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73D CONGRESS
istSession
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5
I N T H E H O U S E OF
b
o
l
REPRESENTATIVES
M A Y 26, 1933
Ordered to be printed with the amendment of the Senate
A BILL
To provide for the safer and more effective use of the assets of
banks, to regulate interbank control, to prevent the undue
diversion of funds into speculative operations, and for other
purposes.
X
Be it enacted by the Senate and House of Representa-
2
tives of the United States of America in Congress assembled,
3
That the short title of this Aet shall be the - Banking Aet
4
e* 1933."
5
TITLE
6
SECTION
4-t
A S OSED
I
m this Act and m
AAY
provision ef
7 tow amended by this A e t —
8
9
-(a)- The terms "banks"? "national bank", "national
banking
association",
"member
bank",
"board",
2
1
trict
and " reserve bank^ shall have the meanings assigned
2
to them in section 4- of the Federal Reserve
as amended.
3
-(fe}- Except where otherwise specifically provided,
4
the te^m - affiliate - shall include any corporation, business
5
trust, association^ or ether similar organization—
6
-{if Of which a member bank, directly or indirectly,
7
owns er controls cither a majority of the voting shares er
8
more than
9
the election of its directors, trustees, er other persons exer
10
cising similar functions at the preceding election, er een-
per centum of the number of shares voted for
11 feels in any manner the election of a "majority of its directors,
12
trustees, or other persons exercising similar functions; or
13
-{2-f Of which control is held, directly or indirectly,
14
through steek ownership or in any ether manner, by the
15
shareholders ef a member bank whe own er control cither
16
a majority ef the shares ef sueh bank or more than 50 per
17
centum ef the number ef shares voted for the election ef
18
directors ef such bank at the preceding election, er fey
19
trustees fer the benefit ef the shareholders ef any such
20
bank; er
21
Of which a mai oritv el its directors, trustees, er
22
ether persons exorcising similar functions are directors ef
23
any one member bank.
24
-(ef ¥he term - holding company affiliate " shall include
25 ttfty corporation, business trast, association^ ef otker similar
26
organization—
3
1
Which owns or eontrols, directly or indirectly,
2
either a majority of the shares of capital stock el a? member
3
bank or more than oO per centum of the number ef shares
4
voted for the election ef directors ef any one bank at the
5
preceding election, er controls in any manner the election
6
ef €b majority ef the directors ef my one bank; or
7
For the benefit ef whose shareholders er members
8
afl er substantially aH the capital stock ef a member bank
9
is heldfeytrustees.
10
SEC.
-FAR)-
The fourth paragraph after paragraph
11
" Eight " ef section 4 ef the Federal Reserve Aety as
12
amended (U.S.C., title
seer 301), is amended te read
13 ftS follows:
14
" Said board ef directors shall administer the affairs
15
ef said bank fairly and impartially and without discrimina
16
ties in favor ef or against any member bank or banks and
17
may, subject- te the previsions ef k w and the orders ef
18
the Federal Reserve Board, extend te eaeh member bank
19
sueh discounts, advancements, and accommodations as may
20 fee safely and reasonably made with due regard for the
21
claims and demands ef other member banks, the maintc
22
nance ef sound credit conditions, and the accommodation ef
23
commerce, industry, and agriculture.
24
Board may prescribe regulations further defining within the
25
limitations ef this Aet the conditions under wThich discounts,
The Federal Reserve
4
1
advancements, and accommodations may be extended te
2
member banks.—Each Federal Reserve bank shall keep
3
itself informed of the general character and amount Or the
4
loans and investments of its member banks with a view te
5
ascertaining whether undue use IS being made of bank credit
6
for the speculative carrying of or trading in securities, real
7
estate? or commodities, or for any other purpose inconsist
8
ent with the maintenance of sound credit conditions; and^
9
in determining whether to grant ef refuse advances, redis
10
counts, or other credit accommodations, the Federal Reserve
11
bank shall give consideration to sueh information.
12
chairman of the Federal Reserve bank shall report te the
13
Federal Reserve Board any sueh undue use of bank- credit
The
14 fey any member bank, together with his recommendation.
15
Whenever, in the judgment ef the Federal Reserve Board,
16
any member bank is making sueh undue use ef bank credit,
17
the Board may, in its discretion, afte? reasonable notice and
18
an opportunity for a hearing, suspend sueh bank from the use
19
ef the credit facilities ef the Federal Reserve System and
20
terminate sueh suspension or may renew it hem time
21
te time."
22
3T The first paragraph ef section 7- ef the Federal
23
Reserve Aet7 as amended (U.S.C., title iSj seer 289), is
24
amended, effective July iy 1933, te read as follows:
26
shall have been paid er provided for? the stockholders shall
5
1 fee entitled te receive an annual dividend ef % per centum en
2
the paid in capital stock, wMefe dividend shallfeecumulative.
3
After the aforesaid dividend claims have feeen felly met?
4
the net earnings shall fee paid into the surplus fend ef the
5
Federal Reserve bank.-"
6
7
S E O T
4T
•• (a) The first paragraph ef section 9 ef the
Federal Reserve Aety as amended (U.S.C., title • 12j sec.
8
Suppr A^fj title
seer 321) 7 is amendedfeyinserting
9
immediately after fee words " United States " a comma and
10
the following: - including Mems Kan banks and other fe-
ll
corporatcd banking institutions engaged fe similar business."
12
-(fe)- The second paragraph ef section 0 ef the Federal
13
Reserve Aety as amended (U.S.C., title
seer 329), is
14
amendedfeyadding at the end thereof the following: " Pre-
15
vided, however,
16
any State member bank from establishing and operating
17
branches fe the United States e* any dependency or insular
18
possession thereof or fe any foreign country, en fee same
19
terms and conditions and subject te fee same limitations and
20
restrictions as are applicable te fee establishment ef branches
That nothing herein contained shall prevent
21 fey national banks."
22
-fe)- Section 0 ef fee Federal Reserve Aetj as amended
23
(U.S.C., title ^
seesr 321 331; Suppr
24
321 331), is further amended fey adding at fee end thereof
25 fee following new paragraphs:
title
seesr
6
1
" Any mutual savings bank having no eapital steeky but
2
having surplus and undivided profits net less than the amount
3
el eapital required for the organization ef a national bank
4
in the same plaeej may apply for and be admitted te member-
5
ship in the Federal -Reserve System in the same manner and
6
subject te the same previsions ef law as State banks and trust
7
eempanie% exeept that such savings bank shah subscribe for
8
eapital stock ef the Federal Reserve bank in an amount equal
9
te sis tenths ef 4 per centum ef its total deposit liabilities as
10
shown by the most recent report ef examination ef sueh
11
savings bank- preceding its admission te membership. There
12
after sueh subscription shall be adjusted semiannually en the
13
same percentage basis in aeeerda^ee with rules and regular-
14
tions proscribed by the Federal Reserve Beard?
15
mutual sa?vings bank- applying for membership is net per-
16
mittcd by the laws under which it was organized te purchase
17
stock in a Federal Reserve bankj it shall7 upon admission te
18
the system, deposit wife the Federal Reserve bank an amount
19
equal te the amount whieh it w7ould have been required te
20
pay in en account ef a subscription te eapital stock. There
21
after sueh deposit shallfeeadjusted semiannually in the same
22
manner as subscriptions for stock.
23
subject to the same conditions with respect te repayment as
24
amounts paid upon subscriptions te eapital steek by other
25
member banks and the Federal Reserve bank shall pay inter
4f any
Sueh deposit shall be
7
1
est thereon at the same rate as dividends arc actually paid
2
en outstanding shares el steek ef sueh Federal Reserve baafe.
3
If the laws under which sueh savings bank was er ganized be
4
amended so as te authorize mutual savings banks to subscribe
5
for Federal Reserve bank stock sueh savings bank shall there-
6
upon subscribe for the appropriate amount ef stock in the
7
Federal Reservefeankyand the deposit hereinbefore provided
8
for in lieu ef payment upon capital stock shall be applied
9
upon sueh subscription. If the laws under which sueh sav-
10
ings bank was organizedfeenet amended at the nest session
11
ef the legislature following the admission ef sneh savings
12
bank te membership so as to authorize mutual savings banks
13
te purchase Federal Reserve bank stock, er if sueh lawsfeeso
14
amended and suehfeankfail within sis months thereafter te
15
purchase such steeky aH ef its rights and privileges as a
16
member bank shall fee forfeited and its membership in the
17
Federal Reserve System shall be terminated in the manner
18
prescribed elsewhere in this section with respect te State
19
banks and trust companies. Each mutual savings bank shall
20
comply with all the provisions ef law applicable te State
21
member banks and trust companies, with the regulations ef
22
the Federal Reserve Board and with the conditions ef
23
membership prescribed for such savingsfeankat the tunc of
24
admission te membership, exeept as otherwise hereinbefore
25
provided with respect te eapital stock.
8
1
S B O T
-(ft)- Tfee second paragraph ef section 4Q ef
2
tfee Federal Reserve Aetj as amended -(•U.S.C., title
v
SCO. 242)-, is amended te read as follows:
4
-Tfee Secretary ef tfee Treasury and tfee Comp
5
troller ef tfee Currency U
6
time tfeey are in office and fer twe years thereafter te
7
hold any office, position, or employment in any member
8
bank.
9
Board shall fee ineligible during the time they arc in office
10
and fer two years thereafter te held any office, position, ef
11
employment m any member bank, except that this restric
12
tien shall net apply te a member who has served the fuB
13
term fer which he was appointcdr
14
the term ef any appointive member ef the Federal Reserve
15
Board in office when this paragraph as amended takes effect?
16
the President shall &
17
member at net te exceed twelve years, as designatedfeythe
18
-President at the time ef nomination? but in sueh manner as
19
te provide for the expiration ef the term ef net mere than one
20
appointive member in any two year period? and thereafter
21
eaeh appointive member shall held effiee for a term ef twelve
22
years from the expiration ef the term ef bk predecessor.
23
the six persons thus appointed? one shah fee designated fey
24
the President as governor and one a^s vice governor ef the
25
Federal Reserve Board.
fee
ineligible during tfee
The appointive members el the Federal Eeserve
Upon the expiration ef
the term Of the successor te such
Of
Tfee governor ef tfee Federal
9
1
Reserve Board, subject to its supervision, shall fee its active
2
executive officer.
3
Board shall within fifteen days after notice ef appointment
4
make and subscribe to the oath ef office."
5
Each member of the Federal Reserve
-(fe)- The fourth paragraph ef section -10 ef the Federal
6
Reserve Aet? as amended (U.S.C., title
7
amended te read as
seer 8 4 4 ) , is
folloWS-7
8
- The principal offices ef the Board shall fee i n •the JJis
9
triet ef Columbia? A t meetings ef the Board the Secretary
10
ef the Treasury shall preside as chairman, and? i n Ms
11
absence,- the governor shall preside-
I n the absence ef
12 feeth the Secretary ef the Treasury and the
governor the
13
viee governor shall preside.
I n the absence ef the Score -
14
tary ef the Treasury, the governor,
and the viee governor
15
the Board shall eleet a member to act as chairman pro
16
tempore.
17
manner i n which its obligations shall fee incurred and
18
its disbursements and expenses allowed and paid? and may
19
20
leave en deposit i n the Federal Reserve banks the proceeds ef
assessments levied npen them to defray its estimated expenses
22
mont, compensation, leave, and expenses shall fee governed
23
solely fey the provisions ef this Aet? spocifie amendments
24
thereof? and rales and regulations ef the Beard net inoonsist
25
ent therewith; and funds derived from sneh assessments shall
The Board shall determine and proscribe the
10
1
net fee construed to be Government funds er appropriated
2
moneys.
o
an officer er an cctor el any bank, banking institution^ trust
4
company, er Federal Reserve bank er held stock in any bank,
5
banking institution, er trust company; and before entering
6
upon his duties as a member ef the Federal Reserve Board he
7
shall certify under eath that he has complied with this re-
8
quiremcntj and sueh certification shall be filed with the seere-
9
tary ef the Beardv
£fe member ef the Federal Reserve Board shall be
Whenever a vacancy shall occur, other
10
than fey expiration ef terna^ among the sis members ef the
11
Federal Reserve Board appointedfeythe President as above
12
provided, a successor shallfeeappointedfeythe President7 fey
13
ami with the advice and consent ef the Senate, te fill sueh
14
vacancy, and when appointed he shall held office for the
15
imexpired term ef his predecessor."
16.
S E O t
6 t
Paragraph -fn*)- ef section
4 - i
ef the Federal
17
Reserve Aefc as amended (U.S.O., title 12, see. 218), is
18
amended te read as follows:
19
" (m) Upon the affirmative vote ef not less than six
20
ef its members the Federal Reserve Board shall have power
21
te fis from thne te time for eaeh Federal Reserve distriet the
22
percentage ef individualfeankcapital and surplus which may
23 fee represented fey leans secured fey stock er bond collateral
24
madefeymember banks within sueh district, but ne sueh lean
25
sfeaHfeemadefeyany suehfeankte any person in an amount
11
1
m excess el 4-0 per centum ef tfee unimpaired capital an4
2
surplus el suehfeanfe-Any percentage se fixedfeythe Fed
3
eral Eeserve Board shallfeesubject te change from time te
4
time upon ten days' notice, and it shall fee the duty ef the
5
Board te establish sueh percentages with a view te prevent-
6
ing the undue use el bank loans fer the speculative carrying
7
ef securities.
8
te direct any member bank te refrain from further increase
9
ef its loans securedfeystock er bond collateral ler any period
10
up te ene year under penalty el suspension el aH rediscount
11
privileges at Federal Eeserve banks."
12
13
14
15
The Federal Eeserve Board shall have newer
SEC. ^ The Federal Eeserve Aet? as amended, is
amended fey inserting between sections
title
seesr
and
(U.S.C.,
and £42} thereof the Mlewing new
section:
16
" SEC. 12A. -(a)- There is hereby created a Federal
17
Open Market Committee (hereinafter referred te as the
18
' committee '), which shall consist ef as many members as
19
there are Federal Eeserve districts.
20
bank fey its board el directors shall annually select ene
21
member el said committee.
22
mittee shall fee held at Washington, District el Columbia,
23
at least leur times each year, upon the eaH el the governor
24
el the Federal Eeserve Board er at tfee reoucst et anv
Each Federal Eeserve
The meetings el said com
12
1
three members ef the committee, andj m the discretion ef
2
the Board, may be attended fey the members ef the Board.
3
^{fef iNe Federal Reserve bank shall engage in open-
4
market operations under section 44 ef this Aet except in
5
accordance with regulations adopted by the Federal Reserve
6
Board.
•
the committee and to the several Federal Reserve banks
8
regulations relating te the open market transactions el sueh
9
banks and the relations ef the Federal Reserve System with
10
The Board shall consider, adopt, and transmit te
foreign central er other foreign banks.
11
" (c) The timej character? and volume ef aH purchases
12
and sales ef paper described in section 14 of this Aet as
13
eligible for open market operations shaH be governed with
14
a view te accommodating commerce and business and with
15
regard te their bearing upon the general credit situation ef
16
the country.
17
^
If any Federal Reserve bank shall decide not te
18
participate in open market operations recommended and ap-
19
proved as provided in paragraph -(b)- hereof, it shah file
20
with the chairman ef the committee within thirty days a
21
notice el its decision, and transmit a copy thereof to the
22
Federal Reserve Board."
23
24
SeOT 8T
The eighth paragraph ef section
Federal Reserve Aetj as amended (U.S.C., title
ef the
seer
13
1
2
3 4 1 I
S V P F ,
TIDE
SCCT
347), is amended
read as
follows:-
3
"Any Federal Reserve bank
may make advances for
4
periods net exceeding fifteen days te its member banks en
5
their promissory notes secured by the deposit er pledge
6
ef bonds,- notes, certificates ef indebtedness, or Treasury
7
biHs ef the United States, er by fee deposit er pledge ef
8
debentures or other sueh obligations ef Federal intor-
9
mediate credit banks which are eligible for purchase fey
10
Federal Reserve banks under section
11
any
-{&)- ef this Act; and
Federal Reserve bank may make advances for periods
12
net exceeding ninety days te its member banks en their
13
promissory notes secured fey sueh notes? drafts, biHs ef e^-
14
change, or bankers' acceptances as are eligible for rediscount
15
er for purchase fey Federal Reserve banks under fee provi
16
sions ef this Aetr AH sueh advances shaHfeemade at rates
17
tefeeestablishedfeysneh Federal Reserve banks, sueh rates
18
tefeesubject te fee review7 and determination ef fee Federal
19
Reserve Board. If any member bank te which any sneh ad-
20
vance has been made shall? during fee hie or continuance ef
21
sueh advance, and despite an official warning ef fee Reserve
22
bank ef fee district or ef fee Federal Reserve Board te fee
23
contrary? increase its outstanding loans secured fey collateral
24
in fee feraa ef stocks? bonds? debentures, or other sneh efeh-
25
gajtions, or loans made te members ef any organized stock
14
1
exchange, investment house, or dealer in securities, upon any
2
obligation, note? or b i t t y secured er unsecured? for the purpose
8
ef purchasing and/or carrying stocks, bonds, er other invest
4
mcnt securities (except obligations ef the United States)
5
sueh advance shallfeedeemed immediately due and payable?
o
and sueh member bank shall be ineligible as a borrower at
7
the Reserve bank ef the district under the provisions ef this
8
paragraph for sueh period as the Federal Reserve Rea^d
9
shall determine:
Provided,
That no temporary carrying er
10
clearance loans made solely for the purpose ef facilitating
11
the purchase er delivery ef securities offered for public sub-
12
scription shall be included in the leans referred te in this
13
paragraph."
14
SbOT 9T
Section 44 ef the Federal Reserve Aet? as
15
amended (U.S.C., title 42? sees? 353 te 358), is amended
16
by adding at the end thereof the following new paragraph:
17
" (g) The Federal Reserve Board shall receive special
18
supervision ever all relationships and transactions ef any
19
kind entered into by any Federal Reserve bank with any
20
foreign bank er banker, er with any group ef foreign banks
21
er bankers, and aH sueh relationships and transactions shall
22 fee subject te sueh regulations, conditions, and limitations as
23
the Board may prescribe?
24
tive ef any Federal Reserve bank shall conduct negotiations
25
ef any kind with the officers er representatives ef any
officer er other rcprcscnta-
15
1
foreign feank er banker without first obtaining the pcrmis
2
sien ef the Federal Reserve Board.
3
Board shall have the right7 in its discretion, te fee rcprc
4
sented in any conference er negotiations fey sueh reprcsenta
5
tive er representatives as the Board may designate,
6
report ef aH conferences er negotiations, and ali understand
7
ings er agreements arrived at er transactions agreed upon,
8
and aH other material faets appertaining te sueh conferences
9
er negotiations, shall fee filed with the Federal Reserve
10
Board in writing by a duly authorized officer ef each
11
Federal Reserve bank which shall have participated in sueh
12
conferences er negotiations."
13
SeOT
I O T
-(a)- Section
The Federal Reserve
A fuH
ef the Federal Reserve Aetj
14
as amended, is amended by inserting after the sixth para
15
graph thereof the following new paragraph:
16
"
member bank shall aet as the medium er agent ef
17
any nonbanking corporation, partnership? association, busi
18
ncss trust, er individual in making loans en the security ef
19
stocks? bonds, and: other investment securities te brokers er
20
dealers in stocks, bonds, and ether investment securities.
21
Every violation of this provision fey any member bank shaH
22 fee punishable fey a fine ef net mere than $100 per day dur23
ing the continuance ef sueh violation; and sueh fine may fee
24
collected,feysuit er otherwise, by the Federal Reserve bank
25
of' the district in wThich sueh member bank is located."
16
-
1
2
(b) • Such scctien 19 ef the Federal Reserve Act, as
amended (U.S.C,, title 42? seesr 443? £74? 161 166; Supfb
B
4
title
seer 462a), is further amended fey adding at
the end thereef the following new paragraph:
5
- T h e Federal Reserve Beard shatt from time te time
6
limit fey regulation the rate Ox interest which may fee paid
7 fey memfeer hanks en deposits? and may prescribe differ
8
ent rates for such navment en time and savings deposits
9
having different maturities er subject te different conditions
10
respecting withdrawal er repayment.
11
shah pay any time deposit before its maturity? er waive any
12
requirement ef notice before payment ef any savings deposit
13
except as te all saving deposits having the same require-
14
mcnt."
15
Section
ife member bank
ef the Federal Reserve Aet? as
16
amended (U.S.C., title 42? seesr £75? 326? £03? 593 595;
17
Supp. :s£E? title 42? seer 593) ? is further amendedfeyadding
18
at the end thereof thefollowingnew paragraph:
" (g) ife executive officer ef any memberfeanfeshall
20
borrow from er otherwise become indebted te any member
21
bank ef which he is an executive officer, and ne member
22
bank shall make any lean er extend credit in any other man-
23
nor te any ef its ewn executive officers: Provided,
24
loans heretofore made te any sueh officer may fee renewed
25
er extended net more than twe years from the effective
That
17
1
-date ef this title? if in aeeerd wife sound banking practice?
2
H any cxccutiye officer ef any member bank borrow from
er if fee fee er become indebted te any bank other fean a
4
member bank ef which he is an executive officer, he shaH
5
make a written report te fee chairman ef fee board ef
6
directors ef fee member bank ef wrhich he is an executive
7
officer, stating fee date and amount ef sueh lean er indebted
8
noss, the security therefor, and fee purpose for which fee
9
proceeds have been er arc te fee used.
Any executive
10
officer ef any member bank violating the provisions ef this
11
paragraph shall fee deemed guilty ef a misdemeanor and
12
shall fee imprisoned net exceeding one year-,- er fined net
13
more than $5,000, er both; and any member bank violating
14
the provisions ef this paragraph shall fee fined net more
15
than $10,000, and mayfeefineda further sum equal te the
16
amount so loaned er credit se extended."
17
S E O T
4-ST
The Federal Eeserve Aet? as amended, is
18
amended fey inserting bctwrccn section 24 and section
19
(U.S.C., title
20
42? see? WWf- hereof fee following new section:
21
" SEC. 34AT
see? m
and
Supp?
title
Hereafter no national bank, without fee
22
approval ef fee Comptroller ef fee Currency, and no State
23
member bank, without the approval ef fee Federal Eeserve
24
Beard? shaH -(4)- invest in bank premises? er in the steek?
25
bonds, debentures, er other sueh obligations ef any corpora
H. E, 5661
2
18
1
tien
holding the premises e l sueh hank or
make loans
2
to er upon the security ef the steefe ef any sneh corporation,
3
if the aggregate ef all sueh investments and loans will
4
exceed the amount ef the capital steefe ef sneh feanfer^
SEC.
5
The Federal Eeserve Act? as amended, is
6
further amended fey inserting after section 36- -{af (U.S.C.,
•
title 12^ sees* 611 631) thereof tke following new section:
8
9
-fhf ^etwith standing any other pro vision
"SEOT
r
\
f
1 f t -ITT
tTT l e t Vv
r> 1 1
FTNIFN
A !
n
^ITTII
T\ n f n - n n
n j-
r* / \ r v ^ T >~>
M i l i S l l l l u V7T tt! V 1 V 1J 11 t i l i l l U tttI U U l l l l l l U l l
1 r> TTT
A T
i - n
n / V l l i F\ r
1 M W t / T TTT t / U U l l y
10
te which any corporation organised under the laws ef the
11
United States shall fee a party? arising ent ef transactions
12
involving international or fetoign bankmg,* or banking i n
13
a dependency er insular possession ef the United States,
14
er out ef other international er foreign financial operations,
15
cither directly er through the agency, ownership, er control
16
ef branches or loeal institutions m dep endeneics or insular
17
possessions ef the United States or i n foreign countries,
18
shallfeedeemed te arise under the laws ef the United States?
19
and the distriet eeurts ef the United States shall have
20
original jurisdiction ef all sueh suits; and any defendant i n
21
any sueh suit may? at any time before the trial thereof?
22
remove sueh suits from a State court into the district court-
23
ef the United States for the preper district fey following the
24
procedure for the removal ef eauses otherwise provided fey
25
law?
19
1
" Notwithstanding any other prevision ef law? aH suits
2
ef a eivil nature at common law er in equity te which any
3
Federal Reserve bank shaH be a party shaH he deemed te
4
arise under the laws ef the United States? and the district
5
courts ef the United States shall have original jurisdiction
6
ef aH sueh suits; and any Federal Reserve bank which is a
7
defendant in any sueh suit may, at any time before the trial
8
thereof, remove sueh suit from a State court into the district
9
court ef the United States for the proper district by following
10
the procedure for the removal ef causes otherwise provided
11
by lawr
12
any Federal Reserve bank er its property before final judg
13
ment in any suit? action, er proceeding in any State? county,
14
municipal, er United States court."
15
No attachment er execution shall be issued against
SfiGr 14T Paragraph -Seventh" ef section 5136 ef
16
the Revised Statutes? as amended (U.S.C., title 12? seer 24-?
17
Supp. ^^E? title 12? seer
is amended te read as follows:
18
" Seventh? ¥e exercise by its board ef directors er
19
duly authorized officers er agents, subject te law? aH sueh
20
incidental powers as shall fee necessary te carry en the
21
business ef banking; fey discounting and negotiating promis
22
sery notes, drafts,feiHsef exchange, and other evidences ef
23
debt;feyreceiving deposits-?feybuying and selling exchange,
24
coin, and bullion; by loaning money en personal security;
25 ftftd by obtaining, issuing," and circulating notes according te
20
1
the provisions ef this title? and generally by engaging in aH
2
forms ef banking business and undertaking aH types ef bank-
3
ing transactions that may? fey the laws ef the State in
4
which sueh bank is situated, fee permitted te banks ef
5
deposit and discount organized and incorporated under tfee
6
laws ef sueh State? except insofar as they may be forbidden
• fey the provisions ef any Aet ef Congress.
8
The business
ef dealing in investment securities fey the association shall
9 fee limited te purchasing and selling sueh securities without
10
recourse, solely upon the order, and fer the account ef
11
customers, and in no ease for its own aecou-nt? and the asse-
12
ciation shall net underwrite any issue ef securities: Pro •
13
vided,
14
investment securities under sueh limitations and restrictions
15
as the Comptroller ef the Currency may fey regulation pre-
16
scribe, but in ne event -(4)- shah the total amount ef any
17
issue ef investment securities ef any ene obligor er maker
18
purchased after this seetien as amended takes effect and held
19
by the association fer its own account exceed at any time 40
20
per centum ef the total amount ef sueh issue outstanding, but
That the association may purchase fer its own account
this limitation shall net apply te any sueh issue the total
22
amount ef which dees net exceed $100,000 and dees net
23
exceed 50 per centum ef the ea^ital ef the association? nor
24
-ffl- shah the tetal amount ef the investment securities ef
25
any ene obligor er maker purchased after this section as
21
1
amended fakes effect and held by fee association for its own
2
account eseeed at any fene 45 per centum ef fee amount ef
3 fee capital stock ef fee association actually paid in and un4
impaired and 3S per centum ef its unimpaired surplus fund.
5
As used in feis section fee term - investment securities -
6
shall mean marketable obligations evidencing indebtedness
7
ef any person, copartnership, association, er corporation m
8 fee form ef bonds, notes, and/or debentures commonly
9
known as investment securities under sueh further definition
10
ef fee term - investment securities - as may fey regulation
11 fee prescribed fey fee Comptroller ef fee Currency.
Except
12
as hereinafter provided er otherwise permittedfeylaw? noth
13
ing herein contained shaH authorize fee purchasefeyfeeasso
14
ciation ef any shares ef steek ef any corporation.
15
tations herein contained as te investment securities shall net
16
apply te obligations ef fee United States, er obligations ef
17
any State er ef any political subdivision thereof, er obliga
18
tions issued under authority ef fee Ecdcral Earm Loan Aet?
19
as amended, er any other Acts creating Ecdcral corpora
20
tiens-?
21
monly known as fee safe deposit business fee association shaH
22
net invest in fee capital stock ef a corporation organized
23
under fee law ef any State te conduct a safe deposit busi
24
ness in an amount in excess ef 4# per centum ef the capital
Provided,
The limi
That in carrying en the business eem-
22
1
steefe ef the association actually paid m and unimpaired and
2
1 PC
p r v r i A | l~f"C; n-n-iynThfll"P/^/I ClIVnlllQ ^
1 0 JJ Ui uCirl^rrrr trr Ttt? ttllllli U'MII UU bU.1 JJllU%
3
The restrictions ef this seetien as te dealing in invest-
4
ment securities shall take eSeet two years after the date el
5
the aj)proval el tins A_et.
6
Seot
-faf Section
ef the Revised Statutes,
i
as ameneee
8
seer ^ t f j is amended te Fead as follows:
9
., title 12? see. 51 j Supp?
title
- SeGt
After this section as amended takes effect,
10
no national hanking association shall he organized with a
11
less eapital than $400?000? except that sueh associations
12
with a eapital ef
not less than $ou,lHA> may he organized
13
in any place the population ef whieh dees net exceed six
14
thousand inhabitants?
-N-o sueh association
shall he organ
15
wed m a city the population ol whieh exceeds fifty thousand
16
persons with a eapital ol less than $200,000? except that
17
in the outlying districts el sueh a eity where the State laws
18
permit- the organization el State banks with a capital el
19
$100,000 er less? national banking associations now organ-
20
ized er hereafter organized may? with the approval ef the
21
99
Comptroller
jftl
no 000 " of the Currcney? have a capital ef net less than
ZiLi
r[p ± V/VJKTXTV).
23
-(hf The tenth prnzgrnph ef section 0 ef the Federal
Reserve Aety as
24
25 amended te read
amended -f&rSrOry title 12, sec? 329) ? is
as follows-
23
1
"-Ne applying bank- shall be admitted te membership
2
in a Federal Reserve bank unless it possesses a paid up unim-
3
paired capital sufficient te entitle it te become a national
4
banking association in the plaee where it is situated under
5
the provisions el the National Bank Aet? as amended."
6
S E O T
4&T
Seetien 5139 ef the Revised Statutes, as
7
amended (U.S.C., title 43? seer
Suppr
title 42?
8
seer 53f? is amended by adding at the end thereof the follow
9
ing new paragraph:
10
"After twe years frem the date ef the enactment ef
11
the Banking Aet ef 4933? ne certificate representing the
12
stock el any sueh association shall represent the stock ef
13
any other corporation, except a member bank, nor shah the
14
ownership? sale? er transfer ef any certificate representing
15
the steek ef any sueh association fee conditioned m any
16
manner whatsoever upon the ownership, sale? er transfer
17
ef a certificate representing the stock ef any other corpora
18
tien? except a member bank."
19
S E O T
47T
-(ftf Alter the expiration el twe years after
20
the date ef enactment ef this Aetr it shall fee unlawful—
21
-(4-f Fer any person, firm, corporation, association,
22
business trust, er other similar organization, engaged prin
2o
crpallv in the business ef issuing, underwriting, selling, er
24
distributing, at wholesale er retail, er through syndicate
25
participation, stocks? bonds, debentures, notes, er other se-
24
1
curitics, te engage at the same fene te any extent
2
in fee business ef receiving deposits sufejeet te eheek er te
3
repayment upon presentation ef a passbook? certificate ef
4
deposit, er efeer evidence ef debt? er upon request ef the
5
depositor; er
6
-(2)- For any person, firm, corporation, association?
7
business trust? er other similar organization, efeer than a
8
banking institution er private banker subject te examination
9
and regulation under State er -Federal law? te engage te
10
extent whatever in the business ef receiving deposits
11
subject te check er te repayment upon presentation ef a
12
passbook, certificate ef deposit, er other evidence ef debt,
13
er upon request ef fee depositor? unless sneh person, firm?
14
corporation, association^ business trust? er other similar
15
organization shall submit te periodic examination by fee
16
Comptroller ef the Currency erfeyfeeFederal Reserve Bank
17
ef fee district and shaH make and publish periodic reports
18
ef its condition, exhibiting in detail its resources and -hafeili-
19
ties? sneh examination and reports tefeemade and published
20
at fee same times and in fee same manner and wife like
effect and penalties as are new provided fey law in respect
22
ef national banking associations transacting business in the
23
same locality.
-ffef Whoever shall willfully violate any ef fee pre-
25
visions ef this section shaH upon conviction fee fined net
25
1
mere tfeas $§t§9Q w imprisoned set more than five years?
2
er ketfey and any officer, directory employee, er agent ef
3
any person-, firm, corporation, association, business trust,
4
er etfeer similar organization wbe knowingly participates
5
ffi any sueh violation shall fee punished fey a like foe er
6
imprisonment or feetfer
7
Sect 18. The first two sentences ef secton m m
8
the
^
o tt> riUilvl
t*^ ^U
™U
f.n T
rl joe
a I I a3
tX
t7
j1
o1
jU
l V
ctlll
Jt*o
t7 oI'Uu
ll tTtt5
V 73 .
H
Revised
Statutes
(U.S.C.,
title
seer
8#f
ef
a*e
-
10
- A n y association may take? receive? reserve? and eharge
11
en any loan er diseeunt made? er upon any notes, feiHs ef
l^5
exchange? er other evidences ef debt, interest at the rate
13
allowed fey the laws ef the State, Territory, er District where
14
the bank is located? or at a rate ef i per ecntum m oxecss
15
ef the discount rate en ninety day eemmereial paper in effect
16
at the Federal Reserve bank in the Federal Eeserve distriet
17
where the bank is leeated? whichever may fee the greater?
18
and no more, exeept that where fey the laws ef any State
19
a different rate is limited for banks organized under State
20
laws? the rate so limited shall fee allowed for associations
21
organized er easting in any sueh State under this title?
22
When no rate is fixed by the laws ef the State, er Territery?
23
er District, the bank may take? receive? reserve? er charge a
24
mte net exceeding 7- per eentuna? er 4- per ecntum in exeess
25
ef the discount- rate en ninety day commercial paper in
26
1
effect at the Federal Reserve bank m the Federal Reserve
9
district where the bank is located, whichever may be the
3
greater, and sueh interest may be taken in advance, reckon
4 ' y Mi YA» tnu
R\ nil
/-If>yTTfj
fnf W
w Il Il Ii UpIlIl trtu
fV>r> N~
r>
nfn
N TUT
UTUY
5
V>-|11 U Rnt'u tnfli
ny QTH A p-nnp R\f
ni'I U V IUUIIIJU U I
UIIJ ,
debt has te run."
6
SEC. 4-9T IN any ease in which, in the opinion ef the
7
Comptroller ef the Currency, it would be te the advantage
g
ef the depositors and unsecured creditors ef any national
9
banking association whose business has been closed, fer sueh
10
association te resume business upon the retention by the
11
association, f©¥ a reasonable period te fee prescribed fey tfee
12
Comptroller, el all er any part ef its deposits, the Comjp
13
troller is authorized, in his discretion, te permit the associa
14
tien te resume business if depositors and unsecured creditors
15
ef the association representing a least 85 per centum ef its
16
total deposit and unsecured credit liabilities consent in writing
17
te sueh retention ef deposits.
18
be construed te affeet in any manner any powers ef the
19
Comptroller under the provisions ef law in feree en the date
20
of enactment ef this Aet with rcspeet te the reorganization
21
of national banking associations.
Nothing in this section shall
22
SeOt 20t Whenever-, m the opinion ef the Comp—
23
troller ef the Currency? and director er officer ef a national
24
bank, er ef a bank er trust company doing business in the
25
District ef Columbia, er whenever, in the opinion ef a Fed
27
1
era!
agent? any
direetor er officer el
ef a State member
eral Reserve agenty
fray director
2
bank in his district sfeaH
shall have eentinued
continued te violate any law
3
to sueh
such Bftftfe
hank er
or trust eemp
eompany
relating te
anv er shall have con-
4
tinued
tinucd unsafe er unsound praetiees in eondueting the business
5
ef sueh bank or trust company? after having been warned
6
fhA
i ImnrtfT'n
Ipt' tjr
A the
fhA 0urrcney er the Federal Reserve
un-vyT the
iiiu (J
vj
u
m ij troiler
i i uiitT
titu
fey
omp
el
7
agent, as the ease may
he? te discontinue sueh -violations
violations
agent.
mav fee?
8
ol law er such unsafe er unsound praetiees? the Comptroller
9
ef the Currency er the Federal Reserve agent? as the case
10
may he? may eertify the faets te the Federal Reserve Board.
11
I n any sueh ease the Federal Reserve Board may cause
12
notice to he served upon sueh director or officer te appear
13
before sueh Board te show eausc why he should not fee
14
removed from office.
15
eaeh director of the hank affected? by registered mail;-
16
after granting the accused director er effieer a reasonable
17
epportunity to fee heard? the Federal Reserve Board finds
18
that he has continued te violate any law relating te sueh
19
bank er trust company er has eentinued unsafe er unsound
20
praetiees in eondueting the business ef sueh bank er trust
21
company after having been warned fey the Comptroller ef
22
the Lurrencv er the Federal Reserve agent te discontinue
23
sueh violation ef law er sueh unsafe er unsound practices?
24
the Federal Reserve Beard? in its discretion? may order that
25
sueh director er officer fee removed from office-.
A eepy of sueh order shall fee sent te
If
A copy ef
28
1
such order shell he served upon sueh director er officer?
2
A copy ef sueh order shall also he served upon the hank- ef
3
which he is a director er officer, whereupon sueh director er
4
officer shall eease te he a director er officer ef sueh bank:
5
Provided?
6
whieh it is based shall not be made public er disclosed te
7
anyone except the director er officer involved and the dircc
8
tors ef the bank involved, otherwise than in connection with
9
proceedings for a violation of this section.
That sueh order and the findings ef faet upon
Any sueh director
10
er officer removed from office as herein provided who there -
11
after participates in any manner in the management ef sueh
12
bank shah be fined net mere than $5,000 er imprisoned
13
for net more than five years, er both, in the discretion ef
14
the court.
15
See? 34-t After one year from the date ef enactment
16
of this Act-, notwithstanding any ether provision ef law? the
17
board ef directors, beard ef trustees, er ether similar gev-
18
erning body ef every national banking association and ef
19
every State bank er trust company which is a member ef the
20
Federal Eeserve System shaH eensist ef net less than five
21
nor more than twenty five members; and every director,
22
trustee? er other member ef sueh governing body shall be the
23
bona fide owner in his own right ef shares ef stock ef sueh
24
hanking association, State bank er trust company having a
25
par value in the aggregate ef net less than $2,000.
If any
29
1
national banking association violates the provisions ef
2
seetion and continues sueh violation after thirty days' notice
3
frena the Comptroller ef the Currency, the said Comptroller
4
may appoint a receiver er conservator thorcfor7 in accordance
5
with the previsions ef existing lawr
6
trast company which is a member ef the Federal Reserve
7
System violates the provisions ef this section and continues
8
soeh violation after thirty days' notice from the Federal
9
Reserve Board., it shall ho subject to the forfeiture ef its
10
membership in the Federal Reserve System m accordance
11
with the previsions of section 9 ef the federal Reserve Aet?
12
as amended.
13
SEGT
te
If any State bank ef
From and after January 4? 1934, no officer
14
er director ef any member bank shall be an officer, director,
15
er manager ef any corporation? partnership? er unincorpo
16
rated association engaged primarily in the business ef pur-
17
chasing? selling? er negotiating securities? and no member
18
bank shall perform the functions of a correspondent bank
19
en behalf ef any sueh individual, partnership, corporation,
20
or unincorporated association-? and no sueh individual,- part-
21
nership? corporation? er unincorporated association shall
22
perform fee functions ef a correspondent for any member
23
bank or hold en deposit any funds en behalf ef any member
24
bank, unless in any sueh ease there is a permit therefor
25
issued by fee Federal Reserve Board;- and the Board is
30
X
authorized te issue sueh permit if Hi its judgment it is not
2
incompatible with tfee public interest, and to revoke any
3
such permit whenever it finds alter reasonable notice and
4
opportunity te be heard? that the pufehe interest requires
5
sueh revocation.
6
S®6r
The Aet entitled
ii
A n Aet te supplement
7
existing laws against unlawful restraints and monopolies,
8
and ler other purposes— approved October 45? 1914, as
9
amended, is hereby amended by adding alter section 8
10
thereof -(U.S.C., title 46? seer
"
1 1
S E O T
8 A T
thefollowingnew section
That Irem and alter fee 4st day el Janu
12
ary 4934, ne director? efeeer? er employee el any feank?
13
banking association, er trust company organized er opcrat-
14
ing under the laws el the United States shall be at the same
15
tnne a director? ofheer? er employee el a corporation er a
16
member el a partnership organised ler any purpose what-
17
soever whieh shall make leans secured by stock er bond
18
collateral te any individual? association? partnership, er
19
corporation other than its own subsidiaries^
20
S®6T S4T
Tfee previsions el section 5454 el the Revised
21
Statutes and section 23 ef the Federal Reserve Aet? as
22
amended (U.S.C., title 42? seesr 63 and
23
bility upon shareholders in national banking associations in
24
addition te the amount invested in shares) ? shall net apply te
25
held any shareholder m any national banking association
(imposing lia-
31
1
individually responsible in any amounts ie excess of the
2
amount invested in shares in sueh association, on account
3
of any shares acquired by him after the date ef enactment
4
ef this title?
5
TITLE
6
H
AFFILIATES
SECTION
7
2Q4T
The paragraph ef section
4
ef the
8
Federal Reserve Aety as amended (U.S.C.- title 12y sec.
9
304), which commences with the wrords - T h e Federal
10
Reserve Board shall classify - is amendedfeyinserting before
11
the period at the end thereof a colon and the following:
12
"
13
within the same Federal Reserve district are affiliated with
14
the same holding company affiliate, participation fey sueh
15
member banks in any sueh nomination er election shall fee
16
confined te one ef sueh banks, which may be designated for
17
the purpose by such holding company affiliate."
18
Provided,
SEOT
That whenever any two er more member banks
202T
Section 0 ef the Federal Reserve Aety as
19
amended (U.S.C., title 12y sees? 321 331; Supp?
title
20
12r sees? 321 331), is amended by adding at the end thereof
21
the following new paragraphs:
22
" Eaehfeankadmitted te membership under this section
23
shaH obtain from eaeh ef its affiliates other than: member
24
banks and furnish te the Federal reserve bank ef its district
25
and te the Federal Reserve Board net less than three reports
32
1
during eaefe year.
Suefe reports sfeali fee » suefe lore* as
2
#te Ecdcral Eeserve Beard may nrescribeT shall be verified
3
by the eath er affirmation ef the president er sueh other
4
officer as may be designated by the board ef directors ef
5
suefe affiliate te verify suefe reports? and shall disclose the
6
information hereinafter provided for as ef dates identical
7
with those feed by the Federal Reserve Beard for
8
reports ef the condition ef the affiliated member bank?
9
Each sueh report ef an affiliate shah be transmitted as
10
herein provided at the same time as the corresponding
11
report ef the affiliated member bank? except that the Fed-
12
eral Reserve Board may? in its discretion, extend sueh time
13
for good eanse shown.
14
information as in the judgment ef the Federal Reserve
15
Beard shall fee necessary to disclose felly the relations
16
between sueh affiliate and sueh bank and te enable the Board
17
te inform itself as te the effect ef sneh relations upon the
18
affairs ef sueh bank?
19
be published by the bank nnder the same conditions as
20
govern its own condition reports.
Each sueh report shall contain sueh
The reports ef sueh affiliates shaH
21
—iiYriy such affiliated member bank may be required te
22
obtain from any sueh affiliate sueh additional reports as
23
in the opinion ef its -Federal Jcteserve bank er the Federal
24
Reserve Board may be necessary fe order to obtain a full
25
and complete knowledge ef the condition ef the affiliated
33
1
member bank?
Sueh additional reports shah be transmitted
2
te fee Federal Reserve bank and fee Federal Reserve Board
3
and shall be in sueh form as fee Federal Reserve Board
4
may prescribe.
5
"Any sueh affiliated member bank which fails te
6
obtain from any ef its affiliates and furnish any report
7
provided for by the two preceding paragraphs of this section
~
shall be subject to a penalty ef $400 for eaeh day during
9
which sueh failure continues, which? by direction ef the
Federal Reserve Board, may be collected, by suit er other
H
wise, by the Federal Reserve bank ef the district in which
sueh member bank is located.
For fee purposes of this
13
paragraph and fee two preceding paragraphs ef this section,
14
the term 6 affiliate ' shall include holding company affiliates
15
as weH as other affiliates.
16
" State member banks shall be subject te the same
17
limitations and conditions wife respect te the purchasing,
18
soiling, underwriting, and holding ef investment securities
19
and stock as arc applicable in the ease ef national banks
20
under paragraph ' Seventh- ef section
21
Statutes, as amended.
ef the Revised
22
"After two years from the date ef the enactment ef
23
the Banking Aet ef 1933? no certificate representing fee
24
stock ef any State member bank shah represent the stock
25
of any ether corporation, except a member bank, nor shah
H. R. 5661
3
34
1
the ownership, sale? or transfer of any certificate represent
2
ing the stock ef any sueh bank-feeconditioned in any manner
3
whatsoever upon the ownership? sale? er transfer ef a cer-
4
tificate representing the stock of any other corporation,
5
except a member feank?
6
" Each State member bank affiliated with a holding
7
company affiliate shah obtain from sueh holding company
8
affiliate, within sueh time as the Federal Reserve Board shah
9
prescribe, an agreement that sueh holding c o mp any affiliate
10
shallfeesubject te the same conditions and limitations as are
11
applicable under section 5144 ef the Revised Statutes, as
12
amended, in the ease ef holding company affiliates ef national
13
banks.
14
the Federal. Reserve Board.
15
member bank affiliated with a holdmg company affiliate to
16
obtain sueh an agreement within the time so prescribed, the
17
Federal Reserve Board shall require sueh bank- te surrender
18
its stock in the Federal Reserve bank and te forfeit aH rights
19
and privileges ef membership in the Federal Reserve System
A copy ef eaeh sueh agreement shall be filed with
Upon the failure ef a State
20
as pro vi d c d m this section. Whenever the Federal Reserve
21
Board shaH have revoked the voting permit ef any sueh
22
holding company affiliate, the Federal Reserve Board may,
23
ie its discretion, require any er all State member banks
24
affiliated with sueh holding company affiliate te surrender
25
their stock in the Federal Reserve bank and te forfeit aH
35
1
rights and privileges el membership in the Federal Reserve
2
System as provided in this section.-
3
" I n connection with examinations el State member
4
banks, examiners selected er approved by the Federal
5
Reserve Board shall make sueh examinations el the affairs
6
el all affiliates el sueh banks as shall be necessary te disclose
7
fully fee relations between such banks and their affiliates
8
and the effect el sueh relations upon the affairs el sueh banks.
9
The expense el examination ol affiliates el any State member
10
bank may, in fee discretion el the Federal Reserve Board,
11
be assessed against sueh bank and when so assessed, shall
12 fee paid by sueh bank. In the event el the refusal te give
13
any information requested in the course ot the examination
14
ef any sueh affiliate, er in the event ef the refusal te permit
15
sueh examination, er in the event ef the refusal te pay
16
any expense so assessed, the Federal Reserve Board may,
17
m its discretion, require any er all State member banks
18
affiliated wife sueh affiliate te surrender their stock in the
19
Federal Reserve bank and te forfeit all rights and privileges
20
ef membership in the Federal Reserve System, as provided
21
in this section."
22
The Federal Reserve Aet? as amended, is
23
amended by inserting between sections 2& and 34 thereof
24
(U.S.C., title 43? seesr 64 and 374- Supjb
25
see. 374-)- the following new section:
title 43?
36
1
- SfiOr S&Av
member kb»fe s M -(-if make any lem
2
or a w extension Or credit to, or purchase securities under
3
repurchase agreement from, any of its affiliates, er (2-)- in
4
vest any ef its funds in the capital stock, bonds, debentures,
5
er ether sueh obligations ef any sueh affiliate, er -(&)- accept
6 fee capital stock, bonds? debentures, er other sneh obliga
7
tions ef any sneh affiliate as collateral security for advances
8
made te any person, partnership, association, er eorporatin,
9
if? in fee ease ef any sneh affiliate? fee aggregate amount ef
10
sneh loans, extensions ef credit, repurchase agreements,
11
investments, and advances against sneh collateral security
12
wiH exceed 40 per centum ef the capital steek and surplus
13
ef sneh member bank? er if? in the ease ef ail sneh affiliates,
14 fee aggregate amount ef sneh loans, extensions ef credits,
15
repurchase agreements, investments, and advances against
16
sneh collateral security will exceed 80 per centum ef the
17
capital stock and surplus ef sneh member bank.
18
" Within the foregoing limitations, eaeh lean er extcn
19
sien ef credit ef any kind er character te an affiliate shall be
20
secured by collateral in the form of stocks, bonds, debentures,
21
er other sneh obligations having a market value at the time
22
ef making the lean er extension ef credit ef at least 80 per
23
centum more than the amount of the lean er extension ef
24
credit, er ef at least 40 per centum more than the amount ef
25 fee loan er extension ef eredit if it is secured by obligations
37
1
ef any State, er ef any political subdivision er agency
2
thereof: ProvidedT
3
shah net apply to loans or extensions of eredit seeured by
4
obligations ef the United States Government, the Federal
5
intermediate credit banks? er the Federal land banks? er by
6
sueh notes, drafts? bills of exchange, or bankers' acceptances
•
as arc eligible for rediscount er lor purchase
8
Reserve banks?
9
officer, elerk? er other employee or anv representative ef
10
any sueh affiliate shall be deemed a loan te the affiliate to
11
the extent that the proceeds ef sueh lean are used for the
12
benefit el? er transferred te? the affiliate.
13
That the provisions of this paragraph
fey
cdcral
A loan or extension of eredit to a director
" For the purposes of this section the term ' affiliate '
14
s U
15
affiliates, and the previsions ef this section shall net apply
16
te any affiliate -(4-)- engaged solely i n holding the bank
17
premises of the member bank w i t h which it is affiliated?
18
-(2}- engaged solely i n eondueting a safe deposit business or
19
the business ef an agrieultural credit corporation er livestock
20
lean eompany, -f3)- i n the eaptial steek ef whieh a national
21
banking association is authorized to invest pursuant
22
section
23
organized under section 25 -(a)- ef the Federal Reserve
24
Aet? as amended. but as te any such affiliate, member
25
banks shah eontinue to fee subject te ether provisions ef
inefode holding company affiliates m well as other
te
ef the Federal Reserve Act? as amended, er
38
2
law applicable te loans by sueh banks and investments by
2
sueh banks in stocks, bonds, debentures, er other sueh
3
obligations."
4
S®Or 204-7 Section #444 ef the Revised Statutes, as
5
amended (U.S.C., title
g
as follows :
7
see? 64-fj is amended te read
" SEO. 5144. In all elections ef directors and in de-
3
elding aH questions at meetings ef shareholders, eaeh share
9
holder shaH fee entitled to one vote en eaeh share ef stock
10
held fey him; except -flf- that shares ef its own stock held
11
by a national bank as sole trustee shaH net be voted, and
12
shares ef its own stock held by a national bank and one
13
er more persons as trustees may fee voted fey sueh other
14
person er persons, as trustees, in the same manner as if he
15
er they were the sole trustee, and -fSf shares controlled
16 fey any holding company affiliate ef a national bank shaH
17
net fee voted unless sueh holding company affiliate shaH
18
have first obtained a voting permit as hereinafter provided,
19
which permit is in force at the time sueh shares are voted.
20
Shareholders may vote fey proxies duly authorized in
21
wrriting; but no officer, clerk, teller, er bookkeeper ef sueh
22
bank shaH act as proxy; and no shareholder w^hose liability
23
is past due and unpaid shaHfeeallowred te vote.
24
25
" For the purposes ef this section shares shaH fee
deemed te fee controlled fey a holding company affiliate if
39
1
tfeey are owned er controlled directly ef indirectly fey suefe
2
holding company affiliate, er feeM fey any trustee for the
3
benefit of the shareholders er members thereof.
4
"Any sueh holding company affiliate may make appli-
5
cation te the Federal Eeserve Board for a voting permit
6
entitling it te east ene vote at all elections ef directors and
7
in deciding ah questions at meetings ef shareholders ef sueh
8
bank en each share ef stock controlled by it er authoriz
9
ing the trustee er trustees holding the steek fer its benefit
10
er fer the benefit ef its shareholders so to vote fee same.
11
The Federal Eeserve Board may, in its discretion, grant er
12
withhold sueh permit as the public interest may require.
13
In acting upon sueh application, the Board shall consider
14
thefinancialcondition ef fee applicant, the general character
15
ef its management, and the probable effect ef the granting
16
ef sueh permit upon the affairs ef sueh bank, but no sueh
17
permit shall be granted except upon the following conditions:
18
" (a) Every sueh holding company affiliate shall? in
19
making the application fer sueh permit, agree -{if te
20
receive, en dates identical wife those fixed fer the examina
21
tien ef banks with which it is affiliated, examiners duly
22
authorized te examine sueh banks, who shall make sueh
23
examinations ef sueh holding company affiliate as shall be
24
necessary te disclose fully the relations between sueh banks
25
and sueh holding company affiliate and the effect ef sueh
40
1
relations upon the affairs ef sneli banks, suefe examinations
2
te DC at tllO expense ef the holding company affiliate so
8
examined;
4
contain such information as shall he neeessary te disclose
5
fully the relations between sueh affiliate and sueh banks
6
and the effect of such relations upon the affairs ef sueh
7
hanks-j -f&f feat sueh examiners may examine eaeh bask
8
owned er eentrehed by the holding eempany affiliate? both
9
individually and in conjunction with ether hanks owned er
10
controlled by sueh holding eempany affiliate? and -(4)- that
11
publication ef individual er consolidated statements ef een-
12
dition ef sueh hanks may be required;
that the reports ef sueh examiners shall
13
" (b) After five years after the enactment ef the
14
Banking Aet ef 1933? every sueh holding eempany affiliate
15
-fi)- shall possess? and shall continue te possess during
16
the life ef sueh permit, free and elear ef any hen? pledge?
17
er hypothecation ef any nature, readily marketable assets
18
other than bank stock in an amount net less than 4-2 per
19
centum ef the aggregate par value ef all bank stocks een-
20
trolled by sueh holding eempany affiliate? which amount
21
shall be increased by net less than 2 per centum per annum
22
ef sueh aggregate par value until sueh assets shall amount te
23
per ecntum ef the aggregate par value ef sueh bask stocks-
24
and -£2f shall reinvest in readily marketable assets other than
^ni
hnn
oil HUr
net earnings ever and above 6 per centum
ucllliv\z gfnr*Ir
ll/Uiv ttlx
41
1
per a f f i m en the keek value el ite ewft shares outstanding-
2
until sueh assets shall amount te sueh
3
aggregate par value ef aH bank stocks controlled by it?
4
9
per centum el the
^-fef Notwithstanding the foregoing provisions ef tins
5
section,- alter five years after the enactment ef the Bank
6
ing Aet ef 1933, -ft}- any sueh holding company affiliate
7
the shareholders
8
vidually and severally liable i n proportion te the number
N
Ftrr
ohNYNA v7T
rvi S
enoh
wJLJLMIUft
llUii
er members ef whieh
rnnlriTnn*
r t r t U r i t g Lpnmr^nnv
Ullijmliy
lfi
l l Hhn
l i l i c fil lIr*
A
shall
hrln
xxtTttt
be indi-
HTT fLr>orn
tr^yiiUIlI
10
respectively, i n addition to amounts invested therein, for
11
all statutory liability imposed en sueh holding company
12
affiliate by reason ef its control ol shares e l stock e l hanks,
13
shall be required only te establish and maintain out e l net
14
earnings ever and above % per centum per annum en the
15
book value el its own shares outstanding a reserve ef readily
16
marketable assets in an amount net less than 4-2 per centum
17
ef the aggregate par value ef bank steeks controlled by it?
18
and -f2f the assets required by this section te be possessed
19
by sueh holding eempany aitihate may be used by it I or
20
replacement ef capital i n hanks affiliated with it and for
21
losses incurred in sueh banks, but any deficiency i n sueh
22
assets resulting from sueh use shall be made up within sueh
23
period as the Federal Reserve Board may by regulation
24
prescribe;
42
1
- (d) Every officer, director, agent, and employee ef
2
every sueh holding company affiliate shall he subject te the
3
same penalties for false entries m any book, report? er
4
statement ef such holding company affiliate as are applicable
5
te officers, directors? agents, arid employees ef member
6
banks under section 5209 ef the Revised Statutes, as
7
amended; and
8
" (e)- Every sueh holding company affiliate shall, m rts
9
application for sueh voting permit, -f4)- shew that it dees net
10
own, control, er have any interest in? and is net participating
11
in the management er direction ef? any corporation, business
12
trust? association? er other similar organization formed for
13
the purpose ef? er engaged principally in? the issue, fieta-
14
tion, underwriting? public sale? er distribution, at wholesale
15
er retail er through syndicate participation, ef stocks? bonds,
16
debentures, notes, or ether securities ef any sort -{here-
17
inafter referred te as - securities company ^j-j -(£)- agree that
18
during the period that the permit remains in force it will
19
not acquire any ownership, eentrel? er interest in any sueh
20
securities company er participate in the management er
21
direction thereof-?
22
the application for such permit? it owns, controls, er has an
23
interest in? er is participating in the management er dircc
24
tion ef? any sueh securities company, it wiH? within hve
25
years after fee filing ef sueh application? divest itself ef its
agree that if? at the time ef filing
43
1
ownership^ control, and interest m suefe securities company
2
and wiH cease participating in tfee management er direction
8
thereof-,- and will set thereafter, during tfee period tfeat fee
4
permit remains is force, acquire any further ownership,
5
control, er interest in any sueh securities company ef par-
6
ticipate in fee management er direction thereof; and -f4}-
7
agrco feat thenceforth it wife declare dividends esly eut ef
8
actual set earnings.
9
at any tfene it shall appear te tfee Federal Reserve
10
Board feat any holding company affiliate feas violated any
11
ef tfee provisions ef tfee Banking Aet ef 1933 er ef aey
12
agreement made pursuant te tfeis section,- tfee Federal B e
13
serve Board may, is its discretion revoke any such voting
14
permit after giving sixty days' notice fey registered mail ef
15
its intention te tfee holding company affiliate and affording
16
it an opportunity tefeeheard. Whenever fee Federal Re-
17
serve Board shall have revoked any sueh voting permit, ne
18
national bank whose stock is controlled fey fee holding com
19
pany affiliate whoso permit is se revoked shall receive depos
20
its ef public moneys ef tfee United States, ner shall any snefe
21
national bank pay any further dividend te suefe holding com
22
pany affiliate upon any shares ef suefe bank controlled by
23
suefe holding company affiliate.
24
" Whenever fee Federal Reserve Board shall have re-
25
voked asy voting permit as hereinbefore provided, fee
44
1
rights, privileges, and franchises ef any er all national banks
2
the stock ef which is controlled by sueh holding company
3
affiliate shall, in the discretion ef the Federal Reserve Board?
4
be subject te forfeiture in accordance with section 3- ef the
5
Federal Reserve Aet? as amended/'
6
S E C . 205T
After twe years from the date ef the enact
7
ment ef this Aetr no member bank shall be affiliated m any
8
manner described in seetien 4 -fb}- ef this title wife any eer-
9
poration, association, business trust, er other similar organiza
10
tien engaged principally in fee issue, flotation? underwriting,
11
public sale? er distribution at wholesale er retail er through
12
syndicate participation ef stocks, bonds, debentures, notes,
13
er other securities.
14
Fer every violation ef this section the member bank
15
involved shall be subject te a penalty net exceeding $1,000
16
per <lay fer eaeh day during which sueh violation continues.
17
Sueh nenaltv may be assessed by the Federal Reserve Board?
18
in its discretion, and? when se assessed, may be collected by
19 fee Federal Reserve bank by suit er otherwise.
20
If any sueh violation shall continue fer s s calendar
21
months after the member bank shall have been warned by
22 fee Federal Reserve Board te discontinue the same, -faf in
23
the ease ef a national bank? aH rights? privileges, and
24
franchises granted te it under the National Bank Aet may
25 fee forfeited in the manner prescribed in section 2- ef the Fed-
45
1
efaA Reserve Act, as amended, ef? -fb)- in the ease ef a State
2
member bank? ah of its rights arid privileges ef membership
3
in the Federal Reserve System may be forfeited in the
4
manner prescribed m section 0 of the Federal Reserve Aet?
O ftS amended.
6
•SEGT
306? -(a)- The second sentence ef the first parar
7
graph ef section 5200 ef the Revised Statutes? as amended
8
(U.S.C., title 43? see? 84- Supp? ^4? title 43? see? 84f?
9
is amended by inserting before fee period at fee end thereof
10 fee following: " and shall include in the ease ef obligations
11
ef a corporation ah obligations ef all subsidiaries thereof in
12
which sueh corporation owns or
13
interest/-
controls
a majority
14
-(h)- The amendment made by this section shah net
15
apply te sueh obligations of subsidiaries held by such asse-
16
ciation en fee date this section takes effect?
17
S®e? 307? Section 5344 ef the Revised Statutes, as
18
amended (U.S.C., title 43? see? 464- Supp? ¥4? title 43?
19
see? 161), is amended by adding at the end thereof the
20
following new paragraph:
21
" Each national banking association shall obtain from
22
eaeh ef its affiliates other than member banks arid furnish
23
te fee Comptroller ef the Currency not less than three
24
reports during eaeh year, in such form as the Comptroller
25
may proscribe? verified by the oath er affirmation ef the
46
1
president er such other officer as may fee designated fey the
2
board ef directors ef sneh affiliate te verify sneh reports,
3
disclosing the information hereinafter provided fer as ef
4
dates identical with these fer which the Comptroller shaH
5
during sueh year require the reports ef the conditions ef the
6
association.
7
- affiliate - shall include holding company affiliates as weH
8
as ether affiliates?
Fer the purpose ef this section the term
Eaeh sueh report ef an affiliate shaH
9 fee transmitted te the Comptroller at the same time as the
10
corresponding report ef the association, except that the
11
Comptroller may, in his discretion, extend sueh time fer
12
good cause shewn?
13
information as in the judgment ef the Comptroller ef the
14
Currency shaH fee necessary te disclose fuHy the relations
15
between sueh affiliate and such bank and te enable the
16
Comptroller te inform himself as te the effect ef sueh rekt-
17
tions upon the affairs ef sueh bank.
18
affiliates shaH be published by the association under fee same
19
conditions as govern its own condition reports, The Comp
20
troHer shaH alse have power to eaH fer additional reports
21
wife respect te any sueh affiliate wrhcncvcr in his judgment
Eaeh such report shaH contain sueh
The reports ef sueh
22 fee same are necessary in order te obtain a fuH and com
23
plctc knowledge ef the conditions ef the association wife
24
which it is affiliated.
25
transmitted te fee Comptroller ef fee Currency m sueh form
Such additional reports shall fee
47
1
as he may prescribe. Any seek affiliated bank which fails
2
te obtain and furnish any report required under this scctiop
3
shall be subject te a penalty of $100 fer eaeh day during
4
which sueh failure continues/'
5
Seer 208 -(a)- The first paragraph ef section 5240 ef
6
The Revised Statutes, as amended (IT.S.C.? title 42?
7
seer 481)7 is amended by inserting before the period
8
at the end thereof a colon and the following proviso:
9
" Provided,
That in making the examination ef any
10
national bank the examiners shall include sueh an cxam-
11
ination ef the affairs ef aH its affiliates other than member
12
banks as shall be necessary te disclose fully the relations be-
13
tween sueh bank and sueh affiliates and the effect ef sueh
14
relations upon the affairs of such bank j and in the event ef
15
the refusal to give any information required in the course
16
ef the examination ef any sueh affiliate, er in the event ef the
17
refusal te permit such examination, aH the rights,- privileges,
18
and franchises ef the bank shall be subject te forfeiture in
19
accordance with section 2- ef the Federal Reserve Act, as
20
amended.
The Comptroller ef the Currency shall have
power? and ho is hereby authorized? te publish the report
ef his examination ef any national banking association er
23
affiliate which shall net within ene hundred and twenty
24
alter notification ef fee recommendations er suggestions
^
ef fee Comptroller, based on said examination, have com-
48
I
plied wife the same te bis satisfaction.- ^finety days1 netiee
prior to such publicity shaH be given- to the bank or
3
affiliate."
a
(b) Section o2 40 of the Ivc vised Statutes? as amended
5
(U.S.C., title 42? see? 481 )7 is further amended by adding
6
after the first paragraph thereof
7
paragraph-
the following new
8
" The examiner making the examination ef any affiliate
9
ef a national bank shaH have powrcr te make a thorough
10
examination ef aH the affairs ef the affiliate, and in doing
11
so he shall have power te administer oaths and te examine
12
any ef fee officers, directors, employees, and agents thereof
13
under oath and te make a report ef Ins findings te the
14
Comptroller ef the Currency.
15
ef sueh affiliates may he assessed by the Comptroller ef fee
16
Currency upon the affiliates examined in proportion to assets
17
er resources held by the affiliates upon the dates ef cxamina
18
tion of the various affiliates.
19
refuse te pay sueh expenses er shall fail te do se within
20
sixty- days after the date ef such assessment, then sueh
21
expenses may be assessed against the affiliated national bank
22
and? when se assessed? shaH be paid by sueh national bankr
23
Provided,
24
more national banks, sueh expenses may be assessed against?
25
and collected from, any er aH ef sueh national banks in sueh
howevevj
The expense ef examinations
4f any sueh affiliate shah
That, if the affiliation is wife two or,
49
I
groportiona as
prcocribc.
Comptroller ef the Currency may
If any affiliate ef a nationalfeanfesfeafl refuse te
g
permit- an examiner te make an examination ef tbe affiliate
^
or shall refuse to give any information required in the course
5
of any sueh examination? the national bank with which it is
q
affiliated shall he subject te a penalty ef net mere than $400
rj
for eaeh day that any sueh refusal shall continue. Such pen-
g
alty may be assessed by the Comptroller ef the Currency and
9
collected in the same manner as expenses ef examinations.-'
10
TITLE III
II
F E D E B A L ©EPOSIT INSUBANCE COBROBATION
12
13
S E C T I O N 304?
-(a)- There is hereby created a Federal
Deposit Insurance Corporation (hereinafter referred te as
the - Corporation tyy whose duty it shah be te purchase,
15
hold, and hquidate as hereinafter provided, the assets ef
16
national banks which have been closed by action ef the
17
Comptroller ef the Currency? er by vote ef their directors,
lg
and the assets ef State member banks, and te make loans te
19
State banks and trust companies as hereinafter provided,
20
which have been closed by action ef the appropriate State
21
authorities, or by vote ef their directors.
22
(b)' The
management of the Corporation shah be
23
vested in a beard ef directors? consisting ef five members,
24
one ef whom shall be the Comptroller ef the Currency, one
H. R. 5661
1
50
1
a member ef the Federal Reserve Beard designated by the
2
Board for the purpose? and tkree eitizens ef the United
3
States appointed fey the President, fey and with the advice
4
and eonscnt el the Senate? who shall held their offices dur-
5
ing a term ef sis years?
6
pointivo members ef the beard shaH be members ef the
7
same political party.
Jfet mere than two ef the ap-
The terms ef tlie appointive members
8 first appointed shahfeefor two? four? and sis years? as desig
9
natcd fey-the President?
The appointive members ef the
10
beard shaH receive compensation at the rate ef $10,000
11
per annum, payable monthly out ef the funds ef the Cer-
12
poration, but no other member ef the board shaH rccciyc
additional compensation for service as a member.
14
fc;
is hereby authorized tofeeappropriated? out
15
ef any money in the Treasury net otherwise appropriated,
16
the sum ef $150,000?000?' which shaHfeeavailable for pay-
17
feent fey the Secretary ef the Treasury for capital stock of
18
the Corporation m an equal amount, which shafl fee sufe-
19
seribed fer by him en behalf of the United States.
20
mcnts upon sueh subscription shaH be subject te eaH in whole
21
er in part by the beard of directors of the Corporation? Such
22
stock shaH fee in addition te the amount ef eapital stock
23
acquired te be subscribed fer by Federal Reserve banks and
24
member and nonmember banks as hereinafter provided
25
the United States shaH be entitled te the payment ef divi-
Pay-
51
1
dcnds en snefe steek te tfee ssffio extent as member and
2
nonmember banks are entitled te sueh payment en the
3
elass A stock el tfee Corporation feeld fey them.
4
fer payments fey the United States ler er en account el
5
sueh stock shahfeeissued fey fee Corporation te the Scerc
6
tary el the Treasury and shall fee evidence el fee stock
7
ownership el the United States.
8
9
Receipts
-(df The capital stock el the Corporation shall fee
divided into shares of #400 each.
Certificates el stock el
10
the Corporation shallfeeel twe classes, elass A and class Br
11
Class A stock shall be held by member and nonmember
12
banks only and they shall be entitled te payment el divi-
13
dcnds out el net earnings at the rate el 0 per centum per
14
annum en the capital stock paid in by them, which divt-
1°
dcnds shall be cumulative, er te the extent el 30 per
16
centum el sueh net earnings in any ene year, whichever
amount shall be fee greater, but sueh stock shall have no
18
wfee at meetings el stockholders.
Class B stock shall fee
19
held fey Federal Reserve banks only and shah net fee
20
entitled te the payment el dividends.
21
Reserve bank shall subscribe te shares el elass B stock m
Every Federal
the Corporation te an amount equal te one half ef the
23
surplus ef sueh bank en January 4?
and its subscrip
24
tions shall be accompanied by a certified check payable te
fee Corporation in an amount equal te one half ef sueh
52
1
subscription.
The remainder of suefe subscription shaH be
2
subject te eaH from time to time by tfee board ef directors
3
upon ninety days' notice
4
-(e)- Every member bank shaH subscribe te tfee class A
5
capital stock ef tfee Corporation in an amount equal to one
6
half ef 4 per centum ef its total net outstanding time
7
and demand deposits en January 4? 1933, as computed in
8
accordance with regulations ef tfee Ecdcral Reserve -Board
9
governing tfee computation ef reserves?
One fealf ef suefe
10
subscription shaH fee paid in fuH within ninety days after
11
receipt ef notice from the chairman ef the board ef directors
12
of the Corporation, and the remainder ef sueh subscription
13
shall be subject te eaH from time te time by the feoard
14
ef directors ef the Corporation.
15
-(f)- The amount ef the outstanding elass A stock
16
ef the Corporation held fey member banks shall be
17
annually adjusted as hereinafter provided as of the last
18
preceding eaH date as member banks increase their time
19
and demand deposits or as additional banks become mem
20
bcrs, er subscribe te the stock ef the Corporation, and sueh
21
stock may be decreased in amount as member banks reduce
22
their time and demand deposits or cease te be members.
23
Shares ef the capital stock ef the Corporation owned by
24
member banks shall net be transferred er hypothecated.
25
When a member bank increases its time and demand
53
1
deposits? it shall, at the beginning ef eaeh calendar year,
2
subscribe for an additional amount of capital stock ef the
3
Corporation equal to one half of 4 per ecntum ef sueh
4
increase in deposits.
5
tienal stock shall be paid for at the time ef fee subscription
6
therefor and the balance shah be subject te eah by the board
7
ef directors of the Corporation.
8
bership in the Federal Reserve System at any time after the
9
organization of the Corporation shall be required te sub-
10
scribe for an amount of class A eapital stock equal te one
11
half ef 4 per centum ef the time and demand deposits ef the
12
applicant bank as ef the date ef sueh admission, paying
13
therefor its par value plus one half ef 4 per centum a month
14
from the period ef the last dividend en the elass A steek ef
15
the Corporation?
16
and demand -deposits it shall surrender. not later than fee
17
4st day ef January thereafter, a proportionate amount ef
One half ef the amount of sueh addi
A bank admitted te mem
When a member bank reduces its time
1 ft TtJty
jifi jTinl
gT l m
pfiTtifnl
pfnplr t / TrvPt±±t? a
t t v 7 l Urjin
.TilM r
oy
x
t lfli
i u aV. U
jJltctl
{511/CIV
I O
nvn
r>T*
O
i fi rvntfcllU.
n-nrl
v7Txl
11U11,
19
when a mcmber bank voluntarilv liquidates it shah surrender
20
ah its holdings ef fee eapital steek ef the Corporation andr
21
be released from its stock subscription net previously callcd;-
22
The shares so surrendered shall be canceled and the member
9Q
Ko-nlr qT~> oil mnmyn ~
i n n o T^TH r>~n ~
f fli rvT*rt"f AT* TITI./I OT* yn cm Ifif] nn ci
O
M i l l IIV
tslllixt
VU
itt
jJiljllUjlJ: t
t l l U l tJJLtJl?
LlllU-vJl
I
l l l c l tlt/llkT
24
to be prescribed by the Board? a sum equal te its cash paid
25
subscriptions en fee shares surrendered and its proportionate
54
1
share ef dividends net te eseeed ene half ef 4- per centum
2
a month? frem the period ef the last dividend on such stock,
3
less any liability el sueh member bank te the Corporation.
4
S©e?
? -(af A n y State hank er trust eompanv,
5
not a member bank ef the Federal Eeserve System? with
6
the approval el the State authority having supervision el
7
sueh bank er trust company awl certification te the Gerpe-
8
ration by sueh authority that sueh hank er trust company
9
is in solvent condition? alter examination by? and approval
1 A
Jl \J
trr?
n
fKn.
till'
p r\y*Y\ r \ r n f i n n
V j U i UUxUJt/lUil,
fliin
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llpUIi
n 11
nttTtxT t7t7
o /vt»amrt rv f a
ilLll. U U l I l i r
on fi f1 pn
vl lll liutt
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vrr
lilt?
PHTY) T i l TT TTH t i l
ert trt7TlTpT\~ T r t t r r
rvn
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/ ^^
•pxt v^liu^v o T7t
t i l l Of, t i f i n
ti l i N
titbit'
OT1 f l
ttrrvt
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ttUlJll
12
subscribing te the same amount ol steek as would he re quire d
13
i l sueh bank er trust eempany became a member bank?
14
The Corporati on is authorized te prescribe rules and regu-
15
lations ler the further examination ef sueh bank er trust
16
company and fix the compensation ef exammors employed
17
for sueh examination.
18
and -(4f el section £04- and el section
19
State bank or trust company and te its holding el such steek
20
as i l it were a member bask?
21
directors e l the Corporation is el opinion that any sueh State
22
bank er trust company has lailed te eemply with the previ-
23
sions el this title applicable te sueh State bank er trust com
24
pany er feat the continued partieipatien by any sueh State
25
bank er trust eempany is detrimental te fee sale and eeenem-
A l l the previsions el subsections -fef
shall apply to sueh
II at any time the beard el
55
1
ieal carrying out ef fee duties ef fee Corporation under this
2
title? fee beard shaH give notice thereof te sneh State bank er
3
trust company and? after hearing? the board may by order
4
require the withdrawal ef such State bank er trust company
5
from participation in the benefits ef this title, whieh order shall
6
become effective at sueh time? not less than thirty days after
7
the issuance thereof? as the board may fi% and fee Corpora-
8
tien shaH pay te sueh State bank er trust company the
9
amount paid fer stock held by it (and its stock shaH be
10
retired and canceled).
11
-(-fe)- fe ease any State bank er trust company, net
12
a member ef the Federal Reserve System, is prohibited by
13
State law? er fey the State authority, from complying with
14
the requirement ef subscribing fer stock in the Corporation
15
pursuant te subsection -(a)- ef this section, it shall be entitled
16
te the privileges of this title upon complying with the ether
17
requirements ef sneh snbscction, and upon making a deposit
18
hi law lul money with the Corporation equal te tne lace
19
amount ef stock which it wrould be required te subscribe fer
20
if it became a member bank?
21
interest en any sneh deposit to the bank er trust company
22
making suefe deposit at a rate equal te the rate of the divi •
23
dend paid en steek ef member banks?
The Corporation shall pay
Such deposit shaH
24 fee adjusted in like manner as holdings ef stock in the Corpo
25
ration fey member banks are adjusted under subsection -(f)-
56
1
ef section §04t7
2
company making the deposit, sueh deposit and accrued inter -
3
est thereon shall he applied in the same manner as cash
4
paid subscriptions and dividends are applied under section
5
S03r
6
ef this section shall apply to any bank er trust company
7
making sueh deposit, except that in lieu ol payments by the
8
Corporation te the bank er trust company ef amounts paid
9
for stock the Corporation shall return te sueh bank er trust
10
The provisions ef the last sentence ef subsection -(a)-
company the amount of the deposit.
H
12
Upon insolvency ef the State bank er trust
S E C . S03T
If any member bank shall be declared in-
solvent, the stock held by it in the Corporation shall be
canceled, without impairment ef the liability ef sueh bank,
14
and all cash paid subscriptions en sueh stock, with its pre-
15
portionatc share ef dividends net te exceed one half el I
16
per centum per month from the period ef last dividend en
17
sueh steek shall fee first applied te all debts ef the insolvent
18
bank or the receiver thereof te the Corporation, and the feaU
19
ancc, if any? shall fee paid te the receiver ef the insolvent
20
bank.
21
SEC. 304. Upon the appointment ef all the appointive
22
members ef the board ef the Corporation? the Corporation
23
shah become a body corporate and as such shall have
24
power—
57
1
First. Te adept and use a corporate seal?
2
Second. Te have succession until dissolved by an Aet
3
el Congress.
4
Third. Te make contracts?
5
Fourth. Te sue and he sued? complain and defend, in
6
any court el law er equity, State or Federal.
7
Filth? Te appoint hy its heard el directors sueh officers
8
and employees as are net otherwise provided ler in this
9
section, te define their duties, fix their compensation,
11( )w
--
vomnvn
N N rlC* Attx
| 1 V>nm
v^ A TX£ZVS:. ilit?
FV> r\ ULl
NR^N
N L H trrrtJTlJUl,
ILLfVPnf txO
1UL1LLL1 UK tjUlltiD
txxvlll "rtrttx
letitry^
x-tRt>xRLt/t/F A
11
dismiss at pleasure sueb officers er employees.
12
tfeis or any other Act shall he construed te prevent the
13
appointment and compensation, as an officer er employee
14
el the Corporation? el any officer er employee of the U mted
16
or executive department thereof.
7
Nothing i»
17
Sixth? Te prescribe by its board ef directors, bylaws
18
net inconsistent with law? regulating the manner in which
19
its general business may be conducted? and fee privileges
20
granted te it by law may be exercised and enjoyed?
21
Seventh? Te exercise by its beard ef directors, er duly
22
authorized officers er agents? all powers specifically granted
'23
by the previsions ef this section and sueh incidental powers
24
as shall be neeessary te earry out the powers se granted.
58
1
8eOT 3Q&7 Tfee beard ef direeters shall administer tfee
2
affairs ef tfee Corporation faMy and impartially and without
3
discrimination?
4
shall dctorniine and prescribe the manner in which its ebh-
5
gations shallfeeincuired and its expenses allowed and paid.
The heard ef directors ef the Corporation
6'1'lan
'nrTlnvn
nII G
Ar>fif AHwf a
vr f}>n
Tnt? ivjUrpUl
cXftin
/IU
k5xC
ln
tTt11TTu UlltitluU
tllvf n1J
11y
7vAA
ttnun^ta
Xx /"ttlu
7
T ^ m f r>rl
^ i f f>f AC|
*y > A i l n
I
U JLlllUU.
KTttfctTJO
TrittTTn
t v>
xTT
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rrittxiilt?l
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8
departments ef the Government?
The Corporation with
9
the consent ef any Federal Reserve bank er ef any feeard?
11
ment ef tfee Government, including any field serviee thereof?
12
may avail itself ef the use ef information? services, and
13
facilities thereof m carrying ent the provisions ef this section.
14
See?
-faf The Corporation shaH insure the time
15
and demand deposits ef aH memberfeankswhich are class A
16
stockholders of the C orp oration a*s herein alter ore sen b c d?
17
Notwithstanding any ether provision ef law? whenever any
18
national bank whieh is a elass A stockholder ef the Cerpera-
19
tien shall have been closed by action ef its beard ef directors
20
er by the Comptroller ef the Currency, as the ease may be?
21
en account ef inability te meet the demands ef its depositors,
22
the Comptroller ef the Currency shaH appoint the Cerpe-
23
ration receiver fer sueh bank.
24
after the Corporation shaH organize a new national bank
25
te assume the insured deposit liabilities ef sueh closed bank?
As seen as possible there-
59
1
Wj
2
rarily the functions provided for it in this paragraph.
3
the purposes ef this subsection, the term insured deposit
4
liability shall mean with rcspcet te the owner ef any claim
5
arising out ef a depesit liability ef sueh elesed bank the
6
following nereentaffes ef the net amount due te
7
owner by sueh elesed bask en account ef deposit
8
bilities : 400 per eentum ef the amount by which sueh
9
net amount does net exceed ftOyOOO^ and -f-5 per centum
10
ef the amount, if any? by whieh sueh net amount exceeds
11
$-10,000 but dees not exceed $50,000?- and 50 per centum
12
ef the amount? if any? by whieh sueh net amount exceeds
13
$50,000: Provided,
14
te such owner for the purpose of fixing sueh percentage,
15
there shall be added together all net amounts due te sueh
16
owner in the same capacity er the same right? en account
17
ef deposits, regardless ef whether sueh deposits be main-
18
tained in his name er m the names ef others for his benefit?
19
3?er the purposes ef this subsection? the term
20
posit liabilities - shall mean the aggregate amount ef all
21
sueh insured deposit liabilities ef sueh elesed bank?
22
Corporation shall determine as expeditiously as possible the
23
net amounts due te depositors ef the closed bank and shall
24
make available te the new bank an amount equal te the
25
insured deposit liabilities of sueh closed bank, whereupon
TuvaTTu
IIU W
deposits and otherwise te perform tempoFor
such
lia-
That? in determining the amount due
1
insured de-
The
60
1
sueh new bank shall assume fee insured deposit liability ef
2
such closed bank te each ef its depositees? and fee Corpora-
3
tien shall be subrogated te ah rights against the closed bank
4
ef the owners ef sneh deposits and shah be entitled te receive
5
the same dividends from the proceeds of the assets ef sneh
6
closed bank as would have been payable to eaeh sneh depesi-
7
tor nntil sneh dividends shall equal fee insured deposit liabil-
8
ity te such depositor assumed by the new bank, whereupon
9
ail further dividends shah be navable to such depositor?
Of
10
the amount thus made available by the
the
11
new bank? sueh portion shah be paid te it in cafe: as may be
12
necessary te enable it te meet immediate cash demands and
13
the remainder shah be credited te it on fee books ef the Cer-
14
poration subject to withdrawal en demand and shah bear
15
interest at the rate ef £ per centum per annum until with
16
drawn.
17
peratien? accept new deposits, which? together with ah
18
amounts made available to the new bank by the Corporation,
19
shall be kept en hand in cash, invested in direct obligations
20
of fee United States, er deposited wife the Corporation er
21
wife a Federal Reserve bank.
22
tain en deposit wife the Federal Reserve bank of its district
23
the
The new bank may? wife the approval ef the Cer-
Such new bank shah main
reserves required by law of member banks but shall net
24
be required te subscribe for stock of the Federal Reserve
25
bank until its own capital stock has been subscribed
61
1 ftftd paid fef in the manner hereinafter provided.
The
2
articles ef association and organization certificate of sneh
8
new hank may fee executed fey sueh representatives ef the
4
Corporation as it may designate; the new bank shaH net
5 fee required to have any directors at the time ef its organiza
6
tien? but shah be managed by an executive officer tofeedesig
7
natedfeythe Corporation; and no capital stock needfeepaid
8
in fey the Corporation; but in other respects sueh bank shah
9 fee organized in accordance with the existing provisions ef
10
law relating te the organization ef national banks; and?
11
until the requisite amount of capital stock for sueh bank has
12
been subscribed and paid fer in the manner hereinafter pre-
13
vided, sueh bank shall transact no business except that
14
authorized by this subsection and sueh business as may be
15
incidental te its organization.
16
Corporation it is desirable te de sej the Corporation shall
17
offer capital steek ef the new bank fer sale on sueh terms and
18
conditions as the Corporation shall deem advisable, m an
19
amount sufficient in the opinion ef the Corporation te make
When in the judgment ef the
possible the conduct ef the business ef the new bank on a
21
sound basis, but in no event less than that requiredfeysection
22
§4-58 of the Revised Statutes? as amended, fer the organiza
tion ef a national bank in the place wrherc sueh new bank is
24
located, giving the stockholders ef the closed bank the first
25
opportunity te purchase sueh stock.
Upon proof that an
62
1
adequate amount ef capital stock ef the new bank has been
2
subscribed and paid for in east* by subscribers satisfactory
3
to the Comptroller of the Currency, he shall issue te sueh
4
bank a certificate ef authority te commence business and
5
thereafter it shall be managed by directors elected by its own
6
shareholders and may exercise ail ef the powers granted by
7
law to national banking associations.
8
ef capital for sueh new bank is net subscribed and paid in?
9
the Corporation may offer te transfer its business te any
10
other banking institution m the same place which will take
11
ever its assets, assume its liabilities, and pay te the Corpora
12
tien for sueh business sueh amount as the Corporation may
4f an adequate amount
deem adequate. Unless the capital stock of the new bank is
14
sold er its assets acquired and its liabilities assumed by
15
another banking institution, in the manner herein prescribed,
within two years from the date ef its organization, the Cor
1
•
poration shall place the new bank in voluntary llq uidation
18
and wind up its affairs. The Corporation shall open en its
19
books a deposit insurance account and? as seen as possible
20
after taking possession ef any closed national bank, the Cer-
21
poration shah make an estimate ef the amount which wih
22
ke available from ah sources for application in satisfaction
23
ef the portion ef the claims ef depositors te which it has been
94.
subrogated and shah debit te sueh deposit insurance account
the excess, if any? ef the amount made available by the Cor
ES
1
poration te the new bank for depositors over and above the
2
amount el sueh estimate.
3
ration te realise e-s rapidly as possible upon fee assets of sueh
4
elosed bank, having due regard to the condition, of credit in
5
fee
It shall be fee duty of fee Gorpo
district in which sueh closed bank is located; to enforce
6
the individual liability ef the stockholders asd
7
thereof; and te wind up fee affairs of sueh closed bank in
8
conformity with fee provisions ef law relating to the liquida
9
tien ef closed national banks, except as herein otherwise pre-
10
vidcd, retaining for its own account sueh portion of the
11
amount realized from sueh liquidation as it shall fee entitled
1
^
JL.Li
tftn
7
13
depositors and paying to depositors and other creditors the
14
amount available for distribution to them, after deducting
15
therefrom their share ef the eests of the liquidation of the
16
elesed bank.
17
tien en account of its subrogation te the claims of depositors
18
he less than the amount ef the estimate hereinabove provided
19
for? the deposit insurance aeeeunt shall fee charged w i f e fee
20
deficiency and? if the total amount so realize*1 shall exceed
21
the amount of sueh estimate? such aeeount shall fee ere dit od
22
wife sueh excess?
23
banks, fee Corporation shall have aH the rights? powers, and
24
privileges now possessed by er hereafter given receivers of
25
insolvent national banks and shah he subject to fee obliga-
l"ppppivp
tJUUI VU
on
v7lr
nnJ P
C ft iumuilTl il i
A I I llv
tTT
to
directors
o n K-pa
(yn
f a t i £t tl?m C i t c inim
BU.U1
UgC
t t Lfir>r>
U l I V\7
t T r o o vTTn |
If fee total amount realized by the Corpora
With respect to sueh elesed national
64
1
tions and penalties net inconsistent with tfee previsions ef
2
this paragraph: te whieh sueh receivers are new er may
4
Whenever any State member bank which is a elass A
5
stockholder ef fee Corporation shall have been closed by
6
action ef its board ef directors er fey the appropriate State
7
authority, as the ease may be, en account ef inability te
8
meet fee demands ef its depositors, the Corporation shall
9
accept appointment as receiver thereof, if sueh appointment
10
be tendered by the appropriate State authority and be
11
authorized er permitted by State law?
12
poration shall organize a new national bank, in accordance
13
wife the provisions ef this subsection, te assume the insured
14
deposit liabilities ef such closed State bank, te reccivc new
15
deposits and otherwise te perform temporarily the functions
16
provided for in this subsection.
17
tien ef the right ef the Corporation te receive dividends en
18
the same basis as m the ease ef a closed national bank under
19
this subsection, sueh recognition being accorded by State
20
law? by allowance ef claims by the appropriate State
21
authority, by assignment ef claims by depositors, er by any
22
other effective method, the Corporation shall make available
23
te sueh new national bank, in the manner prescribed by this
24
subsection, an amount equal te the insured deposit liabilities
25
ef sueh closed State bank; and the Corporation and sueh new
Thereupon the COP-
Upon satisfactory recogni
65
1
national bank shaH perform aH of tfee functions and duties
2
and shall have aH the rights and privileges with respect to
8
sueh State bank and the depositors thereof which are pre-
4
scribed by this subsection with respect te closed national
5
banks holding elass A stock- in the Corporation: Provided,
@ That therightsel depositors and other creditors ef sueh State
KNNLT-
NIL LIN < 1 NFNYRNI IN/I/1 RN, O (
{ IVFL l l ) l I'
TTTIFLI FLI A FT
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g
previsions ef State law-?
9
respeet te sueh State bank? the Corporation shah possess the
j ()
powers and privileges provided by State law with respect te
11
a receiver ef such State bankT except insofar as the same
12
are in eenSiet with the previsions ef this subsection?
And
pramded
further
That, with
13
Whenever any State member bank which is a class A
15
ef its beard ef directors er by the appropriate State authority,
1 ^ as the ease may be? en aeeount ef inability to meet the demands
17
ef its depositors? and the applicable State law does net permit
jg
the appointment ef the Corporation as receiver ef sneh bank,
19
the Corporation shall organize a new national bank? in
20
accordance with the provisions ef this subsection? te assume
21
the insured deposit liabilities ef sneh elesed State bank? te
22
reeeive new deposits? and otherwise to perform temporarily
23
the functions provided fer in this subsection?
24
factory recognition ef the right ef the Corporation te receive
H. R. 5661
5
Upon satis
66
1
d i v i d e n d s Oft t h e Same baSIS aS 1ft t h e ease e l a c l o s e d n a t i o n a l
2
bank under this subsection? sueh recognition being accorded
3
by State law? by allowance el claims by the appropriate
4
State authority, by assignment ol claims by depositors, er
5
by any other effective method? the Corporation shall make
6
available te sueh new bank? in accordance with the pre-
7
visions el this subsection? the amount ol insured deposit
8
liabilities as te whieh sueh recognition has been accorded;
9
and sueh new hank shall assume sueh insured deposit liabili
10
ties and shall in other respects comply with the provisions
11
ef this subsection respecting new banks organized to assume
12
insured deposit liabilities el closed national banks.
Insofar
as possible in view of the applicable provisions of State law?
14
the Corporation shall proceed with respect te the receiver ef
15
sueh closed bank and with respect te the new bank organized
16
te assume its insured deposit liabilities in the manner pre-
17
scribed by this subsection with respect te closed national
18
banks and new banks organized te assume their insured
l^
deposit liabilities, except that the Corporation shall have
none e l the powers, duties, or responsibilities ef a receiver
with respect te the windng up ef the affairs ef sueh closed
^
State bank.
^^
Baay purchase and liquidate any er all of the assets of sueh
24
bank?
The Corporation, m its discretion, however,
67
1
Whenever the net debit balance ef the deposit insur
2
anee account ef the Corporation shall equal er exceed ene
3
fourth ef i per centum ef the total deposit liabilities ef aH
4
elass A stockholders as ef fee date ef the last preceding eah
5
report, the Corporation shall levy upon such stockholders
6
an assessment equal te ene fourth ef 4 per centum ef their
7
total deposit liabilities and shall credit the amount collected
8 from sueh assessment te sueh deposit insurance account. Jfe
9
bank which is a holder ef elass A stock shah pay any divi-
10
dcnds until aH assessments levied upon it by the Corporation
11
shall have been paid in fuh-j and any director er officer ef
12
any sueh bank who participates in the declaration er pay-
13
mcnt ef any sueh dividend may? upon conviction, be fined
14
net more than I^OOOy er imprisoned for net more than ene
15
year, er both.
16
The term " receiver " as used in this section shall
17
mean a receiver, liquidating agent, er conservator ef a
18
national bank, and a receiver, liquidating agent, eenserva-
19
tor? commission, person, er other agency charged by State
20
law with fee responsibility and the duty ef winding up the
21
affairs ef an insolvent State member bank.
22
Eer the purposes ef this section only, the term
23
- -national bank " shall include all national banking associa
24
tions and all banks,- banking associations, trust companies,
68
1
savings banks, and ether banking institutions located in the
2
District ef Columbia which are members ef the Federal
3
4
5
Reserve System; and the term - State member bank - shall
include ah State banks? banking associations, trust eompaniesj savings banks, and ether banking institutions organized
6
under the laws ef any State, which are members ef the
I
Federal Reserve System.
any determination ef the insured deposit liabilities
8
9
ef any closed bank or of the total deposit liabilities of any
10
bank which is a holder of class A steek ef the Corporation,
11
tor the
purposes ef this subsection? there shall be excluded
12
13
the amounts ef ah deposits of sueh bank which are payable
14
enJy at an office thereof located in a foreign country.
The Corporation may make sueh rules, regulations,
15
16
and contracts as it may deem necessary in order te carry
17
out the provisions of this section.
Money of the C orporation not
18
19
otherwise employed
20
shall be invested in securities ef the Government ef the
21
United States, except that for temporary periods, in the
22
discretion ef the board ef directors, funds of the Corporation
23
may be deposited in any Federal Reserve bank er with the
24
Treasurer ef the United States.
25
purpose by the Secretary ef the Treasury, the Corporation
When designated for that
shallfeea depositary ef public moneys, except receipts from
customs, under sueh regulations as may be prescribed fey
69
1
the said Secretary, and may also be employed as a financial
2
agent effeeGovernment.
3
able duties as depositary ef public moneys and financial
4
agent effeeGovernment as may be required ef it?
It shaH perform aH sueh reason
5
-(fe)- Nothing herein contained shall be construed to
6
prevent the Corporation from making loans te national
7
banks closed by action ef the Comptroller ef the Currency,
8
er by vote ef their directors, er te State banks closed fey
9
action ot the appropriate State authorities, erfeyvote ef
10
their directors, er from entering into negotiations te secure
11
the reopening ef sueh banks.
12
-(e)- Receivers er liquidators ef State banks which
13
are new er may hereafter become insolvent er suspended
14
shall be entitled te offer the assets ef sueh banks for sale
15
te the Corporation or
1 Ct
T^ r>T*f>
O
j/tTTTttTt/TTj
L Y U I N I TTI V>
tlJJUII
security fer leans from the Ger^rv
r r v r t A i liJLi,
V\ n-NMI nmn-n
| H I IlitnhJiM 1
~
f
ttUIII
111
tIIU
A
r
FL T
>
T
T
T
A
' l
>
T
'
1 ofn
M j J J J I U j J l lcfclU
17
State autheritv in accordance wife express provision ef
18
State law in the ease ef State banks? er from the Comp-
19
troller ef the Currency in the ease ef national banks? The
20
proceeds ef every sueh sale er lean shall be utilized fer fee
21
same purposes and in the same manner as other funds reafe-
22
ized: from the liquidation of the assets ef sueh banks? The
23
Comptroller ef the Currency may? in his discretion, pay
24
dividends on proved elaims at any time after the expiration
25
ef the period ef advertisement made pursuant te section 5235
70
1
ef fee Revised Statutes? and no liability shah attaeh te fee
2
Comptroller of fee Currency or to the receiver ef any
3
national bank by reason of any sueh payment for failure to
4
pay dividends to a claimant whose elaim is net proved at
5
the time ef any sueh payment?
7
to issue and to have outstanding at any one time in an
8
amount aggregating not mere than three times the amount
9
ef its eapital? its notes, debentures? bends? er ether sueh ebh-
10
gatiens? te be redeemable at the option of the Corporation
11
before maturity in such manner as may be stipulated i n
12
such obligations? and te bear sueh rate er rates ef interest?
13
and te mature at sueh time er times as may be determined
14
by the Corporation: Provided,
"I
_L y
That the Corporation may
f> /I -i n/^/MTr>4- knnin nlinvt "i'AT'TTl rtl^l 1 .
fi
rvn TTf>V>1 A nt
KjtvTI UI1 CC LLlo"U lllltJ U(lolo 1511 UI IIU1 111 t7 IJ11ol11U1 lr? pel y M fJlVJ ttu
16
maturity without interest.
The notes, debentures? bends?
17
and other sueh obligations of
18
secured by assets ef the Corporation in sueh manner as
19
shah be prescribed by its beard ef directors?
20
tions may be offered for sale at sueh priee er priees as the
21
Corporation
fee
Corporation may
be
Such ebhga-
may cietermine?
22
-(e)- A h notes, debentures, bonds, er other sueh ebh-
23
24
25
gations issued by the Corporation shall be exempt? both
as
principal and
interest,
all taxation
(exceptby
estate
andto inheritance
taxes)
newfrom
or hereafter
imposed
the
71
1
•XTin ted States^ b y any Territory? dependency, er possession
2
thereof er b y any State? eonnty, nmnieipality? er leeal taxing
3
authority?
4
tal? reserves, and surplus? and its income, shall be exempt
5
f r e i n a l l taxation n e w er hereafter imposed b y the United
7
er b y any State? county? municipality, er local taxing author
8
ity? exeept that any real property ef the Corporation shah be
T h e Corporation? including? its franchise? rts eapr-
9ail 'Jj rit tv? Tc/tTtttJty? _l i n iiui nil, "ttiiiii y ? nlnili"J pmi? trr lUv'Mt ttta
o n m Q l n j -
£./-X S i t o / ~ > : t * r » i j - A T * 1 f ) 1
O A l l Y 1 ! 17"
YV~1 T i l l ' m
f
i
1._
A T
1A P f i l
I n v
10 fttie» te tke same extent according to rts value as other real
11
property is taxed?
12
UH: order that the Corporation may be supplied
13
with sueh forms of notes? debentures, bonds? or other
14
sueh obligations as i t m a y need for issuance under this Act?
15
the Secretary ef the Treasury is authorized t e prepare sueh
16
forms as shall be suitable and approved by the Corporation,
17
to be held i n the Treasury subjeet to delivery, upon order
18
ef the Corporation?
19
and ether material executed in connection therewith shall
20
remain i n the custody of the Secretary of the Treasury.
21
T h e Corporation: shah reimburse the Secretary ef the Treas
22
e r y for any expenses incurred i n the preparation, custody,
^^
and delivery et sueh notes? debentures? bonds? or other sueh
T h e engraved plates, dies? bed pieces,
72
1
-(g)- Tlie Corporation shah annually make ft report ef
2
its ot) orations to the Congress as soon as practicable after
3
the 1st day of January in each year.
4
-fh)- Whoever, for the purpose ef obtaining any leas
5
from the Corporation, or any extension or renewal thereof,
•
or tor the purpose ef inducing the Corporation te purchase
8
any assets, er lor the purpose of influencing in any way
9
the action ef the Corporation under this section, makes any
10
statement? knowing it te be false, or willfully overvalues any
11
security, shall he punished by a fine ef not mere than $5,000?
12
er by imprisonment for not more than two years? er both?
13
Whoever -(4)- falsely makes, forges, er counter
14
feits any obligation or eeupen? in imitation ef er purporting
15
to be an obligation or coupon issued by the Corporation, er
16
passes, utters, or publishes, or attempts to pass? utter?
17
er publish? any false? forged? or counterfeited obligation or
18
coupon purporting to have been issued by the Corporation?
19
knowing the same te be false? forged? or counterfeited? or
falsely alters any obligation or coupon issued er pur-
21
porting to have been issued by the Corporation? er -f4)-
22
passes, utters, or publishes? or attempts to pass? utter? or
23
publish? as true, any falsely altered or spurious obligation
24
or coupon? issued er purporting to have been issued by the
25
Corporation, knowing the same te be falsely altered or
73
1
spurious-, sli all fee punished m¥ a foe ef net more fean
2
$10,000, erfeyimprisonment fer net more fean five years?
3
er both.
4
5
-(if Whoever? being connected in any capacity wife
fee
Corporation, -{4f embezzles? abstracts, purloins? er
6"\TTI 11 4~i "i 11 -R T
TY11 NN RTNLI NN
N Tl^T" ^ A N ATTH
FLLNFLR1
RN A AI I
finn
AT; A^II AT
W lltrttci V Ilil^llU UlJLUb Mi ij lliUttt^TTJ? Ittlltlhy bU lull LIUh, "r ULIIUI
7
things ef value, whether belonging to it or pledged, or
8
otherwise intrusted te it? er -f^f with intent te defraud fee
9
Corporation or any other body, politic er corporate, er any
10
individual, er to deceive any officer, auditor, er exam
11
iner ef -the Corporation? makes any false entry in any
12
book, report, er statement ef er te the Corporation, er
13
without being duly authorized draws any order or issues,
14 puts forth, er assigns any note? debenture, bond, er other
15
such obligation, or draft, bih ef exchange, mortgage, judg-
16
ment? er decree thereof, shaH be punished by a fine ef net
17
more than $10,000,- er by imprisonment for not more than
18 five years, er both.
19
-fkf £fe individual, association? partnership? er eerpe-
20
ration shall use the words - Federal Bank Deposit Insurance
21
VJon)oration « or a combination ef any three ef these five
22
words? as fee name er a part thereof under which he er it
23
shall eta business,
24
or corporation shall advertise er otherwise represent falsclv
25
by any device whatsoever that his er its deposit liabilities
^e individual, association, partnership?
74
1
are insured er in anywise guaranteed fey the Federal Bank
2
Deposit
3
e l tfee United States? er fey any instrumentality thereof
4
and no elass A stockholder of tfee Federal Bank Deposit
5
Insurance Corporation shah advertise er otherwise repre
6
sent falsely fey
by any deviee
device whatsoever to extent te which
7
er the manner in which its deposit liabilities are insured
8
by the
fey
9
Every individual? partnership?
Insurance
Corporation,
Bank Deposit
Federal Bank
er fey tfee Government
Insurance
Corporation.
10
violating this subdivision shall fee punished by a fane e l not
11
exceeding $1,000? er by imprisonment net exceeding one
12
year? er both?
13
-{If
142? 443?
413? 444?
444? 415?
-{±f The provisions of sections 142?
14
446? and 447 ef the Criminal Cede ef the United States
15
(U.S.C., title 48? eh? 5? sees? 202 te SOTy inclusive)
in-
16
solar ICO OJU K/HVUiMlVj UI Vv extended te apply te eontracts er
17
agreements with the Corporation under this section, which for
18
the purposes hereof shall be held te include loans? advances,
19
extensions? and renewals thereof? and aeeeptanccs, releases,
20
and substitutions ef security therefor? purchases er sales ef
21
assets, and all contracts and agreements pertaining te the
22
samc.-
23
- ( » f The Secret Service Division ef the
Treasury
24
Department is authorized te detect? arrest? and deliver into
25
the custody ef the United States marshal having jurisdiction
75
1
any person committing any ef tfee offenses punishable under
2
this section.
3
307T
member bank e l tfee Federal Eeserve
4
System shall? after tfee date e l enactment ef tfeis Aet? and no
5
State bank- or trust company, not a member bank? shall?
6
after it feas become entitled to participation i n tfee benefits
7
ef tfeis title, pay interest at a greater rate tfean # per eentum
8
per annum with respect to any time deposit -(as defined i n
9
section 40 ef tfee Federal Reserve Aet? as amended) made
10
m suefe bank-
11
gEOr 308T Section 0 of tfee A e t entitled ^ A n A e t to
12
establish postal savings depositories for depositing savings at
13
interest with tfee security of tfee Government for repayment
14
thereof, and for other purposes
15
as amended
(U.S.C., title
approved June 25? 1910,
seer 759), is amended fey
16
striKinsr out the period at the end thereof and inserting i n
17
lieu thereof a eelen and the following: " Provided,
18
sueh security shall fee required i n ease ef sueh part of the
19
deposits as are insured under title 141 of the Banking A e t
20
ef493£r
21
SEOT&O&T
That no
A national bank? reserve bank? or other mem
22 feer bank as defined by section 4 of title 4 of this Aet? or any
23
bank or trust company whose deposits are guaranteed i n any
24
respect under the provisions of this title? er any employee of
25
any sueh bank, shall not cither directly er indirectly aet as
76
1
en agent er broker for any partnership, association, er eer-
2
poration engaged in the business ef writing er selling any
3
form ef insurance.
4
er corporation violating this section ef this Act shall be guilty
5
ef a misdemeanor and shall be punished by a nnc not ex- •
6
cccding $4,000 er imprisonment not exceeding one year,
7
er both.
8
9
10
SEC.
34-QT
Any individual, partnership, association,
Terms used in this title shah have the mean
ing assigned te sueh terms under the Federal Reserve Aet? as
amended -(U.S.C., title 42? dn Si Suppt ¥4? title 43? ehT
11
S E C . S44T
The foregoing provisions ef this title shah
12
take effect at sueh time as the President by proclamation
13
declares that sueh surveys have been made as he finds nee-
14
cssary for the proper execution of sueh provisions, but in no
15
event shall sueh provisions take effect later than one year
16
after the enactment ef this Aetr
17
SEOR
S43T The right te alter, amend, er repeal this Aet
18
is hereby expressly reserved.
19
er the application thereof te any person or circumstances,
20
is held invalid, the remainder ef the Act7 and the appli-
21
cation ef sueh provision te other persons er circumstances,
22
shall net be affected thereby.
23
24
If any provision of this Aet?
That the short title of this Act shall be the " Banking
of
1933."
Act
77
1
2
SEC. 2. As used in this Act and in any provision
law amended by this
3
(a)
of
Act—
The terms " banks
bank
" member bank
"
" board
national
4
banking
5
trict
6
to them in section 1 of the Federal Reserve Act, as amended.
7
association
" national
and " reserve bank " shall have the meanings assigned
(b)
Except
where otherwise specifically
8
term " affiliate " shall include any corporation,
9
association, or other similar
10
" dis-
(1)
provided,
the
business trust,
organization—
Of which a member bank, directly
or
indirectly,
11
owns or controls either a majority
12
than 50 per centum of the number of shares voted for the
13
election of its directors,
14
similar
15
manner the election of a majority
16
other persons exercising similar functions;
17
of the voting shares or more
trustees, or other persons
exercising
functions at the preceding election, or controls in any
(2)
of its directors,
trustees, or
or
Of which control is held, directly
or
indirectly,
18
through stock ownership or in any other manner, by the share-
19
holders of a member bank who own or control either a
20
of the shares of such bank or more than 50 per centum of the
21
number of shares voted for the election of directors
22
bank at the preceding election, or by trustees for the benefit
23
of the shareholders of any such bank; or
majority
of such
78
1
(3)
Of which a majority
of its directors,
trustees, or
2
other persons exercising similar functions are directors of any
3
one member bank.
4
(c) The term " holding company affiliate " shall include
5
any corporation,
6
organization—
7
(1)
business trust, association, or other
Which
owns or controls,
directly
or
similar
indirectly,
8
either a majority
9
bank or more than 50 per centum of the number of shares
of the shares of capital stock of a member
10
voted for
the election of directors
11
preceding
election, or controls in any manner
12
of a majority
13
(2)
For
the benefit of whose shareholders or members
all or substantially
15
is held by trustees.
SEC. 3 (a)
all the capital
The fourth
stock of a member bank
paragraph
17
" Eighth99
18
amended, is amended to read as follows:
19
of section 4 of the Federal
" Said
the election
of the directors of any one bank; or
14
16
of any one bank at the
board of directors
after
paragraph
Reserve Act,
shall administer
the
as
affairs
20
of said bank fairly
21
tion in favor
22
may,
23
the Federal
24
such discounts, advancements, and accommodations
as may
25
be safely
for
and impartially
and without
discrimina-
of or against any member bank or banks and
subject to the provisions
Reserve Board,
and reasonably
of law
and the orders
of
extend to each member bank
made with
due regard
the
79
1
claims
and demands of other member banks, the
2
nance of sound credit conditions, and the accommodation
3
commerce, industry,
4
Board may prescribe regulations further
5
limitations
6
advancements, and the accommodations may be extended to
7
member
8
itself informed
9
loans and investments of its member banks with
and agriculture.
The Federal
Each
Federal
defining within
reserve
of the general character
bank
of
Reserve
of this Act the conditions under which
banks.
mainte-
the
discounts,
shall
keep
and amount
of the
a view to
10
ascertaining
11
for the speculative carrying
12
estate, or commodities, or for any other purpose
13
ent with the maintenance
14
in determining
15
counts or other credit accommodations,
16
bank shall give consideration
17
chairman
18
Federal
19
by any member bank, together with
20
Whenever,
21
any member bank is making such undue use of bank
22
the Board may, in its discretion, after reasonable notice and
23
an opportunity
24
of the credit facilities
whether undue use is being made of bank credit
of or trading
of sound credit
whether to grant
of the Federal
Reserve Board
in securities,
real
inconsist-
conditions;
and,
or refuse advances,
redis-
the Federal
reserve
to such information.
The
reserve bank shall report
to the
any such undue use of bank
credit
his
in the judgment of the Federal
recommendation.
Reserve
Board,
credit,
for a hearing, suspend such bank from the use
of the Federal
Reserve System
and
80
1
may terminate
2
to time
3
such suspension or may renew it from
(b) The paragraph
of section 4 of the Federal
4
Act,
as amended, which commences with
5
Federal
6
ing before the period
7
following:
8
member banks within
9
affiliated with the same holding company affiliate,
time
Reserve
the words
" The
Reserve Board shall classify " is amended by insert-
u
at the end thereof a colon and the
Provided,
That
whenever
the same Federal
any
two or
Reserve district
tion
11
election shall be confined to one of such banks, which
12
be designated
for
the purpose
any
are
participa-
10
by such member banks in
more
such nomination
by such holding
or
may
company
affiliate"
14
SEC. 4. The first paragraph
15
Reserve Act,
16
1932j
17
as amended, is amended, effective July
to read as
"After
of section 7 of the Federal
follows:
all necessary expenses of a Federal Reserve bank
18
shall have been paid or provided
19
be entitled to receive an annual dividend
20
the paid-in
21
After
22
the net earnings shall be paid into the surplus
23
Federal
24
25
dividend
shall
of 6 per centum on
cumulative.
claims have been fully
fund
met,
of the
Reserve bank "
SEC. 5. (a)
for, the stockholders
capital stock, which, dividend shall be
the aforesaid
Federal
1,
The first paragraph
of section 9 of the
Reserve Act, as amended, is amended by
inserting
81
^
immediately
after
2
and
the following:
3
o^er
incorporated
4
business
5
(b)
the words
" United
"including
banking
Morris
institutions
The second paragraph
Reserve
Act,
States"
Plan
a comma
banks
engaged in
and
similar
of section 9 of the Fed-
6
eral
as amended,
7
at the end thereof the following:
3
nothing
9
bank from establishing and operating branches in the United
herein contained
is amended
"Provided,
shall prevent
by
however,
States or any dependency or insular
11
any foreign
12
subject to the same limitations
13
cable to the establishment of branches by national
14
(c)
15
is further
16
new
17
That
any State member
10
country,
adding
possession thereof or in
on the same terms and conditions
and restrictions
as are
and
appli-
banks"
Section 9 of the Federal Reserve Act, as amended,
amended by adding at the end thereof the
following
paragraphs:
66
Any mutual savings bank having no capital stock (and
18
any other banking institution
19
weekly or other time deposits which are segregated from
20
other deposits and are regarded as capital stock for the pur-
21
poses of taxation
22
having surplus and undivided profits not less than the amount
23
of capital
24
in the same place, may apply for and be admitted to member-
H .
required
R . 5661
the capital of which consists of
and the declaration
for the organization
6
of dividends),
of a national
all
but
bank
82
1
ship in the Federal
2
subject to the same provisions
3
companies,
4
capital stock of the Federal
5
to six-tenths of 1 per centum of its total deposit liabilities
6
shown
7
savings bank preceding
its admission
8
after such subscription
shall be adjusted semiannually
9
same percentage
basis in accordance
10
tions prescribed
by the Federal
11
mutual
12
mitted by the laws under
13
stock in a Federal
14
the system, deposit with the Federal
15
equal
16
pay in on account of a subscription
17
after such deposit shall be adjusted semiannually
18
manner
19
subject to the same conditions
20
amounts
21
member banks and the Federal
22
est thereon at the same rate as dividends
23
on outstanding
24
If the laws under which such savings bank was organized
25
amended so as to authorize
Reserve System in the same manner
of law as State banks and trust
except that such savings
savings
bank
applying
of
examination
with
for
Board.
membership
subscriptions
Thereon the
regulaIf
any
is not
per-
to purchase
admission
Such
stock.
to
in the same
deposit
shall be
respect to repayment
to capital
as
stock by other
inter-
are actually
shares of stock of such Federal
to
There-
reserve bank shall pay
mutual
such
have been required
to capital
stock.
with
as
reserve bank an amount
it would
for
of
rules and
Reserve
for
equal
to membership.
which it was organized
which
as subscriptions
upon
report
reserve bank, it shall, upon
to the amount
paid
bank shall subscribe
Reserve bank in an amount
by the most recent
and
reserve
paid
bank.
be
savings banks to subscribe
83
1
for Federal reserve bank stock such savings bank shall there-
2
upon subscribe for the appropriate
3
Federal
4
for in lieu of payment upon capital
5
upon such subscription.
6
ings bank was organized be not amended at the next session
7
of the legislature
8
bank to membership so as to authorize mutual savings banks
9
to purchase Federal
amount of stock in the
reserve bank, and the deposit hereinbefore
provided
stock shall be applied
If the laws under which such sav-
following
the admission
of such savings
reserve bank stock, or if such laws be so
10
amended and such bank fail within
11
purchase such stock, all of its rights
12
member bank shall be forfeited
13
Federal
14
prescribed
15
banks and trust companies.
16
comply
17
member banks and trust companies, with the regulations
of
18
the Federal
of
19
membership prescribed for such savings bank at the time of
20
admission
21
provided with respect to capital stock.
22
six months thereafter to
and privileges
and its membership in the
Eeserve System shall be terminated
elsewhere
with
in
this
section
Board
to membership,
ivith
in the manner
respect
to
State
Each mutual savings bank shall
all the provisions
Reserve
as a
of law applicable
and
with
to State
the conditions
except as otherwise
hereinbefore
" Each bank admitted to membership under this section
23
shall obtain from
each of its affiliates other than member
24
banks and furnish
to the Federal
25
and to the Federal
Reserve Board not less than three reports
reserve bank of its
district
84
1
during
each year.
Such reports shall be in such form as
2
the Federal
3
hj
4
officer as may be designated by the board of directors of such
5
affiliate to verify
6
mation
7
irith
8
reports
9
Each
Reserve Board
may prescribe, shall be verified
the oath or affirmation
of the president
or such other
such reports, and shall disclose the
hereinafter
those fixed
provided
by
the
of the condition
such report
for
as
Federal
of
of
dates
Reserve
the affiliated,
of an affiliate
shall
infor-
identical
Board
member
for
bank.
be transmitted
herein
provided
11
report
of the affiliated
12
eral Reserve Board
13
jor
14
information
15
Board shall be necessary to disclose fully the relations between
1®
such affiliate and such bank and to enable the Board to inform
17
itself as to the effect of such relations upon the affairs of such
18
bank.
19
bank under the same conditions as govern its own
20
oo
94.
as in
corresponding
member bank, except that the Fed-
may, in its discretion,
good cause shown.
extend such time
Each such report shall contain such
the judgment
of the Federal
Reserve
The reports of such affiliates shall be published by the
condition
reports.
91
99
at the same time as the
as
66
Any such affiliated member bank may be required
obtain from any such affiliate such additional
reports as in
the opinion of its Federal reserve bank or the Federal
Board
may
be necessary in
order
complete knowledge of the condition
to obtain
to
Reserve
a full
and
of the affiliated member
85
1
bank.
Such additional
2
Federal
3
shall be in such form
4
prescribe.
5
"Any
reports shall be transmitted
reserve bank and the Federal
such
as the Federal
affiliated
member
Reserve Board
and
Reserve Board
may
bank
which
6
obtain
7
provided for by the two preceding paragraphs
8
shall be subject to a penalty
9
which
from
any of its affiliates
such failure
and furnish
which,
Federal
11
wise, by the Federal
12
such member bank is located.
13
paragraph
14
the term ' affiliate ' shall include holding
15
as well as other affiliates.
17
limitations
18
selling,
19
and stock as are applicable
20
under paragraph
21
Statutes, as amended.
22
and conditions
u
After
i
report
of this section
reserve bank of the district
For
member banks shall
underwriting,
to
during
of the
may be collected, by suit or other-
with
Seventh
9
one year from
which
of this section,
company
be subject
affiliates
to the same
respect to the
and holding
in
the purposes of this
and the two preceding paragraphs
" State
any
by direction
10
16
fails
of $100 for each day
continues,
Reserve Board,
to the
of investment
purchasing,
securities
in the case of national
banks
of section 5136 of the Revised
the date of the enactment of
23
the Banking
24
stock of any State member bank shall represent the stock
25
of any other corporation,
Act
of 1933,
no certificate
representing
the
except a member bank or a corpo-
86
j
ration
2
gaged solely in holding
3
member bank, nor shall the ownership,
4
any certificate
5
conditioned in any manner whatsoever upon the
(j
sale, or transfer of a certificate representing the stock of any
7
other corporation,
3
" Each
9
existing on the date this paragraph
company
takes effect en-
the bank premises of such
representing
State
sale, or transfer
of
the stock of any such bank be
except a member
bank.
State member bank affiliated
affiliate shall obtain from
ownership,
with
a
such holding
holding
company
10
affiliate, within such time as the Federal Reserve Board
11
prescribe, an agreement that such holding company
affiliate
12
shall be subject to the same conditions and limitations
as are
13
applicable
14
amended, in the case of holding company affiliates of
15
banks.
16
the Federal
17
member bank affiliated
18
obtain such an agreement within
19
Federal Reserve Board shall require such bank to surrender
20
its stock in the Federal
21
and privileges of membership in the Federal
22
as provided in this section.
23
Board
24
holding company affiliate, the Federal
under section 5144
shall
of the Revised Statutes, as
national
A copy of each such agreement shall be filed
Reserve Board.
Upon the failure
with a holding
with
of a State
company
affiliate
the time so prescribed,
reserve bank and to forfeit
the
rights
Reserve System
Whenever the Federal
shall have revoked the voting
all
to
permit
Reserve
of any
Reserve Board
such
may,
87
1
in its discretion,
2 - affiliated
require
any or all State member banks
with such holding
company
3
their stock in the Federal
4
rights and privileges
5
System as provided in this section.
6
" In
to
surrender
reserve bank and to forfeit
of membership in the Federal
connection
examiners
affiliate
with
examinations
selected or
approved
all
Reserve
of State member
7
banks,
by
8
Reserve Board
9
of all affiliates of such banks as shall be necessary to disclose
shall make such examinatins
Federal
of the
between such banks and their
affairs
10
fully
11
and the effect of such relations upon the affairs of such banks.
12
The expense of examination
13
bank may, in the discretion
14
be assessed against such bank and, when so assessed, shall
15
be paid by such bank.
16
any information
17
of any such affiliate, or in the event of the refusal to permit
18
such examination,
19
any expense so assessed, the Federal
20
in its discretion,
21
affiliated
22
Federal
23
of membership in the Federal
24
in this section."
the relations
the
of affiliates of any State member
of the Federal
Reserve
Board,
In the event of the refusal
requested in the course of the
or in
affiliates
to give
examination
the event of the refusal
require
with such affiliate
to pay
Reserve Board
may,
any or all State member banks
to surrender
reserve bank and to forfeit
their stock in the
all rights and
privileges
Reserve System, as provided
88
1
SEC. 6. (a)
2
the Federal
3
as follows:
4
" The
Reserve Act, as amended, is amended to read
Secretary
of
5
trailer
6
time they are in
7
hold
8
bank.
The appointive
9
Board
shall be ineligible
of
the
the Currency
any
of section 10 of
The second paragraph
Treasury
shall
Comp-
during
the
two years
thereafter
to
or employment
members of
during
the
he ineligible
office and for
office, position,
and
in
any
member
the Federal
Reserve
the time they are in office
10
and for two years thereafter
11
employment
12
tion shall not apply
13
term for which he was appointed.
14
the term of any appointive
15
Board
16
the President
17
member at not to exceed twelve years, as designated by the
18
President
19
to provide for the expiration
20
appointive
21
each appointive
22
years from the expiration
23
the six persons thus appointed,
24
the President
25
Federal
to hold any office, position,
in any member bank, except that this
restric-
to a member who has served the
Upon the expiration
member of the Federal
in office when this paragraph
shall fix
or
full
of
Reserve
as amended takes effect,
the term of the successor to such
at the time of nomination,
but in such manner as
of the term of not more than one
member in any two-year
period,
and
thereafter
member shall hold office for a term of twelve
as governor
Reserve Board.
of the term of his predecessor.
one shall be designated by
and one as vice governor
The
Of
governor
of
the
of the
Federal
89
1
Reserve Board,
2
executive officer.
3
Board
4
make and subscribe to the oath of office "
5
6
subject to its supervision,
Each
shall within
member of
shall be its active
the Federal
fifteen days after notice of
(b) The fourth paragraph
appointment
of section 10 of the Federal
Reserve Act, as amended, is amended to read as
7
" The principal
8
trict of Columbia.
9
of the Treasury
offices of the Board
shall preside as chairman,
absence, the governor
11
both the Secretary
12
vice
governor
the Board
shall preside.
15
tern/pore.
16
manner
shall
The
in
preside.
In
of the Treasury
tary of the Treasury,
14
shall
In
follows:
shall be in the Dis-
At meetings of the Board
10
Reserve
the
Secretary
and,
in
the absence of
and the governor
and the vice
governor
elect a member to act as chairman
which
shall
the
the absence of the Secre-
the governor,
Board,
his
determine
its obligations
and
shall
prescribe
he incurred,
its disbursements and expenses allowed and paid,
pro
the
and
and may
18
leave on deposit in the Federal Reserve banks the proceeds of
19
assessments levied upon them to defray its estimated expenses
20
and the salaries of its members and employees, ivhose employ-
21
ment, compensation,
22
solely by the provisions
23
thereof, and rules and regulations of the Board
24
ent
25
not
therewith;
leave, and expenses shall be governed
of this Act,
specific
amendments
not inconsist-
and funds derived from such assessments shall
be construed to be Government
funds
or
appropriated
90
1
moneys.
No member of the Federal Reserve Board shall be
2
an officer or director of any bank, banking institution,
3
company, or Federal Reserve bank or hold stock in any bank,
4
banking
5
upon his duties as a member of the Federal Reserve Board he
6
shall certify under oath that he has complied with this require-
7
merit, and such certification shall be filed with the secretary of
8
the Board.
9
expiration
institution,
or trust company;
and before
trust
entering
Whenever a vacancy shall occur, other than by
of term, among the six members of the
Federal
10
Reserve Board appointed by the President as above provided,
11
a successor shall be appointed by the President,
12
the advice and consent of the Senate, to fill
such
vacancy,
13
and when appointed
the
unexpired
14
term of his predecessor."
15
SEC. 7. Paragraph
16
Reserve Act,
17
"(m)
he shall hold office for
with
of section 11 of the
Federal
as amended, is amended to read as
follows:
Upon
(m)
by and
the affirmative
vote of not less than
six
18
of its members the Federal Reserve Board
19
to fix from time to time for each Federal
20
percentage of individual
21
be represented by loans secured by stock or bond
22
made by member banks within such district,
23
shall be made by any such bank to any person in an amount
24
%n excess of 10 per centum of the unimpaired
25
surplus of such bank.
shall have power
reserve district
the
bank capital and surplus which may
collateral
but no such loan
capital
and
Any percentage so fixed by the Fed-
91
1
eral Reserve Board
2
time upon ten days? notice, and it shall be the duty of the
3
Board, to establish such percentages with a view to prevent-
4
ing the undue use of bank loans for the speculative
5
of securities.
6
to direct any member bank to refrain
7
of its loans secured by stock or bond collateral
8
up to one year under penalty of suspension of all
9
privileges at Federal reserve banks "
10
shall be subject to change from
The Federal Reserve Board
SEC. 8. The
Federal
11
amended by inserting
12
the following
carrying
shall have power
from further
Reserve Act,
increase
for any
period
rediscount
as amended,
between sections 12 and 13
is
thereof
new sections:
U
13
time to
SEC. 12A.
(a)
There is hereby created a
Federal
14
Open
15
'committee'),
16
there are Federal
17
bank by its board
18
member of said
19
mittee shall be held at Washington,
20
at least four times each year, upon the call of the governor
21
of the Federal
22
three members of the committee, and, in the discretion
23
the Board,
24
25
Market
"(b)
market
Committee (hereinafter
referred
which shall consist of as many
reserve districts.
of directors
committee.
Reserve Board
Each
shall
to as the
members as
Federal
annually
The meetings
District
reserve
select one
of said
of
Columbia,
or at the request of
may be attended by the members of the
No Federal
operations
com-
reserve bank shall engage in
under section 14 of this Act
any
of
Board.
open-
except
in
92
1
accordance with regulations
2
Board.
3
the committee
4
regulations
5
banks and the relations of the Federal
6
foreign central or other foreign banks.
7
The Board
and
relating
"(c)
adopted by the Federal
Reserve
shall consider, adopt, and transmit
to the several Federal
reserve
to the open-market transactions
to
banks
of such
Reserve System
with
The time, character, and volume of all purchases
8
and sales of paper described in section 14 of this Act as
9
eligible for
open-market
operations
a view to accommodating
11
regard
12
the
shall be governed
with
commerce and business and
with
to their bearing upon the general credit situation
country.
13
"(d)
14
participate
15
proved
16
with
17
notice of its decision, and transmit
18
Federal
19
of
If
any Federal
reserve bank shall decide not to
in open-market operations recommended and, ap-
as provided
the chairman
Reserve
"SEC.
in paragraph
(b)
hereof, it shall
of the committee within
thirty
file
days a
a copy thereof to the
Board.
12B.
(a)
There is hereby created a
20
Bank Deposit Insurance
21
to as the
22
hold, and liquidate,
23
national
24
Comptroller
25
and the assets of State member banks which have been closed
6
Corporation9),
Corporation
referred
whose duty it shall be to purchase,
as hereinafter
banks which
(hereinafter
Federal
provided,
the assets of
have been closed by action
of the Currency,
or by vote of their
of the
directors,
93
1
by action of the appropriate
2
of their directors;
3
as hereinafter
4
all member banks which shall have become class A
5
holders of the
6
" (b)
State authorities,
and on and after July
provided,
1, 1934, to insure,
the time and demand
deposits of
stock-
Corporation.
The management
of the Corporation
7
vested in a board of directors
8
one of whom shall be,the Comptroller
9
a member of the Federal
consisting
Board
11
governors of the twelve Federal
12
procedure
13
Board.
14
any additional
shall be
of five
members,
of the Currency,
Reserve Board
10
15
or by vote
designated by the
for the purpose, and three selected annually
by the
reserve banks under
as may be prescribed
one
by the Federal
such
Reserve
No member of such board of directors shall receive
(c)
compensation for his services as such member.
to be
appropriated,
16
out of any money in the Treasury not otherwise
appropriated,
17
the
18
for payment by the Secretary
19
stock of the Corporation
20
be subscribed for
21
Payments upon such subscription
22
whole or in part by the board of directors of the
23
Such stock shall be in addition to the amount of capital stock
24
required
25
member banks as hereinafter provided, and the United
sum
There is hereby authorized
of
$150,000,000,
which
shall
of the Treasury
in an equal amount,
be
available
for
which
by him on behalf of the United
capital
shall
States.
shall be subject to call
to be subscribed for by Federal
in
Corporation.
reserve banks and
States
94
1
shall
2
to the same extent as member banks are entitled to such
3
ment on the class A stock of the Corporation
4
Receipts for payments by the United
5
of such stock shall be issued by the Corporation
to the Secre-
6
tary
of
7
ownership
8
"(d)
9
be entitled
of
divided
to the payment
the Treasury
and
of the United
The
into
capital
of dividends
shall
on such stock
held by them.
States for or on account
be evidence
the stock
States.
stock of
shares of $100
the Corporation
each.
Certificates
shall
the Corporation
11
Class
12
shall
13
at the rate of 6 per centum per annum
14
paid
15
to the extent of 30 per centum of such net earnings
16
one year,
17
stock shall
18
B
19
shall
20
Federal
reserve
21
stock in
the Corporation
22
of the surplus
23
subscriptions
24
able to the Corporation
25
such subscription.
shall be of two classes—class
be
of stock of
10
pay-
A and class
B.
A stock shall be held by member banks only and they
be entitled to payment of dividends
in
by them, which
whichever
dividends
amount
shall
out of net
earnings
on the capital
shall
be cumulative,
be the greater,
in
be held by Federal
not be entitled
reserve
to the payment
bank shall
subscribe
of such bank on January
only
and
Every
of class
to one
1, 1933,
by a certified
in an amount
The remainder
equal
any
Class
of dividends.
to an amount
shall be accompanied
banks
to shares
or
but such
have no vote at meetings of stockholders.
stock shall
stock
B
half
and its
check
pay-
equal to one half of
of such subscription
shall
95
1
be subject to call from time to time by the board
2
upon ninety days'
Every
of
directors
notice.
3
"(e)
bank which is or which
4
of the Federal
5
shall
6
A stockholder of the Corporation
7
and thereafter
8
ship
9
class A
Reserve
becomes a member
System on or before July
1,
1934,
take all steps necessary to enable it to become a class
in
on or before July
no State bank shall
the Federal
stockholder
Reserve
be admitted
System
until
of the Corporation,
1,
1934;
to member-
it
becomes
no national
a
bank
10
in the continental
Lt
by the Comptroller
of the Currency
12
mence the business
of banking
13
of the Federal
14
of the Corporation,
15
United
10
appointed
17
its banking
18
of the Corporation.
19
the Corporation
20
amount equal to one half of 1 per centum of its total deposit
21
liabilities
22
scribed
23
case of a member
24
tion takes effect, the amount
25
for
United
Reserve
States shall be granted
a receiver
be permitted
business until
for
it to com-
a class A
stockholder
bank in the
continental
or conservator
to resume
member
has been
the transaction
it becomes a class A
Every
certificate
it becomes a member
and
and no national
States for which
shall
authorizing
until
System
a
bank
stockholder
shall
apply
class A stock of the Corporation
as computed
by the Federal
in accordance
Reserve
Board;
bank organized
by such member
bank
with
after
in
regulations
to
an
pre-
except that in the
the date
of such class A
during
of
the first
this sec-
stock
applied
twelve
months
96
1
after
its
organization
2
paid-up
3
ration
4
class A
5
annually
6
member
7
Corporation
8
the case of a member State bank, or the Comptroller
9
Currency,
capital
shall
and surplus,
equal
5 per
and beginning
of such twelve months' period
stock of
in
such member
the same manner
banks.
centum
as in
of
shall
shall request the Federal
in the case of a national
of such
be
adjusted
the case of
such
other
application
the
Reserve Board,
the basis of a thorough examination
11
not the assets of the applying
12
quate to enable it to meet all of its liabilities
13
and other creditors;
14
the Comptroller
in
of the
bank, to certify
10
upon
of such bank whether or
bank are unquestionably
and the Federal
of the Currency
its
after the expi-
the amount
bank
TJpon receipt
of
ade-
to depositors
Reserve Board
shall make such
or
certification
*
15
as soon as practicable.
16
ative, the Corporation
17
applying
18
and shall
19
Corporation:
20
required
21
stockholder
of the Corporation
22
remainder
of such subscription
23
time to time by the board of directors
24
Tf such certification
25
deny such application.
If such certification
be in the affirm-
shall grant such application
and the
bank shall pay one half of its subscription
thereupon
become a class A
Provided,
That
to make such payment
in
stockholder
no member
bank
full
of the
shall
be
or shall become a class A
before July
1, 1934.
shall be subject to call
of the
from
Corporation.
be in the negative, the Corporation
If any national
The
shall
bank shall not have
97
1
become a class A stockholder of the Corporation
2
July 1, 1934, the Comptroller
3
a receiver or conservator therefor in accordance with the pro-
4
visions of existing law.
5
not have become a class A stockholder of the
6
on or before July
7
terminate its membership in the Federal
8
accordance with the provisions of section 9 of this Act.
9
If
of the Currency
on or before
shall
appoint
any State member bank shall
Corporation
1, 1934, the Federal Reserve Board
shall
Reserve System in
" ( f ) Any State bank or trust company which has ap-
10
plied for membership in the Federal
11
conversion into a national
12
consent of the Corporation,
13
tion, pending action on such application,
14
paying
15
it would be required
16
ing a member bank.
17
tion applicable
18
State bank or trust
19
were already
20
cation of such State bank or trust company for
21
in the Federal
22
national
23
complete its membership in the Federal
24
its conversion into a national
H .
R .
Reserve System or for
banking association may, with the
obtain
the benefits of this secby subscribing
and
for the same amount of stock of the Corporation
5661
to subscribe and pay for upon becomThereupon
the provisions
of this sec-
to member banks shall be applicable
company
it
That if the appli-
Reserve System or for
membership
conversion
association be approved
7
to such
to the same extent as if
a member bank: Provided,
banking
as
into
a
and it shall not
Reserve System or
banking association within
a
98
1
reasonable time, or if such application
2
then the amount paid
3
account of its subscription
4
ration shall be repaid to it and it shall no longer be subject
5
to the provisions
6
"(g)
If
shall be disapproved,
by such bank or trust company
on
to the capital stock of the Corpo-
or entitled to the privileges
of this section.
any mutual savings bank which hereafter be-
7
comes a member of the Federal
Reserve System is not per-
8
mitted by the laws under which it was organized to purchase
9
stock in the Corporation,
it shall apply
to the
Corporation
10
for
11
application
12
accordance with this section, it shall deposit with the Cor-
13
poration an amount equal to the amount which it would have
14
been required
15
capital
16
shall be adjusted in the same manner
17
stock by class A stockholders.
18
to the same conditions with respect to repayment as amounts
admission
to the benefits of this section and, if
be granted
after
appropriate
such
certification
to pay in on account of a subscription
stock of the Corporation.
Thereafter
in
to
such deposit
as subscriptions
for
Such deposit shall be subject
paid on subscriptions
to class A stock by other member banks
20
and the Corporation
shall pay interest thereon at the same
21
rate as dividends
22
of class A stock.
23
with the Corporation,
24
the purposes of this section, be deemed to be a class A stock-
25
holder of the Corporation.
19
are actually
paid on autstanding
As long as such deposit is
such mutual
If
shares
maintained
savings bank shall,
for
the laws under which such
99
1
savings bank was organized be amended so as to authorize
2
mutual
3
Corporation,
4
thereafter
5
class A stock and the deposit hereinafter
Q
of payment upon class A stock shall be applied upon such
7
subscription.
8
was organized
9
legislature
savings banks to subscribe for class A stock of the
such savings
subscribe for
If
bank shall
within
an appropriate
the law under
six
amount
months
of such
provided for in lieu
which such savings bank
be not amended at the next session of the
following
the admission
of such savings
bank
10
to the benefits of this section so as to authorize mutual
11
banks to purchase class A stock, or, if the law be so amended
12
and such bank shall fail
13
purchase such class A stock, the deposit previously
14
with the Corporation
15
and it shall no longer be entitled to the benefits of this section,
16
unless it shall have been closed in the meantime on account
17
of inability
18
"(h)
within
savings
six months thereafter
shall be returned
to
made
to such savings bank
to meet the demands of its depositors.
The amount
of the outstanding
class A stock
19
of the Corporation
20
adjusted
21
call date as member banks increase their time and demand
22
deposits or as additional
23
scribe to the stock of the Corporation,
24
decreased in amount
25
and demand deposits or cease to be members.
held by member banks shall be annually
as hereinafter
provided
as of the last
preceding
banks become members or suband such stock may be
as member banks reduce their
time
Shares of
100
1
the capital
stock
2
banks shall
not be transferred
3
member
4
shall,
5
for an additional
6
equal
7
posits.
One half of the amount of such additional
8
be paid
for at the time of the subscription
9
balance
shall
bank
at
of
the
increases
the beginning
Corporation
by
its
time
and
of
each
calendar
be subject to call
demand
Corporation
therefor,
by the board
12
Federal
13
of the Corporation
14
amount of class A capital
stock equal to one half
15
centum
demand
16
cant bank as of the date of such admission,
17
for
18
from
19
of
20
time
and
21
than
the 1st day
22
amount of its holdings in the capital
23
and when a member bank voluntarily
24
render all its holdings
25
and
its par
value
the period
plus
demand
be released
When
deposits
of
from
January
a
it
the
of
appli-
paying
there-
bank
a month
a
not
its
later
proportionate
stock of the
liquidates
stock of the
its stock subscription
stock
reduces
surrender,
thereafter,
an
the
on the class A
member
of the capital
for
of 1 per
of 1 per centum
shall
in the
organization
to subscribe
deposits
of the last dividend
the Corporation.
to membership
be required
one half
of
on or before the date
at any time after
and
and the
of directors
this section takes effect and admitted
the time
in de-
stock shall
11
of
it
of such increase
bank organized
shall
deposits
subscribe
the Corporation.
System
a
year,
10
Reserve
When
stock of the
of 1 per centum
A
member
or hypothecated.
amount of capital
to one half
owned
not
Corporation,
it shall
sur-
Corporation
previously
101
1
called.
2
the member bank shall
3
regulations
4
a sum
5
surrendered
6
exceed one half
7
of the last dividend
8
member bank to the
The
so surrendered
be canceled
by the Federal
to its cash-paid
and
therefor,
under
Reserve
Board,
subscriptions
and its proportionate
If
shall
receive in payment
to be prescribed
equal
"(i)
9
shares
on the shares
share of dividends
of 1 per centum a month, from
not to
the period
on such stock, less any liability
of such
Corporation.
any member bank shall
be declared
insolvent,
10
01 shall
11
the Corporation
12
liability
13
stock, with its proportionate
14
one half of 1 per centum per month from
the period
15
dividend
to all debts of the
16
insolvent bank or the receiver thereof to the Corporation,
17
the balance, if any, shall be paid to the receiver of the insolvent
18
bank.
cease to be a member bank, the stock held by it in
of such bank, and all cash-paid
Upon
1933, the Corporation
21
such shall
have
22
" First.
23
" Second.
of
25
subscriptions
share of dividends
shall become a body corporate
on such
of last
and
Act of
and as
poiver—
To adopt and use a corporate
seal.
To have succession until dissolved by an Act
Congress.
" Third.
of the
not to exceed
the date of enactment of the Banking
20
24
impairment
on such stock shall be first applied
"(j)
19
shall be canceled, without
To make
contracts.
102
1
2
" Fourth.
To sue and be sued, complain and defend, in
any court of law or equity, State or
8
" Fifth.
Federal.
To appoint by its board of directors such officers
4
and employees as are not otherwise
5
section,
6
require
7
dismiss at pleasure such officers or employees.
8
this or any
other Act
9
appointment
and compensation
to
define
their
duties,
provided
fix
their
bonds of them and fix the penalty
shall
be construed
Nothing
to prevent
in
the
as an officer or employee
11
States in any board, commission, independent
12
or executive department
of any officer or employee of the
United
establishment,
thereof.
To prescribe by its board of directors,
14
not inconsistent with
15
its general business may be conducted,
16
granted to it by law may be exercised and enjoyed.
17
this
thereof, and to
of the Corporation
" Sixth.
in
compensation,
10
13
for
law, regulating
the manner
and the
bylaws
in
which
privileges
" Seventh. To exercise by its board of directors, or duly
18
authorized
19
by the provisions
20
as shall be necessary to carry
21
" (k)
officers or agents, all powers specifically
The
of this section and such incidental
board
of
directors
shall
affairs of the Corporation
23
discrimination
24
banks and may, subject to the provisions
25
each national
powers
out the powers so granted.
22
in favor
granted
fairly
administer
and impartially
the
and without
of or against any member bank or
of law, extend to
bank which is closed by action of the Comp-
103
1
troiler
2
each State member bank which is closed by action
3
appropriate
4
accommodations
5
with due regard for the claims and demands of other mem-
6
ber banks.
7
determine and prescribe the manner in which its
8
shall be incurred
9
Corporation
of the Currency,
or by vote of its directors,
State authorities,
as may
be safely
and
reasonably
made
The board of directors of the Corporation
shall be entitled to the free use of the
11
merits of the Government
12
sent of any Federal
13
sion,
14
of the Government,
15
avail itself of the use of information,
16
thereof in carrying
independent
with
The
United
as the executive
The Corporation
shall
obligations
and its expenses allowed and paid.
States mails in the same manner
"(I)
of the
or by vote of its directors, such
10
17
and to
departthe con-
reserve bank or of any board, commisestablishment,
including
or
executive
department
any field service thereof, may
services, and
facilities
out the provisions of this section.
Effective on and after July
1, 1934 (thus
afford-
18
ing
19
Corporation
20
all member banks which
21
Corporation
22
any other provision
of law,
23
which
stockholder
of the Corporation
shall
24
have been closed by action of its board of directors
or by
25
the Comptroller
ample
time
for
examination
shall insure
preparation),
the
the time and demand deposits of
are class A
as hereinafter
is a class A
and
prescribed.
stockholders
Notwithstanding
whenever any national
of the Currency,
of the
bank
as the case may be, or
104
1
account of inability
2
the Comptroller
3
ration
4
after
5
to assume the insured deposit liabilities
6
to receive new deposits and otherwise
7
rarily
8
the purposes of this subsection, the term ' insured
9
liability9
10
arising
11
following
12
owner
by
13
bilities:
100 per centum of such net amount not exceeding
14
$10,000;
15
such net amount exceeds $10,000 but does not exceed $50,000;
16
and 50 per centum of the amount, if any, by which such net
17
amount exceeds $50,000:
18
amount due to such owner for the purpose of fixing such per-
19
centage, there shall be added together all net amounts due to
20
such owner in the same capacity or the same right, on account
21
of deposits, regardless
22
tained in his name or in the names of others for his benefit.
23
For
24
posit
25
such insured
to meet the demands of its
of the Currency
receiver for such bank.
the Corporation
shall appoint
depositors,
the
Corpo-
As soon as possible there-
shall organize
a new national
bank
of such closed bank.
to perform
tempo-
the functions provided for it in this paragraph.
For
deposit
shall mean with respect to the owner of any
out of a deposit liability
percentages
of
the
such closed bank
claim
of such closed bank the
net
amount
on account
due
of
to
such
deposit
lia-
and 75 per centum of the amount, if any, by which
Provided,
of whether
That, in determining
such deposits be main-
the purposes of this subsection, the term
liabilities?
shall
mean the aggregate
deposit liabilities
the
6
insured
amount
of such closed bank.
of
deall
The
105
1
Corporation
2
net amounts due to depositors of the closed bank and
3
make available
4
insured
5
such new bank shall assume the insured
6
such closed bank to each of its depositors, and the
7
tion shall be subrogated to all rights against the closed bank
8
of the owners of such deposits and shall be entitled to receive
9
the same dividends from the proceeds of the assets of such
10
closed bank as would have been payable to each such deposi-
11
tor until such dividends shall equal the insured deposit
12
ity to such depositor assumed by the new bank,
13
all further
14
the amount thus made available
15
new bank, such portion shall be paid to it in cash as may be
10
necessary to enable it to meet immediate cash demands and
17
the remainder shall be credited to it on the books of the Cor-
18
poration
19
interest at the rate of 3 per centum per annum until
20
drawn.
21
poration,
22
amounts made available to the new bank by the
23
shall be kept on hand in cash, invested in direct
24
of the United
25
with a Federal
shall determine as expeditiously
as possible the
to the new bank an amount
deposit liabilities
shall
equal to the
of such closed bank,
whereupon
deposit liability
Corpora-
liabil-
whereupon
dividends shall be payable to such depositor.
subject to withdrawal
by the Corporation
on demand
accept
new
deposits, which,
States, or deposited with
Reserve bank.
Of
to the
and shall
The new bank may, with the approval
of
bear
with-
of the Cor-
together
ivith
all
Corporation,
obligations
the Corporation
Such new bank shall
or
main-
106
1
tain on deposit with the Federal Reserve bank of its
2
the reserves required
3
be required
4
serve bank until
5
and paid
6
articles
7
new bank may be executed by such representatives
8
Corporation
9
be required
by law of member banks but shall not
to subscribe for
for
district
stock of
its own capital
in the manner
Re-
stock has been subscribed
hereinafter
of association and organization
as it may designate;
the Federal
provided.
certificate
The
of such
of the
the new bank shall
to have any directors at the time of its
not
organiza-
10
tion, but shall be managed by an executive officer to be desig-
11
nated by the Corporation;
12
in by the Corporation;
13
be organized
in accordance with the existing provisions
14
law
to the organization
15
until the requisite amount of capital stock for such bank has
16
been subscribed and paid for in the manner hereinafter
pro-
17
videdj
that
18
authorized
19
incidental
20
Corporation
21
offer capital stock of the new bank for sale on such terms and
22
conditions
23
amount sufficient in the opinion of the Corporation
24
possible the conduct of the business of the new bank on a
25
sound basis, but in no event less than that required
relating
and no capital stock need be paid
but in other respects such bank shall
such bank shall
transact
of national
of
banks;
and,
no business except
by this subsection and such business as may be
to its organization.
When in the judgment
of the
it is desirable to do 'so, the Corporation
shall
as the Corporation
shall deem advisable,
in
an
to make
by section
107
1
5138 of the Revised Statutes, as amended, for the
2
o/ a national
organiza-
bank in the place where such new bank is
3
located, giving
4
opportunity
5
adequate amount of capital stock of the new bank has been
6
subscribed and paid for in cash by subscribers
7
to the Comptroller
of the Currency,
8
bank a certificate
of authority
9
thereafter it shall be managed by directors elected by its own
the stockholders of the closed bank the first
to purchase such stock.
Upon
proof
that
satisfactory
he shall issue to such
to commence business and
10
shareholders and may exercise all of the powers granted
11
law to national banking associations.
12
of capital for such new bank is not subscribed and paid
13
the Corporation
14
other banking institution
15
over its assets, assume its liabilities,
16
tion for such business such amount as the Corporation
17
deem adequate.
18
sold or its assets acquired
19
another banking institution,
20
within
21
poration
22
and wind up its affairs.
23
books a deposit insurance
24
after taking possession of any closed national
25
poration
an
by
If an adequate amount
may offer to transfer
in,
its business to any
in the same place which will
and pay to the
take
Corporamay
Unless the capital stock of the new bank is
and its liabilities
assumed by
in the manner herein
prescribed,
two years from the date of its organization,
the Cor-
shall place the new bank in voluntary
liquidation
The Corporation
shall open on its
account and, as soon as possible
bank, the Cor-
shall make an estimate of the amount
which
will
108
1
be available
2
of the portion
3
subrogated and shall debit to such deposit insurance
4
the excess, if any, of the amount made available by the Cor-
5
poration
6
amount of such estimate.
It shall be the duty of the Corpo-
7
ration to realize as rapidly
as possible upon the assets of such
8
closed bank, having due regard to the condition
9
the district
from all sources for application
in
satisfaction
of the claims of depositors to which it has been
account
to the new bank for depositors over and above the
of credit
in
in which such closed bank is located; to enforce
10
the individual
11
thereof;
12
conformity
13
tion of closed national banks, except as herein otherwise
14
vided,
15
amount realized from such liquidation
16
to receive on account of its subrogation
17
positors
and paying
18
amount
available
19
therefrom
20
closed bank.
21
tion on account of its subrogation
22
be less than the amount of the estimate hereinabove
23
for, the deposit insurance account shall be charged with the
24
deficiency
25
the amount of such estimate, such account shall be credited
liability
of the stockholders
and to wind up the affairs
for
to the
its own account such portion
liquida-
of the
to the claims of de-
to depositors and other creditors
for distribution
pro-
as it shall be entitled
to them, after
their share of the costs of the liquidation
If
directors
of such closed bank in
with the provisions of law relating
retaining
and
the total amount realized by the
the
deducting
of the
Corpora-
to the claims of depositors
provided
and, if the total amount so realized shall exceed
109
1
with such excess. With respect to such closed national
2
the Corporation
3
leges now possessed by or hereafter given receivers of insol-
4
vent national banks and shall be subject to the obligations
5
penalties not inconsistent with the provisions
6
graph
7
become subject.
8
9
banks,
shall have all the rights, powers, and
of this
to which such receivers are now or may
privi-
and
para-
hereafter
" Whenever any State member bank which is a class A
stockholder
of the Corporation
action of its board of directors
shall have been closed by
or by the appropriate
11
auhority,
12
meet the demands of its depositors,
13
accept
14
be tendered by the appropriate
15
thorized or permitted
16
poration
17
with the provisions
18
deposit liabilities
19
deposits and otherwise to perform
20
provided for in this subsection.
21
tion of the right of the Corporation
22
the same basis as in the case of a closed national
23
this subsection, such recognition
24
law, by allowance of claims by the appropriate
25
thority,
as the case may be, on account
appointment
State
of inability
the Corporation
as receiver thereof, if such
and be au-
Thereupon
shall organize a new national
shall
appointment
State authority
by State law.
to
the
bank, in
Cor-
accordance
of this subsection, to assume the insured
of such closed State bank, to receive new
temporarily
the
functions
Upon satisfactory
recogni-
to receive dividends
bank under
being accorded
by assignment of claims by depositors,
on
by
State
State
au-
or by any
110
1
other effective method, the Corporation
2
to such new national bank, in the manner prescribed by this
3
subsection, an amount equal to the insured deposit
4
of such closed State bank; and the Corporation
5
national
6
and shall have all the rights and privileges
7
such State bank and the depositors thereof which are pre-
8
scribed by this subsection with respect to closed national
9
holding
bank shall perform
shall make
liabilities
and such new
all of the functions
class A stock in the Corporation:
available
and duties
with respect to
Provided,
banks
That
10
the rights of depositors and other creditors of such State bank
11
shall be determined
12
visions
13
respect to such State bank, the Corporation
14
powers and privileges provided by State law with respect to
15
a receiver
16
are in conflict with the provisions of this subsection.
17
in accordance with the applicable
of State law:
And
provided
further,
That,
prowith
shall possess the
of such State bank, except insofar
as the same
" Whenever any State member bank which is a class A
18
stockholder of the Corporation
19
of its board of directors or by the appropriate
20
as the case may be, on account of inability
21
of its depositors, and the applicable State law does not permit
22
the appointment
of the Corporation
23
the Corporation
shall organize
24
accordance with the provisions
25
the insured
deposit liabilities
shall have been closed by action
State
authority,
to meet the demands
as receiver of such bank,
a new national
bank,
in
of this subsection, to assume
of such closed State bank, to
Ill
1
receive
new deposits, and otherwise
2
the functions
3
factory
4
dividends
5
bank under
6
by State
7
State authority,
8
by any
9
available
provided
recognition
visions
for
to perform
temporarily
in this subsection.
Upon
of the right of the Corporation
to receive
on the same basis as in the case of a closed
this subsection, such recognition
law,
by allowance
of claims
by assignment
of
new bank,
this subsection,
accordance
the amount
such recognition
appropriate
shall
with
of
insured
12
and such new bank shall assume such insured
deposit
13
ties and shall
the
14
of this subsection respecting
15
insured
16
as possible in view of the applicable
17
the Corporation
18
such closed bank and with respect to the new bank
19
to assume its insured
20
scribed
21
banks
22
deposit
23
none of the powers,
24
with respect to the winding
25
State
deposit liabilities
liabili-
provisions
to assume
banks.
provisions
Insofar
of State
law,
shall proceed with respect to the receiver
new
liabilities,
bank.
accorded;
new banks organized
of closed national
deposit liabilities
by this subsection
and
with
pro-
deposit
liabilities
in other respects comply
has been
The
banks
with
respect
organized
except that
in
to closed
duties, or responsibilities
up of the affairs
Corporation,
in
insured
shall
of a
have
receiver
of such
its discretion,
pre-
national
their
the Corporation
of
organized
the manner
to assume
or
make
the
11
as to which
in
accorded
by depositors,
other effective method, the Corporation
to such
national
being
by the
of claims
satis-
closed
however,
112
1
may purchase and liquidate
2
bank.
8
any or all of the assets of such
" Whenever the net debit balance of the deposit
insur-
4
ance account of the Corporation
shall equal or exceed one
5
fourth
6
class A stockholders as of the date of the last preceding
7
report,
8
an assessment equal to one fourth
9
total deposit liabilities
of 1 per centum of the total deposit liabilities
the Corporation
of all
call
shall levy upon such stockholders
of 1 per centum of their
and shall credit the amount collected
10
from such assessment to such deposit insurance account.
No
11
bank which is a holder of class A stock shall pay any
divi-
12
dends until all assessments levied upon it by the
13
shall have been paid in full;
14
any such bank who participates
15
ment of any such dividend
16
not more than $1,000, or imprisoned for not more than one
17
year, or both.
18
" The term ' receiver'
or officer of
in the declaration
may, upon conviction,
or
pay-
be fined
as used in this section shall mean
19
a receiver,
20
bank, and a receiver, liquidating
21
sion, person, or other agency charged by State law with the
22
responsibility
23
insolvent State member bank.
24
2 5
" For
' national
liquidating
and any director
Corporation
agent, or conservator
of a
national
agent, conservator,
commis-
and the duty of winding
the purposes
bank'
of
this
up the affairs
section
shall include all national
only,
banking
of an
the
term
associa-
113
1
tions and all banks, banking
2
savings banks, and other banking institutions
3
District
4
Reserve System;
5
include all State banks, banking
6
nies, savings banks, and other banking institutions
7
under
8
Federal Reserve System.
9
of Columbia
associations, trust
which
6
and the term
any determination
located in the
are members of the
Federal
State member bank9
associations, trust
the laws of any State, which
"In
companies,
shall
compa-
organized
are members of the
of the insured deposit
liabilities
10
of any closed bank or of the total deposit liabilities
11
bank which is a holder of class A stock of the
12
for
13
the amounts of all deposits of such bank which are payable
14
only at an office thereof located in a foreign
of any
Corporation,
the purposes of this subsection, there shall be excluded
15
" The Corporation
country.
may make such rules,
regulations,
16
and contracts as it may deem necessary in order to carry out
17
the provisions of this section.
18
" Money
of the Corporation
not otherwise
employed
19
shall be invested in securities of the Government of the United
20
States, except that for temporary
21
the board of directors,
22
deposited in any Federal reserve bank or with the Treasurer
23
of the United States.
24
the Secretary
H .
K . 5661
funds
of the Corporation
may be
When designated for that purpose by
of the Treasury,
8
periods, in the discretion of
the Corporation
shall be a
114
1
depositary
2
under such regulations
3
Secretary,
4
of the Government.
5
duties as depositary of public moneys and financial
6
the Government as may be required of it.
"(m)
7
of public
moneys, except receipts from
as may be prescribed
Nothing
It shall perform
agent
all such reasonable
agent of
herein contained shall be construed to
prevent the Corporation
9
closed by action of the Comptroller
from making loans to national
10
vote of their directors,
11
action of the appropriate
12
their directors,
13
the reopening of such banks.
" (n)
by the said
and may also be employed as a financial
8
14
customs,
of the Currency,
banks
or by
or to State member banks closed by
State authorities,
or by vote of
or from, entering into negotiations
Receivers or liquidators
to secure
of member banks which
15
are now or may hereafter
16
shall be entitled to offer the assets of such banks for sale to
17
the Corporation
18
tion, upon receiving
19
authority
20
law in the case of State member banks, or from the Comp-
21
troller
22
proceeds of every such sale or loan shall be utilized for the
23
same purposes and in the same manner as other funds
24
ized from the liquidation
25
Comptroller
in
become insolvent
or suspended
or as security for loans from the
permission from
accordance
of the Currency
with
Corpora-
the appropriate
express provisions
in the case of national
of
banks.
of the assets of such banks.
of the Currency
may, in his discretion,
State
State
The
realThe
pay
115
1
dividends
2
of the period of advertisement made pursuant
3
of the Revised
4
Comptroller
5
national
6
pay
7
the time of any such
8
9
on proved
claims
Statutes,
of
the
at any time after the
and no liability
Currency
or
expiration
to section 5235
shall
attach to the
to the receiver
of
any
bank by reason of any such payment for failure
dividends
"(o)
to a claimant
The
to issue and
whose claim
to
is not proved
at
payment.
Corporation
to have
outstanding
an
the amount
of
its capital,
12
gations,
13
before maturity
in
14
such obligations,
and to bear such rate or rates of interest,
15
and to mature
16
by the Corporation:
17
sell on a discount
18
maturity
19
and
20
secured
21
shall
22
tions may be offered for sale at such price
23
corporation
its notes, debentures,
to be redeemable
by
such
such
be prescribed
may
issued
bonds, or other such
at the option
manner
Provided,
of the
as may
That
basis
short-term
interest.
The
obligations
of
assets of
All
twice
obli-
Corporation
be stipulated
in
at such time or times as may be determined
without
other
gations
than
one time in
11
"(p)
more
empowered
amount
25
not
at any
and
10
24
aggregating
is authorized
the Corporation
obligations
notes,
the
the Corporation
payable
debentures,
Corporation
in
such
by its board of directors.
may
at
bonds,
may
be
manner
as
Such
obliga-
or prices
as the
determine.
notes, debentures,
by
bonds, or other such
the Corporation
shall
be exempt,
obliboth
116
1
as to principal
and interest, from
2
and
3
United
4
thereof, or by any State, county, municipality,
5
authority.
6
tal, reserves, and surplus,
7
/rom all taxation
8
States, by any Territory,
9
or by any State, county, municipality,
inheritance
taxes)
now
or
States, by any Territory,
The Corporation,
all taxation
hereafter
including
11
subject
12
taxation
imposed
13
reaZ property
Territorial,
United
author-
of the Corporation
county,
municipal
shall be
or
to its value
that the Corporation
16
obligations
17
Secretary
18
forms as shall be suitable and approved
of notes, debentures,
local
as other
the Treasury
held in the Treasury
0/ the Corporation.
21
and
22
remain
23
The Corporation
24
ury for
other material
under
is authorized
executed in
any expenses incurred
supplied
this Act, the
by the
such
Corporation,
upon
order
plates, dies, bed pieces,
connection
of the Secretary
shall reimburse
be
to prepare
subject to delivery,
The engraved
the custody
may
bonds, or other such
as it may need for issuance
20
by the
or local taxing
with such forms
in
be exempt
is taxed.
I71 order
to
ite capi-
thereof,
15
19
taxing
or possession
to the same extent according
of
or local
its franchise,
dependency,
ity, except that any real property
by the
or possession
and its income, shall
10
14
imposed
dependency,
now or hereafter
to State,
(except estate
therewith
of the
the Secretary
shall
Treasury.
of the Treas-
in the preparation,
custody,
117
1
and delivery
2
obligations.
3
"(r)
its
of such notes, debentures, bonds, or other such
The
Corporation
4
of
5
after the 1st day of January
6
operations
"(s)
annually
to the Congress
Whoever,
for
as soon
in each
or
8
thereof, or the acceptance, release, or substitution
9
therefor,
or for
10
purchase
any assets, or for the purpose
11
way the action of the Corporation
12
any statement, knowing
13
any security,
14
$5,000,
15
both.
shall
of inducing
be punished
Whoever
(1)
falsely
any
obligation
or
coupon,
18
porting
19
poration,
20
to pass, utter, or publish,
21
obligation
22
Corporation,
knowing
23
terfeited,
(3)
24
issued or purporting
25
or (4) passes, uttersr or publishes,
of
to be an obligation
of influencing
to
in any
this section, makes
makes, forges,
in
imitation
or coupon
passes, utters,
or
issued
publishes,
any false, forged,
purporting
overvalues
or
or
of
than
alters
counteror
pur-
by the
Cor-
or
attempts
counterfeited
to have been issued by the
the same to be false, forged,
falsely
security
by a fine of not more
feits
or
renewal
the Corporation
under
17
or coupon
or
loan
for not more than two years, or
"(t)
(2)
extension
any
it to be false, or willfully
or by imprisonment
or
practicable
of obtaining
from
the purpose
any
as
report
year.
the purpose
Corporation,
make a
7
16
the
shall
any
obligation
to have been issued by the
or
or councoupon
Corporation,
or attempts to pass, utter,
118
1
or publish, as true, any falsely altered or spurious
2
or coupon, issued or purporting
3
Corporation,
4
spurious,
shall
5
$10,000,
or by imprisonment
6
or both.
7
"(u)
knowing
Whoever,
to have been issued by the
the same to be falsely
be punished
obligation
altered
by a fine of not more
or
than
for not more than five years,
being connected in any capacity
with
8
the
9
willfully
10
things
11
otherwise intrusted
12
Corporation
13
any individual,
14
iner
15
book, report,
16
without
17
puts forth,
18
such obligation,
19
ment, or decree thereof, shall be punished by a fine of not
20
more than $10,000,
21
five years, or both.
22
Corporation,
(1)
misapplies
of value,
embezzles, abstracts,
or
any moneys, funds, securities, or other
whether
belonging
to it, or (2)
or any
to it
or pledged,
with intent to defraud
other body, politic
or corporate,
or to deceive any officer, auditor,
of the Corporation,
makes any false
the
or
or examany
or statement of or to the Corporation,
or
authorized
draws
entry
or
in
being duly
"(v)
purloins,
any order or issues,
or assigns any note, debenture, bond, or other
or draft,
bill of exchange, mortgage,
or by imprisonment
No individual,
judg-
for not more than
association, partnership,
or corpo-
6
Insurance
23
ration shall use the words
24
Corporation
25
ivords, as the name or a part thereof under which he or it
Federal Bank Deposit
\ or a combination
of any three of these five
119
1
shall do business.
2
or Corporation
3
by any device whatsoever that his or its deposit
4
are
5
Bank
6
ment of the United States, or by any instrumentality
thereof;
7
and no class A stockholder
Deposit
8
Insurance
9
sent falsely
insured
No individual,
association,
partnership,
shall advertise or otherwise represent
or
Deposit
in
anywise
Insurance
Corporation
guaranteed
Corporation,
shall advertise
or the manner
11
by
12
Every
13
violating
14
exceeding $1,000,
15
year, or both.
IQ
"(w)
in which
the Federal
individual,
Bank
partnership,
this subdivision
Federal
or by the
Govern-
Bank
or otherwise
repre-
the extent to which
its deposit liabilities
Deposit
liabilities
the
of the Federal
by any device whatsoever
10
by
falsely
Insurance
association,
are
insured
Corporation.
or
corporation
shall be punished by a fine of not
or by imprisonment
The provisions
not exceeding one
of sections 112, 113, 114,
17
116, and 117 of the Criminal
18
(U.S.C.,
19
so far
20
agreements with the Corporation
21
the purposes hereof shall be held to include loans, advances,
22
extensions, and renewals thereof, and acceptances, releases,
23
and substitutions
24
assets, and all contracts
25
same.
Code of the United
115,
States
title 18, ch. 5, sees. 202 to 207, inclusive),
as applicable,
are extended to apply
of security
in
to contracts or
under this section, which for
therefor,
purchases or sales of
and agreements pertaining
to the
120
1
"(x)
The Secret Service
2
Department
3
into
4
jurisdiction
5
punishable
6
is authorized
the custody
any
of
the
person
of the
to detect, arrest,
United
States
committing
any
Treasury
and
marshal
of
Federal Bank Deposit Insurance
8
to as the 'Fund'),
1933,
hereinafter
11
"(b)
having
the offenses
" SEC. 12G. (a) There is hereby created a
9
deliver
under this section.
7
10
Division
Fund
Temporary
(hereinafter
which shall become operative
and whose duty it shall be to insure
provided
until
July
1,
referred
on
July
deposits as
1934.
Each member bank licensed before July
1,
1933,
12
by the Secretary
13
vested in him by the proclamation
14
March 10, 1933, shall, on or before July
15
a member of the Fund;
16
such date, and each State bank or trust
17
becomes a member of the Federal
18
such date, shall, upon being so licensed or so admitted
19
membership, become a member of the Fund;
20
bank or trust company and/or
mutual
savings bank
which
21
is not a member of the Federal
Reserve System may,
upon
22
application
23
before January
24
by a certificate
25
State bank or trust company or mutual
of the Treasury,
therefor,
pursuant
to the
authority
of the President
issued
1, 1933, become
each member bank so licensed after
company
Reserve System
of the State banking
after
to
and any State
become a member of the Fund
1, 1934, if such application
which
on or
is accompanied
authority
that
such
savings bank is, on
121
1
the date of such application,
2
unrestricted
3
"(c)
solvent with
respect
to its
deposits.
The Fund shall insure the amounts owed to each
4
of the depositors of each of its members, but not to exceed
5
$2,500
6
of this section shall not apply to any impounded
7
any impounded portion thereof.
8
or hereafter
9
shall not render a deposit ineligible for
10
in the case of any one depositor;
"(d)
proclaimed
Each
but the
deposit or
Any restrictions
by the Secretary
of the
which
a member on or before July
12
Fund
13
oath showing
14
amount
15
eligible for
16
certified
check in an amount equal to one half
17
centum
of the total
18
and each member bank, State bank,
19
which shall become a member of the Fund
20
1933, shall at the time of its admission
21
with the Fund
22
depositors
23
fifteenth
24
it was so admitted,
25
this section, together with
1, 1933,
shall file with
on or before such date, a certified
insurance
statement
of its depositors
under
amount
Treasury
shall become
11
of its deposits as of June
heretofore
insurance.
member of the Fund
the number
provisions
15,
and
1933,
the
under
the
total
which
are
this section, together with
of the deposits
and
a
of 1 per
so
certified;
trust
company
after
July
1,
to membership
file
such a statement showing the number
of its
and the total amount of its deposits as of the
day of the month preceding
in
which
which are eligible for insurance
under
a certified
the month
check in an
amount
122
1
equal to one half of 1 per centum of the total amount
2
the deposits so certified.
3
by each such member on January
4
number of its depositors and the total amount of its deposits
5
as of December 15, 1933, which are eligible for such in-
6
surance, together with a certified check in an amount
7
to one half of 1 per centum of the increase, if any, in the
8
total amount of such deposits since the date covered by the
9
statement
10
statement shall be filed
1, 1934,
filed upon its admission
showing
to membership
the
equal
in
the
Fund.
11
12
A similar
of
"(e)
requires
If
at any time prior
additional
to July
1, 1934, the
funds with which to meet its
Fatid
obligations
13
under
14
ject to one additional
assessment only in an amount
not
15
exceeding the total amount theretofore paid to the Fund
by
16
such member.
;u
17
this section, each member of the Fund
" ( f ) During
shall be subr
the period that deposits are insured
under
18
this section, no member of the Fund
19
rate in excess of M per centum per annum on the amount
20
of any of its deposits so insured.
21
22
"(g)
shall pay interest at a
Whenever any member of the Fund
been closed by the appropriate
legal authorities,
shall have
the
Fund
23
shall pay to the depositors of such member as soon as possible
24
thereafter
25
closing which
the amount of their deposits on the date of such
are insured
under
this section.
After
such
123
1
payment the Fund
2
the closed bank of the owners of such insured
3
shall
4
proceeds of the assets of such closed bank as would
5
been payable
6
insured
7
be entitled
shall be subrogated to all rights
deposits and
to receive the same dividends
to each such depositor
ivith
the
have
respect to his
In the event that the Fund
shall be unable to pay
8
any of its obligations, when due, the Secretary
9
ury shall pay the amount thereof, which is hereby
10
to be appropriated
11
otherwise appropriated.
12
by the Secretary of the Treasury,
13
reimbursed
14
Insurance
15
ment on the members of the Fund
16
centum of the total insured
17
January
18
ized to collect until
19
been fully
20
after the expiration
of the Treasauthorized
out of any money in the Treasury
If
to the Treasury
Corporation
any such advances are
not
made
they shall be subsequently
by the Federal
Bank
Deposit
by means of a special annual assessof one fourth
of 1 per
deposits of such members on
1, 1934, which the Corporation
is hereby
author-
such time as such advances shall
have
reimbursed, but no such assessment shall be made
"(i)
In
22
obligations
23
(h)
24
on July
from
deposit.
"(h)
21
against
of ten years after July
the event that the Fund
without
1,
shall pay all of its
recourse to the provisions
of this section, any balance remaining
1, 1934, shall be transferred
1934.
of subsection
in
the
to the Federal
Fund
Bank
124
1
Deposit
2
insurance
3
Insurance
Corporation
and credited to its deposit
account.
" ( j ) The Fund
shall be a body corporate with
power
4
to adopt and use a corporate seal; to make contracts;
to sue
5
and be sued, complain
Q
equity, State or Federal;
to appoint by its board of
directors,
7
which shall consist of the members of the Federal
Reserve
g
Board,
9
to carry
and defend in any court of law or
such officers and employees as may
be necessary
out the powers granted to the Fund
by this sec-
10
tion,
to define their duties, fix their compensation,
11
bonds of them and fix the penalty
12
at pleasure
13
board of directors
14
lating the manner in which its general business may be con-
15
ducted and the privileges granted to it by law may be exer-
16
cised and enjoyed; and to exercise by its board of
17
or duly authorized
18
granted
19
be necessary to carry out the powers so granted.
20
her of the board of directors of the Fund
21
additional
22
"(k)
thereof, and to dismiss
such officers or employees; to prescribe
bylaws, not inconsistent
with
officers or agents, all powers
by this section and such incidental
law,
by its
regu-
directors,
specifically
powers as shall
No mem-
shall receive any
compensation for his services as such member.
There is hereby authorized
23
out of any money in the Treasury
24
priated,
require
the sum of $10,000,000,
to be
appropriated,
not otherwise
appro-
which shall be made im-
125
1
mediately available
2
any of its expenses or obligations.
3
"(I)
to the Fund
for the purpose of
All functions of the Fund
shall cease on July
4
1934;
5
dividends
6
of this section.
7
after July
8
Insurance
9
account, unless there is a balance due the Treasury
except that it may proceed to collect any
The net proceeds of all
1,1934,
for
credit
11
tions shall first be paid into the Treasury
12
such
of this section, in which
Deposit
insurance
under
event such collecto the extent of
balance"
SE<1. 9. (a)
Federal
15
(g)
collections
to its deposit
subsection (h)
14
such
shall be paid to the Federal Bank
Corporation
1,
liquidating
to which it may be entitled under subsection
10
13
paying
of section 13 of the
The eighth paragraph
Reserve Act, as amended, is amended to read as
follows:
16
"Any
Federal
reserve bank may
make advances
for
17
periods not exceeding fifteen days to its member banks on
18
their
19
of bonds, notes, certificates
20
bills of the United
21
debentures
22
mediate credit
23
Federal
24
any Federal
25
not exceeding ninety
promissory
or
notes secured by the deposit
of indebtedness,
or
or
pledge
Treasury
States, or by the deposit or pledge of
other
such
banks which
obligations
of
are eligible
reserve banks under section 13 (a)
Federal
for
purchase
of this Act;
reserve bank may make advances for
days to its member
interby
and
periods
banks on
their
126
1
promissory
notes secured by such notes, drafts,
bills of ex-
2
change, or bankers' acceptances as are eligible for
3
or for purchase by Federal
4
sions of this Act.
5
to be established by such Federal
(J
the review and determination
7
If
8
made shall, during
9
and despite an official warning
rediscount
reserve banks under the
provi-
All such advances shall be made at rates
reserve banks, subject to
of the Federal Reserve
Board.
any member bank to which any such advance has been
the life or continuance of such advance,
of the reserve bank of the
10
district
11
increase its outstanding
12
form
13
or loans made to members of any organized stock exchange,
14
investment
15
tion, note, or bill, secured or unsecured, for the purpose of
16
purchasing
17
ment securities
18
such advance shall be deemed immediately
due and
19
and such member bank shall be ineligible
as a borrower
20
the reserve bank of the district
21
paragraph
22
shall determine:
23
clearance loans made solely for
24
the puchase or delivery
or of the Federal
Reserve Board
to the
contrary,
loans secured by collateral
of stocks, bonds, debentures, or other such
obligations,
house, or dealer in securities, upon any
and/or
carrying
stocks, bonds, or other
(except obligations
of the United
Provided,
obliga-
investStates)
payable,
under the provisions
for such period as the Federal
in the
of this
Reserve
That no temporary
the purpose of
at
Board
carrying
or
facilitating
of securities offered for public
sub-
127
1
scription
2
paragraph
(b)
3
shall be included
in the loans referred
The
of
paragraph
section
13
of
the
4
Reserve Act, as amended, beginning
5
the powers now vested in national
6
amended (effective six months hence) to read as
"Any
7
national
banking
" That
banking
to in
Federal
in addition
business in any place the population
9
five thousand inhabitants,
to
associations " is
follows:
association located and
8
this
doing
of which does not exceed
as shown by the last
preceding
10
decennial census, may, under such rules and regulations
11
may be prescribed by the Comptroller
12
as the broker or agent for others in making
13
loans on real estate located within
14
place in which such association is located, receiving for such
15
services a reasonable fee or commission;
16
ciation shall in any case guarantee either the principal
17
interest of any such
18
of the Currency,
one hundred
19
amended, is amended by adding
20
following
21
"(g)
procuring
miles of the
but no such assoor
Reserve Act,
at the end thereof
as
the
paragraph:
The Federal Reserve Board
shall exercise special
22
supervision
23
kind
24
foreign bank or banker, or with any group of foreign
25
or bankers, and all such relationships
act
loan"
SEC. 10. Section 14 of the Federal
new
or
as
over all relationships
and transactions
entered into by any Federal
of any
reserve bank with
and transactions
any
banks
shall
128
1
be subject to such regulations,
2
I/IE Board
3
tive of any Federal
reserve bank shall conduct
4
of
the officers or representatives
5
foreign
6
sion of the Federal
7
Board
8
in any conference or negotiations by such representative
9
representatives
any
may prescribe.
kind
with
conditions, arid limitations
No officer or other
bank or banker without first obtaining
Reserve Board.
representanegotiations
of
any
the permis-
The Federal
Reserve
shall have the right, in its discretion, to be represented
as the Board
may designate.
A full
of all conferences or negotiations, and all understandings
11
agreements arrived
12
other
13
negotiations,
14
in writing
15
bank which shall have participated
material
at or transactions
facts
appertaining
or
report
10
16
as
or
agreed upon, and all
to such conferences or
shall be filed with the Federal
Reserve
by a duly authorized officer of each Federal
Board
reserve
in such conferences or
negotiations."
17
SEC. 11. (a)
18
Act,
19
paragraph
20
Section
19 of
the Federal
as amended, is amended by inserting
thereof the following
new
after
Reserve
the sixth
paragraph:
" No member bank shall act as the medium or agent of
21
any nonbanking
22
ness trust, or individual
23
stocks, bonds, and other investment securities to brokers or
24
dealers
25
Every
in
corporation,
partnership,
busi-
in making loans on the security of
stocks, bonds, and
violation
association,
of this provision
other investment
securities.
by any member bank shall
m
1
be punishable by a fine of not more than $100 per day dur-
2
ing the continuance of such violation;
3
collected, by suit or otherwise, by the Federal
4
of the district in which such member bank is located
(b)
5
Such section 19 of the Federal
6
amended, is further
7
the following
8
9
and such fine may be
new
reserve bank
Reserve Act, as
amended by adding at the end thereof
paragraphs:
" No member bank shall, directly
or indirectly
by any
device whatsoever, pay any interest on any deposit which is
10
payable on demand: Provided,
11
shall be construed as prohibiting
12
accordance with
13
other contract
14
is in force on the date of the enactment of this
15
but no such certificate
16
renewed or extended unless it shall be modified to conform
17
to this paragraph,
18
action as may be necessary to conform
19
as soon as possible consistently
20
tions: Provided,
21
apply to any deposit of such bank which is payable only at
22
an office thereof located in a foreign
23
24
H .
heretofore
5661
in
of deposit or
entered into in good faith
which
paragraph;
of deposit or other contract
shall be
and every member bank shall take such
however,
That
to this
paragraph
with its contractual
this paragraph
Reserve Board
by regulation
R .
the payment of interest
the terms of any certificate
" The Federal
limit
That nothing herein contained
obligashall
n6t
country.
shall from
time to time
the rate of interest which may be paid
9
130
1
by member banks on time deposits, and may prescribe
2
ent rates for
3
having different
4
respecting
5
shall pay any time deposit before its maturity,
6
requirement
7
except as to all saving deposits having the same requirement
8
9
(c)
lish
such payment
maturities
withdrawal
or
on time and savings
or subject to different
repayment.
No
differdeposits
conditions
member
bank
or waive any
of notice before payment of any savings deposit
Section 8 of the Act entitled
postal savings
depositories
for
"An
Act
depositing
"
to estab-
savings
at
10
interest with the security of the Government
11
thereof, and for other purposes",
12
as amended, is amended by striking
13
thereof and inserting
14
depositor may withdraw
15
deposited to his or her credit with the accrued interest
16
on notice given sixty days in advance and under such regu-
17
lations as the Postmaster General may prescribe;
18
drawal of any part of such funds may be made upon demand,
19
but no interest shall be paid on any funds so
20
Provided,
21
funds
22
prescribed by the Postmaster
23
That
approved June 25,
the following
new
"Any
the whole or any part of the funds
Savings
depositories
but
only
with-
withdrawn:
may
regulations
deposit
to be
General"
SEC. 12. Section 22 of the Federal
25
1910,
out the first sentence
in member banks on time under
amended, is further
repayment
in lieu thereof the following:
Postal
24
for
Reserve Act, as
amended by adding at the end thereof
paragraph:
131
1
u
2
borrow
3
bank of which
4
bank shall make any loan or extend credit in any other man-
5
ner to any of its own executive officers.
6
officer of any member bank borrow from or if he be or become
7
indebted to any bank other than a member bank of which
8
he is an executive officer, he shall make a written
9
the chairman
(y)
No executive officer of any member bank shall
from
or otherwise become indebted to any member
he is an executive officer, and no member
If
any executive
report to
of the board of directors of the member bank
10
of which he is an executive officer, stating the date and amount
11
of such loan or indebtedness, the security
12
purpose for which the proceeds have been or are to be used.
13
Any executive officer of any member bank violating
14
visions of this paragraph
15
meanor and shall be imprisoned
16
fined not more than $5,000,
17
violating
18
more than $10,000,
19
to the amount so loaned or credit so extended."
20
the provisions
shall be deemed guilty
amended by inserting
22
the following
23
"SEC. 23A.
the pro-
of a misde-
or both; and any member bank
shall be fined not
and may be fined a further
21
and the
not exceeding one year, or
of this paragraph
SEC. 13. The Federal
new
therefor,
Eeserve Act,
sum equal
as amended, is
between sections 23 and 24 thereof
section:
No member bank shall (1) make any loan
24
or any extension of credit to, or purchase securities
under
25
repurchase agreement from, any of its affiliates, or (2)
invest
132
1
any of its funds in the capital
2
other such obligations of any such affiliate, or (3)
3
capital stock, bonds, debentures, or other such obligations of
4
any such affiliate
5
to any person, partnership,
6
the case of any such affiliate, the aggregate amount of such
7
loans, extensions of credit,
8
ments, and advances against
9
exceed 10 per centum of the capital
as collateral
stock, bonds, debentures, or
security
for
accept the
advances made
association, or corporation,
repurchase
agreements,
such collateral
stock and surplus
such member bank, or if, in the case of all such
11
the aggregate amount
12
repurchase
13
such collateral
14
capital stock and surplus of such member bank.
15
" Within
will
the foregoing
will
of
affiliates,
of such loans, extensions of
security
in
invest-
security
10
agreements, investments,
if,
credits,
and advances
against
exceed 20 per centum of the
limitations,
each loan or exten-
16
sion of credit of any kind or character to an affiliate shall be
17
secured by collateral in the form, of stocks, bonds, debentures,
18
or other such obligations
19
of making the loan or extension of credit of at least 20 per
20
centum more than the amount of the loan or extension of
21
credit, or of at least 10 per centum more than the amount of
22
the loan or extension of credit if it is secured by
23
of any
State,
24
thereof:
Provided,
25
shall not apply
having a market value at the time
or of any political
That
subdivision
the provisions
of this
obligations
or
agency
paragraph
to loans or extensions of credit secured by
133
1
obligations
2
intermediate
3
such notes, drafts,
4
as are eligible for
5
Reserve banks.
6
officer, clerk,
7
any such affiliate shall be deemed a loan to the affiliate to
8
the extent that the proceeds of such loan are used for the
9
benefit of, or transferred
10
of the United
" For
States Government,
credit banks, or the Federal
the
Federal
land banks, or by
bills of exchange, or bankers} acceptances
rediscount
or for purchase
by
Federal
A loan or extension of credit to a director
or other employee or any
representative
of
to, the affiliate.
the purposes of this section the term ' affiliate9
11
shall
12
affiliates, and the provisions
13
to
14
premises of the member bank with
15
(2)
16
the business of an agricultural
17
loan company,
18
banking
19
section
25
20
or
organized
21
Reserve Act, as amended; but as to any such affiliate, mem-
22
ber banks shall continue to be subject to other provisions
23
law applicable
24
such banks in
25
include
any
holding
affiliate
(1)
company
affiliates
(4)
association
obligations
of
engaged solely in holding
which
it is
affiliated,
a safe-deposit business or
credit corporation
is authorized
the Federal
apply
the bank
or livestock
in the capital stock of which a
under
as other
of this section shall not
engaged solely in conducting
(3)
as well
to invest
Reserve
section 25
Act,
(a)
national
pursuant
as
to
amended,
of the
Federal
of
to loans by such banks and investments by
stocks, bonds,
debentures,
or
other
such
134
1
SEC. 14. The Federal
2
amended by inserting
3
thereof the following
" SEC. 24A.
4
Reserve Act,
as amended,
between section 24
and section 25
new section:
Hereafter
no national
bank, without
5
approval of the Comptroller
6
member bank, without
7
Board,
8
bonds, debentures, or other such obligations of any
9
tion holding
shall (1)
is
of the Currency,
the approval
the
and no State
of the Federal
Reserve
invest in bank premises, or in the stock,
corpora-
the premises of such bank or (2)
make loans
10
to or upon the security of the stock of any such
corporation,
11
if the aggregate of all such investments and loans will exceed
12
the amount of the capital stock of such bank."
13
SEC. 15. The Federal
14
further
15
the following
16
U
Reserve Act,
amended by inserting
as amended, is
after section 25
(a)
thereof
new section:
SEC. 25. (b)
Notwithstanding
any other
provision
17
of law all suits of a civil nature at common law or in equity
18
to which any corporation
19
United
20
involving
21
a dependency or insular
22
or out of other international
23
either directly
24
of branches or local institutions
25
possessions of the United
organized
States shall be a party,
international
under the laws of the
arising out of
or foreign
banking,
transactions
or banking
possession of the United
or foreign financial
or through the agency, ownership,
in
States,
operations,
or
control
in dependencies or
insular
States or in foreign
countries,
135
1
shall be deemed to arise under
2
and
the district
courts
3
original
jurisdiction
4
any
5
remove such suits from
6
of the United
7
procedure
8
law.
such
suit
the
United
may,
at any
time before
a State court
States for the proper
for
States
States,
shall
have
of all such suits; and any defendant
the removal
" Notwithstanding
9
of
the laws of the United
the trial
thereof,
into the district
district
any other provision
court
by following
of causes otherwise
in
the
provided
by
of law, all suits
10
of a civil
11
Federal
12
arise
13
courts
14
of all such suits; and any Federal
15
defendant
16
thereof, remove such suit from a State court into the district
17
court of the United
18
the procedure
19
by law.
20
any Federal
21
ment in any suit, action, or proceeding
22
municipal,
nature
Reserve
under
bank shall
be deemed to
be a party
the laws of the United
States shall
shall
States, and
the
have original
Reserve
any
district
jurisdiction
bank which
is a
in any such suit may, at any time before the trial
No
24
the Revised
25
follows:
to which
of the United
SEC.
23
at common law or in equity
for
States for the proper
the removal
attachment
Reserve
or United
16.
by
following
of causes otherwise
provided
or execution shall be issued
bank or its property
States
Paragraph
Statutes,
district
before
against
final
in any State,
judg-
county,
court.''
" Seventh "
as amended,
of section
is amended
5136
of
to read
as
136
1
" Seventh.
To exercise by its board
of directors
or
authorized
officers or agents, subject to law, all such
2
duly
3
incidental
4
ness of banking;
5
notes, drafts,
6
by receiving deposits; by buying and selling exchange, coin,
7
and bullion;
8
by obtaining,
issuing,
9
the provisions
of this title; and generally
powers as shall be necessary to carry
by discounting
on the busi-
and negotiating
promissory
bills of exchange, and other evidences of debt;
by loaning
money on personal
and circulating
security;
notes according
and
to
by engaging in all
10
forms
11
banking
12
in which such bank is situated,
13
deposit and discount organized
14
laws of such State, except in so far
15
bidden by the provisions
16
ness of dealing in investment securities by the association shall
17
be limited
18
recourse, solely upon
19
customers, and in no case for its own account, and the asso-
20
ciation
21
vided, That the association may purchase for its own account
22
investment securities under such limitations
23
as the Comptroller
24
scribe, but in no event (1)
25
issue of investment securities of any one obligor
of banking
business and undertaking
transactions
that may,
to purchasing
all
types of
by the laws of the State
be permitted
to banks of
and incorporated
under the
as they may be for-
of any Act of Congress.
The busi-
and selling such securities
the order,
shall not underwrite
and for
the account
any issue of securities:
of the Currency
without
and
of,
Pro-
restrictions
may by regulation
pre-
shall the total amount of any
or maker
137
1
purchased after this section as amended takes effect and held
2
by the association for its own account exceed at any time 10
3
per centum of the total amount of such issue outstanding,
4
this limitation
5
amount
6
exceed 50 per centum of the capital
7
(2)
8
any one obligor
9
amended takes effect and held by the association for its own
10
account exceed at any time 15 per centum of the amount of
11
the capital stock of the association actually
12
impaired
13
As
14
shall mean marketable
15
of any person, copartnership,
16
the form
17
known as investment securities under such further
18
of the term
19
be prescribed by the Comptroller
20
as hereinafter
21
ing herein contained shall authorize the purchase by the asso-
22
ciation of any shares of stock of any corporation.
23
tations herein contained as to investment securities shall not
24
apply
25
any State or of any political
shall not apply
to any such issue the total
of which does not exceed $100,000
and does not
of the association,
shall the total amount of the investment
or maker purchased
after
this section the term
of
obligations
paid in and
surplus
' investment
fund.
securities'
indebtedness
debentures
as may
by
in
commonly
definition
regulation
of the Currency.
provided or otherwise permitted
of the United
Except
by law,
noth-
The
limi-
States, or obligations
subdivision
of
un-
association, or corporation
investment securities9
to obligations
securities
evidencing
bonds, notes and/or
i
nor
this section as
and 25 per centum of its unimpaired
used in
but
thereof, or
of
obliga-
138
1
tions issued under authority
2
as amended:
3
commonly
4
tion shall not invest in the capital
g
organized
the law of any State to conduct
a safe-
g
deposit business in an amount in excess of 15 per
centum
7
of the capital
g
unimpaired
9
Provided,
known
under
of the Federal Farm
That
in carrying
as the safe-deposit
Loan
on the business
business the associa-
stock of a
stock of the association actually
corporation
paid in and
and 15 per centum of its unimpaired
The restrictions
Act,
surplus
of this section as to dealing in invest-
10
ment securities shall take effect one year after the date of
11
the approval
12
13
of this Act.
SEC. 17. (a)
Section 5138 of the Revised
Statutes,
as amended, is amended to read as follows:
14
" SEC. 5138. After
this section as amended takes effect,
15
no national
10
capital
than $100,000,
17
capital
of not less than $50,000
18
place the population
19
inhabitants.
20
wty the population
21
with a capital of less than $200,000,
22
tying
23
organization
24
less, national
banking association shall be organized with a less
except that such associations with a
may be organized
of which does not exceed six
in
thousand
No such association shall be organized
of which exceeds fifty
any
in a
thousand persons
except that in the out-
districts of such a city where the State laws permit the
of State banks with a capital
banking
of $100,000
associations now organized
or
or here-
139
1
after organized may, with the approval
2
the Currency,
3
(b)
4
Reserve Act,
5
of the Comptroller
have a capital of not less than
The tenth paragraph
$100,000
of section 9 of the
Federal
as amended, is amended to read as
follows:
" No applying
bank shall be admitted
to
membership
Q
in a Federal reserve bank unless it possesses a paid-up
7
paired
g
banking association in the place where it is situated
9
the provisions
capital
sufficient to entitle it to become a
of the National
unim-
national
under
Bank Act, as amended:
10
vided, That this paragraph
11
and trust companies organized prior
12
graph
13
less than
14
of
shall not apply
Pro-
to State banks
to the date this
as amended takes effect and having
a capital
paraof not
$25,000."
SEC. 18. Section
5139
of the Revised
Statutes,
as
15
amended, is amended by adding at the end thereof the fol-
16
lowing new
17
"After
paragraph:
one year from
the date of the enactment
18
the Banking
19
stock of any such association shall represent
20
an
21
tion existing on the date this paragraph
22
solely in holding the bank premises of such association,
23
shall the ownership, sale, or transfer of any certificate
24
senting the stock of any such association be conditioned
y
Act
of 1933,
other corporation,
no certificate
representing
of
the
the stock of
except a member bank or a
corpora-
takes effect engaged
nor
reprein
140
1
any manner whatsoever upon the ownership, sale, or transfer
2
o/ a certificate representing the stock of any other
3
tion, except a member bank "
4
SEC. 19. Section
5
5144
corpora-
of the Revised Statutes,
as
amended, is amended to read as follows:
6
"
5144. In all elections of directors,
each share-
7
holder shall have the right to vote the number of shares owned
8
by him for as many persons as there are directors to be elected,
9
or to cumulate such shares and give one candidate as many
10
votes as the number of directors multiplied
11
his shares shall equal, or to distribute them on the same prin-
12
ciple among as many candidates as he shall think fit;
13
in deciding
14
each shareholder shall be entitled to one vote on each share
15
of stock held by him; except (1)
16
held by a national bank as sole trustee shall not be voted, and
17
shares of its own stock held by a national
18
or more persons as trustees may be voted by such other
19
person or persons, as trustees, in the same manner as if he
20
or they were the sole trustee, and
21
by any holding
22
not be voted unless such holding
company
23
have first obtained a voting permit
as hereinafter
24
which permit
is in force at the time such shares are voted.
25
Shareholders
may
by the number of
all other questions at meetings of
shareholders,
that shares of its own stock
(2)
bank and one
shares
company affiliate of a national
vote by
and
proxies
duly
controlled
bank shall
affiliate
shall
provided,
authorized
in
141
1
writing;
but no officer, clerk, ieZZer, or bookkeeper of such
2 ftanife s/iaZZ ac£ as proxy;
3
and no shareholder
whose
liability
is past due and unpaid shall be allowed to vote.
4
" For
the purposes
of this
section shares
5
deemed to be controlled
Q
they are owned or controlled directly
7
holding
8
benefit of the shareholders or members thereof.
9
company
"Any
by a holding
affiliate,
company
shall
affiliate
or indirectly
or held by any
be
if
by such
trustee for
such holding company affiliate may make
the
appli-
10
cation to the Federal
11
entitling
12
in deciding all questions at meetings of shareholders of such
13
bank on each share of stock controlled
14
ing the trustee or trustees holding
15
or for
16
The Federal Reserve Board may, in its discretion,
17
withhold
18
In
19
the financial
20
of its management, and the probable effect of the
21
of such permit
22
permit shall be granted except upon the following
23
Reserve Board
a voting
permit
it to cast one vote at all elections of directors
by it or
the stock for
and
authorizits benefit
the benefit of its shareholders so to vote the same.
such permit
as the public
acting upon such application,
"(a)
upon the affairs
Every
such holding
making
25
receive, on dates identical
the application
for
interest
the Board
condition of the applicant,
24
for
grant
or
may
require.
shall
consider
the general
character
granting
of such bank, but no such
company
such permit,
affiliate
agree
with those fixed for the
conditions:
shall,
in
(1)
to
examina-
142
1
tion
2
authorized
8
examinations
4
necessary to disclose fully
5
and such holding
6
relations
7
to be at the expense of the holding
8
examined;
9
contain
of banks with
which
it is affiliated,
to examine such banks, who shall
of such holding company
company affiliate
upon the affairs
(2)
such information
11
and the effect of such relations
12
banks;
13
owned or controlled
(3)
14 individually
and the effect of such
upon
that such examiners
by the holding
and in conjunction
the affairs
company
shall
of such
affiliate,
both
with other banks owned or
16
publication
17
dition of such banks may be required;
After
so
and such banks
by such holding company affiliate;
" (b)
affiliate
may examine each bank
controlled
Banking
company
between such affiliate
of individual
examinations
of such examiners
15
19
between such banks
as shall be necessary to disclose
fully
the relations
as shall be
of such banks, such
that the reports
duly
make such
affiliate
the relations
10
18
examiners
and (4)
that
or consolidated statements of con-
five years
after
the enactment
Act of 1933, every such holding company
of
the
affiliate
20
(1)
21
the life of such permit,
22
or hypothecation
23
other than bank stock in an amount not less than 12 per
24
centum of the aggregate par value of all bank stocks con-
2 5
trolled
shall
possess, and
shall
continue
free and clear of any lien,
of any nature,
by such holding
to possess
company
readily
during
pledge,
marketable assets
affiliate,
which
amount
143
1
shall be increased by not less than 2 per centum per annum of
2
such aggregate par value until such assets shall amount to 25
3
per centum of the aggregate par value of such bank stocks;
4
and (2) shalVreinvest in readily marketable assets other than
5
bank stock all net earnings over and above 6 per
6
per annum on the book value of its own shares
7
until such assets shall amount to such 25 per centum of the
8
aggregate par
9
"(c)
10
section, after
11
ing Act of 1933,
12
the
13
vidually
14
of shares of such holding
15
respectively,
16
all
17
affiliate by reason of its control of shares of stock of banks,
18
shall be required
19
earnings over and above 6 per centum per annum
on the
20
book value of its own shares outstanding
readily
21
marketable assets in an amount of not less than 12 per centum
22
of the aggregate par value of bank stocks controlled
23
and (2)
24
by such holding
25
replacement
value
of all
Notwithstanding
shareholders
or
statutory
the foregoing
in
of
which
company
of the
shall
to amounts
company
indi-
number
held by them
invested
only to establish and maintain
of capital
be
therein,
imposed on such holding
the assets required
Bankaffiliate
to the
affiliate
it;
of this
company
liable in proportion
addition
liability
the enactment
members
by
provisions
any such holding
and severally
outstanding
bank stocks controlled
five years after
(1)
centum
for
company
out of net
a reserve of
by
it,
by this section to be possessed
affiliate
may be used by it
in banks affiliated
with
it and
for
for
144
1
losses incurred
in such banks, but any deficiency in such
2
assets resulting
from such use shall be made up within
3
period
4
as the Federal
Reserve Board
may by
such
regulation
prescribe;
5
"(d)
Every
officer, director,
agent, and employee of
6
every such holding company affiliate shall be subject to the
7
same penalties for false entries in any book, report, or state-
8
mewf o/ s^c/fc holding company affiliate as are applicable
9
officers, directors,
10
11
under
to
agents, and employees of member banks
section 5209
of the Revised Statutes,
as amended;
and
12
Every
such holding company affiliate shall, in its
13
application
14
oum, control, or have any interest in, and is not
15
iw the management or direction of, any corporation,
16
imsi, association, or other similar
17
the purpose of, or engaged principally
18
tion, underwriting,
19
or retail or through syndicate participation,
20
debentures, notes, or other securities of any sort
21
after referred
22
during
23
not acquire any ownership, control, or interest in any such
24
securities
company
25
direction
thereof;
for such voting permit,
organization
company9);
that the permit
or participate
(3)
participating
business
formed
at wholesale
of stocks, bonds,
(2)
(herein-
agree that
remains in force it
in
agree that if,
for
in, the issue, flota-
public sale, or distribution,
to as 'securities
the period
(1) show that it does not
the management
at the time of
will
or
filing
145
1
the application
2
interest in, or is participating
for such permit, it owns, controls, or has a,n
in the management or direc-
3
tion of, any such securities company,
4
years after the filing
5
ownership,
6
and will
7
thereof, and will
8
permit
9
control, or interest in any such securities company or par-
control,
of such application,
not thereafter,
in force,
acquire
ticipate
11
agree that thenceforth it will
12
actual net earnings.
"If
15
of the provisions
17
18
19
any further
thereof;
declare dividends
direction
that the
ownership,
and
Reserve
that any holding company affiliate has violated
of the Banking
agreement made pursuant
serve Board
permit after giving
its intention
Act of 1933
it an opportunity
21
serve Board
22
national
Re-
revoke any such voting
sixty days' notice by registered mail of
to the holding company affiliate
20
any
or of any
to this section, the Federal
may, in its discretion,
(4)
only out of
at any time it shall appear to the Federal
Board
company
the period
in the management or direction
14
16
during
five
divest itself of its
in the management or
10
13
within
and interest in such securities
cease participating
remains
it will,
to be heard.
and
affording
Whenever the Federal
shall have revoked any such voting permit,
bank whose stock is controlled
Reno
by the holding com-
23
pany affiliate whose permit is so revoked shall receive depos-
24
its of public moneys of the United States, nor shall any such
H .
R . 5661
10
146
1
national
2
pany affiliate upon any shares of such bank controlled
3
such holding company
4
bank pay any further
dividend to such holding com-
affiliate.
" Whenever the Federal
Reserve Board
shall have re-
5
voked
Q
rights, privileges, and franchises of any or all national
7
the stock of which is controlled
8
affiliate shall, in the discretion of the Federal Reserve
9
be subject to forfeiture
10
any
voting
by
permit
as hereinbefore
provided,
by such holding
the
banks
company
Board,
in accordance with section 2 of the
Federal Reserve Act, as amended
11
SEC. 20. After
one year from
the date of the enact-
12
ment of this Act, no member bank shall be affiliated in any
13
manner described in section 2 (b)
14
ration,
15
tion engaged principally
16
public sale, or distribution
17
syndicate
18
or other securities.
19
hereof with any
association, business trust, or other similar
For
participation
every violation
in the issue, flotation,
organizaunderwriting,
at wholesale or retail or
through
of stocks, bonds, debentures, notes,
of this section the member bank
20
involved shall be subject to a penalty not exceeding
21
per day for each day during
22
Such penalty may be assessed by the Federal Reserve
23
in its discretion,
24
the Federal reserve bank by suit or otherwise.
corpo-
which such violation
$1,000
continues.
Board,
and, when so assessed, may be collected by
147
1
If
2
months after
3
the Federal
4
the case of a national
5
franchises granted to it under the National
Q
be forfeited in the manner prescribed in section 2 of the Fed-
7
eral Reserve Act, as amended, or, (b) in the case of a State
8
member bank, all of its rights and privileges
9
in
any such violation
shall continue for six
the member bank shall have been warned
Reserve Board
the Federal
to discontinue the same, (a)
bank, all the rights, privileges,
Reserve System may
11
as amended.
13
(a)
After
the expiration
(1)
For
any person, firm,
and
in the
Reserve
of one year
the date of enactment of this Act it shall be
14
in
of membership
be forfeited
manner prescribed in section 9 of the Federal
SEC. 21.
by
Bank Act may
10
12
calendar
Act,
after
unlawful—
corporation,
association,
15
business trust, or other similar
16
business of issuing, underwriting,
17
wholesale or retail, or through syndicate participation,
18
bonds, debentures, notes, or other securities, to engage at the
19
same time to any extent whatever in the business of receiv-
20
ing deposits subject to check or to repayment
21
tion of a passbook, certificate
22
of debt, or upon request of the depositor;
23
(2)
For
any
person,
organization,
firm,
business trust, or other similar
25
banking institution
selling, or distributing,
at
stocks,
upon presenta-
of deposit, or other evidence
24
or private
engaged in the
or
corporation,
organization,
banker subject to
association,
other than a
examination
148
1
and regulation
under State or Federal
law, to engage to
2
any extent whatever
g
subject to check or to repayment
^
passbook, certificate
g
or upon request of the depositor, unless such person,
g
corporation,
association,
7
organization
shall
g
Comptroller
Q
of the district
in the business of receiving
upon presentation
business trust,
submit
to periodic
or
exhibiting
firm,
other
similar
examination
by the
or by the Federal Reserve bank
and shall make and publish periodic
10
of its condition,
11
ties, such examination
12
at the same times and in the same manner
13
effect and penalties as are now provided
14
of national
15
same locality.
16
(b)
Whoever
of a
of deposit, or other evidence of debt,
of the Currency
banking
deposits
reports
in detail its resources and
liabili-
and reports to be made and published
violate
like
by law in respect
associations transacting
shall willfully
and with
business in the
any of the pro-
17
visions of this section shall upon conviction be fined not more
18
than $5,000 or imprisoned not more than five years, or both,
19
and any officer, director,
20
firm, corporation,
21
organization
22
lation shall be punished by a like fine or imprisonment
23
both.
24
25
employee, or agent of any person,
association, business trust, or other
who knowingly
SEC. 22. Paragraph
participates
(c)
in any such vio-
of section 5155
or
of the Re-
vised Statutes, as amended, is amended to read as
similar
follows:
149
1
"(c)
A
national
banking
association
may
with
the
2
approval
3
operate neiv branches within
4
or village,
5
association is situated, if such establishment and
6
are at the time expressly authorized
7
law of the State in question and subject to the restrictions as
8
to location imposed by the law of the State on State banks.
9
No such association shall establish a branch outside of the
10
city, town, or village in which it is situated unless it has a
11
paid-in
12
$500,000:
13
less than one million,
and which have no cities located therein
14
with
exceeding one hundred
15
capital shall be not less than $250,000:
16
States ivith a population
17
which ham no cities located therein with a population exceed-
18
ing
19
or at any point
and
unimpaired
Provided,
a population
fifty
thousand,
of the 'Currency
the limits
within
capital
establish and
of the city,
town,
the State in whieh said
operation
to State banks by the
stock of
That in States with
not
less than
a population
thousand,
Provided,
That
of less than one-half million,
the capital
shall
not
of
the
in
and,
be less than
$100,ooor
20
21
of the (Urmptroller
Paragraph
(d) of section 5155 of the Revised Statutes,
as amended, is amended to read as follows:
22
"(d)
The aggregate capital
of every national
banking
23
association and its branches shall at no time be less than the
24
aggregate minimum
25
Ushment of an equal number of national banking associations
capital
required
by law for
the estah-
150
1
situated in the various
2
its branches are situated
3
SEC. 23. (a)
places where such association
Sections 1 and 3 of the Act
4
"An Act to provide for the consolidation
5
associations
Q
amended by striking
7
village"
wherever
8
inserting
in lieu
9
iotro, or village "
10
entitled
of national
banking
approved November 7, 1918, as amended, are
out the words " county, city, town, or
they occur
thereof
in
each such section,
the words
" State,
amended, is further
12
sentence thereof and inserting
13
" The capital
14
not be less than that required
15
organization
16
in
17
such a consolidation,
18
national
19
the corporate
20
national
21
dation
shall be merged into and continued
22
dated
national
23
association shall be deemed to be the same corporation
24
each of the constituent
25
chises, and interests of each of such constituent
of a national
banking
such consolidated
banking
under
following:
association
existing
law for
shall
the
association in the place
association
is located.
or upon a consolidation
associations under
as
out the second
in lieu thereof the
stock of such consolidated
city,
7, 1918,
11
amended by striking
and
county,
Section 3 of such Act of November
which
and
Upon
of two or more
section 1 of this
Act,
existence of each of the constituent banks and
banking
associations participating
banking
association
institutions.
and
All
in such consoliin the consolithe
consolidated
the rights,
as
fran-
banks and
151
1
national
hanking
associations
2
property,
3
thereto belonging, s/iaZZ
4
vested in
5
without
any deed or other transfer;
6
national
7
and without
8
court or otherwise, shall hold and enjoy the same and
9
rights of property,
real, personal,
in
and to every species of
and mixed,
and choses in
action
deemed to be transferred
such consolidated
national
to and
banking
association
and such
consolidated
banking association, by virtue of such
consolidation
any order or other action on the part
franchises,
of any
and interests, including
all
ap-
10
pointments,
designations,
and
11
rights
interests
trustee,
12
registrar
13
receiver, committee of estates of lunatics and in every other
14
fiduciary
15
as such rights,
16
joyed by any such constituent institution
17
consolidation:
18
constituent institution
19
acting under appointment
20
administrator,
21
estates, assignee, receiver,
22
or in any other fiduciary
23
banking
24
of competent jurisdiction
25
same extent as was such constituent
and
as
nominations
and
executor,
of stocks and bonds, guardian
all
other
administrator,
of estates, assignee,
capacity, in the same manner and to the same extent
franchises,
Provided,
and interests were held or en-
any
such
at the time of such consolidation
was
registrar
however,
at the time of such
That
where
of any court as trustee, executor,
of stocks and bonds, guardian
committee of estates of
capacity,
the consolidated
association shall be subject to removal
in the same manner
corporation
of
lunatics
national
by a court
and to the
prior
to
152
1
the consolidation,
and nothing herein contained shall he con-
2
sJrwed! to impair
in any manner
3
remove such a consolidated national
4
to appoint
5
of/ier fiduciary,
6
m s^c/i, a manner
7
ing associations, nor shall any such consolidated,
8
9
banking
of any court
banking
in lieu thereof a substitute
association
to
and
trustee, executor,
or
e^ce^J that such right shall not be exercised
as to discriminate
removed solely because of the fact
10
11
the right
against national
bank-
association
that it is a
national
association
SEC. 24. The first two sentences of section 5197 of the
Revised Statutes are amended to read as follows:
12
"Any
association may take, receive, reserve, and charge
13
on any loan or discount
14
exchange, or other
15
allowed by the laws of the State, Territory,
16
the bank is located, or at a rate of 1 per centum in excess
17
of the discount rate on ninety-day
18
at the Federal
19
ivhere the bank is located, whichever
20
and no more, except that where by the laws of any
State
21
a different
State
22
laws,
23
organized
24
When no rate is fixed by the laws of the State, or
25
or pistrict,
made, or upon any notes, bills of
evidences of debt, interest
rate is limited
the rate so limited
or existing
in
for
shall
any
or District
commercial
Reserve bank in the Federal
may
such State
rate
where
paper in effect
Reserve
district
be the
greater,
banks organized
be allowed
at the
under
for
under
associations
this
title.
Territory,
the hank may take, receive, reserve, or charge a
153
1
rate not exceeding 7 per centum, or 1 per centum in excess
2
of the discount
3
effect at the Federal
4
district
may
be the
5
greater, and such interest may be taken in advance,
reckon-
6
ing the days for which the note, bill,
7
debt has to run "
8
9
rate on ninety-day
commercial
paper
Eeserve bank in the Federal
where the bank is located, whichever
in
Eeserve
or other evidence of
SEC. 25. (A) The second sentence of the first
para-
graph of section 5200 of the Eevised Statutes, as amended,
10
is amended by inserting
11
the following:
12
of a corporation
13
which
14
before the period at the end thereof
" and shall include in the case of
such
all obligations of all subsidiaries
corporation
owns or
controls
obligations
thereof
a
in
majority
interest"
15
(b)
The amendment made by this section shall
16
apply
17
ciation on the date this section takes effect.
18
to such obligations of subsidiaries
SEC. 26.
Section 5211
not
held by such asso-
of the Eevised
Statutes,
as
19
amended, is amended by adding at the end thereof the fob
20
lowing new
21
paragraph:
" Each national
banking association shall obtain
22
each of its affiliates other than member banks and
23
to the Comptroller
24
reports during
25
^iay
prescribe,
of the Currency
each year, in such form
verified
not less than
as the
from
furnish
three
Comptroller
by the oath or affirmation
of the
154
1
president
2
board of directors
3
disclosing
4
dates identical
5
during
6
association.
7
1
or such other officer as may be designated by the
of such affiliate
the information
to verify
provided
reports,
for
as of
the Comptroller
shall
such year require the reports of the condition
of the
affiliate'
hereinafter
such
with those for which
For
the purpose
shall include
of
holding
this
section the
company
affiliates
term
as well
8
as other affiliates.
9
be transmitted
to the Comptroller
10
corresponding
report
11
Comptroller
12
good cause shown.
13
information
14
Currency
15
between such affiliate
and such bank
16
Comptroller
himself as to the effect of such rela-
17
tions upon the affairs
18
affiliates shall be published by the association under the same
19
conditions
20
troller
21
with respect to any such affiliate whenever in his
22
the same are necessary in order to obtain a full
23
plete knowledge
24
which
25
transmitted
Each
such report
of
of an affiliate
at the same time as the
the association,
may, in his discretion,
Each
except that
the
extend such time
for
such report
as in the judgment
shall contain
of the Comptroller
shall be necessary to disclose fully
to inform
of such bank.
as govern its own condition
and
of the conditions
is affiliated.
Such
to the Comptroller
such
of the
the
relations
to enable the
The reports
reports.
of such
The
shall also have power to call for additional
it
shall
Compreports
judgment
and com-
of the association
additional
reports
of the Currency
shall
with
be
in such form
155
1
as he may prescribe.
Any such affiliated
2
to obtain and furnish
any report required
8
shall be subject to a penalty of $100 for
4
which such failure
SEC. 27.
5
bank which
fails
under this section
each day
during
continues."
(a)
The first paragraph
of section 5240
of
6
the Revised Statutes, as amended, is amended by
inserting
7
before the period at the end thereof a colon and the
following
8
proviso:
9
any national
"Provided,
That
in making
the examination
of
bank the examiners shall include such an exam-
10
ination
11
banks as shall be necessary to disclose fully
12
tween such bank and such affiliates and the effect of such
13
relations upon the affairs of such bank; and in the event of
14
the refusal
15
of the examination
of the affairs
of all its affiliates other than member
to give any information
required
refusal to permit such examination,
17
and franchises
18
accordance with section 2 of the Federal
amended.
The
all the rights,
Comptroller
21
of his examination
22
affiliate
23
days after notification
24
of the Comptroller,
25
plied with the same to his satisfaction.
and he is hereby authorized,
of any national
shall not within
in
Reserve Act,
of the Currency
power,
privileges,
of the bank shall be subject to forfeiture
20
which
in the course
of any such affiliate, or in the event of the
16
19
the relations be-
to publish
banking
of the recommendations
have
the
report
and
or
twenty
or suggestions
based on said examination,
Ninety
shall
association
one hundred
as
have comdays'
notice
156
1
prior
2
to such
publicity
shall
be given
to the bank
or
affiliate."
3
(b)
Section 5240 of the Revised Statutes, as amended,
4
is further
5
thereof the following
6
amended by adding
new
after
the first
paragraph
paragraph:
" T h e examiner making the examination
7
of a national
8
examination
9
so he shall have power to administer
bank shall have power
of all the affairs
of any
to make a
of the affiliate,
affiliate
thorough
and in
doing
oaths and to examine
10
any of the officers, directors, employees, and agents thereof
11
under
12
Comptroller
13
of such affiliates may be assessed by the Comptroller
14
Currency
15
or resources held by the affiliates upon the dates of examina-
16
tion
17
refuse to pay such expenses or shall fail
18
sixty
19
expenses may be assessed against the affiliated national
bank
20
and, when so assessed, shall be paid by such national
bank:
21
Provided,
22
more national
23
and collected from, any or all of such national
24
proportions
25
prescribe.
oath and to make a report
of the Currency.
of his findings
The expense of
examinations
upon the affiliates examined in proportion
of the various
days
after
affiliates.
any
of the
to assets
such affiliate
shall
to do so
within
the date of such assessment, then such
however, That,
if the affiliation
is with
two or
banks, such expenses may be assessed against>
as the
If
If
to the
Comptroller
of
the
any affiliate of a national
banks in such
Currency
may
bank shall
refuse
157
1
to permit an examiner to make an examination
2
or shall refuse to give any information
required
3
of any such examination,
bank with which it is
4
affiliated shall be subject to a penalty of not more than
5
for each day that any such refusal shall continue.
6
alty may be assessed by the Comptroller
7
collected in the same manner as expenses of
8
9
the national
of the affiliate
in the course
Such pen-
of the Currency
of the Currency,
and
examinations
SEC. 28. In any case in which, in the opinion
Comptroller
$100
it would be to the
of the
advantage
10
of the depositors and unsecured creditors
11
banking association whose business has been closed, for such
12
association
13
association, for a reasonable period to be prescribed
by the
14
Comptroller,
Comp-
15
troiler is authorized, in his discretion,
16
tion to resume business if depositors and unsecured
17
of the association representing at least 85 per centum of its
18
total deposit and unsecured credit liabilities
19
to such retention of deposits.
20
be construed to affect in any manner
21
Comptroller
22
of enactment of this Act with respect to the
23
of national
24
25
to resume business upon
the retention
of all or any part of its deposits, the
Nothing
to permit
national
by the
the associa-
consent in
creditors
writing
in this section shall
any powers
of the
under the provisions of law in force on the date
banking
reorganization
associations.
SEC. 29. Whenever,
troller
of any
of the Currency,
in
the opinion
of
the
any director or officer of a
Compnational
158
1
bank, or of a bank or trust company doing business in the
2
District
3
4
5
6
7
8
9
of Columbia, or whenever, in the opinion of a Fed-
eral Reserve agent, any director or officer of a State member
bank in his district
relating
shall have continued to violate any law
to such bank or trust company or shall have con-
tinued unsafe or unsound practices in conducting the business
of such bank or trust company, after having
by the Comptroller
of the Currency
been warned
or the Federal
agent, as the case may be, to discontinue
such
10
of law or such unsafe or unsound practices, the
11
of the Currency
12
may be, may certify the facts to the Federal
13
14
15
16
17
18
19
In
or the Federal
any such case the Federal
removed from office.
each director
after
Comptroller
Reserve
Reserve Board
Board.
may cause
or officer to appear
to show cause why
he should not be
A copy of such order shall be sent to
of the bank affected, by registered mail.
granting
opportunity
violations
Reserve agent, as the case
notice to be served upon such director
before such Board
Reserve
the accused director
to be heard, the Federal
If
or officer a reasonable
Reserve Board
20
that he has continued to violate
21
bank or trust company or has continued unsafe or unsound
22
practices
in conducting
company
after
23
24
2 5
any law relating
finds
the business of such bank or
having been warned
by the Comptroller
the Currency
or the Federal
such violation
of law or such unsafe or unsound
to such
Reserve agent to
trust
of
discontinue
practices,
159
1
the Federal Reserve Board, in its discretion,
2
such director
3
such order
4
A copy of such order shall also be served upon the bank of
5
which he is a director or officer, whereupon such director
Q
officer shall cease to be a director
7
Provided,
g
which it is based shall not be made public
or disclosed to
9
anyone except the director or officer involved
and the direc-
or officer be removed from
shall
That
may order
office.
A copy of
be served upon such director
or
officer.
or officer of such
such order and the findings
tors of the bank involved,
11
proceedings for a violation of this section.
12
or officer removed from office as herein provided
in
after participates
upon
otherwise than in connection
Any such
or
bank:
of fact
10
with
director
who there-
in any manner in the management of such
bank shall be fined not more than $5,000,
or imprisoned
15
not more than five years, or both, in the discretion
lg
court.
17
that
SEC. 30. After
for
of the
one year from the date of enactment of
18
this Act,
19
board of directors,
20
erning
21
every State bank or trust company which is a member of the
22
Federal
23
nor
24
trustee, or other member of the governing
25
banking
notwithstanding
any other provision
of law,
board of trustees, or other similar
body of every national
banking
association
than
twenty-five
members;
and
association, State bank, or trust
every
body of a
company,
gov-
and of
Reserve System shall consist of not less than
more
the
five
director,
national
which
160
1
has a paid-in
2
shall be the bona fide owner in his own right
3
stock of such banking association, State bank or trust com-
4
pany having a par value in the aggregate of not less than
5
$2,000.
6
provisions
7
thirty
8
the said Comptroller
9
therefor,
If
and unimpaired
any national
capital
banking
in excess of
$50,000
of shares of
association violates the
of this section and continues such violation
days' notice from
the Comptroller
of the
after
Currency,
may appoint a receiver or conservator
in accordance with the provisions
of existing
laic.
10
If any State bank or trust company which is a member of
11
the Federal
12
section and continues such violation
13
from the Federal
14
forfeiture
15
in accordance with the provisions of section 9 of the Federal
16
Reserve Act, as amended.
17
SEC. 31. From
Reserve System violates the provisions
Reserve Board,
after thirty
and after January
days' notice
Reserve System
1, 1934, no officer
18
or director of any member bank shall be an officer,
19
or manager of any corporation,
20
rated association engaged primarily
21
chasing, selling,
22
bank shall perform
23
on behalf of any such individual,
24
or unincorporated
25
nership,
the functions
partnership,
or
director,
unincorpo-
in the business of
securities,
of a correspondent
partnership,
or unincorporated
pur-
and no member
bank
corporation,
association; and no such individual,
corporation,
thu
it shall be subject to the
of its membership in the Federal
or negotiating
of
association
partshall
161
1
perform
2
bank or hold on deposit any funds on behalf of any member
3
bank, unless in any such case there is a permit
4
issued by the Federal
5
authorized
Q
incompatible
7
such permit
whenever it finds after
8
opportunity
to be heard,
9
such revocation.
10
the functions
of a correspondent
Reserve Board;
to issue such permit
with
the public
SEC. 32. The Act
for
if in its judgment
interest,
"An
reasonable notice
and
Act
12
and for other purposes ", approved
13
amended, is hereby amended by adding
14
thereof the following
unlawful
it is not
any
that the public
entitled
is
and to revoke
existing
15
therefor
and the Board
11
laws against
any member
restraints
interest
to
requires
supplement
and monopolies>
October 15, 1914,
after
as
section 8
new section:
" SEC. 8A. That from and after the 1st day of
Janu-
1934,
bank,
16
ary
17
banking association, or trust company, organized or
ic
ing under the laws of the United States shall be at the same
19
time a director,
20
member of a partnership
21
soever which
22
collateral
23
corporation
24
25
no director,
operat-
officer, or employee of a corporation
organized for any purpose
shall make loans secured by stock or
to any
individual,
association,
other than its own
SEC. 33. Nothing
prohibit
officer, or employee of any
in
or a
whatbond
partnership,
or
be construed
to
subsidiaries."
this Act
shall
a national banking association from holding stock in
H. R. 5661
11
162
1
a corporation
2
of its assets pursuant to the direction of the Comptroller
3
organized by such association to liquidate a part
of the
Currency.
4
SEC. 34. The right
to alter,
is hereby
reserved.
5
Act
expressly
6
this Act,
7
cumstances, is held invalid,
8
application
9
stances, shall not be affected thereby.
or the application
amend, or repeal
If
provision
of
thereof to any person or
cir-
the remainder
of such provision
any
this
of the Act, and the
to other persons or
circum-
Passed the House of Eepresentatives May 23, 1933.
Attest:
SOUTH TBIMBLE,
Clerk.
Passed the Senate amended May 15 (calendar day,
May 25), 1933.
Attest:
E D W I N A. H A L S E Y ,
Secretary.
H3
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