of meeting existing liabilities: Provided, however, That
no bank shall at any time make new loans or shall pay any dividends unless
and until the total reserve required by law is fully restored. In
estimating the reserves required by this Act, the net balance of amounts
due to and from other banks shall be taken as the basis for ascertaining the
deposits against which reserves shall be determined. Balances in reserve
banks due to member banks shall, to the extent herein provided, be counted
as reserves. National banks located in Alaska or outside the continental
UnitedStates may remain nonmember banks, and shall in that event maintain
reserves and comply with all the conditions now provided by law regulating
them: orsaid banks, except in the Philippine Islands, may, with the consent of
theReserve Board, become member banks of any one of the reserve districts,
and shall, in that event, take stock, maintain reserves, and be subject to all
theother provisions of this Act.
Sec . 20. 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




26
United States notes, providing for a redistribution of the national-bankcurrency,
and for other purposes," as provides that the fund deposited by any national
banking association with the Treasurer of the United S t a t e s f o r t h e redemption
of its notes shall be counted as a part of its lawful reserve as providedin the Act
aforesaid, is hereby repealed. And from and after the passage of t h i s Act such fund
of five per centum shall in no case be counted by any nationalbanking association
as a part of its lawful reserve. BANK EXAMINATIONS.

Sec. 21. Section fifty-two
hundred and forty7, United States Revised Statutes, is amended to read as
follows: The Comptroller of the Currency,
with the approval of the Secretary ofthe Treasury, shall appoint examiners
who shall examine every member bank at least twice in each calendar year and
oftener if considered necessary : Provided, h
owever, That the Federal Reserve
Board may authorize examination by theState authorities to be accepted in the
case of State banks and trust companiesand may at any time direct the holding of a
special examination of State banksor trust companies that are stockholders in any
Federal reserve bank. Theexaminer making the examination of any national bank,
or of any other memberbank, shall have power to make a thorough examination
of all the affairs of the bank and in doing so he shall have power to administer
oaths and to examineany of the officers and agents thereof under oath and shall
make a full and detailed report of the condition of said bank to the Comptroller
of the Currency. The Federal Reserve Board, upon the recommendation of the
Comptroller of the Currency, shall fix the salaries of all bank examiners
and make report thereof to Congress. The expense of the examinations herein
provided for shall be assessed by the Com ptroller of the Currency upon the
banks examined in proportion to assets or resources held by the banks upon the
dates of examinationof the various banks. In addition to the examinations made
and conducted by the
Comptroller of the Currency, every Federal reserve bank may, with the
approval of the Federal r e s e r v e agent or the Federal Reserve Board, provide
for special examina­ tion of member banks within its district. The expense of
such examinations shall be borne by the bank examined. Such examinations
shall be so conducted as to inform the Federal reserve bank of the condition of
its member banks and of the lines of credit which are being extended by them.
Every Federalreserve bank shall at all times furnish to the Federal Reserve
Board such information as may be demanded concerning the condition of any
member bank within the district of the said Federal reserve bank. No bank
shall be subject to any visitatorial powers other than
such as are authorized by law, or vested in the courts of justice or such as
shall be or shall have been exercised or directed by Congress, or by either
House thereof or by any committee of Congress or of either House duly




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T h e F ederal R eserve B oard sh all, at least once each year, order u n
examination of each Federal reserve bank, and upon joint application of ten
member banks the Federal Reserve Board shall order a special examinationand
report of the condition of any Federal reserve bank. S e c .
2 2 . No member bank or any officer, director, or employee thereof s h a l l

hereafter make any loan or grant any gratuity to any bank examiner.Any bank
officer, director, or employee violating this provision shall be deemed guilty
of a misdemeanor and shall be imprisoned not exceeding one year or fined not
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b e d is q u a lif ie d f r o m h o ld in g o f f ic e a s a n a t io n a l- b a n k e x a m in e r .
N o n a tio n a l-b a n k e x a m in e r s h a ll p e r fo r m a n y o th e r s e r v ic e fo r
c o m p e n s a t io n w h ile h o ld in g s u c h o ffic e fo r a n y b a n k o r o ffic e r ,
d ir e c to r , o r e m p lo y e e th e r e o f. O t h e r t h a n t h e u s u a l s a la r y o r
d ir e c t o r ’s fe e p a id t o a n y o ffic e r , d ir e c t o r , o r e m p lo y e e o f a m e m b e r
b a n k a n d o th e r th a n a r e a s o n a b le fe e p a id b y s a id b a n k to s u c h
o f f i c e r , d ir e c t o r , o r e m p lo y e e f o r s e r v ic e s r e n d e r e d t o s u c h b a n k ,
n o o f f ic e r , d ir e c t o r , e m p lo y e e , o r a t t o r n e y o f a m e m b e r b a n k s h a ll
b e a b e n e fic ia r y o f o r r e c e iv e , d ir e c t ly o r in d ir e c t ly , a n y fe e ,
c o m m is s io n , g ift, o r o th e r c o n s id e r a tio n fo r o r in c o n n e c tio n
w it h a n y t r a n s a c t io n o r b u s in e s s o f t h e b a n k . N o e x a m in e r , p u b lic
o r p r iv a t e , s h a ll d is c lo s e t h e n a m e s o f b o r r o w e r s o r t h e c o lla t e r a l
fo r lo a n s o f a m e m b e r b a n k to o th e r th a n th e p r o p e r o ffic e r s o f
s u c h b a n k w it h o u t fir s t h a v in g o b t a in e d t h e e x p r e s s p e r m is s io n in
w r i t in g f r o m t h e C o m p t r o lle r o f t h e C u r r e n c y , o r fr o m t h e b o a r d
o f d ire cto rso f s u c h b a n k , e x ce p t w h e n o rd e re d to d o so b y a c o u rt
o f c o m p e t e n t ju r is d ic ­ t io n , o r b y d ir e c t io n o f t h e C o n g r e s s o f t h e
U n ite d S ta te s , o r o f e ith e r H o u s e t h e r e o f, o r a n y c o m m itte e o f
C o n g r e s s o r o f e it h e r H o u s e d u ly a u t h o r iz e d . A n y p e r s o n v io la t in g
a n y p r o v is io n o f th is s e c tio n s h a ll b e p u n is h e d b y a fin e o f n o t
e x c e e d in g $ 5 ,0 0 0 o r b y im p r is o n m e n t n o t e x c e e d in g o n e y e a r ,
or both. E x c e p t a s p r o v id e d in e x is t in g la w s , t h is p r o v is io n s h a ll
n o t t a k e e ffe c t u n t il s ix t y d a y s a ft e r t h e p a s s a g e o f t h is A c t . S e c .
2 3 . T h e s t o c k h o ld e r s o f e v e r y n a t io n a l b a n k in g a s s o c ia t io n
s h a ll b e h e l d in d iv id u a lly r e s p o n s ib le f o r a ll c o n t r a c t s , d e b t s ,
and engagem ents of such association, each to the am ount of
h is s to c k th e r e in , a t th e p a r v a lu e th e r e o f in a d d itio n to th e
a m o u n t in v e s t e d in s u c h s t o c k . T h e s t o c k h o ld e r s in a n y n a t io n a l
h a n k in g a s s o c ia t io n w h o s h a ll h a v e tr a n s fe r r e d th e ir s h a r e s
o r r e g is t e r e d t h e t r a n s fe r t h e r e o f w it h in s ix ty d a y s n e x t b e fo r e th e
d a t e o f t h e f a il u r e o f s u c h a s s o c ia t i o n t o m e e t i t s o b l i g a t io n s , o r
w i t h k n o w l e d g e o f s u c h i m p e n d i n g f a i lu r e , s h a l l b e l ia b l e t o t h e
sa m e e x te n t a s if th e y h a d m a d e n o s u c h tra n s fe r , to th e e x te n t th a t
th e s u b s e q u e n t tr a n s fe r e e fa ils t o m e e t s u c h lia b ility ; b u t




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provision shall not be construed to affect in any way any recourse which s u c h
shareholders might otherwise have against those in whose names s u c h s h a r e s
are registered at the time of such failure.
LOANS ON FARM LANDS. Sec.

24. Any national banking association not situated in a centralreserve city may
make loans secured by improved and unencumbered farm land, situated within
its Federal reserve district, but no such loan shall bemade for a longer time than
five years, nor for an amount exceeding fiftyper centum of the actual value of the
property offered as security. Any suchbank may make such loans in an aggregate
sum equal to twenty-five per centum of its capital and surplus or to one-third of
its time deposits and such banksm a y continue hereafter as heretofore to receive
time deposits and to pay intereston the same. The Federal Reserve Board shall
have power
from time to time to add to the list of cities in which national banks shall
not be permitted to make loanssecured upon real estate in the manner described
in this section.

FOREIGN BRANCHES. Sec.

25. 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 prescribed by thesaid board, for the purpose of securing authority to establish
branches in foreigncountries 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 agentsof the United States. Such application shall specify, in addition
to the name and capital of the banking association filing it, the place or places
where thebanking operations proposed are to be carried on, and the amount of
capital setaside for the conduct of its foreign business. The Federal Reserve Board
shallhave 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 foreign business
isinadequate, or if for other reasons the granting of such application is deemed
inexpedient. Every national banking association which shall receive authority
to establish
foreign branches shall be required at all times to furnish informationconcerning
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
branchindependently of the accounts of other foreign branches established by it
andof its home offce, and shall at the end of each fiscal period transfer
to its generalledger the profit or loss accruing at each branch as a separate




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S ec . 26. All provisions of law inconsistent with or superseded by any of the
p ro vi s i on s of this Act are to that extent and to that extent only h e r e b y r e pe al e d
: Provided, Nothing in this Act contained shall b e construed to repeal t h e 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,” and the Secretary of the Treasurymay
for the purpose of maintaining such parity and to strengthen the gold reserve,
borrow gold on the security of United States bonds authorized by section two
of the Act last referred to or for one-year gold notes bearing interest at a rate of
not to exceed three per centum per annum, or sell the same if necessaryto obtain
gold. When the funds of the Treasury on hand just ify, he may purchase and
retire such outstanding bonds and notes. Sec.

27. The provisions of the Act of May thirtieth, nineteen hundred and eight,
authorizing national currency associations, the issue of additionalnational-bank
circulation, and creating a National Monetary Commission, which expires by
limitation under the terms of such Act on the thirtieth day of June, nineteen
hundred and fourteen, are hereby extended to June thirtieth,nineteen hundred
and fifteen, and sections fifty-one hundred and fifty-three,fifty-one hundred
and seventy-two, fifty-one hundred and ninety-one, and fifty-two hundred and
fourteen of the Revised Statutes of the United States,which were amended by
the Act of May thirtieth, nineteen hundred and eight,are hereby reenacted to
read as such sections read prior to May thirtieth, nineteen hundred and eight,
subject to such am endm ents or m odifications as are prescribed in this Act:
Provided, however, That section nine of the Act first referred to in this section
is hereby amended so as to change the tax rates fixed in said Actby making the
portion applicable thereto read as follows : National banking
associations having circulating notes secured otherwisethan by bonds of the
United States, shall pay for the first three months a tax atthe rate of three per
centum per annum upon the average amount of such oftheir notes in circulation

as are based upon the deposit of such securities, and afterwards an additional
tax rate of one-half of one per centum per annum for each month until a tax of

six per centum per annum is reached, and thereaftersuch tax of six per centum per
annum upon the average amount of such notes. S ec . 28. Section fifty-one hundred
and forty-three of the Revised Statutesis hereby amended and reenacted to read
as follows: Any association formed under this title may, by the vote of shareholders
owning two-thirds of its capitalstock, reduce its capital to any sum not below the
am ount required by this title to authorize the formation of associations; but no
such reduction shall be allowable which will reduce the capital of the association
below the amount required for its outstanding circulation, nor shall any reduction
be m ade until the amount of the proposed reduction has been reported to the
Comptroller ofthe Currency and such reduction has been approved by the said




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of the Currency and by the Federal Reserve Board, or by the organization
pending the organization of the Federal R eserve Board.

com m ittee

Sec . 29. If any clause, sentence, paragraph, or part of this Act shall for

any reason be adjudged by any court of competent jurisdiction to be invalid,
s u c h judgment shall not affect, impair, or invalidate the remainder of this A ct,
but shall be confined in its operation to the clause, sentence, paragraph, or
part thereof directly involved in the controversy in which such judgment shall
have been rendered.
SEC. 30. The right to amend, alter, or repeal this A ct is hereby expressly
reserved.




Speaker of the House of Representatives

Vi
ce

President o f the United States and
President o f the Senate.

I certify that this A c t originated in the House of Representatives.




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