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THE

FEDERAL RESERVE ACT
THE

NATIONAL-BANK ACT
AND

All Other Federal Laws Relating to Banking, with
Complete Indexes .and References

1812—1914

THE NATIONAL CITY BANK




OF NEW

YORK

THE NATIONAL CITY BANK
of New York
Original Charter Dated 1812
CAPITAL FULLY PAID

.

.

.

.

SURPLUS AND UNDIVIDED PROFITS
JAMES STILLMAN, Chairman
F . A . VANDERLIP, President.
Vice-President. .
Vice-President.
J. A. STILLMAN, Vice-President.
J . E . GARDIN, Vice-President.
SAMUEL MCROBERTS, Vice-President.
J . T . TALBERT, Vice-President.
C. V. RICH, Vice-President.
H. R. ELDRIDGE, Vice-President.
ARTIIUR KAVANAGII, Cashier.
W . A . SIMONSON,

I I . M . KILHORN,

$25,000,000
.

$33,000,000

of the Board.

W. II. TAFPAK, Assistant Cashier.
S. £ . ALBECK, Assistant Cashier.
G. £ . GREGORY, Assistant Cashier.
A. H. TITUS, Assistant Cashier.
WILLIAM REED, Assistant Cashier.
T . A. REYNOLDS, Assistant Cashier.
JAMES MATTHEWS, Credit Manager.
E . P. CURRIER, Sec'y to the President.
J . T . COSBY, Manager Foreign Dept.
G . H. MOTTELER, Asst. Mgr. For. Dept.
L . J . BURNES, 2d Asst. Mgr. For. Dept.

DIRECTORS.
J. OGDEN ARMOUR,

of Annour & Co.
CLEVELAND H. DODGE,
of Phelp*. Dodge & Co.
HENRY C. FRICK,
Pittsburgh, Pa.
JOSEPH P. GRACE,
of W. R. Grace & Co.
ROBERT S. LOVETT,
Chairman, Union Pacific R.R. Co.
CYRUS II. McCORMICK,
President, International Harvester Co.
EDWIN S. MARSTON,
President, Farmers' Trust & Loan Co.
GERRISII H. MILLIKEN,
of Decring, Uilliken & Co.
J. P. MORGAN,
of J. P. Morgan & Co.
JAMES H. POST,
of B. H. IIowcll, Son & Co.
M. TAYLOR PYNE,
30
Pine Street, New York.
lirTtTT1,
WILLIAM ROCKEFELLER,
26 Broadway, New York.




JACOB H. SCHIFF,

of Kuhn, Loeb & Co.
SAMUEL SLOAN,
Vicc-Pres., Farmers' Loan & Trust Co.
WILLIAM DOUGLAS SLOANE,
of W. & J. Sloane.
JOHN W. STERLING.
of Shearman & Sterling.
JAMES STILLMAN;
Chairman of the Board.
JAMES A/ STILLMAN.
55 Wall Street, New York.
ERIC P. SWENSON,
of S. M. Swenson & Sons.
HENRY A. C. TAYLOR,
S Pine Street, New York.
O
MOSES TAYLOR,
of Kean, Taylor & Co.
FRANK TRUMBULL*
Chairman, Chesapeake & Ohio Ry. Co.
P. A. VALENTINE,
6S Wall Street, New York.
FRANK A. VANDERLIP,
President

INTRODUCTORY.
IIS volume is presented In recognition of the
necessity for a complete and convenient exposition of the Federal Statutes on banking and currency.
It contains no comment on the law; but is arranged
with a view to easy access through reference notes at
the foot of paragraphs, to all the Federal law there is
on the subject of banking and currency.
It is the purpose of the City Bank to be as useful as
possible to bankers in connection with the installation
of the new banking system. It will endeavor to keep
fully informed oii the subject and to make this information at once available.
In this volume the Federal Reserve Act has been
indexed by subjects, and also alphabetically. In the
subject index the general subjects treated of in the
Act are brought together in the order of their relative
importance, as, for example, everything relating to the
Organization Committee is presented under that head;
the same treatment is given the Federal Reserve Board,
and so on.
The paragraph numbers and the headings inserted
throughout the-Act arc not a part of the law, but are
inserted for more ready reference.
The index to the National Bank Act and other
statutes is the same as that prepared under the direction of the Comptroller of the Currency.
Copies-of this volume will be furnished without cost
upon application to
T H E NATIONAL CITY B A N K OF N E W YORK.




CONTENTS.
Subject index to Federal Reserve Act
Alphabetical index to Federal Reserve Act
Federal Reserve Act
Powers of Organization Committee defined
Regulations ior Admission of State banks to reserve system
Statutes relating to banking (date.s of enactment)
location of Sections Revised Statutes
Index to National-Bank Act
National-Bank Act




Page.
5-14
15-22
23-54
55-56
57-59
63-65
66
07-96
97

SUBJECT INDEX TO FEDERAL RESERVE ACT.
This index to The Federal Reserve Act is arranged by subjects in the
order in which they are of natural sequence in the formation of the Federal
Reserve System. Under each general head will be found references to everything in the Act relating to that subject.
For convenience of reference the paragraphs of the Act have been numbered consecutively and reicrcnces arc made to these numbers.
Abbreviations.
Organization Comniittec— Means The Reserve Rank Organization Committee.
Reserve Board—The Federal Reserve Board.
Reserve Batik—Federal Reserve Bank.
Member Bank—Any bank which has become a member of a Federal Reserve
Bank.
Reserve District—Federal Reserve District.
Reserve City—Federal Reserve City.
Reserve Notes—Federal Reserve Notes.

ORGANIZATION COMMITTEE.
Paragraph
Composed of Secretary of the Treasury, Secretary of Agriculture,
Comptroller of the Currency
2
Majority constitutes quorum
2
Authorized to:
Divide the Continental United States into not less than eight nor
more than twelve reserve districts
2
File certificate showing limits of reserve districts
16
Designate a city in each reserve district as a reserve city
2, 4
Establish a reserve bank in each reserve city
3
Exercise functions chairman board directors reserve bank pending
his selection
34
Formulate regulations for admission of member banks
4
Formulate by-laws for admission of State banks as members
53. 54
Approve reduction capital stock of National banks
145
Give banks 30-days* notice to subscribe for stock
4
Call for unpaid capital stock subscription
4
Approve Comptroller's form of resolution for stock subscription...
16
Call meetings of National bank directors if necessary in organizing
reserve banks
45
Offer unsubscribed stock to public
9
Allot unsubscribed stock to United States
.
11
Designate any five banks (National or State) in each reserve district
to execute "certificate of organization ior reserve banks
—
17
Classify into three groups member banks in each reserve district..
38
Fix date first meeting Reserve Board
61
Kmploy counsel and "experts
3
Take testimony, administer oaths, send for persons and papers
3
Appropriation for expenses
14
FEDERAL RESERVE BOARD.
Composed of:
Secretary of the Treasury and Comptroller of the Currency ex-oftlcio
Secretary of the Treasury ex-officio chairman
Five persons appointed by the President and confirmed by the Senate
Shall take an oath of office




5

58
61
58
59

ALPHABETICAL

INDEX TO FEDERAL RESERVE ACT. 6

F E D E R A L R E S E R V E BOARD—Composed of- • Continued.
Paragraph
Only one shall be selected from any one reserve district
58
Two shall be experienced in banking and finance
59
One shall be designated by the President as governor of the reserve
board, and shall be its active executive ofliccr
59
One shall be designated by the President as vice-governor
59
Term of service ten years
59
Term of first five shall be for 2, 4, 6, 8 and 10 years
59
Removal !>v the President ior cause
59
Salaries, Sl'2,000 per year and traveling expenses
58
Devote entire time
58
N o member shall be an officer or director in or stockholder of any
bank and must take an oath to that effect
61
No member shall for two years after he has ceased to be such
member be employed by any member bank (also applies to Secretary and Assistant Secretaries of the Treasury and Comptroller)
59
Vacancies to be filled by the President
.
61, 62
Senators and Representatives in Congress ineligible
35
Powers:
Make regulations for its own conduct
'4
Exercise general supervision over reserve banks
7a
To formulate regulations governing offices of reserve agents
43
Suspend, administer, reorganize or liquidate a reserve bank
/3
Create additional reserve districts and citics
2
Permit national banks in Alaska or outside the United States, except
in the Philippines, to become members
128
Review the acts of the organization committee as to the creation
of reserve districts and designation of reserve citics
2
Call meetings of Advisory Council
.
78
Direct the Comptroller to bring suit against banks for violation of
Act
7
Examine reserve and member banks
66, 134
May accept State examination of State banks
130
Upon joint application or ten member banks shall order special ex134
amination of reserve bank
Act as a clearing house for reserve banks or designate any reserve
bank to so act
108
Fix charges for reserve and member banks for clearing or collecting
chccks
107
Make regulations and fix charges for the transfer of funds
108
Make regulations limiting liability of member banks
55
Tssuc weekly statements as to condition reserve banks
66
Require reports from member banks
66
Require one reserve bank to rediscount discounted paper of other
reserve banks
67
Suspend any reserve requirement for 30 days and renew suspension
for 15-day periods
68
Make regulations permitting member banks to check against their
reserves in reserve banks
126
Establish a graduated tax on deficiencies of reserves against reserve notes
68
Regulate issue and retirement of reserve notes
65,69.95
Shall be notified each day of volume of outstanding notes of reserve
banks
96
Additional security may be called for to protect notes
96
.May reject application for notes in whole or in part
98
To fix rate of interest on reserve notes
98
Require reserve banks to maintain redemption fund for notes
98
Prescribe regulations for exchange of collateral to secure notes
101
Make assessments for expenses of note circulation
104
May require deposit of gold with Treasury for redemption of notes
100
Increase or decrease number of cities heretofore designated as
reserve or central reserve cities
70
Appoint Class C directors
34, 43
Select chairman and reserve agent for each reserve bank
43
Require bonds of reserve agents
74
Approve salaries and expenses reserve banks
44



ALPHABETICAL

INDEX TO FEDERAL RESERVE ACT.

FEDERAL RESERVE BOARD—Powers—Continued.
Paragraph
Assess reserve banks for expenses of reserve board
60
Suspend or remove directors or officers reserve banks
71
State banks admitted to membership under by-laws to be established
54
Surrender of stock may be required of State banks
57
Surrender of stock by member banks to be subject to regulations
by reserve board
47
Require writing off of doubtful assets of reserve banks
72
Define character of paper that may be rcdiscounted
81
Rediscount, regulations to be made
86
Open market operation regulations to be made
87
Purchase of tax warrants, C C regulations to be made
L,
89
Review and determine discount rates
91
Permit National banks to act as trustees, registrars, etc
76
May grant permission to federal reserve banks to open bank accounts, appoint correspondents and establish agencies abroad..
92
Permit National banks to establish foreign branches
141
May order special examination of ioreign branches
142
Receive from Treasurer lists of government bonds for sale by
member banks
Ill
May require reserve banks to buy government bonds of member
banks, not to excecd in the aggregate $25,000,000 in any one year 111
Shall allot bonds to reserve banks to be purchased by them according to their capital and surplus
112
May add to the cities wherein national banks may not make farm
loans
140
Shall approve applications for reduction of capiLal by national banks 145
Shall fix the salaries of bank examiners
131
Make regulations for the transfer of reserve bank stock
13
Shall report annually to Congress
64
May employ attorneys, experts, assistants and clerks
77
May have quarters in the Treasury
59
First meeting to be held in Washington
61
FEDERAL RESERVE BANKS.
Organization:
Upon the establishment of not less than 8 nor more than 12 districts
and selection of a reserve city in each, the Comptroller shall forward to national and other banks in each district resolutions subscribing for stock, to be adopted by boards of directors of applying banks. When the minimum capital of $4,000,000 has been
subscribed for in a district, the Committee or Board shall designate five banks applying for membership in a district to execute
the certificate of organization of a reserve bank, and upon the
filing of this certificate with the Comptroller, the reserve bank
shall become a body corporate
16, 17. 18, 19
Board of Directors:
F.ach reserve bank shall be conducted by a board of nine directors,
each serving for three years, and divided into classes A. B and C:
the first three of each class shall, however, serve for 1, 2 and 3
years, respectively
29. 31, 46
Class A directors shall be chosen by and be representative of the
stockholding banks
32,38 42
Class B directors shall be representative of commercial, industrial
or agricultural pursuits, and are to J)e chosen by the stockholding
banks
33.38-42
No Class B director shall be an officer, director or employe of any
bank
36
Class C directors are. to be chosen by the reserve board
34. 43
No Class C director shall be an officer, director or employe, or
stockholder of any bank
'
37
Class C directors shall have been residents for 2 years of the districts in which appointed
43
v
One of Class C directors, possessing tested banking experience,
shall be designated by the reserve board as Chairman of the
board and Reserve Agent
43



7

ALPHABETICAL

INDEX TO FEDERAL RESERVE ACT. 8

F E D E R A L RESERVE BANKS—Board of Directors—Cont'd. Paragraph
One possessing tested banking experience, shall be designated as
Deputy Chairman of the board and Deputy Reserve Agent......
43
The Chairman and Reserve Agent is to receive compensation fixed
by the resei ve board
••
43
The Chairman shall be the official representative ot the reserve board
and shall make regular reports to it
43
Members of boards oi director.-, are to receive reasonable allowances
for expenses and may receive compensation, to be approved by
the reserve board and paid by the banks
44
No Senator or Representative in Congress shall be a director
3o
Capitalization:
No reserve bank shall commence business with a subscribed capital
of less than $4,000,01)0
j
Siock is to be issued in shares of $100
4/
.National banks are required to subscribe in an amount equal to 6c/o
oi their capital and surplus within 30 days after noticc by the
organization committee or the reserve board that the districts
have been defined and reserve bank cities designated
4
Payments for stock to be in gold or gold certificates, one-sixth on
call oi reserve board; one-sixth within three months; and onesixth within six months thereafter. The balance shall remain
subject to call by the reserve board
4
Double liability attaches to owners of stock
5
Stock shall not be transferred or hypothecated
47
State banks and trust companies admitted to membership on same
terms as national banks as to capital subscription
53
Individuals or corporations are to be given opportunity to subscribe
to the capital oi reserve batiks in the event the subscription by
banks docs not furnish required capital
9
Amount of public stock that may be held by single corporation or
person limited to $25,000
10
The United States inav be allotted stock in the event the banks and
the public do not furnish sufficient capital for the regional banks.
11
Stock not held by member banks shall have no voting power
12
Powers:
To adopt and use a corporate seal
20
To have succession ior twenty years
21
To make contracts
22
To complain or defend in any court of law or equity
23
To appoint officers, employes, etc., and require bonds
24
To prescribe by iis board of directors by-laws for its conduct
25
To exercise all powers prescribed by law and such incidental
powers as are necessary to the conduct of banking
26
To receive deposits from the United States and from its member
banks
80
To rcceivc solely for exchange purposes, deposits from other reserve
banks
80
Required to maintain against its deposits a reserve equal to 35% in
gold or lawful money; and reserves in gold equal to 40% against
its notes in actual circulation
97
Deposits to consist of lawful money, national bank notes, federal
reserve notes or checks and drafts upon solvent member banks
payable upon presentation
80
Discounts:
May discount upon the indorsement of any of its member banks,
notes, drafts and bills of exchange issued or drawn ior agricultural, industrial or commercial purposes, or-to be used for such
purposes; the reserve board to have the right to define the character oi the paper to be thus discounted
81
May not discount notes, drafts or bills covering investments or
issued or drawn for the purpose of trading in stocks, bonds or
other investment securities
81
Maturity at the time of discount of above paper must not exceed
ninety days
•
81



ALPHABETICAL

INDEX TO FEDERAL RESERVE ACT.

F E D E R A L R E S E R V E BANKS—Discounts -Continued.
Paragraph
Notes, drafts and hills drawn or issued for agricultural purposes or
based on live stock, having a maturity not to exceed six months
may be discounted to a limited amount, the extent of which to be
fixed by the reserve board
81
May discount acceptances based on importation or exportation of
goods having a maturity not exceeding three months and indorsed
by at least one member bank, but not in amount to exceed onehalf the capital stock and surplus of the bank for which the rediscounts are made
82
Jixcept bills of exchange drawn in good faith against existing
values the aggregate discounts of paper bearing the same name
shall not exceed ten per cent, of the capital and surplus of the
bank for which the rediscounts arc made
83
All rediscount operations to be subject to such restrictions, limitations and regulations as may be imposed by the reserve board
86
Rates of discount are to be established from time to time, with the
approval of the reserve board, fixed with a view of accommodating commerce and business
91
#
To purchase from member banks, and to sell, with or without its
indorsement, bills of exchange arising out of commercial transactions
90
Open market operations permitted and defined
87
To deal in gold coin or bullion at home or abroad and make loans
thereon
88
T o exchange federal reserve nores for gold coin or gold certificates
88
To borrow gold coin or bullion, pledging acceptable security, including United States bonds
88
To buy and sell bonds and notes of the United States and obligations of a State or a political subdivision thereof of not over six
months' maturity, and issued in anticipation of assured revenues.
89
To establish accounts with other reserve banks for exchange purposes
92
To open and maintain bank accounts in foreign countries
92
To establish agencies in foreign countries for the purpose of purchasing and selling bills of exchange of not over 90-days' maturity
and having two signatures
'
92
Government Deposits:
Reserve banks arc to be the fincal agents of the government, in
which government funds may be deposited, except funds in the
Treasury for the redemption of circulating notes
93
Note Issue:
The issue of reserve notes l>y the government is authorized at discretion of reserve board to make advances to reserve banks upon
application by such banks
95, 96
Application may be rejected in whole or in part by reserve board..
98
Such notes are to be obligations of the United States and receivable by all reserve and member banks and for all taxes, customs
and other public dues
95
Redeemable in gold on demand at the Treasury of the United States,
or in gold or lawful money at any federal reserve bank
95
Secured by reserves in gold of not less than 40 per cent, of notes
in circulation, and collateral security consisting of notes and bills
accepted for rediscount in an amount equal to the notes in actual
circulation
96, 97
They are to be a first lien on all of the assets of the issuing bank..
98
Reserve notes shall bear upon their faces a distinctive letter and
serial number to identify the notes of each reserve bank
97
Reserve notes of one reserve bank received by another shall be at
once returned to the issuing bank for credit or redemption
97
N o reserve bank shall pay out the notes of another under penalty
of a ten per cent, tax on the amount of the notes so paid out
97
Reserve notes presented for redemption at the Treasury shall be
redeemed out of the redemption fund and returned to the issuing
bank
97
Reserve notes unfit for use to be returned to the Comptroller for
destruction
97



9

10

SUBJKCT INDEX TO FEDERAL RESERVE ACT.

F E D E R A L R E S E R V E BANKS- Note Issue -Continued.
Paragraph
Rate of interest to be charged issuing banks to be fixed by reserve
98
board
Reserve banks required to maintain with the Treasury a sum in
gold sufficient in the oninion of the Secretary of the Treasury,
but in no event less than 5% of outstanding notes to redeem the
notes presented; such fund to be a part of the 40% r c " c m p t < I2 n O Q
fund
;
Reserve notes presented to the Treasury otherwise than tor redemption may be exchanged for gold out of the redemption fund and
returned to the reserve bank of issue, or the notes may be returned to the issuing bank for the credit of the United S t a t e s . . . .
9/
Reduction of reserve notes in circulation and reduction of liability
therefor bv issuing banks may be accomplished by# the deposit of
notes, gold, gold certificates or lawful money with the reserve
agent; federal reserve notes so deposited not to be reissued
99
Collateral securities for the notes may be withdrawn and other
securities substituted
101
Reserve notes to be engraved and printed under the jurisdiction of
the Secretary of the Treasury and Comptroller of the Currency..
102
Reserve notes shall he in denominations of $5, $10, $20. $50 and $100 102
Reserve notes shall be kept available for issue in the Treasury, subtreasuries and mints
103
Expense of issue shall be borne by reserve banks
104
#
Section 5174 R. S. providing examination of plates, dies, etc., of
national bank notes, made applicable to reserve notes
^5
Extends existing appropriations and materials for preparation of
reserve notes
106
Circulating Notes on U. S. Bonds:
Upon deposit of United States bonds bearing the circulation privilege with the Treasurer, reserve banks may issue circulating
notes to the amount of the face value of the bonds, no limit
being placed on the amount that may be so issued
27, 114, 115
Notes issued on bonds shall be the obligation of the issuing banks,
and issued in the same form and tenor and redeemed under the
same terms and conditions as national bank notes
115
Bond Refunding:
After December 23, 1915, a member bank desiring to retire any
part of its circulation shall file with the Treasurer of the United
States an application to sell at par and interest its bonds to secure
the circulation to be retired. The reserve board is given authority
to require reserve banks to purchase these bonds to an aggregate
amount of $25,000,000 in any one year, the bonds to be paid for in
lawful money and the circulation outstanding secured by them
retired, and the purchasing bank permitted to issue its own circulation to the face value of the bonds
110-115
In lieu of issuing circulation against the bonds purchased of member banks, reserve banks are authorized to exchange them, onehalf for one year 3% United States gold notes, and one-half for
30-year 3% gold bonds without the circulation privilege, the bank
obligating itself to redeem the one-year notes at maturity for a
period of thirty years, the government to issue to it new notes in
lieu of those redeemed
116, 117
One-year gold notes may be exchanged for 3% thirty-year bonds in
the dircrelion of the reserve board
118
Clearing-house Functions:
Reserve board authorized to require a reserve bank to exercise the
functions of a clearing house for the reserve banks, and also may
require each reserve bank to exercise such functions for its
member banks
_
Reserve banks shall receive on deposit at par from member or
reserve banks checks and drafts drawn on any of its depositors;
and when remitted by a reserve bank, checks and drafts drawn on
funds sn any reserve or member bank



108

107

ALPHABETICAL

INDEX TO FEDERAL RESERVE ACT.

FEDERAL RESERVE BANKS- Clearing-house Functions—Cont'd.
Paragraph
Actual expenses incurred in collecting and remitting funds, or (or
exchange sold arc not prohibited. "The Federal Reserve Board
shall, by rule, fix the charges to be collcctcd by the member
banks from its patrons whose checks are cleared through the
federal reserve banks and the charge which may be imposed for
the service of clearing or collection rendered by the Federal Reserve Bank"
107
May rcceivc eligible paper as one-half oi each installment of reserves deposited by member banks
124
Reserves of member banks on deposit with reserve banks may be
checked against
126
Earnings:
Stockholders to receive 6% cumulative annual dividend after ail
expenses are paid
49
AfLer dividend payments, one-hall' of the net earnings shall go into
a surplus fund until it shall aggregate 40% of paid in capital stock
49
Remainder to be paid to the United States as a franchise tax, the
Secretary of the Treasury to have discretion to use it to supplement the gold reserve or to reduce the government's bonded indebtedness; surplus after liquidation to go to the United States.. 49, 50
Except on real estate reserve banks arc exempt from taxation....
51
Examinations:
Reserve banks to be examined at least once a year
134
Upon joint application of ten member banks, reserve board shall
order a special examination of a reserve bank
134
Reserve banks may obtain the examination of a member bank....
132
Branch Banks:
Branches reserve banks shall be established in the bank's own
district
15
May be established in a district in which a reserve bank lias been
suspended
15
Management of branches to be by a board of seven directors, four
selected by reserve bank and three by reserve board
15
Reserve bank to designate one director as manager; all to have
same qualifications as directors of reserve banks
15
Foreign agencies may be established by reserve banks; bank accounts maintained in foreign countries and correspondents appointed
92
MEMBER BANKS.
All national banks are required and State banks and trust companies are authorized to signify their acceptance of the Act, arid
become member banks by subscribing to the capital stock of the
reserve bank of their district
4, 53
Failure of national banks to become members forfeits their rights,
7
privileges and franchise if they do not join within one year
Upon failure of national banks to accept the provisions of Act
within 60 days, they shall cease to act as reserve agent
6
Directors personally liable for damages for failure to comply with
Act, except for failure to join within one year
7
Application for stock
16
No discrimination in favor of or against a me rubor bank is permitted on the part of reserve banks
30
Discounts, advancements and accommodations are to be made by
reserve banks with due regard for the claims and demands of
other member banks
30
The board of directors of each member bank shall elect a district
reserve elector, and shall nominate candidates for A and B
directors of reserve banks, to be voted for and elected by the district reserve electors
39, 40
Upon increasing or decreasing its capital stock, a member bank
must correspondingly increase or decrease the amount of capital
stock it owns in the reserve bank
47



11

ALPHABETICAL

INDEX TO FEDERAL RESERVE ACT. 12

M E M B E R BANKS—Continued.
Paragriph
Acccptance: Any member bank may accept drafts or bills of
exchange drawn upon it growing out of transactions involving the
importation or exportation of goods, having not more than six
months' sight to run, to an amount in the aggregate not to exceed one-half its capital and surplus
84
Exchange charges may be made by member banks
107
Depositaries: Member bank® may be used as government depositaries
94
No government funds shall be placed in banks not members
94
Circulation: Member banks may retire their circulation, and atter
December 23, 1915, may sell their bonds to reserve banks up to
an amount aggregating $25,000,000 a year, if reserve board
approves
110-111
Deposit of bonds with Treasury not required
109
Reserves: Member bunks are required to keep reserves as follows:
In central reserve cities 18% of demand and 5% of time deposits.
Of this, 6/18 to be in its own vaults; 7/18 in the reserve bank,
and the balance in its own vaults or with the reserve b a n k . . . . . .
123
Member banks in reserve cities, 15% of demand and 5% of time
deposits. Oi this 6/15 in its own vaults for 3 years, thereafter
5/15. In reserve bank for three years 3/15; then increasing
1/15 for each of three succeeding half years; thereafter 6/15.
The balancc for first three years in own vaults or reserve bank, .
or in national banks in reserve or central reserve cities. Aiter
three years in own vaults or reserve bank or both
.122, 123
Member banks not in reserve or central reserve cities, 12% of
demand and 5% of time deposits. Of this, 5/12 in its own vaults
for 3 years, thereafter 4/12. In reserve bank for one year 2/12;
then increasing 1/12 for each of three succeeding half years;
thereafter 5/12. Balance for first three years in own vaults or in
reserve bank or in national banks in reserve or central reserve
cities. After 3 years in own vaults or reserve bank or both
121
Demand deposits arc those payable within 30 days
119
Time deposits are those payable after 30 days, and all savings accounts and certificates of deposit subject to not less than 30 days'
notice before payment
119
Interest may be paid on time deposits
139
Member banks may check against reserves held by reserve banks..
126
Ouc-half of cach installment of reserve deposits with reserve bank
may be eligible paper
124
Stale banks as member banks may for .first 3 years keep their
reserves as required by law of State
125
The 5% redemption fund in the Treasury may not be counted as a
part of the reserve
129
Method of estimating reserves
127
May make no new loans or pay dividends when reserves arc below
requirements
126
Deposits of member banks with non-member banks prohibited in
excess of 10% of capital and surplus of depositing bank
125
Discount privilege shall not be extended by member banks to nonmember banks, cxcept with consent of reserve board
125
Limitation as to fees and benefits to directors, officers and employes of member banks
136
Examinations: Member banks to be examined at least twice a
year by the Comptroller of the Currency; examiners given power
to administer oaths, shall report to Comptroller
130
State banks as members to submit to examinations and regulations
prescribed by organisation committee or reserve board
54
State examination of State banks as members may be accepted....
130
Reserve banks may order special examinations of member banks..
132
Shall make reports to reserve board when required
66
N o bank shall be subject to visitorial powers other than authorized
by law or exercised by the courts or Congress
133
Jurisdiction of examiners
130



ALPHABETICAL

INDEX TO FEDERAL RESERVE ACT.

13

MEMBER BANKS— Continued.
Paragraph
CoiL of examination to be borne by member banks; examiners to
receivc salaries
131
Loans and gratuities to examiners prohibited
135
Foreign Brunches oi Xaiional Banks arc permitted to banks having
u capital and surplus oi $l,UUO,UuO or over, also branches in United
States dependencies with approval oi reserve board
141
Accounts oi ioreign branches must be kept independently; examinations provided
142
Farm Land Loans:
National banks as members not located in a central reserve city
may loan for periods oi five years 25c/o oi their capital and surplus
or 1/3 of their time deposits on unincumbered farm lands
139, 140
Limitations oi indebtedness of national banks
85
Prohibitions in Revised Statutes made applicable respecting liability, loans on own bank stock, impairment oi capital, payment of unearned dividends
55
May reduce capital stock
145
National banks in Alaska or outside the Uniied States may remain
non-member banks, or, except those in the Philippine Islands
may become member banks oi any one oi the districts
128
Dissolution of national bank shall not abolish liability of stockholders
8
Double liability of stockholders provided
138
Extension of double liability for 60 days aiter transfer oi stock in
case oi subsequent iailure of bank
138
State banks and trust companies inay convert into national bank..
52
Application for membership oi State banks
53
Membership requirements
53-57
Trust Functions Granted:
The rights to act as trustee, executor, administrator, or registrar
oi stocks, may be granted national banks as members
76
FEDERAL ADVISORY COUNCIL.
Created
Majority constitutes quorum
Compensation and allowances
Powers:
To confer with Federal Reserve Board
Make oral or written representations
Call for information and make recommendations
T H E PRESIDENT OF T H E UNITED
Appoints members reserve board
Fills vacancies on reserve board
May place employes in classified service

78
78
78
79
79
79

STATES.
58
62
77

T H E SECRETARY OF T H E TREASURY.
Member organization committee
2
Ex-oilicio chairman reserve board
58, 61
Powers as secretary not diminished
63
Ineligible for two years tor position with member bank
59
Holds United States stock in regional banks
11
Dispose of United States stock in reserve banks
11
Dispose of earnings derived by the United States from reserve banks
50
Deposit general fund of Treasury in reserve banks
93
Constitute reserve banks fiscal agents of government
93
Designate member banks as depositaries
94
Fix amount of note redemption fund in Treasury....
97, 98, 100
Direct Comptroller to have prepared plates and dies ior printing
notes
102
Prescribe form, and tenor of notes
102
May make available ior preparation of notes any appropriations
already made for engraving and printing and for distinctive paper 106



ALPHABETICAL

INDEX TO FEDERAL RESERVE ACT. 14

T H E SECRETARY OF T H E TREASURY—Continued.
Paragraph
Prescribe form and tenor of notes issued by reserve banks on government bonds
•••
Approval required to exchange 2% bonds for one year 3<fo notes
and 30-year 3% bonds
•• •
••*•
JJJ?
May request reserve banks to redeem one-year 3% gold notes
no
t9
May exchange notes for bonds
:\ '\
}{7
Prescribe issue and tenor of 3% notes and bonds
1 A/
Announce establishment of federal bank for enforcement of reserve
provision
• • * • • • •• • * * • •
•• •
May borrow gold pledging bonds or buy gold selling bonds
COMPTROLLER OF T H E CURRENCY.
Member organization committee
Member reserve board
Compensation increased
^
Court proceedings to enforce Act in Comptroller s name
/
Forward to banks stock subscription resolution
Jo
Receive and preserve organization certificate
Authorize reserve banks to commence business
....
Receive from reserve board directors' certificate of increase anc *
decrease in capital stock
. . . . 47, 4°
Issue certificate upon conversion of "other" banks into national
bank
52
Ineligible for position with member bank
•.
Bureau of the Comptroller created
Issue and retire federal reserve notes
69
Prepare plates and dies for printing of notes
102
Destroy unfit federal reserve notes
.
.
97
Deposit finished notes in Treasury, sub-treasuries and mints
103
Have control and custody of plates and dies
104
Issue circulating notes to reserve banks on deposit of United States
bonds
.t
US
Examine member banks at least twice a year.
130
Recommend to reserve board salaries of examiners
131
Approval necessary for reduction of capital of national banks
145
T R E A S U R E R O F T H E U N I T E D STATES.
Shall receive application from member banks to sell their bonds
securing circulating notes
Shall report such applications quarterly to reserve board
Shall notify member banks of amount of bonds sold for t h e m . . . .
Receive bonds on deposit from reserve banks

110
Ill
113
115

A S S I S T A N T SECRETARIES OF T H E TREASURY.
Ineligible for position with member bank
59
Reserve Agent:
Shall hold gold and lawful money for redemption of outstanding
notes
100
Shall transmit as much gold to the Treasury for the redemption of
notes as the Secretary may request 1
100
Shall exchange collateral deposited to secure notes, upon request of
reserve bank
101
Inconsistent provisions of law repealed
143
Gold standard act reaffirmed
„
143
Emergency Currency Act extended to June 30, 1915
144
Tax changed on emergency currency note
144
Court decisions to affect only that sentence or paragraph of the
Act in controversy
146
Right to amend, alter or repeal reserved
147
Approved Dec. 23, 1913
148
Regulations under Federal Reserve Act
58-59




ALPHABETICAL INDEX TO FEDERAL RESERVE ACT.
A
Paragraph
Acceptances
82, 80
Bankers
87
Accept drafts or bills of exchange
84
Accounts
80, 92, 142
Advisory council
78
Agencies in foreign countries
92
Agricultural products
81
Alter, amend or repeal act
147
Approved
148
Assets—doubtful to be written oft
72
Assistant Secretaries of the Treasury not eligible for position with
member bank
59
B
Bank—meaning of
Banks, adopt resolution
Bills
Accepted for rediscount as security for notes
Bills of exchange
Board, meaning of
Bonds—State and political sub-divisions

1
16
81
96
81, 83, 84, 85, 86, 87, 92
1
89

C
Cable transfers
87
Capital stock
4, 47
May be reduced by national banks
145
State banks must possess sufficient capital to bccomc national
54
Certificate of organization
17
Charter bonds
109
Checks
80
Circulation:
By Federal Reserve Banks
27, 114, 115
Cancel and retire
113
Federal Reserve Bank- permitted to take out
114
Federal Reserve Bank- not limited
115
Limit of li:ibili;y
85
May retire after two years
110
National bank notes
80
Citics—Federal Reserve
2
Cities -Tn which banks may make farm loans
140
Cities—Reserve and central reserve
122,123
Cities—Increase or decrease number of reserve or central reserve
70
Classified service
77
Clearing checks
•
107
Collateral
88, 101
To secure notes
96
Commercial transactions
1
81, 92
Comptroller of the Currency:
Approve reduction capital national banks
145
Approve State bank conversion into National Association
52
Authorize Federal Reserve Bank to begin business
28
Certificate showing change Federal Reserve Bank stock
47, 48
Compensation increased
58
Control and custody of plates and dies
104
deposit finished notes in available places
103
Examine member banks
130
Forward application blanks
16
Ineligible to hold offioe in any member bank
59




15

16

ALPHABETICAL INDEX TO FEDERAL RESERVE ACT.

Comptroller of the Currency-Continued.
Issue and retirement of Federal Reserve notes
Issue and retirement of bond secured notes of reserve banks
Member oi organization committee
Member of Federal Reserve Board
Organization certificate transmitted to
Prepare plates and dies for printing notes
Recommend salaries examiners
State banks as members to report condition
State banks as members to report dividends
Suit for dissolution national bank
To give certificate on conversion
Upon filing certificates Federal Reserve Board shall have power
Correspondents
Court decisions limited
Credit, lines of
D
Deposit, limit in non-member
Deposits:
Current funds
Demand
Exception to liability
Government
Philippine Islands
Received from member banks at par
By Federal Reserve Banks
Redemption fund
To retire Federal Reserve notes
Time
Directors:
Class "A"
Class "B"
Class 11B" cannot be officer any bank
'
Class "C"
Class "C" cannot be officer or stockholder any bank
Compensation
Federal Reserve Bank to control
How chosen
Number and term of office
Qualifications branch banks
Qualifications Federal Reserve Banks
State institutions continue
Subject to orders, Federal Reserve Board
Terms of office
Vacancies
Discount
Establish rates
Extended by Federal Reserve Bank
Federal Reserve Banks required
Limit as to amount of acceptances
Ninety-day bills
N o member shall act as medium of a non-member
Rates fixed by board
Dissolution:
National banks
Not impair remedy
District reserve elector
Districts:
Established by
Geographical limits
Number
"
.
Readjusted
Dividend
Cumulative
Unearned prohibited

Liability for dividends




Paragraph
69
115
2
38
18
102
131
56
56
7
52
19
92
146
132
125
80
11?
85
93
94
107
107
93
99
119
32
33
36
34, 43
37
44
24
1.
38
31
15
36.37
52
30
46
46
81
91
30
67
82
81
125
67
7
8
39
16
4
2
2
47
49
55

85

ALPHABETICAL INDEX TO FEDERAL RESERVE ACT.

17

Paragraph
5. 138
80, 81

Double liability
Drafts

Earnings
49, 50
Electors
39
Eligible for discount
81
For part reserve
124
Emergency Currency Act extended
144
Tax changed
144
Examinations:
Branches abroad
142
By Federal Reserve Banks
132
By State authorities
130
Cost to be borne by member banks
131
Every member bank twice each year
130
Of Federal Reserve Banks
134
Special examination of Federal Reserve Bank on application ten mem
bcr banks
134
Examiners:
Appointment
130
Jurisdiction of
130
Salaries
131
Executor
76
Expenses for collecting checks
107
Experienced in Banking:
Deputy Federal Reserve Agent
43
Federal Reserve Agent
43
Members of Federal Reserve Board
59
F

Federal advisory council
78
Federal Reserve agent
43, 96
To give bond
74
Federal Reserve Banks:
Certificate of organization
17
Deal in gold coin and bullion
88
Deposit United States Bonds and receive circulation
27
Designate manager of branches
15
Exempt from taxes
51
General supervision
75
How organized
16
Into liquidation
50
Issuing bank to have redeemed notes returned
97
Liabilities incurred
85
May exchange bonds purchased from member banks for one-year
notes and thirty-year 3% bonds
116, 117, 118
Not to commence business until authorized by Comptroller
28
19
Powers
Receive applications of State banks
53
Required capital
14
Shall control exchange one-year gold notes for 3% thirty-year bonds
118
Shall establish branches
15
Stock, amount required by members
4
Stock, public subscription
9
Stock, allot to United States
11
Suspend for violation
73
To be fiscal agents of the government
93
To bear expense of issue of notes
104
To establish rates of discount
91
To purchase and sell bills of exchange
90
To receive deposits of government funds
93
Under control board of directors
.30
Federal Reserve Board:
(See Powers Federal Reserve Board)
Membership
58



18

ALPHABETICAL INDEX TO FEDERAL RESERVE ACT.
Paragraph

79
Federal Reserve notes
Application ior
«o
Exchange for gold
"."VI"
May be exchanged for gold out of redemption fund when presented to
Treasury ior other purposes than redemption
j"
Not to be reissued
Other appropriation made available for preparation
^
Redemption funds
(i
Unfit for use
At
Fees, other usual salary
Fiscal agents oi the United Stales
Five per cent fund
:
JJ
Foreign branches
{"J*
Accounts to be kept independently
Franchise Tax
G
Gold certificates
88, 97
Gold, notes redeemed in
g
Gold redemption fund
Gold reserve
-Jj
Governor and vice governor reserve board
59
Importation or exportation
Indorse
Ineligible to hold oifice in any bank:
Comptroller of the Currency
Directors, Class B
Directors Class C
Members oi Federal Reserve Board
Secretary of the Treasury
Installment-Reserve

_ §2
. . . . . 8 1 , 82. 83. 87, 90
58
36
37
61
58
121

L

Lawful money
Laws amended, Section 5154
Section 324
Section 5202
Section 5174
Inconsistent provisions repealed
Gold standard act not repealed
Liquidation Federal Reserve Hank
Live stock paper
Loans
Loans to bank examiners prohibited
Loans on farm lands
Member bank, meaning of

M

1

N

National Banks:
Fail to act
Required to join
National Bank notes
Redemption funds
Note issues
Notes
Deposited with Treasury, United States
Lien on all assets
Maturity
Not to be reissued
Plates and dies
Redemption
Serial number
When issued on bonds



80, 95, 97, 99, 100, 101
52
65
85
105
143
143
50
81
88
135
139

6, 7
4
80
93
95
81
103
98
81
99
102
97, 100
97
115

ALPHABETICAL INDEX TO FEDERAL RESERVE ACT.

19

O
Oath:
Paragraph
Members Federal Reserve Board must subscribe to oath of office....
59
Members Federal Reserve Board certify under oath not an officer or
stockholder of any ba;:k
61
National Bank Examiners may put officers under oaili
130
Officers, amenable to penalties '
56
Open market operations
87
Organization ComuiiLte
2
Approve reduction capital stock oi national bank*
145
Approve Comptroller's form of resolution for stock .-subscription
16
Call meetings of directors
45
Classify member banks into groups
38
Formulate by-laws for admission of State banks as members
54
Give notice to subscribe
4
Permit applying bank to become stockholders Federal Reserve Bank
53
Powers of
3
Powers to incur expenses
14
Prescribe examinations for applying banks
54
To act as chairman of Board. Federal Reserve Bank
34
To fix date for the first meeting Federal Reserve Board
61
To establish districts
16
To receive applications from State banks
53

P Penalty for making loan to bank examiner
135
Penaltv for paying out notes
97
Plates and dies
102. 104, 105, 106
Postal savings deposits
94
Powers of the Federal Reserve Board
80
To add to or reclassify cxisLing reserve or central reserve cities
70
To adopt regulations to control local office
43
To adopt rules to govern branches Federal Reserve Bank
15
T o adopt rules for transfer stock
13
To appoint Deputy Federal Reserve Agent
43
To approve application of any Federal Reserve Bank for the exchange at par 3% bonds for one-year 3% gold notes
118
To approve application of Federal Reserve Bank for exchange 2%
United States Bonds one-year notes 3</c without circulation privilege
116
To approve applications for reduction capital of national banks
145
To approve application for special examinations of member banks by
Federal Reserve Banks
132
T o approve compensation fixed by Federal Reserve Bank Boards...
44
To approve compensation of the members of the Federal Advisory
Council
78
To authorize issue of notes
95
To authorize examinations by State authorities or direct special examinations of State institutions
130
To authorize suit to dissolve national banks
7
To call for additional securities to protest notes
96
To call for remainder of stock subscription
'4, 47
To call meetings Federal Advisory Council
79
To consent to national banks located in Alaska to bccomc member
128
banks of any one of the reserve districts
To designate chairman board
34
To designate Class "C" directors
34, 43
To designate Federal Reserve Agent
43
To employ attorneys and others
77
To establish by-laws in re applications made by State banks
54
T o establish a graduated tax on reserves below requirements
68
To examine and require reports from Federal Reserve and member
banks
.
66
T o exercise the functions of a clearing house for Federal Reserve
Banks, or may designate a Federal Reserve Bank to exercise such
functions
.
108
T o exercise supervision over Federal Reserve Banks
75
To fix compensation Federal Reserve Agent
43



20

ALPHABETICAL INDEX TO FEDERAL RESERVE ACT.

Powers of Federal Reserve Board Continued.
Paragraph
To fix by rule charges to be collected by member banks from patrons
107
for collecting checks
To fix the rate of interest to be paid by Federal Reserve Banks ior
notes issued to it
First meeting to be held in Washington
6/
To fix penalties under which member banks may check against reserve 126
To fix salaries of bank examiners upon recommendation oi Comptroller
131
Foreign operations reserve banks subject to consent Reserve Board..
92
To give permission to a member bank to apply ior discount for a
non-member
125
To grant in whole or in part, or reject entirely any application ior
Federal Reserve notes
'
98
To grant special permission to national banks to act as trustee, etc..
76
To have general supervision over the issue oi national currency
65
To have control over Board of Directors of Federal Reserve Banks..
30
To have power to add to list, of cities in which National banks shall
noL be permitted to loan on real estate
140
To have power to determine character oi the paper
81
To issue regulations fixing charges governing the transfer of funds..
108
To levy assessment semi-annually
60
To make regulations for its own conduct
74
T o make rules and regulations for purchase and sale of bills eligible
for discount
87
To make rules and regulations for purchase of bonds of any State, etc.
89
To order an examination once cacls year of each Federal Reserve Bank 134
To permit or require Federal Reserve Banks to discoun; paper of
other Federal Reserve Banks
67
To permit Slate banks L purchase stock Federal Reserve Bank
O
53
To prescribe examinations applying banks
54
To prescribe rules relative to State banks
55
101
T o prescribe rules and regulations for withdrawal of collateral
To require bonds oi Federal Reserve Agents
74
To require Federal Reserve Bank to maintain redemption fund with
United States
98
To require Federal Reserve Banks to purchase bonds from banks
111
To require deposit of gold with Treasury ior redemption of notes..
100
To require any bank to surrender stock Federal Reserve Bank
57
To require the writing of! of doubtful assets
72
To restore membership upon proof
57
To restrict and limit rediscounts of domestic and foreign bills of exchange and acceptances
86
To review discount rates established by Federal Reserve Banks
91
To suspend operation of any Federal Reserve Bank
73
To suspend member banks iroiri privileges
57
To suspend or remove any officer or director of a Federal Reserve Bk.
71
To suspend reserve requirements
68
To supervise the issue and retirement of Federal Reserve notes
69
Protest
81
Public subscriptions
9
Quorum—Federal Advisory Council
Organization Committee
Rates:
Discount fixed by board
Rediscounts
Eligible for
Limitations
Refunding bonds
Repeal
Reports:
Board may require
By Federal Reserve Agent
By State banks becoming members



Q

78
2

R
67
82
87
86
110
147

!•!.".!!.

66
43
56

ALPHABETICAL INDEX TO FEDERAL RESERVE ACT.

21

Reports —Continued.
Paragraph
Federal Reserve Agent on notes
96
Federal Reserve Board
64
National Bank Examiners to report to Comptroller
1,10
Publish weekly
66
Representatives in Congress
_
55
Reserve:
Suspend requirements
68
Reserve Agent:
Cease to act
6
Located in reserve district
14
Reserves:
Against demand deposits'
121
Against Time deposits
:
121
Balances in reserve banks to count as reserve
127
•Bank in a central reserve city
123
Bank in a reserve city
122
Bank not in a reserve city
121
Bank reserves
119
Eligible paper half each installment
124
Estimating reserves
127
Federal Reserve Banks, deposits
97
Notes
97
Five per cent, iund not to be counted as part of lawful reserve
129
No bank under its reserve shall make now loans or pay dividends
126
State banks joining must comply
54
State bank or trust company as required by State law
125
When to be established
120
With a Federal Reserve Bank may be checked against under rules...
126
Reserve Cities:
Add to and reclassify
'
70
Changing present status
14
Defined
2
Responsibility of .stockholders
138
Regulations under Federal Reserve Act (pages 55 to 59).
S
Salary:
Employes of Federal Reserve Board
77
How raised
60
Members of Advisory Council
78
Federal Reserve Board
58
Secretary oi Treasury:
Announce establishment of Federal Reserve Bank for eniorcenient oi
120
Approve vouchers ior expenses of Organization Committee
14
Dispose of slock Federal Reserve Bank
II
Ex-officio chairman Federal Reserve Board
61
Fix amount oi note redemption fund . . . ,
100
General direction of the Bureau of Comptroller oi Currency
65
Hold stock Federal Reserve Bank
%—
11
May borrow gold, pledging bonds; or may buy gold, selling bonds
143
58
Member of Federal Reserve Board
Organization Committee
2
Net earnings, how used
50
Powers of unchanged
63
Prescribe form of notes issued by reserve banks on government bonds
115
Redemption of notes
93
To assign offices
59
Use other appropriations for preparation of notes
106
Security
88.101
Senators cannot act as officer or director Federal Reserve Bank
35
Shareholders, Federal Reserve Bank individually responsible.:
5
Shares, converted banks
52
State Banks:
Amenable to penalties
56
As members
53
Authorized to join
4



22

AT.PTTABF.TTCAL, INDEX TO FEDERAL RESERVE ACT.

State Hanks—Continued.
Convert into national
Must conform to provisions National Bank J.aw
Stock:
Canceled
Federal Reserve Bank allotted to United States
Increase and decrease
Member banks not transferable
Public
Shares $100
Transfer of
Stocks and bonds
Subscribe to capital stock
Subscriptions, stock Federal Reserve 'Bank
Surplus fund
Balance properly United States
On liquidation Federal Reserve Bank
Suspend, officers and directors Federal Reserve Bank
T
Taxes, exemption
Changed on emergency currency
Terms:
Acceptance
Meaning
5lcmbers Federal Reserve Board
Trust companies in D. C
Trustee, appointment as
Treasurer of the United States:
Notify member batiks of bonds sold
To report applications for sale of bonds
U
United States bonds
Allot to each Federal Reserve Board
Exchange 2% for 3c/o
Federal Reserve Banks to purchase
Refunding
United States one-year 3%
Thirty-year 3%

Paragraph
g?
,7
11
47
4/
^
47
13
81
4, 47
4
49
50
• 50
71
51
144
4
1
59
4
76
112
Ill
81, 88, 89
Ill
116
Ill
110
" 117
117

V
Vacancy in Federal Reserve Hoard
Vacancies Federal Advisory Council
Violations, directors responsible
Voting power, only member banks
Visitatorial powers




61. 62
" 78
!.....!..!
7
12
133

FEDERAL RESERVE ACT.
An Act To provide for the establishment of Federal reserve banks, to
furnish an elastic currency, to afford means of rediscounting commercial paper,
to establish a more effective supervision of banking in the United States, and
for other purposes.
Be it cnactcd by the Senate and House of Representatives
of the
United States of America in Congress assembled, That the short title
1
of this Act shall he the "Federal Reserve Act:
DEFINITIONS.
1. Wherever the word "bank" is used in this Act, the word shall he
held to include State bank, banking association, and trust company,
except where national batiks or Federal reserve banks are specifically
referred lo.
The terms "national bank" and "national banking association 9 ' used
in this Act shall be held to he synonymous and interchangeable. The
term "member bank" shall be held to mean any national bank, State
bank, or bank or trust company which has become a member of one
of the reserve banks created by this Act. The term "board" shall he
held to mean Federal Reserve Board; the term "district" shall be held
lo mean Federal reserve district; the term "reserve bank" shall be held
to mean Federal reserve bank.
ORGANIZATION COMMITTEE—FEDERAL RESERVE DISTRICTS.
2. SEC. 2. As soon as practicable, the Secretary of the Treasury.
I he Secretary of 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 districts, each district to contain only one of such Federal
reserve cities. The determination of said organization committee shall
not be subject to review except by the Federal Reserve Board when
organized: Provided, That the districts shall he apportioned with due
regard to the convenience and customary course of business, and shall
not necessarily be coterminous with any State or States. The districts
thus created may be readjusted and new districts may from time to
time be created by the Federal Reserve Board, not to exceed twelve
in all. 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 to act.
ORGANIZATION OF RESERVE BANKS.
3. 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 located. The said committee
shall supervise the organization in each of the cities designated of a




23

24

FEDERAL* RESERVE ACT. 24

Federal reserve bank., which shall include in its title the name^ of the
city in which it is situated, as "Federal "Reserve Bank of Chicago."
NATIONAL BANKS REQUIRED AND STATE BANKS AND TRUST
COMPANIES AUTHORIZED TO ACCKPT ACT.
4. 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 association within that
district shall be required within thirty days after notice from the
organization committcc, 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 kink, one-sixth of the subscription to
be payable on call of the organization committee or of the Federal
Reserve Board, one-sixth within three months, and one-sixth within
six months thereafter, and the remainder of 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.
RESPONSIBILITY OF SHAREHOLDERS.
5. The shareholders of every Federal reserve bank shall be held
individually responsible, equally and ratably, and not one for another,
for all contracts, debts and engagements of such bank to the extent
of the amount of their subscriptions to such stock at the par value
thereof, in addition to the amount subscribed, whether such subscriptions have been paid up in whole or in part, under the provisions of
this Act.
PENALTY FOR FAILURE TO ACCEPT ACT.
6. Any national bank failing to signify its acceptance of the terms
of this Act within the sixty days aforesaid, shall cease to act as a
reserve agent, upon thirty, days' notice, to be given within the discretion of the said organization committee or of the Federal Reserve
Board.
7. Should any national banking association in the United States
now organized fail within one year after the passage of this Act to
become a member bank or fail to comply with any of the provisions of
this Act applicable thereto, all of the rights, privileges, and franchises
of such association granted to it under the national-bank Act, or under
the provisions of this Act. shall be thereby forfeited. Any noncompliance with or violation of this Act. shall, however, be determined and
adjudged by any court of the United States of competent jurisdiction
in a suit brought for that purpose in the district or territory in which
such bank is located, tinder direction of the Federal Reserve Board,
by the Comptroller of the Currency in his own name before the association shall be declared dissolved. In cases of such noncompliance or
violation, other than the failure to become a member bank under the
provisions of this Act. every director who participated in or assented
to the same shall be held liable in his personal or individual capacity




FEDERAL* RESERVE ACT.

25

for all damages which said bank, ils shareholders, or any other person
shall have sustained in consequence of such violation.
8. Such dissolution shall not take away or impair any remedy
against such corporation, its stockholders or officers, ior any liability or
penalty which shall have been previously incurred.
PUBLIC SUBSCRIPTION TO STOCK.
9. Should the subscriptions by banks to the stock of said Federal
reserve banks or any one or more of them be, in the judgment of the
organization committee, insufficient to provide the amount o£ capital
required therefor, then and 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 slock in saitf
Federal reserve banks, or any one or more of them, as said committee
shall determine, subject to the same conditions as to payment and
slock liability as provided for member banks.
AMOUNT OF STOCK PRIVATELY HELD LIMITED.
10. N o individual, copartnership, or corporation other than a
member bank of its district shall be permitted to subscribe for or to
hold at any time more than $25,OCX) par value of slock in any Federal
Reserve bank. Such stocks shall be known as public stock and may be
transferred on the books of the Federal reserve bank by the chairman
of the board of directors of such bank.
GOVERNMENT STOCK.
11. Should the total subscriptions by banks and the public to the
stock of said Federal reserve banks, or any one or more of them, be,
in the judgment of the organization committee, insufficient to provide
the amount of capital required therefor, then and in that event the
said organization committee shall allot to the United Stales such an
amount of said stock as said committee shall determine. Said United
States stock shall be paid for at par out of any money in the Treasury
not otherwise appropriated, and shall be held by the Secretary of the
Treasury and disposed of for the benefit of the United Slates in such
manner, at such times and at such price, not less than par, as the Secretary of the Treasury shall determine.
VOTING POWER.
12. Stock not held by member banks shall not be entitled to voting
power.
STOCK TRANSFERS.
13. The Federal Reserve Board is hereby empowered to adopt and
promulgate rules and regulations governing the transfers of said stock.
CAPITAL REQUIREMENTS—RESERVE CITIES—APPROPRIATION
FOR ORGANIZATION.
14. N o Federal reserve bank shall commence business with a subscribed capital less that $4,000,000. The organization of reserve districts and Federal reserve cities shall not be construed as changing the
present status of reserve cities and central reserve cities, except in so
far as this Act changes the amount of reserves that may be carried
with approved reserve agents located therein. The organization committee shall have power to appoint such assistants and incur such



26

FEDERAL* RESERVE ACT. 26

expenses in carrying out the provisions of this AcL as it shall deem
necessary, and such expenses shall be payable by the Treasurer of the
United States upon voucher approved by the Secretary of the Treasury, and the sum of §100,000, or so much thereof as may be necessary,
is hereby appropriated, out of any moneys in the Treasury not otherwise appropriated, for the payment of such expenses.
BRANCH RESERVE BANKS.
15. SEC. 3. Each Federal reserve bank shall establish branch
banks within the Federal reserve district in which it is located and
may do so in the district of any Federal reserve bank which may have
been suspended. Such branches shall be operated by a board of directors, under rules and regulations approved by the Federal Reserve
'Hoard. 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.
STOCK SUBSCRIPTION RESOLUTION.
16. SEC. 4. When the organization committee shall have established Federal reserve districts as provided in section two of this Act,
a certificate shall be filed with the Comptroller 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 hoard of directors of
each bank executing such application, authorizing a subscription to the
capital stock of the Federal reserve bank organizing in that district in
accordance with the provisions of this Act.
INCORPORATION OF RESERVE BANKS.
17. When the minimum amount of capital stock prescribed by this
Act for the organization of any Federal reserve bank shall have been
subscribed and 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 an organization certificate which
shall specifically state the name of such Federal reserve bank, the territorial extent of the district over which the operations of such Federal
reserve bank are to be carried on, the city and Stale in which said
bank is to be located, the amount of capital stock and Ihc number of
shares into which the same is divided, the name and place of doing
business of each bank, executing such certificate, and of all hanks
which have subscribed to the capital stock of such Federal reserve bank
and the number of shares subscribed by each, and the fact that the
certificate is made to enable those banks executing the same, and all
banks which have subscribed or may thereafter subscribe to the capital
slock of such Federal reserve bank, to avail themselves of the advantages of this Act.



FEDERAL* RESERVE ACT.

27

18. The said organization certificate shall be acknowledged before
a judge of some court of record or notary public; and shall be, together'
with the acknowledgment thereof, authenticated by the seal of such
court, or notary, transmitted to the Comptroller of the Currency, who
shall file, record and carefully preserve the same in his oflicc.
19. Upon the filing of such certificate with the Comptroller of the
Currency as aforesaid, the said Federal reserve bank shall become a
body corporate, and as such, and in the name designated in such organization certificate, shall have power—
CORPORATE SEAL.
20. First. T o adopt and use a corporate seal.
TWENTY-YEAR FRANCHISE.
21. Second. To have succession for a period of twenty years from
its organization unless it is sooner dissolved by an Act of Congress, or
unless its franchise becomes forfeited by some violation of law.
RIGHT TO MAKE CONTRACTS.
22. Third. T o make contracts.
COURT JURISDICTION.
23. Fourth. To sue and be sued, complain and defend, in any court
of law or equity.
APPOINTMENT OF OFFICERS AND EMPLOYES.
24. Fifth. T o appoint by its board of directors, such officers and
employes as are not otherwise provided for in this Act, to define their
duties, require bonds of them and fix the penalty thereof, and to dismiss
at pleasure such officers or employes.
BY-LAWS REQUIRED.
25. Sixth. T o prescribe by its board of directors, by-laws not inconsistent with law. regulating the manner in which its general business may be conducted, and the privileges granted to it b}'. law may
be exercised and enjoyed.
INCIDENTAL POWERS.
26. Seventh. T o exercise by its board of directors, or duly authorized officers or agents, all powers specifically granted by the provisions
of this Act, and such incidental powers as shall be necessary to carry
on the business of banking within the limitations prescribed by this Act.
FEDERAL BANK CIRCULATION ON GOVERNMENT BONDS.
27. Eighth. Upon deposit with the Treasurer of the United States
of any bonds of the United States in the manner provided by existing
law. relating to national banks, to receive from the Comptroller of the
Currency circulating notes in blank, registered and countersigned as
provided by law, equal in amount to the par value of the bonds so
deposited, such notes to be issued under the same conditions and provisions of law as relate to the issue of circulating notes of national
banks secured by bonds of the United Stales bearing the circulating
privilege, except"that the issue of such notes shall not be limited to the
capital stock of such Federal reserve bank.



28

FEDERAL* RESERVE ACT. 28

APPROVAL OF COMPTROLLER TO COMMENCE BUSINESS.
28. 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.
BOARDS OF DIRECTORS.
29. liverv Federal reserve bank shall be conducted under the supervision and control of a board of directors.
The board of directors shall perforin the duties usually appertaining
to the office of directors of banking associations and all such duties as
are prescribed by law.
30. Said board shall administer the affairs of said bank fairly and
impartially and without discrimination in favor of or against any member bank or banks, and shall, subject to the provisions of law and the
orders of the Federal Reserve Board extend to each member bank such
discounts, advancements and accommodations as may be safely and
reasonably made with due regard for the claims and demands of other
member banks.
31. Such board of directors shall be selected as hereinafter specified
and shall consist of nine members, holding office for three years, and
divided into three classes, designated as classes A, B, and C.
A AND B DIRECTORS.
32. Class A shall consist of three members, who shall be chosen by
and be representative of the stock-holding banks.
33. Class B shall consist of three members, who at the time of their
election shall be actively engaged in their district in commerce, agriculture or some other industrial pursuit.
C DIRECTORS APPOINTED BY FEDERAL BOARD.
34. Class C shall consist of three members, who shall be designated
by the Federal 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 designate one of such directors as chairman of the
board to be selected. Pending the designation of such chairman, the
organization committee shall exercise the powers and duties appertaining to the office of chairman in the organization' of such Federal reserve bank.
INELIGIBILITY OF SENATORS AND CONGRESSMEN FOR
EMPLOYMENT.
35. N o Senator or Representative in Congress shall be a member
of the Federal Reserve Board or an officer or a director of a Federal
reserve bank.
LIMITATIONS OF DIRECTORS.
36. N o director of class R shall be an officer, director, or employe
of any bank.
37. N o director of class C shall be an officer, director, employe, or
stockholder of any bank.
ELECTION OF DIRECTORS.
38. Directors of class A and class B shall be chosen in the following
manner:



FEDERAL* RESERVE ACT.

29

The chairman of the board of directors of the Federal reserve bank
of the district in which the bank is situated or, pending the appointment of such chairman, the organization committee shall classify the
member banks of the district into three general groups or divisions.
Each group shall contain as nearly as may be one-third of the aggregate number of the member banks of the district and shall consist, as
nearly as may be. of banks of similar capitalization. The groups shall
be designated by number by the chairman.
39. At a regularly called meeting of the board of directors of each
member bank in the district it shall elect by. ballot a district reserve
elector and shall certify his name to the chairman of the board of
directors of the Federal reserve bank of the district. The chairman
shall make lists of the district reserve electors thus named by banks
in each of the aforesaid three groups and shall transmit one list to each
elector in each group.
40. Each member bank shall be permitted to nominate to the chairman one candidate for director of class A and one candidate for
director of class B. The candidates so nominated shall be listed by
the chairman, indicating by whom nominated, and a copy of said list
shall, within fifteen days after its completion, be furnished by the
chairman to each elector.
41. Every elector shall, within fifteen days after the receipt of the
said list, certify to the chairman his first, second, and other choices of
a director of class A and class B, respectively, upon a preferential
ballot, on a form furnished by the chairman of the board of directors
of the Federal reserve bank of the district. Each elector shall make a
cross opposite the name of the first, second, and other choices for a
director of class A and for a director of class B, but shall not vote
more than one choice for any one candidate.
42. Any candidate having a majority of all votes cast in the
column of first choice shall be declared elected. If no candidate have a
majority of all the votes in the first column, then there shall be added
together the votes cast by the electors for such candidates in the
second column and the votes cast for the several candidates in the first
column. If any candidate then have a majority of the electors voting,
by adding together the first and second choices, he shall be declared
elected. If no candidate have a majority of electors voting when the
first and second choices shall have been added, then the votes cast in
the third column for other choices shall be added together in like
manner, and the candidate then having the highest number of votes
shall be declared elected. An immediate report of election shall be
declared.
CHAIRMAN AND RESERVE AGENT.

43. Class C directors shall be appointed by the Federal Reserve
Board. They shall have been for at least two years residents^ of the
district for which they are appointed, one of whom shall be designated
by said board as chairman of the board of directors of the Federal
reserve bank and as "Federal reserve agent." He shall be a person of
tested banking experience; and in addition to his duties as chairman
of the board of directors of the Federal reserve bank he shall be
required to maintain under regulations to be established by the Federal
Reserve Board a local office of said board on the premises of the
Federal Reserve Board, and shall act as its official representative for

MEMORANDUM.
On the bottom line of Page 29 of the 11 Federal Reserve and
National Bank Acts, I n d e x e d / ' the word 14 board'' should read
44
bank " and the following phrase should be inserted:
"on the premises of the Federal Reserve Bank. H e shall make
regular reports to the Federal Reserve Board and shall' act as its
official representative for"—etc.



30

FEDERAL* RESERVE ACT. 30

the performance of the functions 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 Federal reserve bank to which
he is designated. One of the directors of class C, who shall be a person
of tested banking experience, shall be appointed by the Federal Reserve
Board as deputy chairman and deputy Federal reserve agent to exercise the powers of the chairman of the board and Federal reserve
agent in case of absence or disability of his principal.
C O M P E N S A T I O N O F DIRECTORS, O F F I C E R S A N D

EMPLOYES.

44. Directors of Federal reserve banks shall receive, in addition to
any compensation otherwise provided, a reasonable allowance for
necessary expenses in attending meetings of their respective boards,
which amount shall be paid by the respective Federal reserve banks.
Any compensation that may be provided by boards of directors of
Federal reserve banks for directors, officers or employes shall be subject to the approval of the Federal Reserve Board.
CALL MEETINGS OF BANK DIRECTORS FOR
PURPOSES.

ORGANIZATION

45. The Reserve Bank Organization Committee may, in organizing Federal reserve 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.
TENURE

OF

OFFICE

OF

DIRECTORS.

46. At the first meeting of the full board of directors of each
Federal reserve 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 of such meeting, one whose term of office shall expire
at the end of two years from said date, and one whose term of office
shall expire at the end of three years from said date. Thereafter
every director of a Federal reserve bank chosen 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 such
directors, such appointees to hold office for the unexpired terms of
their predecessors.
RESERVE BANK

STOCK

ISSUE.

47. SEC. 5. The capital stock of each Federal reserve bank shall
be divided into shares of $100 each. The outstanding capital stock
shall be increased from time to time as member banks increase their
capital stock and surplus or as additional banks become members, and
may be decreased as member banks reduce their capital stock or
surplus or cease to be members. Shares of the capital stock of Federal
reserve banks owned by member banks shall not be transferred or
hypothecated. When a member bank increases its capital stock or
surplus, it shall thereupon subscribe for an additional amount of
capital stock of the Federal-reserve bank of its district equal to six
per centum of the said increase, one-half of said subscription to be




FEDERAL* RESERVE ACT.

31

paid in the manner hereinbefore provided for original subscription,
and one-half subject to call of the Federal Reserve Board. A bank
applying for stock in a Federal reserve bank at any time after the
organization thereof must subscribe for an amount of the capital stock
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. When the capital stock of any Federal reserve
bank shall have been increased either on account of the increase of
capital stock of member banks or on account of the increase in the
number of member banks, the board of directors shall cause to be
executed^ a certificate to the Comptroller of the Currency showing the
increase in capital stock, the amount paid in, and by whom paid. When
a member bank 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 bank voluntarily liquidates it shall surrender
all of its holdings of the capital stock of said Federal reserve bank and
be released from its stock subscription not previously called. In either
case the shares surrendered shall be canceled and the member bank,
shall receive in payment therefor, under regulations to be prescribed
by the Federal Reserve Board, a sum equal to its cash-paid subscriptions on the shares surrendered and one-half of one per centum a
month from the period of the last dividend, not to exceed the book
value thereof, less any liability of such member bank to the Federal
reserve bank.
NOTE.—See paragraphs 38, 39, 40 National Bank Act.
INSOLVENT

MEMBER

BANKS.

48. SEC. 6. If any member bank shall be declared insolvent and
a receiver appointed therefor, the stock held by it in said Federal
reserve bank shall be canceled, without impairment of its liability,
and all cash-paid subscriptions on said stock, with one-half of one per
centum per month from the period of last dividend, not to exceed
the book value thereof, shall be first applied to all debts of the insolvent member bank to the Federal reserve bank, and the balance, if
any, shall be paid to the receiver of the insolvent bank. Whenever
the capital stock of a Federal reserve bank is reduced, either on
account of a reduction in capital stock of any member bank or of the
liquidation or insolvency of such bank, the board of directors shall
cause to be executed a certificate to the Comptroller of the Currency
showing such reduction of capital stock and the amount repaid to
such bank.
DIVISION

OF

EARNINGS.

49. SEC. 7. After all necessary expenses of a Federal reserve
bank have been paid or provided for, the stockholders shall be entitled
to receive an annual dividend of six per centum on the paid-in capital
stock, which dividend shall be 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 shall amount to forty
per centum of the paid-in capital stock of such bank.



32

FEDERAL* RESERVE ACT. 32

GOVERNMENT'S

SHARE

IN

EARNINGS—HOW

USED.

50. The net earnings derived by the United States from Federal
reserve banks shall, in the discretion of the Secretary, be used to supplement the gold reserve held against outstanding United States notes,
or shall be applied to the reduction of the outstanding bonded indebtedness of the United States under regulations to be prescribed by the
Secretary of the Treasury. Should a Federal 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 the
United States and shall be similarly applied.
TAXATION

EXEMPTION.

51. Federal reserve banks, including the capital stock and surplus
therein, and the income derived therefrom shall be exempt from
Federal, State, and local taxation, except taxes upon real estate.
CONVERSION

OF

STATE

BANKS

TO

NATIONAL.

52. SEC. 8. Section fifty-one hundred and fifty-four, United
States Revised Statutes, is hereby amended to read as follows:
Any bank incorporated by special law of any State or of the United
States, or organized under the general laws of any State or of the
United States and having an unimpaired capital sufficient to entitle it
to become a national banking association under the provisions of the
existing laws may, by the vote of the shareholders owning not less
than fifty-one per centum of the capital stock of such bank or banking
association, with the approval of the Comptroller of the Currency, be
converted into a national banking association, with any name 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 certificate may be executed by a majority of the directors
of the bank or banking institution, and the certificate shall declare that
the owners of fifty-one per centum of the capital stock have authorized
the directors to make such certificate and to 'change or convert the
bank or banking institution into a national association. A majority of
the directors, after executing the articles of assocation and the organization certificate, shall have power to execute all other papers and to
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 for the 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, offcers, and employes, shall have
the same powers and privileges, and shall be subject to the same
duties, liabilities, and regulations, in all respects, as shall have been
prescribed by the Federal Reserve Act and by the national banking Act
for associations originally organized as national banking associations.
NOTE.—See paragraphs 53, 207 National Bank Act.



33

FEDERAL* RESERVE ACT.
STATE

BANKS

AND

TRUST

COMPANIES

AS

MEMBERS.

53. SEC. 9. Any bank incorporated by special law of any State,
or organized under the general laws of any State or of the United
States, may make application to the reserve bank organization committee, pending organization, and thereafter to the Federal Reserve Board
for the right to subscribe to the stock of the Federal 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 prescribe,
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 Federal Reserve Board shall permit the applying
bank to become a stockholder in the Federal reserve bank of the district, stock shall fee issued and paid for under the rules and regulations
in this Act provided for national banks which become stockholders in
Federal reserve banks.
BY-LAWS

ADMITTING

STATE

BANKS

AS

MEMBERS.

54. The organization committee or the Federal Reserve Board shall
establish by-laws for the general government of its conduct in acting
upon applications made by the State bank, and banking associations
and trust companies for stock ownership in Federal reserve banks.
Such by-laws shall require applying banks not organfzed 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 bank unless it
possesses a paid-up unimpaired capital sufficient to entitle it to become
a national banking association in the place where it is situated, under
the provisions of the national banking Act.
SECTIONS OF
MEMBER

REVISED
BANKS.

STATUTES

MADE

APPLICABLE

TO

.55. Any bank becoming a member of a Federal reserve bank under
the provisions of this section shall, in addition to the regulations and
restrictions hereinbefore provided, be required to conform to the provisions of law imposed on the national banks respecting the limitation
of liability which may be incurred by any person, firm, or corporation
to such banks, the prohibition against making purchase of or loans on
stock of such banks, and the withdrawal or impairment of capital, or
the payment of unearned dividends, and to such rules and regulations as
the Federal Reserve Board may, in pursuance thereof, prescribe.
NOTE.—See paragraphs 139, 140, 143, 183 and 142 National Bank Act.

56. Such banks, and the officers, agents, and employes 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 Revised Statutes. The member
banks shall also be required to make reports of the conditions 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



34

FEDERAL* RESERVE ACT. 34

section fifty-two hundred and thirteen for the failure to make such
report.
NOTE.—See paragraphs 136, 138, 139, 147, 149, 152, 154 and 155 National
Bank Act.
R E S E R V E BOARD MAY
B A N K STOCK.

REQUIRE SURRENDER

OF

RESERVE

57. If at any time it.shall appear to the Federal Reserve Board that
a member bank has failed to comply with the provisions of this section
or the regulations of the Federal Reserve Board, it shall be within the
power of the said board, after hearing, to require such bank to surrender its stock in the Federal reserve bank; upon such surrender the
Federal reserve bank shall pay the cash-paid subscriptions to the said
stock with interest at the rate of one-half of one per centum per
month,, computed from the last dividend, if earned, not to 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 Board may restore membership upon due proof of compliance with the conditions imposed by
this section.
FEDERAL

RESERVE

BOARD.

58. SEC. 10. A Federal Reserve Board is hereby created which
shall consist of seven members, including the Secretary of the Treasury and the Comptroller of the Currency, who shall be members exofficio, and five members appointed by the President of the United
States, by and with the advice and consent of the Senate. In selecting the five appointive members of the Federal Reserve Board, not
more than one of whom shall be selected from any one Federal reserve
district, the President shall have due regard to a fair representation
of the different commercial, industrial and geographical divisions of
the country. The five members of the Federal Reserve Board appointed by the President and confirmed as aforesaid shall devote their
entire time to the business of the Federal Reserve Board and shall each
receive an annual salary of $12,000, payable monthly, together with
actual necessary traveling expenses, and the Comptroller 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 , 0 0 0 annually for his services as a member of
said Board.
NOTE.—See paragraph 2 National Bank A c t
QUALIFICATION

OF

MEMBERS

OF

THE

RESERVE

BOARD.

59. The members of said board, the Secretary of the Treasury, the
Assistant Secretaries of the Treasury, and the Comptroller of the Currency shall be ineligible during the time they are in office and for two
years thereafter to hold any office, position, or employment in any
member bank. Of the five members thus appointed by the President
at least two shall be persons experienced in banking or finance. One
shall be designated by the President to serve for two, one for four, one



35

FEDERAL* RESERVE ACT.

for six, one for eight, and one for ten years, and thereafter each
member so appointed shall serve for a term of ten years unless sooner
removed for cause by the President. Of the five persons thus appointed, one shall be designated by the President as governor and
one as vice-governor of the Federal Reserve Board. The governor of
the Federal Reserve Board, subject to its supervision, shall be the
active executive officer. The Secretary of the Treasury may assign
offices in the Department of the Treasury for the use of the Federal
Reserve Board. Each member of the Federal Reserve Board shall
within fifteen days after notice of appointment make and subscribe to
the oath of office.
EXPENSES OF
BANKS.

RESERVE

BOARD

ASSESSED

ON

MEMBER

60. 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 employes for the half year succeeding the levying of such assessment, together with any deficit
carried forward from the preceding half year.
FIRST MEETING RESERVE

BOARD.

61. The first meeting of the Federal Reserve Board shall be held
in Washington, District of Columbia, as soon as may be after the
passage of this Act, at a date to be fixed by the Reserve Bank Organization Committee. The Secretary of the Treasury shall be ex-officio
chairman of the Federal Reserve Board. No member of the Federal
Reserve Board shall be an officer or director of any bank, banking
institution, trust company, or Federal reserve bank, nor hold stock in
any bank, banking institution, or trust company; and before entering
upon his duties as a member of the Federal Reserve Board he shall
certify under oath 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 the five members of the Federal
Reserve Board appointed by the President, as above provided, a successor shall be appointed by the President, with the advice and consent
of the Senate, to fill such vacancy, and when appointed he shall hold
office for the unexpired term of the member whose place he is selected
to fill.
VACANCIES ON RESERVE BOARD—HOW

FILLED.

62. The President shall have the power to fill all vacancies that
may happen on the Federal Reserve Board during the recess of the
Senate, by granting commissions which shall expire thirty days after
the next session of the Senate convenes.
P O W E R S O F S E C R E T A R Y OF T H E T R E A S U R Y N O T
LIMITED.

HEREBY

63. Nothing in this Act contained shall be construed as taking
away any powers heretofore vested by law in the Secretary of the
Treasury which relate to the supervision, management, and control of
the Treasury Department and bureaus under such department, and
wherever any power vested by this Act in the Federal Reserve Board
or the Federal reserve agent appears to conflict with the powers of the



36

FEDERAL* RESERVE ACT. 36

Secretary of the Treasury, such powers shall be exercised subject to
the supervision and control of the Secretary.
R E S E R V E B O A R D S H A L L R E P O R T A N N U A L L Y TO

CONGRESS.

64. 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 to be printed for the information of the Congress.
J U R I S D I C T I O N O F C O M P T R O L L E R OF T H E

CURRENCY.

65. Section three hundred' and twenty-four of the Revised Statutes
of the United States shall be amended so as to read as follows: There
shall be in the Department of the Treasury a bureau charged with the
execution of all laws 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.
RESERVE BOARD SHALL EXAMINE RESERVE BANKS; MAKE
WEEKLY REPORTS OF THEIR CONDITION.

66. SEC. 11. The Federal Reserve Board shall be authorized and
empowered:
(a) To examine at its discretion the accounts, books and affairs of
each Federal reserve bank and of each member bank, .and to require
such statements and reports as it may deem necessary. The said
board shall publish 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 and combined, 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.
P E R M I T OR
BANKS.

REQUIRE

REDISCOUNTS

BETWEEN

RESERVE

67. (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.
SUSPEND

RESERVE

REQUIREMENTS.

68. ^ (c) To suspend for a period not exceeding thirty days, and
from time to time to renew such suspension for periods not exceeding
fifteen days, any reserve requirement specified in this Act: Provided,
That it shall 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 further, That when 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 centum, 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



37

FEDERAL* RESERVE ACT.

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.
SUPERVISE

AND

REGULATE

ISSUE

OF

RESERVE

NOTES.

69. (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.
R E S E R V E B O A R D MAY A D D TO OR D I M I N I S H N U M B E R
R E S E R V E A N D C E N T R A L R E S E R V E CITIES.

OF

70." (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.
NOTE.—See paragraph 126 National Bank Act.
S U S P E N D OR R E M O V E O F F I C E R S O R D I R E C T O R S O F R E S E R V E
BANKS.

71. f f ) To suspend or remove any officer or director of any
Federal reserve bank, the cause of such removal to be forthwith communicated in writing by the Federal Reserve Board to the removed
officer or director and to said bank.
WORTHLESS

ASSETS

TO

BE

WRITTEN

OFF.

72. (g) To require the writing off of doubtful or worthless assets
upon the books and balance sheets of Federal reserve banks.
R E S E R V E B O A R D M A Y S U S P E N D , A D M I N I S T E R OR L I Q U I D A T E
ANY RESERVE BANK.

73. (h) To suspend, for the violation of any of the provisions of
this Act, the operations of any Federal reserve bank, to take possession
thereof, administer the same during the period of suspension, and,
when deemed advisable, to liquidate or reorganize such bank.
MAKE REGULATIONS—REQUIRE

BONDS.

74. (i) To require bonds of Federal reserve agents, to make
regulations for the safeguarding of all collateral, bonds, Federal reserve notes, money or property of any kind deposited in the hands of
such agents, and said board shall perform the duties, functions, or
services specified in this Act, and make all rules and regulations necessary to enable said board effectively to perform the same.
GENERAL SUPERVISION OVER RESERVE

75. ( j )
banks.

BANKS.

To exercise general supervision over said Federal reserve

LIMITED TRUST POWERS GRANTED NATIONAL

BANKS.

76. (k) To grant by special permit to national banks applying
therefor, when not in contravention of State or local law, the right to
act as trustee, executor, administrator, or registrar of stocks and
bonds under such rules and regulations as the said board may prescribe,



38

FEDERAL* RESERVE ACT. 38

ATTORNEYS,
BOARD.

EXPERTS

AND

ASSISTANTS

FOR

RESERVE

77. (1) To employ such attorneys, experts, assistants, clerks, or
other employes as may be deemed necessary to conduct the business of
the board. All salaries and fees shall be fixed in advance by said
board, and shall be paid in the same manner as the salaries of the
members of said board. All such attorneys, experts, assistants, clerks,
and other employes shall be appointed without regard to the provisions
of the Act of January sixteenth, eighteen hundred and eighty-three
(volume twenty-two, United States Statutes at Large, page four hundred and three), and amendments thereto, or any rule or regulation
made in pursuance thereof: Provided, That nothing herein shall prevent the President from placing said employes in the classified service.
ADVISORY

COUNCIL.

78. SEC. 12. There is hereby created a Federal Advisory Council,
which shall consist of as many members as there are Federal reserve
districts. Each Federal reserve bank by its board of directors shall
annually select from its own Federal reserve district one member of
said council, who shall receive such compensation and allowances as
may be fixed by his board of directors, subject to the approval of the
Federal Reserve Board. The meetings of said advisory council shall
be held at Washington, District of Columbia, at least four times each
year, and oftener if called by the Federal Reserve Board. The
council may in addition to the meetings above provided for hold such
other meetings in Washington, District of Columbia, "or elsewhere, as
it may deem necessary, may select its own officers and adopt its own
methods of procedure, and a majority of its members shall constitute
a quorum for the transaction of business. Vacancies in the council
shall be filled by the respective reserve banks, and members selected
to fill vacancies, shall serve for the unexpired term.
79. The Federal Advisory Council shall have power, by itself or
through its officers, (1) to confer directlv with the Federal Reserve
Board on general business conditions; (2) to make oral or written
representations concerning matters within the jurisdiction of said
board; (3) to call for information and to make recommendations in
regard^ to discount rates, rediscount business, note issues, reserve conditions in the various districts, the purchase and sale of gold or securities by reserve banks, open-market operations by said banks, , and the
general affairs of the reserve banking system.
C H A R A C T E R OF D E P O S I T S I N R E S E R V E

BANKS.

80. SEC. 13: Any Federal reserve bank may receive from any
of its member banks, and from the United States, deposits of current
funds in lawful money, national-bank notes, Federal reserve notes, or
checks and drafts upon solvent member banks, payable upon presentation ; or solely for exchange purposes, may receive from other
Federal reserve banks deposits of, current funds in lawful money,
national-bank notes, or checks and drafts upon solvent member or
other Federal reserve banks, payable upon presentation.
DISCOUNT

OPERATIONS.

81. Upon the indorsement of any of its member banks, with a
waiver of demand, notice and protest by such bank, any Federal re


39

FEDERAL* RESERVE ACT.

serve bank may discount notes, drafts, and bills of exchangej 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 agricultural products, or other goods, wares,
or merchandise from beiug eligible for such discount; but such definition shall not include notes, drafts, or bills covering merely investments
or issued or drawn for the purpose of carrying or trading in stocks,
bonds, or other investment securities, except bonds and notes of the
Government of the United States. Notes, drafts and bills admitted to
discount under the terms of this paragraph must have a maturity at
the time of discount of not more than ninety days: Provided, That
notes, drafts, and bills drawn or issued for agricultural purposes or
based on live stock and having a maturity not exceeding 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.
82. 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 member bank. The amount of acceptances so
discounted shall at no time exceed one-half the paid-up capital stock
and surplus of the bank for which the rediscounts are made.
83. The aggregate of such notes and bills bearing the signature or
indorsement of 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 surplus of said bank; but this restriction
shall not apply to the discount of bills of exchange drawn in good
faith against actually existing values.
A C C E P T A N C E S BY M E M B E R

BANKS.

84. Any member bank may accept drafts or bills of exchange drawn
upon it and growing out of transactions involving the importation
or exportation of goods having not more than six months sight to
run; but no bank shall accept such bills to an amount equal at any
time in the aggregate to more than one-half its paid-up capital stock
and surplus.
LIMITATION

OF

INDEBTEDNESS

OF

NATIONAL

BANKS.

85. Section fifty-two hundred and two of the Revised Statutes of
the United States is hereby amended so as to read as follows: No
national banking association shall at any time be indebted, or in any
way liable, to an amount exceeding the amount of its capital stock at
such time actually paid in and remaining undiminished by losses or
otherwise, except on account of demands of the nature following:
First. Notes of circulation.
Second. Moneys deposited with or collected by the association.
Third. Bills of exchange or drafts drawn against money actually on
deposit to the credit of the association, or due thereto.



40

FEDERAL* RESERVE ACT. 40

Fourth. Liabilities to the stockholders of the association for dividends and reserve profits.
Fifth. Liabilities incurred under the provisions of the Federal Reserve Act.
REDISCOUNT

RESTRICTIONS.

86. 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.

87. SEC. 14. Any Federal reserve bank may, under rules and
regulations prescribed by the Federal Reserve Board, purchase and
sell in the open market, at home or abroad, either from or to domestic
or foreign banks, firms, corporations, or individuals, cable transfers
and 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.
P O W E R S O F R E S E R V E B A N K S — D E A L I N GOLD COIN, ETC.

88. Every Federal reserve bank shall have power:
(a) To deal in gold coin and bullion at home or abroad, to make
loans thereon, 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 other securities which Federal
reserve banks are authorized to hold;
DEAL IN

GOVERNMENT

OR M U N I C I P A L

BONDS.

89. (b) To buy and sell, at home or abroad, bonds and notes of
the United States, and bills, notes, revenue bonds, and warrants with
a maturity from date of purchase of not exceeding six months, issued
in anticipation of the collection of taxes or in anticipation of the
receipt of assured revenues by any State, county, district, political
subdivision, or municipality in the continental United States, including irrigation, drainage and reclamation districts, such purchases to
be made in accordance with rules and regulations prescribed by the
Federal Reserve Board;
BUY

AND

SELL

BILLS

OF

EXCHANGE.

90. (c) To purchase from member banks and to sell, with or
without its indorsement, bills of exchange arising out of commercial
transactions, as hereinbefore defined;
ESTABLISH

RATES

OF

DISCOUNT.

91. (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 Federal reserve bank for each class of paper, which
shall be fixed with a view of accommodating commerce and business;
OPEN ACCOUNTS
COUNTRIES.

WITH

EACH

OTHER

AND

IN

FOREIGN

92. (e) to establish accounts with other Federal reserve banks for
exchange purposes, and, with the consent of the Federal Reserve



FEDERAL* RESERVE ACT.

41

Board, to open and maintain banking accounts in foreign countries,
appoint correspondents, and establish agencies in such countries wheresoeverit may deem best for the purpose of purchasing, selling, and
collecting bills of exchange, and to buy and sell with or without its indorsement, through such correspondents or agencies, bills of exchange
arising out of actual commercial transactions which have not more than
ninety days to run and which bear the signature of two or more responsible parties.
GOVERNMENT

DEPOSITS.

93. 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 Federal reserve 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 Government or
any part thereof may be deposited in such banks, and disbursements
may be made by checks drawn against such deposits.
NOTE.—See paragraph 50 National Bank Act, reenacted by paragraph
144 Federal Reserve Act. Also paragraph 123 National Bank Act.

94. No public funds of the Philippine Islands, or of the postal savings, or any Government funds, shall be deposited in the continental
United States in any bank not belonging to the system established by
this Act: Provided, hozvever, 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.—See paragraph 50 National Bank Act, extended until June 30, 1915.
F E D E R A L RESERVE CIRCULATING

NOTES.

95. SEC. 16. Federal reserve notes, to be issued at the discretion
of the Federal Reserve Board for the purpose of making advances to
Federal reserve banks through the Federal reserve agents as 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 of the United
States, in the city of Washington, District of Columbia, or in gold or
iawful money at any Federal reserve bank.
96. 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 to the local Federal reserve agent of
collateral in amount equal to the sum of the Federal reserve notes thus
applied for and issued pursuant to such application. The collateral
security thus offered shall be notes and bills, accepted for rediscount
under the provisions of section thirteen of this Act, and the Federal
reserve agent shall each day notify the Federal Reserve Board of all
issues and withdrawals of Federal reserve notes to and by the Federal
reserve bank to which he is accredited. The said Federal Reserve
Board may at any time call upon a Federal reserve bank for additional
security to protect the Federal reserve notes issued to it



42
GOLD

FEDERAL* RESERVE ACT. 42

AND

OTHER

SECURITY

AGAINST

NOTES.

97. Every Federal Reserve bank shall maintain reserves in gold or
lawful money of not less than thirty-five per centum against its
deposits, and reserves 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 deposited 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. Whenever Federal reserve notes issued through
one Federal reserve bank shall be received by another Federal reserve
bank they shall be promptly returned for credit or redemption to the
Federal reserve bank through which they were originally issued. No
Federal reserve bank shall pay out notes issued through another under
penalty of a tax of ten per centum upon the face value of notes so
paid out. Notes presented for redemption at the Treasury of the
United States shall be paid out of the redemption fund and'returned to
the Federal reserve banks through which they were originally issued,
and thereupon such Federal 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, then such 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 reserve notes received by the Treasury, otherwise than for
redemption, may be exchanged for gold out of the redemption fund
hereinafter provided and returned to the reserve bank through which
they were originally issued, or they may be returned to such bank
for the credit of the United States. Federal reserve notes unfit for
circulation shall be returned by the Federal reserve agents to the
Comptroller of the Currency for cancellation and destruction.
NOTE REDEMPTION F U N D IN TREASURY.

98. The Federal Reserve Board shall require each Federal reserve
bank to maintain on deposit in the Treasury of the United States a
sum in gold sufficient in the judgment of the Secretary of the Treasury
for the redemption of the Federal reserve notes issued to such bank,
but in no event less than five per centum; but such deposit of gold shall
be counted and included as part of the forty per centum reserve hereinbefore required. The board shall have the right, acting through the
Federal reserve agent, to grant in whole or in part or to reject entirely
the application of any Federal reserve bank for Federal reserve notes;
but to the extent that such application may be granted the Federal
Reserve Board shall, through its local Federal reserve agent, supply
Federal reserve notes to the bank so applying, and such bank shall be
charged with the amount of such notes and shall pay such rate of interest on said amount as may be established by the Federal Reserve
Board, and the amount of such Federal reserve notes so issued to any
such bank shall, upon delivery, together with such notes of such
Federal reserve bank as may be issued under section eighteen of this
Act upon security of United States two per centum Government bonds,
become a first and paramount lien on all the assets of such bank.




43

FEDERAL* RESERVE ACT.

METHOD

OF RETIRING

NOTES.

99. 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 United States. Federal reserve notes so deposited shall not be reissued, except upon compliance with the conditions of an original issue.
RESERVE

AGENT

TO

HOLD

SECURITY

FOR

NOTES.

100. The Federal reserve agent shall hold such gold, gold certificates. or lawful money available exclusively for exchange for the outstanding Federal reserve notes when offered by the reserve bank of
which he is a director. Upon the request of the Secretary of the Treasury the Federal Reserve Board shall require the Federal reserve agent
to transmit so much of said gold to the Treasury of the United States
as may be required for the exclusive purpose of the redemption of such
notes.
EXCHANGE

OF

COLLATERAL

PERMITTED.

101. Any Federal reserve bank may at its discretion withdraw
collateral deposited with the local Federal reserve agent for the protection of its Federal reserve notes deposited with it and shall at the
same time substitute therefor other like collateral of equal amount with
the approval of the Federal reserve agent under regulations to be prescribed by the Federal Reserve Board.
PRINTING

OF

NOTES.

102. In order to furnish suitable notes for circulation as Federal
reserve notes, the Comptroller of the Currency shall, under the direction of the Secretary of the Treasury, cause plates and dies to be engraved in the best manner to guard* against counterfeits and fraudulent alterations, and shall have printed therefrom and numbered such
quantities of such notes of the denominations of $5, $10, $20, $50,
$100, as may be required to supply the Federal reserve banks. Such
notes shall be in form and tenor as directed by the Secretary of the
Treasury under the provisions of this Act and shall bear the distinctive
numbers of the several Federal reserve banks through which they are
issued.
NOTE.—See paragraph 71 National Bank Act.
CUSTODY

OF UNISSUED

NOTES.

103. When such notes have been prepared, they shall be 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.
COMPTROLLER

TO

HAVE CUSTODY

OF DIES AND

PLATES.

104. The plates and dies to be procured by the Comptroller of the
Currency for the printing of such circulating notes shall remain under
his control and direction, and the expenses necessarily incurred in
executing the laws relating to the procuring of such notes, and all other
expenses incidental to their issue and retirement, shall be paid by the
Federal reserve banks, and the Federal Reserve Board shall include in



44

FEDERAL*RESERVE ACT. 44

its estimate of expenses levied against the Federal reserve banks a
sufficient amount to cover the expenses herein provided for.
105. 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, Revised Statutes, is hereby extended to include notes
herein provided for.
NOTE.—See paragraph 79 National Bank Act.
EXISTING APPROPRIATIONS
AVAILABLE.

FOR

NOTE

PRINTING

MADE

106. 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 Act of
May thirtieth, nineteen hundred and eight, and any distinctive paper
that may be on hand at the time of the passage of this Act may be
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 Act in addition to circulating notes provided for
by existing law, the Secretary is hereby authorized to use so much of
any funds in the Treasury not otherwise appropriated for the purpose
of furnishing the notes aforesaid: Provided, however, That nothing
in this section contained shall be construed as exempting national banks
or Federal reserve banks from their liability to reimburse the United
States for any expenses incurred in printing and issuing circulating
notes.
NOTE.—See paragraph 124 National Bank Act.
CLEARING

HOUSE

FUNCTIONS.

107. 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, or for
exchange sold to its patrons. The Federal Reserve Board shall, by
rule, fix the charge 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.
108. 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 require each such bank to
exercise the functions of a clearing house for its member banks.
REPEAL

OF

BOND

REQUIREMENTS

OF

NATIONAL

BANKS.

109. SEC. 17. So much of the provisions of section fifty-one
hundred and fifty-nine of the Revised Statutes of the United States,




45

FEDERAL* RESERVE ACT.

and section four of the Act of June twentieth, eighteen hundred and
seventy-four, and section eight of the Act of July twelfth, eighteen
hundred and eighty-two, and of any other provisions of existing
statutes as require that before any national banking associations shall
be authorized to commence banking business it shall transfer and
deliver to the Treasurer of the United States a stated amount of United
States registered bonds is hereby repealed.
NOTE.—See paragraphs 57, 67, 68 N a t i o n a l B a n k Act.
RETIREMENT

OF

NATIONAL

BANK

CIRCULATION.

110. SEC. 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 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.
SALE

AND

TRANSFER

OF

BONDS

TO

RESERVE

BANKS.

111. The Treasurer shall, at the end of each quarterly period, furnish the Federal Reserve Board with a list of such applications, and
the Federal Reserve Board may, in its discretion, require the Federal
reserve banks to purchase such bonds from the banks whose applications have been filed with the Treasurer at least ten days before the
end of any quarterly period at which the Federal Reserve Board may
direct the purchase to be made: Provided, That Federal reserve banks
shall not be permitted to purchase an amount to exceed $25,000,000
of such bonds in any one year, and which amount shall include bonds
acquired under setion four of this Act by the Federal reserve bank.
112. Provided further, That the Federal Reserve Board shall allot
to each Federal reserve bank such proportion of such bonds as the
capital and surplus of such bank shall bear to the aggregate capital and
surplus of all the Federal reserve banks.
113. Upon notice from the Treasurer of the amount of bonds so
sold for its account, each member shall duly assign and transfer, in
writing, such bonds to the Federal reserve bank purchasing the same,
and such Federal reserve bank shall, thereupon, deposit lawful money
with the Treasurer of the United States for the purchase price of such
bonds, and the Treasurer shall pay to the member bank 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
and permanently retired when redeemed.
114. The Federal reserve banks purchasing such bonds shall be
permitted to take out an amount of circulating notes equal to the par
value of such bonds.
115. 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 manner provided by existing law, shall be entitled to receive from the Comptroller of the Currency circulating notes
in blank, registered and countersigned as provided by law, equal in
amount to the par value of the bonds so deposited. Such notes
shall be the obligations of the Federal reserve 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



46

FEDERAL* RESERVE ACT. 46

provided by law. They shall be issued and redeemed under the same
terms and conditions as national-bank notes, except that they shall not
be limited to the amount of the capital stock of the Federal reserve
bank issuing them.
ONE-YEAR GOLD TREASURY
AUTHORIZED.

NOTES; THIRTY-YEAR

BONDS

116. Upon application of any Federal reserve bank, approved by
the Federal Reserve Board, the Secretary of the Treasury may issue
in exchange for the United States two per centum gold bonds bearing
the circulation privilege, but against which no circulation is outstanding, one-year gold notes of the United States without 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 per centum bonds so tendered: Provided} That at the time of such
exchange the Federal Reserve bank obtaining such one-year gold notes
shall enter into an obligation with the Secretary of the Treasury, binding itself to purchase from the United States for gold at the maturity
of such one-year notes, an amount equal to those delivered in exchange
for such bonds, if so requested by the Secretary, and at each maturity
of one-year notes so purchased by such Federal reserve bank, to purchase from the United States such an amount of one-year notes as the
Secretary may tender to such bank, not to exceed the amount issued to
such bank in the first instance, in exchange for the two pier centum
United States gold bonds; said obligation to purchase at maturity such
notes shall continue in force for a period not to exceed thirty years.
117. For the purpose of making the exchange herein provided for,
the Secretary of the Treasury is authorized to issue at par Treasury
notes in coupon or registered form as he may prescribe in denominations of one hundred dollars, or any multiple thereof, bearing interest
at the rate of three per centum per annum, payable quarterly, such
Treasury notes to be payable not more than one year from the date of
their issue in gold coin of the present standard value, and to be exempt
as to principal and interest from the payment of all taxes and duties
of the United States except as provided by this Act, as well as from
taxes in any form by or under State, municipal, or local authorities.
And for the same purpose, the Secretary is authorized and empowered
to issue United States gold bonds at par, bearing three per centum
interest, payable thirty years from date of issue, such bonds to be of
the same general tenor and effect and to be issued under the same
general terms and conditions as the United States three per centum
bonds without the circulation privilege now issued and outstanding.
118. Upon application of any Federal reserve bank, approved by
the Federal Reserve Board, the Secretary may issue at par such three
per centum bonds in exchange for the one-year gold notes herein provided for.
NOTE.—See p a r a g r a p h 69 N a t i o n a l B a n k A c t .
DEMAND

AND

TIME

DEPOSITS

DEFINED.

119. SEC. 19. Demand deposits within the meaning of this Act
shall comprise all deposits payable within thirty days, and time deposits shall comprise all deposits payable after thirty days, and all
savings accounts and certificates of deposit which are subject to not
less than thirty days' notice before payment.




47

FEDERAL* RESERVE ACT.
RESERVE REQUIREMENTS
BANKS.

OF

MEMBER

BANKS—COUNTRY

120. 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 any district, every subscribing member bank shall
establish and maintain reserves as follows:
NOTE.—See paragraphs 120 and 121 N a t i o n a l B a n k Act.

121. (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 the aggregate 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 additional one-twelfth, until five-twelfths 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 reserves may 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 by law.
After said thirty-six months' period said reserves, other than those
hereinbefore 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.
RESERVE
REQUIREMENTS
CITIES.

OF

MEMBER

BANKS—RESERVE

122. (b) A bank in a reserve city, as now or hereafter defined,
shall hold and maintain reserves equal to fifteen per centum of the
aggregate amount of its demand 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 after the date aforesaid at least three-fifteenths, and for each
succeeding six months an 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 reserves may 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 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 Federal reserve bank, or in both, at the option
of the member bank.
RESERVE
REQUIREMENTS
R E S E R V E CITIES.

OF

MEMBER

BANKS—CENTRAL

123. (c) A bank in a central reserve city, as now or hereafter
defined, shall hold and maintain a reserve equal to eighteen per centum



48

FEDERAL* RESERVE ACT. 48

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.
NOTE.—See S e c t i o n 5191 R e v i s e d S t a t u t e s , p a r a g r a p h 120 N a t i o n a l B a n k
A c t , r e e n a c t e d b y s e c t i o n 27, p a r a g r a p h 144 F e d e r a l R e s e r v e A c t .
See
a l s o p a r a g r a p h s 121, 123, 131, 132 N a t i o n a l B a n k A c t .
ELIGIBLE

PAPER

MAY

BE

RECEIVED

AS

RESERVE.

124. Any Federal reserve bank may receive from the member
banks as reserves, not exceeding one-half of each installment, eligible
paper as described in section fourteen properly indorsed and acceptable
to the said reserve bank.
STATE

BANK

AND

TRUST

COMPANY

RESERVES.

125. If a State bank or trust company is required by the law
of its State to keep its reserves either in its own vaults or with
another State bank or trust company, such reserve deposits so kept
in such State bank or trust company shall be construed, within the
meaning of this section, as if they were reserve deposits in a national
bank in a reserve or central reserve city for a period of three years
after the Secretary of the Treasury shall have officially announced
the establishment 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 discounts from a
Federal reserve bank under the provisions of this Act except by
permission of the Federal Reserve Board.
RESERVES

MAY

BE

CHECKED

AGAINST.

126. 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 the Federal 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.
HOW

TO

ESTIMATE

RESERVES.

127. 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.
BANKS

OUTSIDE

THE

UNITED

STATES.

128. National banks located in Alaska or outside the continental
United States may remain nonmember banks, and shall in that event
maintain reserves and comply with all the conditions now provided
by law regulating them; or said banks, except in the Philippine
Islands, may, with the consent of the Reserve Board, become member




49

FEDERAL* RESERVE ACT.

banks of any one of the reserve districts, and shall, in that event, take
stock, maintain reserves, and be subject to all the other provisions
of this Act.
FIVE

PER

CENT.

FUND

NO

LONGER

RESERVE.

129. 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 United States notes, providing for a redistribution of the national-bank currency, and for other purposes/' as
provides that the fund deposited by any national banking association
with the Treasurer of the United States for the redemption of its notes
shall be counted as a part of its lawful reserve as provided in the Act
aforesaid, is hereby repealed. And from and after the passage of
this Act such fund of five per centum shall in no case be counted by
any national banking association as a part of its lawful reserve.
NOTE.—See p a r a g r a p h 124 N a t i o n a l B a n k A c t .
EXAMINATION OF MEMBER

BANKS.

130. SEC. 21. Section fifty-two hundred and forty, United States
Revised Statutes, is amended to read as follows:
The Comptroller of the Currency, with the approval of the Secretary of the Treasury, shall appoint examiners who shall -examine
every member bank at least twice in each calendar year and oftener
if considered necessary: Provided, however, That the Federal Reserve
Board may authorize examination by the State authorities to be accepted in the case of State banks and trust companies and may at
any time direct the holding of a special examination of State banks
or trust companies that are stockholders in any Federal reserve
bank. The examiner making the examination of any national bank,
or of any other member bank, 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 examine any 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.
SALARIES

TO

BE

PAID

EXAMINERS.

131. 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 Comptroller
of the Currency upon the banks examined in proportion to assets or
resources held by the banks upon the dates of examination of the
various banks.
RESERVE BANKS MAY
MEMBER BANKS.

OBTAIN

THE

EXAMINATION

OF

132. 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 reserve agent or the Federal Reserve
Board, provide for special examination 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



so

FEDERAL* RESERVE ACT. 50

of the lines of credit which are being extended by them. Every Federal
reserve bank shall at all times furnish to the Federal Reserve Board
such information as may be demanded concerning the condition of
any member bank within the district of the said Federal reserve bank.
VISITATORIAL

POWERS.

133. 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 authorized.
EXAMINATION

OF R E S E R V E

BANKS.

134. The Federal Reserve Board shall, at least once each year,
order an examination of each Federal reserve bank, and upon joint
application of ten member banks the Federal Reserve Board shall
order a special examination and report of the condition of any Federal
reserve bank.
LOANS

AND

GRATUITIES

PROHIBITED TO

EXAMINERS.

135. SEC. 22. No member bank or any officer, director, or employe thereof shall hereafter make any loan or grant any gratuity to
any bank examiner. Any bank officer, director, or employe violating this provision shall be deemed guilty of a misdemeanor and shall
be imprisoned not exceeding one year or fined not more than $ 5 , 0 0 0 .
or both; and may be fined a further sum equal to the money so loaned
or gratuity given. Any examiner accepting a loan or gratuity from
any bank examined by him or from an officer, director, or employe
thereof shall be deemed quilty of a misdemeanor and shall be imprisoned not exceeding one year or fined not more than $ 5 , 0 0 0 , or
both; and may be fined a further sum equal to the money so loaned
or gratuity given; and shall forever thereafter be disqualified from
holding office as a national-bank examiner. No national-bank examiner shall perform any other service for compensation while holding
such office for any bank or officer, director, or employe thereof.
L I M I T A T I O N AS TO F E E S A N D B E N E F I T S T O D I R E C T O R S ,
OFFICERS AND EMPLOYES OF MEMBER BANKS.

136. Other than the usual salary or director's fee paid to any Officer,
director, or employe of a member bank and other than a reasonable
fee paid by said bank to such officer, director, or employe for services
rendered to such bank, no officer, director, employe, or attorney of a
member bank shall be a beneficiary of or receive, directly or indirectly,
any fee, commission, gift, or other consideration for or in connection
with any transaction or business of the bank. No examiner, public
or private, shall disclose the names of borrowers or the collateral for
loans of a member bank to other than the proper officers of such
bank without first having obtained the express permission in writing
from the Comptroller of the Currency, or from the board of directors
of such bank, except when ordered to do so by a court of competent
jurisdiction, or by direction of the Congress of the United States, or
of either House thereof, or any committee of Congress or of either
House duly authorized. Any person violating any provision of this
section shall be punished by a fine of not exceeding $ 5 , 0 0 0 or by
imprisonment not exceeding one year, or both.



FEDERAL* RESERVE ACT.

51

137. Except as provided in existing laws, this provision shall not
take elfect until sixty days after the passage of this Act.
R E S P O N S I B I L I T Y O F S T O C K H O L D E R S O F N A T I O N A L BANKS.

138. SEC. 23. The stockholders of every national banking association shall be held individually responsible for all contracts, debts, and
engagements of such association, each to the amount of his stock
therein, at the par value thereof in addition to the amount invested
in such stock. The stockholders in any national banking association
who shall have transferred their shares or registered the transfer
thereof within sixty days next before the date of the failure of such
association to meet its obligations, or with knowledge of such impending failure, shall be liable to the same extent as it they had made
no such transfer, to the extent that the subsequent transferee fails to
meet such liability; but this provision shall not be construed to affect
in any way any recourse which such shareholders might otherwise
have against those in whose names such shares are registered at the
time of such failure.
L O A N S O N FARM

LANDS.

139. SEC. 24. Any national banking association not situated in a
central reserve city may make loans secured by improved and unencumbered farm land, situated within its Federal reserve district, but
no such loan shall be made for a longer time than five years, nor
for an amount exceeding fifty per centum of the actual value of the
property offered as security. Any such bank 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 banks may
continue hereafter as heretofore to receive time deposits and to pay
interest on the same.
140. 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 loans secured upon real estate in the manner
described in this section.
FOREIGN

BRANCHES.

141. 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 the said board for the purpose of securing authority to establish branches in foreign countries or dependencies
of the United States for the furtherance of the foreign commerce of
the United States, and to act, if required to do so, as fiscal agents of
the United States. Such application shall specify, in addition to the
name and capital of the banking association filing it, the place or
places where the banking operations proposed are to be carried on,
and the. amount of capital set aside for the conduct of its foreign
business. The Federal Reserve Board shall- have power to approve
or to reject such application if, in its judgment, the amount of capital proposed to be set aside for the conduct of foreign business is
inadequate, or if for other reasons the granting of such application
is deemed inexpedient.
142. Every national banking association which shall receive author


52

FEDERAL* RESERVE ACT. 52

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

PROVISIONS
OF
REAFFIRMED.

LAW

REPEALED—GOLD

143. SEC. 26. All provisions of law inconsistent with or superseded by any of the provisions of this Act are to that extent and to
that extent only hereby repealed: Provided, Nothing in this Act contained shall be construed to repeal the parity 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 Treasury may 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 necessary to obtain
gold. When the funds of the Treasury on hand justify, he may
purchase and retire such outstanding bonds and notes.
NOTE.—See p a r a g r a p h 240 N a t i o n a l Bank A c t .
EMERGENCY

CURRENCY

ACT

EXTENDED.

144. SEC. 27. The provisions of the Act of May thirtieth, nineteen hundred and eight, authorizing national currency associations, the
issue of additional national-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 amendments or modifications 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 Act by making the portion applicable thereto read as follows:
National banking associations having circulating notes secured
otherwise than by bonds of the United States, shall pay for the first
three months a tax at the rate of three per centum per annum upon
the average amount of such of their 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




FEDERAL* RESERVE ACT.

53

tax of six per centum per annum is reached, and thereafter such tax
of six per centum per annum upon the average amount of such notes.
NOTE.—On June 30, 1915, when the provisions of the Act of May 30, 1^08,
will expire, sections 5153, 5172, 5191 and 5214 of the Revised Statutes will
be revived by the above as they were prior to May 30, 1908.
Section 5153 deals with public depositaries.
It was not expressly
amended by the Act of May 30, 1908, but was supplemented by Section 15
of that Act, requiring interest to be paid on public deposits. This section
as it read prior to May 30, 1903, will be found as paragraph 50, National
Bank Act. See also paragraph 93 Federal Reserve Act.
Section 5172 of the Revised Statutes deals with the printing, denominations and form of circulating notes of National banks. A s amended by the
Act oi May 30, 1908, it will be found as paragraph 75 of the National Bank
Act. As rccnacted it will read as follows:
Section 5172. (Printing, denominations, and form of the circulating
notes.) In order to furnish suitable notes for circulation, the Comptroller
of the Currency shall, under the direction of the Secretary of the Treasury,
cause plates and dies to be engraved, in the best manner to guard against
counterfeiting and fraudulent alterations, and shall have printed therefrom,
and numbered, such quantity of circulating notes, in blank, of the denominations of one dollar, two dollars, three dollars, five dollars, ten dollars,
twenty dollars, fifty dollars, one hundred dollars, five hundred dollars, and
one thousand dollars, as may be required to supply the associations entitled
to receive the same. Such notes shall express upon their face that they are
secured by United States bonds, deposited with the Treasurer of the
United States, by the written or engraved signatures of the Treasurer and
Register, and by the imprint of the seal of the Treasury; and shall also
express upon their face the promise of the association receiving the same
to pay on demand, attested by the signatures of the president or vicepresident and cashier; and shall bear such devices and such other statements, and shall be in such form, as the Secretary of the Treasury shall, by
regulation, direct.
(Section 5175, paragraph 80, of the National Bank Act, should be read in
connection with the above section.)
Section 5191, dealing with reserves, provides that reserve requirements
shall not apply to public moneys. This section is now largely superseded
by the reserve provisions in the Federal Reserve Act (paragraphs 119-127),
but since the character of reserve money is not specified in the Federal
Reserve Act, it would seem that the requirement contained in Section 5191
R. S. (paragraph 120 National Bank Act), that reserves shall consist of
lawful money of the United States, is made applicable.
Section 52l4 was never directly amended until the Act of May 30, 1908,
but it had virtually been superseded by two previous statutes, one of which,
Act March 3, 1883, repealed the tax on the capital and deposits of national
banking associations, and the other, March 14, 1900, levied a tax of onefourth of one per cent, on the circulation of National banks secured by the
deposit of United States two per cent, bonds, in lieu of existing taxes on
their circulation imposed by section 5214; and this latter tax was the one
in force on May 29, 1908.
REDUCTION

OF CAPITAL PERMITTED

TO

NATIONAL

BANKS.

145. SEC. 28. Section fifty-one hundred and forty-three of the
Revised Statutes is hereby amended and reenacted to read as follows:
Any association formed under this title may, by the vote of sharesholders owning two-thirds of its capital stock, reduce its capital to any
sum not below the amount required by this title to authorize the formation of associations; but no such reduction shall be allowable which
will reduce the capital of the association below the amount required
for its outstanding circulation, nor shall any reduction be made until
the amount of the proposed reduction has been reported to the Comptroller of the Currency and such reduction has been approved by the
said Comptroller of the Currency and by the Federal Reserve Board,



54

FEDERAL* RESERVE ACT. 54

or by the organization committee pending the organization of the
Federal Reserve Board.
C O U R T S N O T TO
T H E ACT.

REPEAL

UNADJUDICATED PORTIONS

OF

146. 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, such judgment shall not affect, impair, or
invalidate the remainder of this Act, 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.
147. SEC. 30. The right to amend, alter, or repeal this Act is hereby expressly reserved.
148. Approved, December 23, 1913.




DUTIES

AND

POWERS ORGANIZATION
DEFINED.

COMMITTEE

The first official circular of the Federal Reserve Bank Organization
Committee was issued February 14, 1914, and is devoted to a definition
of certain sections of the Federal Reserve Act, regarding which
inquiries have been made by National and State banks. It also defines
the duties and powers of the Committee. It is given below in full:
In view of the large number of inquiries received from both National and
State Banks as to the proper interpretation of various sections of the
Federal Reserve Act, it is deemed advisable to explain, as briefly as the
circumstances will permit, the operation of this Act in so far as it relates
to the duties and powers of the Organization Committee and the method of
procedure adopted by the Committee. For convenience, these duties are
considered in their chronological order.
First. Section 2 of the Federal Reserve Act provides as follows:
"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."
It will be observed that under the provisions of this section all National
Banks are required, and all other eligible banks are permitted, to signify
their acceptance of the provisions of this Act within sixty days from its
passage. Banks should not confuse this notice to the Committee- with the
formal application for stock to be filed later.
T o facilitate compliance with this provision of the Act, the Committee
has forwarded to all National Banks a prescribed form of resolution to be
adopted by the Boards of Directors of such banks, and upon request from
State Banks is forwarding a prescribed form of resolution for use by such
banks. When certified copies of such resolutions have been received and
filed, no other action by applying banks is necessary until the locations of
the several Federal Reserve Banks have been established by the Committee,
and the districts to be served by such banks have been defined.
The Committee is now engaged in holding hearings in various parts of
the United States in order to have before it as much information as possible
to enable it to properly determine the locations of such banks and the
districts to be served.
Section 2 further provides as follows:
"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 association 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 on call of the^ Organization Committee or of the Federal Reserve
Board, one-sixth within three months, and one-sixth within six months
thereafter, and the remainder of 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."
This section should be read in connection with Section 4 of the Federal
Reserve Act, which reads as follows:
"When the Organization Committee shall have established Federal Re-




55

56

REGULATIONS UNDER FEDERAL RESERVE ACT.

serve districts as provided in Scction 2 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 cach 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 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 the Federal Reserve Bank organizing in that district in accordance
with the provisions of this Act."
It will be observed from the foregoing that the Comptroller of the Currency will cause to be forwarded to those banks which have signified their
intention to become members of Federal Reserve Banks, a form of application to be executed by such banks after the districts have been laid out
and the location of the Federal Reserve Banks definitely established by the
Organization Committee. These forms will be forwarded in due course
and in accordance with the further provisions of the Act, when the minimum amount of stock for any Federal Reserve Bank has been subscribed
the Committee will designate five banks to execute the necessary organization certificate. Subscriptions to stock will therefore not be called by the
Committee until after these preliminary steps have been taken.
Attention is called to the fact that all National Banks are required to
signify, within sixty days from the passage of the Federal^ Reserve Act,
whether or not they accept the provisions of the Act and intend to subscribe to the stock of the Federal Reserve Banks when organized.
That within thirty days after the Organization Committee has announced
the designation of cities in which Federal Reserve Banks are to be organized, fixed the geographical limits to be served, and notified such National
Banks, all such National Banks are required to subscribe to the capital
stock of such Federal Reserve Banks. These provisions are clearly set
forth in the Federal Reserve Act, and the Committee will expect and require
a strict compliance therewith.
A number of banks appear to be under the misapprehension that they are
allowed twelve months' time in which to acccpt the provisions of the
Federal Reserve Act. This limitation, which is manifestly intended to
cause automatically a forfeiture of the charters of those banks failing to
comply with the provisions of the Act, must not be construed as extending
the time specifically set out in the Act within which such banks must take
the action above outlined.
T h e provisions relating to membership by State Banks are, under the
terms of the Act, entirely optional. State Banks are not required to signify
within any given time their intention to become members, but are permitted
to do so if they desire to become members as soon as Federal Reserve
Banks are originally organized.
T w o methods are prescribed by the Federal Reserve Act by which such
banks may become members of the Federal Reserve System. First, under
Section 8, by conversion of State Banks into National Banks, in which case
the laws applicable to National Banks become immediately operative as
soon as such conversion is completed. Second, under Section 9, State Banks
may become members, as State Banks, retaining their State charters, in
which case such banks arc subject, specifically, to the provisions of the
Federal Reserve Act contained in Section 9, and to such other provisions
of the Act as are clearly applicable. Banks becoming members as State
Banks, therefore, mav exercise those powers conferred by their State charters which are not in conflict with the specific provisions of the Federal
Reserve Act.
State Banks and Trust Companies signifying their intention to become
members of the Federal Reserve System before the organization of the
Federal Reserve Banks will be permitted to participate in the selection of
directors of said Reserve Banks, as prescribed by the Federal Reserve Act.
The. Committee has prescribed the regulations under which State Banks
and Trust Companies may become members, and a copy of such regulations, with the forms approved for use by such banks, "will be furnished
upon request of any State Bank desiring to apply for membership in a
Federal Reserve Bank.




M . C. ELLIOTT,

Secretary,

Reserve Bank Organisation

Committee.

57

REGULATIONS UNDER FEDERAL RESERVE ACT.

On February 20, 1914, the Organization Committee issued the
following:
REGULATIONS A N D BY-LAWS, RESERVE BANK ORGANIZATION
COMMITTEE, PRESCRIBING CONDITIONS UNDER WHICH
STATE BANKS AND TRUST COMPANIES MAY SUBSCRIBE
TO T H E STOCK A N D BECOME MEMBERS OF FEDERALRESERVE BANKS.

Section 9 of the Federal Reserve Act reads in part, as follows:
"Any bank incorporated by special law of any State, or organized under
the general laws of any State of the United States, may make application to
the Reserve Bank Organization Committee, pending organization, and
thereafter to the Federal Reserve Board for the right to subscribe to the
stock of the Federal 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 prescribe, 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 Federal Reserve Board shall permit the applying
bank to become a stockholder io the Federal Reserve Bank of the district,
stock shall be issued and paid for under the rules and regulations in this
Act provided for National Banks which become stockholders in Federal
Reserve Banks."
Pursuant to the provisions of this section, the Reserve Bank Organization Committee has prescribed the following regulations and by-laws specifying the conditions under which State Banks and Trust Companies may
become members of Federal Reserve Banks.
First.—Any State Bank or Trust. Company eligible to membership in a
Federal Reserve Bank under the Federal Reserve Act and desiring to subscribe to the capital stock of the Federal Reserve Bank to be organized in
the district which will include the place of business of such State Bank or
Trust Company shall submit to its board of directors for consideration a
resolution in the following form, to wit:
Whereas, Under Section 2 of the Act of Congress known as the Federal
Reserve Act, approved on the 23d day of December, 1913, it is provided
that: "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 trusty 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 thereof;" and
IVJiereas, This bank is believed by the Board of Directors to be eligible
to membership and to have the right to subscribe to the capital stock of
the Federal Reserve Bank to be organized; and
JFhercas, It is the intention of this Board to apply under the provisions
of the Federal Reserve Act for i its proper proportion of stock of the
Federal Reserve Bank to be organized within the district in which this bank
will be located when the geographical limits to be served by such Federal
Reserve Bank have been fixed and announced by the Organization Committee.
Nozv, therefore, be it resolved, That the president of this bank be, and he
hereby is authorized, empowered and directed to notify the Reserve Bank
Organization Committee that this bank will apply for an allotment of stock
of the Federal Reserve Bank aforesaid, and, if granted, will become a
member of such Federal Reserve Bank subject to the provisions of the
Federal Reserve A c t
When such resolution has been passed by the board of directors, the
president or executive officer of such State Bank or Trust Company shall
transmit a duly certified copy of such resolution to the Reserve Bank Organization Committee at Washington.
Second.—When the location of the several Federal Reserve Banks provided for in the Federal Reserve Act have been established and the districts
to be served by such Federal Reserve Banks have been defined, the Committee will cause to be forwarded to such State Banks or Trust Companies,
at the same time that applications are forwarded to National Banks under



58

REGULATIONS UNDER FEDERAL RESERVE ACT.

the provisions of the Federal Reserve Act, a form of application for an
amount of capital stock in such Federal Reserve Bank equal to 6 per cent,
of the unimpaired capital stock and surplus of such State Bank or I r u s t
Company. This application must be accompanied by a statement showing
the assets and liabilities of such. State Bank or Trust Company listed 011
forms approved by the Committee. These forms will be furnished by the
Committee upon request. The Board of Directors or a committee composed of not less than five members of such Board shall certify that in their
opinion the assets listed in the manner prescribed by the Committee represent actual existing values, and that in the opinion of said Board none of
such assets are carried at an excessive valuation on the books of said bank.
State Banks and Trust Companies shall also file with their applications
for membership copies of their charters, with amendments, and a digest
thereof showing the powers (granted by such charters and amendments)
classified to indicate:
a. Those powers which such banks and trust companies have exercised
and desire to continue to exercise.
b. Those powers which, while granted, have not been exercised and which
such banks and trust companies will not desire nor attempt to exercise as
members of the Federal Reserve System.
Third.—In lieu of a special examination of the conditions of such bank
by a National Bank examiner or cxamincr>appointcd by the Committee or
the Federal Reserve Board, the Committee may accept a certificate from a
duly accredited State examiner or bank commissioner to the effect that the
statement filed by the Board of Directors as aforesaid represents the true
condition of such State Bank or Trust Company, and that the capital stock
of such bank is in the opinion of such examiner or commissioner unimpaired, the surplus represents actual existing values and the liabilities are
as shown by such statement. The Committee, however, will reserve the
right in any case to require a special examination by a National Bank
examiner or an examiner selected by the Committee or by the Federal
Reserve Board as a condition precedent to membership in any Federal
Reserve Bank.
Fourth.—Only those banks' which have an unimpaired capital sufficient to
entitle them to become National banking associations under the provisions
of the National Bank Act shall be considered as eligible to membership in
a Federal Reserve Bank.
In accordance with Section 5138, U. S. Revised Statutes, as amended by
the Act of March 14, 1900, State Banks or Trust Companies in order to be
eligible to membership must have unimpaired capital stock, as follows:
In cities or towTns of less than 3,000 inhabitants, $25,000.
In cities or towns of more than 3,000 inhabitants, but less than 6,000
inhabitants, $50,000.
In cities of more than 6,000 inhabitants but less than 50,000 inhabitants,

$100,000.

In cities of more than 50,000 inhabitants, $200,000.
Fifth.—State Banks becoming members as such under the provisions of
Section 9 of the Federal Reserve Act and retaining their State charters shall
be subject to the provisions of Section 9 and to such other provisions
of the Federal Reserve Act as arc applicable thereto.
Sixth.—State Banks desiring to become members under Section 8 of the
Federal Reserve* Act by being first converted into National'Banks in accordance with the provisions of this section, shall become members as
National Banks. Where such conversion into National Banks is completed before the expiration of 60 days from the passage of the Federal Reserve Act; such banks should file with the Organization Committee the
form of resolution prescribed by the Committee to signify their acceptance
of the terms and provisions of the f ederal Reserve Act before February 23,
1914. Where such conversion is not completed before the expiration of the
60 days aforesaid, the board of directors of such banks shall, in executing
the articles of association and organization certificate as required by Section
8, at the same time adopt the resolution prescribed by the Organization
Committee as aforesaid, and such resolution shall accompany the organization certificate filed with the Comptroller of the Currency.
Seventh.—Where such conversion is completed after the organization of
the Federal Reserve Banks, such organization certificate shall be accompanied by an application to the Federal Reserve Board or to the Organiza


59

REGULATIONS UNDER FEDERAL RESERVE ACT.

tion Committee for an amount of stock equal to 6 per cent, of the unimpaired capital and surplus of such bank.
Eighth.—Whenever a trust company shall become converted into a
National Bank under the provisions of Section 8 of the Federal Reserve Act
and shall desire to continue to act as trustee, executor, administrator or
registrar of stocks and bonds, such organization certificate shall, when
filed with the Comptroller of the Currency, be accompanied by an application to the Federal Reserve Board for permission to engage in such business, and no certificate for the conversion of such trust company into a
National Bank shall be approved by the Comptroller of the Currency until
the Federal Reserve Board has granted this permission under rules and
regulations prescribed by it.
Ninth.—Whenever a State Bank or Trust Company with established
branches shall make application for conversion into a National Bank and
shall desire to retain such branches, such State Bank or Trust Company
shall comply with Section 5155, U. S. Revised Statutes, which reads as
follows:
"Jt shall be lawful for any bank or banking association organized under
State laws, and having branches, the capital being joint and assigned to and
used by the mother-bank and branches in definite proportions, to become a
National banking association in conformity with existing laws, and to
retain and keep in operation its branches, or such one or more of them as
it may elect to retain; the amount of the circulation redeemable at the
mother-bank, and each branch to be regulated by the amount of capital
assigned to and used by each."
Tenth.—State Banks or Trust Companies applying for membership in the
Federal Reserve System under Section 8 of the Federal Reserve Act by
conversion into National banking associations, or applying for membership
under Section 9 as State Banks will, if otherwise found to be eligible, be
given a reasonable time within which to adjust the loans and investments
of such banks to conform to the requirements of the Federal Reserve Act
and other laws of the United States applicable thereto. Any bank applying
for membership and having loans to any one person, firm, or corporation
in excess of the limit allowed by the Federal Reserve Act or other loans
and investments prohibited by such act shall, before being admitted to membership, give satisfactory assurance to the Committee or to the Federal
Reserve Board that such loans and investments will be eliminated or made
to conform to the provisions of the Federal Reserve Act and other applicable laws not later than January 1, 1915.
The condition of the applying bank or trust comnany and the general
nature of its business will be considered by the Committee in each case in
determining whether such banks shall be admitted to membership.
Eleventh.—The Committee or the Federal Reserve Board will from time
to time adopt and publish such additional regulations and by-laws as may
be deemed necessar}' and advisable.




W . G. MCADOO,
D . F . HOUSTON,
J. S. WILLIAMS,

Reserve Bank Organisation

Chairmant

Committee.




NATIONAL-BANK ACT
AND

Other Laws Relating to Banking




AND INDEX




DATES OF ACTS RELATING TO NATIONAL BANKS.
THE NATIONAL BANK ACT AND ACTS AMENDATORY THEREOF AND SUPPLEMENTARY
THERETO.

Page
Feb. 25, 1863. An act to provide a national currency secured by a pledge
of United States stocks, and to provide for the circulation and redemption thereof
170
June 3, 1864. Act of February 25, 1863, repealed and reenacted with
certain amendments
97, 169, 170
Mar. 3, 1865. Tax on bank circulation. State banks converted may
retain and keep in operation branches
115
Feb. 5, 1867. Penalty for imitating bank circulation
131
Mar. 2, 1867. Refunding excess tax
155
Feb. 10, 1868. Taxation of shares of national-bank stock
156
Feb. 19, 1869. Prohibiting loans on United States or national-bank
notes, or withholding such notes from use
150
Mar. 3, 1869. Reports of condition, and earnings and dividends
153
Mar. 3, 1869. False certification of checks
151
Apr. 6, 1869. Penalty for embezzlement, abstraction, etc
151
July 8, 1870. Penalty for embezzlement, abstraction, etc
151
July 12, 1870. Issue of circulation redeemable in gold
..129, 130, 147
July 14, 1870. Liquidating banks to retire circulation
158
Mar. 1, 1872. Leavenworth struck out as reserve city
141, 142
June 8, 1872. Certificates of deposit for United States motes (repealed
March 14, 1900)
145
Feb. 19, 1873. Reports of State banks
100
Mar. 3, 1873. Examination of plates and dies
127
Mar. 3, 1873. Assessment for impairment of capital..
149
Mar. 3, 1873. Use of the word "national"
169
June 20, 1874. Fixing the amount of United States notes, providing for
102, 122,
a redistribution of national-bank currency, etc
127, 142, 146, 159
June 23, 1874. Maceration of United States and national-bank notes...
129
June 23, 1874. Stamps on bank checks. Repealed March 3, 1883.
Jan. 14, 1875. Aggregate amount of circulation not limited
128
Jan. 19, 1875. Circulating notes of national gold banks
129
Feb. 18, 1875. Correcting errors and omissions in the Revised Statutes
99
129, 147, 158, 160, 170, 180
Feb. 19, 1875. Appointment and compensation of bank examiners
168
Mar. 3, 1875. Distinctive paper for printing notes
127
Mar. 3, 1875. Clerical force for redemption of circulating notes
144
June 30. 1876. Receivers, appointment of
149, 163, 164
Feb. 27, 1877. Examination of plates and dies
127
Feb. 27, 1877 Reports to Comptroller
153
Feb. 27, 1877. Destruction of redeemed notes
159
Mar. 1, 1879. Semiannual duty, abatement of
156
Feb. 14, 1880. Conversion of gold banks
130
Feb. 26, 1881. Verification of returns of national banks
153
July 12, 1882. Corporate existence, extension o f . . . 105, 106, 107, 108, 122, 123
July 12, 1882. Issue of gold certificates
150
July 12, 1882. Punishment for falsely certifying check.
151
Mar. 3, 1883. Capital and deposits, repealing tax on
154
Mar. 29, 1886. Insolvent banks, protection of assets by use of trust
funds
166, 167
May 1, 1886. Increase of capital stock, change of name or location,
104, 105, 111




63

64

DATES OF ACTS RELATING TO NATIONAL

BANKS.
Page

Mar.
Mar.
Aug.
July
July
Aug.
Jan.
Mar.
Mar.
Mar.
Apr.
Apr.
Mar.
Feb.
Dec.
June
Jan.
Mar.
Mar.
Mar.
May
May

3, 1887. Courts, jurisdiction of
105
3, 1887. Reserve and central reserve cities, providing for additional, etc
144, 146
13, 1888. Courts, jurisdiction oi
105
14, 1890. Disposition of redemption account
144
28, 1892. Stolen or lost national-bank notes, redemption of
145
3, 1892. Agent of shareholders of national bank, appointment of;
amends act of June 30, 1876
164
12, 1895. Annual report of Comptroller of the Currency, printing of
100
2, 1897. Appointment and qualification of shareholders' agent;
amends acts June 30, 1876, and August 3, 1892
164
14, 1900. Authorizing banks with minimum capital $25,000; bonds,
circulation, taxation, etc
109, 125, 154, 183, 189
3, 1901. National bank depositaries
114
12, 1902. Authorization of recxtcnsion of charter...
109
28, 1902. Annual Report of Comptroller to contain information regarding failed banks, list of employes, etc
100
3, 1903. Additional reserve cities; minimum population, 25,000..
144
28, 1905. Qualification of directors, banks with capital of $25,000..
112
21, 1905. Taxation of circulation based on Panama Canal bonds..
119
22, 1906. Amendment section 5200, loan limitation
148
26, 1907. Political contributions prohibited
152
4, 1907. Additional copies of Report of Comptroller
100
4, 1907. Public depositaries
,....
114
4, 1907. Gold certificates and United States notes, issue of
186, 189
22, 1908. Additional Deputy Comptroller
98
30, 1908. Authorizing National Currency Associations, the issue of
additional bank circulation, and creating a National
Monetary Commission
114, 123, 126, 131, 132, 133, 134,
135, 136, 137, 138, 139, 142, 154
ACTS OF A GENERAL NATURE AF1-F.CT1XG NATIONAL BANKS.

July
June
Mar.
July
Mar.
June
Dec.
Feb.
Mar.
Feb.

7,
30,
3,
13,
26,
6.
24,
8,
1,
25,

1838. Issuing'circulation of expired association
1864. Taxation of State banks
171.
1865. Taxation of State banks
172,
1866. Taxation of State banks
171, 172,
1867. Taxation of State banks
1872. Taxation of State banks
171,
1872. Taxation of State banks
1875. Taxation of State banks
1879. Taxation of State banks
1862. Taxation of national-bank notes and notes and certificates
of United States circulating as currency
Mar. 3, 1863. Taxation of national-bank notes and notes and certificates
of United States circulating as currency
Mar. 3, 1864. Taxation of national-bank notes and notes and certificates
of United States circulating as currency
June 30, 1864. Taxation of national-bank notes and notes and certificates
of United States circulating as currency
Jan. 28, 1865. Taxation of national-bank notes and notes and certificates
of United States circulating as currency
Mar. 3, 1865. Taxation of national-bank notes and notes and certificates
of United States circulating as currency
July 14. 1870. Taxation of national bank notes and notes and certificates
of United States circulating as currency
Aug. 13, 1894. Taxation of national-bank notes and notes and certificates
of United States circulating as currency
174,
July 17, 1862. Restriction on notes less than one dollar
Feb. 21, 1857. Foreign coins not legal tender
July 17, 1861. Demand Treasury notes legal tender same as United
States notes
Feb. 12, 1862. Demand Treasury notes legal tender same as United
States notes
Feb. 25, 1862. Demand Treasury notes legal tender same as United
States notes
Feb. 25, 1862. United States notes legal tender except for duties on
imports and interest on public debt



182
173
173
173
173
173
173
172
174
174
174
174
174
174
174
174
175
175
175
176
176
176
176

DATES OF ACTS RELATING TO NATIONAL BANKS.

65
Page

Mar. 17, 1862. Demand Treasury notes legal tender same as United
States notes
July 11, 1862. United States notes legal tender except for duties on
imports and interest on public debt
Jan. 17, 1863. United States notes legal tender except for duties on
imports and interest on public debt
Mar. 3. 1863. United States notes legal tender except for duties on
imports and interest on public debt
Mar. 3, 1863. Interest-bearing notes legal tender to same extent as
United States notes
June 30, 1864. Interest-bearing notes legal tender to same extent as
United States notes
Feb. 12, 1873. Gold coins of United States legal tender
Feb. 12, 1873. Minor coins of United States legal tender to amount of
twenty-five cents
Feb. 28, 1878. Standard silver dollars legal tender
June 9, 1879. Subsidiary silver coins legal tender to amount not exceeding ten dollars
July 12, 1882. Gold certificates, for what receivable
!
150,
Mar. 4, 1900. Currency act
183,
Mar. 4, 1907. Amending national bank act
June 14, 1866. Government depositories
177,
June 8, 1872. Government depositories
Mar. 3. 1873. Government depositories
177,
Feb. 27, 1877. Government depositories
Feb. 3, 1879. Government depositories
Feb. 25, 1863. Counterfeiting national-bank notes
June 3, 1864. Counterfeiting national-bank notes
June 30, 1864. Forging or counterfeiting United States securities
180,
June 30, 1864. Using plates to print without authority
Feb. 5, 1867. Penalty for taking unauthorized impression of tools, having such impression or dealing in counterfeit circulation
June 30, 1876. Fraudulent notes to be so marked by United States
officers and officers of national banks
Aug. 5, 1909. Excise tax on corporations
Aug. 5, 1909. Panama Canal bonds, issue of, authorized at 3 per cent.
Mar. 2, 1911. Panama Canal bonds under act of Aug. 5, 1909, not available as security for circulation
Mar. 2, 1911. Issue of gold certificates on deposit of foreign coin or
bullion
Mar. 2, 1911. Certified checks drawn on national and State banks, receivable for duties on imports and internal taxes

176
176
176
176
176
176
175
176
175
176
176
189
189
179
178
178
177
179
180
180
181
180
182
183
190
196
197
187
197

SPECIAL ACTS RELATING TO NATIONAL BANKS.

Apr. 12, 1900. National banking laws extended to Porto Rico
Apr. 30, 1900. National banking laws extended to Hawaii
May 2, 1900. National banking laws extended to Indian Territory
Mar. 2, 1900. Qualification of directors in Oklahoma




190
191
190
190

INDEX
Section.

32 4
32 5
32 6
32 7
32 8
32 9
33 0
33 1
33 2
33 3
380
629
736
88 4
88 5
3408
341 1
341 2
341 3
341 4
341 5
341 6
341 7
358 3
3584
358 5
358 6
358 7
358 8
358 9
359 0
3620
364 0
364 1
3642
364 3
364 4
364 5
364 6
364 7
364 8
364 9

TO

Page.

97
97
98
98
98
98
99
99
99
99
170
170
170
171
171
171
172
172
172
172
173
173
173
175
175
175
175
176
176
176
176
177
114
114
114
114
114
114
114
114
114
114

SECTIONS
Section.

Page.

3701
3847
4046
5133
5134
5135
5136
513 7
513 8
513 9
514 0
514 1
514 2
514 3
514 4
514 5
514 6
514 7
514 8
514 9
515 0
515 1
515 2
515 3
515 4
515 5
515 6
5157........
515 8
515 9
516 0
516 1
516 2
516 3
516 4
516 5
516 6
516 7
516 8
516 9
5170
517 1

66




OF

174
177
178
102
102
102
102
109
109
109
110
110
Ill
1U
Ill
112
U2
112
112
113
113
113
113
114
115
115
116
118
118
118
119
120
120
120
120
121
121
121
124
124
125
125

REVISED
Section.
5172
517 3
5174
517 5
5176
5177
5178
5179
5180
5181
5182
518 3
518 4
518 5
518 6
518 7
518 8
518 9
519 0
519 1
519 2
519 3
519 4
519 5
519 6
519 7
519 8
519 9
5200
520 1
520 2
520 3
520 4
5205.
520 6
520 7
520 8
520 9
521 0
521 1
521 2
521 3

STATUTES.

Page.
126

127
127
128
128
128
128
128
128
128
128
129
129
129
130
130
131
131
141
141
142
145
145
145
147
147
147
148
148
148
148
149
149
149
150
150
151
151
152
153
153
153

Section.

521 4
521 5
521 6
521 7
521 8
521 9
522 0
522 1
522 2
522 3
522 4
522 5
522 6
522 7
522 8
522 9
523 0
523 1
523 2
523 3
523 4
5235
5236
523 7
523 8
523 9
524 0
524 1
5242
524 3
541 3
541 4
5415
543 0
543 1
543 2
543 3
543 4
5437
5488
5497

Page.

154
15o
loS
155
155
156
157
157
158
158
158
159
159
160
160
160
160
161
161
161
161
162
162
162
163
167
167
168
169
169
180
180
180
180
181
182
182
182
182
179
179

I N D E X TO N A T I O N A L - B A N K ACT, ETC.
A
Acknowledgment. (See Oath.)
Paracraph
Act authorizing "Additional circulation":
Duration of
118
Acting Comptroller of the Currency
4
Acts:
Special, authorizing change of name or location of national bank..
266
Additional circulation, act May 30, 1908:
Application to issue, to- be approved by the Comptroller and
Secretary
99, 101
Comptroller to order the preparation of
75
Conditions under which issuable
101
Disposition of deposits to retire
69
Disposition of taxes paid on.
156
Distribution of, how determined.
105
Liability for redemption of, by members of national currency association
99
Limit of, including United States bond-sccured, issuable by any bank
103
Limit of, issued by all national banks
103
Monthly returns of, for taxation..
.
156
;
Per cent, of, issuable on securities, including commercial paper,
through national currency association
99
Per cent, of, issuable on State bonds, etc
99, 101
Plates for printing of
75
Redemption fund of other banks available, when
100
Redemption fund required on
104
Redemption of, in lawful money at Treasury
110
Reduction of, provision for
69
Sale of securities to redeem
99
Stock of, to be deposited in the Treasury or subtreasuries
75
Subject to applicable provisions of law, relating to United States
bond-secured circulation
102
Tax rate on
156
Withdrawal of, on deposit of lawful money or national-bank notes..
69
Administrator. (See Trustee.)
Advertisements (see also Noticc; Publication):
Imitation of circulation in, penalty for
96
Agency, National Bank Redemption, provisions for
90, 91, 124
Agent:
Association as fiscal, of Government
50
Bonds, examination by
65
Central reserve, city
131
Central reserve, city, additional.
133
Circulation, to witness destruction
90
Liquidating bank
185
Reserve
120
Reserve, city, additional provisions for
126
Reserve, city, additional central, provisions for
133
Shareholders, appointment and qualification of
185
Shareholders, duties of
185
Special, to examine bank failing to redeem notes
171
"Witnessing destruction of circulation by
90
Aiding misdemeanors of officers
149
Allotment. (See Shares.)
Amendments:
Proposed, to national-bank act to be made in Comptroller's report
11
Restriction of, to articles of association
35




67

68

INDEX T NATIONAL-BANK ACT, ETC.
O

Appointment:
Paragraph
Agent to examine bonds
65
Agent to witness destruction of circulation
90
Committee to examine plates, etc
79
Committee to witness destruction of circulation
90
Comptroller
2
Deputy Comptroller . *
4
Directors of associations
19
Dissenting shareholders, committee of appraisal
29
Examiners of associations
190
Clerks of Comptroller's office
6
Officers of associations
19
L
Receivers of associations
...
178, 183
Special commission for preliminary examination of associations...
71
Vacancies in board of directors
45
Appraisal. (See Shares.)
Articles of association:
Amendment of, for extension of corporate existence
25, 26
Amendment of, restricted
35
Converted State bank, execution of, by
52
Increase of capital stock by amendment of
39
Proceedings in regard to, and form of
16
Provisions for elections when not provided for in
46
Reduction of capital stock
40
Specification of object of association in
17
Title and location, change of
21
Assessments:
Examinations
190
Examiner, compensation of
*
190
Impairment of capital
143
Plates, engraving of
30, 124
Redemption of circulation
67, 68, 69
Repayment of tax
•
160
Reports of circulation, failure to make
157
Semiannual duty
157
Shareholder's personal liability
48
Tax on unauthorized circulation
202, 203. 204
Transportation of notes
124
Assessors:
Shareholders' lists accessible to
151
Assets:
Additional circulation banks' assets liable for redemption
99
Comptroller's annual report to contain statement of national banks.
11
Expenses of receiver paid from
182
Failed bank, may be turned over to agent
185
Insolvent banks, distribution of
180
Of consolidated banks
166
Receiver to collect, etc
178
Receiver to sell on order of court
178
Reports of condition to contain statement of
152
Shareholders' agent to distribute
185
United States as paramount lien on
174
Assignment (see also Treasurer United States; Bonds, United States):
Of assets after insolvency, void
192
Register of bonds
62
United States bonds as security for circulation
61
Assistant Treasurer, United States:
Circulation, unfit, to be sent to Treasurer for redemption
124
Fraudulent notes to be marked by
239
Public moneys to be deposited with
224, 225
Unauthorized withdrawal of public money from
228
Associations:
Defined
55
Attachment:
Not to issue prior to final judgment of court
192
Attorney General, opinion of
*
267, 268, 269



69

INDEX TO NATIONAL-BANK ACT, ETC.

Auction:
Paragraph
Bonds of expiring associations
31
Bonds of liquidating associations
31
Bonds, sale of, when association has failed to pay its circulating notes 174
Enforcement of assessment, impaired capital
143
Purchase of property by receiver
186
Sale of delinquent national-bank stock
143
Sale of dissenting shareholders' stock
29
Authority. (See Certificate.)
Bad debts:
Defined
142
Ballot. m(Sce Elections; Shareholders.)
Bank circulation. (Sec Circulation.)
Banking house:
Association may own
- 33
Banking powers (see also Real estate and National banking associations):
Corporate
19
Incidental
19
Bills of exchange:
Discount of
135
Illegal transfer of, void
192
Interest on
.
135
Penalty for official malfeasance, relative to
149
Restriction on loans, not applicable to
...
138
Restriction on association's liability, not applicable to
140
Transfer of, to creaie a preference, void
192
Bimetallism
253
Board of directors (see also Directors):
Election of
19
Election postponed
46
National Monetary Commission
98
Number constituting
42
President
47
Provisions for
42
Three-fourths to be residents of State
43
Vacancy,
filling
45
Bonds, official:
Comptroller
3
Deputy Comptroller
4
Officers of associations
19
Public depositaries
50
Receiver
178
Shareholders* agent
185
Shareholders', on election of agents
185
Bonds, United States:
Annual examination of. provided for
65
Assignment or transfer of, to be countersigned by Comptroller
61
Association to be notified of transfer or assignment
63
Cancellation of, forfeited, for circulation redeemed
173
Circulation issuable on
74
Circulation obtainable on
74
Comptroller, access to records of and deposit with Treasurer
64
Converted State banks to deposit
52
Coupon, to be exchanged for registered
60
Deficiency in proceeds from sale of, what first lien
174
Defined
56
;
Deposit of, required to begin business
57
Depositaries required to deposit
50
Depreciation in value of, how made good
66
Exchange of, permitted
66
Forfeiture of^ for failure to redeem circulation
171
General provisions respecting
66
Gold banks to deposit
92
Government depositaries, deposit of, required
50
Increase of deposit of
59



70

INDEX TO NATIONAL-BANK ACT, ETC.

Bonds, United States—Continued.
Paragraph
Interest on, liable for penalty for failure to make returns and pay tax
157
Interest on, liable for penalty for failure to make reports to Comptroller
155
Interest on, withheld on impaired capital
143
Lawful money, deposit of, to retire circulation and withdraw
67
Minimum amount to be deposited
57
Maximum circulation issuable on
74
Obligations of United States, including, defined. .
230
Panama Canal, available as security for circulation
58
Panama Canal, additional issue of authorized
259
Panama Canal, authorized by Act of Aug. 5, 1909, not receivable as
security for circulation
260
Penalty for illegal dealing in counterfeit
237
Penalty for illegal possession or use of material for printing
233
Penalty for passing counterfeit
..
234
Penalty for taking or possessing unauthorized impressions of tools,
s
etc., used in printing
235, 236
Reassignment of, to liquidating bank
167
Record of transfer or assignment of, to be kept by Comptroller
62
Refunding of
250
Registered, to be deposited with Treasurer United States
57 •
Relation of, on deposit to capital
59
Return of, to association
66
Sale of, at auction, for failure to redeem circulation
174
Sale of, privately, at not less than par, for failure to redeem circulation
175
Taxation, exempt from
210
Tax on circulation secured by Panama Canal bonds
58
Transfer of, how effected
61
Treasurer United States to have access to records of Comptroller
relative to
64
Treasurer United States to hold, in trust for association
61
Withdrawal of, and of circulation
67
Withdrawal of
59
Bookkeeper. (See Officers.)
Books. (See Comptroller; Treasurer United States.)
Borrowed money. (See Liability of association; Loans.)
Branch banks:
State banks entering system by conversion may retain
53
Business:
Authorization of association to begin, when
36
Place of
119
Suspension of, after default to pay circulation
172
Business paper. (See Commercial paper.)
By-laws:
Prescribed by directors of national banks
19
C
Cancellation. (See Bonds, United States; Circulation.)
Capital stock:
Additional circulation, relation of, to
99
Agent of shareholders to distribute assets ratably
185
Amount to be paid before association begins business
36
Appointment and qualification of shareholders' agent
185
Association to begin business, amount to be paid
36
Branches of converted State banks
53
Certificate of officers and directors required relative to payment of 36. 70
Circulation net to be used to correct
141
Circulation outstanding not exceeding 5 per cent, of, free from
taxation
200
Circulation, proportion to
59
Compensation of examiners based on. except in certain cases
190
Conversion of State banks authorized, when
52
Creditor's bill against shareholders
184
Deposit of United States bonds based on
57



71

INDEX TO NATIONAL-BANK ACT, ETC.

Capital Stock—Continued.
Paragraph
Directors, individual liability of
189
Directors, qualifications of
43
Dividends declared oil, and net earnings in excess of dividends to
be reported
154
Dividends on, and creation of surplus
137
Dividends on, when prohibited
142
Disposition of, delinquent shareholders
37
Division of, into shares and number and value of each
35
Enforcement of assessment, to make good impairment of..."
143
Enforcing individual liability of shareholders of, by receiver
183
Enforcing payment of.
37
Holders of shares of, in expiring associations to be extended or
reorganized to have preference in the allotment of shares
29
Holding of shares of, required by directors
44
Impairment of, assessment for
143
Impairment of, receiver may be appointed for failure to make good
183
Increase of, provisions for
38, 39
Individual liability of shareholders
48
Liabilities of an association not to exceed, except on account of
certain demands
140
Liquidation, shareholders owning two-thirds of, may vote to go into
163
List of shareholders of, to be transmitted to the Comptroller
151
Loans on security of shares or purchase of, prohibited
139
Loans restricted to 10 per cent, of, including surplus, etc.
138
Minimum amount required of national banks
34
Minimum of bonds to
57
National currency association, requirements relative to
98
Number of shares and amount of, stated in organization certificate
17
Payment of, provisions for
36
Penalty for failure to make good impairment of
143
Personal liability of shareholders
48
Receiver may be appointed when—impaired
143
Receiver may be appointed when, not fully paid in
37
Reduction of, provisions for
40
Relation of bond deposit to
59
Restoration of, when below the minimum required
37
Shareholders of, list to be kept and subject to inspection
151
Shareholders owning two-thirds of, may place an association in
liquidation
163
Shareholders owning two-thirds of, may change title and location.
21
Shareholders owning two-thirds of, may increase stock
38, 39
Shareholders owning two-thirds of, may reduce stock
40
Shareholders owning two-thirds of, may extend corporate existence
26
Shareholders entitled to one vote on each share of, held by
41
Shareholders of converted State banks not liable when
48
Shareholders of, not consenting to an extension may withdraw
29
Shares of, acquired for debt to be disposed of when
139
State taxation of shares of
162
Subscriptions to, when payable
36
Surplus fund to be created to the amount of 20 per cent, of
.137
United States registered bonds to be deposited as security for circulation to be based on
57
When'increase of, becomes valid
38
Withdrawal of bonds on reduction of, or closing of business
59
Withdrawal of bonds, limited
66
Cashier (see also President; Officers):
Appointment of
19
190
Bank examiner may examine on oath
Bond assignments by
61
Certificate of officers and directors
70
Certificate of stock payment
36
Circulating notes, to sign
75
Election or appointment of
19
Embezzlement by
149
Examiner of own bank can not be
190
Expiration of corporate existence, certification by
31



72

INDEX TO NATIONAL-BANK ACT, ETC.

Cashier—Continued.
Paragraph
Extension of corporate existence, certification by
26
False certification of checks
147
Incomplete circulation, provisions relative to
128
Increase of stock, certification of
38
Liquidating bank, duty in
164
Penalty for—
Countersigning or delivering circulation improperly
95
False certification of checks
148
Issuing circulation of expired associations
238
Official malfeasance
149
Pledging, etc., circulation
145
Unauthorized receipt of public money
229
Protest of circulation, waiving notice of
170
Proxy, not to act as
41
Reports of condition, verified by
152
Reports of earnings and dividends, verified by
154
Shareholders, lists of, by
.
151
Signature of, forged or wanting, not to invalidate circulation
128
Taxable circulation, returns by
157
Unauthorized circulation, returns by
204
Voluntary liquidation, certified by
164
Central reserve agents. (See Agents; Reserve agents.)
Certificate:
198
Certified copy of organization, evidence
Comptroller's, of authority
71
Converted State banks
52
Destruction of notes
90
Execution of organization
18
Extension of corporate existence
27
Increase of stock valid, when
38
May be withheld, when
71
National currency association, to be filed with and approved by the
Secretary of the Treasury
98
Officers and directors to attest
70
Organization, to specify
17
Payment of installments of stock to be certified
36
Publication of Comptroller's, of authority
72
Reduction of stock valid, when
40
Sealed, of Comptroller, evidence
197
Voluntary liquidation
164
Certificate of incorporation of national currency association:
Approval of, by Secretary of Treasury
98
Body corporate upon execution of
98
Execution of
98
Certification of checks, when forbidden, and penalty for
147, 148
Certified copies. (See Evidence.)
Charter (see also Corporate existence):
Certificate of Comptroller authorizing the bank to begin business
known as
71
Forfeiture of
189
Issue of, to national banks
71
Charter number to be printed on circulation
76
Checks:
Certified receivable for duties on imports and internal taxes
261
False certification of, unlawful
147
Falsely certified, an obligation of association.^
147
Penalty for false certification of
148
Circulation (see also Additional circulation):
Amount of, obtainable
74
Amount of, obtainable by gold banks
92
Association may issue
19
Association to receive interest on bonds as long as, honored
66
Associations consolidating, deposit of lawful money to retire, unnecessary
166
Associations to redeem, in lawful money on demand
131
Bonds in excess of amount required may be withdrawn
59



73

INDEX TO NATIONAL-BANK ACT, ETC.

Circulation—Continued.
Paragraph
Bonds forfeited when, dishonored
171
Bonds, United States, to secure
57
Certificates of destruction, by whom executed
90
Charter number on
76
Collection of tax on . . :
159
Consolidating banks
166
Cost of plates to be paid bv association
124
Counterfeiting, etc
95. 97, 230, 232-238
Countersigning unlawfully
95
Deposit of United States bonds to secure
57
Deposit of bonds to be increased when capital is increased. '.
59
Destroyed, to be replaced by an equal amount of new notes
124
Disposition of redemption account balances
127
Examination of bank upon protest of, by agent of Comptroller
171
Expense of plates for new notes of extended banks
30
Expenses of redemption, how paid
124
Extended bank, shall differ from prior issues
30
For what, is receivable
88
Fraudulent notes to be so stamped
239
Gain from lost and destroyed
30
Gold bank, to be redeemed in gold coin
*
92
Government depositaries to receive, at par
50
Inscription on
75, 92
Increasing capital stock, use of, prohibited
141
Limit on aggregate amount of
74
Liquidating bank to deposit lawful money to redeem
167
Minimum deposit of bonds required
57
Notice of redemption of, to be forwarded to bank
124
Other, prohibited for national-bank
89
Penalty for failure to make return of taxable
158
Pledging, as security prohibited
141
Profit on unredeemed, inures to the United States
30
Proceedings when return is not made
206
Prohibition against circulating uncurrent notes
144
Proportion to bonds deposited
74
Proportion to capital
57
Protest of
170
Receivable at par by all national banks
134
Redeemed, to be canceled
177
Redemption fund
104, 124
Redemption of, in United States notes
124
Redemption of, extended banks
30
Redemption of, liquidating banks
169
Redemption of, closed banks
168
Redemption of, incomplete
128
Refunding excess tax
160
Restriction on notes less than $1
212
Restriction on notes less than $5
80
Restriction on notes of $5
74
Restriction of tax provisions
208
Semiannual return of, subject to tax
157, 205
Statement concerning, of closed banks to appear in annual report
of Comptroller
11
Tax on
156
Tax on converted bank
207
Tax on, insolvent banks remitted
161, 209
Tax on State bank issue
199-206
Tax on, subject to State l a w . . .
211
Treasurers and public depositaries to return all, of closed banks...
168
When exempt from tax
200
When issuable
88
Withdrawal of, by depositing lawful money, limitation of
67
Worn out or mutilated, destroyed
90, 91
Citizens:
National banking associations, where
24
Claims. (See Insolvency; Receiver.)



74

INDEX TO NATIONAL-BANK ACT, ETC.

Clearing house:
Paragraph
Certificates issued by, counted as reserve
.
121
Receipt in settlement of balances of gold and silver certificates by.
146
Clearing-house certificates. (.SVtf Clearing-house; Reserve.)
Clerks:
Appointment and qualification of, by the Secretary
6
Clerical force for redemption of circulating notes
125
Duties of, fixed by the Comptroller
6
Employment of, for the Bureau by the Comptroller
6
Of banks cannot act as proxy
41
:
Names and compensation of, in annual report and official Register 11, 12
Closed associations. (Sec Insolvent banks.)
Coin. (See Gold; Silver.)
Commercial paper:
Additional circulation on
99
Characterized, when available as security for additional circulation..
99
Discount of
135, 140
Committee of appraisal. (See Dissenting shareholders.)
Comptroller of the Currency:
Action as to agent of shareholders
185
Acts of, subject to approval of Secretary
Ill
Additional circulation to be issued by, when
99
Agent, special, to be appointed for association failing to redeem
circulation
171
Annual report to be made to Congress by
II
Application for additional circulation to be made to
99
Appointment, term and salary of
2
Approve receiver's purchase of property
187
Approve reserve agent
121, 131
Articles of association and organization certificate of national banks
to be filed with
16, 17
Bonds and records of, with Treasurer, access to
64
Bonds, sale of. privately or at public auction by
174, 175
Capital stock, increase or reduction of, to be approved by
38,39, 40
Certificate to begin business
71
Certified copy of organization certificate, evidence
198
Charter number of bank, he to have it put on circulating n o t e s . . . .
76
Cited in injunction of receiver
181
Circulation worn, mutilated, destruction of
90, 91
Creditors of failed banks, he to pay dividends to
180
Distribution of Comptroller's reports
13, 14
Duties of
1
Enforce stockholders' liability
48
Engraving of plates for printing of additional circulation to be
ordered by
75
Enjoined by bank, how
181
Examiners, appointment of
190
Extension of corporate existence, approval of, by
25
Evidence scaled certificates
197
Forfeit, cancel, or sell bonds of notes not redeemed
175
Forfeiture of charter, suit to be brought by
189
Interest in national banks, issuing currency, prohibited
7
Jurisdiction of circuit courts to enjoin
195
Liquidation of associations to be notified of
164
Notice to banks short in reserve
120
Notice to creditors of insolvent banks
179
Oath to be taken and bond to be given by
3
Plates and dies, examination of
79
Printing report of
13, 14
Qualification of
3
Receivers, appointed by
;
120, 178
Recommendation relative to issue of additional circulation, to be
referred to and approved by the Secretary
99
Reports of banks other than national, to be obtained and published by
11
Reports to be made to.
152-154
Reserve cities, designation of, b y , . . .
126, 133
Secretary of Treasury to approve certain acts of
Ill



75

INDEX TO NATIONAL-BANK ACT, ETC.

Comptroller of the Currency—Continued.
Paragraph
State banks converted, approved by
52
Title and location, change of, to be approved by
21
Title of national banks, subject to approval of
17
Transfer and assignment of bonds to be countersigned by
102
Verification by, of banks' monthly returns of additional circulation
for taxation
156
Compounding debts, of insolvent national banks
178
Congress:
Co nipt roller's report to be made to
11
Consolidation of national banks, provisions regarding liquidation and
bonds
166
Contributions. (Str Political contributions.)
Converted State banks. (See State banks converted.)
Corporate existence:
Extension of
25-27
Reextension of
32
Liquidation, not terminating
31
Corporate powers. * (See Powers.)
Corporation (see also Liability of association):
Association becomes, when
19
Excise tax on
258
National currency association becomes, when
98
Cost. (See Expenses.)
Counterfeits, making or using notes, plates, tools, etc
231-237
Coupon bonds. (.S>f Bonds, United States.)
Courts. (See Crimes, jurisdiction, etc.)
Creditors:
Bill in equity by, against shareholders.
184
Checks falsely certified a valid obligation of associations
147
Creditors' rights not to be impaired
192
Directors' liability
189
Expiration of existence, notice to
31
Insolvency, notice of, to
179
Nonpayment of circulation, notice of, to
173
Payment of assets of failed banks
180
Preference of illegal
192
Shareholders, list of, subject to inspection by
151
Shareholders, personal liability of, to
48
Voluntary liquidation, notice of, to
164
Creditor's bills:
Against shareholders
184
Crimes, jurisdiction, etc.:
Abstraction of money, funds, etc
149
Aiders and abettors
149
Counterfeiting circulation
.
232
Dealing in counterfeit circulation
237
Embezzlement
J49
Evidence, certified copy of organization certificate
198
Evidence, sealed certificate of Comptroller competent
197
False certification of checks
147, 148
False entries
149
Having or taking unauthorized impressions of tools, etc
235-236
Illegal possession or use of material for circulation
233
Imitating circulation for advertising purposes...
96
Improper countersigning or delivering circulation
95
Issuing circulation without authority. .
149
Issuing circulation of expired associations
238
Jurisdiction, general, of national-bank cases
24, 28
Jurisdiction to enjoin Comptroller or receiver
195
Misapplication, willful
149
Mutilating circulation
97
Obligations of the United States defined
230
Official malfeasance
149
Passing counterfeit circulation
234
Pledging United States notes or bank circulation
145
Taking unauthorized impression of tools, etc
235



76

INDEX TO NATIONAL-BANK ACT, ETC.
Paragraph

Currency. (See Circulation; Gold; Gold certificates; Silver; Silver certificates; Lawful money; United States note certificates.)
Currency Bureau:
Designation of office of Comptroller of the Currency
Expenses of, in liquidating failed banks
Offices, vaults, etc., for
Submission of list of employees
11,

1
12
9
12

D
Debts, compounding of:
Real estate held for
33
Deficicncy. (See Bonds; Capital; Circulation; Receiver, Reserve.)
Denominations:
Circulation of gold banks
92
Circulation of national banks
75
Converted State-bank shares
52
Gold certificates
146, 245
;
Shares of national-bank stock
.
*
35, 52
Deposit of United States bonds. (See Bonds, United States.)
Depositaries. (See Government depositaries.)
Deposits:
Public moneys
50, 224
Reserve to be kept on
93. 120-124
Depreciation. (See Bonds; Circulation.)
Deputy Comptroller:
Appointment
4
Bond
4
Duties
4
Interest in bank issuing national currency prohibited by
7
Oath to be taken
4
Salary of
4
Deputy Comptroller, additional:
Powers of
5
Salary of
5
Destruction of mutilated notes. (See Redemption.)
Dies. (See Plates and dies.)
Directors (see Board of directors):
Appointment or election of
19
Assessment, provisions for enforcement of
143
Attestation of reports to Comptroller, by
152
Capital impaired, duties in
37
Certificate of officers and
70
Certification of, to extension
26
Conversion of State bank, action by
52
Dividends, declaration of, by
137
Embezzlement, penalty
149
Enforcing payment of capital
37
Exception in Oklahoma
262
Failure to hold annual election
46
Forfeiture of charter for violation, etc., bv
189
Liability of
189
Names and residences of, to be ascertained by Comptroller
70
Not to be appointed by Comptroller to examine own bank
190
Number and election of
42
Oath of
.
44
Oklahoma, qulification of national bank in
262
Penalty for issuing circulation of expired association
238
Penalty for official malfeasance
149
Penalty for unauthorized receipt of public money
229
President of board, to be a
47
Powers of
19
Proxy, can not act as
41
Qualifications of
43
Qualifications of, in Oklahoma
262
Shareholders dissenting to extension to give notice to, etc
29
Vacancies in board of
45



77

INDEX TO NATIONAL-BANK ACT, ETC.
Paragraph

Disbursing funds of United States officers, depositing with nationalbank depositaries.
Discount. (See Loans; Liability of association; Interest.)
Dissenting shareholders:
Withdrawal of, on extension
29
Dissolution. (See Expiration of corporate existence; Forfeiture; Insolvency; Liquidation.)
Distinctive paper:
National-bank circulation, etc., to be printed on
77
Unauthorized possession or use of
233
Dividends (see also Surplus and dividends):
Comptroller to make ratable, of assets of insolvent banks
180
Directors may declare, when
137
Earnings and, to be reported
154
Penalty for failure to report earnings and
155
Restriction on association's liability
140
Unearned, prohibited
142
Drafts:
Obligations of United States including
230
Official malfeasance
149
Liability of association, relative to
140
Penalty for mutilating
97
Dues. (See Taxation; Duties.)
Duties:
Associations organized under act of February 25, 1863
207
Circulation, converted State banks
207
Circulation, enforcing payment of, on
159
Circulation, exempt from
200
Circulation, not receivable for customs
88
Circulation, refunding excess on
160
Circulation, restrictions on
208
Circulation, semiannual on
156
Circulation, unauthorized
199-204
Comptroller's
1
Deputy Comptroller's
4
Directors'
42, 44
Examiners'
190
Gold certificates receivable for
245
Public depositaries, designation and
50
Receiver, appointment and
178
Shareholders' agent
185
E
Earnings. (See Dividends.)
• Elections:
Change of title or location
Corporate powers
Directors and officers of national currency association
Extension of corporate existence
Failure to hold annual
Increase of stock
Number of directors
Oaths of directors
Qualifications of directors
Qualifications of shareholders
Reduction of stock
Shareholders' agent
Voluntary liquidation
Embezzlement, misapplication of funds, etc.:
Penalty for
Employes and expenses. (See Clerks; Expenses.)
Enforcing payment of capital stock.
Provisions for
••
Engraving. (See Circulation; Plates and dies.)
Equity. (See Creditor's bill against shareholders.)
Evidence



21
19
98
25
46
39
42
44
43
41
40
Jj»
163

•

149

37
197

»

198

78

INDEX TO NATIONAL-BANK ACT, ETC.

Examination of organization proceedings:
Preliminary to authorizing, to begin business
Examinations:
Annual, of bonds
Ascertainment of value of stock of dissenting shareholders
Bonds and records, provisions for
Compensation of examiners
Examiners to make
Limitation of visitorial powers
List of shareholders subject to
Plates and dies annually
Preliminary, to beginning business
Qualification of examiners
Special, of extended associations
Examiners:
Appointment of
Compensation of
Qualifications of
Special commission
Execution. (.SV* Suits.)
Executor. (Sec Trustees.)
Existence:
Extension of
National currency association, corporate existence of
Reextension of
Term of corporate, of national banks
Expenses:
Bureau, to be stated in Comptroller's annual report
Circulation, redemption of
Circulation, transportation and redemption of
Duties of shareholders* agent relative to
Examinations
Examinations, dissenting shareholders
Examinations, special
Examiners, fees of
Liquidation of failed national banks
National Currency Commission
Plates, cost of
Plates and dies, examination of
Provisions for, act May 30, 1908
Receiverships, how paid
Receiverships, paid prior to election of shareholders* agent
Sale of bonds
Sale of delinquent stock

Failed national banks:
Report of expenses
Failure. (See Insolvency.)
False entry:
Penalty for, official malfeasance
Falsely certifying checks
Penalty for
Fees. (Seei Examiners; Receivers.)
Fine. (See Penalty.)
Firm. (See Liability of association.)
Fiscal agent. (See Agent; Government depositaries.)
Forfeiture of charter:
Suit to be brought for, by Comptroller of the Currency
Forgery. (See Crimes; Penalty.)
Franchise:
Forfeiture of
Fraudulent notes:
United States and national bank officers to mark



Paragraph
70
6a
29
64
190
190
191
151
79
70
190
27
190
190
190
71

25
98
32
19
11» 12
124
68
185
190
29
27
190
12
117
30, 124
79
114
182
185
174
37

12
149
147
148

189
189
239

INDEX TO NATIONAL-BANK ACT, ETC.

79

G
Gold:
Paragraph
Certificates not to be issued when reserve of gold coin and bullion
is depleted
245
Circulation of gold banks redeemable in
92
Deposit of, for certificates
146, 245
Dollar, standard unit of value
240
Gold banks not required to take circulation of other banks at par..
134
Issue of certificates of deposit of
146, 245
Organization of gold banks
92
Reserve gold of one hundred and fifty millions
241
Reserve of gold banks to be silver and
93
Taxation of, gold certificates by State, etc
211
Gold banks:
Circulation of, issuable
92
Conversion of
94
Deposit of bonds by
92
Exempted from provisions relative to other bank circulation
134
Organization of
•
92
Reserve required for
93, 131
Tax on circulation
156
Gold bank notes. (See Gold banks; Circulation.)
Gold certificates:
Deposit of gold for
245
Issue of, prohibited, when
101, 146
Minimum denomination
:
245
Payable to order
245
Receivable for
146, 245
Gold reserve in Treasury:
Gold certificates not to be issued when depleted
245
Government depositaries:
Deposit and withdrawal of public moneys
224
Deposits by certain postmasters
225
Designation and duties of
50
Interest to be paid by
51
National banks as
50
National-bank circulation to be received by
50
National banks as financial agents of the Government
50
Penalty for misapplication of money-order funds
226
Penalty for unauthorized deposit of public moneys
228
Penalty for unauthorized receipt or use of public moneys
229
Secretary of the Treasury to designate
50
Securities to be deposited by
50
Guardian. (Sec Trustee.)
H
Hawaii:
.
National banking laws applicable to
House of Representatives:
Comptroller's reports to be sent to
Members of, on National Monetary Commission....
Speaker of, appointment by, of members of National Monetary
Commission
Hypothecation. (See Pledging.)

265
13
115

I
Imports, interest on public debt:
J •
Circulation of national banks not receivable for duties and interest
Improper use of circulation:
Pledging, hypothecating, etc
Uncurrent circulation
:..
Incomplete circulation (see also Circulation):
Redemption of
Indian Territory:
.
National-bank act in effect in
Injunction. (See Comptroller; Suits.)



oo
88
J4*
144

„„

80

INDEX TO NATIONAL-BANK ACT, ETC.

Insolvency:
Paragraph
Assets, distribution of, by receiver
180
Expenses incident to, report of
12
Impairment of capital
143
Jurisdiction of courts to enjoin Comptroller
195
Jurisdiction of national-bank cases
24, 28
Notice to creditors of associations in
179
Penalty for issuing circulation of associations in
238
Preference of creditors
192
Receiver, appointment of
.178
Receiver, duties of
178
Receiver, when may be appointed
178, 183
Redemption of circulation of association in
168
Shareholders* agent
185
Taxes on bank in, remitted
161, 209
Interest in national banks prohibited:
By Comptroller
7
By Deputy Comptroller
7
Interest (see also Usury):
Rate of, chargeable by national banks
135
United States deposits
51
Internal Revenue, Commissioner of:
Penalty for failure to make returns to, of taxable circulation
206
Remission of tax against insolvent State banks
161, 209
Semiannual return to, of taxable circulation other than national
205
International bimetalism:
Act March 14,. 1900, relative to
253
Issue and Redemption Division established
243

Judgment (see also Suits):
Appointment of receiver when judgment obtained against b a n k . . . .
Illegal preference of creditors
Jurisdiction. (See Crimes, jurisdiction, ctc.S

183
192

L

Larceny. (See Crimes, jurisdiction, etc.)
Lawful money:
Defined
120
Defined for gold banks
93
Deposit of, to retire United States bond-sccurcd circulation
67, 68
Exemption of circulation from taxation when, deposited
200
Expiring associations to deposit
31
Extended banks to deposit
30
Five per cent, fund
124, 127
Forfeiture of bonds, for failure to redeem circulation in
171
Limit of amount to be deposited monthly
69
Liquidating associations to deposit.
165
Liquidating associations, consolidating, not to deposit
166
National bank circulation, including,, to be deposited to retire additional circulation
69
National bank circulation to be redeemed in, at Treasury
110
Payment of protested circulation in
173
Protest of circulation, for failure to redeem in
170
Receiver to be appointed for failure to maintain reserve of
120
Redemption account, disposition of
127
Reserve to be
120
Withdrawing circulation, deposit of
67, 68
Lawful money reserve. (See Reserve.)
Legal tender:
Gold coins
.
*
214
Minor coins
218
Silver dollars
*
216-242
Subsidiary silver coins
217
United States notes
219, 220



81

INDEX TO NATIONAL-BANK ACT, ETC.

Liability:
Paragraph
Association's for pledging, etc., United States notes, etc
145
Banks and assets, additional circulation
99
Converted State bank for old notes
207
Creditor's bill against shareholders
184
Estates owning stock subject to
49
False certification of checks
147
Individual, of directors
189
Limited to amount of capital, except
140
Personal, of shareholders
48
Shareholders, debars from voting
41
Shareholders of certain banks exempt from
48
Trustees, exempt from, when
49
Liabilities:
Associations organized under act of February 25, 1863
54
Change of title or location not to affect
22
Comptroller's report to contain statement of national banks
11
Converted State banks
207
Deficiency in reserve, not to increase liabilities
' 120
Deposit of lawful money relieves from, on circulation
167
Duties of receiver
178
Exceptions to limitation
140
Extended associations
28
Liquidating associations, on consolidation
166
Loans, restrictions on
138
Reports of condition to show
152
Restriction on
140
Lien:
National currency association to have benefit of, when
99
United States has paramount, on assets of association
:.
174
Limitations:
Associations, corporate existence
19
Bonds, withdrawal of
66, 67
Capital, converted State banks
52
Capital stock, increase of
38, 39
Capital stock, reduction of
40
Capital stock, payment of
36
Capital stock, requisite amount of
34
Circulation, denominations
75
;
Circulation, deposit of lawful money on withdrawing
67
Circulation exempt from tax
200
Circulation obtainable
74
Circulation obtainable by gold banks
92
Circulation to be taken at par
134
Circulation, tax on
156, 208
Circulation, unauthorized, tax on
202, 203. 204
Corporate existence of converted gold banks
94
Creditors of insolvent banks, notice to
179
Creditors of insolvent bank, illegal preference
192
Directors, number of
42
Dividends
137, 142
;
Expiration of corporate existence
31
Extension of corporate existence
25. 32
Gold certificate, denominations of
146
Impairment of capital
143
Interest rate
135
Jurisdiction, general, of national-bank cases
24, 28, 195
Lawful money deposited to" retire circulation
68
Liability of national banks
140
Location of associations, change of
21
Loans
138
"National" in title of bank
193
Place of business
Public depositaries
50
Real estate holdings
33
Reserve, gold banks
93
Receiver, appointment of
183



82

INDEX TO NATIONAL-BANK ACT, ETC.

Limitations—Continued.
Paragraph
Receiver, purchase of property to protect trust
186
Reports of condition, transmitted
152
Reports of earnings and dividends, transmitted
154
Reserve requirements
•
120
Reserve with central reserve agents
131
Reserve with reserve agents
121
Shareholders, personal liability of
48
Shareholders, personal liability of certain converted banks
48
Shares of stock, par value
35
Shares of stock, directors to own
43
State taxation of money
211
State taxation of national banks
162
Stock, purchased or acquired
139
Suits, conduct of
194
United States bonds deposited
57
Visitorial powers
191
Voluntary liquidation, vote
163
Voluntary liquidation, deposit of lawful money
165
Voters at elections
41
Liquidation:
Bonds withdrawn
167
Creditor's bill against shareholders
184
Consolidation
166
Expiring associations to comply with provisions for
31
Lawful money to be deposited
165
Notice of, to be published
164
Penalty for issuing circulation of associations in
238
Redemption of circulation of associations in
168, 169
Sale of bonds, when
167
Vote required
163
Liquidation and^ receivership (see also Liquidation; Receiver):
Bonds, deficiency in, first lien on assets for redemption of circulation
174
Bonds, forfeiture of
171
Bonds, sale of, at auction
174
Bonds, sale of, privately
175
Bonds, withdrawal of
167
Charter, forfeiture of
189
Circulation, protest of
170
Consolidation, provisions for
166
Creditor's bill against shareholders
184
Deposit of lawful money on liquidating...
165
Distribution of assets of insolvent associations
180
Enjoining proceedings
181
Enjoining proceedings, where brought
196
Expiring associations
31
Illegal preference of creditors
192
Jurisdiction, general, of national-bank cases
24
Jurisdiction of circuit courts
195
Notice of vote to liquidate
164
Notice to creditors of insolvent associations
179
Notice to present circulation for redemption
173
Penalty for issuing circulation of expired associations
238
Receiver, appointment of
178
Receiver, when may be appointed
183
Receiver, purchase of property to protect trust
186
Receivership, expenses of.t
182
Shareholders' agent, appointment of
185
Shareholders' agent, duties of
185
Suits, conduct of
194
;
Suspension of business for nonpayment of circulation
172
Taxes on insolvent associations remitted
161, 209
Vote required for liquidation
163
Loans:
Associations* liability restricted
140
Circulation as collateral for, prohibited
141



83

INDEX TO NATIONAL-BANK ACT, ETC.

Loans—Continued.
Prohibited on security of own stock
Real estate, prohibited
Restrictions on
Location (see also Title and location):
Change of
Organization, certificate to state
Losses:
Bad debts and, exceeding profits
Lost or stolen national bank notes:
Redemption of

Paragraph
139
33
138

M
Maceration:
Redeemed circulation to be disposed of by
Maximum. (See Bonds; Capital; Circulation; Limitations.)
Minimum. (5V? Bonds; Capital; Circulation; Limitations.)
Misdemeanor. (See Crimes; Penalty; Official malfeasance.)
Monetary system:
National Monetary Commission to investigate and report on
Money in the Treasury:
Appropriation of, to carry out provisions of act of May 30, 1908...
Expenses of National Monetary Commission, to be paid from
Moneys. (See Lawful money; Legal tender; Circulation; Public moneys.)
Mortgages:
Assignment of. when illegal
Assignment, when official malfeasance
Real estate, possession, etc., of by association
y
Mutilated or worn circulation:
Redemption of

21
17
142
128

91

116
114
117
192
149
33
90

N
National:
Use of the word, in titles of associations other than national, prohibited
193
National-bank act:
Provides for a national currency, etc
15
Status of national banks organized under act of February 25, 1863..
54
National banking associations:
Amendment of articles of association restricted
35
16
Articles of association entered into by.
Branches may be retained by converted State banks..53
Capital required
34
Cancellation of redeemed circulation
177
Certificate of officers and directors
70
Circulation obtainable by
74
Circulation of. tax on
156-160
Circulation of, to be redeemed in United States notes
124
Circulation to be taken at par
134
Circulation of, for what receivable
88
Circulation unsigned or with forged signatures to be redeemed
128
Change of title and location
21-23
Charter forfeiture
189
#
Charter number to be printed on circulation of
76
Closed bank circulation
168
Comptroller and Deputy Comptroller not to be interested in issuing circulation
J
Conversion of State banks to
52
Corporate and incidental powers of
19
Deposit of bonds by
^7
Directors individually liable when
189
Directors, number and election of
42
Directors, oath of
,
44
Directors, qualification of
43
Election, holding annual
io?
Enjoining proceedings
;
18}
:
Examination of, prior to being authorized to begin business
70, 71



§4

INDEX TO NATIONAL-BANK ACT, ETC.

National banking associations—Continued.
Paragraph
Expiration of corporate existence, provisions on
31
Extended bank circulation
30
Exchange of bonds
^ 60
Extension of corporate existence o f . . . . .
*
25-27
Formation of national currency associations by
98
General provisions respecting bonds
66
Gold bank circulation, provisions for issuing
92
Gold banks may be organized
92
Gold banks, conversion of
94
Increase of capital stock by
38, 39
Liability of, as members of national currency association
99
Liquidating bank circulation
169
Liquidation, provisions for
163-167
Lost or stolen notes of, to be redeemed
128
National-bank act relative to, in force in the Indian Territory
263
Oklahoma, qualification of directors in
262
Organization certificate to specifically state
17
Payment of stock prior to beginning business
36
Post-notes, issue of, prohibited
89
Preparation of bank circulation
75
Publication of certificate of authority
72
President of, to be chosen by board
47
Receiver may be appointed for failure to restore capital.!
37
Reduction of capital stock
40
Receiver for, when may be appointed
183
Redemption and destruction of circulation of
90, 91, 124
Redemption account,, disposition of
127
Regulation of business of
119-162
Relation of bond deposit to capital of
59
Security for circulation
57, 58
Shares of stock
35
Shareholders of, qualifications of, at elections
41
Shareholders' agent
185
Shareholders of, personally liable
48
Shareholders of, when not personally liable
48
Status of, organized under act of February 25, 1863
54
Subscribed stock not paid for forfeited to
37
Suspension of business after default to pay circulation
172
Taxation of circulation of, by States, etc
210, 211
Tax provisions restricted
208
Taxes on insolvent, remitted
161, 209
Where proceedings to enjoin may be brought
196
Withdrawing circulation
67, 68, 69
National currency associations:
Additional circulation issued by on State, etc., bonds, other securities, and commercial paper
99
Board of
•
98
Body corporate when
98
By-laws of, to be approved by Secretary of Treasury
98
Certificate of incorporation to be filed with Secretary of Treasury..
98
Circulation, additional, securities for and amount issuable
99
Circuit court, United States, suit in, against defaulting bank, when
99
Commercial paper characterized and amount circulation issuable
thereon
99
Composition of
98
Composition of membership
98
Comptroller to receive and recommend to the Secretary disposition
of applications to issue additional circulation
99
Conditions of membership in
98
Creation of, authorized
98
Duties of
99
Effect of reduction, below 10, in membership
98
Liability of members
99
Lien, of United States, benefit of, for
99
Lien on assets of defaulting member enforceable by
99
Limit of act creating
118



85

INDEX TO NATIONAL-BANK ACT, ETC.

National currency associations—Continued.
Paragraph
Limit of circulation to be issued to members of
103
Membership in, how obtained
98
National bank, member in but one
98
National banks to organize
98
Number of, to be formed in any city
98
Officers and executive committee, election and powers of
98
Organization authorized
98
Powers of
98, 99
Powers of board
*
98
Redemption fund, how made good
•
100
Sale of securities authorized when
100
Secretary of the Treasury to approve
Ill
Secretary of the Treasury to determine character and value of
securities tendered and approved or otherwise the issue of addiditional circulation
101
Securities deposited with, to be held in trust for the United States. 102, 106
Securities, exchange of, and additional
99
Securities, including commercial paper, basis for additional circulation
99
Treasurer United States may use redemption fund of other banks
when
100
National Monetary Commission:
Appointment of members of
115
Composition of
115
Creation of, authorized
115
Duties of
116
Expenses of, provided
117
Limit of act creating
118
Report to Congress provided
116
New York City:
Associations in, reserve agents
120, 121, 131
Bonds, sale of forfeited, in
174
Notice of expiration of corporate existence in paper in
31
Notice of voluntary liquidation in paper in
164
Net profits.
Dividends.)
Nonresidents:
Directors
43, 262
State, etc.. taxation of stock of
162
Notary public:
Acknowledgment of organization certificates before
^
18
Acknowledgment of reports
152, 153, 154
Notice. (See Publication; Printing.)
O
Oath:
Certificate of officers and directors
36, 70
Directors
44
Examiners may take statements under
190
Execution of organization certificate
18, 52
Official, by Comptroller
3
Official, by Deputy Comptroller
4
Payment of installments
36
Reports of condition, and earnings and dividends
152, 154
Semiannual return of circulation
Shareholders, list of
151
Obligations of the United States:
Defined
230
Penalty for dealing in counterfeit
237
Penalty for illegal possession or use of material for
233
Penalty for passing counterfeit
234
Penalty for pledging
.145
Penalty for taking or having unauthorized impressions of tools, etc.235-236
Officers (see also President; Cashier):
Bonds assigned to be signed by cashier or other
61
Certificate of directors and
70
Certificate of payment of increase of stock
38



86

INDEX T NATIONAL-BANK ACT, ETC.
O

Officers—Continued.
.
Paragraph
Certification of payment of stock by president or cashier
36
Circulation properly signed, issuable
...
_
88
Disqualified to examine national banking associations in which interested as
190
Election or appointment of, by directors
19
Examination of, under oath
190
False certification of checks forbidden
147
Forfeiture of charter, provisions for
189
Forged signatures of, to circulation not to invalidate
128
Fraudulent notes to be marked b y . . .
239
National currency association, election of
98
Oath, administration of, to reports
153
Official malfeasance, penalty" for
149
Penalty for false certification of checks
148
Penalty for improper countersigned, etc., circulation
..
95
Penalty for issuing circulation of expired associations
238
Penalty for official malfeasance
149
Penalty for pledging, etc., circulation.
145
Penalty for unauthorized receipt of public money
229
Preference of creditors
192
President of board a director
47
26
President or cashier, certification of extension
President or cashier, certification of expiration of existence
31
President or cashier, certification of liquidation
164
President or cashier waiving notice of protest
170
President or vice-president and cashier to sign circulation
75
Proxy, not to act as
41
Receiver, appointment of, for violation of national-bank act by
183
Redemption of unsigned circulation
128
Reports of condition, verification of, by president or cashier
152
Reports of earnings and dividends, attestation of, by president or
cashier
154
Shareholders' list, verified by president or cashier
151
Taxation, circulation subject to, returns by president or cashier...
157
Taxation, unauthorized circulation, returns by president or cashier
205
Officers, United States:
Deposit and withdrawal of public money
224
Penalty for improper countersigning or delivering circulation
95
Penalty for unauthorized deposit of public money
228
Receiving or disbursing public money to mark fraudulent
239
Officers, vaults, etc.:
Assignment of, to the Comptroller by the Secretary
9
Oklahoma:
Deposit guarantee law
267
Qualification of directors of association in
262
Organization and powers of national banks:
Amendment of articles of association
35
Articles of association
16
Branches of converted State banks
53
Capital stock
17
Capital stock requirements
.
34
Certificate of authority to begin business
71
Certificate of officers and directors
70
Change in title and location
21
Conversion of gold banks
94
Conversion of State banks
52
Corporate powers
19
Deposit of bonds
57
Directors, election of
.
46
Directors, number and election of
42
Directors, oath of :
44
Directors, qualification of
43
Directors, qualification of, in Oklahoma
262
Directors, to choose president
47
Directors, vacancy, how
filled
45
Enforcing payment of stock
37



87

INDEX TO NATIONAL-BANK ACT, ETC.

Organization and powers of national banks—Continued.
Paragraph
Examination preliminary to beginning business
70
Execution of organization certificate
18
Extension of corporate existence
25
Failure to hold election
46
Gold banks, conversion of
94
Gold banks, organization of
92
Incidental powers
19
Increase of capital stock, provisions for
38, 39
Increase of capital stock, when valid
38
Liquidation
163
Location and title, change of
21
Location
17
Organization certificate
17
Payment of stock
36
President, election of, by board
47
President, qualification of
47
Publication of certificate of authority to begin business
72
Reduction of capital stock, provisions for
40
Restoration of capital stock
37
Shareholders
17
Shareholders, personal liability of
48
Shareholders, qualification of, at election
41
Shareholders, when personally liable
48
Shares of stock
35
State banks, conversion of
52
t
State banks, converted, may retain branches
53
Status of associations organized under act of February 25, 1863
54
Title
17
Title and location, change of
21
Vacancies in board, how
filled
45
Organization certificate:
Certified copy of, evidence. .
198
Comptroller to grant or withhold.
71
Conversion of gold hanks
94
Conversion of State banks
52
Execution of
18
Sealed certificate of Comptroller, evidence
197
Specifications in
17
P

Panama Canal Bonds:
Available as security for circulation
Tax on circulation secured by
Payment of capital stock:
Provisions relative to
Penalty:
Appointment of receiver for violations of act
Bond of Comptroller
Bond of Deputy Comptroller
Counterfeiting circulation
Dealing in counterfeit circulation
Kalse certification of checks
Failure to pay installment on stock
Failure to redeem circulation
Forfeiture of charter
Illegal possession or use of material for circulation
Imitating bank circulation for advertising purposes
Improper countersigning or delivering circulation
Interest, unlawful
v •;
Issuing circulation of expired associations
Jurisdiction of United States courts
Mutilating circulation
•
Misapplication of money-order f u n d s . . . .
"National," unlawful use of the word
Official malfeasance
_
Passing counterfeit circulation



58
58
36
178, 183
3
4
232
237
148
37
171
189
233
96
95
136
238
24-28
97
^193
149
2J4

88

INDEX T NATIONAL-BANK ACT, ETC.
O

Penalty—Continued.
.
Paragraph
Pledging United States notes or bank circulation
145
Reports to Comptroller, failure to make
Reserve, maintenance of
120
Semiannual return of circulation
156-160, 202-204, 20s
Taking or having unauthorized impressions of tools, etc
235. 236
Unauthorized deposit of public money
228
Unauthorized receipt or use of public money
229
Personal liability. (See shareholders; Trustee; Liability.)
Plates:
Act May 30, 1908
75
Control of
78
Cost of engraving
30, 124
Custody of
9
Engraving of
75
Examination annually
•
79
Expense of examination and destruction of
79
Extended banks
30
Liquidating bank, to be destroyed
79
Penalty for counterfeiting, or having possession of counterfeit. ...233, 235
Penalty for taking unauthorized impressions of tools, etc
235
236
Penalty for having false impressions of tools, etc
Pledging or hypothecating circulation:
Prohibited
141
Political contributions:
Prohibited
150
Population:
Relation of capital stock to
34
Porto Rico:
National banking laws applicable to
264
Postmasters:
Deposit of public funds by
225
Misapplication of money-order funds by
226
Postmaster-General:
_ .
Deposit of funds by authority of
226
Post-notes:
National banking associations prohibited from issuing
89
Powers (see aho Comptroller):
Granted to national banks
19
Incidental, of national banks
19
National currency association
98. 99
Visitorial, limitation of
191
Preparation of circulation:
Provisions for
75
President (see also Officers):
Certificate of officers and directors
70
Countersigning or delivering circulation improperly
95
Director to be
47
Election or appointment of, by directors
'19
False certification of checks and penalty for
147-148
Official malfeasance, penalty for
149
Proxy, not to act as
41
Public money, unauthorized rcceipt of, by
229
Signature of, forged, not to invalidate circulation
128
Signature of, on circulation
75-88
Violations of act by, penalty for
183. 189
President^ of the United States:
Appointment of Comptroller by
2
Printing (see also Publication):
Additional circulation
75
Annual report of the Comptroller, number printed and distribution of
11, 12, 13, 14
Certificate of authority to begin business
72
Charter numbers on circulation
76
Circulation of associations
75
Circulation of extended banks
30
Creditors of insolvent associations, notice to
179



89

INDEX TO NATIONAL-BANK ACT, ETC.

Printing-—Continued.
Paragraph
Notice of special annual election
46
Notice of sale of delinquent stock
. . . .37, 143
Notice of sale of bonds at public auction
' 174
Notice of liquidation.
164
Notice of expiration
31
Penalty for counterfeiting circulation
...*....!
232
Penalty for illegal possession or use of material for circulation
233
Penalty for imitating circulation
96
Penalty for taking or having unauthorized impressions of tools,
for
.
235, 236
Reports oi condition
152
Shareholders' agent, notice of election of
185
Voluntary liquidation, notice of
164
Protest of circulation:
Bonds forfeited, when
171
Bonds, sale of, when
174, 175
Failure to redeem circulation
170
Publication (see also Printing):
Annual election, notice of holding special
46
Certificate of authority to begin business
72
Creditors of insolvent associations, notice to
179
Nonpayment of circulation, notice -to present
173
Reports of condition of national banks
152
Sale of bonds, notice of
174
Sale of delinquent stock, notice of
37, 143
Shareholders' agent, notice of election of
185
Yoluntary liquidation, notice of
164
Public debt. (See Imports and interest on public debt.)
Public deposits (see also Deposits):
Banks to give security for
50
Interest on
51

Q
Qualification:
Comptroller of the Currency
Deputy Comptroller
Directors of national banks
Directors of national banks in Oklahoma
Examiners of associations
Shareholders' agent
R
Rate. (See Interest; Tax; Usury.)
Ratio (see also Bonds; Capital; Circulation):
Additional national-bank circulation, to capital and surplus
Real estate:
Investments and holdings restricted
Subject to State, etc., taxation
Receiver:
Appointment and duties of
Appointment of, for failure to dispose of own stock. .
Appointment of, for failure to restore diminished capital
Appointment of, for false certification of checks
Appointment of, for nonpayment of circulation
Appointment of, for impairment of capital
Appointment of, for insolvency
Appointment of, for nonmaintenance of reserve
Courts may enjoin
Expenses of, how paid
General jurisdiction of national-bank cases
Jurisdiction of circuit courts to enjoin Comptroller
Purchase of property by, to protect trust
Receiverships. (See Liquidation and receivership; Receiver.)



3
4
43
262
190
185

99
33
162
178
178
178
178
178
178
183
178
181
182
24, 28
195
186

90

INDEX TO NATIONAL-BANK ACT, ETC.

Redemption:
Additional circulation, act May 30, 1908
100, 104
Cancellation of circulation sent for
.... .
177
Deposit of lawful money for, of associations in liquidation.,..
JOD
Disposition of, account
127
Enjoining Comptroller
181
Extended bank circulation
30
First lien on assets . .*
174
Five per cent, fund for, to be maintained
124
Five per cent, fund for, part of lawful reserve
124
Forfeiture of bonds
171
Forged signatures not to prevent
128
General provisions respecting
124
Incomplete circulation
128
Issue and redemption division established
243
Lawful money, of circulation
110
Liquidating bank circulation
108, 169
Notice to present circulation for
1/3
Proceeds from sale of bonds for, of circulation
167
Profit on circulation not presented for
30
Protest of circulation, for failure to redeem
170
Records of
176
Sale of bonds
174, 175
United States notes, of circulation in
124
Unsigned circulation to be redeemed
^ 128
Withdrawn circulation
67, 68
Worn or mutilated circulation
90, 91
Redemption account:
Disposition of
127
Redemption of United States notes:
Gold ccin and bullion to be set apart as reserve for
241
Register of the Treasury:
Signature on circulation
75
Registered bonds. (See Bonds, United States.)
Regulation of banking business:
Assessment, enforcement of
143
Circulation, improper use of
141
Dividends
137
Dividends prohibited, when
142
Examiners, appointment of
190
Examiners, compensation of
190
Impairment of capital
143
Interest, limited
135
Interest, unlawful, penalty for
136
Laws governing certain associations
55
Liability of association restricted
140
Loans, restrictions on
'
,, *
138
Net profits
.....!.!...!.!,..!
137
Place of business
119
Real estate, purchasing, etc
33
Reports of condition
152
Reports, failure to make
155
Reports, verification of
153, 154
Reports of dividends and earnings
154
Reserve cities
120, 126
Reserve cities, balances with agents
121
Reserve cities, central
131, 133
Reserve citics, requirements
' 120
Reserve requirements, gold banks
.......I....!..!...
93
Shareholders, list of
151
State taxation of associations
. ..
162
Stock, holding, etc
139
Surplus and dividends
137
Uncurrent notes, use of, prohibited
".I!.!!.!,..!.!!!...
144
Unearned dividends prohibited
142
191
^ Visitorial powers, limitation of
Reimbursement. (Set Circulation; Expenses; Plates and dies.)



91

INDEX TO NATIONAL-BANK ACT, ETC.

Reports:
Amendments proposed in Comptroller's
Annual, to be made to Congress
Banks, other than national
Circulation, semiannual return of
Closed bank
Condition of national banks in
Distribution of
Dividends and earnings
List of shareholders
Payment of capital stock
Printed, number of copies
Statement of condition of national banks
Verification of, relative to additional circulation, by
Reserve:
Clearing-house certificates
Five per cent, fund
Gold and silver, held by gold banks
Gold certificates
Lawful money
Maintenance of
Penalty for failure to maintain
Proportion of, with agents
Requirements
Requirements for gold banks
Silver certificates
United States deposits, not required on United
tificates
Reserve agents (see also Agent):
Balance with
Reserve cities:
Additional, provisions for
Central, deposits in
Central, provisions for
Named
Requirements, not applicable to gold banks in San
Requirements of associations in
Residence:
List of shareholders and reported annually
List of shareholders in organization certificate
National banks
Qualification of directors of associations
Resources. (See Assets.)
Restoration of capital stock:
Provisions for
Returns. (See Circulation; Reports; Taxation.)

Paragraph
11
11
11
* . " . ! .*. . * ! 1 5 7
12
V . . . .
' 11
13 14
V. V.V.... 154, 155
151
36
13, 14
152, 153
the Comptroller
156
121
124
93
146
120
120
120
121, 131
120
93
223
States note cer123
121
126
131
133
120
131
120

Francisco

151
17
24
43, 262
37, 143

S
Sale:
.
Assets of insolvent associations by r e c e i v e r . . . . . .
Assets of insolvent associations by shareholders agent
Bonds for failure to redeem circulation
167, 171,
Securities deposited for additional circulation
Stock for delinquent payment of installment
Stock on impairment of capital
Stock taken for debt
Seal of office of Comptroller:
Certified copy of organization certificate under, evidence
Certificates under, competent evidence
/'.""'A
Description, impression of. and certificate of approval by Secretary
of the Treasury, to be filed with the Secretary of State
Devised by Comptroller and approved by Secretary
Secretary of Interior:
Report to. of Bureau employes
Secretary of State:
Description, impression, and certificate of seal of Comptroller to be
filed with



178
18a
175
100
37
143
139
198
197

8
8
12
8

92

INDEX TO NATIONAL-BANK ACT, ETC.

Secretary of the Treasury:
Paragraph
Acts of Comptroller and Treasurer to be approved by
Agent, special, to be appointed for associations failing to redeem
circulation
Appointment of Comptroller on recommendation of
£
Appointment and classification of clerks by
°
4
Appointment of Deputy Comptroller by
Assignment of rooms, etc., for the Comptroller by
9
Authorization of, for issue of additional circulation
99
Authorized to exchange registered for coupon bonds
w
Circulation, worn or mutilated, destruction of, by
. . 9 0 , 91
Determines character and value of securities for additional circulation
99
Duties of Comptroller under general direction of
1
Exchange of bonds, terms of, prescribed by
66
Information relative to available securities for additional circulation to be obtained by, and tendered to banks
100
Organization of national banks with capital less than $100,000 to be
approved by
.
34
Plates and dies, examination of, by
.
79
Recommendation of appointment of Comptroller by
2
Recommendation of Comptroller to be approved, or otherwise, by..
99
Receivers, appointment of, by Comptroller, concurrence in by, in
certain cases
120
Reserve cities, designation of, by Comptroller, to be approved by..
133
Rules to be established by, relative to act May 30, 1908
Ill
Seal of office of Comptroller to be approved by.
8
Supervision, of formation of national currency associations....
98
Securities, other than United States bonds, for additional circulation:
Character, etc., acceptable by Treasurer of the United States and
Secretary of the Treasury
101
Character, etc., acceptable through national currency association...
99
Exchange of
99, 101
Information relative to available, to be obtained by Secretary and
tendered to banks
106
Receipts for, to be given by Treasurer or assistant treasurer
102
Sale of, when
100
Treasurer or assistant treasurer to accept
102
Transfer and assignment of, to be countersigned by Comptroller of
Currency
102
Withdrawal of, to retire circulation
69
Security for circulation (see Bonds, United States; Additional circulation):
Commercial paper as
99
Municipal, etc., bonds as
101
United States bonds as
57, 58
Security for loans:
Personal
19
Senate:
Comptroller's reports to be sent to
13
Members of, on National Monetary Commission. .
115
Presiding officer of, appointment by, of members of National Monetary Commission
115
Shareholders:
Agent of, to return to, assets of insolvent association
185
Appointment and qualification of agent of
185
Assessment for impairment of capital
143
Assets of insolvent association to be returned to, ratably after debts
are paid
180
Consent of, necessary to extension
26
Conversion of State banks, requirements
52
Creditor's bill against
184
Directors, election or appointment of, by
19, 42
Dissenting to extension may withdraw
29
Duties of agent of
185
Enforcement of assessment for impairment of capital stock
143
Enforcing payment by, of installments
37
Estates and funds with trustee liable for assessment
49
Extension of corporate existence
25, 26
Increase of capital stock by
38, 39



93

INDEX TO NATIONAL-BANK ACT, ETC.

Shareholders—Continued.
Paragraph
List of, to be kept and copy sent to Comptroller
151
List of, subject to inspection
151
Location, change of, by
21
Names, residents, and number of shares held by each in organization certificates
17
Personal liability of
48
Personal liability of, in certain converted State banks.
48
Provisions for election by, when
46
Proxies, voting by
41
Qualifications ot directors
43
Reduction of capital stock by
40
Rights and liabilities of, on transfer of shares
35
Title,and location of association, change of, by
21
Vote of, necessary to place association in liquidation
163
Voters, qualification of
41
Shareholders' agent. (See Agent.)
Snares:
Association not to own or hold its own, "except
139
Consent of owners of two-thirds, necessary to extension.
26
Converted State bank to be the same as prior to conversion
52
Disposition of, taken for debt
:-•••:
\ • • ^39
Fifty per cent, of aggregate value of, to be paid in prior to begining business
36
Holding of. in other banks, by converted banks authorized
52
Installments, payment and certification of
36
List of owners of. to be kept and copy sent to Competrollcr
151
139
Loan on security of, prohibited
Oath of director relative to
44
Owners of two-thirds may place association in liquidation
163
Organization certificate to state capital and number of
17
Personal property
.
35
Preference in allotment of, in succeeding association
29
Qualifications of directors
43
Receiver may be appointed for failure to dispose of, taken
183
Sale or forfeiture of, for failure to pay installments due
37
Sale of. when necessary
:
29, 139, 143
State taxation of
162
Transfer of
;•••*•,
35
Value of. of shareholders dissenting to extension, how ascertained..
29
Value, par, of each
35, 52
Voting
41
Signature on circulation:
President or vice-president and cashier
75
Treasurer and Register, United States
75
Silver:
Construed to be lawful money, when
93
Reserve of gold banks to be gold and
93
Silver certificates:
Clearing-house balances payable in
223
Issue of, in place of Treasury notes, when
.244
Reserve of national banks may be
223
Silver certificates, denomination of
246
Silver coinage:
Subsidiary
247, 248
Solicitor of the Treasury:
Conduct of suits under direction and supervision of
194
Speaker of the House of Representatives:
Appointment by, of members of House of Representatives on
National Monetary Commission
115
Special agent. (See Agent.)
Special reports. (See Reports.)
State banks:
Branches of converted
53
Circulation of. when exempt from taxation
200
Conversion of
52
Penalty for failure to make return of tax on circulation
206
Penalty for unauthorized receipt of public money
229



94

INDEX TO NATIONAL-BANK ACT, ETC.

State banks—Continued.

Paragraph

Reports of, provided for
Return of taxable circulation
Shareholders' personal liability, exceptions
Shares of, converted
Tax on converted
on? ?n4
Tax on unauthorized circulation
State courts. (See Comptroller; Suits.)
State, Territory, or District:
.
.
Change of title or location of associations
gi
Compensation of national-bank examiners
^
Conversion of bank organized under authority of laws of
Interest,. legal rate in, national banks not to take, etc., in excess of
13o
"National/' use of the word in titles
193
43
Qualification of directors
•
Proceedings to enjoin Comptroller or receiver, to be brought in
district in which association is located
196
Taxation of circulation of State, etc., associations
199-209
Taxation of money by
210, 211
Taxation of national banks by
162
Succession:
Expired associations
29
Period of, national banks
19
Suits:
Against United States officers or agents...
194
Certified copy of organization certificate evidence in
198
Circuit courts, jurisdiction of, to enjoin Comptroller
195
"Circuit and district courts, jurisdiction of
24, 28
Corporate powers of associations
19
Creditor's bill against shareholders
184
Crimes, jurisdiction, etc. (See Crimes.)
Enjoining Comptroller or receiver
181
Forfeiture of charter
189
Proceedings to enjoin Comptroller to be brought, where
196
Sealed certificate of Comptroller, competent evidence
197
Shareholders' agent
185
Shareholders' liability, to enforce
178
Solicitor of the Treasury to direct and supervise certain
194
Surplus (see also Surplus and dividends):
Additional circulation issuable, measured by
99
Converted State bank with capital of $5,000,000
48
Creation of
137
Loans, limit of, measured by capital and
138
Surplus and dividends:
Provisions for surplus and payment of dividends
137
Surrender of bonds. (See Bonds, United States.)
T
Tax:
Bills of converted Slate bank
207
159
Circulation, enforcing payment of
Circulation, exempt from
200
Circulation, failure to make returns
158
Circulation, rate and time of payment
156
Circulation, refunding excess
160
Circulation, semiannual return of
157
Money of all kinds subject to, by States, etc.
211
Notes, State banks, corporation, company or persons
199, 202-204
Notes, State banks, corporation, company or persons, failure to
make return
206
Notes, State banks, corporation, company, or persons, semiannual
return
205
Provisions restricted
208
Remission of, on insolvent national banks
161, 209
State taxation of national banks
162
Taxation. (See Tax.)
Teller. (See Officers.)
Territorial court. (See Comptroller; Redemption; State, etc.)



95

INDEX TO NATIONAL-BANK ACT, ETC.

Title and location:
Paragraph
Change of, by national banks
21-23
Transfers. (See Treasurer, United States; Bonds, United States.)
Treasurer, United States:Acceptance of bonds, etc., on approval of Secretary
101
Ill
Acts of, to be approved by Secretary of Treasury
Circulation, withdrawal of, provisions for
69
Deposit of securities w i t h . . . .
101
Disposition of redemption account
127
Enforcing tax on circulation
159
Examination of bonds and records, provisions for
64-66
Interest on bonds to be retained by, when
143, 159
Monthly returns of additional circulation to, and verification of
reports by Comptroller of the Currency
156
Proceedings on default in making return on circulation subject to
duty
159
Proceeds of sale of securities to be deposited with, to redeem additional circulation
100
Public moneys to be deposited with assistant treasurer, Government depositaries, or
224
Receipt for bonds deposited to be given by, or assistant treasurer.
102
Redemption fund of other banks available on default
100
Redemption fund to be kept with
124
Redemption of circulation by
124
Redemption of circulation in United States notes by
124
Semiannual return to, of circulation subject to duty
157
Signature of, on circulation
75
Tax, excess, refunding
160
Tax on circulation to be paid to
156
Title to bonds deposited with, in trust for United States
102
Transfer of bonds in trust for associations to be made to
61
Treasury notes:
Demand
220
Interest bearing
221
Issue of
255
Treasury, United States (see also Treasurer, United States):
Associations to reimburse, for cost of redemption of circulation and
plates
124
Currency bureau in
1
Divisions of issue and redemption established
243
Notice to present circulation at
^
Penalty for failure of associations to report to be paid into
..155, 157
Redemption account, disposition of
127
Redemption fund, 5 per cent., in
124
Redemption of circulation at
67, 124, 168, 176, 177
Trust:
Purchase of property bj- receiver to protect
186
Trustee:
Shareholders' liability, exemptions from
49
U

Uncurrent notes:
Issue of, prohibited
..
United States (see also Officers of the United States; Crimes, jurisdiction, etc.):
Courts of, may enjoin proceedings
Forfeiture of charter
Suits in which United States is party
United States deposits:
Interest to be paid on, when
Reserve on. in banks, not required
United States disbursing officers:
Fraudulent notes to be marked by
Penalty for unauthorized deposit of public money
Withdrawal of public money
United States notes:
Circulation of banks to be redeemed in
Fraudulent, to be marked



144
181
189
194
51
123
239
228
224
124
239

96

INDEX TO NATIONAL-BANK ACT, ETC.

Paragr
United States notes—Continued.
^
Obligations of the United States defined
^
Penalty for dealing in counterfeit
^
Penalty for illegal use or possession of material for printing
£50
Penalty for passing counterfeit
234
Penalty for pledging, etc
'
-"/"i
Wl
Penalty for taking or having unauthorized impressions ot tools, e t c . . ^ o
Subject to taxation by States, etc
211
Usury:
Interest, when not
Penalty for

V
Vacancies:
Board of directors,
filling
Vice-president (see also Officers):
Bonds, United States, may sign transfer of
Circulation, may sign
Election or appointment of
Proxy, not to act as
Violations of provisions of national-bank act:
Forfeiture of charter for
Visitorial powers:
Limitation of national banking associations, subject to
Voluntary liquidation. (See Liquidation.)
Voters:
Qualifications of shareholders at elections
W
Withdrawal:
Additional circulation
Bonds, general provisions respecting
Circulation, provisions of
Deposit and, of public moneys
Dissenting shareholders
Expired associations, bonds of
Illegal preference of creditors
Liquidating associations, bonds of
Reduction of capital
Unearned dividends




.45
^ 61
75, 88
19
41
189
191
41

69
66
67, 68
224, 228
29
31
192
167
40
142

THE NATIONAL BANK ACT AND ACTS AMENDATORY
THEREOF AND SUPPLEMENTARY THERETO.
C H A P T E R I.
BUREAU OF THE COMPTROLLER OF THE CURRENCY,
1. 324. Bureau of tlic Comptroller of
the Currency.
2. 325. Comptroller oi the Currency.
3. 326. Qualification of Comptroller of
the Currency. Amount of
bond.
4. 327. Deputy Comptroller of the Currency.
5. Act May 22, 1908. Additional Deputy Comptroller of the Currency.
6. 328. Clerks. .
7. 329. interest in national banks prohibited.
8. 330. Seal ot Comptroller #of the Currency.
9. 331. Rooms, vaults, and furniture
for Currency Bureau.

10. 332. Banks other than national in
District of Columbia. (See
see. 714, Code District of
Columbia.)
11. 333. Report ot Comptroller.
12. Act April 28, 1902. Report of
Comptroller to give complete list of all employes
of the office, information
about failed banks, employes under receivers, etc.
13. Act January 12, 1895. Number of
copies of report to be
printed.
14. Joint resolution March 4, 1907.
Three thousand additional
copies authorized to be
printed.

BUREAU OF THE COMPTROLLER OF THE CURRENCY. (AS AMENDED BY FEDERAL RESERVE
ACT.)
1. .Sec. 324.—There shall be in the Department of the lgAct june^
Treasury ai Bureau charged with the .execution of all sec/i; i3Stat!
laws passed by Congress relating to the issue and regu- Amended by
lation of a national currency secured by United States
bonds and, under the general supervision of the Federal Act.
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
direction of the Secretary of the Treasury.
COMPTROLLER OF THE CURRENCY.
2. Sec. 325.—The Comptroller of the Currency shall be
jone^
appointed by the President, on the recommendation of scc/i; 13 Stat,
the Secretary of the Treasury, by and with the advice Act March 3,
and consent of the Senate, and shall hold his office for ^JJs* l i s t S
the term of five years, unless sooner removed by the L., 398.
President, upon reasons to be communicated by him to
the Senate; and he shall be entitled to a salary of five
thousand dollars a year.
NOTE.—Compensation increased, paragraph 58 Federal Reserve
Act. Member organization committee, paragraph 2 Federal Reserve Act. Ex-officio member reserve board, paragraph 58
Federal Reserve Act. Ineligible for employment, paragraph 59
Federal Reserve Act.




97

98

BUREAU OF T H E COMPTROLLER OF T H E CURRENCY.

QUALIFICATION OF COMPTROLLER
RENCY, A M O U N T OF BOND.
nc

m C c" io(i
sec.'i; 13 Stat,
L

*' "*

3

OF THE

CUR-

Sec

*
- 326.—The Comptroller of the Currency shall,
wit bin fifteen days from the time of notice of his appointment, take and subscribe the oath of office; and he
shall give to the United States a bond in the penalty of
one hundred thousand dollars, with not less than two
responsible sureties, to be approved by the Secretary of
the Treasury, conditioned for the faithful discharge of
the duties of his office.
DEPUTY

COMPTROLLER OF

THE

CURRENCY.

imT c.uni06f' 4. Sec. 327.—There shall be in the Bureau of the Compl y 99 *3Stat* troller of the Currency a Deputy Comptroller of the Currency, to be appointed by the Secretary, who shall be entitled to a salary of two thousand five hundred dollars a
year and who shall possess the power and perform the
duties attached by law to the office of Comptroller during
a vacancy in the office or during the absence or inability of
the Comptroller. The Deputy Comptroller shall also take
the oath of office prescribed by the Constitution and laws
of the United States, and shall give a like bond in
the penalty of fifty thousand dollars.
NOTE.—The salary of the Deputy Comptroller has been fixed at
various amounts by different appropriation bills, as follows: Act
March 3, 1875 (sundry civil bill), 18 Stat. L., 396, $3,000; act
March 3, 1901, 31 Stat. L., 978, §2,800; act March 18, 1904, 33
Stat. L., 103, $3,000; act February 3, 1905, 33 Stat. L., 649, and
all subsequent acts, $3,500.
A D D I T I O N A L D E P U T Y C O M P T R O L L E R O F T H E CURR E N C Y . A C T M A Y 22, 1908.
cxccufiv^atand
propriatio'naa"
approved May

«• 1 0
> QS
>

5. * * * Deputy Comptroller, three thousand five
dollars; Deputy Comptroller, three thousand
dollars.
NOTE.—The Attorney General of the United States, in an opinion rendered June 19, 1908, said: "Generally speaking, a deputy
has power to do every act which his principal may do and is not
restricted to some particulars of his office. (Throop on Public
Officers, sec. 583; Mechem's Public Officers, see. 570; Erwin v.
U. S., 37 Fed. Rep. 470.) Doubtless it was on account of this
general rule, and with the intention that there should be no restriction, that Congress did not deem it necessary to prescribe
specifically the duties of the additional Deputy Comptroller. There
being no limitation or restriction upon the power of that officer,
my opinion is that he would have the same authority as that conferred by statute upon the first deputy.
CLERKS.

un

ISM* l M:
sec."l: 13 Stat!
L m

"'

\ct June 3

6
- S e c - 328.—The Comptroller of the Currency shall
employ, from time to time, the necessary clerks, to be
appointed and classified by the Secretary of the Treasury, to discharge such duties as the Comptroller shall
direct.
I N T E R E S T

un

I N

NATIONAL BANKS

PROHIBITED.

I G? c W, 7. Sec. 329.—It shall not be lawful for the Comptroller
S4
lc; 99".13 Stat ' or the Deputy Comptroller of the Currency, either di


99 BUREAU OF THE COMPTROLLER OF THE CURRENCY.

rectly or indirectly, to be interested in any association
issuing national currency under the laws of the United
States.
S E A L O F COMPTROLLER OF T H E

CURRENCY.

8. Sec. 330 [as amended 1875].—The seal devised by lgAct J ^ e j ,
the Comptroller of the Currency for his office, and approved sec. 2: 13 Stat,
by the Secretary of the Treasury, shall continue to be L'Ac\°Fcb. 38,
the seal of office of the Comptroller, and may be renewed 1875, ^ so; is
when necessary. A description of the seal, with an im- tat ' ''
pression thereof, and a certificate of approval by the Secretary of the Treasury, shall be filed in the office of the Secretary of State.
ROOMS, V A U L T S , A N D F U R N I T U R E FOR CURRENCY"
BUREAU.

^ 9. Sec. 331.—There shall be assigned, from time to ^
J une 10 |
c 3
time, to the Comptroller of the Currency, by the Secretary ^ *1 0j)^3 Stat '
of the Treasury, suitable rooms in the Treasury building *'
for conducting the business of the Currency Bureau, containing safe and secure fireproof vaults, in which the
Comptroller shall deposit and safely keep all the plates
not necessarily in the possession of engravers or printers,
and other valuable things belonging to his department;
and the Comptroller shall from time to time furnish the
necessary furniture, stationery, fuel, lights, and other
proper conveniences for the transaction of the business of
his office.
10.

Sec. 332.—

Refers entirely to. banks other than national in the District of
Columbia.
R E P O R T OF COMPTROLLER.

11. Sec. 333 [as amended 1875].—The Comptroller of
the Currency shall make an annual report to Congress, at
the commencement of its session, exhibiting—
First. A summary of the state and condition of every
J«ne63.
association from which reports have been received the pre- 13 ' s u l * L.',
ceding year, at the several dates to which such reports n \ c t Fcb 19f
refer, with an abstract of the whole amount of banking jgra. s£c- ^ ^
capital returned by them, of the whole amount of their Act Feb. is,
debts and liabilities, the amount of circulating notes out- if^stat L°i
standing, and the total amount of means and resources,
specifying the amount of lawful money held by them at
the times of their several returns, and such other information in* relation to such associations as in his judgment
may be useful.
Second. A statement of the associations whose business
has been closed during the year, with the amount of their
circulation redeemed and the amount outstanding.
Third. Any amendment to the laws relative to banking
by which the system may be improved and the security



100

BUREAU OF THE COMPTROLLER OF THE CURRENCY.

of the holders of its notes and other creditors may be
increased.
Fourth. A statement exhibiting under appropriate
heads the resources and liabilities and condition of the
banks, banking companies, and savings banks organized
under the laws of the several States and Territories; such
information to be obtained by the Comptroller from the
reports made by such banks, banking companies, and savings banks to the legislatures or officers of the different
States and Territories, and, where such reports can not
be obtained, the deficiency to be supplied from such other
authentic sources as may be available.
Fifth. The names and compensation of the clerks employed by him, and the whole amount of the expenses of
the banking department during the year.
COMPTROLLER TO GIVE COMPLETE LIST OF ALL
EMPLOYES OF T H E OFFICE, INFORMATION
ABOUT FAILED BANKS. EMPLOYES, UNDER
RECEIVERS, ETC. ACT APRIL 28, 1902.

i9oi°tAiegisi^ 12t—Provided, That for the fiscal year of nineteen huntive'executive, dred and two and thereafter, a full and complete list of
A P P O RA I M sll officers, agents, clerks, and other employes of the office
R P I TC
L C t m Stat '
Comptroller of the Currency, including bank examiners, receivers and attorneys for receivers, and
clerks employed by such examiners and receivers, or any
other person connected with the work of said office ^ in
Washington or elsewhere, whose salary or compensation
is paid from the Treasury of the United States or assessed against or collected from existing or failed banks
under their supervision or control, shall be transmitted to
the Secretary of the Interior in accordance with the provisions of an Act of Congress approved January twelfth,
eighteen hundred and eighty-five, relating to the Official
Register: And provided further, That the Comptroller of
the Currency is hereby directed to include in his Annual
Report to the Speaker of the House of Representatives,
expenses incurred during each year, in liquidation of each
failed national bank separately.
NUMBER OF COPIES OF REPORT TO B E PRINTED.
ACT OF JANUARY 12, 1895.
13
1895? lei' 73;
- Sec*
* * * T h e r e s h a 1 1 b e printed of the
28 'stat. L.; annual report of the Comptroller of the Currency, ten thou616
*
sand copies; one thousand for the Senate, two thousand
for the House, and seven thousand for distribution by the
Comptroller of the Currency.

T H R E E T H O U S A N D ADDITIONAL COPIES AUTHORIZED TO BE PRINTED. JOINT RESOLUTION NO.
25, MARCH 4, 1907.
219^* Mar R c |;

L^kU

Stat

'

14.—That section 73 of an act ''Providing for the puban
d binding, and the distribution of public
documents," approved January 12, 1895, be, and the*same




BUREAU OF THE COMPTROLLER OF THE CURRENCY*

is hereby, so amended as to authorize the printing annually hereafter of ten thousand copies of the annual report
of the Comptroller of the Currency, for distribution by
the Comptroller of the Currency, instead of seven thousand copies as heretofore.




CHAPTER II.
ORGANIZATION A N D POWERS.

15. Act June 20, 1874. The nationalbstik act
16. 5133. Formation of national banking associations.
17. 5134. Requisites of organization
certificate.
18. 5135. How certificate shall be acknowledged and filed.
19. 5136. Corporate powers of association.
20. Act May 1, 1886. Section 1 relates
to increase of capital stock
and is inserted after section
5142.
21. Act May 1, 1886. May change name
and location.
22. Act May 1, 1886. Debts not affected by change.
23. Act May 1. 1886. N o release from
liabilities.
24. Act August 13, 1888. t National
banks deemed citizens of
states in which located.
25. Act July 12, 1882. # Extension of
corporate existence.
26. Act of July 12, 1882. Consent of
two-thirds necessary.
27. Act July 12, 1882. Special examination of bank and issue of
certificate of approval by
Comptroller.
28. Act of July 12, 1882. Status not
changed by extension. Jurisdiction of suits by or
against national banks.
29. Act July 12, 1882. Dissenting
shareholders may withdraw.
30. Act July 12, 1882. Redemption of
circulating notes i s s u e d
prior to extension.
31. Act July 12, 1882. Dissolution of
banks not extending period
of succession.

32. Act April 12, 1902. Re-extension
of corporate existence.
33. 5137. Power to hold real property.
34. 5138. Requisite amount of capital.
35. 5139. Shares of stock and transfers.
36. 5140. How payment of capital stock
must be made and certified.
37. 5141. Proceedings if shareholder
fails to pay installments.
38. 5142. National banks may increase
capital stock.
39. Act May 1, 1886. Increase of capital stock.
40. 5143. Reduction of capital stock.
41. 5144. Right of shareholders to
vote. Proxies authorized.
42. 5145. Election of directors.
43. 5146. Requisite qualification of directors.
44. 5147. Oath required from directors.
45. 5148. Filling vacancies.
46. 5149. Proceedings where no election is held on the proper
day.
47. 5150. Election of president of the
board.
48. 5151. Individual liability of shareholders.
49. 5152. Executors, trustees, etc., not
personally liable.
50. 5153. National banking associations to be depositaries of
public moneys.
51. Act May 30, 1908. Interest on public deposits.
52. 5154. Conversion of state banks
into national banking associations.
53. 5155. State banks having branches.
54. 5156. Reservation of rights of associations organized under
act of 1863.

T H E N A T I O N A L B A N K ACT.

ACT J U N E 20, 1874.

20, 15. Sec. 1.—An act entitled "An act to provide a naLc/i; is stat! tional currency secured by a pledge of United States
L.. 123.
bonds, and to provide for the circulation and redemption
thereof/' approved June 3, 1864, shall hereafter be known
as "the national-bank act."
102
Act June




103 ORGANIZATION ANt> POWERS.

FORMATION OF N A T I O N A L BANKING ASSOCIATIONS.

16. Sec. 5133.—Associations for carrying on the busi- Act June 3,
ness of banking under this Title may be formed by any lfc%; % stat!
number of natural persons, not less in any case than five. L-» m
They shall enter into articles of association, which shall
specify in general terms the object for which the association is formed, and may contain any other provisions,
not inconsistent with law, which the association may see
fit to adopt for the regulation of its business and the conduct of its affairs. These articles shall be signed by the
persons uniting to form the association, and a copy of
them shall be forwarded to the Comptroller of the Currency, to be filed and preserved in his office.
R E Q U I S I T E S OF ORGANIZATION

CERTIFICATE.

17. Sec. 5134.—The persons uniting to form such an
£une10e'
association shall, under their hands, make an organization sec.'6; is stat!
L 101
certificate, which shall specifically state:
" "
First. The name assumed by such association; which
name shall be subject to the approval of the Comptroller
of the Currency.
• Second. The place where its operations of discount and
deposit are to be carried on, designating the State, Territory, or district, and the particular county and city, town,
or village.
Third. The amount of capital stock and the number of
shares into which the same is to be divided.
Fourth. The names and places of residence of the
shareholders and the number of shares held by each of
them.
Fifth. The fact that the certificate is made to enable
such persons to avail themselves of the advantages of
this Title.
NOTE.—For authority to change names or locations see act May
1, 1886, following section 5136.
HOW

CERTIFICATE
AND FILED.

SHALL

BE

ACKNOWLEDGED

18. Sec. 5135.—The organization certificate shall be acJ une 10 |
knowledged before a judge of some court of record, or sec.^G; 13 Stat'
notary public; and shall be, together with the acknowl- "
edgment thereof, authenticated by the seal of such court,
or notary, transmitted to the Comptroller of the Currency, who shall record and carefuly preserve the satne
in his office.
CORPORATE P O W E R S OF ASSOCIATION.

J une
19. Sec. 5136.—Upon duly making and filing articles of
c
10|
association and an organization certificate, the association sec. s^is Stat,
shall become, as from the date of the execution of its
organization certificate, a body corporate, and as such,
and in the name designated in the organization certificate,
it shall have power—
./First. To adopt and use a corporate seal.




104

ORGANIZATION ANt> POWERS.

Second. To have succession for the period of twenty
years from its organization, unless it is sooner dissolved
according to the provisions of its articles of association,
or bv the act of its shareholders owning two-thirds of its
stock, or unless its franchise 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 and equity, as fully as natural persons.
Fifth; To elect or appoint directors, and by its board
of directors to appoint a president, vice-president, cashier,
and other officers, define their duties, require bonds of
them and fix the penalty thereof, dismiss such officers or
any of them at pleasure, and appoint others to fill their
places.
Sixth. To prescribe, by its board of directors, by-laws
not inconsistent with law, regulating the manner in
which its stock shall be transferred, its directors elected
or appointed, its officers appointed, its property transferred, its general business conducted, and the privileges
granted to it by law exercised and enjoyed.
Seventh. To exercise by its board of directors, or duly
authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business of banking; by discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences
of debt; by receiving deposits; by buying and selling
exchange, coin, and bullion; by loaning money on personal security; and by obtaining, issuing, and circulating
notes according to the provisions of this Title.
But no association shall transact any business except
such as is incidental and necessarily preliminary to its
organization, until it has been authorized by the Comptroller of the Currency to commence the" business of
banking.
NOTE.—See sees. 5168, 5169 and 5170, paragraphs 70, 71, 72,
post, relating to issuing and publishing of certificate authorizing
association to begin business.
I N C R E A S E O F C A P I T A L S T O C K . A C T M A Y 1, 1886.
20. Sec. 1.—
Relates to increase of capital stock and is inserted after section
5142, paragraph 38, Revised Statutes.
MAY

CHANGE NAME
M A Y 1, 1886.

AND

LOCATION:

HOW.

ACT

Act May i, 21. Sec. 2.—Any national banking association may
sff'2; 24 S t a t ! change its name or the place where its operations of disL., is.
count and deposit are to be carried on, to any other place
within the same State, not more than thirty miles distant, with the approval of the. Comptroller of the Currency, bv the vote of shareholders owning two-thirds of
the stock of such association. A duly authenticated
notice of the vote and of the new name or location selected shall be sent to the office of the Comptroller of the



105 ORGANIZATION ANt> POWERS.

Currency ; but no change of name or location shall be
valid until the Comptroller shall have issued his certificate of approval of the same.
D E B T S N O T A F F E C T E D BY CHANGE.

ACT MAY 1,1886.

22. Sec. 3.—All debts, liabilities, rights, provisions, and
c!ay73,
powers of the association under its old name shall devolve ^-'j*; 24Stat!
upon and inure to the association under its new name.
N O R E L E A S E FROM LIABILITIES.

ACT MAY 1, 1886.

23. Sec. 4.—Nothing in this act contained shall be so
construed as in any manner to release any national banking association under its old name or at its old location
from any liability, or affect any action or proceeding in
law in which said association may be or become a party
or interested.

^73!
2

*stat.

N A T I O N A L B A N K S D E E M E D CITIZENS OF STATES
I N W H I C H LOCATED. ACT A U G U S T 13, 1888.

24. Sec. 4.—All national banking associations estab4;
lished under the laws of the United States shall, for the
'stat. L/,
purposes of all actions by or against them, real, personal, Act Aug. 13.
or mixed, and all suits in equity, be deemed citizens of ^ ' 4 ; % stat!
the States in which they are respectively located; and in L» 43'6such cases the circuit and district courts shall not have jurisdiction other than such as they would have in cases between individual citizens of the same State. The provisions of this section shall not be held to affect the jurisdiction of 'the courts of the United States in cases commenced by the United States or by direction of any officer
thereof, or cases for winding up the affairs of any such
bank.
EXTENSION
OF CORPORATE
JULY 12, 1882.

EXISTENCE.

ACT

25. Sec. 1.—That any national banking association orcUly290,'
22 Stat
ganized under the acts of February twenty-fifth, eighteen ^'Y^
*
hundred and sixty-three, June third, eighteen hundred and
sixty-four, and February fourteenth, eighteen hundred
and eighty, or under sections fifty-one hundred and
thirty-three, fifty-one hundred and thirty-four, fifty-one
hundred and thirty-five, fifty-one hundred and thirty-six,
and fifty-one hundred and fifty-four of the Revised
Statutes of the United States, may, at any time within
the two years next previous to the date of the expiration
of its corporate existence under present law, and with the
approval of the Comptroller of the Currency, to be
granted, as hereinafter provided, extend its period of
succession by amending its articles of association for a
term of not more than twenty "years from the expiration
of the period of succession named- in said articles of association, and shall have succession for such extended
period, unless sooner dissolved by the act of shareholders
owning two-thirds of its stock; or unless its franchise be


106

ORGANIZATION ANt> POWERS.

comes forfeited by some violation of law, or unless hereafter modified or repealed.
NOTE.—Act of February 14, 1880, relates to the conversion of
gold banks into currency banks, and is inserted after Revised
Statutes 5186.
C O N S E N T OF T W O - T H I R D S NECESSARY.
12, 1882.

ACT JULY

Sec
ME? cUly29o;
- 2.—That such amendment of said articles ^ of
sec/2; 22 Stat association shall be authorized by the consent in writing
of shareholders owning not less than two-thirds of the
capital stock of the association; and the board of directors
shall cause such consent to be certified under the seal
of tlie association, by the president or cashier, to tht
Comptroller of the Currency, accompanied by an application made by the president or cashier for the approval
of the amended articles of association by the Comptroller; and such amended articles of association shall
not be valid until the Comptroller shall give to such association a certificate under his hand and seal that the association has complied with all the provisions required to be
complied with, and is authorized to have succession for the
extended period named in the amended articles of association.

SPECIAL E X A M I N A T I O N OF B A N K A N D I S S U E OF
CERTIFICATE OF A P P R O V A L BY COMPTROLLER.
ACT JULY 12, 1882.

isskct cUly29o;
®ec* 3 *— T ^at u P o n t h e r e c e i P t
application
sec. 3; 22 Stat! and certificate of the association provided for in the preL 163
'* *
ceding section, the Comptroller of the Currency shall
cause a special examination to be made, at the expense of
the association, to determine its condition; and if after
such examination or otherwise, it appears to him that
said association is in a satisfactory condition, he shall
grant his certificate of approval provided for in the preceding section, or if it appears that the condition of said
association is not satisfactory, he shall withhold such certificate of approval.
S T A T U S N O T C H A N G E D BY E X T E N S I O N , JURISDICT I O N O F SUITS BY OR A G A I N S T N A T I O N A L
BANKS. ACT JULY 12, 1882.

iss2Ct culy29o' ^ ' ®ec* ^ — a n y
association so extending the
sec/4; 22 Stat! period of its succession shall continue to enjoy all the
L., M
rights and privileges and immunities granted and shall
continue to be subject to all the duties, liabilities, and restrictions imposed by the Revised Statutes of the United
States and other acts having reference to national banking associations, and it shall continue to be in all respects
the identical association it was before the extension of its
period of succession: Provided, however, That the jurisdiction for suits hereafter brought by or against any association established under any law providing for national banking associations, except suits between them
and the United States or its officers and agents, shall be



107 ORGANIZATION ANt> POWERS.

the same as, and not other than, the jurisdiction for suits
by or against banks not organnized under any law of the
United States which do or might do banking business
where such national banking association may be doing business when such suits may be begun: And all laws and
parts of laws of the United States inconsistent with this
proviso be, and the same are hereby, repealed.
NOTE.—See also act of August 13, 1888, relating to citizenship
of national banks and jurisdiction of the circuit and district
courts, which follows sec. 5136, paragraph 19, ante.
DISSENTING
SHAREHOLDERS
A C T J U L Y 12, 1882.

MAY

WITHDRAW.

29. Sec. 5.—That when any national banking associa- -^g^0* £u*y29o'
tion has amended its articles of association as provided sec? 5; 22 sW.
in this act, and the Comptroller has granted his certificate 163'
of approval, any shareholder not assenting to such,
amendment may give notice in writing to the directors,
within thirty days from the date of the certificate of approval, of his desire to withdraw from said association,
in which case he shall be entitled to receive from said
banking association the value of the shares so held by
him, to be ascertained by an appraisal made by a committee of three persons, one to be selected by such shareholder, one by the directors, and the third by the first two;
and in case the value so fixed shall not be satisfactory to any such shareholder, he may appeal to the Comptroller of the Currency, who shall cause a reappraisal to
be made, which shall be final and binding; and if said
reappraisal shall exceed the value fixed by said committee, the bank shall exceed the value fixed by said reappraisal,
and otherwise the appellant shall pay said expenses; and
the value so ascertained and determined shall be deemed
to be a debt due, and be forthwith paid, to said shareholder, from said bank; and the shares so surrendered
and appraised shall, after due notice, be sold at public
sale, within thirty days , after the final appraisal provided
in this section: Provided, That in the organization of any
banking association intended to replace any existing
banking association, and retaining the name thereof, the
holders of stock in the expiring association shall be entitled to preference in the allotment of the shares of the
new association in proportion to the number of shares
held by them respectively in the expiring association.
REDEMPTION
OF CIRCULATING
NOTES
ISSUED
P R I O R T O E X T E N S I O N . A C T J U L Y 12, 1882.

30. Sec. 6.—That the circulating notes of any associa- Act July 12,
tion so extending the period of its succession which shall
22 stat!
have been issued to it prior to such extension shall be re- L-* 163deemed at the Treasury of the United States, as provided
in section three of the act of June twentieth, eighteen
hundred and seventy-four, entitled "An act fixing the
amount of United States notes, providing for redistribu


108

ORGANIZATION ANt> POWERS.

tion of national bank currency, and for other purposes/'
and such notes when redeemed shall be forwarded to the
Comptroller of the Currency, and destroyed, as now provided by law; and at the end of three years from the date
of the extension of the corporate existence of each bank
the association so extended shall deposit lawful money
with the Treasurer of the United States sufficient to redeem the remainder of the circulation which was outstanding at the date of its extension, as provided in
section fifty-two hundred and twenty-two, fifty-two
hundred and twenty-four, and fifty-two hundred and
twenty-five of the Revised Statutes; and any gain that
may arise from the failure to present such circulating notes
for redemption shall inure to the benefit of the United
States; and from time to time, as such notes are redeemed
or lawful money deposited therefor as provided herein, new
circulating notes shall be issued as provided by this act,
bearing such devices, to be approved by the Secretary of
the Treasury, as shall make them readily distinguishable
from the circulating notes heretofore issued: Provided,
hoivever, That each banking association which shall obtain
the benefit of this act shall reimburse to the Treasury
the cost of preparing the plate or plates for such new
circulating notes as shall be issued to it.
NOTE.—Act of June 20, 1874, section 3, mentioned above, is inserted after Revised Statutes 5192. T h e destruction of bank
notes by burning, as provided in sections 5184, 5225, Revised
Statutes, is superseded by act of June 23, 1874, which requires
bank notes to be macerated.
DISSOLUTION OF BANKS NOT EXTENDING
O F S U C C E S S I O N . A C T J U L Y 12, 1882.
Act July 12,

PERIOD

31. Sec. 7.—That national banking associations whose

sec?7;c22 Stat! corporate existence has expired or shall hereafter expire,

l., 164.

a n ( j w hich

do not avail themselves of the provisions of
this act, shall be required to comply with the provisions
of sections fifty-two hundred and twenty-one and fiftytwo hundred and twenty-two of the Revised Statutes in
the same manner as if the shareholders had voted to go
into liquidation, as provided in section fifty-two hundred
and twenty of the Revised Statutes; and the provisions
of sections fifty-two hundred and twenty-four and fiftytwo hundred and twenty-five of the Revised Statutes
shall also be applicable to such associations, except as modified by this act; and the franchise of such associations is hereby extended for the sole purpose of liquidating
their affairs until such affairs are finally closed.
NOTE.—Other sections of act of July 12, 1882.
Sec. 8.—[Relates to bond deposits and circulating notes.] Follows Revised Statutes, section 5167.
Sec. 9 — [Relates to withdrawal of circulating notes.] Follows
Revised Statutes, section 5167.
Sec. 10.—Repealed sections 5171-5176, Revised Statutes, and
was superseded by act of March 14, 1900. (See section 5171, Revised Statutes.)




109 ORGANIZATION ANt> POWERS.

Sec. H.^—Authorizes the exchange of three per cent, bonds for
outstanding three and one-half per cent, bonds.
Sec. 12.—Authorizes the issue of gold certificates upon the deposit of gold coin. Inserted after section 5207.
Sec. 13.—[Relates to false certification of checks.] Follows Revised Statutes, section 5208.
REEXTENSION OF CORPORATE
OF A P R I L 12, 1902.

EXISTENCE.

ACT

32. That the Comptroller of the Currency is hereby 190^ct tpri£jg:
authorized, in the manner provided by, and under the con- 32 stat. L., 102!
ditions and limitations of, the act of July 12, 1882, to
extend for a further period of twenty years the charter of
any national banking association extended under said act
which shall desire to continue its existence after the expiration of its charter.
POWER TO HOLD REAL

PROPERTY.

33. Sec. 5137—A national banking association may
purchase, hold, and convey real estate for the following
purposes, and for no others:
First. Such as shall be necessary for its immediate accommodation in the transaction of its business.
Second. Such as shall be mortgaged to it in good faith
by way of security for debts previously contracted.
Third. Such as shall be conveyed to it in satisfaction of
debts previously contracted in the course of its dealings.
Fourth. Such as it shall purchase at sales under judgments, decress, 01* mortgages held by the association, or
shall purchase to secure debts due to it.
But no such association shall hold the possession of any
real estate under mortgage, or the title and possession of
any real estate purchased to secure any debts due to it, for
a longer period than five years.

June10^;
Stat
•

R E Q U I S I T E A M O U N T O F CAPITAL.

34. Sec. 5138 [as amended 1900].—No association
June10ji;
shall be organized with a less capital than one hundred thou7^ 13 stat!
sand dollars, except that banks with a capital of not less Act Mar. 14,
than fifty thousand dollars may, with the approval of the
31
Secretary of the Treasury, be organized* in any place the L% &
population of which does not exceed six thousand inhabitants, and except that banks with a capital of not less
than twenty-five thousand dollars may, with the sanction
of the Secretary of the Treasury, be organized in any place
the population of which does not exceed three thousand
inhabitants. No association shall be organized in a city
the population of which exceeds fifty thousand persons
with a capital of less than two hundred thousand dollars.
S H A R E S O F STOCK A N D

TRANSFERS.

35. Sec. 5139.—The capital stock of each association lgAct J*™^
shall be divided into shares of one hundred dollars each, sec.i2;i3Stat!
and be deemed personal property, and transferable on the 102*
books of the association in such manner as may be pre


110

ORGANIZATION ANt> POWERS.

scribed in the by-laws or articles of association. Every
person becoming a shareholder by such transfer shall, in
proportion to his shares, succeed to all the rights and liabilities of the prior holder of such shares; and no change
shall be made in the articles of association by which the
rights, remedies, or security of the existing creditors of
the association shall be impaired.
H O W PAYMENT OF T H E CAPITAL STOCK MUST BE
MADE AND CERTIFIED.
igAct

June^J, 36. Sec. 5140.—At least fifty per centum of the capital
sec/i4;ci3 Stat! stock of every association shall be paid in before it shall
L 103
*' *
be authorized to commence business; and the remainder
of the capital stock of such association shall be paid in
installments of at least ten per centum each, on the whole
amount of the capital, as frequently as one installment
at the end of each succeeding month from the time it shall
be authorized by the Comptroller of the Currency to commence business; and the payment of each installment shall
be certified to the Comptroller, under oath, by the president
or cashier of the association.
PROCEEDINGS IF SHAREHOLDER FAILS TO PAY INSTALLMENTS.

tm? l une m, 37. Sec. 5141.—Whenever any shareholder, or his asto
I I 13 Stat ' s*&nee>
O
Pay any installment on the stock when the
same is required by the preceding section to be paid, the
directors of such association may sell the stock of such
delinquent shareholder at public auction, having given three
weeks' previous notice thereof in a newspaper published
and of general circulation in the city or county where the
association is located, or if no newspaper is published in
said city or county, then in a newspaper published nearest thereto, to any person who will pay the
highest price therefor, to be not less than the amount
then due thereon, with the expenses of advertisement and
sale; and the excess, if any, shall be paid to the delinquent
shareholder. If no bidder can be found who will pay for
such stock the amount due thereon to the association, and
the cost of advertisement and sale, the amount previously
paid shall be forfeited to the association, and such stock
shall be sold as the directors may order, within six
months from the time of such forfeiture, and if not sold
it shall be canceled and deducted from the capital stock
of the association. If any such cancellation and reduction shall reduce the capital of the association below the
minimum of capital required by law, the capital stock
shall, within thirty days from the date of such cancellation, be increased to the required amount; in default of
which a receiver may be appointed, according to the provisions of section fifty-two hundred and thirty-four, to
close up the business of the association.



111 ORGANIZATION ANt> POWERS.
N A T I O N A L B A N K S MAY I N C R E A S E CAPITAL STOCK.

38. Sec. 5142.—Any association .formed under this 1864 c 10G
Act June 3,
*
•
Title may, by its articles of association, provide for an in13. 13
crease of its capital from time to time, as may be deemed Stat- L-, 103.
expedient, subject to the limitations of this Title. But the
maximum of such increase to be provided in the articles
of association shall be determined by the Comptroller of
the Currency; and no increase of capital shall be valid until
the whole amount of such increase is paid in, and notice
thereof has been transmitted to the Comptroller of the
Currency, and his certificate obtained specifying the amount
of such increase of capital stock, with his approval thereof,
and that it has been duly paid in as part of the capital of
such association.
INCREASE OF CAPITAL STOCK.

A C T M A Y 1, 1886.

39. Sec. 1.—That any national banking assoiation may, £ct May 1,
with the approval of the Comptroller of the Currency, SccS; 24 stat!
by the vote of shareholders owning two-thirds .of the stock L - 18of such association, increase its capital stock, in accordance
with existing laws, to any sum approved by the said
Comptroller, notwithstanding the limit fixed in its
original articles of association and determined by said
Comptroller; and no increase of the capital stock of any
national banking association either within or beyond the
limit fixed in its original articles of association shall be
made except in the manner herein provided.
NOTE.—Other sections of this act follow Revised Statutes 5136.
REDUCTION

OF CAPITAL

STOCK.

40. Seq. 5143 [as amended by paragraph 145 Fed.
Jun<y>
Res. Act].—Any association formed under this title sec. 13^13 stat!
may, by the vote of shareholders owning two-thirds of its ''
capital stock, reduce its capital to any sum not below the
amount required by this title to authorize the formation
of associations; but no such reduction shall be allowable
which will reduce the capital of the association below the
amount required for its outstanding circulation, nor shall
any reduction be made until the amount of the proposed
reduction has been reported to the Comptroller of the
Currency and such reduction has been approved by the said
Comptroller of the Currency and by the Federal Reserve
Board, or by the organization committee pending the organization of the Federal Reserve Board.
NOTE.—See paragraph 47 Federal Reserve Act.
RIGHT OF SHAREHOLDERS
AUTHORIZED.

TO

VOTE;

PROXIES

41. Sec. 5144,—In all elections of directors, and in deciding all questions at meetings of shareholders, each
shareholder shall be entitled to one vote on each share of
stock held by him. Shareholders may vote by proxies duly
authorized in writing; but no officer, clerk, teller, or
book-keeper of such association shall act as proxy; and no



June10|;
'11^ 13 stat'
'

112

ORGANIZATION ANt> POWERS.

shareholder whose liability is past due and unpaid shall be
allowed to vote.
NOTE.—The Circuit Court of the United States, in United States
v. Barry, 36 F. R., 246, held that the words "liability past due and
unpaid" referred only to unpaid subscriptions for stock.
ELECTION OF DIRECTORS.
Act June 3,
42. Sec. 5145.—The affairs of each association shall be
10
sect'. 9^*10 ; 13 managed by not less than five directors, who shall be elected

stat.

102.

l£unei06

t k e shareholders at a meeting to be held at any time
before the association is authorized by the Comptroller of
the Currency to commence the business of banking; and
afterward at meetings to be held on such day in January
of each year as is specified therefor in the articles of
association. The directors shall hold office for one year,
and until their successors are elected and have qualified.

REQUISITE
43,

Sec

QUALIFICATION

OF

DIRECTORS,

- 5 1 4 6 f a s a m e n d e d 1905],—Every director
sees. 9, 10; 13 must, during his whole term of service, be a citizen of the
10
St
Act Feb 28, United States, and at least three fourths of the directors
L^fa^n©" m u s t ^ a v e r e s ^ e d
State, Territory, or District in
' which the ^association is located for at least one year immediately preceding their election and must be residents therein during their continuance in office. Every
director must own in his own right at least ten shares of
the capital stock of the association of which he is a director, unless the capital of the bank shall not exceed
twenty-five thousand dollars, in which case he must own
in his own right at least five shares of such capital stock.
Any director who ceases to be the owner of the required
number of shares of the stock, or who becomes in any other
manner disqualified, shall thereby vacate his place.
OATH

1864? lun*ioi;
jec. 9^13

REQUIRED FROM

DIRECTORS.

44

- S e c - 5 1 4 7 - — E a c h director, when appointed or
Stat! elected, shall take an oath that he will, so far as the duty
devolves on him, diligently and honestly administer the
affairs of such association, and will hot knowingly violate,
or willingly permit to be violated, any of the provisions
of this Title, and that he is the owner in good faith, and
in his own right, of the number of shares of stock required
by this Title, subscribed by him, or standing in his name
on the books of the association, and that the same is not
hypothecated, or in any way pledged, as security for any
loan or debt. Such oath, subscribed by the director making it, and certified by the officer before whom it is taken,
shall be immediately transmitted to the Comptroller of
the Currency, and shall be filed and preserved in his office.
FILLING

VACANCIES.

im? l ^ i o l 45. Sec. 5148.—Any vacancy in the board shall be filled
lT lo!.13 S t a t ^ a PP°i n tnient by the remaining directors, and any director so appointed shall hold his place until the next election.



113 ORGANIZATION ANt> POWERS.
PROCEEDINGS W H E R E NO ELECTION IS H E L D ON
T H E PROPER DAY.
46. Sec. 5149.—If, from any cause, an election of directors is not.made at the time appointed, the association
shall not for that cause be dissolved, but an election may

J.uneio<!;
lo^; 13stat.

be held on any subsequent day, thirty days' notice thereof
in all cases having been given in a newspaper published
in the city, town, or county in which the association is
located; and if no newspaper is published in such city,
town, or county, such notice shall be published in a newspaper published nearest thereto. If the articles of association do not fix the day on which the election shall be
held, or if no election is held on the day fixed, the day
for the election shall be designated by the board of directors in their by-laws, or otherwise; or if the directors
fail to fix the day, shareholders representing two-thirds
of the shares may do so.
E L E C T I O N OF P R E S I D E N T OF T H E BOARD.

^

3

47. Sec. 5150.—One of the directors, to be chosen by im? c ^ W
Stat
the board, shall be the president of the board.
*
I N D I V I D U A L LIABILITY OF

SHAREHOLDERS.

48. Sec. 5151.—The shareholders of every national m t ^ m ,
banking association shall be held individually r e s p o n s i b l e ,
13 Stat.
equally and ratably, and not one for another, for all con''
tracts, debts, and engagements of such association, to the
extent of the amount of their stock therein, at the par value
thereof, in addition to the amount invested in such shares;
except that shareholders of any banking association now
existing under State laws, having not less than five millions
of dollars of capital actually paid in, and a surplus of twenty
per centum on hand, both to be determined by the Comptroller of the Currency, shall be liable only to the amount invested in their shares; and such surplus of twentv per centum shall be kept undiminished, and be in addition to the
surplus provided for in this Title; and if at any time there is
a deficiency in such surplus of twenty per centum, such association shall not pay any dividends to its shareholders until
the deficiency is made good; and in case of such deficiency,
the Comptroller of the Currency may compel the associaiton to dose its business and wind up its affairs under
the provisions of chapter four* of this Title.
NOTE.—See act of June 30. 1876. following section 5238, Revised
Statutes, for enforcement of liability prescribed by this section in
cases of voluntary liquidation.
NOTE.—See paragraph 8 Federal Reserve Act.
EXECUTORS, TRUSTEES, ETC., N O T PERSONALLY*
LIABLE.

49. # Sec. 5152—Persons holding stock as executors,
administrators, guardians, or trustees shall not be personally subject to any liabilities as stockholders; but the estates '*
and funds in their hands shall be liable in like manner and
* Chapter 5 of this compilation.



£uneio|
Stat
-

114

ORGANIZATION ANt> POWERS.

to the same extent as the testator, intestate, ward, or person
interested in such trust-funds would be, if living and competent to act and hold the stock in his own name.
NATIONAL BANKING ASSOCIATIONS TO BE DEPOSITARIES OF PUBLIC MONEYS. (REENACTED
B Y P A R A G R A P H 144 F E D E R A L R E S E R V E ACT.)

50. Sec. 5153 [as amended 1907].—All national bankigAct Juae^g.
sec. 45; 13 stat! ing associations, designated for that purpose by the SecreL
Act 3Mar. 3, tary of the Treasury., shall be depositaries of public money,
un
sec'i- 3i Stlt'
der such regulations as may be prescribed by the SecreL.,' 1448.
' tary; and they may also be employed as financial agents of
Ia
mif 34 stat! the Government; and they shall perform all such reasonable
l., 1290.
duties, as depositaries of public money and financial agents
of the Government, as may be required of them. The
Secretary of the Treasury shall require the associations thus
designated to give satisfactory security, by the deposit of
United States bonds and otherwise, for the safe-keeping
and prompt payment of the public money deposited with
them, and for the faithful performance of their duties as
financial agents of the Government: Provided, That the
Secretary shall, on or before the first of January of each
year, make a public statement of the securities required •
during that year for such deposits. And every association
so designated as receiver or depositary of the public money
shall take and receive at par all of the national currency
bills, by whatever association issued, which have been paid
into.the Government for internal revenue, or for loans or
stocks: Provided, That the Secretary of the Treausry shall
distribute the deposits herein provided for, as far as practicable, equitably between the different States and sections.
NOTE.—See paragraphs 93 and 94 Federal Reserve Act.
NOTE.—-For other provisions relating to duties and liabilities of
depositaries see following sections of the Revised Statutes of the
United States:
Sec. 3640.—Transfer of moneys from depositaries t o Treasury
authorized.
Sec. 3641.—Transfer of postal deposits.
Sec. 3642.—Accounts of postal deposits.
Sec. 3643.—Entry of each deposit, transfer, and payment.
Sec. 3644.—Public moneys in Treasury and depositories subject
to draft of Treasurer.
Sec. 3645.—Regulations for presentment of drafts.
Sec. 3646.—Duplicates for lost or stolen checks authorized.
Sec. 3647.—Duplicate check when officer who issued is dead.
Sec. 3648.—Advances of public moneys prohibited.
Sec. 3649.—Examination of depositaries.
See also sees. 3620, 3847, 4046, 5488, and 5497, paragraphs 224
to 229, post.

l^'se^k30,

INTEREST ON PUBLIC DEPOSITS.
5L

Sec

A C T M A Y 30, 1908.

- 15.—That all national banking associations
designated as regular depositaries of public money shall pay
upon all special and additional deposits made by the Secretary of ^ the Treasury in such depositaries, and all such
associations designated as temporary depositaries of public
money shall pay upon all sums of public money deposited in
such associations interest at such rate as the Secretary of




115 ORGANIZATION ANt> POWERS.

the Treasury may prescribe, not less, however, than one
per centum per annum upon the average monthly amount of
such deposits: Provided, however, That nothing contained
in this Act shall be construed to change or modify the obligation of any association or any of its officers for the
safe-keeping of public money: Provided further, That the
rate of interest charged upon such deposits shall be equal
and uniform throughout the United States.
CONVERSION OF STATE BANKS
BANKING ASSOCIATIONS.

INTO

NATIONAL

52. Sec. 5154 [as amended by paragraph 52, Sec. 8 ig^f Juneid;
Stat
Fed. Res. Act].—Any bank incorporated by special law
'
t)f any State or of the United States or organized under
the general laws of any State or of the United States and
having an unimpaired capital sufficient to entitle it to become a national banking association under the provisions
of the existing laws may, by the vote of the shareholders
owning not less than fifty-one per centum of the capital
stock of such bank or banking association with the approval
of the Comptroller of the Currency be converted into a
national banking association, with any name 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 certificate may be executed by
a majority of the directors of the bank or banking institution, and the certificate shall declare that the owners of fiftyone per centum of the capital stock have authorized the
directors to make such certificate and to change or convert
the bank or banking institution into a national association.
A majority of the directors, after executing the articles of
association and the organization certificate, shall have power
to execute all other papers and to 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 for the 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 employes,
shall have the same powers and privileges, and shall be
subject to the same duties, liabilities, and regulations, in
all respects, as shall Have been prescribed by the Federal
Reserve Act and by the national banking Act for associations originally organized as national banking associations.
NOTE.—See paragraph 52, section 8, Federal Reserve Act.
S T A T E BANKS HAVING BRANCHES.

Act Mar

53. Sec. 5155.—It shall be lawful for any bank or bank- ises,^
ing association organized under State laws, and having



3

tat

*

116

ORGANIZATION ANt> POWERS.

branches, the capital being joint and assigned to and used
"by the mother-bank and branches in definite proportions, to
become a national banking association in conformity with
existing laws, and to retain and keep in operation its
branches, or such one or more of them as it may elect to
retain; the amount of the circulation redeemable at the
mother-bank, and each} branch, to be regulated by the
amount of capital assigned to and used by each.
RESERVATION OF RIGHTS OF ASSOCIATIONS ORGANIZED UNDER ACT OF 1863.

Act June^.
sec.'62;Ci3 stat!

L., lis.

54. Sec. 5156.—Nothing in this Title shall affect any
appointments made, acts done, or proceedings had or commenced prior to the third day of June, eighteen hundred
and sixty-four, in or toward the organization of any national banking association under the act of February twentyfive, eighteen hundred and sixty-three; but all associations
which on the third day of June, eighteen hundred and sixtyfour, were organized or commenced to be organized under
that act shall enjoy all the rights and privileges granted,
and be subject to all the duties, liabilities, and restrictions
imposed by this Title, notwithstanding all the steps prescribed by this Title for the organization of associations
were not pursued, if such associations were duly organized
under that act.




CHAPTER III.
OBTAINING AND ISSUING CIRCULATING NOTES.

55. 5157. What associations are governed by chapters two,
three, and four.
56. 5158. Registered bonds intended
by the terms "United States
bonds."
57. 5159. Deposit of bonds required
before issue of circulating
notes.
58. Act December 21, 1905. Panama
Canal bonds have all rights
and privileges accorded to
other two per cent bonds of
the United States.
59. 5160. Increase or reduction of deposit to correspond with
capital.
60. 5161. Exchange of coupon for registered bonds.
61. 5162. Manner of making transfers
of bonds.
62. 5163. Registry of transfers.
63. 5164. Notice of transfer to be given
to association interested.
64. 5165. Examination of registry and
bonds.
65. 5166. Annual examination of bonds
by association.
66. 5167. General provisions respecting bonds.
67. Act June 20, 1874. Withdrawal of
circulating notes on deposit
of lawful money and withdrawal of bonds.
68. Act July 12, 1882. Amount of
bonds required to be on deposit. Reduction of amount
or retirement in full of circulating notes.
69. Act July 12, 1882, as amended
May 30,1908. Withdrawal of
circulating notes on deposit
of lawful money and withdrawal of bonds. Not more
than nine millions to be. deposited during any calendar
month. Withdrawal of additional circulation on deposit of lawful money or
national-bank notes.
70. 5168. Comptroller to determine if
association can commence
business.
71. 5169. Certificate of authority to
commence banking to be issued.
72. 5170. Publication of certificate.




73. 5171. Repealed by act August 12,
1882.
74. Act March 14, 1900. Delivery of
circulating notes.
75. 5172. Printing denominations and
form of the circulating
notes.
76. Act June 20, 1874. Charter number to be printed on notes.
77. Act March 3, 1875. Distinctive
paper for printing notes.
78. 5173. Plates and dies to be under
control of the Comptroller.
79. 5174. Examination of plates and
dies.
80. 5175. Limit to issue of notes under
five dollars.
81. 5176. Repealed by act July 12,
1882.
82. 5177. Repealed by act January 14,
1875.
83. Act January 14, 1875. Aggregate
amount of circulating notes
not limited.
84. 5178. Superseded by act January
14, 1875.
85. 5179. Superseded by act January
14, 1875.
86. 5180. Repealed by act January 14,
1875.
S7. 5181. Superseded bv act January
14, 1875.
88. 5182. For what demands national
bank-notes may be received.
89. 5183. Issue of post notes, etc.,
prohibited.
90. 5184. Destroying a n d replacing
worn out and mutilated
notes.
91. Act June 23, 1874. Maceration of
national-bank notes.
92. 5185. Organization of associations
to issue gold notes.
93. 5186. Reserve requirements f o r
gold banks.
94. Act February 14, 1880. Conversion
of national gold banks into
currency banks.
95. 5187. Penalty for issuing circulating notes to unauthorized
associations.
96. 5188. Penalty for imitating bank
circulation. Use of same
for advertising purposes.
97. 5189. Penalty for mutilating circulation.

117

118

OBTAINING AN£> ISSUING CIRCULATING NOTES.

ACT MAY 3 0 , 1 9 0 8 , AUTHORIZING NATIONAL CURRENCY ASSOCIATIONS,
THE ISSUE OF ADDITIONAL NATIONAL-BANK
CIRCULATION, AND
CREATING A NATIONAL MONETARY COMMISSION.

98. Sec. 1. Formation of national
currency associations.
99. Sec. 1 (continued).
Conditions
under which banks belonging to national currency as- j
sociations may take out additional circulation.
100. Sec. 2. Redemption fund below
requirement. Duty of Treas- ;
urer of the United States. i
101. Sec. 3. What national banks may |
apply for authority to issue ;
additional circulation on j
bonds other than United j
States bonds. What bonds •
will be accepted for such i
additional circulation.
102. Sec. 4. Legal title of bonds deposited to secure additional
circulation. Assignment of
bonds by Treasurer to be
countersigned by the Comptroller of the Currency.
103. Sec. 5. Additional
circulation,
how treated.
L i m i t to
amount of circulation issued
to each bank. Limit to
total amount outstanding
under this act.
104. Sec. 6. Amount of redemption
fund.
105. Sec. 7. Equitable distribution of
notes.
106., Sec. 8. Secretary of the Treasury
to furnish information as to
the value and character of
securities.

107. Sec. 9. Amends section 5214, Revised Statutes.
108. Sec. 10. Amends act July 12,
1882, as amended March 4,
1907. Inserted after section 5167.
109. Sec. 11. Amends section 5172, Revised Statutes.
110. Sec. 12. Circulating notes to be
redeemed in lawful money
of the United States.
111. Sec. 13. All acts of the Comptroller of the Currency and
Treasurer of the United
States under this act to be
approved by the Secretary
of the Treasury.
112. Sec. 14. Is amendatory of section
5191, Revised Statutes. Inserted after that section.
113. Sec. 15. Relates to deposit of
public money and is inserted after section 5133, Revised Statutes.
114. Sec, 16. Expenses of act.
115. Sec, 17. Appointment of monetary commission.
116. Sec. 18. Powers of commission.
Commission to report to
Congress.
117. Sec. 19. Expenses of commission.
118. Sec, 20. When act expires by
limitation.

W H A T ASSOCIATIONS A R E G O V E R N E D
TERS TWO, T H R E E , A N D FOUR.

BY

CHAP-

55. Sec. 5157.—The provisions of chapters two, three,
and four* of this Title, which are expressed without restrictive words, as applying to 'national banking associations/' or to "associations," apply to all associations organized to carry on the business of banking under any act of
Congress.
REGISTERED B O N D S I N T E N D E D
" U N I T E D S T A T E S BONDS."

BY

THE

TERM

Act June 3,
56. Sec. 5158.—The term "United States bonds/' as
seo*4; 13 stat! usec * throughout this chapter, shall be construed to mean
L 100.
m
registered bonds of the United States.

D E P O S I T OF B O N D S R E Q U I R E D B E F O R E I S S U E OF
CIRCULATING N O T E S .

is&r luni06, 57. Sec. 5159.—Every association, after having comsec.ie£i3Stat. plied with the provisions of this Title, preliminary to the
•Chapters three, four, and five of this compilation.



119

OBTAINING AN£> ISSUING CIRCULATING NOTES.

commencement of the banking business, and before it shall
be authorized to commence banking business under this
Title, shall transfer and deliver to the Treasurer of the
United States any United-States registered bonds, bearing
interest, [to an amount mot less than thirty thousand doU,
lars and not less than one-third of the capital stock paid
inJ] Such bonds shall be received by the Treasurer upon
deposit and shall be by him safely kept in his office, until
they shall be otherwise disposed of, in pursuance of the
provisions of this Title.
NOTE.—Partially repealed by paragraph 109 Federal Reserve
Act.
NOTE.—The italicized words are held to be modified by the acts
o f f l i n e 20, 1874, and July 12, 1882. Section 4, act of June 20,
1874, which follows section 5167, provides in part that the amount
of bonds on deposit for circulation shall not be reduced below
$50,000. This determines the amount of bonds required to be
deposited by banks organizing with capital stock over $150,000.
Banks having a capital of $150,000, or less, are not required to
keep on deposit bonds in excess of one-fourth of the capital stock
as security for their circulating notes, by act July 12, 1882, chapter
290, section 8. This act follows section 5167, Revised Statutes.
PANAMA CANAL BONDS HAVE ALL RIGHTS AND
PRIVILEGES ACCORDED TO OTHER TWO PER
CENT BONDS OF T H E U N I T E D STATES.
ACT
D E C E M B E R 21, 1905.

58. That the two per cent bonds of the United States Act Dec. 21,
authorized by section eight of the act entitled 4,An.act toSffc. 84 Stat '
provide for the construction of a canal connecting the
waters of the Atlantic and Pacific oceans,*" approved June
twenty-eight, nineteen hundred and two, shall have all
the rights and privileges accorded by law to other two per
cent bonds of the United States, and every national banking association having on deposit, as provided by law,
such bonds issued under the provisions of said section eight
of said act approved June twenty-eight, nineteen hundred
and two, to secure its circulating notes, shall pay to the
Treasurer of the United States, in the months of January
and July, a tax of one-fourth of one per cent each half
year upon the average amount of such of its notes in circulation as are based upon the deposit of said two per cent
bonds; and such taxes shall be in lieu of existing taxes on its
notes in circulation imposed by section fifty-two hundred
and fourteen of the Revised Statutes.
I N C R E A S E OR R E D U C T I O N O F D E P O S I T T O C O R R E S P O N D W I T H CAPITAL.

59. Sec. 5160.—The deposit of bonds made by each as- lgAc* June10j!'
sociation shall be increased as its capital may be paid up sec. is; 13 stat!
104,
or increased, so that every association shall at all times
have on deposit with the Treasurer registered United States
bonds to the amount [of at least one-third of its capital
stock actually paid inj. And any association that may
desire to reduce its capital, or close up its business and
dissolve its organization, may take up its bonds upon returning to the Comptroller its circulating notes in the



120

OBTAINING AN£> ISSUING CIRCULATING

NOTES.

proportion hereinafter required, or may take up any excess
of bonds beyond [one-third of. its capital stock], and upon
which no circulating notes have been delivered.
NOTE.—In reference to italicized words see notes under section
5159, and acts of June 20, 1874, and July 12, 1882, set forth in
full following Revised Statutes, section 5167. These acts fix the
minimum of bonds as $50,000 for all banks over $150,000 capital
and as one-fourth of the capital stock for all banks having a
capital of $150,000 or less.
EXCHANGE
un

1864? l \ol
sec/i6;i3Stat!
L

''

m

60

-

Sec

OF COUPON FOR REGISTERED

MANNER OF MAKING TRANSFERS OF
1864? l™\ol
L°' IOJ1>3 STAT*

BONDS.

61. Sec. 5162.—All transfers of United States bonds,
MAC E
* by any association under the provisions of this Title,
shall be made to the Treasurer of the United States in
trust for the association, with a memorandum written or
printed on each bond, and signed by the cashier, or some
other officer of the association making the deposit. A
receipt shall be given to the association, by the Comptroller
of the Currency, or by a clerk appointed by him for that
purpose, stating that the bond is held in trust for the association on whose behalf the transfer is made, and as
security for the redemption and payment of any circulating
notes that have been or may be delivered to such association. No assignment of transfer of any such bond by the
Treasurer shall be deemed valid unless countersigned by the
Comptroller of the Currency.
REGISTRY OF

M ? cunio6
M

BONDS.

* 5161—To facilitate a compliance with the
two preceding sections, the Secretary of the Treasury is
authorized to receive from any association, and cancel,
any United States coupon bonds, and to issue in lieu thereof
registered bonds of like amount, bearing a like rate of interest, and having,the same time to run.

TRANSFERS.

62

' S e ( :' 5 1 6 3 - — T h e Comptroller of the Currency shall
sees. 19-20; 13 keep in his office a book in which he shall cause to be
stat. L., I S entered, immediately upon countersigning it, every transfer
C.
or assignment by the Treasurer, of any bonds belonging
to a national banking association, presented for his signature. He shall state in such entry the name of the association from whose accounts the transfer is. made, the name
of the party to whom it is made, and the par value of the
bonds transferred.
NOTICE OF TRANSFER TO BE GIVEN TO
TION INTERESTED.
ne

I864ct ^ i06
s e c / w a s Stat!
L

** 10°-

ASSOCIA-

. 63The Comptroller of the Currency shall,
immediately upon countersigning and enterting any transfer or assignment by the Treasurer, of any bonds belonging to a national banking association, advise by mail the
association from whose accounts the transfer is made, of
the kind and numerical designation of the bonds, and the
amount thereof so transferred.




121 OBTAINING AN£> ISSUING CIRCULATING

NOTES.

EXAMINATION OF REGISTRY AND BONDS.

64. Sec. 5165.—The Comptroller of the Currency jgAct J™*^
shall have at all times, during office hours, access to. the sec.'20;i3Stat
books of the Treasurer of the United States for the purpose L-. 105of ascertaining the correctness of any transfer or assignment of the bonds deposited by an association, presented to
the Comptroller to countersign; and the Treasurer shall
have the like access to the book mentioned in section fiftyone hundred and sixty-three, during office hours, to ascertain the correctness of the entries in the same; and the
Comptroller shall also at all times have access to the bonds
on deposit with the Treasurer to ascertain their amount
and condition.
ANNUAL EXAMINATION OF BONDS BY ASSOCIATION.

65. Sec. 5166.—Every association having bonds depos~igAct J ™ ^
ited in the office of the Treasurer of the United States shall, sec. 25; 13 Stat.
once or oftener in each fiscal year, examine and compare L*»106the bonds pledged by the association with the books of
the Comptroller of the Currency and with the accounts of
the association, and, if they are found correct, to execute to
the Treasurer a certificate setting forth thd different kinds
and the amounts thereof, and that the same are in the
possession and custody of the Treasurer at the date of the
certificate. Such examination shall be made at such time
or times, during the ordinary business hours, as the Treasurer and the Comptroller, respectively, may select, and
may be made by an officer or agent of such association, duly
appointed in writing for that purpose; and his certificate
before mentioned shall be of like force and validity as if
executed by the president or cashier. A duplicate of such
certificate, signed by the Treasurer, shall be retained by the
association.
GENERAL PROVISIONS RESPECTING BONDS.

66. Sec. 5167—The bonds transferred to and deposited lgAct June10^
with the Treasurer of the United States, by any associa- sec. 26; 13 stat!
tion, for the security of its circulating notes, shall be held 10(*
exclusively for that purpose, until such notes are redeemed,
except as provided in this Title. The Comptroller of the
Currency shall give to any such association powers of attorney to receive and appropriate to its own use the interest
on the bonds which it has so transferred to the Treasurer;
but such powers shall become inoperative whenever such
association fails to redeem its circulating notes. Whenever
the market or cash value of any bonds thus deposited with
the Treasurer is reduced below the amount of the circulation issued for the same, the Comtproller may demand and
receive the amount of such depreciation in other United
States bonds at cash value, or in money, from the association, to be deposited with the Treasurer as long as such
depreciation continues. And the Comptroller, upon the
terms prescribed by the Secretary of the Treasury may
permit an exchange to be made of any of the bonds



122

OBTAINING AN£> ISSUING CIRCULATING NOTES.

deposited with the Treasurer by any association for other
bonds of the United States authorized to be received as
• security for circulating notes, if he is of opinion that such
an exchange can be made without prejudice to the United
States; and he may direct the return of any bonds to the
association which transferred the same, in sums of not less
than one thousand dollars, upon the surrender to him and
the cancellation of a proportionate amount of such circulating notes: Provided, That the remaining bonds which shall
have been transferred by the association offering to surrender circulating notes'are equal to the amount required
for the circulating notes not surrendered by such association, and that the amount of bonds in the hands of the Treasurer is not diminished below the amount required to be kept
on deposit with him, and that there has been no failure by
the association to redeem its circulating notes, nor any
other violation by it of the provisions of this Title, and that
the market or cash value of the remaining bonds is not
below the amount required for the circulation issued for
the same.
W I T H D R A W A L OF CIRCULATING N O T E S ON D E P O S I T OF L A W F U L M O N E Y A N D W I T H D R A W A L
OF B O N D S . ACT J U N E 20, 1874.
1874? cune343;

67. Sec. 4.—That any association organized under this
w
Lc' ii418 Stat* act> o r an>T
*he a c t s
hi c h this is an amendment,
desiring to withdraw its circulating notes, in whole or in
part, may, upon the deposit of lawful money with the
Treasurer of the United States in sums of not less than
nine thousand dollars, take up the bonds which said asso-.
ciation has on deposit with the Treasurer for the security
of such circulating notes; which bonds shall be assigned
to the bank in the manner specified in the nineteenth section of the national-bank act; and the outstanding notes
of said association, to an amount equal to the legal-tender
notes deposited, shall be redeemed at the Treasury of the
United States, and destroyed as now provided by law:
Provided, That the amount of the bonds on deposit for
circulation shall not be reduced below fifty thousand dollars.
NOTE.—See paragraph 109 Federal Reserve Act.
NOTE.—Other sections of this act referred to under Revised
Statutes, section 5192. Section 19 of the national-bank act is incorporated in Revised Statutes, sections 5162-5164.
A M O U N T O F B O N D S R E Q U I R E D TO B E O N D E P O S I T ;
R E D U C T I O N OF A M O U N T OR R E T I R E M E N T IN
F U L L O F CIRCULATING N O T E S . A C T JULY 12,
1882.

- 8 - — T h a t rational banks now organized or
organized, having a capital of one hundred and
fifty
thousand dollars, or less, shall not be required to
keep on deposit or deposit with the Treasurer of the United
States United States bonds in excess of one-fourth of their
capital stock as security for their circulating notes; but

1882* t ^ m

68

*

Sec

sec. 8; 22 Stat! hereafter
L 164

''

*




123

OBTAINING AN£> ISSUING CIRCULATING NOTES.

such banks shall keep on deposit or deposit with the Treasurer of the United States the amount of bonds as herein
required. And such of those banks having on deposit bonds
in excess of that amount are authorized to reduce their circulation by the deposit of lawful money as provided by law;
[provided, that the amount of such circulating notes shall
not in any case exceed ninety per centum of the par value
of the bonds deposited as herein provided;] Provided further, That the national banks which shall hereafter make
deposits of lawful money for the retirement in full of their
circulation shall at the time of their deposit be assessed for
the cost of transporting and redeeming their notes then
outstanding, a sum equal to the average cost of the redemption of national-bank notes during the preceding year, and
shall thereupon pay such assessment. And all national
banks which have heretofore made or shall hereafter make
deposits of lawful money for the reduction of their circulation shall be assessed and shall pay an assessment in the
manner specified in section three of the act approved June
20, 1874, for the cost of transporting and redeeming their
notes redeemed from such deposits subsequently to June 30,
1881.
NOTE.—Partially repealed by paragraph 109, sec. 17 Federal
Reserve A c t
NOTE.—The limitation of the circulation not to exceed ninety
per cent, of the bonds deposited is superseded by act March 14,
1900, which follows Revised Statutes 5171. Act June 20, 1874,
section 3, mentioned in this section, follows Revised Statutes,
section 5192.
W I T H D R A W A L OF CIRCULATING N O T E S O N DEP O S I T OF L A W F U L MONEY, A N D W I T H D R A W A L
O F BONDS. N O T MORE T H A N N I N E M I L L I O N S
TO B E D E P O S I T E D D U R I N G A N Y CALENDAR
MONTH. * W I T H D R A W A L OF A D D I T I O N A L CIRCULATION ON D E P O S I T O F L A W F U L MONEY
OR N A T I O N A L B A N K N O T E S . ACT MAY 30, 1908.

69. Sec. 10.—That section nine of the Act approved lg^ct M^y^o,
July twelfth, eighteen hundred and eighty-two, as amended
by the Act approved March fourth, nineteen hundred and
seven, be further amended to read as follows:
"Sec. 9. That any national banking association desiring to withdraw its circulating notes, secured by deposit
of United States bonds in the manner provided in section
four of the Act approved June twentieth, eighteen hundred
and seventy-four, is hereby authorized for that purpose to
deposit lawful money with the Treasurer of the United
States and, with the consent of the Comptroller of the Currency and the approval -of the Secretary of the Treasury,
to withdraw a proportionate amount of bonds held as
security for its circulating notes in the order of such
deposits: Provided, That not more than nine millions of
dollars of lawful money shall be so deposited during any
calendar month for this purpose.
"Any national banking association desiring to withdraw
any of its circulating notes, secured by the deposit of securi


124

OBTAINING AN£> ISSUING CIRCULATING NOTES.

ties other than bonds of the United States, may make such
withdrawal at any time in like manner and effect by the
deposit of lawful money or national bank notes with the
Treasurer of the United States, and upon such deposit a
proportionate share of the securities so deposited may be
withdrawn: Provided, That the deposits under this section
to retire notes secured by the deposit of securities other
than bonds of the United States shall not be covered into
the Treasury, as required by section six of an Act entitled
'An Act directing the purchase of silver bullion and the
issue of Treasury notes thereon, and for other purposes,'
approved Julv fourteenth, eighteen hundred and ninety, but
shall be retained in the Treasury for the purpose ^of redeeming the notes of the bank making such deposit."
NOTE.—This section extended to June 30, 1915, by paragraph
144 Federal Reserve Act.
NOTE.—See paragraphs 110 to 118 Federal Reserve Act.
COMPTROLLER TO DETERMINE
CAN COMMENCE B U S I N E S S .

IF

ASSOCIATION

70. Sec. 5168.—Whenever a certificate is transmitted to
ig Act June 3,
sec. it;°i3 stat! the Comptroller of the Currency, as provided in this Title,
L

" 10i

and the association transmitting the same notifies the Comptroller that at least fifty per centum of its capital stock
has been duly paid in, and that such association has complied with all the provisions of this Title required to be
complied with before an association shall be authorized to
commence the business of banking, the Comptroller shall
examine into the condition of such association, ascertain
especially the amount of money paid in on account of its
capital, the name and place of residence of each of its
directors, and the amount of the capital stock of which each
is the owner in good faith, and generally whether such
association has complied with all the provisions of this Title
required to entitle it to engage in the business of banking;
and shall cause to be made and attested by the oaths of a
majority of the directors, and bv the President or cashier
of the association, a statement of all the facts necessary to
enable the Comptroller to determine whether the association
is lawfully entitled to commence the business of banking.
CERTIFICATE
OF
AUTHORITY
BANKING TO BE ISSUED.

isuT J.uni06;

TO

COMMENCE

71. Sec. 5169.—If, upon a careful examination of the
i3CS'sti2' l ^ f a c t s s o r e P o r t e d * and of any other facts which may come
102, 104.* " t o the knowledge of the Comptroller, whether by means of
a special commission appointed by him for the purpose of
inquiring into the condition of such association, or otherwise. it appears that such association is lawfully entitled
to commence the business of banking, the Comptroller shall
give to such association a certificate, under his hand and
official seal, that such association has complied with all the
provisions required to be complied with before commencing
the business of banking, and that such association is authorized to commence such business. But the Comptroller



125 obtaining an£> issuing circulating notes.
may withhold from an association his certificate authorizing
the commencement of business, whenever he has reason to
suppose that the shareholders have formed the same for
anv other than the legitimate objects contemplated by this
Title.
NOTE.—See paragraph 102 Federal Reserve Act.
PUBLICATION

OF

CERTIFICATE.

72. Sec. 5170.—The association shall cause the certifi- m C c. un m
1 8 13 Stat
cate issued under the preceding section to be published
1 0^
in some newspaper printed in the city or county where the
association is located, for at least sixty days next after the
issuing thereof; or, if no newspaper is published in such
city or county, then in the newspaper published nearest
thereto.
73. Sec. 5171.—
This section was repealed by act of July 12, 1882, and the repealing section was superseded by act of March 14, 1900, section
12, which follows.
DELIVERY OF CIRCULATING NOTES. ACT OF MARCH
14, 1900.

74. Sec. 12.—That upon the deposit with the Treas^ g;
urer of the United States, by any national banking associa- gc/12; 31 Stat!
tion, of any bonds of the United States in the manner pro- *'
vided by existing law, such association shall be entitled to
receive from the Comptroller of the Currency circulating
notes in blank, registered and countersigned as provided
by law, equal in amount to the par value of the bonds so
deposited; and any national banking associations now having bonds on deposit for the security of circulating notes,
and upon which an amount of circulating notes has been
issued less than the par value of the bonds, shall be entitled,
upon due application to the Comptroller of the Currency,
to receive additional circulating notes in blank to an amount
which will increase the circulating notes held by such
association to the par value of the bonds deposited,- such*1
aditional notes to be held and treated in the same way as
circulating notes of national banking associations heretofore issued, and subject to all the provisions of law affecting such notes: Provided, That nothing herein contained
shall be construed to modify or repeal the provisions of section fifty-one hundred and sixty-seven of the Revised
Statutes of the United States, authorizing the Comptroller
of the Currency to require additional deposits of bonds or
of lawful money in case the market value of the bonds
held to secure the circulating notes shall fall below the
par value of the circulating notes outstanding for which
such bonds may be deposited as security: And provided
further, That the circulating notes furnished to national
banking associations under the provisions of this Act shall
be of the denominations prescribed by law, except that no
national banking association shall, after the passage of
this Act, be entitled to receive from the Comptroller of




126

OBTAINING AN£> ISSUING CIRCULATING NOTES.

the Currency, or to issue or reissue or place in circulation, more than one-third in amount of its circulating notes
of the denomination of five dollars: And provided further,
That the total amount of such notes issued to any such
association may equal at any time but shall not exceed the
amount at such time of its capital stock actually paid in:
And provided further, That under regulations to be prescribed by the Secretary of the Treasury any national banking association may substitute the two per centum bonds
issued under the provisions of this Act for any of the bonds
deposited with the Treasurer to secure circulation or to
secure deposits of public money; and so much of an Act
entitled "An Act to enable national banking associations
to extend their corporate existence, and for other purposes,"
approved July twelfth, eighteen hundred and eighty-two,
as prohibits any national bank which makes any deposit of
lawful money in order to withdraw its circulating notes
from receiving any increase of its circulation for the period
of six months from the time it made such deposit of lawful
money for the purpose aforesaid, is hereby repealed, and
all other Acts or parts of Acts inconsistent with the provisions of this section are hereby repealed.
PRINTING D E N O M I N A T I O N S A N D FORM O F T H E CIRCULATING NOTES.

75. Sec. 5172 [as amended May 30, 1908],—In order
i g Act Juaeio3,
sec/22;Ci3 stat! to furnish suitable notes for circulation, the Comptroller
L
'Act05May 30, the Currency shall, under the direction of the Secretary
1908, sec. ii.' of the Treasury, cause plates and dies to be engraved, in
the best manner to guard against counterfeiting and fraudulent alterations, and shall have printed therefrom, and numbered, such quantity of circulating notes, in blank, of the
denominations of five dollars, ten dollars, twenty dollars,
fifty dollars, one hundred dollars, five hundred dollars, one
thousand dollars, and ten thousand dollars, as may be required to supply the associations entitled to receive the
"same. Such notes shall state upon their face that they are
secured by United States bonds or other securities, certified
by the written or engraved signatures of the Treasurer and
Register and by the imprint of the seal of the Treasury.
They shall also express upon their face the promise of the
association receiving the same to pay on demand, attested
by the signature of the president or vice-president and
cashier. The Comptroller of the Currency, acting under the
direction of the Secretary of the Treasury, shall as soon as
practicable cause to be prepared circulating notes in blank,
registered and countersigned, as provided by law, to an
amount equal to fifty per centum of the capital stock of
each national banking association; such notes to be deposited in the Treasury or in the subtreasury of the United
States nearest the place of business of each association,
and to be held for such association, subject to the order of
the Comptroller of the Currency, for their delivery as provided by law: Provided, That the Comptroller of the Cur


127 OBTAINING AN£> ISSUING CIRCULATING NOTES.

rency may issue national-bank notes of the present form
until plates can be prepared and circulating notes issued as
above provided: Provided, however, That in no event shall
blank notes of the present form be issued to any bank as
additional circulation provided for by this act."
NOTE.—See paragraph 144 Federal Reserve Act and note thereto.
CHARTER NUMBER TO B E PRINTED ON NOTES.
J U N E 20, 1874.

ACT

76. Sec. 5.—That the Comptroller of the Currency
shall, under such rules and regulations as the S e c r e t a r y
of the Treasury may prescribe, cause the charter numbers
of the association to be printed upon all national-bank notes
which may be hereafter issued by him.

June3|>;
is stat.

NOTE.—Other sections of this act will be found under Revised
Statutes, 5192.
DISTINCTIVE PAPER
M A R C H 3, 1875.

FOR PRINTING

NOTES.

ACT

77. Sec. 1.—* * * That the national-bank notes
shall be printed under the direction of the Secretary of s^c.'i^is stat.
the Treasury, and upon the distinctive or special paper dry civil bin.
which has been, or may hereafter be, adopted by him for
printing United States notes.
P L A T E S A N D D I E S TO B E U N D E R T H E C O N T R O L O F
T H E COMPTROLLER.

78. Sec. 5173.—The plates and special dies to be pro- l g ^ t June^.
cured by the Comptroller of the Currency for the printing sec. ^ 13 stat!
of such circulating notes shall remain under his control *'
and direction, and the expenses necessarily incurred in
executing the laws respecting the procuring of such notes,
and all other expenses of the Bureau of the Currency,
shall be paid out of the proceeds of the taxes or duties
assessed and collected on the circulation of national banking associations under this Title.
NOTE.—See act June 20-, 1874, following Revised Statutes, 5192,
and act July 12, 1882, following Revised Statutes, 5136, requiring
banks to pay cost of their plates.
EXAMINATION

OF PLATES AND

DIES.

79. Sec. 5174 [as amended 1877].—The Comptroller lgAct Mary
of the Currency shall cause to be examined, each year, the sec.'4; 17 stat.
plates, dies, bed pieces, and other material from which the L'Act°Feb. 27,
national-bank circulation is printed, in whole or in part, |S77, c.
and file in his office annually a correct list of the same.
Such material as shall have been used in the printing of
the notes of associations which are in liquidation, or have
closed business, shall be destroyed, under such regulations
as shall be prescribed by the Comptroller of the Currency
and approved by the Secretary of the Treasury. The expenses of any such examination or destruction shall be
paid out of any appropriation made by Congress for the
special examination of national banks and bank-note plates.
NOTE.—See paragraph 105 Federal Reserve Act.




128

OBTAINING AND ISSUING CIRCULATING NOTES.

LIMIT TO ISSUE OF N O T E S U N D E R F I V E DOLLARS.
Act June 3,
80. Sec. 5175.—Not more than one-sixth part of the
n
slc422;°i3 Stat! °tes furnished to any association shall be of a less deL

*»

' nomination than five dollars. After specie payments are
resumed no association shall be furnished with notes of
a less denomination than five dollars.
NOTE.—Specie payments were resumed January 1, 1879. (See
act of March 14, 1900, section 12, following Revised Statutes, 517i,
limiting the issue of five-dollar notes.)

81. Sec. 5176.—
Repealed by act July 12, 1882, which in turn was superseded by
act March 14, 1900. (See section 5171.)

82.

Sec. 5177-—

Repealed by act January 14, 1875.
AGGREGATE AMOUNT OF CIRCULATING NOTES NOT
L I M I T E D . A C T J A N U A R Y 14, 1875.
ls Act g jan.
c

1^
4

stat. L ; 2 k

83. Sec. 3.—That section 5177 of the Revised Statutes
of the United States, limiting the aggregate amount of circulating notes of national banking associations, be and is
hereby repealed; and each existing banking association
may increase its circulating notes in accordance with existing law without respect to said aggregate limit; and new
banking associations may be organized in accordance with
existing law without respect to said aggregate limit; and
the provisions of law for the withdrawal and redistribution of national bank currency among the several States and
Territories are hereby repealed.
84. Sec. 5178.—
Superseded by act January 14, 1875.

85. Sec. 5179.—
Superseded by act January 14, 1875.

86. Sec. 5180.—
Repealed by act of January 14, 1875.

87. Sec. 5181.—
Superseded by act January 14, 1875.
F O R W H A T D E M A N D S N A T I O N A L - B A N K N O T E S MAY
BE RECEIVED.
Act June 3,
88. Sec. 5182.—After any association receiving circus!cf'23;Ci3Stat: l a t i n S n o t e s under this Title has caused its promise to pay
l.,' 106.
such notes on demand to be signed by the president or
vice-president and cashier thereof, in such manner as to
make them obligatory promissory notes, payable on demand, at its place of business, such association may issue
and circulate the same as money. And the same shall be
received at par in all parts of the United States in payment of taxes, excises, public lands, and all other dues to
the United States, except duties on imports; and also
 for all salaries and other debts and demands owing by



129 OBTAINING AN£> ISSUING CIRCULATING NOTES.

the United States to individuals, corporations, and associations within the United States, except interest on the
public debt, and in redemption of the national currency.
I S S U E OF P O S T NOTES, ETC., P R O H I B I T E D .

89. Sec. 5183 [as amended 1875].—No national b a n k - J u n e ^ ,
ing association shall issue post notes or an}' other notes to sec/23; 13 statl
circulate as money than such as are authorized by the 'Act Feb. is,
g 8 ^ L, 8 ^ 1 8
provisions of this Title.
D E S T R O Y I N G A N D REPLACING
M U T I L A T E D NOTES.

WORN-OUT

AND

90. Sec. 5184.—It shall be the duty of the Comptroller ^
inn\0l
of the Currency to receive worn-out or mutilated circu-s£C.24;i3Stat!
lating notes issued by any banking association, and also, L"' m '
on due proof of the destruction of any such circulating
notes, to deliver in place thereof to the association other
blank circulating notes to an equal amount. Such wornout or mutilated notes, after a memorandum has been
entered in the proper books, in accordance with such regulations as may be established by the Comptroller, as well
as" all circulating notes which shall have been paid or surrendered to be canceled, [shall be burned to ashes] in
presence of four persons, one to be appointed by the
Secretary of the Treasury, one by the Comptroller of the
Currency, one by the Treasurer of the United States, and
one bv the association, under such regulations as the Secretary of the Treasury may prescribe. A certificate of
[such burning,] signed by the parties so appointed, shall
be made in the books of the Comptroller, and a duplicate
thereof forwarded to the association whose notes are thus
canceled.
NOTE.—Act June 23, 1874, provides for maceration in place of
burning.
MACERATION OF
J U N E 23, 1874.

NATIONAL-BANK

NOTES.

ACT

91.
* * F o r the maceration of national bank su^°ryisio^Jj}
notes * * * ; and that all such issues hereafter de- a p propriation
J ne
stroyed may be destroyed by maceration instead of burn}g stat.'
L
ing to ashes, as now' provided by law; and that so much *»
of sections twenty-four and forty-three of the national
currency act as requires national bank notes to be burned
to ashes is hereby repealed; that the pulp from such macerated issue shall be disposed of only under the direction
of the Secretary of the Treasury.
ORGANIZATION O F ASSOCIATIONS TO I S S U E GOLD
NOTES.

92. Sec. 5185 [as amended 1875].—Associations mayls$£* { u l y 2 i;
be organized in the manner prescribed by this Title for the sec/3; 1*6 Stat!
purpose of issuing notes payable in gold; and upon the L'Acf Jan. 19,
deposit of any United States bonds bearing interest pay^
able in gold with the Treasurer of the United States, in
\
the manner prescribed for other associations, it shall be



130

OBTAINING AN£> ISSUING CIRCULATING NOTES.

lawful for the Comptroller of the Currency to issue to
the association making the deposit circulating notes of
different denominations, but none of them of less than
five dollars, and not exceeding in amount eighty per centum
of the par value of the bonds deposited, which shall express
the promise of the association to pay them, upon presentation at the office at which they are issued, in gold coin of
the United States, and shall be so redeemable.
RESERVE REQUIREMENTS FOR GOLD BANKS.

12, 93. Sec. 5186.—Every association organized under the
3*5; 2Si6 preceding section shall at all times keep on hand not less
2521
Isf'
than twenty-five per centum of its outstanding circulation,
in gold or silver coin of the United States; and shall receive
at par in the payment of debts the gold notes of every other
such association which at the time of such payment is
redeeming its circulating notes in gold coin of the United
States, and shall be subject to all the provisions of this
Title: Provided, That, in applying the same to associations
organized for issuing gold notes, the terms "lawful money"
and "lawful money of the United States" shall be construed
to mean gold or silver coin of the United States; and the
circulation of such association shall not be within the limitation of circulation mentioned in this Title.
Act July

CONVERSION OF NATIONAL GOLD BANKS INTO CURRENCY BANKS. ACT FEBRUARY 14, 1880.
an
assoctcF25* a ^ *
y nat*onal
bank organized under the
Stat. L., efe. provisions of the laws of the United States, may, in the
manner and subject to the provisions prescribed by section fifty-one hundred and fifty-four of the Revised Statutes of the United States, for the conversion of banks incorporated under the laws of any State, cease to be a gold
bank, and become such an association as is authorized by
section fifty-one hundred and thirty-three, for carrying
on the business of banking, and shall have the same powers and^ privileges, and shall be subject to the same duties,
responsibilities, and rules, in all respects, as are by law
prescribed for such associations: Provided, That all certificates of organization which shall be issued under this act
shall bear the date of the original organization of each bank
respectively as a gold bank.

PENALTY FOR ISSUING CIRCULATING
UNAUTHORIZED ASSOCIATIONS.

NOTES TO

5187
1864* £unei06
~ N o officer acting under the provisions
sec.27;Ci3Stat of this Title shall countersign or deliver to any associaL., 107.
tion, or to any other company or person, any circulating
notes contemplated by. this Title, except in accordance with
the true intent and meaning of its provisions. Every officer
who violates this section shall be deemed guilty of a high
misdemeanor, and shall be fined not more than double the
amount so countersigned and delivered, and imprisoned not
less than one year and not more than fifteen years.




The National

City Bank

of New York

AMENDMENTS
TO THE CURRENCY ASSOCIATION LAW
OF MAY 30, 1908

The Federal Reserve Act approved Dec. 23, 1913,
extended the Provisions of the Currency Association Law which was to expire June 30, 1914, to
June 30, 1915, and amended it as follows:
Act Extended
SEC. 27. The provisions of the Act of May thirtieth, nineteen hundred and eight, authorizing national currency associations, the issue of additional
national-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 fiftythree, 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 amendments or modifications 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 Act by making the portion applicable thereto
read as follows:
National Banking Associations having circulating
notes secured otherwise than by bonds of the United
States, shall pay for the first three months a tax at
the rate of three per centum per annum upon the
average amount of such of their 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 thereafter such tax of six per centum per annum upon
the average amount of such notes*
The following Act w a s passed by the House
and Senate on August 4, 1914, and approved by
the President*

AN ACT
To amend section twenty-seven of an Act approved
December twenty-third, nineteen hundred and
thirteen, known as the Federal Reserve Act
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section twenty-seven of the
Act approved December twenty-third, nineteen hundred and thirteen, known as the Federal Reserve
Act is hereby amended and reenacted to read as
follows:
"SEC. 27. The provisions of the Act of May
thirtieth, nineteen hundred and eight, authorizing
national currency associations, the issue of additional national-bank circulation, and creating a
National Monetary Commission, which expires by
limitation under the terms of such Act on the thir


tieth day of June, nineteen hundred and fourteen,
are hereby extended to June 30th,'1915, and sections 5153, 5172, 5191 and 5214 of the Revised
Statutes of the United States, which were amended
by the Act of May 30th, 1908, are hereby reenacted
to read as such sections read prior to May 30th,
1908, subject to such amendments or modifications
as are prescribed in this Act; provided, however,
That section 9 of the Act first referred to in this
section is hereby amended so as to change the tax
rates fixed in said Act by making the portion applicable thereto read as follows; 'National Banking Associations having circulating notes secured
otherwise than by bonds of the United States shall
pay for the first three months a tax at the rate of
three per centum per annum upon the average
amount of such of their 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 thereafter such tax of six per centum per annum upon
the average amount of such notes; Provided,
further, That whenever in his judgment he may
deem it desirable, the Secretary of the Treasury
shall have power to suspend the limitations imposed
by section one and section three of the Act referred
to in this section, which prescribe that such additional circulation secured otherwise than by bonds
of the United States shall be issued only to national
banks having circulating notes outstanding secured
by the deposit of bonds of the United States to an
amount not less than forty per centum of the capital
stock of such banks, and to suspend also the conditions and limitations of section five of said Act
except that no bank shall be permitted to issue circulating notes in excess of 125 Jo of its unimpaired




capital and surplus. He shall require each bank
and currency association to maintain on deposit in
the Treasury of the United States a sum in gold
sufficient in his judgment for the redemption of
such notes, but in no event less than 5 per centum.
He may permit national banks, during the period
for which such provisions are suspended, to issue
additional circulation under the terms and conditions
of the Act referred to, as herein amended. Provided further, that the Secretary of the Treasury,
in his discretion, is further authorized to extend the
benefits of this Act to all qualified state banks and
trust companies, which have joined the Federal
Reserve System, or which may contract to join
within fifteen days after the passage of this Act.'"




131 OBTAINING AN£> ISSUING CIRCULATING NOTES.

PENALTY FOR IMITATING BANK CIRCULATION. USE
OF SAME FOR ADVERTISING PURPOSES.

96. Sec. 5188.—It shall not be lawful to design, en- lg£ct Feb.^,
grave, print, or in any manner make or execute, or to utter, sec.'2; i4 stat!
issue, distribute, circulate, or use, any business or profes- L m '
sional card, notice, placard, circular, handbill, or advertisement, in the likeness or similitude of any circulating note or
other obligation or security of any banking association organized or acting under the laws of the United States which
has been or may be issued under this Title, or any act of
Congress, or to write, print, or otherwise impress upon
any such note, obligation, or security any business* or professional card, notice, or advertisement, or any notice or
advertisement of any matter or thing whatever. Every
person who violates this section shall be liable to a penalty
of one hundred dollars, recoverable one-half to the use
of the informer.
PENALTY FOR MUTILATING CIRCULATION.

97. Sec. 5189.—Every person who mutilates, cuts, de- isef iuniol;
faces, disfigures, or perforates with holes, or unites or s£c- ^ ^ Stat!
cements together, or does any other thing to any bank bill,
draft, note, or other evidence of debt, issued by any national
banking association, or who causes or procures the same
to be done, with intent to render *such bank bill, draft,
note, or other evidence of debt unfit to be reissued by said
association, shall be liable to a penalty of fifty dollars,
recoverable by the association.
A C T M A Y 3 0 , 1 9 0 8 , AUTHORIZING N A T I O N A L CURRENCY A S SOCIATIONS, T H E ISSUE OF ADDITIONAL N A T I O N A L - B A N K
CIRCULATION, AND CREATING A N A T I O N A L MONETARY
COMMISSION,

FORMATION OF NATIONAL CURRENCY ASSOCIATIONS—WHAT BANKS ELIGIBLE—MANNER OF
FORMING—ASSOCIATION TO BE BODY CORPORA T E AND EXERCISE POWERS AS SUCH—BUT
O N E ASSOCIATION IN ANY CITY—MEMBERS OF
ASSOCIATION TO B E TAKEN AS NEARLY AS
CONVENIENT FROM STATE, PART OF STATE,
OR CONTIGUOUS PARTS OF ONE OR MORE
STATES—OFFICERS, H O W SELECTED—POWERS
OF OFFICERS AND EXECUTIVE C O M M I T T E E BY-LAWS TO BE APPROVED BY T H E SECRETARY OF T H E TREASURY.

98. Be it enacted by the Senate and House of Repre-^s^
sentaiives of the United States of America in Congress
assembled. That national banking associations, each having an unimpaired capital and a surplus of not less than
twenty per centum, not less than ten in number, having
an aggregate capital and surplus of at least five millions
of dollars, may form voluntary associations to be designated as national currency "associations. The banks
uniting to form such association shall, by their presidents or vice-presidents, acting under authority from the




30

'

ADDITIONAL CIRCULATION ACT, MAY, 1 9 0 8 . 136

board of directors, make and file with the Secretary of
the Treasury a certificate setting forth the names of the
banks composing the association, the principal place of
business of the association, and the name of the association, which name shall be subject to the approval of the
Secretary of the Treasury. Upon the filing.of such certificate the associated banks therein named shall become
a body corporate, and by the name so designated and
approved may sue and be sued and exercise the powers
of a body corporate for the purposes hereinafter men-,
tioned:.Provided, That not more than one such national
currency association shall be formed in any city: Provided further, That the several members of such national
currency association shall be taken, as nearly as conveniently may be, from a territory composed of a State or
part "of a State, or contiguous parts of one or more^ States:
And provided further, That any national bank in such
city or territory, having the qualifications herein prescribed for membership in such national currency association, shall, upon its application to and upon the approval of the Secretary of the Treasury, be admitted to
membership in a national currency association for that
city or territory, and upon such admission shall be deemed
and held a part of the body corporate, and as such entitled
to all the rights and privileges and subject to all the liabilities of an original member: And provided further, That
each national currency association shall be composed exclusively of banks not members of any other national currency association.
The dissolution, voluntary or otherwise, of any bank in
such association shall not affect the corporate existence
of the association unless there shall then remain less than
the minimum number of ten banks: Provided, however,
That the reduction of the number of said banks below the
minimum of ten shall not affect the existence of the corporation with respect to the assertion of all rights in favor
of or against such association. The affairs of the association shall be managed by a board consisting of one representative from each bank. By-laws for the government of
the association shall be made by the board, subject to the
approval of the Secretary of the Treasury. A president,
vice-president, secretary, treasurer, and an executive committee of not less than five members, shall be elected by
the board. The powers of such board, except in the election of officers and making of by-laws, may be exercised
through its executive committee.




ADDITIONAL CIRCULATION ACT, MAY, 1 9 0 8 .

133

CONDITIONS UNDER WHICH BANKS BELONGING
TO
NATIONAL
CURRENCY
ASSOCIATIONS
MAY TAKE OUT ADDITIONAL CIRCULATION—
—AMOUNT LIMITED TO SEVENTY-FIVE PER
CENT. OF THE CASH VALUE OF THE SECURITIES AND COMMERCIAL PAPER DEPOSITED—
ISSUE OF ADDITIONAL CIRCULATION ON DEPOSIT OF STATE, CITY, TOWN, COUNTY, OR
MUNICIPAL BONDS AUTHORIZED TO EXTENT
OF NINETY PER CENT. OF THEIR MARKET
VALUE—THE BANKS AND ASSETS OF ALL
BANKS
MEMBERS
OF SAID
ASSOCIATION
JOINTLY AND SEVERALLY LIABLE TO T H E
UNITED STATES FOR T H E REDEMPTION OF
SUCH ADDITIONAL CIRCULATION—LIEN OF
UNITED STATES UNDER SECTION 5230, REVISED
STATUTES, EXTENDED TO COVER ASSETS OF
ALL BANKS BELONGING TO THE ASSOCIATION
—REQUIREMENT OF ADDITIONAL SECURITIES
—WHEN ASSOCIATION MAY SELL SECURITIES
DEPOSITED WITH IT.

99. The national currency association herein provided
for shall have and exercise any and all powers necessary
to carry out the purposes of this section, namely, to render available, under the direction and control of the
Secretary of the Treasury, as a basis for additional circulation any securities, including commercial paper, held by
a national banking association. For the purpose of obtaining such additional circulation, any bank belonging
to any national currency association, having circulating
notes outstanding secured by the deposit of bonds of the
United States to an amount not less than forty per
centum of its capital stock, and which has its capital
unimpaired and a surplus of not less than twenty per
• centum, may deposit with and transfer to the association,
in trust for the United States, for. the purpose herein- 19o8CtSeCIayi.30,
after provided, such of the securities above mentioned as
may be satisfactory to the board of the association. The
officers of the association may thereupon, in behalf of such
bank make application to the Comptroller of the Currency
. for an issue of additional circulating notes to an amount
not exceeding sevently-five per centum of the cash value
of the securities or commercial paper so deposited. The
Comptroller of the Currency shall immediately transmit
such application to the Secretary of the Treasury with such
recommendation as he thinks proper, and if, in the judgment of the Secretary of the Treasury, business conditions
in the locality demand additional circulation, and if he be
satisfied with the character and value of the securities proposed and that a lien in favor of the United States on the
securities so deposited and on the assets of the banks composing the association will be amply sufficient for the protection of the United States, he may direct an issue of additional circulating notes to the association, on behalf of such
bank, to an amount in his discretion, not, however, exceeding
seventy-five per centum of the cash value of the securities
so deposited: Provided, That upon the deposit of any of



134

ADDITIONAL CIRCULATION ACT, MAY, 1 9 0 8 . 134

the State, city, town, county, or other municipal bonds,
of a character described in section three of this act, circulating notes may be issued to the extent of not exceeding ninety per centum of the market value of such bonds
so deposited: And provided further, That no national banking association shall be authorized in any event to issue
circulating notes based on commercial paper in excess of
thirty per centum of its unimpaired capital and surplus.
The term "commercial paper" shall be held to include only
notes representing actual commercial transactions, which
when accepted by the association shall bear the names of
at least two responsible parties and have not exceeding
four months to run.
The banks and the assets of all banks belonging to the
association shall be jointly and severally liable to the
United States for the redemption of such additional circulation; and to secure such liability the lien created by
section fifty-two hundred and thirty of the Revised Statutes shall extend to and cover the assets of all banks belonging to the association, and to the securities deposited
by the banks with the association pursuant to the provisions of this act; but as between the several banks composing such association each bank shall be liable only in
the proportion that its capital and surplus bears to the
aggregate capital and surplus of all such banks. The
association may, at any time, require of any of its constituent banks a deposit of additional securities or commercial paper, or an exchange of the securities already on
deposit, to secure such additional circulation; and in case
of the failure of such bank to make such deposit or exchange the association may, after ten days' notice to the
bank, sell the securities and paper already in its hands
at public sale, and deposit the proceeds with the Treasurer
of the United States as a fund for the redemption of such
additional circulation. If such fund be insufficient for
that purpose the association may recover from the bank
the amount of the deficiency by suit in the circuit court of
the United States, and shall have the benefit of the lien
hereinbefore provided for in favor of the United States
upon the assets of such bank. The association or the
Secretary of the Treasury may permit or require the withdrawal of any such securities or commercial paper and the
substitution of other securities or commercial paper of equal
value therefor.
REDEMPTION FUND BELOW REQUIREMENT, DUTY
OF TREASURER OF U N I T E D STATES.
7 1 00

i m ? s ™ * i . - Sec. 2.—That whenever any bank belonging to a
national currency association shall fail to preserve or make
good its redemption fund in the Treasury of the United
States, required by section three of the Act of June
twentieth, eighteen hundred and seventy-four, chapter three
hundred and forty-three, and the provisions of this Act,




ADDITIONAL CIRCULATION ACT, MAY, 1 9 0 8 .

135

the Treasurer of the United States shall notify such national
currency association to make good such redemption fund,
and upon the failure of such national currency association
to make good such fund, the Treasurer of the United
States may, in his discretion, apply so much of the redemption fund belonging to the other banks composing such
national currency association as may be necessary for that
purpose; and such national currency association may, after
five days' notice to such bank, proceed to sell at public
sale the securities deposited by such bank with the association pursuant to the provisions of section one of this Act,
and deposit the proceeds with the Treasurer of the United
States as a fund for the redemption of the additional
circulation taken out by such bank under this Act
W H A T NATIONAL BANKS MAY APPLY FOR AUTHORITY TO ISSUE ADDITIONAL CIRCULATION ON
BONDS OTHER THAN UNITED STATES BONDS.
W H A T BONDS WILL BE ACCEPTED FOR SUCH
ADDITIONAL CIRCULATION.

101. Sec. 3.—That any national banking association 19&ctSeCIa^.30,
which has circulating notes outstanding, secured by the
deposit of United States bonds to an amount of not less
than forty per centum of its capital stock, and which
has a surplus of not less than twenty per centum, may
make application to the Comptroller of the Currency for
authority to issue additional circulating notes to be secured
by the deposit of bonds other than bonds of the United
States. The Comptroller of the Currency shall transmit
immediately the application, with his recommendation, to
the Secretary of the Treasury, who shall, if in his judgment business conditions in the locality demand additional
circulation, approve the same, and shall determine the
time of issue and fix the amount, within the limitations
herein imposed, of the additional circulating notes to be
issued. Whenever after receiving notice of such approval
any such association shall deposit with the Treasurer or
any assistant treasurer of the United States such of the
bonds described in this section as shall be approved in
character and amount by the Treasurer of the United
States and the Secretary of the Treasury, it shall be entitled
to receive, upon the order of the Comptroller of the Currency, circulating notes in blank, registered and countersigned as provided by law, not exceeding in amount ninety
per centum of the market value, but not in excess of the
par value of any bonds so deposited, such market value to
be ascertained and determined under the direction of the
Secretary of the Treasury.
The Treasurer of the United States, with the approval
of the Secretary of the Treasury, shall accept as security
for the additional circulating notes provided ior in this
section, bonds or other interest-bearing obligations of any
State of the United States, or any legally authorized bonds
issued by any city, town, county, or other legally constituted




136

ADDITIONAL CIRCULATION ACT, MAY, 1 9 0 8 . 136

municipality or district in the United States, which has
been in existence for a period of ten years, and which
for a period of ten years previous to such deposit has not
defaulted in the payment of any part of either principal or
interest of any funded debt authorized to be contracted by
it, and whose net funded indebtedness does not exceed ten
per centum of the valuation of its taxable property, to be
ascertained by the last preceding valuation of property for
the assessment of taxes. The Treasurer of the United
States, with the approval of the Secretary of the Treasury,
shall accept, for the purposes of this section, securities
herein enumerated in such proportions as he may from time
to time determine, and he may with such approval at any
time require the deposit of additional securities, or require
any association to change the character of the securities
already on deposit.
LEGAL TITLE OF BONDS DEPOSITED TO SECURE
ADDITIONAL CIRCULATION. ASSIGNMENT OF
BONDS BY TREASURER TO BE COUNTERSIGNED
BY T H E COMPTROLLER OF T H E CURRENCY.

Act May 30,
.1908, sec. 4.

102, Sec. 4.—That the legal title of all bonds, whether
p 0 n o r registered, deposited to secure circulating notes
issued in. accordance with the terms of section three of
this Act shall be transferred to the Treasurer of the United
States in trust for the association depositing them, under
regulations to be prescribed- by the Secretary of the Treasury. A receipt shall be given to the association by the
Treasurer or any assistant treasurer of the United States,
stating that such bond is held in trust for the association
on whose behalf the transfer is made, and as security for
the redemption and payment of any circulating notes that
have been or may be delivered to such association. No
assignment or transfer of any such bond by the Treasurer
shall be deemed valid unless countersigned by the Comptroller of the Currency. The provisions of sections fiftyone hundred and sixty-three, fifty-one hundred and sixtyfour, fifty-one hundred and sixty-five, fifty-one hundred and
sjxtv-six, and fifty-one hundred and sixty-seven and sections fifty-two hundred and twenty-four to fifty-two hundred and thirty-four, inclusive, of the Revised Statutes
respecting United States bonds deposited to secure circulating notes shall, except as herein modified, be applicable to
all bonds deposited under the terms of section three of this
Act.

c 0 U

ADDITIONAL CIRCULATION, HOW TREATED. LIMIT
TO AMOUNT OF CIRCULATION ISSUED TO
EACH BANK. LIMIT TO TOTAL AMOUNT OUTSTANDING UNDER THIS ACT.

Act May 30,
1908, sec. 5.

103. Sec. 5.—That the additional circulating notes isunder this Act shall be used, held, and treated in the
same way as circulating notes of national banking associations _ heretofore issued and secured by a deposit of
United States bonds, and shall be subject to all the pro*




ADDITIONAL CIRCULATION ACT, MAY, 1 9 0 8 .

137

visions of law affecting such notes except as herein expressly modified: Provided, That the total amount of circulating notes outstanding of any national banking association, including notes secured by United States bonds as
now provided by law, and notes secured otherwise than by
deposit of such ^ bonds, shall not at any time exceed the
amount of its unimpaired capital and surplus: And provided
further^ That there shall not be outstanding at any time
circulating notes issued under the provisions of this Act
to an amount of more than five hundred millions of dollars.
AMOUNT OF REDEMPTION FUND.

104. Sec. 6.—That whenever and so long as any national igo8CtSecay(j30,
banking association has outstanding any of the additional
circulating notes authorized to be issued by the provisions
of this Act it shall keep on deposit in the Treasury of the
United States, in addition to the redemption fund required
. by section three of the Act of June twentieth, eighteen hundred and seventy-four, an additional sum equal to five per
centum of such additional circulation at any time outstanding, such additional five per centum to be treated, held,
and used in all respects in the same manner as the original
redemption fund provided for by said section three of the
Act of June twentieth, eighteen hundred and seventy-four.
EQUITABLE DISTRIBUTION OF NOTES.

105. Sec. 7.—In order that* the distribution of notes to 19^cts^ay730*
be issued under the provisions of this Act shall be made ' sec'
as equitable as practicable between the various sections
of the country, the Secretary of the Treasury shall not
approve applications from associations in any State in
excess of the amount to which such State would be entitled of the additional notes herein authorized on the
basis of the proportion which the unimpaired capital and
surplus of the national banking associations in such State
bears to the total amount of unimpaired capital and surplus of the national banking associations of the United
States: Providedt however, That in case the applications
from associations in any State shall not be equal to the
amount which the associations of such State would be entitled to under this method of distribution, the Secretary of
the Treasury may, in his discretion, to meet an emergency,
assign the amount not thus applied for to any applying
association or associations in States in the same section
of the country.
SECRETARY OF THE TREASURY TO FURNISH INFORMATION AS TO THE VALUE AND CHARACTER
OF SECURITIES.

106. Sec. 8.—That it shall be the duty of the Secretary 1£^ct May a>.
of the Treasury to obtain information with reference to
the value and character of the securities authorized to be
accepted under the provisions of this Act, and he shall
from time to time furnish information to national bank


138

ADDITIONAL CIRCULATION ACT, MAY, 1 9 0 8 . 138

ing associations as to such securities as would be acceptable under the provisions of this Act.
107. Sec. 9.—
Amends section 5214, Revised Statutes.
114, section 27, Federal Reserve Act.

See also paragraph

108. Sec. 10.—
Amends section 9 of act approved July 12, 1882, as amended by
act approved March 4, 1907, inserted section 5167, paragraph 69
National Bank Act.

109. Sec. 11.—
Amends section 5172, Revised Statutes.
CIRCULATING N O T E S TO B E R E D E E M E D IN L A W F U L
MONEY OF T H E U N I T E D STATES.

Act May 30, 110. Sec. 12.—That circulating notes of national bank1908, sec. 12. ^ a s s o c i a ti 0 ns, when presented to the Treasury for redemption, as provided in section three of the Act approved
June twentieth, eighteen hundred and seventy-four, shall
be redeemed in lawful money of the United States.
ALL ACTS OF T H E COMPTROLLER O F T H E CURRENCY A N D TREASURER O F T H E U N I T E D
STATES U N D E R THIS ACT TO B E A P P R O V E D BY
T H E SECRETARY OF T H E TREASURY.
Sec
acts and
loos* s^cayi30,
* 1 3 *— T h a t
orders of the Comp' sec" ' troller of the Currency and the Treasurer of the United
States authorized by this Act shall have the approval of
the Secretary of the Treasury who shall have power, also,
to make any such rules and regulations and exercise such
control over the organization and management of national
currency associations as may be necessary to carry out the
purposes of this Act.

112. Sec. 14.—
Is amendatory of section 5191, Revised Statutes.

113. Sec. 15.—
Relates to deposits of public money and interest thereon and
is inserted after section 5153, Revised Statutes.
#

E X P E N S E S OF ACT.

Act May 30, 114. Sec. 16.—'That a sum sufficient to carry out the
• sec* ' purposes of the preceding sections of this Act is hereby
appropriated out of any money in the Treasury not otherwise appropriated.
A P P O I N T M E N T OF MONETARY

COMMISSION.

i90scts^ayi730' 1 1 5 ' S e c * 1 7 * — T h a t a Commission is hereby created, to
' • ' be called the "National Monetary Commission/' to be composed of nine members of the Senate, to be appointed by
the Presiding Officer thereof, and nine members of the
House of Representatives, to be appointed by the Speaker
thereof; and any vacancy on the Commission shall be filled
in the same manner as the original appointment.




139

ADDITIONAL CIRCULATION ACT, MAY, 1908.
P O W E R S O F COMMISSION.
TO CONGRESS.

COMMISSION TO REPORT

116. Sec. 18.—That it shall be the duty of this Commis- imf sfc^m'
sion to inquire into and report to Congress at the earliest
date practicable, what changes are necessary or desirable
in the monetary system of the United States or in the
laws relating to banking and currency, and for this purpose they are authorized to sit during the sessions or
recess of Congress, at such times and places as they may
deem desirable, to send for persons and papers, to administer oaths, to summons and compel the attendance of
witnesses, and to employ a disbursing officer and such secretaries, experts, stenographers, messengers, and other assistants as shall be necessary to carry out the purposes
tor which said Commission was created. The Commission
shall have the power, through subcommittee or otherwise,
to examine witnesses and to make such investigations and
examinations, in this or othet countries, of the subjects
committed to their charge as they shall deem necessary.
E X P E N S E S OF

COMMISSION.

117. Sec. 19.—That a sum sufficient to carry 1out the Act sec.y19.
M • 30,
a
/*
•
* • 1
R
• A
purposes of sections seventeen and eighteen of this Act,
and to pay the necessary expenses of the Commission and
its members, is hereby appropriated, out of any money in
the Treasury not otherwise appropriated. Said appropriation shall be immediately available and shall be paid out on
the audit and order of the chairman or acting chairman of
said Commission, which audit and order shall be conclusive
and binding upon all Departments as to the correctness of
the accounts of such Commission.
L

W H E N ACT EXPIRES BY LIMITATION.

118. Sec. 20.—That this Act shall expire by limitation ^Act May^jo,
on the thirtieth day of June, nineteen hundred and fourteen.
NOTE.—This act extended to June 30, 1915, by paragraph 144,
section 27, Federal Reserve Act.




CHAPTER IV.
REGULATION OF THE BANKING

119. 5190. Place of business.
120. 5191. Reserve cities and reserve
requirements.
121. 5192. What may be counted as reserve.
122. Act June 30, 1874. Lawful money
reserve to be determined by
deposits.
123. Act May 30, 1908. N o reserve
need be held against deposits of public money.
124. Act June 30, 1874. Provisions for
redeeming circulation. Five
per cent redemption fund.
125. Act March 3, 1875. Clerical force
for redemption of circulating notes.
126. Act March 3, 1887, as amended
March 3, 1903.
Additional
reserve cities.
127. Act July 14, 1850.
Disposition
of redemption account.
128. Act July 28, 1892. Redemption of
lost or stolen notes and of
notes not properly signed.
129. 5193. Repealed by act March 14,
1900.
130. 5194. Superseded by repeal of
section 5193.
131. 5195. Place for redemption of circulating notes to be designated.
132. Act June 20. 1874. National banks
not required or permitted to
redeem
their
circulating
notes elsewhere than at their
own counters or at the
Treasury of the United
133. Act March' 3, 1887.
Additional
central reserve cities.
134. 5196. National banks t o take
notes of other national
banks at par.
135. 5197. Limitation upon rate of interest which may be taken.
136. 5198. Penalty for taking unlawful interest. Jurisdiction of
suits by or against national
banks
137. 5199. Dividends.
138. 5200. Limitation
of
liabilities
which may be incurred by
any one person, company,
etc.

140




BUSINESS.

139. 5201. Associations must not loan
on or purchase their own
stock.
140. 5202. Restriction on bank's indebtedness.
141. 5203. Restriction upon use of circulating notes.
142. 5204. Prohibition u p o n
withdrawal of capital. Unearned
dividends prohibited.
143. 5205. Assessment for failure to
pay up capital stock or for
impairment of capital.
144. 5206. Prohibition against uncurrent notes.
145. 5207. United States notes not to
be held as collateral.
146. Act July \2, 1882. Issue of gold
certificates.
147. 5208. Penalty for falsely certifying checks.
148. Act July 12, 1882.
Punishment
for falsely certifying checks.
149. 5209. Penalty for embezzlement,
abstraction, willful misapplication, false entries, etc.
150. Act January 26, 1907. National
banks not permitted to make
contributions in connection
with election to political office.
151. 5210. List of shareholders.
152. 5211. Reports to Comptroller of
the Currency.
153. Act February 26, 1881. Verification of reports.
154. 5212. Report of dividends.
155. 5213. Penalty for failure to make
reports.
156. 5214. Taxes
payable
to
the
United States.
157. 5215. Half-yearly return of circulation [deposits and capital
stock].
158. 5216. Penalty for failure to make
return.
159. 5217. Enforcing tax on circulation.
160. 5218. Refunding excess tax.
161. Act March 1, 1879. N o tax to be
paid by insolvent banks.
162. 5219. State taxation.

REGULATION" OF THE BANKING BUSINESS.

141

PLACE OF BUSINESS.

119. Sec. 5190.—The usual business of each national Act June 3,
banking association shall be transacted at an office or bank- ifcS; 13 £
ing house located in the place specified in its organization L * 10L
certificate.
NOTE.—Foreign branches permitted by paragraph 141, section
25, Federal Reserve Act. See act May 1, 1886, following Revised Statutes, 5136, in reference to change in place of business.
R E S E R V E CITIES A N D R E S E R V E

REQUIREMENTS.

120. Sec. 5191.—Every national banking association i n ^ 1 June10^
either of the following cities: Albany, Baltimore, Boston,sec.31; 13Stat.'
Cincinnati, Chicago, Cleveland, Detroit, Louisville, Milwau- LAct°Mar. 1,
kee, New Orleans, New York, Philadelphia, Pittsburgh, ^ \ p 3 2 1 7
St. Louis, San Francisco, and Washington, shall at all*
times have on hand, in lawful money of the United States,
an amount equal to at least twenty-five per centum of the
aggregate amount of [its notes in circulation and] its deposits ; and every other association shall at all times have on
hand, in lawful money of the United States, an amount
equal to at least fifteen per centum of the aggregate
amount [of its notes in circulation and] of its deposits.
Whenever the lawful money of any association in any of
the cities named shall be below the amount of twenty-five'
per centum of its [circulation and~\ deposits, and whenever
the lawful money of any other association shall be below
fifteen per centum of its [circulation and] deposits, such
association shall not increase its liabilities by making any
new loans or discounts otherwise than by discounting or
purchasing bills of exchange payable at sight, nor make
any dividends of its profits until the required proportion,
between the aggregate amount of its [outstatiding notes of
circulation and] deposits and its lawful money of the United
States, has been restored. And the Comptroller of the
Currency may notify any association, whose lawful money
reserve shall be below the amount above required to be
kept 011 hand, to make good such reserve; and if such
association shall fail for thirty days thereafter so to make
good its reserve of lawful money, the Comptroller may,
with the concurrence of the Secretary of the Treasury, appoint a receiver to wind up the business of the association,
as provided in section fifty-two hundred and thirty-four.
NOTE.—See paragraphs 6, 119-124 Federal Reserve Act. This
section is amended by the act of June 20, 1874, section 2, which
provides that no reserve need be held against circulation. Said
act follows section 5192. Act of March 3, 1903, amending act of
March 3. 1887, providing for additional reserve cities, follows
section 5192: Provisions relating to redemption of circulating
notes, acts June 20, 1874. March 3, 1875, and July 14, 1890, follow Revised Statutes, 5192. Provisions relating to redemption
of old notes of banks extending their corporate existence, act
July 12, 1882, follows Revised Statutes, 5136. Leavenworth,
Kansas, was included as a reserve city in the original act, but
was struck out March 1, 1872. Words "lawful money" construed
by Attorney-General as including all that is legal tender. Opin.
Atty. Gen'l 17; 123.



REGULATION" OF THE BANKING BUSINESS. 142

W H A T MAY B E COUNTED AS RESERVE.

121. Sec. 5192.—Three-fifths of the reserve of fifteen
per centum required by. the preceding section to be kept,
L.; iok i m ay consist of balances due to an association, available
1872?c. a j 1 for the redemption of its circulating notes, from associa7
stat. L., 32. t - o n ^ a pp r 0 ved by the Comptroller of the Currency, organized under the act of June three, eighteen hundred
and sixty-four, or under this Title, and doing business in
the cities of Albany, Baltimore, Boston, Charleston, Chicago, Cincinnati, Cleveland, Detroit, Louisville, Milwaukee, New Orleans, New York, Philadelphia, Pittsburgh,
Richmond, Saint Louis, San Francisco, and Washington.
Clearing-house certificates, representing specie or lawful
.money specially deposited for the purpose, of any clearing-house association, shall also be deemed to be lawful
money in the possession of any association belonging to
such clearing-house, holding and owning such certificate,
within the preceding section.

Act June 3,
S S r i s U stat!

NOTE.—See paragraphs 119 to 123 Federal Reserve Act. Leavenworth, Kansas, was included as a reserve city in the original act;
but was struck out March 1, 1872. Charleston and Richmond not
being included in the list of reserve cities enumerated in section
5191, the banks of which are required to hold a reserve of twentyfive per centum of their net deposits, the Comptroller of the Currency has never approved any bank in said cities as reserve agents.
L A W F U L MONEY R E S E R V E TO B E D E T E R M I N E D BY
DEPOSITS. ACT J U N E 20, 1874.
Act June 20,
S ' ; IS stlt!

L., 123.

122. Sec. 2.—That section thirty-one of "the nationalbank act" be so amended that the several associations
therein provided for shall not hereafter be required to keep
on hand any amount of money whatever, by reason of the
amount of their respective circulations; but the moneys
required by said section to be kept at all times on hand
shall be determined by the amount of deposits in all respects, as provided for in the said section.
NOTE.—Section 31 of "the national-bank act" is incorporated in
sections 5191, 5192, Revised Statutes. Section 1 of act June 20,
1874, precedes section 5133, Revised Statutes.
N O RESERVE N E E D BE H E L D A G A I N S T D E P O S I T S
OF PUBLIC MONEY. ACT MAY 30. 1908.

Act May so, 123. Sec. 14.—That the provisions of section fifty-one
1908, sec. 14. hundred and ninety-one of the Revised Statutes, with reference to the reserves of national banking associations, shall
not apply to deposits of public moneys by the United States
in designated depositaries.
NOTE.—By the Act of Aug. 24, 1912, relating to Panama Canal
Zone revenues, it is provided that "all deposits of such funds
shall be subject to the provisions of existing law relating to the
deposit of other public funds of the United States."
P R O V I S I O N FOR R E D E E M I N G CIRCULATION.
FIVE
P E R CENT. R E D E M P T O N F U N D . ACT J U N E 20,1874.

i8&ct J a ne 3^
®ec* 3 ' — ^ a t e v e r y association organized, or to be
sec. 3; is Stat! organized, under the provisions of the said act, and of the
L., 123.
several acts amendatory thereof, shall at all times keep and
have on deposit in the Treasury of the United States, in
lawful money of the United States, a sum equal to five per




REGULATION" OF THE BANKING BUSINESS. 147

centum of its circulation, to be held and used for the redemption of such circulation; which sum shall.be counted
as a part of its lawful reserve, as provided in section two of
this act; and when the circulating notes of any such associations, assorted or unassorted, shall be presented for
redemption, in sums of one thousand dollars, or any multiple thereof, to the Treasurer of the United States, the
same shall be redeemed in [United States notes]. All notes
so redeemed shall be charged by the Treasurer of the
United States to the respective associations issuing the
same, and he shall notify them severally, on the first day of
each month, or oftener, at his discretion, of the amount
of such redemptions; and whenever such redemptions for
any association shall amount to the sum of five hundred
dollars, such association so notified shall forthwith deposit
with the Treasurer of the United States a sum in United
States notes equal to the amount of its circulating notes so
redeemed. And all notes of national banks, worn, defaced,
mutilated, or othenvise unfit for circulation, shall, when received by any assistant treasurer, or at any designated depository of the United States, be forwarded to the Treasurer of the United States for redemption as provided herein.
And when such redemptions have been so reimbursed, the
circulating notes so redeemed shall be forwarded to the
respective associations by which they were issued; but if
any of such notes are worn, mutilated, defaced, or rendered
otherwise unfit for use, they shall be forwarded to the Comptroller of the Currency and destroyed and replaced as now
provided by law: Provided, That each' of said associations
shall reimburse to the Treasury the charges for transportation and the costs for assorting such notes; and the associations hereafter organized shall also severally reimburse
to the Treasury the cost of engraving such plates as shall
be ordered by each association respectively; and the amount
assessed upon each association shall be in proportion to
the circulation redeemed, and be charged to the fund on
deposit with the Treasurer: And provided further, That so
much of section thirty-two of said national-bank act requiring or permitting the redemption of its circulating notes
elsewhere than at its own counter, except as provided for
in this section, is hereby repealed.
NOTE.—Modified by paragraph 129 Federal Reserve Act. See also
paragraph 106 Federal Reserve Act. Section 12 of act of May 30,
1908, provides that notes of national banking associations shall
be redeemed in lawful money of the United States. (See said
section 12, paragraph 110, ante.)
Section 32 of national-bank act is section 5195, Revised Statutes.
Other sections of act of June 20, 18/4.
Section 1 precedes Revised Statutes, 5133.
Section 2. See paragraph 122, ante.
Section 4 follows Revised Statutes, 5167.
Section 5 follows Revised Statutes, 5172.
Section 6 relates to United States notes only.
Sections 7-9 superseded by act of January 14, 1875, which follows Revised Statutes, 5177.



144

REGULATION" OF THE BANKING BUSINESS. 144

CLERICAL FORCE FOR R E D E M P T I O N OF CIRCULATING N O T E S . ACT MARCH 3, 1875.

Act Mar. 3, 125 That to carry into effect the provisions of section
E N * S pSthree of the act entitled "An act fixing the amount of
civUheappropX United States notes, providing for a redistribution of the
atipn act.
national-bank currency, and for other purposes/' approved
June twentieth, eighteen hundred and seventy-four, the
Secretary of the Treasury is authorized to appoint the following force, to be employed under his direction, namely:
In the Office of the Treasurer: * . * * In the Office of
the Comptroller of the Currency * * * And at the end
of each month, the Secretary of the Treasury shall reimburse the Treasury to the full amount paid out under the
provisions of this section by transfer of said amount from
the deposit of the national banking association with the
Treasury of the United States; and at the end of each
fiscal year he shall transfer from said deposit to the Treasury of the United States such sum as may have been
actually expended under his direction for stationery, rent,
fuel, light, and other necessary incidental e x p e n s e s which
have been incurred in carrying into effect the provisions of
the said section of the above-named act.
Act Mar. 3,

A D D I T I O N A L R E S E R V E CITIES. ACT OF MARCH 3,
1903, A M E N D I N G ACT O F MARCH 3, 1887.

Sec
24^* statf' L.;
- 1.—That .whenever three-fourths in number
na ona
55
Act Mar 3'
^ ^ banks located in any city of the United
1903, sec. * l; States having a population of twenty-five thousand peo32^ Stat, L., p j e s h a j j m a J c e a pp]i ca tion to the Comptroller of the Currency. in writing, asking that the name of the city in which
such banks are located shall be added to the cities named in
sections fifty-one hundred and ninety-one and fifty-one hundred and ninety-two of the Revised Statutes, the Comptroller shall have authority to grant such request, and every
bank located in such city shall at all times thereafter have
on hand, m lawful money of the United States, an amount
equal to at least twenty-five per centum of its deposits, as
provided in sections fifty-one hundred and ninety-one and
fifty-one hundred and ninety-five of the Revised Statutes.

NOTE.—See paragraph 70 Federal Reserve Act.
D I S P O S I T I O N O F R E D E M P T I O N ACCOUNT.
14, 1890.

ACT JULY

isaf' JuIy7ol; 1 2 7 - S e c - —That upon the passage of this act the
sec. 6; 26 Stat! balances standing with the Treasurer of the United States
to the respective credits of national banks for deposits
made to redeem the circulating notes of such banks, and
all deposits ^ thereafter received for like purpose, shall
be covered into the Treasury as a miscellaneous receipt,
and the Treasurer of the United States shall redeem from
the general cash in the Treasury the circulating notes of
said banks which may come into his possession subject
to redemption; and upon the certificate of the Comptroller
of the Currency that such notes have been received by




REGULATION" OF THE BANKING BUSINESS.

145

him and that they have been destroyed and that no new
notes will be issued in their place, reimbursement of their
amount shall be made to the Treasurer, under such regulations as the Secretary of the Treasury may prescribe, from
an appropriation hereby created, to be known as "nationalbank notes; Redemption account," but the provisions of this
act shall not apply to the deposits received under section
three of the act of June twentieth, eighteen hundred and
seventy-four, requiring every national bank to keep in
lawful money with the Treasurer of the United States a
sum equal to five per centum of its circulation, to be held
and used for the redemption of its circulating notes; and
the balance remaining of the deposits so covered shall, at
the close of each month, be reported on the monthly public
debt statement as debt of the United States bearing no
interest.
NOTE.—The other sections of this act relate to the purchase
of silver bullion and issue of Treasury notes.
R E D E M P T I O N O F LOST OR STOLEN NOTES, A N D OF
N O T E S N O T PROPERLY SIGNED. ACT JULY 28,
1892.

128. ^ That the provisions of the Revised Statutes of ^ {uty21278.;
the United States, providing for the redemption of national- 'Stat, L.;
bank notes, shall apply to all national-bank notes that have ""
been or may be issued to, or received by, any national
bank, notwithstanding such notes may have been lost by
or stolen from the bank and put in circulation without the
signature or upon the forged signature of the president or
vice-president and cashier.
129.

Sec. 5193.—

Repealed March 14, 1900.
NOTE.—This section as enacted June 8, 1872 (17 Stat. L., 337),
authorized the Secretary of the Treasury to receive on deposit
from national banking associations United States notes in sums
of not less than ten thousand dollars^ and to issue certificates
therefor payable on demand in denominations of not less than
five thousand dollars. This was repealed by act March 14, 1900.
section 6, paragraph 245, post, which provides for issue of gold
certificates payable to order in denominations of ten thousand
dollars.

130. Sec. 5194.—
Dependent on 5193 and superseded by its repeal.
P L A C E FOR R E D E M P T I O N OF CIRCULATING N O T E S
TO B E D E S I G N A T E D .

131. Sec. 5195.—Each association organized in any o f l s ^ t J une 10 |
the cities named in section fifty-one hundred and ninety-««. 32^13 stat!
one shall select, subject to the approval of the Comptroller
of the Currency, an association in the city of New York,
[at which it mill redeem its circulating notes at par;]
and may keep one-half of its lawful money reserve in
cash deposits in the city of New York. [But the foregoing
provision shall not apply to associations organised and located in the City of San Francisco for the purpose of issuing



REGULATION" OF THE BANKING BUSINESS. 146

notes payable in gold. Each association ' not organized
within the cities named shall select, subject to the approval
of the Comptroller, an association in either of the cities
named, at which it will redeem its circulating notes at par.]
The Comptroller shall give public notice of^ the names of
the associations selected [at which redemptions are to be
made by the respective associations], and of any change
that may be made of the association [at which the notes of
any association are redeemed. Whenever any association
fails either to make the selection or to redeem its notes
as aforesaid, the Comptroller of the Currency may upon
receiving satisfactory evidence thereof appoint a receiver,
in the manner provided for in section fifty-two hundred and
thirty-four, to wind up its affairs.] But this section shall
not relieve any association from its liability to redeem its
circulating notes at its own counter, at par, in lawful
money on demand.
NOTE.—Italicized words repealed by act June 20, 1874.
N A T I O N A L BANKS N O T R E Q U I R E D OR P E R M I T T E D
TO REDEEM T H E I R CIRCULATING N O T E S ELSEW H E R E T H A N A T T H E I R O W N COUNTERS. ACT
J U N E 20, 1874.

Act June 20, 132. Sec. 3.—* * * And provided furtherf That so
secf'3; i 8 Stat! much of section thirty-two (section 5195, Revised Stat*
L.. lb.
u tes) of said national-bank act requiring or permitting the
redemption of its circulating notes elsewhere than at its
own counter, except as provided for in this section, is hereby repealed.
NOTE.—Section 3F act of June 20, 1874, is set forth in full after
Revised Statutes, 5192.
A D D I T I O N A L CENTRAL
MARCH 3, 1887.

RESERVE

CITIES.

ACT

lgAct

Mar.^p 133. Sec. 2.—That whenever three-fourths in number
sec. 2; 24 Stat! of the national banks located in any city of the United
States having a population of two hundred thousand peoL., 560.
ple shall make application to the Comptroller of the Currency, in writing, asking that such city may be a central
reserve city, like the city of New York, in which one-half
of the lawful-money reserve of the national banks located
in other reserve cities may be deposited, as provided in
section fifty-one hundred and ninety-five of the Revised
Statutes, the Comptroller shall have authority, with the
approval of the Secretary of the Treasury, to grant such
request, and every bank located in such city shall at all
times thereafter have on hand, in lawful money of the
United States, twenty-five per centum of its deposits, as
provided in section fifty-one hundred and ninety-one of
the Revised Statutes.
NOTE.—See paragraph 70 Federal Reserve Act.
Other sections of act March 3, 1887: Section 1, relating to
additional reserve cities as amended by act of March 3. 1903,
follows Revised Statutes, section 5192.
Section 3 of this act relates to redemption of legal-tender notes.




regulation"of t h e banking

business.

147

NATIONAL BANKS TO TAKE NOTES OF OTHER NATIONAL BANKS AT PAR.

134. Sec. 5196.—Every national banking association Act J*«« jj,
formed or existing under this Title, shall take and receive sec. 32;ci3 stat!
at par, for any debt or liability to it, any and all notes or L'AcJ0juiy 12,
bills issued by any lawfully organized national banking i s ^ c.
a
association. But this provision shall not apply to any asso- l.^253l
'
ciation organized for the purpose of issuing notes payable
in gold.
LIMITATION UPON RATE OF INTEREST WHICH MAY
BE TAKEN.

135. Sec. 5197.—Any association may take, receive, re- ^ c t J^e
serve, and charge on any loan or discount made, or upon see.'30; 13 stat!
m
any note, bill of exchange, or other evidences of debt,
interest at the rate allowed by the laws of the State, Territory, or District where the bank is located, and no more,
except that where by the laws of any State a different
rate is limited for banks of issue organized under State
laws, the rate so limited shall be allowed for associations
organized or existing in any such State under this Title.
When no rate is fixed by the laws of the State, or Territory, or District, the bank may take, receive, reserve, or
charge a rate not,exceeding seven per centum, and.such
interest may be taken in advance, reckoning the days for
which the note, bill, or other evidence of debt has to run.
And the purchase, discount, or sale of a bona fide bill of
exchange, payable at another place than the place of such
purchase, discount, or sale, at not more than the current
rate of exchange for sight drafts in addition to the interest, shall not be considered as taking or receiving a
greater rate of interest.
PENALTY FOR TAKING UNLAWFUL INTEREST. JURISDICTION OF SUITS BY OR AGAINST NATIONAL BANKS.

136. Sec. 5198 [as amended 1875].—The taking, re- ^ t jumMi,
ceiving, reserving, or charging a rate of interest greater
30^1*3 stat!
'
than is allowed by the preceding section, when knowingly '\ ct Feb. is,
£.,Ssk18t
done, shall be deemed a forfetiure of the entire interest
which the note, bill, or other evidence of debt carries with
it, or which has been agreed to be paid thereon. In case
the greater rate of interest has been paid, the person by
whom it has been paid, or his legal representative, may
recover back, in an action in the nature of an action of
debt, twice the amount of the interest thus paid from the
association taking or receiving the same; provided such
action is commenced within two years from the time the
usurious transaction occurred. That suits, actions, and
proceedings against any association under this Title may
be had in any circuit,* district, or territorial court of the
United States held within the district in which such association may be established, or in any State, county, or



REGULATION" OF THE BANKING BUSINESS. 148

148

municipal court in the county or city in which said association is located having jurisdiction in similar cases.
NOTE.—Additional provisions relating to jurisdiction oi actions
by and against national banks are contained in Act July 12, lS&i,
which is inserted after Revised Statutes, section 5136. See paragraphs 195, 196 Revised Statutes of United States,, post, as to
jurisdiction of circuit courts to enjoin Comptroller under section
5237, Revised Statutes, United States.
DIVIDENDS.

137. Sec. 5199.—The directors of any association may,
semiannually, declare a dividend of so much of the net
a
* profit of the association as they shall judge expedient; but
each association shall, before the declaration of a dividend,
carry one-tenth part of its net profits of the preceding
half "year to its surplus fund until the same shall amount to
twenty per centum of its capital stock.

Act June 3,
sec^33 ,ci3 Stat'

l.?io9.

L I M I T A T I O N OF L I A B I L I T I E S W H I C H MAY B E INCURRED BY ANY O N E PERSON, COMPANY, ETC.
Act June 3,
138. Sec. 5200 [as amended 1906].—The total liabilis f c 4 2 9 - i 3 S t a t ' t o a n y association, of any person, or of any company,
L.,' 103.
* corporation, or firm for money borrowed, including in the
n
2
1S06? 34 stft : liabilities of a company or firm the liabilities of the several
l., 451.
members thereof, shall at no time exceed one-tenth part
of the amount of the capital stock of such associations, actually paid in and unimpaired, and one-tenth part of its
unimpaired surplus fund: Provided, however, That the
total of such liabilities shall in no event exceed thirty per
centum of the capital stock of the association. But the
discount of bills of exchange drawn in good faith against
actually existing values, and the discount of commercial or
business paper actually owned by the person negotiating
the same shall not be considered as money borrowed.
ASSOCIATIONS MUST N O T LOAN ON OR P U R C H A S E
T H E I R OWN STOCK.
Act June 3,
139. Sec. 5201.—No association shall make any loan or
secS5;i3Stit; discount on the security of the shares of its own capital
L.,' no.
* stock, nor be the purchaser or holder of any such shares,
unless such security or purchase shall be necessary to
prevent loss upon a debt previously contracted in good
faith; and stock so purchased or acquired shall, within six
months from the time of its purchase, be sold or disposed
of at public or private sale; or, in defeault thereof, a receiver may be appointed to close up the business of the
association, according to section fifty-two hundred and
thirty-four.
RESTRICTION
ON BANK'S I N D E B T E D N E S S .
A M E N D E D BY PARAGRAPH 85 F E D E R A L
S E R V E ACT.)

1912?*

Dec 23i

(AS
RE-

* . 140 * . S e c * 5202.—No national banking association shall
at any time be indebted, or in any way liable, to an amount
exceeding the amount of its capital stock at such time
actually paid in and remaining undiminished by losses or
otherwise, except on account of demands of the nature following:




1UCGULAT10N Of THE BANKING BUSINESS.

149

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.
RESTRICTION U P O N USE OF CIRCULATING

NOTES.

141. Sec. 5203.—No association shall, either directly or Act Junei 3,
indirectly, pledge or hypothecate any of its notes or cir- **®Vfi3 speculation, for the purpose of procuring money to be paid L.,
in on its capital stock, or to be used in its banking operations, or otherwise; nor shall any association use its circulating notes, or any part thereof, in any manner or form,
to create or increase its capital stock.
P R O H I B I T I O N U P O N W I T H D R A W A L O F CAPITAL.
UNEARNED DIVIDENDS PROHIBITED.

142. Sec. 5204.—No association, or any member there- Act June
of, shall, during the time it shall continue its banking
.c13
operations, withdraw, or permit to be withdrawn, either in L-, no.
the form of dividends or otherwise, any portion of its
capital. If losses have at any time been sustained by any
such association, equal to or exceeding its undivided profits
then on hand, 110 dividend shall be made; and no dividend
shall ever be made by any association, while it continues
its banking operations, to an amount greater than its net
profits then on hand, deducting therefrom its losses and bad
debts. All debts due to any association, on which interest
is past due and unpaid for a period of six months, unless
the same are well secured, and in process of collection,
shall be considered bad debts within the meaning of this
section. But nothing in this section shall prevent the reduction of the capital stock of the association under section
fifty-one hundred and forty-three.
A S S E S S M E N T FOR FAILURE TO PAY U P CAPITAL
S T O C K OR F O R I M P A I R M E N T O F C A P I T A L .

3,

143. Sec. 5205 [as amended 1876].—Every association Act Mar. 3.
ft
which shall have failed to pay up its capital stock, as
quired by law, and every association whose capital stock
shall have become impaired by losses or otherwise, shall, m C
19 Stac
within three months after receiving notice thereof from
*
the Comptroller of the Currency, pay the deficiency in
the capital stock,, by assessment upon the shareholders
pro rata for the amount of capital stock held by each;
and the Treasurer of the United States shall withhold
the interest upon all bonds held by him in trust for any
such association, upon notification from the Comptroller
of the Currency, until otherwise notified by him. If any



150

REGULATION" OF T H E BANKING BUSINESS. 150

such association shall fail to pay up its capital stock, and
shall refuse to go into liquidation, as provided by law,
for three months after receiving notice from the Comptroller, a receiver may be appointed to close up the business of the association, according to the provisions of section fifty-two hundred and thirty-four: And provided,
That if any shareholder or shareholders of such bank shall
neglect or refuse, after three months' notice, to pay the
assessment, as provided-in this section, it shall be the duty
of the board of directors to cause a sufficient amount of
the capital stock of such shareholder or shareholders to
be sold at public auction (after thirty days' notice shall be
given by posting such notice of sale in the office of the
bank, and by publishing such notice in a newspaper of
the city or town in which the bank is located, or in a
newspaper published nearest thereto) to make good the
deficiency, and the balance, if any, shall be returned to
such delinquent shareholder or shareholders.
PROHIBITION

AGAINST U N C U R R E N T

NOTES.

144. Sec. 5206.—No association shall at any time pay
s!^39;C13 Stat! out on loans or discounts, or in purchasing drafts or bills
l., lii.
0 f exchange, or in payment of deposits, or in any other
mode pay or put in circulation, the notes of any bank or
banking association which are not, at any such time, receivable, at par, on deposit, and in payment of debts by the association so paying out or circulating such notes; nor shall
any association knowingly pay out or put in circulation
any notes issued by any bank or banking association which
at the time of such paying out or putting in circulation is not
redeeming its circulating notes in lawful money of the
United States.
Act June

3,

U N I T E D STATES N O T E S N O T TO B E H E L D AS COLLATERAL.

Act Feb. i9g 145. Sec. 5207.—No association shall hereafter offer or
;
c
m receive United States notes or national-bank notes as security or as collateral security for any loan of money, or
for a consideration agree to withhold the same from use,
or offer or receive the custody or promise of custody of
such notes as security, or as collateral security, or consideration for any loan of money. Any association offending
against the provisions of this section shall be deemed guilty
of a misdemeanor, and shall be fined not more than one
thousand dollars and a further sum equal to one-third oi
the money so loaned. The officer or officers of any association who shall make any such loan shall be liable for a
further sum equal to one-quarter of the money loaned;
and any fine or penalty incurred by a violation of this
section shall be recoverable for the benefit of the party
bringing such suit.

State. "L,

Act July 12 I S S U E 0 F GOLD CERTIFICATES. ACT J U L Y 12, 1882.
M i s f i t L® 1 4 6 # S e c ' 1 2 * ~ T h a t t h e Secretary of the Treasury js
165. a
*• authorized and directed t o receive deposits of g o l d coin



REGULATION" OF THE BANKING BUSINESS.

151

* * * and issue certificates, therefor * * * Said
certificates- * * *
when held by any national banking association, shall be counted as part of its lawful reserve ; and no national banking association shall be a member of any clearing house in which such certificates shall
not be receivable in the settlement of clearing-house balances: * * * A n c j
provisions of section fifty-two
hundred and seven of the Revised Statutes shall be applicable to the certificates herein authorized and directed to be
issued.
NOTE.—This section given in full, paragraph 223, p o s t See also
currency act of March 4, 1900, as amended March 4, 1907, paragraph 245 post, relating to gold certificates, and making ten
dollars lowest denomination.

PENALTY FOR FALSELY CERTIFYING CHECKS.

147. Sec. 5208.—It shall be unlawful for any officer, lgAct Man^s,
clerk, or agent of any national banking association to cer- is 'stat. l.!
tify any check drawn upon the association unless the person ^
or company drawing the check has on deposit with the
association, at the time such check is certified, an amount
of money equal to the amount specified in such check. Any
check so certified by duly authorized officers shall be a
good and valid obligation against the association; but the
act of any officer, clerk,* or agent of any association, in
violation of this section, shall subject such bank to the
liabilities and proceedings on the part of the Comptroller
as provided for in section fifty-two hundred and thirty-four.
PUNISHMENT FOR FALSELY CERTIFYING CHECKS.
ACT JULY 12, 1882.

148. Sec. 13.—That any officer, clerk, or agent of any ^
J" 1 *^
national banking association who shall willfully violate the s?c. 'i3; 22 stat!
provisions of an act entitled "An act in reference to certi- *' 166*
fying checks by national banks," approved March third,
eighteen hundred and sixty-nine, being section fifty-two
hundred and eight of the Revised Statutes of the United
States, or who shall resort to any device, or receive any
fictitious obligation, direct or collateral, in order to evade
the provisions thereof, or who shall certify checks before
the amount thereof shall have been regularly entered to
the credit of the dealer upon the books of the banking
association, shall be deemed guilty of a misdemeanor, and
shall, on conviction thereof in any circuit or district court
of the United States, be fined not more than five thousand
dollars, or shall be imprisoned not more than five years,
or both, in the discretion of the court.
Act June 3,

PENALTY FOR EMBEZZLEMENT, ABSTRACTION, 1864 c. Stat
106,
13
WILLFUL MISAPPLICATION, FALSE ENTRIES, ^
ETC.
Act Apr. 6,

149. Sec. 5209.—Every president, director, cashier,
£ n 7 ; 10
teller, clerk, or agent of anv association, who embezzles, lgA« jW^b.
abstracts, or willfully misapplies any of the moneys, funds, is s'utL., 195!



152

REGULATION" OF THE BANKING BUSINESS. 152

or credits of the association; or who, without authority
from the directors, issues or puts in circulation any of
the notes of the association; or who, without such authority, issues or puts forth any certificate of deposit, draws
any order or. bill of exchange, makes any acceptance,
assigns any note, bond, draft, bill of exchange, mortgage,
judgment, or decree; or who makes any false entry in any
book, report, or statement of the association, with intent,
in either case, to injure or defraud the association or any
other company, body politic or corporate, or any individual
person, or to deceive any officer of the association, or any
agent appointed to examine the affairs of any such association; and every person who with like intent aids or abets
any officer, clerk, or agent in any violation of this section,
shall be deemed guilty of a misdemeanor, and shall be imprisoned not less than five years nor more than ten.
N A T I O N A L B A N K S N O T P E R M I T T E D TO M A K E CONT R I B U T I O N S I N CONNECTION W I T H ELECTION
TO POLITICAL OFFICE. ACT JANUARY 26, 1907,

1907? 34anstat' 1 5 0 ,
^ s ^ ^e unlawful f° r a n y national bank,
a
L.( S64.
' o r any corporation organized by authority of any laws of
Congress, to make a money contribution in connection
with any election to any political office. It shall also be
unlawful for any corporation whatever to make a money
contribution in connection with any election at which
Presidential and Vice-Presidential electors or a Representative in Congress is to be voted for, or any election by
any State legislature of a United States Senator. Every
corporation which shall make any contribution in violation of the foregoing provisions shall be subject to a fine
not exceeding five thousand dollars, and every officer or
director of any corporation who shall consent to any contribution by the corporation in violation of the foregoing
provisions shall upon conviction be punished by a fine of
not exceeding one thousand and not less than two hundred and fifty dollars, or by imprisonment for a term of
not more than one year, or both such fine and imprisonment in the discretion of the court.
LIST OF S H A R E H O L D E R S .

\ 5 1 ' S e c * 52 10'—The president and cashier of every
sec. 40; 13 Stat national banking association shall cause to be kept at all
times a full and correct list of the names and residences
of all the shareholders in the association, and the number
of shares held by each, in the office where its business is
transacted. Such list shall be subject to the inspection
of all the shareholders and creditors of the association; and
the officers authorized to assess taxes under State authority,
during business hours of each day in which business may
be legally transacted. A copy of such list, on the first
Monday of July of each year, verified bv the oath of such
president or cashier, shall be transmitted to the Comptroller
 of the Currency.
istc I™ 106,



REGULATION" OF THE BANKING BUSINESS.

153

REPORTS TO COMPTROLLER OF THE CURRENCY.
152. Sec. 5211 [as amended 1877].—Every association

Act June s.
shall make to the Comptroller of the Currency not less secS^isstat!
than five reports during each year, according to the form L*jJf9,Mar 3
which may be prescribed by him, verified by the oath or 1 6 ? c/r'i3u;
89
Stat>
affirmation of the president or cashier of such associa- J^*
tion, and attested by the signature of at least three of the
^
directors. Each such report shall exhibit, in detail and STAT' L., 252.
under appropriate heads, the resources and liabilities of
the association at the close of business on any past day
by him specified; and shall be transmitted to the Comptroller within five days after the receipt of a request or
requisition therefor from him, and in the same form in
which it is made to the Comptroller shall be published
in a newspaper published in the place where such association is established, or if there is no newspaper in the place,
then in the one published nearest thereto in the same
county, at the expense of the association; and such proof
of publication shall be furnished as may be required by the
Comptroller. The Comptroller shall also have power to call
for special reports from any particular association whenever in his judgment the same are necessary in order to a
full and complete knowledge of its condition.

VERIFICATION OF REPORTS. ACT FEBRUARY 26, 1881.

153. That the oath or affirmation required by section is£ctcFS2"; a
352
fifty-two hundred and eleven of the Revised Statutes, veri- Statfying the returns made by national banks to the Comptroller of the Currency, when taken before a notary public
properly authorized and commissioned by the State in which
such notary resides and the bank is located, or any other
officer having an official seal, authorized in such State to
administer oaths, shall be a sufficient verification as contemplated by said section fifty-two hundred and eleven:
Provided, That the officer administering the oath is not an
officer of the bank.
REPORT OF DIVIDENDS.

154. Sec. 5212.—In addition to the reports required by
Mar.jj,
the preceding section, each association shall report to the sec. 2^15 Stat.
Comptroller of the Currency, within ten days after dedaring any dividend, the amount of such dividend, and
the amount of net earnings in excess of such dividend.
Such reports shall be attested bv the oath of the president or cashier of the association.
PENALTY FOR FAILURE TO MAKE REPORTS.

155. Sec. 5213.—Every association which fails to make lgAct ^ ^
and transmit any report required under either of the two sees. 1 / 2 ; 15
preceding sections shall be subject to a penalty of one Stat* L " 32t'"
hundred dollars for each day after the periods, respectively, therein mentioned, that it delays to make and transmit its report. Whenever any association delays or refuses




154

REGULATION" OF T H E BANKING BUSINESS. 154

to pay the penalty herein imposed, after it has been assessed by the Comptroller of the Currency, the amount
thereof may be retained by the Treasurer of the United
States, upon the order of the Comptroller of the Currency,
out of the interest, as it may become due to the association,
on the bonds deposited with him to secure circulation. All
sums of money collected for penalties under this section
shall be paid into the Treasury of the United States.

TAXES

PAYABLE

TO

THE

UNITED

STATES.

m C l n n e m 156 * S e c - 5 2 1 4 t a s a ™ e n d e d May 30, 1908].—National
sec. 41 ^13 Stat! banking associations having on deposit bonds of the United
Act Mar. 3, States, bearing interest at the rate of two per centum per
s
1
8
s?a3t. l°" 4W annum, including the bonds issued for the construction of
i0 Act Mar. 14, the Panama Canal, under the provisions of section eight of
sec. 13; 3i stat! "An Act to provide for the construction of a canal con^Act' M y 3o, ne cting the waters of the Atlantic and Pacific oceans/'
a
1908, sec. 9. ' approved June twenty-eighth, nineteen hundred and two,
to secure its circulating notes, shall pay to the Treasurer of
the United States, in the months of January and July, a
tax of one-fourth of* one per centum each half year upon
the average amount of such of its notes in circulation as
are based upon the deposit of such bonds; and such associations having on deposit bonds of the United States
bearing interest at a rate higher than two per centum per
annum shall pay a tax of one-half of one per centum each
half year upon the average amount of such of its notes in
circulation as are based upon the deposit of such bonds.
p®6*^National banking associations having circulating notes seFed. Res. Act. cured otherwise than by bonds of the United States, shall
pay for the iirst three months a tax at the rate of three
per centum per annum upon the average amount of, such
of their notes in circulation as are based upon the deposit
of such securities, and afterzvards 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
thereafter such tax of six per centum per annum upon the
average^ amount of such notes. Every national banking
association having outstanding circulating notes s e c u r e d
by a deposit of other securities than United States bonds
shall make monthly returns, under oath of its p r e s i d e n t
or cashier, to the Treasurer of the United States, in such
form as the Treasurer may prescribe, of the average monthly amount of its notes so secured in circulation; and it
shall be the duty of the Comptroller of the Currency to
cause such reports of notes in circulation to be verified bv
examination of the banks' records. The taxes received on
circulating notes secured otherwise than by bonds of the
United States shall be paid into the Division of Redemption of the Treasury and credited and added to the reserve
fund held for the redemption of United States and other
notes.




REGULATION" OF THE BANKING BUSINESS.

155

HALF-YEARLY RETURN OF CIRCULATION [deposits and
capital stock].

157. Sec. 5215—In order to enable the Treasurer to ls£ct
assess the duties imposed by the preceding section, each sec. 4i;Ci3 stat!
association shall, within ten days from the first days of L " 1U*
January and July of each year, make a return, under the
oath of its president or cashier, to the Treasurer of the
United States, in such form as the Treasurer may pre-"
scribe, of the average amount of its notes in circulation
[and of the average amount of its deposits, and of the
average amount of its capital stock, beyond the amount
invested in United States bonds] for the six months next
preceding the most recent first day of January or July.
Every association which fails so to make such return shall
be liable to a penalty of two hundred dollars, to be collected either out of the interest as it may become due such
association on the bonds deposited with the Treasurer,
or, at his option in the manner in which penalties are to be
collected of other corporations under the laws of the United
States.
NOTE.—The taxes on the average amount of deposits and capital
stock having been repealed by the act of March 3, 1883, and the
original provision therefor struck out of section 5214 as amended
by act of May 30, 1908, there is no longer any obligation to. make
the return of those two items.
P E N A L T Y FOR F A I L U R E TO MAKE RETURN.

158. Sec. 5216.—Whenever any association fails ^ to
J"ne10|
make the half-yearly return required by, the preceding gc. 41 u*3 stat!
section, the duties to be paid by such association shall be
assessed upon the amount of notes delivered to such association by the Comptroller of the Currency [and upon the
highest amount of its deposits and capital stock, to be ascertained in such manner as the Treasurer may deem best].
NOTE.—See note under section 5215 stating that tax on deposits
and capital stock had been repealed.
E N F O R C I N G TAX ON CIRCULATION.

159. Sec. 5217.—Whenever an association fails to pay lgAct J«n*1(|p
the duties imposed by the three preceding sections, the sec.'41; 13 stat!
ul
sums due may be collected in the manner provided for the
*
collection of United States taxes from other corporations;
or the Treasurer may reserve the amount out of the interest, as it may become due, on the bonds deposited with
him by such defaulting association.
R E F U N D I N G EXCESS TAX.

160. Sec. 5218.—In all cases where an association has MarfeiolV
paid or may pay in excess of what may be or has been No. 4§; ^14
found due from it, on account of the duty required to be
paid to the Treasurer of the United States, the association may state an account therefor, which, on being certified by "the Treasurer of the United States, and found
correct by the First Comptroller of the Treasury, shall be




156

REGULATION" OF T H E BANKING BUSINESS. 156

refunded in the ordinary manner by warrant on the Treasury.
NO TAX TO B E PAID BY INSOLVENT BANKS. ACT
MARCH 1, 1879.
internal rev161. Sec. 22.—That whenever and after any bank has
s £ ceased to do business by reason of insolvency or bankg ; 351? S t a t ruptcv, no tax shall be assessed or collected, or paid into
the Treasury of the United States, on account of such
bank, which shall diminish the assets thereof necessary
for the full payment'of all its depositors; and such tax
shall be abated from such national banks as are found by
the Comptroller of the Currency to be insolvent.
STATE TAXATION.
162. Sec. 5219.—Nothing herein shall prevent all the
shares * n any association from being included in the valL./ lii.
" uation of the personal property of the owner or holder
is6sf CFE7; 15 of such shares, in assessing taxes imposed by authority of
stat. L., 34. t j l e state within which the association is located; but the
legislature of each State may determine and direct the
manner and place of taxing all the shares of national banking associations located within the State, subject only to
the two restrictions, that the taxation shall not be at a
greater rate than is assessed upon other moneyed capital
in the hands of individual citizens of such State, and that
the shares of any national banking association owned by
nonresidents of any State shall be taxed in the city or
town where the bank is located, and not elsewhere. Nothing herein shall be construed to exempt the real property
of associations from either State, county, or municipal
taxes, to the same extent, according to its value, as other
^eal property is taxed.

Act June s,
sec?'4I;i3StS:




CHAPTER V.
DISSOLUTION AND RECEIVERSHIP.

163. 5220. Two-thirds vote required 177. 5233. Redeemed notes to be canfor liquidation.
celed.
164. 5221. Notice of voluntary liqui- 178. 5234. Appointment and duties of
dation.
receivers.
165. 5222. Deposit of lawful money to 179. 5235. Notice to creditors of inredeem circulation.
solvent banks to present
166. 5223. No deposit required for
claims.
consolidation.
180. 5236. Dividends. Distribution oi
167. 5224. Reassignment of bonds and
assets of insolvent banks.
redemption of notes of liqui- 181. 5237. When bank may enjoin furdating banks.
ther proceedings.
168. Act June 20, 1874. Duty of Treas- 182. 5238. Fees and expenses.
urer, assistant treasurer, etc., 183. Act June 30, 1876. When receiver
to return notes of failed or
may be appointed.
liquidating banks to Treas- 184. Act June 30, 1876. Creditor's bill
ury for redemption.
against shareholders.
169. 5225. Destruction of redeemed 185. Act June 30, 1876. Appointment.
qualification, and duties of
notes.
shareholders' agent.
170. 5226. Protest of bank circulation.
171. 5227. Bonds forfeited if circula- 186. Act March 29, 1886. Receiver may
purchase property to protion is dishonored. Examitect his trust.
nation by special agent.
187. Act March .29, 1886. Approval of
172. 5228. Stispension of business after
request.
default.
173. 5229. Notice to present circulation 188. Act March 29, 1886. Payment.
for redemption. Cancellation 189. 5239. Penalty for violation of this
title. Forfeiture of charter.
of bonds.
Individual liability of di174. 5230. Sale of bonds at auction.
rectors.
First lien for redeeming cir190. 5240. Appointment of examiners:
culation.
Compensation.
175. 5231. Bonds may be sold at pri191. 5241. Limitation
of
visitoriai
vate sale.
powers.
176. 5232. Disposal of redeemed notes.
Regulations for redemption 192. 5242. Transfers, when void. Illegal preference of creditors.
records.
193. 5243. Use of the title "National."
T W O - T H I R D S V O T E REQUIRED FOR

LIQUIDATION.

163. Sec. 5220.—Any association may go into liquida- igAct June^j.
tion and be closed by the vote of its shareholders owning sec.42,-13 stat!
L
two-thirds of its stock.
" m'
#

NOTE.—For enforcement of shareholders* liability when bank is
in liquidation see act of June 20, 1876, following Revised Statutes,
5238.
N O T I C E O F V O L U N T A R Y LIQUIDATION.

164. Sec. 5221.—Whenever a vote is taken to go into
June10;j;
liquidation it shall be the duty of the board of directors sec. 42; 13 stat.'
to cause notice of this fact to" be certified, under the seal "
of the association, bv its president or cashier, to the Comp*
157




DISSOLUTION AND RECEIVERSHIP.

158

troller of the Currency, and publication thereof to be made
for a period of two months in a newspaper published in
the city of New York, and also in a newspaper published
in the city or town in which the association is located, or
if no newspaper is there published, then in the newspaper
published nearest thereto, that the association is closing
up its affairs, and notifying the holders of its notes and
other creditors to present the notes and other claims against
the association for payment.
D E P O S I T OF L A W F U L MONEY TO R E D E E M CIRCULATION.

165. Sec. 5222.—Within six months from the date of
the vote to go into liquidation, the association shall deposit
"stat L.; w ith the Treasurer of the United States, lawful money^ of
Act July 14, the United States sufficient to redeem all its outstanding
if 0,stS. ill circulation. The Treasurer shall execute duplicate receipts
274
*
'
' for money thus deposited, and deliver one to the association and the other to the Comptroller of the Currency,
stating the amount received by him, and the purpose for
which it has been received; and the money shall be paid
into the Treasury of the United States, and placed to the
credit of such association upon redemption account.

Act June 3,
sees 42

NO D E P O S I T R E Q U I R E D FOR

CONSOLIDATION.

Act July 14, 166. Sec. 5223.—An association which is in good faith
16^'stat. LI; winding up its business for the purpose of consolidating
274
•
with another association shall not be required to deposit
lawful money for its outstanding circulation; but its assets and liabilities shall be reported by the association with
which it is in process of consolidation.
REASSIGNMENT OF B O N D S A N D R E D E M P T I O N
N O T E S OF L I Q U I D A T I N G BANKS.

is64ct l une m

OF

. 1 6 7 * S e c ' 5 2 2 4 f a s a m e n d e d 1875].—Whenever a suffiseC/42;i3Stat! cient deposit of lawful money to redeem the outstanding
^Act^Feb. is, circulation of an association proposing to close its bu sislat L^fco1** n ^ s s
t>een m a de, the bonds deposited by the association to secure payment of its notes shall be reassigned to
it, in the manner prescribed by section fifty-one hundred
and sixty-two. And thereafter the association and its shareholders shall stand discharged from all liabilities upon the
circulating notes, and those notes shall be redeemed at the
Treasury of the United States. And if any such bank
shall fail to make the deposit and take up its bonds thirty
days after the expiration of the time specified, the Comptroller of the Currency shall have power to sell the bonds
pledged for the circulation of said bank, at public auction
in New York City, and, after providing for the redemption and cancellation of said circulation, and the necessary
expenses of the sale, to pay over any balance remaining
to the bank or its legal representatives.




159

DISSOLUTION AND RECEIVERSHIP.

D U T Y O F TREASURER, ASSISTANT TREASURERS,
ETC., TO RETURN NOTES OF FAILED OR
L I Q U I D A T I N G BANKS TO TREASURER FOR RED E M P T I O N . ACT J U N E 20. 1874.
168. Sec. 8.—And it shall be the duty of the Treasurer, Act June 20,

assistant treasurers, designated depositaries, and national
% S t£
bank depositaries of the United States to assort and re- L » ^
turn to the Treasury for redemption the notes of such national banks as have failed, or gone into voluntary liquidation for the purpose of winding up their affairs, and of
such as shall hereafter so fail or go into liquidation.
D E S T R U C T I O N OF R E D E E M E D NOTES.

169. Sec. 5225 [as amended 1877].—Whenever the ^
J" 1 1 ^
Treasurer has redeemed any of the notes of an association sec. 43; i3Stat!
which has commenced to close its affairs, under the five L'Act12Feb. 27,
preceding sections, he shall cause the notes to be mutilated
^
and charged to the redemption account of the association; a * ''
and all notes so redeemed by the Treasurer shall, every
three months, be certified to and [burned] in the manner
prescribed in section fifty-one hundred and eighty-four.
NOTE.—See act of June 23, 1874, following Revised Statutes,
section 5184, directing that bank notes be macerated and not
burned.
P R O T E S T OF BANK CIRCULATION.

Sec. 5226.—Whenever any national banking asso- 18^ct £unc10jj;
t 170.
ciation fails to redeem in the lawful money of the United
46; i s star!
States any of its circulating notes, upon demand of pay- '
ment duly made during the usual hours of business, at the
office of such association, or at its designated place of redemption, the holder may cause the same to be protested,
in one package, by a notary public, unless the president or
cashier of the association whose notes are presented for
payment [or the president or cashier of the association at
the place at which they are redeemable] offers to waive demand and notice of the protest, and, in pursuance of such
offer, makes, signs, and delivers to the party making such
demand an admission in writing, stating the time of the
demand, the amount demanded, and the fact of the nonpayment thereof. The notary public, on making such protest, or upon receiving such admission, shall forthwith forward such admission or notice of protest to the Comptroller
of the Currency, retaining a copy thereof. If, however,
satisfactory proof is produced to the notary public that
the payment of the notes demanded is restrained by order
of any court of competent jurisdiction, he shall not protest
the same. When the holder of any notes causes more
than one note or package to be protested on the same day,
he shall not receive pay for more than one protest.
NOTE.—Circulation redeemable only at Treasury or over own
counter. Designated places of redemption have not existed since
act June 20, 1874. (See said act following Revised Statutes,
5192.)



160

DISSOLUTION A N D

RECEIVERSHIP.

B O N D S F O R F E I T E D I F CIRCULATION IS D I S H O N ORED. E X A M I N A T I O N BY SPECIAL AGENT.
Act June s,
s e c V 1 3 stat!

L./ni

171. Sec. 5227.—On receiving notice that any national
banking association has failed to redeem any of _ its circulating notes, as specified in the preceding section, the
Comptroller of the Currency, with the concurrence of the
Secretary of the Treasury, may appoint a special^ agent,
of whose appointment immediate notice shall be given to
such association, who shall immediately proceed to ascertain whether it has refused to pay its circulating notes in
the lawful money of the United'States, when demanded,
and shall report to the Comptroller the fact so ascertained.
If, from such protest, and the report so made, the Comptroller is satisfied that such association has refused to pay
its circulating notes and is in default, he shall, within thirty
days after he has received notice of such failure, declare
the bonds deposited by such association forfeited to the
United States, and they shall thereupon be so forfeited.
S U S P E N S I O N OF B U S I N E S S A F T E R D E F A U L T .

June i( 3,
172. Sec. 5228 [as amended 1875].—After a default
sec. 4 6 s t a t ! on the part of an association to pay any of its circulating
L
*ACY Feb. is, notes has been ascertained by the Comptroller, and notice
stat L "W* t ^ l e r e o ^ h a s b e e n g i v e n by him to the association, it shall
a

i g Act

*

not be lawful for the association suffering the same to
pay out any of its notes, discount any notes or bills, or
otherwise prosecute the business of banking, except to
receive and safely keep money belonging to it, and to deliver
special deposits.

NOTICE TO P R E S E N T CIRCULATION F O R REDEMPTION. CANCELLATION O F B O N D S .
une
iSG4Ct J i06'
sec. 47; 13 stat!
114

-

173

' S e c - 5229.—Immediately upon declaring the bonds
of an association forfeited for nonpayment of its notes,
the Comptroller shall give notice, in such manner as the
Secretary of the Treasury shall, by general rules or otherwise, direct, to the holders of the circulating notes of such
association, to present them for payment at the Treasury of
the United States; and the same shall be paid as presented
in lawful money of the United States; whereupon the
Comptroller may, in his discretion, cancel an amount of
bonds pledged by such association equal at current market
rates, not exceeding par,, to the notes paid.
SALE OF B O N D S AT AUCTION.
D E E M I N G CIRCULATION.

F I R S T L I E N FOR RE-

iS64Ct Juneioc 174 " ? ec * 5230 -—Whenever the Comptroller has besecs. 47, 4sJ come satisfied, by the protest or the waiver and admission
Ji4# Stat*
specified in section fifty-two hundred and twenty-six, or
by the report provided for in section fifty-two hundred
and twenty-seven, that any association has refused to pay
its circulating notes, he may, instead of canceling its bonds,
cause so much of them as may be necessary to redeem
its outstanding notes to be sold at public auction in the




161 DISSOLUTION AND RECEIVERSHIP.

city of New York, after giving thirty days' notice of
such sale to the association. For any deficiency in the
proceeds of ail the bonds of an association, when thus
sold, to reimburse to the United States the amount expended in paying the circulating notes of the association,
the United btates shall have a paramount lien upon all
its assets; and such deficiency shall be made good out of
such assets in preference to any and all other claims whatsoever, except the necessary costs' and expenses of administering the same.
BONDS MAY BE SOLD A T PRIVATE SALE.

175. Sec. 5231.—The Comptroller may, if he deems it Act June 3,
for the interest of the United States, sell at private s a l e S ^ i a s t X
any of the bonds of an association shown to have made de- u> 114
fault in paying its notes, and receive therefor either money
or the circulating notes of the association. But no such
bonds shall be sold by private sale for less than par,
nor for less than the market value thereof at the time of
sale; and no sales of any such bonds, either public or private, shall be complete until the transfer of the bonds
shall have been made with the formalities prescribed by
sections fifty-one hundred and sixty-two, fifty-one hundred
and sixty-three, and fifty-one hundred and sixty-four.
DISPOSAL OF REDEEMED NOTES;
FOR REDEMPTION RECORDS.

REGULATIONS

176. Sec. 5232.—The Secretary of the Treasury may, 18£ct June10jj;
from time to time, make such regulations respecting the sec/47;i3Stat!
114
disposition to be made of circulating notes after presentation at the Treasury of the United States for payment,
and respecting the perpetuation of the evidence of the
payment thereof, as may seem to him proper.
R E D E E M E D NOTES TO B E CANCELLED.

177. Sec. 5233.—All notes of national banking associa- Act June^,
tions presented at the Treasury of the United States for Sec.47;Ci3 Stat!
114
payment shall, on being paid, be canceled.
A P P O I N T M E N T AND DUTIES OF RECEIVERS.

178. Sec. 5234.—On becoming satisfied, as specified in lgAct June^.
sections fifty-two hundred and twenty-six and fifty-two sec.'so;ci3 star!
hundred and twenty-seven, that any association has r e - L ' m fused to pay its circulating notes as therein mentioned,
and is in default, the Comptroller of the Currency may
forthwith appoint a receiver, and require of him such
bond and security as he deems proper. Such receiver,
under the direction of the Comptroller, shall take possession of the books, records, and assets of every description
of such association, collect all debts, dues, and claims belonging to it, and, upon the order of a court of record of
competent jurisdiction, may sell or compound all bad or
doubtful debts, and, on a like order, may sell all the real
and personal property of such association, on such terms



162

DISSOLUTION AND RECEIVERSHIP.

as the court shall direct; and may, if necessary to pay the
debts of such association, enforce the individual liability
of tlie stockholders. Such receiver shall pay over all
money so made to the Treasurer of the Llnited States,
subject to the order of the Comptroller, and also make
report to the Comptroller oi all his acts and proceedings.
NOTE.—Other provisions authorizing the appointment of receivers of national banks and relating to powers and duties of
receivers and agents will be found in the act of June 30, 1876, as
amended August 3, 1892, and March 2, 1897, and the act of March
29, 1886. Both these acts are set forth following section 5238,
Revised Statutes.
A receiver may also be appointed, under the provisions of section fifty-two hundred and thirty-four of the Revised Statutes of
the United States, for the following violations of law:
Where the capital stock of a national bank has not been fully
paid in and it is thus reduced below the legal minimum and remains so for thirty days. (Sec. 5141, R. S.)
For failure to make good the lawful-money reserve within thirty
days after notice. (Sec. 5191, R. S.)
Where a bank purchases or acquires its own stock, to prevent
loss upon a debt previously contracted in good faith, and the
same is not sold or disposed of within six months from the time
of its purchase. (Sec. 5201, R. S.)
For failure to make good any impairment in its capital stock
and refusing to go into liquidation within three months after receiving notice. (Sec. 5205, .R. S.)
For false certification of checks by any officer, clerk, or agent.
(Sec. 5208, R. S.)
N O T I C E TO CREDITORS OF I N S O L V E N T B A N K S TO
P R E S E N T CLAIMS.
Act June 3, 179. Sec. 5235.—The Comptroller shall, upon appointsIcSo;'13 stat! *ng a receiver, cause notice to be given, by advertisement
L.f 114.
i n s u c ^ newspapers as he may direct, for three consecutive

months, calling on all persons who may have claims against
such association to present the same, and to make legal
proof thereof.
DIVIDENDS; DISTRIBUTION
SOLVENT BANKS.

OF

ASSETS

OF

IN-

ism* £unio6' 1 8 0 , S e c ' 5 2 3 6 , —From time to time, after full provisec.'eo;i3Stat! sion has been first made for refunding to the United
U4
*States any deficiency in redeeming the notes of such association, the Comptroller shall make a ratable dividend of
the money so paid over to him by such receiver on all such
claims as may have been proved to his satisfaction or adjudicated in a court of competent jurisdiction, and, as
the proceeds of the assets of such association are paid
over to him, shall make further dividends on all claims
previously proved or adjudicated; and the remainder of
the proceeds, if any, shall be paid over to the shareholders
of such association, or their legal representatives, in proportion to the stock by them respectively held.
1864* f^ioe
sec.TO;13 stat!
U4

-

W H E N B A N K MAY E N J O I N F U R T H E R PROCEEDINGS.
1 81
. * S e c * 5 2 3 7 * — Whenever an association against

which proceedings have been instituted, on account of any
alleged refusal to redeem its circulating notes as aforesaid,




163 DISSOLUTION AND RECEIVERSHIP.

denies having failed to do so, it may, at any time within
ten days after it has been notified of the appointment of
an agent, as provided in section fifty-two hundred and
twenty-seven, apply to the nearest circuit, or district, or
Territorial court of the United States to.enjoin further
proceedings in the premises; and such court, after citing
the Comptroller of the Currency to show cause why further proceedings should not be enjoined, and after the
decision of the court or finding of the jury that such association has not refused to redeem its circulating notes,
when legally presented, in the lawful money of the United
States, shall make an order enjoining the Comptroller, and
any receiver acting under his direction, from" all further
proceedings on account of such alleged refusal.
NOTE.—See also Revised Statutes, paragraphs 195, 196, post.
FEES AND

EXPENSES.

J 82. Sec. 5238.—All fees for protesting the notes issued ls £ ct J ™ ^
by any national banking association shall be paid by the sec.'a; 13 stat!
person procuring the protest to be made, and such asso- ' n *
ciation shall be liable therefor; but no part of the bonds
deposited by such association shall be applied to the payment of such fees. All expenses of anv preliminary or
other examinations into the condition of any association
shall be paid by such association. All expenses of any receivership shall be paid out of the assets of such association
before distribution of the proceeds thereof.
W H E N RECEIVER MAY BE APPOINTED.
30, 1876.

ACT JUNE
Act Junc

183. Sec. 1.—That whenever any national banking as- 1876?
sociation shall be dissolved, and its rights, privileges, and ^ & 19
franchises declared forfeited, as prescribed in section
fifty-two hundred and thirty-nine of the Revised Statutes
of the United States, or whenever any creditor of any
national banking association shall have obtained a judgment against it in any court of record, and make application, accompanied bv a certificate from the clerk of the
court stating that such judgment has been rendered and
has remained unpaid for the space of thirtv days, or
whenever the Comptroller shall become satisfied of the
insolvency of the national banking association, he may,
after due examination of its affairs, in either case, appoint a receiver who shall proceed to close up such association, and enforce the personal liability of the shareholders, as provided in section fifty-two hundred and thirtyfour of said statutes.
CREDITOR'S B U T , AGAINST
J U N E 30, 1876.

SHAREHOLDERS.

^

Stat

ACT
^

184. Sec. 2.—That when anv national banking associa* IB<
tion shall have eone into liquidation under the p r o v l - | j ™ Stat*
sions of section five thousand two hundred and twenty of




164

DISSOLUTION AND RECEIVERSHIP.

said statutes, the individual liability of the shareholders
provided for by section fifty-one hundred and fifty-one
of said statutes may be enforced by any creditor of such
association, by bill m equity, in the nature of a creditor s
bill, brought by such creditor on behalf of himself and of
all other creditors of the association, against the shareholders thereof, in any court of the United States having
original jurisdiction in equity for the district in which such
association may have been located or established.
APPOINTMENT, QUALIFICATION, AND DUTIES OF
SHAREHOLDERS' AGENT. ACT JUNE 30, 1876, AS
AMENDED 1892, 1897.

185
i876ct M ;
- S e c - 3.—That whenever any association shall have
sec.*3; 1 9 stat! been or shall be placed in the hands of a receiver, as pro*
ly asAamend- v i d e d i n s e c t ; o n fifty_tw0 hundred and thirty-four and
i f S i Slnd other sections of the Revised Statutes of the United
M ' y 1897, States, and when, as provided in section fifty-two hun29 Stat. L.»
T
' dred and thirty-six thereof, the Comptroller of the Cur600.
rency shall have paid to each and every creditor of such
association, not inclnding shareholders who are creditors
of such association, whose claim or claims as such creditor
shall have been proved or allowed as therein prescribed,
the full amount of such claims, and all expenses of the
receivership, and the redemption of the circulating notes
of such association shall have been provided for by depositing lawful money of the United States with the
Treasurer of the United States, the Comptroller of the
Currency shall call a meeting of the shareholders of such
association by giving notice thereof for thirty days in a
newspaper published in the town, city, or county where
the business of such association was carried on, or if no
newspaper is there published, in the newspaper published
nearest thereto. At such meeting the shareholders shall
determine whether the receiver shall be continued and
shall wind up the affairs of such association, or whether
an agent shall be elected for that purpose, and in so determining the said shareholders shall vote by ballot, in
person or by proxy, each share of stock entitling the holder
to one vote, and the majority of the stock in value and
number of shares shall be necessary to determine whether
the said receiver shall be continued, or whether an agent
shall be elected. In case such majority shall determine that
the said receiver shall be continued, the said receiver shall
thereupon proceed with the execution of his trust, and shall
sell, dispose of, or otherwise collect the assets of the said
association, and shall possess, all the powers and authority,
and be subject to all the duties and liabilities originally conferred or imposed upon him by his appointment as such
receiver, so far as the same remain applicable. In case the
said meeting shall, by the vote of a majority of the stock
in . value and number of shares, determine that an agent
shall be elected, the said meeting shall thereupon proceed
to elect an agent, voting by ballot, in person or by proxy,




169 DISSOLUTION AND RECEIVERSHIP.

each share of stock entitling the holder to one vote, and the
person who shall receive votes representing at least a
majority of stock in value and number shall be declared
the agent for the purposes hereinafter provided; and whenever any^ of the shareholders of the association shall, after
the election of such agent, have executed and filed a bond
to the satisfaction of the Comptroller of the Currency,
conditioned for the payment and discharge in full of
each and every claim that may thereafter be proved and
allowed by and before a competent court, and for the faithful prformance of all and singular the duties of such trust,
the Comptroller and the receiver shall thereupon transfer
and deliver to such agent all the undivided or uncollected
or other assets of such association then remaining in the
hands or subject to the order and control of said Comptroller and said receiver, or either of them; and for this purpose said Comptroller and said receiver are hereby severally
empowered and directed to execute any deed, assignment,
transfer, or other instrument in writing that may be necessary and proper; and upon the execution and delivery
of such instrument to the said agent the said Comptroller
and the said receiver shall by virtue of this act be discharged
from any and all liabilities to such association and to each
and all the creditors and shareholders thereof.
Upon receiving such deed, assignment, transfer, or other
instrument, the person elected such agent shall hold, control, and dispose of the assets and property of such association which he may receive under the terms hereof for the
benefit of the shareholders of such association, and he may,
in his own name, or in the name of such association, sue
and be sued and do all other lawful acts and things necessary to finally settle and distribute the assets and property
in his hands, and may sell, compromise, or compound the
debts due to such association, with the consent and approval
of the circuit or district court of the United States for
the district where the business of such association was
carried on. and shall at the conclusion of his trust render to
such district or circuit court a full account of all his proceedings, receipts, and expenditures as such agent, which
court shall, upon due notice, settle and adjust such accounts and discharge said agent and the sureties upon said
bond. And in case any such agent so elected shall refuse to
serve, or die, resign, or be removed, any shareholder may
call a meeting of the shareholders of such association in
the town, city, or village where the business of the said
association was carried on, by giving notice thereof for
thirty days in a newspaper published in said town, city, or
village, or if no newspaper is there published, in the newspaper published nearest thereto, at which meeting the shareholders shall elect an agent, voting by ballot, in person or
by proxy, each share of stock entitling the holder to one
vote, and when such agent shall have received votes representing* at least & majority of the stock in value and


166

DISSOLUTION AND RECEIVERSHIP.

number of shares, and shall have executed a bond to the
shareholders conditioned for the faithful performance of
his duties, in the penalty fixed by the shareholders at said
meeting, with two sureties, to be approved by a judge
of a court of record, and file said bond in the office of
the clerk of a court of record in the county where the
business of said association was carried on, he shall have
all the rights, powers, and duties of the agent first elected
as hereinbefore provided. At any meeting held as hereinbefore provided administrators or executors of deceased
shareholders may. act and. sign as the decedent might have
done if living, and guardians of minors and trustees of
other persons may so"act and sign for their ward or wards
or cestui que trust. The proceeds of the assets or property of any such association which may be undistributed at
the time of such meeting: or may be subsequently received
shall be distributed as follows:
"First. To pay the expenses of the execution of the
trust to the date of such payment.
"Second. To repay any amount or amounts which have
been paid in by any shareholder or shareholders of such
association upon and by reason of any and all assessments
made upon the stock of such association by the order of
the Comptroller of the Currency in accordance with the
provisions of the statutes of the United States; and
"Third. The balance ratably among such stockholders,
in proportion to the number of shares held and owned by
each. Such distribution shall be made from time to time
as the proceeds shall be received and as shall be deemed
advisable by the said Comptroller or said agent."
NOTE.—Other sections of act June 30. 1876:
Section 4 amends Revised Statutes, 5205.
Section 5 relates to counterfeit notes.
Section 6 relates to savings banks and trust companies, organized under act of Congress.
RECEIVER MAY P U R C H A S E P R O P E R T Y TO P R O T E C T
H I S TRUST. ACT MARCH 29, 1886.

iss!jct ^

Sec#
H' .
— T h a t w h e n e v e r the receiver of any nasec.*i; 24 Stat tional bank duly appointed bv the Comptroller of the CurL.. 8.
rencv, and who shall have dulv qualified and entered upon
the discharge of his trust, shall find it in his opinion necessary, in order to fully protect and benefit his said trust,
to the extent of any and all equities that such trust may
have in any propertv, real or personal, by reason of any
bond, mortgage, assignment, or other proper legal claim
attaching thereto, and which said property is to be sold
under any execution, decree of foreclosure, or proper order
of any court of jurisdiction, he may certify the facts in
the case, together with his opinion as to the value of the
propertv to be sold, and the value of the equity his said
trust-may have in the same, to the Comptroller of the
Currency, together with a request for the right and authority to use and employ so much of the money of said




167 DISSOLUTION A N D RECEIVERSHIP.

trust as may be necessary to purchase such property at such
sale.
APPROVAL OF REQUEST.

ACT MARCH 29, 1886.

187. Sec. 2.—That such request, if approved by the Act Mar. 29,
Comptroller of the Currency, shall be, together with the sec.'2; 24 stat.'
certificate of facts in the case, and his recommendation as L:? 84
to the amount of money which, in his judgment, should be
so used and employed, submitted to the Secretary of the
Treasury, and if the same shall likewise be approved by
him, the request shall be by the Comptroller of the Currency allowed, and notice thereof, with copies of the request, certificate of facts, and indorsement of approvals,
shall be filed with the Treasurer of the United States.
PAYMENT. ACT MARCH 29, 1886.

188. Sec. 3.—That whenever any such request shall be lgA<* Mar. 20,
allowed as hereinbefore provided, the said Comptroller of sec. 3; 24 Stat!
the Currency shall be, and is, empowered to draw upon L** 8*
and from such funds of any such trust as may be deposited with the Treasurer of the United States for the benefit of the bank in interest, to the amount as may be recommended and allowed and for he purpose for which such
allowance was made: Provided, however, That all payments
to be made for or on account of the purchase of any such
property and under any such allowance shall be made by
the Comptroller of the Currency direct, with the approval
of the Secretary of the Treasury, for such purpose only
and in such manner as he may determine and order.
PENALTY FOR VIOLATION OF THIS TITLE; FORFEITURE OF CHARTER; INDIVIDUAL LIABILITY
OF DIRECTORS.

189. Sec. 5239.—If the directors of any national bankJune^a.
ing association shall knowingly violate, or knowingly p e r - ^ . 5 3 ^ 1 3 Stat.'mit any of the officers, agents, or servants of the association to violate any of the provisions of this Title, all
the rights, privileges, and franchises of" the association shall
be thereby forfeited. Such violation shall, however, be
determined and adjudged by a proper circuit, district, or
Territorial court of the United States, in a suit brought
for that purpose by the Comptroller of the Currency, in his
own name, before the association shall be declared dissolved. And in cases of such violation every director who
participated in or assented to the same shall be held liable
in his personal and individual capacity for all damages
which the association, its shareholders, or any other person
shall have sustained in consequence of such violation.
APPOINTMENT OF EXAMINERS, COMPENSATION.
190. Sec. 5240 [ a s amended Dec. 23, 1913, paragraphs

cUGeiJ;

Stat
130 to 134].—The Comptroller of the Currency, with the
*
approval of the Secretary of the Treasury, shall appoint ^
^
examiners who shall examine every member bank at least sta°t. L., 323.




168

DISSOLUTION AND RECEIVERSHIP.

twice in each calendar year and oftener if considered necessary: Pr07rided, however, That the Federal Reserve Board
may authorize examination by the State authorities to be
accepted in the case of State banks and trust companies
and may at any time direct the holding of a special examination of State banks or trust companies that are stockholders in any Federal reserve bank. The examiner making the
examination of any national bank, or of any other member
bank, 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 examine any 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 Comptroller of the Currency upon the
banks examined in proportion to assets or resources held
by the banks upon the dates of examination of 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 reserve agent
or the Federal Reserve Board, provide for special examination 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 Federal reserve 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.
L I M I T A T I O N OF V I S I T O R I A L P O W E R S .

No bank? shall be subject to any visitorial 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 authorized.
The Federal Reserve Board shall, at least once each year,
order an examination of each Federal reserve bank, and
upon joint application of ten member banks the Federal
Reserve Board shall order a special examination and report
of the condition of any Federal reserve bank.
L I M I T A T I O N OF V I S I T O R I A L P O W E R S .
preceding section.]

[See subhead in

un
191
I864ct l m\
* S e c - 5 2 4 i —No association shall be subject to any
sec/54; 13 stat! visitorial powers other than such as are authorized by
l. ( lis.
^jg
o r a r e v e s ted in the courts of justice.

NOTE.—See paragraph 133 Federal Reserve Act.



169 DISSOLUTION AND RECEIVERSHIP.

TRANSFERS WHEN VOID; ILLEGAL PREFERENCE OF
CREDITORS.

192. Sec. 5242.—All transfers of the notes, bonds, bills
Junt10ft
of exchange, ^ or other evidences of debt owing to any sec. 52^13 stat!
national banking association, or of deposits to its credit; *'
all assignments of mortgages, sureties on real estate, or
of judgments or decrees in its favor; all deposits of money,
bullion, or other valuable thing for its use, or for the use
of any of its shareholders or creditors; and all payments
of money to either, made after the commission of an act
of insolvency, or in contemplation thereof, made with a
view to prevent the application of its assets in the manner prescribed by this chapter, or with a view to the preference of one creditor to another, except in payment of
its .circulating notes, shall be utterly null and void; and
no attachment, injunction or execution, shall be issued
against such association or its property before final judgment in any suit, action, or proceeding, in any State,
county, or municipal court.
USE OF THE TITLE "NATIONAL."

193. Sec. 5243.—All banks not organized and transl^i]
acting business under the national currency laws, or under gc. 3^17 stat.
this -Title, and all persons or corporations doing the business of bankers, brokers, or savings institutions, except
savings banks authorized by Congress to use the word
"national" as a part of their corporate name, are prohibited
from using the word "national" as a portion of the name
or title of such bank, corporation, firm, ot- partnership;
and any violation of this prohibition committed after the
third day of September, eighteen hundred and seventythree, shall subject the party chargeable therewith to a
penalty of fifty dollars for each day during which it is
permitted or repeated.




CHAPTER

VI.

ACTS OF A GENERAL NATURE AND SECTIONS OF THE REVISED STATUTES, HOT
INCLUDED IN THE NATIONAL BANK ACT, AFFECTING NATIONAL BANKS.
194. District attorney to conduct suits 199-209. Tax on State Bank circulation.
when United States is a party. 210-211. Tax on United States and na"
tional bank notes.
195. Jurisdiction of circuit court to
212.
Restrictions on notes less
enjoin Comptroller.
than one dollar.
196. Where such proceedings must be
213-223. Legal tender.
brought.
197. Sealed certificates of Comptroller 224-229. Government depositaries.
competent evidence.
230-239. Forgeries, frauds, etc.
198. Certified copy of organization 1 240-253. Currency act March 14, 1900.
certificate as evidence.
j 254-257. Act March 4, 1907.
A L L SUITS U N D E R B A N K I N G L A W I N W H I C H
THE
U N I T E D STATES OR A N Y O F I T S OFFICERS OR
AGENTS A R E P A R T I E S TO B E C O N D U C T E D BY
DISTRICT A T T O R N E Y S U N D E R T H E SUPERV I S I O N OF T H E SOLICITOR OF T H E TREASURY.

lwa? Fc!b* I ;

194

* S e c - 380.—All suits and proceedings arising out
the provisions of law governing national banking assoAct June 3, ciations, in which the United States or any of its officers
sfcS6;i3Sut: o r a £ e n t s shall be parties, shall be conducted by the disL./ lie.
' trict attorneys of the several districts under the direction
and supervision of the Solicitor of the Treasury.

s^c. ES^ia Stat! of

NOTE.—See paragraph 146 Federal Reserve Act. The United
States Supreme Couft decided in the case of Gibson v. Peters.
(150 U. S., 342) that a district attorney could not receive any
compensation for services in conducting a suit arising out of the
provisions of the national banking laws in which the United
States or any of its officers or agents are parties.
JURISDICTION OF CIRCUIT
COMPTROLLER.

COURTS

TO

ENJOIN

1864?* Iuni063:

Sec. 629 [as amended 1875].—The circuit courts
shall have original jurisdiction of all suits brought by
11i* ' 1 any banking association established in the district for
is^?4^^*; ai8 which the court is held, under the provisions of Title
stat L., AS. "THE NATIONAL BANKS/' to enjoin the 'Comptroller of
the Currency, or anv receiver acting under his direction,
as provided by said Title.
NOTE.—Proceedings to enjoin Comptroller authorized by section 5237.
Act June

W H E R E

SIJCH

P R O C E E D I N G S M U S T B E BROUGHT.

mm? c u n m 196. Sec. 736.—All proceedings bv anv national banks S L.fiis! i n ? association to enjoin the Comptroller of the Currency,
us' ' under the provisions of any law relating to national banking
associations, shall be had in the district where such association is located.
170




ACTS OF A GENERAL NATURE.

171

S E A L E D CERTIFICATES OF COMPTROLLER COMPET E N T EVIDENCE.

197. Sec. 884.—Every certificate, assignment, and coil- ls ^ ct June10^*
veyance executed by the Comptroller of the Currency, in sec/2; 13 Stat!
m
pursuance of law, and sealed with his seal of office, shall
be received in evidence in alt places and courts; and all
copies of papers in his office, certified by him and authenticated by the said seal, shall in all cases be evidence
equally with the originals. An impression of such seal
directly on the paper shall be as valid as if made on wax
or wafer.
CERTIFIED COPY OF ORGANIZATION
AS EVIDENCE.

CERTIFICATE

198. Sec. 885.—Copies of the organization certificate of 18^ct Jttne10jjany national banking association duly certified by the sec/6; ih stat!
Comptroller of the Currency, and authenticated by his L-' 10L
seal of office, shall be evidence in all courts and places
within the jurisdiction of the United States of the existence of the association, and of every matter which could
be proved by the production of the original certificate.
T A X ON STATE B A N K CIRCULATION.

199. 3408. Tax on circulation.
200. 3411. Circulation; when exempted
from tax.
201. 3412, 3413. Superseded by act
February 8, 1875.
202. Act February 8, 1875. Tax on circulation of banks other than
national.
203. Act February 8, 1875. Tax on
notes of State banks, municipal corporations, etc.

204. Act-February 8, 1875. Banks' returns, payment of tax, penalties.
205. 3414. Semiannual return by banks.
206. 3415. Failure to make return.
Commissioner to estimate.
207. 3416. State banks converted into
national banks.
Returns;
how made.
208. 3417. Tax provisions restricted.
209. Act March 1, 1879. Taxes on insolvent banks.

T A X ON CIRCULATION.

199. ,Sec. 3408.—There shall be levied, collected and 1864, sec. 110;
Act June so,
. ,
. . .
paid, as hereafter provided.
13 stat. L.,
First. * * *
^ActJuIylS,
Second. * * *
Third. A tax of one-twelfth of one per centum each 137, 146/
month upon the average amount of circulation issued by
any bank, association, corporation, company or person, in- p 5 'stat/ L.;
eluding as circulation all certified checks and all notes and
other abligations calculated or intended to circulate or to
be used as money, but not including that in the vault of
the bank, or redeemed and on deposit for said bank; and
an additional tax of one-sixth of one per centum each
month upon the average amount of such circulation, issued as aforesaid, beyond the amount of ninety per centum
of the capital of any such bank, association, corporation,
company, or person.
In the case of banks with branches, the tax herein provided shall be assessed upon the circulation of each branch




ACTS OF A GENERAL NATURE. 172

172

severally, and the amount of capital of each branch shall
be considered to be the amount allotted to it.
NOTE.—The first and second clauses in this section related to
taxes on deposits and capital stock and were repealed by act of
March 3, 1883.
CIRCULATION W H E N E X E M P T E D FROM TAX.

Act Mar. 3, 200. Sec. 3411—Whenever the outstanding circulation
secf 14; 13 stat! of any bank, association, corporation, company, or person
L./ 486. ^ IS reduced to an amount not exceeding five per centum of
1866?* cuyi84!the chartered or declared capital existing at the time the
l.c* K61.4 Stat" same was issued, said circulation shall be free from taxation; and whenever any bank which has ceased to issue
notes for circulation deposits in the Treasury of the United
States, in lawful money, the amount of its outstanding
circulation, to be redeemed at par, under such regulations
as the Secretary of the Treasury shall prescribe, it shall
be exempt from any tax upon such circulation.
201. Sees. 3412, 3413.
Superseded by act February 8, 1875.
TAX ON CIRCULATION
N A T I O N A L BANKS.

Act Feb. g,

OF BANKS OTHER THAN
ACT F E B R U A R Y 8, 1875.

202. Sec. 19.—That every person, firm, association,
other than national-bank associations, and every corporation, State bank, or State banking association shall pay a
tax of ten per centum on the amount of their own notes
used for circulation and paid out by them.

2Ic5"19: 18 STIT!

L.. 3II

T A X ON N O T E S OF S T A T E BANKS, M U N I C I P A L CORPORATIONS, ETC., U S E D AS CIRCULATION A N D
P A I D O U T BY BANKS. ACT F E B R U A R Y 8, 1875.

Act Feb. St

203. Sec. 20.—That every such person, firm, associacorporation, State bank, or State banking association,
a n d also every national banking association, shall pay a
like tax of ten per centum on the amount of notes of any
person, firm, association other than a national banking association, or of any corporation, State bank, or State banking association, or of any town, city, or municipal corporation, used for circulation and paid out by them.

secf'20; is Stat! tion,

L*. 3U-

BANKS' R E T U R N S ; P A Y M E N T O F T A X
ACT F E B R U A R Y 8, 1875.
Act Feb.

if5,stit.c*
311

-

PENALTIES.

8,

204. Sec. 21.—That the amount of such circulating
notes, and of the tax due thereon, shall be* returned, and
' the tax paid at the same time, and in the same manner,
and with like penalties for failure to return and pay the
same, as provided by law for the return and payment of
taxes on deposits, capital, and circulation imposed by the
existing provisions of internal-revenue law.
S E M I - A N N U A L R E T U R N BY B A N K S .
205.' S e c . 3414.—A true and complete

return of the
-no; 13 monthly amount of circulation [of deposits, and of capi^Act^uif 13,taQ> a s a fo r es a id, and of the monthly amount of notes of
1866, c. 1&! persons, town, city, or municipal corporations, State
s
c wU
banks, or State banking associations paid out as aforesaid
Act June 30.




ACTS OF A GENERAL NATURE.

173

for the previous six months, shall be made and rendered in Act Mar. 26,
duplicate on the first day of December and the first day If i5°stat.u
of June, by each of such banks, associations, corporations, * Act June 6>
companies, or persons, with a declaration annexed thereto, lsra, c. 315;
under the oath of such person, or of the president or cashier
l i 1 7 Stat '
of such bank, association, corporation, or company, in
such form and manner as may be prescribed by the Com- sec/5; 1 stat!
7
missioner of Internal Revenue, that the same contains a 1 "' m '
true and faithful statement of) the amounts subject to
tax, as aforesaid; and one copy shall be transmitted to the
collector of the district in which any such bank, association,
corporation, or company is situated, or in which such
person has his place of business, and one copy to the Commissioner of Internal Revenue.
NOTE.—Italicized words repealed by act March 3, 1883. "That
the taxes herein specified imposed by the laws now in force be,
and the same are hereby, repealed, as hereinafter provided, namely: On capital and deposits of banks, bankers, and national
banking associations, except such taxes as are now due and
payable."
F A I L U R E TO MAKE RETURN.
ESTIMATE.
206. Sec. 3415.—In default of

COMMISSIONER

TO

the returns provided in Act June 30.
the preceeding section, the amount of circulation [deposit sec.' 110; 17ik
capital], and notes of persons, town, city, and municipal St j£ t
corporations, State banks, and State banking associations 1 6 c. 184,
86
paid out, as aforesaid, shall be estimated by the Commis- LTuk tat*
sioner of Internal Revenue, upon the best information he
^ec.
can obtain. And for any refusal or neglect to make return s?c,.'2^17 stat!
and payment any such bank, association, corporation, com- ''
pany, or person so in default shall pay a penalty of two
hundred dollars, besides the additional penalty and forfeitures provided in other cases.
NOTE.—See note under preceding section.
S T A T E BANKS CONVERTED I N T O N A T I O N A L BANKS;
RETURNS, H O W MADE.

207. Sec. 3416.—Whenever any State bank or banking 1&Act Mar.^
association has been converted into a national banking sec.'14;i3 stat!
association, and such national banking association has as- L'Acf%iy 13,
sumed the liabilities of such State bank or banking association, including the redemption of its bills, by any agree- L.,*I«.
ment or understanding whatever with the representatives
of such State bank or banking association, such national
banking association shall be held to make the required return and payment on the circulation outstanding, so long as
such circulation shall exceed five per centum of the capital
before such conversion of such State bank or banking
association.
NOTE.—See paragraph 52 Federal Reserve Act.
T A X P R O V I S I O N S RESTRICTED.

Act June

^

208. Sec. 3417 [as amended 1875].—The provision of 1864, ^ vti
this chapter relating to the tax on the [deposits, capitallut. L.f '278.




ACTS OF A GENERAL NATURE. 174

174

1866? £lyi84 a n d ] circulation of banks and to their returns, except as
sec. 9; 14 stat! contained in sections thirty-four hundred and ten, thirtyU
kct Feb. 18, four hundred and eleven, thirty-four hundred and twelve,
st?t L
thirty-four hundred and thirteen, and thirty-four hundred
" ' and sixteen, and such parts of sections thirty-four hundred
and fourteen and thirty-four hundred and fifteen as relate
to the tax of ten per centum on certain notes, shall not
apply to associations which are taxed under and by virtue
of Title "NATIONAL BANKS"
NOTE.—See note tinder section 3414 stating that taxes on deposits and capital were repealed by act March 3, 1883.
T A X E S ON I N S O L V E N T BANKS.

ACT MARCH 1, 1879.

Act Mar. i, 209. Sec. 22.—That whenever and after any bank has
sfcf'22 ;*20 stat! ceased to do business by reason of insolvency or hankie, 351.
ruptcy, no tax shall be assessed or collected, or paid into
the Treasury of the United States, on account of such
bank, which shall diminish the assets thereof necessary
for the full payment of all its depositors; and such tax
shall be abated from such national banks as are found by
the Comptroller of the Currency to be insolvent; and the
Commissioner of Internal Revenue, when the facts shall
so appear to him, authorized to remit so much of said
tax against insolvent State and savings banks as shall be
found to affect the claims of their depositors.
NOTE.—Part of section omitted superseded by act of March 3,
1883.
TAX ON UNITED STATES AND NATIONAL-BANK NOTES.
210. 3701. Obligations of the United
States exempt from taxation.

211. Act August 13, 1894. Nationalbank notes and notes and
certificates of the United
States circulating as currency subject to State taxation.

OBLIGATIONS OF U N I T E D S T A T E S E X E M P T FROM
TAXATION.

Act Feb. 25, 210. Sec. 3701.—All stocks, bonds, Treasury notes, and
S ; 5 s u t ! o t h e r obligations of the United States shall be exempt
b
Mir3*!: 1863* *rom taxation
y or under State or municipal or local auc. 73,L acc. 1; thority.
U

12 S 17m 710. 1 ;Act Mar. 3, 1864, c. 17, sec 1; 13 Stat. L„ 13. Act June 30,
L
t>
J3 s05 L., 218. Act13
Jan. 28, 1S65, c. 22, sec. 1; 13 Stat.
L
3
".,«25*
* I ' c- 71* sec* 2>
Stat. L., 461>. Act July 14, 1870,
c. 266, sec. 1; 16 but L.f 272.

N A T I O N A L - B A N K N O T E S A N D N O T E S A N D CERTIFICATES O F T H E U N I T E D S T A T E S CIRCULATING
AS CURRENCY SUBJECT TO S T A T E TAXATION.
ACT A U G U S T 13, 1894.
Act Aug. 13
1894, sec. 1; £
Stat L., 278.

211. Sec. 1.—That circulating notes of national banking associations and United States legal-tender notes and
other notes and certificates of the United States, payable
on deman4 and circulating or intended to circulate as
currency, and gold, silver, or other coin shall be subject
to taxation as money on hand or on deposit under the




175

ACTS OF A GENERAL NATURE.

laws of any State or Territory: Provided, That any such
taxation shall be exercised in the same manner and at
the same rate that any such State or Territory shall tax
money or currency circulating as money within its jurisdiction.
SEC. 2. That the provisions of this act shall not be
deemed or held to change existing laws in respect of the 28 'stat. L.|
taxation of 'national banking associations.
R E S T R I C T I O N S ON N O T E S L E S S T H A N O N E

DOLLAR.

212. Sec. 3583.—No person shall make, issue, circulate Act July 17,
or pay out any note, check, memorandum, token, or other sec/2; l\ stat!
obligation for a less sum than one dollar, intended to cir- L*» 592culate as money or to be received or used in lieu of lawful money of the United States; and every person so offending shall be fined not more than five hundred dollars
or imprisoned not more than six months, or both, at the
discretion of the court.
LEGAL TENDER.

213. 3584. Foreign coins.
214. 3585. Gold coin of th'e United
States.
215. 3586. Superseded by act February
28, 1878, and act June 9,
1879.
216. Act February 28, 1878. Authorizing coinage of standard silver dollars and making them
legal tender.

217. Act June 9, 1879. Subsidiary silver coins.
218. 3587. Minor coins.
219. 3588. United States notes.
220. 3589. Demand Treasury notes.
221. 3590. Interest-bearing notes.
222. 5182. See section 5182 under national-bank act.
223. Act July 12, 1882. Gold certificates.

F O R E I G N COINS.

213. Sec. 3584.—No foreign gold or silver coins shall igAct Feb. a,
be a legal tender in payment of debts.
sec.'3; n Statl
L., 163.

GOLD COIN OF T H E U N I T E D

STATES.

214. Sec. 3585.—The gold coins of the United States
shall be a legal tender in all payments at their nominal
value when not below the standard weight and limit of
tolerance provided by law for the single piece, and when
reduced in weight below such standard and tolerance, shall
be a legal tender at valuation in proportion to their actual
weight.
215.

Stat

-

'

Sec. 3586.—

Superseded by act February 28, 1878,. and act June 9, 1879.
A U T H O R I Z I N G COINAGE O F S T A N D A R D
SILVER
D O L L A R S A N D MAKING T H E M LEGAL TENDERACT O F F E B R U A R Y 28, 1878.
uioi
—*
~
. ~
12575, C.
216. Sec. 1.—That there shall be coined at the 'several ^

g
J
mints of the United States, silver dollars of the weight of SEC.1: ~ Stat.
JO
412y 2 grains Troy of standard silver * * * ; which - '
coins together with all silver dollars heretofore coined by
the United States, of like weight and fineness, shall be a



ACTS OF A GENERAL NATURE. 176

176

legal tender, at their nominal value, for all debts and
dues, public and private, except where otherwise expressly
stipulated in the contract.
S U B S I D I A R Y S I L V E R COINS.

A C T O F J U N E 9, 1879.

Act Jww^ 217. Sec. 3.—That the present silver coins of the United
see. 3J a Stat! States of smaller denominations than one dollar shall hereL 8
" "
after be a legal tender in all sums not exceeding ten dollars in full payment of all dues public and private.
M I N O R COINS.

Act Feb. 12, 218. Sec. 3587.—The minor coins of the United States
Saw •17 Stat shall be a legal tender, at their nominal value, for any
l , 427.
amount not exceeding twenty-five cents in any one payment.
UNITED STATES NOTES.

1862? Fc?b- i ; 219. Sec. 3588.—United States notes shall be lawful
Lc*s&12 Stat* money, and a legal tender in payment of all debts, public
" c juiy nf and private, within the United States, except for duties
At
sec?'i* 12 Stat! on imports and interest on the public debt.
L., 532. Res. Jan. 17, 1863, No. 9, 12 Stat. L., 823. Act Mar. 3, 1SG3, c. 73,
sec. 3; 12 Stat. L„ 711.
DEMAND TREASURY NOTES.

ls&TJijs 11 220. Sec. 3589.—Demand Treasurv notes authorized by
UU stat. L . , a c t o f j u ] y I7F 1 8 6 1 y c h a pter 5, and the act of Febru^Act^Feb. l^ary 12, 1862, chapter 20, shall be lawful money and a legal
stat,
338. tender in like manner as United States notes.
Act Feb. 25, 1862, c. 33, sec. 1; 12 Stat. L., 345. Act Mar. 17, 1802, c. 45, sec. 2;
12 Stat. L., 370.
INTEREST-BEARING

NOTES.

1863* ^ af, 73 2 2 1 - S e c - 3590.—Treasury notes issued under the au«ec.*2; 12 Stat! thority of the acts of March 3, 1863, chapter 73, and June
AcUune 30,30, 1864, chapter 172, shall b e legal tender to the same
sea'2; 13 S t a t ! e x t e n * as United States notes, for their face value, excludl/218.
'ing interest: Provided, That Treasury notes issued under
the act last named shall not be a legal tender in p a y m e n t
or redemption of any notes issued by any bank, banking
association, or banker, calculated and intended to circulate as money.
F O R W H A T D E M A N D S N A T I O N A L - B A N K N O T E S MAY
BE RECEIVED.

222.

Sec. 5182.—

NOTE.—See section 5182, National-Bank
ante.
G O L D CERTIFICATES.

ACT

Act,

paragraph 88.

J U L Y 12, 1882.

223.^ Sec. 12.—That the Secretary of the Treasury is.
22 'stat.* l.; authorized and directed to receive deposits of gold coin
with the Treasurer or assistant treasurers of the United
States in sums of not less than twenty dollars, and to
issue certificates therefor in denominations of not less
than twenty dollars each, corresponding with the denominations of United States notes. The coin deposited for or




ACTS OF A GENERAL NATURE.

177

representing the certificates of deposit shall be retained
in the Treasury for the payment of the same on demand.
Said certificates shall be receivable for customs, taxes, and
all public dues, and when so received mav be reissued ; and such certificates, as also silver certificates, when
held by any national banking association, shall be counted
as part^ of its lawful reserve; and no national banking
association shall be a member of any clearing house in
which such certificates shall not be receivable in the settlement of clearing-house balances: Provided, That the Secretary of the Treasury shall suspend the issue of such
gold certificates whenever the amount of gold coin and
gold bullion in the Treasury reserved for the redemption of United States notes falls below one hundred millions of dollars; and the provisions of section fifty-two
hundred and seven of the Revised Statutes shall be appicable to the certificates herein authorized and directed to
be issued.
NOTE.—See section 6 of the Currency Act of March 14, 1900,
as amended March 4, 1907, post, paragraph 245, for additional
provisions relating to gold certificates. Gold and silver certificates are not legal tender, but are receivable for all public dues.

GOVERNMENT DEPOSITARIES.

224. 3620. Duty of disbursing officers,
225. 3847. Provisions for deposits by
certain postmasters.
226. 4046. Penalty for misapplication
of money-order funds.
227. 5153. See section 5153 under national-bank act.

228.' 5488. Penalty for unauthorized
deposit of public money.
229. 5497. Penalty for unauthorized
receipt or use of public
money.

D U T Y OF DISBURSING OFFICERS.

224. Sec. 3620 [as amended 1877].—It shall be the ^ t jun^M.
duty of every disbursing officer having any public money sec. i: 14 stat!
intrusted to him for disbursement to deposit the same with Act Feb. 27.
the Treasurer or some one of the assistant treasurers of
19 Stat'
the United States, and to draw for the same only as it L./ 249.
may be required for payments to be made by him in pursuance of law; and draw for the same only in favor of
the persons to whom payment is made, and all transfers
from the Treasurer of the United States to a disbursing
officer shall be by draft or warrant on the Treasury or an
assistant treasurer of the United States. In places, however, where there is no Treasurer or assistant treasurer, the
Secretary of the Treasury may, when he deems inessential
to the public interest, specially authorize in writing the
deposit of such public money in any other public depository,
or, in writing, authorize the same to be kept in any other
manner and under such rules and regulations as he may
deem most safe and effectual to facilitate the payments to
public creditors,




ACTS OF A GENERAL NATURE. 178

Act Mar. 3,
iP'staL
604

L?;

*

PROVISIONS FOR
MASTERS.

DEPOSITS

BY

CERTAIN

POST-

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

226. Sec. 4046.—Every postmaster, assistant, clerk, or
other person employed in or connected with the business
era
St
Act L Ma? 3 *3 o r °P tions of any money-order office who converts to
1873, c. 272- his own use, in any way whatever, or loans, or deposits
6 4 Stat*
0.
in any bank, except as authorized by this Title * or exchanges for other funds, any portion of the money-order
funds, shall be deemed guilty of embezzlement, and any
such person, as well as-every other person advising or
participating therein, shall, for every such offense, be imprisoned for not less than six months nor more than ten
years, and be fined in a sum equal to the amount embezzled; and any failure to pay over or produce any moneyorder funds intrusted to such person shall be taken to be
prima facie evidence of embezzlement; and upon the trial
of any indictment against any person for such embezzlement it shall be prima facie evidence of a balance against
him to produce a transcript from the money-order account books of the Sixth Auditor. But nothing herein
contained shall be construed to prohibit any postmaster
depositing, under the direction of the Postmaster-General, in a national bank designated by the Secretary of the
Treasury for that purpose, to his own credit as postmaster, any money-order or other funds in his charge, nor
prevent his negotiating drafts or other evidences of debt
through such bank, or through United States disbursing
office, or otherwise, when instructed or required to do so
by the Postmaster-General for the purpose of remitting
surplus money-order funds from one post-office to another, to be used in payment of money-orders. Disbursing officers of the United States shall issue, under regulations to be prescribed by the Secretary of the Treasury,
duplicates of lost checks drawn by them in favor of any
postmaster on account of money-order or other public
funds received by them from some other postmaster.
Act June

s,

122;

* "This Title" The Postal Service.



ACTS OF A GENERAL NATURE.

179

N A T I O N A L BANKING ASSOCIATIONS TO B E DEPOSITARIES OF PUBLIC MONEYS.

227. Sec. 5153 [as amended 1907],—
NOTE,—See section 5153 under "National-Bank Act."'
P E N A L T Y F O R UNAUTHORIZED D E P O S I T O t PUBLIC
MONEY.

228. Sec. 5488.—Every disbursing officer of the United Act June w,
States who deposits any public money intrusted to him in S ; ll s S
any place or in any manner, except as authorized by law, 64*
or converts to his own use in any way whatever, or loans
with or without interest, or for any purpose not prescribed by law withdraws from the Treasurer or any assistant treasurer, or any authorized depositary, or for any
purpose not prescribed by law transfers or applies any
portion of the public money intrusted to him, is, in every
such act, deemed guilty of an embezzlement of the money
so deposited, converted, loaned, withdrawn, transferred,
or applied; and shall be punished by imprisonment with
hard labor for a term not less than one year nor more
than ten years, or by a fine of not more than the amount
embezzled or less than one thousand dollars, or by both
such fine and imprisonment.
NOTE.—Sections 5489 to 5496 do not refer to national banks.
P E N A L T Y FOR U N A U T H O R I Z E D RECEIPT OR USE OF
PUBLIC MONEY.

229. Sec. 5497 [as amended 1879].—Every banker,
J™*^
broker, or other person not an authorized depositary of jec/jy u Stat,
public moneys, who knowingly receives from any disburs- Act Feb. 3.
ing officer, or collector of internal revenue, or other agent ^ L./m 20
of the United States, any public money on deposit, or by
way of loan or accommodation, with or without interest,
or otherwise than in payment of a debt against the United
States, or who uses, transfers, converts, appropriates, or
applies any portion of the public money for any purpose
not prescribed by law, and every president, cashier, teller,
director, or other officer of any bank or banking association, who violates any of the provisions of this section, is
guilty of an act of embezzlement of the public money so
deposited, loaned, transferred, used, converted, appropriated, or applied, and shall be punished as prescribed in section fifty-four hundred and eighty-eight. * * *
NOTE.—For duties and liabilities of depositaries see note under
sec. 5153, paragraph 50, ante.
FORGERIES, FRAUDS, ETC.

230. 5413. Obligations of the United
States defined.
231. 5441. Forging or counterfeiting
United States securities.
232. 5415. Counterfeiting national-bank
notes.
233. 5430. Using plates to print notes
without authority.
234. 5431. Penalty for passing counterfeit circulation.
235. 5432. Penalty for taking unauthorized impression of tools.



236/ 5433. Penalty for having such impressions.
237. 5434. Penalty for dealing in counterfeit circulation.
238. 5437. Issuing circulation of expired associations; penalty
therefor.
239. Act June 30, 1876. Fraudulent
notes to be so marked by
United States officers and
officers of national banks.

ACTS OF A GENERAL NATURE. 180

180

OBLIGATIONS OF T H E UNITED STATES

DEFINED.

Act June so,
sec^ 1 * 1 Stat*
3*3

230. Sec. 5413 [as amended 1875, 1877].—The words
'obligation or other security of the United States'7 shall
!!.? 222.
' be held to mean all bonds, certificates of indebtedness,
lsfsf/s); is national-bank currency, coupons, United States notes,
b
Act^eb^ir, Treasury notes, fractional notes, certificates of deposit,
187;! c. 69; i3 bills, checks, or drafts for money drawn by or upon auEtat. l., 253. t h o r i z e d 0 f f i c e r s of the United States, stamps and other representatives of value, of! whatever denomination, which
have been or may be issued under any act of Congress.
FORGING
OR COUNTERFEITING
SECURITIES.

UNITED

STATES

Act June 30,
231. Sec. 5414.—Every person who, with intent to delffii,105*? S172, fraud, falsely makes, forges, counterfeits, or alters any
L
»
obligation or security of the United States shall be punished by* a fine of not more than five thousand dollars
and by imprisonment at hard labor not more than fifteen
years.
COUNTERFEITING

NATIONAL-BANK

NOTES.

232. Sec. 5415.—Every persons who falsely makes,
forges, or counterfeits, or causes or procures to be made,
^Acfjune 3, forged, or counterfeited, or willingly aids or assists in
sfc459-ci3Stat'
making, forging, or counterfeiting, any note in
3
L.? ill
* imitation of, or purporting to be in imitation of, the circulating notes issued by any banking association now or
hereafter authorized and acting under the laws of the
United States; or who passes, utters, or publishes, or attempts to pass, utter, or publish, any false, forged, or
counterfeited note purporting to be issued by any such
association doing a banking business, knowing the same
to be falsely made, forged, or counterfeited, or who
falsely alters, or causes or procures to be falsely altered,
or willingly aids or assists in falsely altering any such
circulating notes, or passes, utters, or publishes, or attempts to pass, utter, or publish as true, any falsely
altered or spurious circulating note issue, or purporting
to have been issued, by any such banking association, knowing the same to be falsely altered or spurious, shall be
imprisoned at hard labor not less than five years nor more
than fifteen years, and fined not more than one thousand
dollars.
ig Act

Feb. 25,
sec/57; 12 stat!

NOTEL—Sections 5416 t o
national bank circulation.
USING
PLATES
TO
AUTHORITY.

1864?4 Jc"nei72,

233

5429,

inclusive,

PRINT

do

NOTES

not

refer

to

WITHOUT

* S e c - 5430.—Every person having control, custody,
sec. i i ; 13 Stat! or possession of any plate, or any part thereof, from
which has been printed, or which may be prepared by
*
direction of the Secretarv of the Treasury for the purpose of printing, any obligation or other security of the
United States, who uses such plate, or knowingly suffers
the same to be used for. the purpose of printing any such
or similar obligation, or other security, or any part



ACTS OF A GENERAL NATURE.

181

thereof, except as may be printed for the use of the United
States by order of the proper officer thereof; and every
person who engraves, or causes or procures to be engraved, or assists in engraving, any plate in the likeness
of any plate designed for the printing of such obligation
or other security, or who sells any such plate, or who
brings into the United States from any foreign place
any such plate, except under the direction of the Secretary of the Treasury or other proper officer, or with any
other intent, in either case, than that such plate be used
for the printing of the obligations or other securities of
the United States; or who has in his control, custody, or
possession any metallic plate engraved after the similitude of any plate from which, any such obligation or other
security has been printed, with intent to use such plate, or
sutfer the same to be used in forging or counterfeiting
any such obligation or other security, or any part thereof;
or who has in his possession or custody, except under
authority from the Secretary of the Treasury or other
proper officer, any obligation or other security, engraved
and printed after the similitude of any obligation or
other security issued under the authority of the United
States, with intent to sell or otherwise use the same; and
every person who prints, photographs, or in any other
manner makes or executes, or causes to be printed photographed,-made, or executed, or aids in printing, photographing, making, or executing any engraving, photograph, print, or impression in the likeness of any such
obligation or other security, or any part thereof, or who
sells any such engraving, protograph, print, or impression, except to the United States, or who brings into the
United States from any foreign place any such engraving, photograph, print, or impression, except by direction of some proper officer of the United States, or who
has or retains in his control or possession, after a distinctive paper has 'been adopted by the Secretary of the
Treasury for the obligations and other securities of the
United States, any similar paper adapted to the making
of any such obligation or other security, except under the
authority of the Secretary of the Treasury or some other
proper officer of the United States, shall be punished by a
fine of not more than five thousand dollars, or by imprisonment at hard labor not more than fifteen years, or by both.
PENALTY FOR
TION.

PASSING

COUNTERFEIT CIRCULA,
.
,
,

234. Sec. 5431.—Every person who, with intent to de- Act June 30,
fraud, passes, utters, publishes, or sells, or attempts t o ^ o - a s S :
pass, utter, publish, or sell, or brings into the United States L, 221.
with intent to pass, publish, utter, or sell, or keeps in
possession or conceals, with like intent, any falsely made,
forged, counterfeited, or altered obligation, or other security of the United States, shall be punished by a fine of not
more than five thousand dollars and by imprisonment at
hard labor not more than fifteen years.




ACTS OF A GENERAL NATURE. 182

182

Ct

eb,

P E N A L T Y FOR TAKING
S I O N OF TOOLS.
235

UNAUTHORIZED

IMPRES-

Sec

iS67 c 26
*
- 5432.—Every person who, without authority
14 Stat! from the United States, takes, procures, or makes, upon
L m
*'
lead, foil, wax, plaster, paper, or any other substance or
material, an impression, stamp, or imprint of, from, or
by the use of, any bedplate, bedpiece, die, roll, plate, seal,
type, or other tool, implement, instrument, or thing used
or fitted or intended to be used, in printing, stamping, or
impressing, or in making other tools, implements, instruments, or things, to be used, or fitted or intended to be
used, in printing, stamping, or impressing any kind or
description of obligation or other security of the United
States, now authorized or hereafter to be authorized by
the United States, or circulating note or evidence of debt
of any banking association under the laws thereof, shallbe punished by imprisonment at hard labor not more than
ten years, or by a fine of not more than five thousand
dollars, or both.

sec.'4;

vm? ccb*26;

P E N A L T Y FOR HAVING SUCH IMRPESSIONS.
236

' Se( T 5433 -—Every person who, with intent to desec/5; 14 Stat. fraud, has in his possession, keeping, custody, or control,
L.» 381
without authority from the United States, any imprint,
stamp, or impression, taken or made upon any substance
or material whatsoever, of any tool, implement, instrument, or thing used, or fitted, or intended to be used for
any of the purposes mentioned in the preceding section;
or who, with intent to defraud, sells, gives, or delivers any
such imprint, stamp, or impression to any other person,
shall be punished by imprisonment at hard labor not more
than ten years, or by a fine of not more than five thousand
dollars.
P E N A L T Y FOR D E A L I N G I N C O U N T E R F E I T
LATION.

CIRCU-

1867?* c.cb*26; 2 3 7 ' S e c ' 5434 -—Every person who buys, sells, exsec. 14 Stat! changes, transfers, receives, or delivers any false, forged,
L m
' '
counterfeited, or altered obligation or other security of
the United States, or circulating note of any banking association organized or acting under the laws thereof,
which has been or may hereafter be issued by virtue of
any act of Congress, with the intent that the same be
passed, published, or used as true and genuine, shall be
imprisoned at hard labor not more than ten years, or
fined not more than five thousand dollars, or both.
NOTE.—Sections 5435 and 5436 do not refer to national-bank
circulation.
I S S U I N G CIRCULATION O F E X P I R E D ASSOCIATIONS,
PENALTY THEREFOR.

1838°* £ulyiss 2 3 8 * S e c * 5 4 3 7 *— I n a11 c a s e s w h e r e t h e charter of any
sec/11*5 stat! corporation which has been or may be created by act of
l., 297.
Congress has expired or may hereafter expire, if any director, officer, or agent of the corporation, or any trustee
thereof, or any agent of such trustee, or any person having




ACTS OF A GENERAL NATURE.

183

in his possession or under his control the property of the
corporation for the purpose of paying or redeeming its
notes and obligations, knowingly issues, reissues, or utters
as money, or in any other way knowingly puts in circulation^ any bill, note, check, draft, or other security purporting to have been made by any such corporation whose
charter has expired, or by any officer thereof, or purporti n g ^ have been made under authority derived therefrom,
or if any person knowingly aids in any such act, he shall
be punished by a fine of not more than ten thousand dollars, or by imprisonment not less than one year nor more
than five years, or by both such fine and imprisonment But
nothing herein shall be construed to make it unlawful for
any person, not being such director, officer, or agent of the
corporation, or any trustee thereof, or any agent of such
trustee, or any person having in his possession or under
his control the property of the corporation for the purpose
hereinbefore set forth, who has received or may hereafter
receive such bill, note, check, draft, or other security,
bona fide and in the ordinary transactions of business to
utter as money and otherwise circulate the same.
F R A U D U L E N T NOTES TO BE SO MARKED BY UNITED
STATES OFFICERS A N D OFFICERS OF NATIONAL
BANKS. ACT JUNE 30, 1876.

239. Sec. 5.—That all United States "officers charged im* se£e f ;
with the receipt or disbursement of public moneys, and 19 S t a t L->
all officers of national banks, shall stamp or write in plain
letters the word "counterfeit," "altered," or "worthless/'
upon all fraudulent notes issued in the form of and intended to circulate as money which shall be presented at
their places of business; and if such officer shall wrongfully stamp any genuine note of the United States, or of
the national banks, they shall, upon presentation, redeem
such notes at the face value thereof.
CURRENCY A C T , APPROVED MARCH 1 4 , 1 9 0 0 .

240. Section 1. Gold dollar declared to
be standard unit of value.
241. Sec. 2. Secretary of Treasury to
set apart and maintain a
gold reserve of one hundred
and fifty million dollars in
gold coin and bullion for the
redemption of United States
notes and notes issued under
the act of July 14, 1890.
May sell bonds to replenish
reserve.
242. Sec. 3. Silver dollar to remain legal tender.
243. Sec. 4. Divisions of issue and redemption established.
244. Sec. 5. When silver dollars are
coined from bullion purchased under act of July 14.
1890, and equal amount of
Treasury notes to be canceled and silver certificates
issued.



245. Sec. 6. Issue of gold certificates.
Issue of gold certificates payable to order.
246. Sec. 7. Issue of silver certificates.
247. Sec. 8. Subsidiary silver coinage.
248. Sec. 9. Recoinage of uncurrent
subsidiary silver coin.
249. Sec. 10. Amends section 5138, Revised Statutes. (See said
section under national-bank
act.)
• . ,
250. Sec. 11. Refunding of United
States bonds.
251. Sec. 12. This section is inserted
in national-bank act following section 5171, which it
supersedes.
252. Sec. 13. See sec. 214, Revised
Statutes, under national
bank act.
253. Sec. J4. International bimetallism.

ACTS OF A GENERAL NATURE. 184

An Act To define and fix the standard of value, to maintain the f
parity of all forms of money issued or coined by the United
States, to refund the public debt, and for other purposes.
GOLD DOLLAR DECLARED TO B E S T A N D A R D U N I T
OF VALUE.

240
i9ooct S'' lt
* Be it enacted by the Senate and House of Repre31 &atseL.f id. sentatives of the United States of America in Congress
assembledJ That the dollar consisting of twenty-five and
eight-tenths grains of gold nine-tenths fine, as established
by section thirty-five hundred and eleven of the Revised
Statutes of the United States, shall be the standard unit
of value, and all forms of money issued or coined by the
United States shall be maintained at a parity of value
with this standard, and it shall be the duty of the Secretary of the Treasury to maintain such parity.

NOTE.—See paragraph 143 Federal Reserve Act.
SECRETARY OF T R E A S U R Y TO S E T A P A R T A N D
M A I N T A I N A GOLD R E S E R V E O F O N E H U N D R E D
A N D F I F T Y MILLION D O L L A R S I N GOLD COIN
A N D B U L L I O N FOR T H E R E D E M P T I O N OF
U N I T E D STATES N O T E S A N D N O T E S I S S U E D
U N D E R ACT OF JULY 14, 1890. MAY S E L L B O N D S
TO R E P L E N I S H RESERVE.

* S e c * 2 — T h a t United States notes, and Treasury
Ei &at? L.f 45! notes issued under the Act of July fourteenth, eighteen
hundred and ninety, when presented to the Treasury for
redemption, shall be redeemed in gold coin of the standard fixed in the first section of this Act, and in order to
secure the prompt and certain redemption of such notes
as herein provided it shall be the duty of the Secretary of
the Treasury to set apart in the Treasury a reserve fund
of one hundred and fifty million dollars in gold coin and
bullion, which f u n d shall be used for such redemption
purposes only, and whenever and as often as any of said
notes shall be redeemed from said fund it shall be the
duty of the Secretary of the Treasury to use said notes so
redeemed to restore and maintain such reserve fund in
the manner following, to wit: First, by exchanging the
notes so redeemed for any gold coin in the general fund of
the Treasury; second, by accepting deposits of gold coin
at the Treasury or at any subtreasurv in exchange for the
United States notes so redeemed; third, by procuring gold
coin by the use of said notes, in accordance with the provisions of section thirty-seven hundred of the Revised
Statutes of the United States. If the Secretary of the
Treasury is unable to restore and maintain the gold coin
in the reserve fund by the foregoing methods, and the
amount of such gold coin and bullion in said fund shall at
any time fall below- one hundred million dollars, then it
shall be his duty to restore the same to the maximum sum
of one hundred and fifty million dollars by borrowing
money on the credit of the United States, and for the
debt thus incurred to issue and sell coupon or registered
bonds of the United States, in such form as he may pre scribe, in denominations of fifty dollars or any multiple
woo* se"'

241

e



185

ACTS OF A GENERAL NATURE.

thereof, bearing interest at the rate of not exceeding three
per centum per annum, payable quarterly, such bonds to
be payable at the pleasure of the United States after one
year from the date of their issue, and to be payable, principal and interest, in gold coin of the present standard
value, and to be exempt from the payment of all taxes or
duties of the United States, as well, as from taxation in
any form by or under State, municipal, or local authority ; and the gold coin received from the sale of said bonds
shall first be covered into the general fund of the Treasury and then exchanged, in the manner hereinbefore provided, for an equal amount of the notes redeemed and
held for exchange, and the Secretary of the Treasury may,
in his discretion, use said notes in exchange for gold, or
to purchase or redeem any bonds of the United States,
or for any other lawful purpose the public interests may
require, except that they shall not be used to meet deficiencies in the current revenues. That United States notes
when redeemed in accordance with the provisions of this
section shall be reissued, but shall be held in the reserve
fund until exchanged for gold, as herein provided; and the
gold coin and bullion in the reserve fund, together with
the redeemed notes held for use as provided in this section,
shall at no time exceed the maximum sum of one hundred
and fifty million dollars.
SILVER DOLLAR TO REMAIN LEGAL TENDER.

242. Sec. 3.—That nothing contained in this Act shall ^Act Mar. u,
be construed to affect the legal-tender quality as now pro- 31 stat? l*., 4e!
vided by law of the silver dollar, or of any other money
coined or issued by the United States.
DIVISIONS OF
LISHED.

ISSUE

AND

REDEMPTION

ESTAB-

243. Sec. 4.—That there be established in the Treasury Act Mar. K
Department, as a part of the office of the Treasurer of the Jxstat?^., 4 !
G
United States, divisions to be designated and known as
the division of issue and the division of redemption, to
which shall be assigned, respectively, under such regulations as the Secretary of the Treasury may approve, all
records and accounts relating to the issue and redemption
of United States notes, gold certificates, silver certificates,
and currency certificates. There shall be transferred from
the accounts of the general fund of the Treasury of the
United States, and taken up on the books of said divisions,
respectively, accounts relating to the reserve fund for the
redemption of United States notes and Treasury notes,
the gold coin held against outstanding gold certificates, the
United States notes held against outstanding currency certificates, and the silver dollars held against outstanding silver
certificates, and each of the funds represented by these accounts shall be used for the redemption of the notes and
certificates for which they are respectively pledged, and
shall be used for no other purpose, the same being held
as trust funds.




186

ACTS OF

a general nature.

WHEN SILVER DOLLARS ARE COINED FROM BULLION PURCHASED UNDER ACT OF JULY 14, 1890,
AN EQUAL AMOUNT OF TREASURY NOTES TO
BE CANCELED AND SILVER CERTIFICATES
ISSUED.

Act Mar. H
3i°stat. s e £, 47*:

244. Sec. 5.—'That it shall be the duty of the Secretary
of the Treasury, as fast as standard silver dollars are
coined under the provisions of the Acts of July fourteenth,
eighteen hundred and ninety, and June thirteenth, eighteen
hundred and ninety-eight, from bullion purchased under
the Act of July fourteenth, eighteen hundred and ninety, to
retire and cancel an equal amount of Treasury notes whenever received into the Treasury, either by exchange in accordance with the provisions of this Act or in the ordinary
course of business, and upon the cancellation of Treasury
notes silver certificates shall be issued against the silver
dollars so coined.

ISSUE OF GOLD CERTIFICATES. ISSUE OF GOLD
CERTIFICATES PAYABLE TO ORDER.
Act Mar. 14, 245. Sec. 6 [as amended by acts of March 4, 1907 and

March 2, 1911 J.—That the Secretary of the Treasury is
mi ct slcr* i r h e r e t ) y authorized and directed to receive deposits of gold
34 'stat. * L.; coin with the Treasurer or any assistant treasurer of the
i m
United States in sums of not less than twenty dollars, and
to issue gold certificates therefor in denominations- of not
less than ten dollars, and the coin so deposited shall be retained in the Treasury and held for the payment of such
certificates on demand, and used for no other purpose. Such
certificates shall be receivable for customs, taxes, and all
public dues, and when so received may be reissued, and
when held by any national banking association may be
counted as a part of its lawful reserve: Proznded, That
whenever and so long as the gold coin and bullion held in
the reserve fund in the Treasury for the redemption of
United States notes and Treasury notes shall fall and remain below one hundred million dollars the authority to
issue certificates as herein provided shall be suspended:
And provided farther, That whenever and so long as the aggregate amount of United States notes and silver certificates
in the general fund of the Treasury shall exceed sixty million dollars the Secretary of the Treasury may, in his discretion, suspend the issue of the certificates herein provided
for: And provided further, That of the amount of such
outstanding certificates one-fourth at least shall be in denominations of fifty dollars or less: And provided further,
That the Secretary of the Treasury may, in his discretion,
issue such certificates in denominations of ten thousand
dollars, payable to order. And provided further, That the
Secretary of the Treasury may, in his discretion, receive,
with the assistant treasurer in New York and the assistant
treasurer in San Francisco, deposits of foreign gold coin
at their bullion value in amounts of not less than one thousand dollars in value and issue gold certificates therefor of
 the description herein authorized: And provided further,
3I°LTATSEL.F 47;.



ACTS OF A GENERAL NATURE.

That the Secretary of the Treasury may, in his discretion,
receive, with the Treasurer or any assistant treasurer of
the United States, deposits of gold bullion bearing the stamp
of the coinage mints of the United States, or the assay office
m New York, certifying their weight, fineness, and value,
m amounts of not less than one thousand dollars in value,
and issue gold certificates therefor of the description herein
authorized. But the amount of gold bullion and foreign
coin so held shall not at any time exceed one-third of the
total amount of gold certificates at such time outstanding.
And section fifty-one hundred and ninety-three of the Revised Statutes of the United States is hereby repealed.

187

Act Mar. 2,

I S S U E OF SILVER CERTIFICATES.

246. Sec. 7.—That hereafter silver certificates shall be Act Mar. 14,
issued only of denominations of ten dollars and under 31 &atfe£, U
except that not exceeding in the aggregate ten per centum
of the total volume of said certificates, in the discretion
of the Secretary of the Treasury, may be issued in denominations of twenty dollars, fifty dollars, and one hundred
dollars; and silver certificates of higher denomination than
ten dollars, except as herein provided, shall, whenever
received at the Treasury or redeemed, be retired and canceled; and certificates of denominations of ten dollars or
less shall be substituted therefor, and after such substitution, in whole or in part, a like volume of United States
notes of less denomination than ten dollars shall from
time to time be retired and canceled, and notes of denominations of ten dollars and upward shall be reissued in substitution therefor, with like qualities and restrictions as
those retired and canceled.
NOTE.—The act of February 28. 1878, authorized the issue of
silver certificates in sums of not less than ten dollars. The act
of March 3, 1887, authorized the issue of one, two, and five dollar
certificates. This section supersedes these acts as to all new
issues.
S U B S I D I A R Y SILVER COINAGE.

247. Sec. 8.—That the Secretary of the Treasury is
hereby authorized to use, at his discretion, any silver bullion 31 stat. L., 47.
in the. Treasury of the United States purchased under the
Act of July fourteenth, eighteen hundred and ninety, for
coinage into such denominations of subsidiary silver coin
as may be necessary to meet the public requirements for
such coin: Provided, That the amount of subsidiary silver
coin outstanding shall not at any time exceed in the aggregate one hundred millions of dollars. Whenever any
silver bullion purchased under the Act of July fourteenth,
eighteen hundred and ninety, shall be used in the coinage
of subsidiary silver coin, an amount of Treasury notes
issued under said Act equal to the cost of the bullion
contained in such coin shall be canceled and not reissued.



ACTS OF A GENERAL NATURE. 188

188

RECOINAGE
COIN.

OF U N C U R R E N T

SUBSIDIARY

SILVER

Act Mar. 14, 248. Sec. 9.—That the Secretary of the Treasury is
3i°Lt?c£
hereby authorized and directed to cause all worn and uncurrent subsidiary silver coin of the United States now
in the Treasury/ and hereafter received, to be recoined,
and to reimburse the Treasurer of the United States for
the difference between the nominal or face value of such
coin and the amount the same will produce in new com
from any moneys in the Treasury not otherwise appropriated.
249. S e c . 10.—
Amends section fifty-one hundred and thirty-eight,
Statutes. (See said section under National-bank act.)
1900* scc.r' 11;

Revised

R E F U N D I N G O F U N I T E D STATES B O N D S .
250
- S e c - 11.—That the Secretary of the Treasury is

31 £tat. L., 48! hereby authorized to receive at the Treasury any of the
outstanding bonds of the United States bearing interest
at five per centum per annum, payable February first,
nineteen hundred and four, and any bonds of the United
States bearing interest at four per centum per annum,
payable July first, nineteen hundred and seven, and any
bonds of the United States bearing interest at three per
centum per annum, payable August first, nineteen hundred and eight, and to issue in exchange therefor an equal
amount of coupon or regisetered bonds of the United
States in such form as he may prescribe, in denominations of fifty dollars or any multiple thereof, bearing
interest at the rate of two per centum per annum, payable
quarterly, such bonds to be payable at the pleasure of
the United States after thirty years from the date of
their issue, and said bonds to be payable, principal and
interest, in gold coin of the present standard value, and
to be exempt from the payment of all taxes or duties
of the United States, as well as from taxation in any
form by or under State, municipal, or local authority:
Provided, That such outstanding bonds may be received
in-exchange at a valuation not greater than their present
worth to yield an income of two and one-quarter per
centum per annum; and in consideration of the reduction
of interest effected, the Secretary of the Treasury is authorized to pay to the holders of the outstanding bonds
surrendered for exchange, out of any money in the Treasury not otherwise appropriated, a sum not greater than
the difference between their present worth, computed as
aforesaid, and their par value, and the payments to be
made hereunder shall be held to be payments on account
of the sinking fund created by section thirty-six hundred
and ninetv-four of the Revised Statutes: And provided
further, That the two per centum bonds to be issued under the provisions of this Act shall be issued at not less
than par, and they shall be numbered consecutively in
the order of their issue, and when payment is made the




ACTS OF A GENERAL NATURE.

189

last numbers issued shall be first paid, and this order shall
be followed until all the bonds are paid, and whenever
any of the outstanding bonds are called for payment interest thereon shall cease three-months after such call;
and there is hereby appropriated out of any money in the
Ireasury not otherwise appropriated, to effect the exchanges of bonds provided for in this Act, a sum not exceeding one-fifteenth of one per centum of the face value
of said bonds, to pay the expense of preparing and issuing
the same and other expenses incident thereto.
251. Sec. 12.—
. This section is inserted in the national-bank act following section fifty-one hundred and seventy-one. which it supersedes.

252. Sec. 13.—
See section 5214, Revised Statutes.
I N T E R N A T I O N A L BIMETALLISM.

253. Sec. 14.—That the provisions of this Act are not Act Mar. w.
intended to preclude the accomplishment of international
bimetallism whenever conditions shall make it expedient
and practicable to secure the same by concurrent action
of the leading commercial nations of the world and at a
ratio which shall insure'permanence of relative value between gold and silver.
A C T MARCH 4 , 1 9 0 7 .

257. Sec. 4. Amends section 9 of act
of July 12, 1882.
The
amended
section follows
section 5167 of the Revised
Statutes.

254. Sec. 1, Act March 4, 1907.—
Amends section 6 of act of March 14, 1900. This amended section is incorporated in said act, paragraph 245, ante.
I S S U E O F TREASURY NOTES. ACT MARCH 4, 1907.

255. Sec. 2.—That whenever and so long as the o u t - ^ ^ ^
standing silver certificates of the denominations of one ^ S t a t dollar, two dollars, and five dollars, issued under the
provisions of section seven of an Act 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," approved March "fourteenth, nineteen hundred,
shall be, in the opinion of the Secretary of the Treasury,
insufficient to meet the public demand therefor, he is hereby
authorized to issue United States notes of the denominations of one dollar, two dollars, and five dollars, and upon
the issue of United States notes of such denominations
an equal amount of United States notes of higher denominations shall be retired and canceled: Provided, however,, That the aggregate amount of United States notes at



L

£
*

ACTS OF A GENERAL NATURE. 190

190

anv time outstanding shall remain as at present fixed by
law: And provided further, That nothing in this Act shall
be construed as affecting the right of any national bank
to issue one-third in amount of its circulating notes of the
denomination of five dollars, as now provided by law.
256. Sec. 3.—
Amends section 5153, Revised .Statutes, paragraph 50, ante.

257. Sec. 4.—
Amends section 9 of act of July 12, 1882, as amended by act
of March 14, 1900.
.
.
.
IA
NOTE.—This section was further amended by section 10 ot act
of May 30, 1908, as set forth following Revised Statutes, 5167,
paragraph 69, ante.
TARIFF ACT APPROVED AUGUST 5, 1 9 0 9 .

258. Sec. 38.—Corporation tax.
259. Sec. 39.—Panama bonds.
NOTE.—Other sections relate to customs duties and internal
revenue.
EXCISE TAX ON

Act Aug. 5,
36Stat!eL,U2i

CORPORATIONS.

258. Sec. 38.—That every corporation, joint stock company or association, organized for profit and having a capital
stock represented by shares, and every insurance company,
now or hereafter organized under the laws of the United
States or of any State or Territory of the United States
or under the acts of Congress applicable to Alaska or the
District of Columbia, or now or hereafter organized under
the laws of any foreign country and engaged in business in
any State or Territory of the United States or in Alaska or
in the District of Columbia, shall be subject to pay a n n u a l l y
a special excise tax with respect to the carrying on or doing business by such corporation, joint stock company or
association or insurance company, equivalent to one per
centum upon the entire net income over and above five thousand dollars received by it from all sources during such
year, exclusive of amounts received by it as dividends upon
stock of other corporations, joint stock companies or associations, or insurance companies, subject to the tax hereby
imposed; or if organized under the laws of any foreign
country, upon the amount of net income over and above five
thousand dollars received by it from business t r a n s a c t e d
and capital invested within the United States and its Territories, Alaska, and the District of Columbia during such
year, exclusive of amounts so received by it as dividends upon
stock of other corporations, joint stock companies or associations, or insurance companies, subject to the tax hereby
imposed: Provided, however, That nothing in this section,
contained shall apply to labor, agricultural or horticultural
organizations, or to fraternal beneficiary societies, orders,
or associations operating under the lodge system, and pro-




ACTS OF A GENERAL NATURE. 195

viding for the payment of life, sick, accident, and other
benefits to the members of such societies, orders, or associations, and dependents of such members, nor to domestic
building and loan associations, organized and operated exclusively for the mutual benefit of their members, nor to
any corporation or association organized and operated exclusively for religious, charitable, or educational purposes,
no part of the net income of which inures to the benefit of
any private stockholder or individual.
Second. Such net income shall be ascertained by deducting from the gross amount of the income of such corporation, joint stock company or association, or insurance
company, received within the year from all sources, (first)
all the ordinary and necessary expenses actually paid within
the year out of income in the maintenance and operation of
its business and properties, including all charges such as
rentals or franchise payments, required to be made as a
condition to the continued use or possession of property;
(second) all losses actually sustained within the year and
not compensated by insurance or otherwise, including a
reasonable allowance for depreciation of property, if any,
and in the case of insurance companies the sums other than
dividends, paid within the year on policy and annuity contracts and the net addition, if any, required by law to be
made within the year to reserve funds; (third) interest
actually paid within the year on its bonded or other indebtedness to an amount of such bonded and other indebtedness not exceeding the paid-up capital stock of such corporation, joint stock company or association, or insurance
company, outstanding at the close of the year, and in the
case of a bank, banking association, or trust company, all
interest actually paid by it within the year on deposits;
(fourth) all sums paid by it within the year for taxes imposed under the authority of the United States or of any
State or Territory thereof, or imposed by the government ,
of any foreign country as a condition to carrying on business therein; (fifth) all amounts received by it within the
year as dividends upon stock of other corporations, joint stock
companies or associations, or insurance companies, subject
to the tax hereby imposed: Provided, That in the case of a
corporation, joint stock company or association, or- insurance company, organized under the laws of a foreign country, such net income shall be ascertained by deducting from
the gross amount of its income received within the year
from business transacted and capital invested within the
United States and any of its Territories, Alaska, and the
District of Columbia, (first) all the ordinary and necessary
expenses actually paid within the year out of earnings in
the maintenance and operation of its business and property
within the United States and its Territories, Alaska, and
the District of Columbia, including all charges such as
rentals or franchise payments required to be made as a condition to the continued use or possession of property;
(second) all losses actually sustained within the year in



ACTS OF A GENERAL NATURE. 196

business conducted by it within the United States or its
Territories, Alaska, or the District of Columbia not compensated by insurance or otherwise, including a reasonable
allowance for depreciation of property, if any, and in the
case of insurance companies the sums other than dividends,
paid within the year on policy and annuity contracts ^ and
the net addition, if any, required by law to be made within
the year to reserve funds; (third) interest actually paid
within the year on its bonded or other indebtedness to an
amount of such bonded and other indebtedness, not exceeding the proportion of its paid-up capital stock outstanding at the close of the year which the gross amount of
its income for the year from business transacted and capital
invested within the United States and any of its Territories,
Alaska, and . the District of Columbia bears to the gross
amount of its income derived from all sources within and
without the United States; (fourth) the sums paid by it
within the year for taxes imposed under the authority of the
United States or of any State or Territory thereof; (fifth)
all amounts received by it within the year as dividends upon
stock of other corporations, joint stock companies or associations, and insurance companies subject to the tax hereby
imposed. In the case of assessment insurance companies
the actual deposit of sums with State or Territorial officers,
pursuant to law, as additions to guaranty or reserve funds
shall be treated as being payments required by law to
reserve funds.
Third. There shall be deducted from the amount of the net
income of each of such corporations, joint stock companies
or associations, or insurance companies, ascertained as provided in the foregoing paragraphs of this section, the sum
of five thousand dollars, and said tax shall be computed
upon the remainder of said net income of such corporation,
joint stock company or association, or insurance company,
for the year ending December thirty-first, nineteen hundred
and nine, and for each calendar year thereafter; and on or before the first day of March, nineteen hundred and ten, and
the first day of March in each year thereafter, u true and
accurate return under oath or affirmation of its president,
vice-president, or other principal officer, and'its treasurer or
assistant^ treasurer, shall be made by each of the corporations, joint stock companies or associations, and i n s u r a n c e
companies, subject to the tax imposed by this section, to
the^ collector of internal revenue for the district in
which such corporation, joint stock company or a s s o c i a t i o n ,
or insurance .company has its principal place of business, or,
in the case of a corporation, joint, stock company or association, or insurance company, organized under the laws of
a foreign country, in the place where its principal business
is carried on within the United States, in such form as the
Commissioner of Internal Revenue, with the approval of
the Secretary of the Treasury, shall prescribe, setting forth
(first) the total amount of the paid-up capital stock of such
corporation, joint stock company or association, or insur


ACTS OF A GENERAL NATURE. 197

ance company, outstanding at the close of the year; (second) the total amount of the bonded and other indebtedness
of such corporation, joint stock company or association, or
insurance company at the close of the year; (third) the
gross amount of the income of such corporation, joint stock
company or association, or insurance company, received
during such year from all sources, and if organized under
the laws of a foreign country the gross amount of its income
received within the year from business transacted and
capital invested within the United States and any of its
Territories, Alaska, and the District of Columbia; also the
amount received by such corporation, joint stock company
or association, or insurance company, within the year by
way of dividends upon stock of other corporations, joint
stock companies or associations, or insurance companies,
subject to the tax imposed by this section; (fourth) the
total amount of all the ordinary and necessary expenses
actually paid out of earnings in the maintenance and operation of the business and properties of such corporation,
joint stock company or association, or insurance company,
within the year, stating separately all charges such as rentals
or franchise payments required to be made as a condition
to the continued use or possession of property, and if organized under the laws of a foreign country the amount so
paid in the maintenance and operation of its business within
the United States and its Territories,. Alaska, and the District of Columbia; (fifth) the total amount of all losses
actually sustained during the year and not compensated by
insurance or otherwise, stating separately any amounts
allowed for depreciation of property, and in the case of insurance companies the sums other than dividends, paid
within the year on policy and. annuity contracts and the net
addition, if any, required by law to be made within the year
to reserve funds; and in the case of a corporation, joint
stock company or association, or insurance company, organized under the laws of a foreign country, all losses
actually sustained by it during the year in business conducted by it within" the United States or its Territories,
Alaska, and the District of Columbia, not compensated by
insurance or otherwise, stating separately any amounts
allowed for depreciation of property, and in the case of insurance companies the sums other than dividends, paid
within the year on policy and annuity contracts and the net
addition, if any, required by law to be made within the
year to reserve*fund; (six) the amount of interest actually
paid within the year on its bonded or other indebtedness to
an amount of such bonded and other indebtedness not exceeding the paid-up capital stock of such corporation, joint
stock company or association, or insurance company, outstanding at the close of the year, and in the case of a bank,
banking association, or trust company, stating separately
all interest paid by it within the year on deposits; or in case
of a corporation, joint stock company or association, or insurance company, organized tinder the laws of a foreign coun


ACTS OF A GENERAL NATURE. 198

try, interest so paid on its bonded or other indebtedness to an
amount of such bonded and other indebtedness not exceeding the proportion of its paid-up capital stock outstanding
at the close of the year, which the gross amount of its income for the year from business transacted and capital invested within the United States and any of its Territories,
Alaska, arid the District of Columbia, bears to the gross
amount of its income derived from all sources within and
without the United States; (seventh) the amount paid by it
within the year for taxes imposed under the authority of
the United'States or any State or Territory thereof, and
s e p a r a t e l y the amount so paid by it for taxes imposed by
the government of any foreign country as a condition to
carrying on business therein; (eighth) the net income of such
corporation, joint stock company or association, or insurance company, after making the deductions in this section
authorized. All such returns shall as received be transmitted forthwith by the collector to the Commissioner of
Internal Revenue.
Fourth. Whenever evidence shall be produced before
the Commissioner of Internal Revenue which in the opinion
of the commissioner justifies the belief that the return made
by any corporation, joint stock company or association, or
insurance company, is incorrect, or whenever any collector
shall report to the Commissioner of Internal Revenue that
any corporation, joint stock company or association, or insurance company has failed to make a return as required by
law, the Commissioner of Internal Revenue may require
from the corporation, joint stock company or association,
or insurance company making such return, such further information with reference to its capital, income, losses, and
expenditures as he may deem expedient; and the Commissioner of Internal Revenue, for the purpose of ascertaining
the correctness of such return or for the purpose of making
a return where none has been made, is hereby authorized,
by any regularly appointed revenue agent specially designated by him for that purpose, to examine any books and
papers bearing upon the matters required to be included in
the return of such corporation, joint stock company or association, or insurance company, and to require the attendance
of any officer or employe of such corporation, joint stock
company or association, or insurance company, and to take
his testimony with reference to the matter required by law
to be included in such return, with power to administer
oaths to such person or persons; and the Commissioner of
Internal Revenue may also invoke the aid of any court of
the United States having jurisdiction to require the attendance of such officers or employes and the production of
such books and papers. Upon the information so acquired
the Commissioner of Internal Revenue may amend any
return or make a return where none has been made. All
proceedings taken by the Commissioner of Internal Revenue
under the provisions of this section shall be subject to the
approval of the Secretary of the Treasury.




ACTS OF A GENERAL NATURE. 199

Fifth. All returns shall be retained by the Commissioner
of Internal Revenue, who shall make assessments thereon;
and in case of any return made with false or fraudulent
intent, he shall add one hundred per centum of such tax, and
in case of a refusal or neglect to make a return or to verify
the same as aforesaid he shall add fifty per centum of such
tax. In case of neglect occasioned by the sickness or
absence of an officer of such corporation, joint stock company or association, or insurance company, required to
make said return, or for other sufficient reason, the collector
may allow such further time for making and delivering such
return as he may deem necessary, not exceeding thirty days.
The amount so added to the tax shall be collected at the
same time and in the same manner as the tax originally
assessed, unless the refusal, neglect, or falsity is discovered
after the date for payment of said taxes, in which case the
amount so added shall be paid by the delinquent corporation, joint stock company or association, or insurance company, immediately upon notice given by the collector. All
assessments shall be made and the several corporations,
joint stock companies or associations, or insurance companies, shall be notified of the amount for which they are
respectively liable on or before the first day of June of each
successive year, and said assessments shall be paid on or
before the thirtieth day of June* except in cases of refusal
or neglect to make such return, and in cases of false or
fraudulent returns, in which cases the Commissioner of
Internal Revenue shall, upon the discovery thereof, at any
time within three years after said return is due, m^ke a return upon information obtained as above provided for, and
the assessment made by the Commissioner of Internal
Revenue thereon shall be paid by such corporation, joint
stock company or association, or insurance company immediately upon notification of the amount of such assessment; and to any sum or sums due and unpaid after the
thirtieth day of June in any year, and for ten days after
notice and demand thereof by the collector, there shall be
added the sum of five per centum on the amount of tax
unpaid and interest at the rate of one per centum per month
upon said tax from the time the same becomes due.
Sixth. When the assessment shall be made, as provided
in this section, the returns, together with any corrections
thereof which may have been made by the Commissioner,
shall be filed in the office of the Commissioner of Internal
Revenue and shall constitute public records and be open
to inspection as such.
Seventh. It shall be unlawful for any collector, deputy
collector, agent, clerk, or other officer or employe of the
United States to divulge or make known in any manner
whatever not provided by law to any person any information obtained by him in the discharge of his official duty, or
to divulge or make known in any manner not provided by
law any document received, evidence taken, or report made
under this section except upon the special direction of the




ACTS OF A GENERAL N A T U R E . 196

196

President; and any offense against the foregoing provision
shall be a misdemeanor and be punished by a fine not exceeding one thousand dollars, or by imprisonment not exceeding one year, or both, at the discretion of the court.
Eighth. If any of the corporations, joint stock companies or associations, or insurance companies aforesaid,
shall refuse or neglect to make a return at the time or times
hereinbefore specified in each year, or shah render a false
or fraudulent return, such corporation, joint stock company or association, or insurance company, shall be liable to
a penalty of not less than one thousand dollars and not exceeding ten thousand dollars.
Any person authorized by law to make, render, sign, or
verify any return who makes any false or fraudulent return, or statement, with intent to defeat or evade the assessment required by this section to be made, shall be guilty of
a misdemeanor, and shall be fined not exceeding one thousand dollars or be imprisoned not exceeding one year, or
both, at the discretion of the court, with the costs of prosecution.
All laws relating to the collection, remission, and refund
of internal-revenue taxes, so far as applicable to and not
inconsistent with the provisions of this section, are hereby
extended and made applicable to the tax imposed by this
section.
Jurisdiction is hereby conferred upon the circuit and district courts of the United States for the district within which
any person summoned under this section to appear to testify
or to produce books, as aforesaid, shall reside, to compel
such attendance, production of books, and testimony by appropriate process.
PANAMA CANAL B O N D S — A D D I T I O N A L I S S U E AUTHORIZED AT R A T E OF I N T E R E S T N O T TO E X CEED 3 PER CENT. P E R A N N U M .

Act Aug. 6, 259. Sec. 39.—That the Secretary of the Treasury is
36 stat!"], 117.; hereby, authorized to borrow on the credit of the United
States from time to time, as the proceeds may be required
to defray expenditures on account of the Panama Canal
and to reimburse the Treasury for such expenditures already made and not covered by previous issues of bonds,
the sum of two hundred and ninety million five hundred
and sixty-nine thousand dollars (which sum together with
the eighty-four million six hundred and thirty-one thousand nine hundred dollars already borrowed upon issues Of
two per cent, bonds under section eight of the Act of June
twenty-eight, nineteen hundred and two, equals the estimate
of the Isthmian Canal Commission to cover the entire cost
of the Canal from its inception to its completion), and to
prepare and issue therefor coupon or registered bonds of
the United States in such form as he may prescribe, and in
denominations of one hundred dollars, five hundred dollars,
and one thousand dollars, payable fifty years from the date
of issue, and bearing interest payable quarterly in gold coin



ACTS OF A GENERAL NATURE.

197

at a rate not exceeding- three per centum per annum; and
the bonds herein authorized shall be exempted from all taxes
or duties of the United States, as well as from taxation in
any form by or under State, municipal, or local authority:
Prozndcd, That said bonds may be disposed of by the Secretary of the Treasury at not less than par, under such
regulations as he may prescribe, giving to all citizens of the
United States an equal opportunity to subscribe therefor,
but no commissions shall be allowed or paid thereon; and a
sum not exceeding one-tenth of one per centum of the
amount of the bonds herein authorized is hereby appropriated, out of any money in the Treasury not otherwise appropriated, to pay the expenses of preparing, advertising,
and issuing the same; and the authority contained in section eight of the Act of June twenty-eight, nineteen hundred
and two, for the issue of bonds bearing interest at two per
centum per annum, is hereby repealed.
A C T MARCH 2 ,

1911.

PANAMA CANAL BONDS ISSUED UNDER ACT OF
AUGUST 5, 1909, NOT RECEIVABLE AS SECURITY
FOR THE ISSUE OF CIRCULATING NOTES TO
NATIONAL BANKS.

260. Be it enacted by the Senate and House of Rep- Act Mar. 2,
rcscntatives of the United States of America in Congress * *
assembled, That the Secretary of the Treasury be, and he
is hereby, authorized to insert in the bonds to be issued by
him under section thirty-nine of an Act entitled "An Act
to provide revenue, equalize duties, and encourage the industries of the United States, and for other purposes/' approved August fifth, nineteen hundred and nine, a provision
that such bonds shall not be receivable by the Treasurer of
the United States as security for the issue of circulating
notes to national banks; and the bonds containing such provision shall not be receivable for that purpose.
CERTIFIED CHECKS DRAWN ON NATIONAL AND
STATE BANKS RECEIVABLE FOR DUTIES ON
IMPORTS AND INTERNAL TAXES.

261. Be it enacted by the Senate and House of Reprc- Act. Mar. 2,
sentatives of the United States of America in Congress
assembled, That it shall be lawful for collectors of customs
and of internal revenue to receive for duties on imports
and internal taxes certified checks drawn on national and
State banks, and trust companies during such time and
under such regulations as the Secretary of the Treasury
may prescribe. No person, however, who may be indebted
to the United States on account of duties on imports or
internal taxes who shall have tendered a certified check or
checks as provisional payment for such duties or taxes, in
accordance with the terms of this Act, shall be released
from the obligation to make ultimate payment thereof until
such certified check so received has been duly paid; and if



ACTS OF A GENERAL NATURE. 202

anv such check so received is not duly paid by the bank on
which it is drawn and so certifying, the United States shall,
in addition to its right to exact payment from the party
originally indebted therefor, have a lien for the amount of
such check upon all the assets of such bank; and such
amount shall be paid out of its assets in preference to any
other claims watsoever against said bank, except the necessary costs and expenses of administration and the reimbursement of the United States for the amount expended in
the redemption of the circulating notes of such bank.
SEC. 2. That this Act shall be effective on and after
June first, nineteen hundred and eleven.
NOTE.—The above Act was amended March 3, 1913, as follows:
"That it shall be lawful for collecting officers to receive certified
checks drawn on national and state banks and trust companies,
during such time and under such regulations as the Secretary of
the Treasury may prescribe, in payment for duties on imports,
internal taxes and all public dues, including special customs deposits; and the Act of March second, nineteen hundred and eleven,
entitled, 'An Act to authorize the receipt of certified checks for
duties on imports and internal taxes/ is hereby amended accordingly."




CHAPTER

VII.

SPECIAL ACTS RELATING TO NATIONAL BANKS.

262. Act May 2, 1890. Qualifications
of directors in Oklahoma.
263. Act May 2, 1890. National banking laws extended to Indian
Territory.
264. Act April 12, 1900. National
banking laws applicable to
Porto Rico.

265. Act April 30, 1900.
National
banking laws applicable to
Hawaii.
266. Special Acts authorizing change
of name or location of National banks.

Q U A L I F I C A T I O N S OF DIRECTORS
ACT MAY 2f 1890.

IN

OKLAHOMA.

262. Sec. 17.—That the provisions of Title sixty-two of lg £ ct s^ay172:
the Revised Statutes of the United States relating to na- 2 Stat L.,
6
tional banks, and all amendments thereto, shall have the
same force and effect in the Territory of Oklahoma as elsewhere in the United States :
"Providedf That persons otherwise qualified to act as
directors shall not be required to have resided in said
Territory for more than three months immediately preceding their election as such."
N A T I O N A L BANKING LAWS E X T E N D E D TO INDIAN
TERRITORY. ACT MAY 2, 1890.

263. Sec. 31.—* * * That all laws relating to na- ^
tional banking associations shall have the same force and 26 it&t. L., 9e!
effect in Indian Territory as elsewhere in the United States.
NOTE.—-The act of May 2, 1890, is "An act to provide a temporary government for the Territory of Oklahoma, to enlarge the
jurisdiction of the United States court in the Indian Territory,
and for other purposes." Sections 17 and 31 are the only sections which relate to national banks.
N A T I O N A L BANKING LAWS APPLICABLE TO PORTO
RICO. ACT APRIL 12, 1900.

264. Sec. 14.—That the statutory laws of the United ^ C Apr. B.
AT
States not locally inapplicable, except as hereinbefore or M &ateLf m.
hereinafter otherwise provided, shall have the same force
and effect in Porto Rico .as in the United States, except
the internal-revenue laws, which, in view of the provisions
of section 3, shall not have force and effect in Porto Rico.
NOTE.—The Attornev-General of the United States in an opinion rendered June 2, 1900, held "There seems to be in the structure of the national banking laws no general provisions which
can nor be carried into force and effect in Porto Rico equally
with all of the various States and Territories to which the laws
were originally applied. I can find no reason to hold that the
statutes relative to the organization and powers of national banks




200

SPECIAL ACTS.

have not, by section 14 9f the Porto Rican act, above referred to,
been extended to that island. The language of that section is
broad enough, and in my opinion does, authorize the organization and carrying on of national banks in Porto Rico."
NATIONAL BANKING LAWS APPLICABLE
H A W A I I . ACT A P R I L 30, 1900.

TO

1900?
5°; 265 * S e c * 5 ' - ' T h a t t h e Constitution, and except as
31 'stat.' L.; herein otherwise provided, all the laws of the United States
14t
which are not locally inapplicable, shall have the same
force and effect within the said Territory as elsewhere in
the United States: Provided, That sections eighteen hundred and fifty and eighteen hundred and ninety of the Revised Statutes of the United States shall not apply to the
Territory of Hawaii.
NOTE.—The Attorney-General of the United States in an opinion rendered June 23, 1900, held "That the act of April 30, 1900,
* * * extended the national banking acts to the Territory of
Hawaii, and would authorize the Comptroller to grant permission
for the organization of national banks therein. (See my opinion
of June 2, 1900, relative to the same question as applied to Porto
Rico.) But I do not think that the provisions of section 5154
apply to banks existing in Hawaii prior to the passage of the act
of April 30, 1900. Sections 5154 and 5155 seem, by their especial
terms, to refer only to banking institutions organized under
special or general laws of a State, and do not seem to apply at
all to banks organized under the laws of any Territory. I think
the object of these two sections was to enable the banks that
were previously strictly State institutions to become national
corporations, and the operation of the act in that respect is to
be so restricted."

266. Sec. 1, Act June 7, 1872.—Special acts authorizing
change of name or location of national banks.




CHAPTER VIII.
OPINIONS OF THE ATTORNEY-GENERAL.

267. Opinion of Attorney-General of
United States on Oklahoma
^ * deposit guarantee law.
268. Opinion of Attorney-General of
United States on Kansas
deposit guarantee law.

j 269. Opinion of Attorney-General of
j
the United States on power
j
of a national bank to enter
j
into a contract with an insurj
ance company guaranteeing
|
the solvency of the bank.

T H E OKLAHOMA D E P O S I T GUARANTEE LAW.

267.—The Attorney-General of the United States, in an
opinion rendered July 28, 1908, said:
The business of insuring deposits is a wholly separate business
from that of banking * * * A national bank has no power to
guarantee the obligations of a third party, unless in connection
with the sale or transfer of "its own property and as an incident
to the business of the bank * * *
# But a contract guaranteeing the payment by another corporation or individual of obligations in no wise connected with the
business of the bank is entirely ultra vires. I hold * * * that
it is illegal for the officers of a national bank to enter into any
such agreement as that contemplated by section 4 of the Oklahoma statutes, and any wilful action to this effect on the part
of any national bank is sufficient cause for the forfeiture of
charter.
T H E KANSAS D E P O S I T GUARANTEE LAW.

268. The Attorney General of the United States, in an
opinion rendered April 6, 1909, said:
The question of the power of a national bank to avail of the
invitation extended to it by this act involves primarily a consideration of the nature of the agreement contemplated by it.
Attorney General Bonaparte, in an opinion rendered to the Secretary of the Treasury, under date of July 28, 1908, considering
an act of the Legislature of the State of Oklahoma (27 Op. A. G.,
p. 38), determined that a national bank could not lawfully enter
into the plan or scheme contemplated by that act, because it
involved essentially a guaranty to the depositors of all State banks
in Oklahoma, and other national banks in that State which might
accept the terms of the law, that their respective depositors
should be paid in full; a contract which he deemed to be clearly
ultra vires.
. . .
The act now under consideration attempts to avoid this objection bv limiting the amount for which any bank may become
liable, 'but within such limitation the same principle is involved,
for to the extent of the contribution and liability required by the
statute each bank becomes liable to creditors of the other banks
which are parties to the plan. But even if a proper construction
of the act would, as contended, make it a guaranty by each bank
of payments to its own depositors, and not a general guaranty
within the limits of contribution prescribed by the act, of all deposits in all the banks which are parties to the scheme, never-




OPINIONS OF THE ATTORNEY-GENERAL.

theless I am strongly of the opinion that a national bank is
without corporate power to expend its moneys for the purpose of
providing insurance that its depositors shall be paid in full. It
may, of course, insure its own property against loss or destruction; it may insure itself against loss of property through theft or
other dishonesty, but the application of its funds for the purpose
of securing a collateral guaranty by third parties that it will pay
in full its debts to its depositors is, it appears to me, beyond
its corporate power.
. . t
«.
Such contract would fall within the principles asserted in Commercial National Bank v. Pirie (82 Fed., 799), Bowen v. Needles
National Bank (94 Fed., 925), for if, as is well established, a
national bank has no power to guarantee the obligation of another, it certainly has no power to employ another to guarantee
its own obligation to a third person.
P O W E R OF N A T I O N A L BANK TO E N T E R I N T O A
CONTRACT W I T H A N I N S U R A N C E COMPANY
GUARANTEEING T H E SOLVENCY OF T H E BANK.

269. The Attorney General of the United States in an
opinion rendered May 7, 1909, said:
Replying to yours of the 29th ultimo, in which, at the request
of the Comptroller of the Currency, you ask for an opinion as to
the power of a national bank to enter into a contract with an
insurance company guaranteeing the solvency of the bank, and
transmitting to me a form of policy which is proposed to be
issued by an insurance company proposed to be organized, I beg
to say that, as a general principle, I have no doubt that it is entirely within the powers of a national bank to contract for the
insurance of its assets against loss. The form of the proposed
policy submitted in your letter is somewhat peculiar. It purports to insure to the bank the payment pf "a sum of money
sufficient to indemnify the bank for any and all losses suffered
by it by- reason of theft, embezzlement, losses in realizing upon
loans and investments, shrinkage in value of assets or otherwise,
in an amount equal to but not exceeding the net excess of its
obligations, other than by reason of the stock of the bank, over
the total aggregate value of the assets of the bank thus reduced
by such losses; provided that there shall be included in the assets
of the bank all net sums which have been realized by reason of
the additional liability of the stockholders of the bank."
Such contract is, in effect, an agreement to pay to the bank
any deficiency in its assets upon ultimate realization necessary to
enable it to pay all of its liabilities of every kind. The policy
is to run for a period of three months, but to be renewable thereafter for periods of three months each with the consent of the insurance company, and at such premiums as the insurance company may fix at least one month before the expiration of the then
current term of the insurance, the premium in every case to be
a percentage of the average indebtedness of the bank during the
period covered by such renewal, with the provision that, if such
rate shall be in excess of one-sixteenth of 1 per cent, upon such
average indebtedness, then and in such event the insurance company shall be liable to account to the bank for the application
of such premium paid by the bank in excess of one-sixteenth ot
1 per cent., "which excess shall be applicable only to the payment of actual losses incurred by the company by reason of
claims under this and similar policies, and any excess over such
extra claims shall be divided pro rata among the banks paying such
extra rate of premium as a participation in the profits during
which period such extra rate of premium has been paid."
It is somewhat uncertain precisely what this paragraph means
and what its effect may be. It seems to me to be objectionable
as committing the bank to a profit-sharing feature, which might
be contended to entail a corresponding liability for losses; and,




OPINIONS OF THE ATTORNEY-GENERAL.

as the attorney for the promoters of the proposed insurance
company informs me that this is not regarded as an essential part
of the plan, I should advise that it had better be eliminated from
the policy.
Another provision contained in the policy subjects the bank to
a periodical examination by the examiners of the insurance company without notice and at such times as the company may elect,
one of such examinations to be within each period of six months
covered by the policy and all renewals thereof. This period is
p r o b a l ? ^ irj^tjvertently placed at six months, as the policy is
proposed to be written for periods of three months only. Aside
from that, I very much question the legality of this clause, or
at least its enforceability. Section 5241 of the Revised Statutes
provides that, " N o association shall be subject to any visitorial
powers other than such as are authorized by this title, or are
vested in the courts of justice."
While this statute does not prohibit the bank from permitting
an examination of its books, in my opinion it does operate to prohibit it from obligating itself to permit such examination; and if
the covenant to insure can be considered as in any respect dependent upon this agreement to permit examinations, it might be
vitiated by the unlawful provision.
I should advise that the
clause be reframed so as to make it clear that the agreement to
insure is not dependent upon the failure to permit the examination, although it might be stipulated that in case, at any time, the
examiner of the company should not be allowed access to the
books of the bank for the purpose of making an examination the
company should have the option, upon reasonable notice, to terminate the contract.
In niy opinion, therefore, it is a matter for the discretion of
the directors and officers of a bank to determine whether or not
they will enter into any such contract in any given instance, this
discretion to be exercised in view of the solvency and general
financial condition of the company making the insurance and the
reasonableness of the rate of premium; and the form of the policy
being modified to conform to the foregoing suggestions, I see no
legal reason why a bank may not enter into it.




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