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66TH CONGRESS : : : 2D SESSION DECEMBER 1, 1919-JUNE 5, 1920 SENATE DOCUMENTS V ol . 6 WASHINGTON : : GOVERNMENT PRINTING OFFICE : : 1920 6 6 t h C o n g r e s s '! 2d Session j SENATE / D ocum ent 1 Xo. 216 THE NATIONAL-BANK ACT AS AMENDED THE FEDERAL RESERVE ACT ANl) OTHER LAWS RELATING TO NATIONAL BANKS Complied under the direction of the Comptroller o f the Currency FEBRUARY, 1920 i WASHINGTON GOVERNMENT PRINTING OFFICE 1920 SENATE RESOLUTION 298. Reported by Mr. Moses. In the S e n a t e o f t i ie U n it e d S t a t e s , February 6 , 1920. Resolved, That there be printed one thousand five hundred copies of the national banking act as amended to date for the use of the Senate document room. A ttest: G e o r g e A. S a n d e rs o n , Secretary• CONTENTS. rage. Dates of acts relating to National Banks_________________________________ National-bank act and acts amendatory thereof and supplementary thereto Bureau of Comptroller of the Currency----------------------------------------------Organization and powers--------------------------------------------------------------------Obtaining and issuing circulating notes----------------------------------------------Regulation of banking business----------------------------------------------------------Dissolution and receivership__________________________________________ Federal reserve act________________________________________________________ Acts of a general nature and sections of the Revised Statutes not included in national-bank act affecting national banks-----------------------------------------Special acts relating to national banks____________________________________ Opinions of Attorney General on guaranty laws of Oklahoma and Kansas and on the insurance of bank deposits__________________________________ Index to national-bank act and general and special acts__________________ Index to Federal reserve act______________________________________________ Index to sections of Revised Statutes--------------------------------------------------------- 3 5 11 10 49 CO 00 117 isi ^07 215 221 273 302 DATES OF ACTS RELATING TO NATIONAL BANKS. THE NATIONAL BANK ACT AND ACTS AMENDATORY THEREOF AND SUPPLEMENTARY THERETO. Page. Feb. 25,1863. An act to provide a national currency secured by a pledge of United States stocks, and to provide for the circula tion and redemption thereof_______________________________181 June 3,1864. Act of February 25, 1863, repealed and reenacted with certain amendments______________________11-113,131,181,182 Mar. 3,1865. State banks converted may retain and keep in operation branches_________________________________________________ 43 Mar. 3,1865. Issue of circulating notes. See note under section 5171____ 59 Feb. 5,1867. Penalty for imitating bank circulation___________________ 66,178 Mar. 2,1867. Refunding excess tax______________________________________ 94 Feb. 10,1868. Taxation of shares of national-bank stock_________________ 95 Feb. 19,1869. Prohibiting loans on United States or national-bank notes, or withholding such notes from use_____________________ 85 Mar. 3,1869. Reports of condition, and earnings and dividends_____ 90,91,92 Mar. 3,1869. False certification of checks_______________________________ 86 Apr. 6,1869. Penalty for embezzlement, abstraction, etc________________ 87 July 8,1870. Penalty for embezzlement, abstraction, etc________________ 87 July 12,1870. Issue of circulation redeemable in gold___________________ 65, 80 July 14,1870. Liquidating banks to retire circulation____________________ 100 Mar. 1,1872. Leavenworth struck out as reserve city___________________ 72 June 8,1872. Certificates of deposit for United States notes (repealed 80 Mar. 14, 1900)___________________________________________ Feb. 19,1873. Reports of State banks____________________________________ 13 Mar. 3,1873. Examination of plates and dies___________________________ 62 Mar. 3,1873. Assessment for impairment of capital_____________________ 83 Mar. 3,1873. Use of the word “ national ” _______________________________ 113 June 20,1874. Fixing the amount of United States notes, providing for a redistribution of national-bank currency________ 20,61, 77,102 June 23,1874. Maceration of United States and national-bank notes______ 64 June 23,1874. Stamps on bank checks. Repealed March 3, 1883. Jan. 14,1875. Aggregate amount of circulation not limited______________ 63 Jan. 19,1875. Circulating notes of national gold banks__________________ 64 Feb. 18,1875. Correcting errors and omissions in the Revised Statutes— 13, 14, 63, 81,101,103 Feb. 19,1875. Appointment and compensation of bank examiners________ 112 11 Mar. 3,1875. Salary of Comptroller_____________________________________ Mar. 3,1875. Distinctive paper for printing notes________________________ 61 Mar. 3,1875. Clerical force for redemption of circulating notes________ 78 June 30,1876. Assessment for failure to pay up capital stock or for im pairment of capital; receivers, appointment of 83,107-110 Feb. 27,1877. Examination of plates and dies___________________________ 62 Feb. 27,1877. Reports to Comptroller____________________________________ 91 Feb. 27,1877. Destruction of redeemed notes______________________________ 102 Mar. 1,1879. Semiannual duty, abatement of____________________________ 94 Feb. 14,1880. Conversion of gold banks__________________________________ 65 Feb. 26,1881. Verification of returns of national banks__________________ 91 July 12,1882. Corporate existence, extension of__________________________ 28-31 July 12,1882. Issue of gold certificates___________________________________ 85 July 12,1882. Punishment for falsely certifying check__________________ 86 July 12,1882. Retirement of circulating notes___________________________ 55, 56 Mar. 3,1883. Capital and deposits, repealing tax on_______________ 91,176,178 Mar. 29,1886. Insolvent banks, protection of assets by use of trust funds__________________________________________________110,111 5 6 DATES OF ACTS RELATING TO NATIONAL BANKS. Page. May Mar. Mar. 1,1886. Increase of capital stock, change of name or location___ 27,28,34 3,1887. Courts, jurisdiction of______________________________________ 28 3,1887. Reserve and central reserve cities, providing for additional, etc____________________________ 1_________________________ 70-73 Aug. 13,1888. Courts, jurisdiction of______________________________________ 28 July 14,1890. Disposition of redemption account_________________________ 79 July 28,1892. Stolen or lost national-bank notes, redemption of___________ 79 Aug. 3,1892. Agent of shareholders of national bank, appointment o f ; amends act of June 30, 1876_____________________________ 108 Jan. 12,1895. Annual Report of Comptroller of the Currency, printing of_ 15 Mar. 2,1897. Appointment and qualification of shareholders’ agent; amends acts June 30, 1876, and August 3, 1892________ 108 Mar. 14,1900. Authorizing banks with minimum capital $25,000; bonds, circulation, taxation, etc_____________________________ 32,60, 92 Mar. 3,1901. National-bank depositaries_________________________________ 42 Apr. 12,1902. Authorization of reextension of charter____________________ 32 Apr. 28,1902. Annual Report of Comptroller to contain information re garding failed banks, list of employees, etc_____________ 14 Mar. 3,1903. Additional reserve cities; minimum population, 25,000____ 72 35 Feb. 28,1905. Qualification of directors, banks with capital of $25,000____ Dec. 21,1905. Taxation of circulation based on Panama Canal bonds____ 51 June 22,1906. Amendment section 5200, loan limitation_________________ 81 Jan. 26,1907. Political contributions prohibited__________________________ 87 Mar. 4,1907. Additional copies of Report of Comptroller________________ 15 Mar. 4,1917. Public depositaries_______________________ _________________ 42 192 Gold certificates and United States notes, issue of________ Limitation on withdrawal of circulation; consent of Comp troller of Currency and the Secretary of the Treasury necessary--------------------------------------------------------------------------56 May 22,1908. Additional Deputy Cmptroller______________________________ 12 May 30,1908. Authorizing National Currency Associations, the issue of additional bank circulation, and creating a National Mon etary Commission. Expired June 30, 1915. Mar. 4,1909. Codification of criminal laws______ 66,179,182,185,186,187,188 Mar. 4,1909. Additional Deputy Comptroller_____________________________ 12 Oct. 15,1914. Interlocking directorates------------------------------------------------------ 35-39 May 15,1916. Amending act of October 15, 1914, relating to interlocking directorates______________________________________________ 36 May 15,1916. Authorizing the deposit of funds of insolvent banks in any regular Government depositary__________________________ 105 Sept. 7,1916. Amending laws in reference to real estate loans, reserves, acceptances, and foreign branches, and authorizing bank to act as insurance agent and as agent in procuring loans on real estate____________________________________ 21, 23, 24, 25 Apr. 24,1917. No reserve required to be held against United States de posits-------------------------------------------------------------------------------77,190 Oct. 5,1917. Limit of issue of notes under $5______________ ____________ 62 Apr. 5,1918. Liabilities incurred under war finance act, excepted from restrictions of section 5202______________________________ 85 May 22,1918. Authorizes contributions to Red Cross during period of the war_______________________________________________________ 198 Sept. 24,1918. Amend section 5200, Revised Statutes. Limitation of lia bilities that may be incurred by any one person________ 81 Sept. 26,1918. Trust company powers of national banks. Reserve require ments. Amends section 5208, penalty for falsely certify ing checks. Amends section 5209, penalty for embezzle ment, abstraction, willful misapplication, false entries, etc. Amends section 22. Federal reserve act____ 24, 75, 86, 87 Nov. 7,1918. Consolidation of national banks-----------------------------------------100 Mar. 3,1919. Amends section 5172, printing denomination and forms of circulating notes_________________________________________ 61 Oct. 22,1919. Amending sections 5200 and 5202, U. S. R. S----------------------- 81, 87 Jan. 13,1920. Amending section 5182, U. S. R. S__________________________ 63 DATES OF ACTS RELATING TO NATIONAL BANKS. THE FEDERAL RESERVE ACT. 7 Page. Dec. 23,1913. Providing for the establishment of Federal reseve banks, to furnish an elastic currency, to afford means of redis counting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes__ 11, 21, 22, 23, 25, 34,41, 42,43, 50, 56-58, 74-76, 83, 87,88, 89,112,117-177,189 Aug. 4,1914. Amending section 27 of the Federal reserve act and section 9 of the act of May 30, 1908, relative to issuance of addi tional circulation_____________________________________ 175,176 Aug. 15,1914. Amending section 19 of the Federal reserve act in reference to reserve requirements________________________ 75, 76,159,160 Mar. 3,1915. Amended paragraphs 3, 4, and 5 of section 13 of Federal re serve act superseded by act of September 7, 1916______ 22,145 Sept. 7,1916. Amends sections 11, 13, 14, 16, 24, and 25 of the Federal re serve act and section 5202, United States Revised Stat utes_______________ 21, 22, 23, 25,143,144,145,146,147,149,165 June 21,1917. Amends sections 3, 4, 9, 13, 14, 16,17, 19, and 22 of the Fed eral reserve act___ 22, 50, 74-76, 87, 88, 89, 90,123,128,132-135, 143,145,148,149,150,151,152,155,156,159,160 Sept. 26,1918. Amends section 22, Federal reserve act____ 24, 75, 85,86,87, 88, 90,127,140,153,159,162,163,164 Mar. 3,1919. Amends sections 7, 10, and 11, Federal reserve act__131,136,142 Sept. 17,1919. Amending section 25, Federal reserve act_________________ 25,165 Dec. 24,1919. Amending section 25, Federal reserve act__________________ 167 ACTS OF A GENERAL NATURE AFFECTING NATIONAL BANKS. Feb. 21,1857. July 7,1838. June 30,1864. Mar. 3,1865. July 13,1866. Mar. 26,1867. June 6,1872. Dec. 24,1872. Feb. 8,1875. Feb. 18,1875. Mar. 1,1879. Feb. 25,1862. Mar. 3,1863. Mar. 3,1864. June 3 0 ,18G4. Jan. 28,1865. Mar. 3,1865. July 14,1870. Aug. 13,1894. July 17,1862. Feb. 21,1.857. July 17,1861. Feb. 12,1862. Feb. 25,1862. Feb. 25,1862. Mar. 17,1862. Foreign coins______________ *________________________________ 186 Issuing circulation of expired association_________________ 194 Taxation of State banks_________________________________ 183,184 Taxation of State banks_________________________________ 182,184 Taxation of State banks___________________________ 182,183,184 Taxation of State banks___________________________________ 183 Taxation of State banks___________________________________ 183 Taxation of State banks________________________________ 183,184 Taxation of State banks.. _____________________________ 183 Taxation of State banks___________________________________ 184 Taxation of State banks___________________________________ 185 Taxation of notes and certificates of United States circulat ing as currency_________________________________________ 185 Taxation of national-bank notes and notes and certificates of United States circulating as currency_______________ 185 Taxation of national-bank notes and notes and certificates of United States circulating as currency_______________ 185 Taxation of national-bank notes and notes and certificates of United States circulating as currency_______________ 185 Taxation of national-bank notes and notes and certificates 185 of United States circulating as currency_______________ Taxation of national-bank notes and notes and certificates of United States circulating as currency_______________ 185 Taxation of national-bank notes and notes and certificates 185 of United States circulating as currency_______________ Taxation of national-bank notes and notes and certificates of United States circulating as currency_______________ 185 Restriction on notes less than one dollar_________________ 185 Foreign coins not legal tender____________________________ 180 Demand Treasury notes legal tender same as United States notes_____________________________________________________ 187 Demand Treasury notes legal tender same as United States notes___________________________________________________ 186,187 Demand Treasury notes legal tender same as United States notes___________________________________________________ 186,187 United States notes legal tender except for duties on im ports and interest on public debt________________________ 187 Demand Treasury notes legal tender same as United States notes_____________________________________________________ 187 8 DATES OF ACTS RELATING TO NATIONAL BANKS. Page. July 11,1862. United States notes legal tender except for duties on im ports and interest on public debt________________________ 186 Jan. 17,1863. United States notes legal tender except for duties on im ports and interest on public debt________________________ 187 Mar. 3,1863. United States notes legal tender except for duties on im ports and interest on public debt________________________ 187 Mar. 3,1863. Interest-bearing notes legal tender to same extent as United States notes_____________________________________________ 187 June 30,1864. Interest-bearing notes legal tender to same extent as United States notes_________ ____________________________________ 187 Feb. 12,1873. Gold coins of United States legal tender__________________ 186 Feb. 12,1873. Minor coins of United States legal tender to amount of twenty-five cents________________________________________ 186 Feb. 28,1878. Standard silver dollar legal tender________________________ 186 Feb. 28,1878. Silver certificates___________________________________________ 199 June 9,1879. Subsidiary silver coins legal tender to amount not exceed ing ten dollars___________________________________________ 186 Mar. 3, 1887. Silver certificates__________________________________________ 199 July 12,1882. Gold certificates, for what receivable______________________ 187 July 1,1902. Philippine coinage__________________________________________ 186 Mar. 2,1903. Philippine coinage_________________________________________ 186 195-201 Mar. 14,1900. Currency act_________________________________________ _ Mar. 4,1907. Amending national-bank act_____________________________ 198, 201 June 14,1866. Government depositories__________________ .______________ 188,191 June 8,1872. Government depositories___________________________________ 188 Mar. 3,1873. Government depositories___________________________________ 188 Feb. 27,1877. Government depositories___________________________________ 188 Feb. 3,1879. Government depositories___________________________________ 191 Mar. 2,1907. Government depositories___________________________________ 188 May 27,1908. Government depositories___________________________________ 188 Mar. 4,1909. Misappropriating postal funds_____________________________ 189 Mar. 4,1909. Government depositories___________________________________ 191 Feb. 25,1863. Counterfeiting national-bank notes________________________ 192 June 3,1864. Counterfeiting national-bank notes________________________ 192 June 30,1864. Forging or counterfeiting United States securities________ 192 June 30,1864. Using plates to print without authority____________________ 192 Feb. 5,1867. Penalty for taking unauthorized impression of tools having such impression or dealing in counterfeit circulation____ 194 Mar. 4,1909. Counterfeiting national-bank notes_________________ 192,193,194 June 30,1876. Fraudulent notes to be so marked by United States officers and officers of national banks____________________________ 195 Aug. 5,1909. Panama Canal bonds, issue of, authorized at 3 per cent___ 201 Mar. 2,1911. Panama Canal bonds under act of August 5,1909, not avail able as security for circulation_________________________ 203 Mar. 2,1911. Issue of gold certificates on deposit of foreign coin or bullion___________________________________________________ 198 Mar. 2,1911. Certified checks drawn on national and State banks receiv able for duties on imports and internal taxes________ 198, 203 Mar. 3,1911. Jurisdiction of United States district courts_______________ 181 Mar. 3,1913, Certified checks on national and State banks and trust companies receivable in payment for duties on imports, internal taxes, and all public dues______________________ 204 198 June 12,1916. Issue of gold certificates-----------------------------------------------------July 17,1916. Government deposits in Federal land banks_______________ 190 Apr. 24,1917. Deposit of proceeds arising from sale of bonds. No reserve required to be held against United States deposits______ 190 May 22,1918. National banks authorized to subscribe to American Red Cross during the w ar___________________________________ 204 187 Dec. 24,1919. Gold certificates made legal tender________________________ SPECIAL ACTS RELATING TO NATIONAL BANKS. Apr. 12,1900. National banking laws extended to Porto Rico_____________ 207 Apr. 30,1900. National banking laws extended to Hawaii________________ 207 Feb. 26, 1913. Granting Fifth-Third National Bank of Cincinnati charter 208 No. 2 0 ___________________________________________________ Fifty-seven acts changing the location or name, or both, of various na tional banks___________________________________________ 208-211 BUREAU OF THE COMPTROLLER OF THE CURRENCY. THE NATIONAL-BANK ACT AND ACTS AMENDATORY THEREOF AND SUPPLEMENTARY THERETO. C H A P T E R I. BUREAU OF THE COMPTROLLER OF THE CURRENCY, 100. 324. Bureau of the Comptroller of the Currency. 101. 325. Comptroller of the Currency. 102. 326. Qualification of Comptroller of the Currency. Amount of bond. 103. 327. Deputy Comptroller of the Currency. 104. Additional Deputy Comptroller of the Currency. 105. 328. Clerks. 106. 329. Interest in national banks prohibited. 107. 330. Seal of Comptroller of the Currency. 108. 331. Rooms, vaults, and furniture for Currency Bureau. 109. 332. Banks other than national in 110. 111. 112. 113. District of Columbia. (See sec. 714, Code District of Columbia.) 333. Report of Comptroller. Act April 28, 1902. Report of Comptroller to give com plete list of all employees of the office, information about failed banks, em ployees under receivers, etc. Act January 12, 1895. Number of copies of report to be printed. Joint resolution March 4, 1907. Three thousand additional copies authorized to be printed. BUREAU OF THE COMPTROLLER OF THE CURRENCY. 100. Sec. 324.— There shall be in the Department o f the lg^ct Jun®0|* Treasury a bureau charged with the execution o f all law sSec. i ; 13 stat! passed by Congress relating to the issue and regulation o f L,,Ac?; Dec. 23, a national currency secured by United States bonds and, i|i3,g sec. ‘ 10 ■ under the general supervision o f the Federal Reserve 260. a * Board, o f all Federal reserve notes, the chief officer o f which bureau shall be called the Comptroller o f the Cur rency and shall perform his duties under the general directions o f the Secretary o f the Treasury. COMPTROLLER OF THE CURRENCY. 101. Sec. 325.— The Comptroller o f the Currency shall lg^ t ^une10^ be appointed by the President, on the recommendation o f sec. 1’ ; 13 stat! the Secretary o f the Treasury, by and with the adviceL'A?t* Mar. 3, and consent o f the Senate, and shall hold his office for the g1^ term o f five years unless sooner removed by the Presi-l',* 398. dent, upon reasons to be communicated by him to the Senate; and he shall be entitled to a salary o f five thou sand dollars a year. N ote.— Section 10 of the Federal reserve act provides that the Comptroller of the Currency shall be an ex officio member of the Federal Reserve Board and shall, in addition to his salary as Comptroller, receive the sum of $7,000 annually for .his service 011 said board. 11 12 BUREAU OF THE COMPTROLLER OF THE CURRENCY. QUALIFICATION OF COMPTROLLER OF THE CURRENCY. AMOUNT OF BOND. i8^ct cuni 06 ®ec* Comptroller o f the Currency shall, i ; 13 stat! within fifteen days from the time o f notice o f his appoint1., 99. ment, take and subscribe the oath o f office; and he shall give to the United States a bond in the penalty o f one hundred thousand dollars, with not less than two respon sible sureties, to be approved by the Secretary o f the Treasury, conditioned for the faithful discharge o f the duties o f his office. sec. DEPUTY COMPTROLLER OF THE CURRENCY. Act June 3, sec64i ; L » "• 13 stat! 103. Sec. 327.— There shall be in the Bureau o f the Comptroller o f the Currency a Deputy Comptroller o f the Currency, to be appointed by the Secretary, who shall be entitled to a salary o f twTo thousand five hundred dollars a year, and who shall possess the power and perform the duties attached by law to the office o f Comptroller dur ing a vacancy in the office or during the absence or ina bility o f the Comptroller. The Deputy Comptroller shall also take the oath o f office prescribed by the Constitution and laws o f the United States, and shall give a like bond in the penalty o f fifty thousand dollars. N ote.— The salary of the Deputy Comptroller has been fixed at various amounts by different appropriation bills, as follows: Act March 3, 1875 (sundry civil bill), 18 Stat. L., 398, $3,000; act March 3, 1901, 31 Stat. L., 978, $2,800; act March 18, 1904, 33 Stat. L., 103, $3,000; act February 3, 1905, 33 Stat. L., 649, and all subsequent acts, $3,500. ADDITIONAL DEPUTY COMPTROLLER OF THE CURRENCY. Act May 22, 104. Deputy Comptroller, $3,500; Deputy Comptroller, 1., 203. a *$3*000, who shall be appointed by the Secretary o f the iooo* 3sastat! Treasury, and shall possess the power and perform the 1., 867. duties attached by law to the office o f Comptroller dur ing a vacancy in the office o f Comptroller and Deputy Comptroller or during the absence or inability o f the Comptroller and the Deputy Comptroller, and said assist ant Deputy Comptroller shall give a like bond in the pen alty o f fifty thousand dollars. N ote.— The additional Deputy Comptroller was first provided for in the act of May 22, 1908. CLERKS. Act June 3, 105. Sec. 328.— The Comptroller o f the Currency shall sec^i; ct3 s\at! employ, from time to time, the necessary clerks, to be 1., loo, appointed and classified by the Secretary o f the Treas ury, to discharge such duties as the Comptroller shall direct. BUREAU OF THE COMPTROLLER OF THE CURRENCY. 13 INTEREST IN NATIONAL BANKS PROHIBITED. 106. Sec. 329.— It shall not be lawful fo r the Comptrol- Act June 3, ler or the Deputy Comptroller o f the Currency, either sec. i ; 13 stat! directly or indirectly, to be interested in any association L*» 10°issuing national currency under the laws o f the United States. N ote .— Section 10 of the Federal reserve act provides in part that no member of the Federal Reserve Board shall be an officer or director of any bank, banking institution, trust company, or Federal reserve bank, nor hold stock in any bank, banking institu tion, or trust company. As the Comptroller of the Currency is a member of the board, he is thus prohibited from being connected as an officer or shareholder with any bank, banking institution, or trust company, whether State or national. It would appear that under section 329 a Deputy Comptroller of the Currency would be prohibited from being interested not only in any national bank but in any State bank that should become a member bank and a shareholder in one of the Federal reserve banks. SEAL OF COMPTROLLER OF THE CURRENCY. 107. Sec. 330 [as amended 1875].— The seal devised b y lgAct June 3, the Comptroller o f the Currency for his office, and ap- sec. &; 13 stat! proved by the Secretary o f the Treasury, shall continue to L*Act.°Feb. is, be the seal o f office o f the Comptroller, and may be re3U 1® newed when necessary. A description o f the seal, with a ’ ’* an impression thereof, and a certificate o f approval by the Secretary o f the Treasury, shall be filed in the office o f the Secretary o f State. ROOMS, YAULTS, BUREAU. AND FURNITURE FOR CURRENCY 108. Sec. 331.— There shall be assigned, from time to Act June 3, time, to the Comptroller o f the Currency, by the Secretary g|c64^. c13 g^at. o f the Treasury, suitable rooms in the Treasury building L*» 10°for conducting the business o f the Currency Bureau, con taining safe and secure fireproof vaults, in which the Comptroller shall deposit and safely keep all the plates not necessarily in the possession o f engravers or printers, and other valuable things belonging to his department; and the Comptroller shall from time to time furnish the necessary furniture, stationery, fuel, lights, and other proper conveniences for the transaction o f the business o f his office. 109. Sec. 332.— Refers entirely to banks other than national in the District of Columbia and is incorporated in section 714 of the Code of the District of Columbia and has been repeatedly amended. REPORT OF COMPTROLLER. 110. Sec. 333 [as amended 1875].— The Comptroller o f the Currency shall make an annual report to Congress, at the commencement o f its session, exhibiting— First. A summary o f the state and condition o f every Act June 3, association from which reports have been received th e }I64,stat 6l.| preceding year, at the several dates to which such reports117 14 BUREAU OF THE COMPTROLLER OF THE CURRENCY. isfaf’ sec!' ref e.r 5 with an abstract o f the whole amount o f banking 'stat.' l.’ capital returned by them, o f the whole amount o f their Act. Feb. is, debts and liabilities, the amount o f circulating notes outstat.’ l.j^siV.*8 standing, and the total amount o f means and resources, specifying the amount o f lawful money held by them at the times o f their several returns, and such other inform a tion in relation to such associations as, in his judgment, may be useful. Second. A statement o f the associations whose business has been closed during the year, with the amount o f their circulation redeemed and the amount outstanding. Third. A ny amendment to the laws relative to banking by which the system may be improved, and the security o f the holders o f its notes and other creditors may be increased. Fourth. A statement exhibiting under appropriate heads the resources and liabilities and condition of the banks, banking companies, and savings banks organized under the laws o f the several States and Territories; such inform ation to be obtained by the Comptroller from the reports made by such banks, banking companies, and savings banks to the legislatures or officers of the different States and Territories, and, where such reports can not be obtained, the deficiency to be supplied from such other authentic sources as may be available. F ifth. The names and compensation o f the clerks em ployed by him, and the whole amount o f the expenses of the banking department during the year. 17^ COMPTROLLER TO GIVE COMPLETE LIST OF ALL EM PLOYEES OF THE OFFICE, INFORMATION ABOUT FAILED BANKS, EMPLOYEES, UNDER RECEIVERS, ETC. ACT APRIL 28, 1902. ^Act Aprn 28, 111. Provided, That fo r the fiscal year o f nineteen huntive, "executive, dred and two and thereafter, a full and complete list of prdo3p?i*at?oPn o f f i c e r s , agents, clerks, and other employees o f the LCt ;i 382 Stat ° ® ce Comptroller o f the Currency, including bank examiners, receivers and attorneys fo r receivers, and clerks employed by such examiners and receivers, or any other person connected with the work o f said office in Washington or elsewhere, whose salary or compensation is paid from the Treasury o f the United States or as sessed against or collected from existing or failed banks under their supervision or control, shall be transmitted to the Secretary o f the Interior in accordance with the pro visions o f an A ct o f Congress approved January twelfth, eighteen hundred and eighty-five, relating to the Official R egister: And provided further, That the Comptroller o f the Currency is hereby directed to include in his annual report to the Speaker o f the House o f Representatives, expenses incurred during each year, in liquidation o f each failed national bank separately. BUREAU OF THE COMPTROLLER OF THE CURRENCY. NUMBER OF COPIES OF REPORT TO BE PRINTED. OF JANUARY 12, 1895. 15 ACT 112. Sec. 73.— This section provides in part that there lg£ct Jan. 12 , shall be printed “ O f the annual report o f the C om p-28stat.L.',6161 troller o f the Currency, ten thousand copies; one thou sand for the Senate, two thousand for the House, and seven thousand for distribution by the Comptroller o f the Currency.” THREE THOUSAND ADDITIONAL COPIES AUTHORIZED TO BE PRINTED. PUBLIC RESOLUTION NO. 25, MARCH 4, 1907. 113. That section 73 o f an act “ Providing for the pub- MarU\ R? 9075; lie printing and binding, and the distribution o f pu blic34^stat. l.’ documents,” approved January 12,1895, be, and the same is hereby, so amended as to authorize the printing annu ally hereafter o f ten thousand copies o f the annual report o f the Comptroller o f the Currency, fo r distribution by the Comptroller o f the Currency, instead o f seven thou sand copies as heretofore. BUREAU OF THE COMPTROLLER OF THE CURRENCY. ORGANIZATION AND POWERS. 164312°—20------ 2 17 CHAPTER II. ORGANIZATION AND POWERS. 200. Act June 20, 1874. The nationalbank act. SOI. 5133. Formation of national banking associations. 202. 5134. Requisites of organization certificate 203. 5135. How certificate shall be ac knowledged and filed. 204. 5136. Corporate powers of asso ciations. 205. Acts December 23, 1913, and Sep tember 7, 1916. Loans on improved real estate. 206. Act December 23, 1913, as amend ed. When national bank as a member of Federal reserve system may ac cept drafts or bills of ex change. 207. Act September 7, 191G. Accept ance of drafts or bills of exchange drawn upon na tional banks by banks or bankers in foreign coun tries or dependencies of the United States. 208. Act December 23. 1913, as amend ed. Trust company pow ers of national banks. 209. Act September 7, 1916. Power of national bank to act as insurance agent or as broker or agent in making or procuring loans on real estate. 210. Act December 23, 1913, as amend ed. Foreign branches. 211. Act May 1, 1886. Change of name and location. 212. Act May 1, 1886. Debts not af fected by change. 213. Act May 1, 1886. No release from liabilities. 214. Act August 13, 1888. National banks deemed citizens of State in which located. 215. Act July 12, 1882. Extension of corporate existence. 216. Act July 12, 1882. Consent of two-thirds necessary. 217. Act July 12, 1882. Special ex amination of bank and issue of certificate of ap proval by Comptroller. 218. Act July 12, 1882. Status not changed by extension. Jurisdiction of suits by or against national banks. 219. Act July 12, 1882. Dissenting shareholders may with draw. 220. Act July 12, 1882. Redemption of circulating notes is sued prior to extension. 221. Act July 12, 1882. Dissolution of banks not extending period of succession. 222. Act April 12, 1902. Reextension of corporate existence. 223. 5137. Power to hold real prop erty. 224. 5138. Requisite amount of capital. 225. 5139. Shares of stock and trans fers. 226. 5140. How payment of capital stock must be made and certified. 227. 5141. Proceedings if shareholder fails to pay installments. 228. 5142. National banks may in crease capital stock. 229. Act May 1, 1886. Increase of capital stock. 230. 5143. Reduction of capital stock. 231. 5144. Right of shareholders to vote. Proxies author ized. 232. 5145. Election of directors. 233. 5146. Requisite qualification of directors. 234. Acts of October 15, 1914, and May 15, 1916. Interlocking di rectorates— when forbid den. 235. Act October 15, 1914. Enforce ment of act in reference to interlocking director ates. 236. 5147. Oath required from direc tors. 237. 5148. Filling vacancies. 238. 5149. Proceedings where no elec tion is held on the proper day. 239. 5150. Election of president of the board. 240. 5151. Individual liability of share holders. 241. Act December 23, 1913. Indi vidual liability of share holders. Liability of shareholders who have transferred their shares. 242. 5152. Executors, trustees, etc., not personally liable. 243. 5153. National banking associa tions to be depositaries of public moneys. 244. Act December 23, 1913. Govern ment deposits in Federal reserve banks. 245. 5154. Conversion of State banks into national banking as sociations. 246. 5155. S t a t e b a n k s h a v i n g branches. 247. 5156. Reservation of rights of associations organi2ed under act of 1863. 19 20 ORGANIZATION AND POWERS. THE NATIONAL BANK ACT. ACT JUNE 20, 1874. Act June 20, 200. Sec. 1.— A n act entitled “ A n act to provide a nasec 1l ; is Stet! tional currency secured by a pledge o f United States 1., 123. bonds, and to provide for the circulation and redemption thereof,” approved June 3, 1864, shall hereafter be known as “ the national-bank act.” FORMATION OF NATIONAL BANKING ASSOCIATIONS. Act June 3, 201. Sec. 5133.— Associations fo r carrying on the busisec^; 13 &tat! H6SS o f banking under this Title may be form ed by any 1., loo. number o f natural persons, not less in any case than five. They shall enter into articles o f association, which shall specify in general terms the object for which the associa tion is formed, and may contain any other provisions, not inconsistent with law, which the association may see fit to adopt fo r the regulation o f its business and the con duct o f its affairs. These articles shall be signed by the persons uniting to form the association, and a copy o f them shall be forwarded to the Comptroller o f the Cur rency, to be filed and preserved in his office. REQUISITES OF ORGANIZATION CERTIFICATE. cUni 06 ®02. Sec. 5134.— The persons uniting to form such an 13 statl association shall, under their hands, make an organizaL” 101‘ tion certificate, which shall specifically state: First. The name assumed by such association; which name shall be subject to the approval o f the Comptroller o f the Currency. Second. The place where its operations o f discount and deposit are to be carried on, designating the State, Terri tory, or district, and the particular county and city, town, or village. Third. The amount o f capital stock and the number o f shares into which the same is to be divided. Fourth. The names and places o f residence o f the shareholders and the number o f shares held by each o f them. Fifth. The fact that the certificate is made to enable such persons to avail themselves o f the advantages o f this Title. 1864* sec. 6; N ote.— For authority to change names or locations see act May 1, 1886, post, paragraph 211. HOW CERTIFICATES SHALL BE ACKNOWLEDGED AND FILED. 1864 * cUni 06' ®ec* — ^ e organization certificate shall be sec. i ; 13 stat! acknowledged before a judge o f some court o f record, or 1., i o i . notary public; and shall be, together with the acknowl edgment thereof, authenticated by the seal o f «uch court, or notary, transmitted to the Comptroller o f the Cur rency, who shall record and carefully preserve the same in his office. ORGANIZATION AND POWERS. 21 CORPORATE POWERS OF ASSOCIATION. 204. Sec. 5136.— Upon duly making and filing articles Act June 3, o f association and an organization certificate, the asso- sf<?48 ; 13 stat! ciation shall become, as from the date o f the execution L*» 101of its organization certificate, a body corporate, and as such, and in the name designated in the organization certificate, it shall have power— First. T o adopt and use a corporate seal. Second. T o have succession for the period o f twenty years from its organization, unless it is sooner dissolved according to the provisions o f its articles or association, or by the act o f its shareholders owning two-thirds o f its stock, or unless its franchise becomes forfeited by some violation o f law. Third. To make contracts. Fourth. T o sue and be sued, complain and defend, in any court o f lawT and equity, as fully as natural persons. Fifth. T o elect or appoint directors, and by its board o f directors to appoint a president, vice president, cashier, and other officers, define their duties, require bonds o f them and fix the penalty thereof, dismiss such officers or any o f them at pleasure, and appoint others to fill their places. Sixth. T o prescribe, by its board o f directors, by-laws not inconsistent with law, regulating the manner in wThich its stock shall be transferred, its directors elected or appointed, its officers appointed, its property trans ferred, its general business conducted, and the privileges granted to it by law exercised and enjoyed. Seventh. To exercise by its board o f directors, or duly authorized officers or agents, subject to law, all such inci dental powers as shall be necessary to carry on the busi ness o f banking; by discounting and negotiating promis sory notes, drafts, bills o f exchange, and other evidences o f debt; by receiving deposits; by buying and selling exchange, coin, and bullion; by loaning money on per sonal security; and by obtaining, issuing, and circulating notes according to the provisions o f this Title. But no association shall transact any business except such as is incidental and necessarily preliminary to its organization, until it has been authorized by the Comp troller o f the Currency to commence the business o f banking. N ote .— See sections f>169 and 5170, paragraphs 320 and 321, post, relating to issuing and publishing of certificate authorizing asso ciation to begin business. LOANS ON IMPROVED REAL ESTATE. 205. Sec. 24.— Any national banking association not £ec. 2243: situated in a central reserve city may make loans secured 38 ’stat.* l.’, by improved and unencumbered farm land situated 27j?ct. Sept. 7, Avithin its Federal reserve district or within a radius o f ^91^ 439 stat- 22 ORGANIZATION AND POWERSr one hundred miles o f the place in which such bank is located, irrespective o f district lines, and may also make loans secured by improved and unencumbered real estate located within one hundred miles o f the place in which such bank is located, irrespective o f district lines; but no loan made upon the security o f such farm land shall be made fo r a longer time than five years, and no loan made upon the security o f such real estate as dis tinguished from farm land shall be made for a longer time than one year nor shall the amount o f any such loan, whether upon such farm land or upon such real estate, ' exceed fifty per centum o f the actual value o f the prop erty offered as security. A ny such bank may make such loans, whether secured by such farm land or such real estate, in an aggregate sum equal to twenty-five per centum o f its capital and surplus or to one-third o f its time deposits and such banks may continue hereafter as heretofore to receive time deposits and to pay interest on the same. The Federal Reserve Board shall have power from time to time to add to the list o f cities in which national banks shall not be permitted to make loans secured upon real estate in the manner described in this section. WHEN NATIONAL BANK AS A MEMBER BANK OF FED ERAL RESERYE SYSTEM MAY ACCEPT DRAFTS OR BILLS OF EXCHANGE. 1913* sec0’ 1 3 * mem^er bank may accept drafts or bills o f six 26Ict Mar. 3, months’ sight to run, exclusive o f days o f grace, which l919^838 ®tat*grow out transactions involving the importation or Act sept. 7, exportation o f goods; or which grow out o f transactions Stat*involving the domestic shipment o f goods, provided ship1917*sec”! 21* documents conveying or securing title are attached *sec’ ' at the time o f acceptance; or which are secured at the time o f acceptance by a warehouse receipt or other such document conveying or securing title covering readily marketable staples. No member bank shall accept, whether in a foreign or domestic transaction, for any one person, company, firm, or corporation to an amount equal at any time in the aggregate to more than ten per centum o f its paid-up and unimpaired capital stock and surplus, unless the bank is secured either by attached documents or by some other actual security growing out o f the same transaction as the acceptance; and no bank shall accept such bills to an amount equal at any time in the aggregate to more than one-half o f its paid-up and unimpaired capital stock and surplus: Provided, how ever , That the Federal Reserve Board, under such gen eral regulations as it may prescribe, which shall apply to all banks alike regardless o f the amount o f capital stock and surplus, may authorize any member bank to accept such bills to an amount not exceeding at any time 88 'stat? l . / exchange drawn upon it having not more than ORGANIZATION AND POWERS. 23 in the aggregate one hundred per centum o f its paid-up and unimpaired capital stock and surplus: Provided, fur ther, That the aggregate o f acceptances growing out o f domestic transactions shall in no event exceed fifty per centum o f such capital stock and surplus. 207. Acceptance of drafts or bills of exchange drawn upon 1QAct JjepJj.J* national banks by banks or bankers in foreign countries or L., amending dependencies of the United States. |eecs* 11°* FedA ny member bank may accept drafts or bills o f ex change drawn upon it having not more than three months’ sight to run, exclusive o f days o f grace, drawn under regulations to be prescribed by the Federal Reserve Board by banks or bankers in foreign countries or de pendencies or insular possessions o f the United States for the purpose o f furnishing dollar exchange as required by the usages o f trade in the respective countries, dependen cies, or insular possessions. Such drafts or bills may be acquired by Federal reserve banks in such amounts and subject to such regulations, restrictions, and limitations as may be prescribed by the Federal Reserve B oard: Provided, however, That no member bank shall accept such drafts or bills o f exchange referred to in this para graph for any one bank to an amount exceeding in the aggregate ten per centum o f the paid-up and unimpaired capital and surplus o f the accepting bank unless the draft or bill o f exchange is accompanied by documents convey ing or securing title or by some other adequate security: Provided further, That no member bank shall accept such drafts or bills in an amount exceeding at any time the aggregate o f one-half o f its paid-up and unimpaired capital and surplus. TRUST COMPANY POWERS OF NATIONAL BANKS. 208. The Federal Reserve Board is authorized by section 11, paragraph k ,o f the Federal reserve act a to grant 38Stat.L.,28il by special permit to national banks applying therefor, when not in contravention o f State or local law, the right to act as trustee, executor, administrator, registrar o f stocks and bonds, guardian o f estates, assignee, receiver, committee o f estates o f lunatics, or in any other fiduciary capacity in which State banks, trust companies, or other corporations which come into competition with national banks are permitted to act under the laws o f the State in which the national bank is located. “ Whenever the law's o f such State authorize or permit the exercise o f any or all o f the foregoing powers by State banks, trust companies, or other corporations which compete with national banks, the granting to and the exercise o f such powers by national banks shall not be deemed to be in contravention o f State or local law within the meaning o f this act. “ National banks exercising any or all o f the powders enumerated in this subsection shall segregate all assets held in any fiduciary capacity from the general assets o f ORGANIZATION AND LOWERS. the bank and shall keep a separate set o f books and records showing in proper detail all transactions en gaged in under authority o f this subsection. Such books and records shall be open to inspection by the State authorities to the same extent as the books and records o f corporations organized under State law which exer cise fiduciary powers, but nothing in th is . act shall be construed as authorizing the State authorities to ex amine the books, records, and assets o f the national bank which are not held in trust under authority o f this sub section. 26, “ No national bank shall receive in its trust depart ment deposits o f current funds subject to check or the deposit o f checks, drafts, bills o f exchange, or other items for collection or exchange purposes. Funds deposited or held in trust by the bank awaiting investment shall be carried in a separate account and shall not be used by the bank in the conduct o f its business unless it shall first set aside in the trust department United States bonds or other securities approved by the Federal Reserve Board. “ In the event o f the failure o f such bank the owners o f the funds held in trust fo r investment shall have a lien on the bonds or other securities so set apart in addi tion to their claim against the estate o f the bank. “ Whenever the laws o f a State require corporations acting in a fiduciary capacity to deposit securities w^ith the State authorities fo r the protection o f private or court trusts, national banks so acting shall be required to make similar deposits and securities so deposited shall be held for the protection o f private or court trusts, as provided by the State law. “ National banks in such cases shall not be required to execute the bond usually required o f individuals if State corporations under similar circumstances are exempt from this requirement. “ National banks shall have power to execute such bond when so required by the laws o f the State. “ In any case in which the laws o f a State require that a corporation acting as trustee, executor, administrator, or in any capacity specified in this section, shall take an oath or make an affidavit, the president, vice president, cashier, or trust officer o f such national bank may take the necessary oath or execute the necessary affidavit. “ It shall be unlawful for any national banking asso ciation to lend any officer, director, or employee any funds held in trust under the powers conferred by this section. A ny officer, director, or employee making such loan, or to whom such loan is made, may be finecl not more than $5,000, or imprisoned not more than five years, or may be both fined and imprisoned, in the dis cretion o f the court. “ In passing upon applications for permission to exer cise the powers enumerated in this subsection, the F ed eral Reserve Board may take into consideration the GftGAttlEATIOK AND POWERS. 25 amount o f capital and surplus o f the applying bank, whether or not such capital and surplus is sufficient under the circumstances o f the case, the needs o f the community to be served, and any other facts and circumstances that seem to it proper, and may grant or refuse the applica tion accordingly: Provided, That no permit shall be issued to any national banking association having a capi tal and surplus less than the capital and surplus required by State law o f State banks, trust companies, and cor porations exercising such powers.” 209. Power of national bank to act as insurance agent or Act Sept 7t as broker or agent in making or procuring loans on real estate. ing sec. 13 of That in addition to the powers now vested by law in Fed* Res* Act* national banking associations organized under the laws o f the United States any such association located and doing business in any place the population o f which does not exceed five thousand inhabitants, as shown by the last preceding decennial census, may, under such rules and regulations as may be prescribed by the Comptroller o f the Currency, act as the agent for any fire, life, or other insurance company authorized by the authorities o f the State in which said bank is located to do business in said State, by soliciting and selling insurance and col lecting premiums on policies issued by such com pany; and may receive for services so rendered such fees or commissions as may be agreed upon between the said association and the insurance company for which it may act as agent; and may also act as the broker or agent for others in making or procuring loans on real estate located within one hundred miles o f the place in which said bank may be located, receiving for such services a reasonable fee or commission: Provided, however, That no such bank shall in any case guarantee either the prin cipal or interest o f any such loans or assume or guarantee the payment o f any premium on insurance policies issued through its agency by its prin cip al: And provided further, That the bank shall not guarantee the truth o f any statement made by an assured in filing his applica tion for insurance. FOREIGN BRANCHES [as amended 1919]. 210. Sec. 25.— A ny national banking association pos- 19£ct Dec. 23, sessing a capital and surplus o f $1,000,000 or more may 38 ’stat.* l.’, file application with the Federal Eeserve Board for p e r -27|ct Sept< 7> mission to exercise, upon such conditions and under such Jf1 ra f9 stat* regulations as may be prescribed by the said board, either *Act s'ept. 17, or both o f the follow ing pow ers: 1919, First. T o establish branches in foreign countries or dependencies or insular possessions o f the United States for the furtherance o f the foreign commerce o f the United States, and to act if required to do so as fiscal agents o f the United States. ORGANIZATION AND POWERS. Second. T o invest an amount not exceeding in the aggregate ten per centum o f its paid-in capital stock and surplus in the stock o f one or more banks or corporations chartered or incorporated under the laws o f the United States or o f any State thereof, and principally engaged in international or foreign banking, or banking in a de pendency or insular possession o f the United States either directly or through the agency, ownership, or control o f local institutions in foreign countries, or in such depend encies or insular possessions. Until January 1, 1921, any national banking association, without regard to the amount o f its capital and surplus, may file application with the Federal Eeserve Board for permission, upon such conditions and under such regulations as may be pre scribed by said board, to invest an amount not exceeding in the aggregate 5 per centum o f its paid-in capital and sur plus in the stock o f one or more corporations chartered or incorporated under the laws o f the United States or o f any State thereof and, regardless o f its location, princi pally engaged in such phases o f international or foreign financial operations as may be necessary to facilitate the export o f goods, wares, or merchandise from the United States or any o f its dependencies or insular possessions to any foreign country: Provided, however, That in no event shall the total investments authorized by this sec tion by any one national bank exceed 10 per centum o f its capital and surplus. Such application shall specify the name and capital o f the banking association filing it, the powers applied for, and the place or places where the banking or financial operations proposed are to be carried on. The Federal Eeserve Board shall have power to approve or to reject such application in whole or in part i f for any reason the granting o f such application is deemed inexpedient, and shall also have power from time to time to increase or decrease the number o f places where such banking opera tions may be carried on. Every national banking association operating foreign branches shall be required to furnish inform ation con cerning the condition o f such branches to the Comptroller o f the Currency upon demand, and every member bank investing in the capital stock o f banks or corporations described above shall be required to furnish inform ation concerning the condition o f such banks or corporations to the Federal Eeserve Board upon demand, and the Fed eral Eeserve Board may order special examinations o f the said branches, banks, or corporations at such time or times as it may deem best. Before any national bank shall be permitted to pur chase stock in any such corporation the said corporation shall enter into an agreement or undertaking with the Federal Eeserve Board to restrict its operations or con duct its business in such manner or under such limita- ORGANIZATION AND POWERS. 27 tions and restrictions as the said board may prescribe fo r the place or places wherein such business is to be con ducted. I f at any time the Federal Reserve Board shall ascertain that the regulations prescribed by it are not being complied with, said board is hereby authorized and empowered to institute an investigation o f the matter and to send for persons and papers, subpoena witnesses, and administer oaths in order to satisfy itself as to the actual nature o f the transactions referred to. Should such in vestigation result in establishing the failure o f the cor poration in question, or o f the national bank or banks which may be stockholders therein, to comply with the regulations laid down by the said Federal Reserve Board, such national banks may be required to dispose o f stock holdings in the said corporation upon reasonable notice. Every such national banking association shall conduct the accounts o f each foreign branch independently o f the accounts o f other foreign branches established by it and o f its home office, and shall at the end o f each fiscal period transfer to its general ledger the profit or loss accrued at each branch as a separate item. A ny director or other officer, agent, or employee o f any member bank may, with the approval o f the Federal Reserve Board, be a director or other officer, agent, or employee o f any such bank or corporation above men tioned in the capital stock o f which such member bank shall have invested as hereinbefore provided, without being subject to the provisions o f section eight o f the A ct approved October fifteenth, nineteen hundred and four teen, entitled “ A n A ct to supplement existing law's against unlawful restraints and monopolies, and for other purposes.” CHANGE OF NAME AND LOCATION OF BANK. 1, 1886. ACT MAY 211. Sec. 2.— That any national banking association may lgAct May? i, change its name or the place where its operations o f dis- sec. 2 ; 24 stat! count and deposit are to be carried on, to any other place u» 18# within the same State, not more than thirty miles dis tant, wTith the approval o f the Comptroller o f the Cur rency, by the vote o f shareholders owning two-thirds o f the stock o f such association. A duly authenticated notice o f the vote and o f the new name or location se lected shall be sent to the office o f the Comptroller o f the Currency; but no change o f name or location shall be valid until the Comptroller shall have issued his certifi cate o f approval o f the same. DEBTS NOT AFFECTED BY CHANGE. ACT MAY 1, 1886. 212. Sec. 3.— That all debts, liabilities, rights, provi- Act May 1, . -1 « .I 1 *i i i loob) c. To, sec. sions, and powers ot the association under its old name 3 ; 24 stat. l., shall devolve upon and inure to the association under 19, its new name. 28 ORGANIZATION AND POWERS. NO BELEASE FBOM LIABILITIES. ACT MAT 1, 1886. Act May i, 213. Sec. 4.— That nothing in this act contained shall be construed as in any manner to release any national ” banking association under its old name or at its old loca tion from any liability, or affect any action or proceeding in law in which said association may be or become a party or interested. 4®824 °stat.SLC; so 19. N ote .— Section 1 of this act relates to increase of capital stock and is inserted after Section 5142, United States Revised Statutes. NATIONAL BANKS DEEMED CITIZENS OF STATES IN WHICH LOCATED. ACT AUGUST 13, 1888. lsi^'sec T- 24 ®eCt — That all national banking associations esstat.’ l., *554. tablished under the laws o f the United States shall, for 1888 * A cug*8$ ^ e purposes o f all actions by or against them, real, perl c,43&25 Stat‘ sona^ or mixed, and all suits in equity, be deemed citizens o f the States in which they are respectively located; and in such cases the circuit and district courts shall not have jurisdiction other than such as they would have in cases between individual citizens o f the same State. The p ro visions o f this section shall not be held to affect the jurisdiction o f the courts o f the United States in cases commenced bv the United States or by direction o f any officer thereof, or cases for winding up the affairs o f any such bank. N ote .— See act March 3, 1911, section 24, 36 Stat. L., 1092, para graph 701, post, as to jurisdiction of United States courts in national banking cases. EXTENSION OF COBPOBATE EXISTENCE. 1882. ACT JULY 12, 1882* JcUly29 o ®ec* **— That any national banking association gee. i ; 22 stat! organized under the acts o f February twenty-fifth, eightL*» 162* een hundred and sixty-three, June third, eighteen hun dred and sixty-four, and February fourteenth, eighteen hundred and eighty, or under sections fifty-one hundred and thirty-three, fifty-one hundred and thirty-four, fiftyone hundred and thirty-five, fifty-one hundred and thirty-six, and fifty-one hundred and fifty-four o f the Revised Statutes o f the United States, may, at any time within the two years next previous to the date o f the ex piration o f its corporate existence under present law, and with the approval o f the Comptroller o f the Currency, to be granted, as hereinafter provided, extend its period o f succession by amending its articles o f association for a term o f not more than twenty years from the expiration o f the period o f succession named in said articles o f asso ciation, and shall have succession for such extended period, unless sooner dissolved by the act o f shareholders owning two-thirds o f its stock, or unless its franchise becomes forfeited by some violation o f lawT, or unless hereafter modified or repealed. N ote.— Act of February 14, 1880, relates to the conversion of gold banks into currency banks, and is inserted after Revised Statutes 5186. ORGANIZATION AND POWERS. CONSENT OF TWO-THIRDS NECESSARY. 1882. 29 ACT JULY 12, 216. Sec. 2.— That such amendment o f said articles o f association shall be authorized by the consent in writing sec. o f shareholders owning not less than twTo-thirds o f the *' capital stock o f the association; and the board o f direc tors shall cause such consent to be certified under the seal o f the association, by its president or cashier, to the Comptroller o f the Currency, accompanied by an appli cation made by the president or cashier for the approval o f the amended articles o f association by the Comp troller; and such amended articles o f association shall not be valid until the Comptroller shall give to such asso ciation a certificate under his hand and seal that the association has complied with all the provisions required to be complied wTith, and is authorized to have succession for the extended period named in the amended articles o f association. Jculy29o; stat! SPECIAL EXAMINATION OF BANK AND ISSUE OF CER TIFICATE OF APPROVAL BY COMPTROLLER. ACT JULY 12, 1882. 217. Sec. 3.— That upon the receipt o f the application Act and certificate o f the association provided for in the pre- sec. k 22 stat* ceding section, the Comptroller o f the Currency shallL,> 163, cause a special examination to be made, at the expense o f the association, to determine its condition; and i f after such examination or otherwise it appears to him that said association is in a satisfactory condition, he shall grant his certificate o f approval provided for in the pre ceding section, or if it appears that the condition o f said association is not satisfactory, he shall withhold such certificate o f approval. STATUS NOT CHANGED BY EXTENSION. JURISDICTION OF SUITS BY OR AGAINST NATIONAL BANKS. ACT JULY 12, 1882. 218. Sec. 4.— That any association so extending the ^uly29o’ period o f its succession shall continue to enjoy all the sec."4 ; 22 stat! rights and privileges and immunities granted and shall L” 163# continue to b£ subject to all the duties, liabilities, and re strictions imposed by the Revised Statutes o f the United States and other acts having reference to natiQnal bank ing associations, and it shall continue to be in all respects the identical association it was before the extension o f its period o f succession: Provided, however, That the juris diction for suits hereafter brought by or against any as sociation established under any law providing for na tional banking associations, except suits between them and the United States, or its officers and agents, shall be the same as, and not other than, the jurisdiction for suits by or against banks not organized under any law o f the United States wThich do or might do banking business where such national banking associations may be doing business when such suits may be begun: A nd all laws 30 ORGANIZATION AND POWERS. and parts o f laws o f the United States inconsistent with this proviso be, and the same are hereby, repealed. N ote.— See also act of August 13, 1888, relating to citizenship of national banks and jurisdiction of the circuit and district courts, paragraph 214, ante, and act of Mar. 3, 1911, sec. 24, 36 Stat. L., 1092, paragraph 701, post, as to jurisdiction of United States courts in national banking cases. DISSENTING SHAREHOLDERS JULY 12, 1882. MAY WITHDRAW. ACT 1882 * Jculy29o ®ec‘ — That when any national banking associascc. 5; 2*2 stat! tion has amended its articles o f association as provided l., 163. *n ac^ an(j ftle Comptroller has granted his certificate o f approval, any shareholder not assenting to such amendment may give notice in writing to the directors, within thirty days from the date o f the certificate o f ap proval, o f his desire to withdraw from said association, in which case he shall be entitled to receive from said banking association the value o f the shares so held by him, to be ascertained by an appraisal made by a com mittee o f three persons, one to be selected by such share holder, one by the directors, and the third by the first t w o ; and in case the value so fixed shall not be satisfac tory to any such shareholder, he may appeal to the Com p troller o f the Currency, who shall cause a reappraisal to be made, wThich shall be final and bin d in g ; and if said reappraisal shall exceed the value fixed by said commit tee, the bank shall pay the expenses o f said reappraisal, and otherwise the appellant shall pay said expenses; and the value so ascertained and determined shall be deemed to be a debt due, and be forthwith paid, to said share holder from said bank; and the shares so surrendered and appraised shall, after due notice, be sold at public sale, withtin thirty days after the final appraisal provided in this section: Provided, That in the organization o f any banking association intended to replace any existing banking association, and retaining the name thereof, the holders o f stock in the expiring association shall be enti tled to preference in the allotment o f the shares o f the new' association in proportion to the number o f shares held by them respectively in the expiring association. REDEMPTION OF CIRCULATING NOTES ISSUED PRIOR TO EXTENSION. ACT JULY 12, 1882. 1882 * cUly29o! ^20. Sec. 6.— That the circulating notes o f any associaLec'i6^22 stat't i ° n so extending the period o f its succession which shall have been issued to it prior to such extension shall be re deemed at the Treasury o f the United States, as provided in section three o f the act o f June twentieth, eighteen hundred and seventy-four, entitled “ A n act fixing the amount e f United States notes, providing for redistribu tion o f national bank currency, and for other purposes,” and such notes when redeemed shall be forwarded to the Comptroller o f the Currency, and destroyed as now pro vided by la w ; and at the end o f three years from the date ORGANIZATION AND POWERS. 31 o f the extension o f the corporate existence o f each bank the association so extended shall deposit lawful money with the Treasurer o f the United States sufficient to re deem the remainder o f the circulation which was out standing at the date o f its extension, as provided in sections fifty-two hundred and twenty-two, fifty-two hundred and twenty-four, and fifty-two hundred and twenty-five o f the Revised Statutes; and any gain that may arise from the failure to present such circulating notes fo r redemption shall inure to the benefit o f the United States; and from time to time, as such notes are redeemed or lawful money deposited therefor as provided herein, new circulating notes shall be issued as provided by this act, bearing such devices, to be approved by the Secretary o f the Treasury, as shall make them readily distinguishable from the circulating notes heretofore issued: Provided, however, That each banking associa tion which shall obtain the benefit o f this act shall reim burse to the Treasury the cost o f preparing the plate or plates for such new circulating notes as shall be issued to it. N ote.— For act of June 20, 1874, section 3, mentioned above, see paragraph 414, post. The destruction of bank notes by burn ing, as provided in sections 5184, 5225, Revised Statutes, is super seded by act of June 23, 1874, paragraph 340, post, which requires bank notes to be macerated. DISSOLUTION OF BANKS NOT EXTENDING PERIOD OV SUCCESSION. ACT JULY 12, 1882. 221. Sec. 7.— That national banking associations whose lg£ct July2jt2, corporate existence has expired or shall hereafter expire sec. 7; 22 stat! and which do not avail themselves o f the provisions o f L*’ 164, this act, shall be required to comply with the provisions o f sections fifty-two hundred and twenty-one and fiftytwo hundred and .twenty-two o f the Revised Statutes in same manner as if the shareholders had voted to go into liquidation, as provided in section fifty-two hundred and twenty o f the Revised Statutes; and the provisions o f sections fifty-two hundred and twenty-four and fiftytwo hundred and twenty-five o f the Revised Statutes shall also be applicable to such associations, except as modified by this act;-and the franchise o f slich associa tions is hereby extended for the sole purpose o f liquidat ing their affairs until such affairs are finally closed. N ote .— Other sections of act of July 12, 1882. S ec . 8. [Relates to bond deposits and circulating notes. 1 Fol lows Revised Statutes, section 5167. S ec . 9.— [Relates to withdrawal of circulating notes.] Follows Revised Statutes, section 5167. S ec . 10.— Repealed sections 5171 and 5176, Revised Statutes, and was superseded by act of March 14, 1900. (See section 5171, Revised Statutes.) Sec. 11.— Authorizes the exchange of three per cent bonds for outstanding three and one-half per cent bonds. S ec . 12.— Authorizes the issue of gold certificates upon the de posit of gold coin. Inserted after section 5207. S ec . 13.— [Relates to false certification of checks.] by act of Sept. 26, 1918. Superseded 32 ORGANIZATION AND POWERS. REEXTENSION OF APRIL 12, 1902. CORPORATE EXISTENCE. ACT OF 1902!* ^pri5032; 102 222. That the Comptroller o f the Currency is hereby Stat* L‘*auth?r.ize(l 5 in the manner provided bv, and under the conditions and limitations of, the act o f July 12, 1882, to extend fo r a further period o f twenty years the charter o f any national banking association extended under said act which shall desire to continue its existence after the expiration o f its charter. POWER TO HOLD REAL PROPERTY. is 64* cUni 06 ®ec* ^ national banking association may sec. ’ 2 8 ; liJ purchase, hold, and convey real estate for the follow ing stat. l., 107. p Urp0SeSj and fo r no others: First. Such as shall be necessary fo r its immediate ac commodation in the transaction o f its business. Second. Such as shall be mortgaged to it in good faith by way o f security for debts previously contracted. Third. Such as shall be conveyed to it in satisfaction o f debts previously contracted in the course o f its dealings. Fourth. Such as it shall purchase at sales under ju d g ments, decrees, or mortgages held by the association, or shall purchase to secure debts due to it. But no such association shall hold the possession o f any real estate under mortgage, or the title and possession o f any real estate purchased to secure any debts due to it, fo r a longer period than five years. N o te .— For power to loan on real estate see paragraph 205, ante. REQUISITE AMOUNT OF CAPITAL. 1864* f neioi; 224. Sec. 5138 [as amended 1900]— No association shall sec. 7 ; 13 stat! be organized with a less capital than one hundred thouL’ Act^Mar. 14, sand dollars, except that banks with a capital o f not less io*;0, 3i 41’stat ^ an thousand dollars may, with the approval o f the l .,’48. * Secretary o f the Treasury, be organized in any place the population o f which does not exceed six thousand inhab itants, and except that banks with a capital o f not less than twenty-five thousand dollars may, with the sanction o f the Secretary o f the Treasury, be organized in any place the population o f which does not exceed three thousand inhabitants. No association shall be organized in a city the population o f which exceeds fifty thousand persons with a capital o f less than two hundred thousand dollars. SHARES OF STOCK AND TRANSFERS. 1864* cUneio6; stat l 2 ;i 021^ 225. Sec. 5139.— The capital stock o f each association ^e divided into shares o f one hundred dollars each, and be deemed personal property, and transferable on the books o f the association in such manner as may be pre- ORGANIZATION AND POWERS. 83 scribed in the by-laws or articles o f association. Every person becoming a shareholder by such transfer shall, in proportion to his shares, succeed to all rights and lia bilities o f the prior holder o f such shares; and no change shall be made in the articles o f association by which the rights, remedies, or security o f the existing creditors o f the association shall be impaired. N ote.— See also section 23, Federal reserve act, following sec tion 5151, United States Revised Statutes. HOW PAYMENT OF THE CAPITAL STOCK MUST BE MADE AND CERTIFIED. 3, 226. Sec. 5140.— A t least fifty per centum o f the capital Act June c. 106, stock o f every association shall be paid in before it shall sec. ’ 14; 13 be authorized to commence business; and the remainder stat* L., 103. o f the capital stock o f such association shall be paid in installments o f at least ten per centum each, on the whole amount o f the capital, as frequently as one installment at the end o f each succeeding month from the time it shall be authorized by the Comptroller o f the Currency to commence business; and the payment o f each install ment shall be certified to the Comptroller, under oath, by the president or cashier o f the association. PROCEEDINGS IF SHAREHOLDER FAILS TO PAY INSTALL MENTS. 227. Sec. 5141.— Whenever any shareholder, or his as- igAct June 3, c. 106, signee, fails to pay any installment on the stock when the sec. ’ 15; 13 U, 103. same is required by the preceding section to be paid, the stat> directors o f such association may sell the stock o f such delinquent shareholder at public auction, having given three weeks’ previous notice thereof in a newspaper pub lished and o f general circulation in the city or county where the association is located, or if no newspaper is published in said city or county, then in a newspaper published nearest thereto, to any person who will pay the highest price therefor, to be not less than the amount then due thereon, with the expenses o f advertisement and sale; and the excess, if any, shall be paid to the delinquent shareholder. I f no bidder can be found who will pay for such stock the amount due thereon to the association, and the cost o f advertisement and sale, the amount previously paid shall be forfeited to the association, and such stock shall be sold as the directors may order, within six months from the time o f such forfeiture, and if not sold it shall be canceled and deducted from the capital stock o f the association. I f any such cancellation and reduction shall reduce the capital o f the association below the minimum o f capital required by law, the capital stock shall, within thirty days from the date o f such cancellation, be in creased to the required amount; in default o f which a receiver may be appointed, according to the provisions 164312°- -20------ 8 34 ORGANIZATION AND POWERS. o f section fifty-tw o hundred and thirty-four, to close up the business o f the association. NATIONAL BANKS MAY INCREASE CAPITAL STOCK. i& m 1 cUniO0’ ®ec‘ — A ny association form ed under this title sc<\ ’ 1 3 ; 13 may, by its articles o f association, provide for an increase stiit. l., 103. 0£ -£S capj£ai f rom time to time, as may be deemed expe dient, subject to the limitations o f this title. But the maximum o f such increase to be provided in the articles o f association shall be determined by the Comptroller o f the Currency; and no increase o f capital shall be valid until the whole amount o f such increase is paid in, and notice thereof has been transmitted to the Comptroller o f the Currency, and his certificate obtained specifying the amount o f such increase o f capital stock, with his approval thereof, and that it has been duly paid in as part o f the capital o f such association. INCREASE OF CAPITAL STOCK. ACT MAY 1, 1886. Act May i, 229. Sec. 1.— That any national banking association i ; 24C'stat.SL?i may, with the approval o f the Comptroller o f the Cur18rency, by the vote o f shareholders owning two-thirds o f the stock o f such association, increase its capital stock, in accordance with existing laws, to any sum approved by the said Comptroller, notwithstanding the limit fixed in its original articles o f association and determined by said Com ptroller; and no increase o f the capital stock o f any national banking association either within or beyond the limit fixed in its original articles o f association shall be made except in the manner herein provided. N ote .— For other sections of this act see paragraphs 211, 212, and 213, ante. REDUCTION OF CAPITAL STOCK. 230. Sec. 5143.— A ny association formed under this title may, by the vote o f shareholders owning two-thirds o f stat. l „ 103. capital stock, reduce its capital to any sum not below the amount required by this title to authorize the form a tion o f associations; but no such reduction shall be allow able which will reduce the capital o f the association below Act Dec. 23, the amount required for its outstanding circulation, nor 38 13 btat 2l.! shall any reduction be made until the amount o f the pro274. * Mposed reduction has been reported to the Comptroller o f the Currency and such reduction has been approved by the said Comptroller o f the Currency and by the Federal Reserve Board, or by the organization committee pend ing the organization o f the Federal Reserve Board. Act June 3, sec64, 1 3 ; 10i 3 RIGHT OF SHAREHOLDERS TO YOTE; PROXIES AUTHOR IZED. Act June 3, se8c!4, i i ; 1 13 stat. l . , 102. 231. Sec. 5144.— In all elections o f directors, and in deciding all questions at meetings o f shareholders, each shareholder shall be entitled to one vote on each share o f ORGANIZATION AND POWERS. 35 stock held by him. Shareholders may vote by proxies duly authorized in w ritin g; but no officer, clerk, teller, or bookkeeper o f such association shall act as proxy; and no shareholder whose liability is past due and unpaid shall be allowed to vote. N ote .— The Circuit Court of the United States, in United States v. Barry (36 F. R., 246), held that the words “ liability past due and unpaid ” referred only to unpaid subscriptions for stock. ELECTION OF DIRECTORS. 232. Sec. 5145.— The affairs o f each association shall b e lgAct June10|> managed by not less than five directors, who shall be secs. 9, 10; 13 elected by the shareholders at a meeting to be held at any stat L,» 102, time before the association is authorized by the Comp troller o f the Currency to commence the business o f bank ing ; and afterward at meetings to be held on such day in January o f each year as is specified therefor in the articles o f association. The directors shall hold office for one year, and until their successors are elected and have qualified. REQUISITE QUALIFICATION OF DIRECTORS. 233. Sec. 5146 [amended 1905].— Every director must, 18^ t ^une10|» during his whole term of service, be a citizen o f the secs.’ 9, 1 0^ 13 United States, and at least three-fourths of the direc- st ActLFeb.0 28, tors must have resided in the State, Territory, or District in which the association is located for at least one year sis. immediately preceding their election and must be resi dents therein during their continuance in office. Every director must own in his own right at least ten shares o f the capital stock o f the association o f which he is a d i rector, unless the capital o f the bank shall not exceed twenty-five thousand dollars, in which case lie must own in his own right at least five shares o f such capital stock. A ny director who ceases to be the owner o f the required number o f shares o f the stock, or who becomes in any other manner disqualified, shall thereby vacate his place. INTERLOCKING DIRECTORATES— WHEN FORBIDDEN. 234. Sec. 8.— That from and after two years from the 1^ct ^oct. 15. date o f the approval o f this act no person shall at the s ta V u ^ ^ ?8 same time be a director or other officer or employee o f more than one bank, banking association, or trust com pany, organized or operating under the laws o f the United States, either o f which has deposits, capital, surplus, and undivided profits aggregating more than $5,000,000; and no private banker or person who is a director in any bank or trust company, organized and operating under the laws o f a State, having deposits, capital, surplus, and undi vided profits aggregating more than $5,000,000, shall be eligible to be a director in any bank or banking associa- 36 ORGANIZATION AND POWERS. tion organized or operating under the laws o f the United States. The eligibility o f a director, officer, or employee under the foregoing provisions shall be determined by the average amount o f deposits, capital, surplus, and un divided profits as shown in the official statements o f such bank, banking association, or trust company filed as pro vided by law during the fiscal year next preceding the date set for the annual election o f directors, and when a director, officer, or employee has been elected or selected in accordance with the provisions o f this A ct it shall be law ful fo r him to continue as such for one year thereafter under said election or employment. No bank, banking association, or trust company, or ganized or operating under the laws o f the United States, in any city or incorporated town or village o f more than two hundred thousand inhabitants, as shown by the last preceding decennial census o f the United States, shall have as a director or other officer or employee any private banker or any director or other officer or employee o f any other bank, banking association, or trust company located in the same place: Provided, That nothing in this section shall apply to mutual savings banks not having a capital stock represented by shares: Provided further, That a director or other officer or employee o f such bank, banking association, or trust company may be a director or other officer or employee o f not more than one other bank or trust company organized under the laws o f the United States or any State where the entire capital stock o f one is owned by stockholders in the other: And 'provided further, That nothing contained in this section shall forbid a director o f class A o f a Federal reserve bank, as defined in the Federal reserve act, from being an officer or director or both an officer and director in one member Act Ma 15 : 'provided further, That nothing in this act 1916 ; 39aystat! shall prohibit any officer, director, or employee o f any L*» 12U member bank or class A director o f a Federal reserve bank, who shall first procure the consent o f the Federal Reserve Board, which board is hereby authorized, at its discretion, to grant, withhold, or revoke such consent, from being an officer, director, or employee o f not more than twTo other banks, banking associations, or trust companies, whether organized under the laws o f the United States or any State, if such other bank, banking association, or trust company is not in substantial com petition with such member bank. The consent o f the Federal Reserve Board may be procured before the person applying therefor has been elected as a class A director o f a Federal reserve bank or as a director o f any member bank. That from and after two years from the date o f the approval o f this act no person at the same time shall be a director in any two or more corporations, any one o f which has capital, surplus, and undivided profits aggre- ORGANIZATION AND POWERS. 37 gating more than $1,000,000, engaged in whole or in part in commerce, other than banks, banking associations, trust companies and common carriers subject to the act to regulate commerce, approved February fourth, eighteen hundred and eighty-seven, if such corporations are or shall have been theretofore, by virtue o f their business and location o f operation, competitors, so that the elimination o f competition by agreement between them would constitute a violation o f any o f the provisions o f any o f the antitrust laws. The eligibility o f a director under the foregoing provision shall be determined by the aggregate amount o f the capital, surplus, and undivided profits, exclusive o f dividends declared but not paid to stockholders, at the end o f the fiscal year o f said corpora tion next preceding the election o f directors, and when a director has been elected in accordance with the provi sions o f this act it shall be lawful for him to continue as such foi; one year thereafter. W hen any person elected or chosen as a director or officer or selected as an employee o f any bank or other corporation subject to the provisions o f this act is eligible at the time o f his election or selection to act for such bank or other corporation in such capacity his eligibility to act in such capacity shall not be affected and he shall not become or be deemed amenable to any o f the provisions hereof by reason o f any change in the affairs o f such bank or other corporation from whatsoever cause, whether specifically excepted by any o f the provisions hereof or not, until the expiration o f one year from the date o f his election or employment. N ote.— See Sec. 25, Federal reserve act, page 165, post, in refer ence to directors of foreign branches. ENFORCEMENT OF ACT IN REFERENCE TO INTERLOCKING DIRECTORATES. 235. Sec. 11.— That authority to enforce c o m p l i a n c e 19^ct Oct. 15, with sections two, three, seven and eight o f this act by 38 stat.* l .’, the persons respectively subject thereto is hereby vested:734, in the Interstate Commerce Commission where applicable to common carriers, in the Federal Reserve Board where applicable to banks, banking associations and trust com panies, and in the Federal Trade Commission where ap plicable to all other character o f commerce, to be exer cised as follow s: Whenever the commission or board vested with juris diction thereof shall have reason to believe that any person is violating or has violated any o f the provisions o f sections two, three, seven, and eight o f this act, it shall issue and serve upon such person a complaint stating its charges in that respect, and containing a notice o f a hearing upon a day and at a place therein fixed at least thirty days after the service o f said complaint. The ORGANIZATION AND POWERS. person so complained o f shall have the right to appear at the place and time so fixed and show cause why an order should not be entered by the commission or board requiring such person to cease and desist from the vio lation o f the law so charged in said complaint. A n y person may make application, and upon good cause shown may be allowed by the commission or board, to intervene and appear in said proceeding by counsel or in person. The testimony in any such proceeding shall be reduced to writing and filed in the office o f the commission or board. I f upon such hearing the commission or board, as the case may be, shall be o f the opinion that any o f the pro visions o f said sections have been or are being violated, it shall make a report in writing in which it shall state its findings as to the facts, and shall issue and cause to be served on such person an order requiring such person to cease and desist from such violations, and divest itself o f the stock held or rid itself o f the directors chosen con trary to the provisions o f sections seven and eight* o f this act, if any there be, in the manner and within the time fixed by said order. Until a transcript o f the record in such hearing shall have been filed in a circuit court o f appeals o f the United States, as hereinafter provided, the commission or board may at any time, upon such no tice and in such manner as it shall deem proper, m odify or set aside, in whole or in part, any report or any order made or issued by it under this section. I f such person fails or neglects to obey such order of the commission or board while the same is in effect, the commission or board may apply to the circuit court o f appeals o f the United States, within any circuit where the violation complained o f was or is being committed or where such person resides or carries on business, for the enforcement o f its order, and shall certify and file with its application a transcript o f the entire record in the proceeding, including all the testimony taken and the report and order o f the commission or board. U pon such filing o f the application and transcript the court shall cause notice thereof to be served upon such person and thereupon shall have jurisdiction o f the proceeding and o f the question determined therein, and shall have power to make and enter upon the pleadings, testimony, and proceedings set forth in such transcript a decree affirm ing, m odifying, or setting aside the order o f the commis sion or board. The findings o f the commission or board as to the facts, i f supported by testimony, shall be con clusive. I f either party shall apply to the court for leave to adduce additional evidence, and shall show to the satis faction o f the court that such additional evidence is ma terial and that there were reasonable grounds for the failure to adduce such evidence in the proceeding before the commission or board, the court may order such addi tional evidence to be taken before the commission or ORGANIZATION AND POWERS. board and to be adduced upon the hearing in such man ner and upon such terms and conditions as to the court may seem proper. The commission or board may m odify its findings as to the facts, or make new findings, by rea son o f the additional evidence so taken, and it shall file such modified or neAv findings, which, if supported by testimony, shall be conclusive, and its recommendations, if any, for the modification or setting aside o f its original order, with the return o f such additional evidence. The judgment and decree o f the court shall be final, except that the same shall be subject to review by the Supreme Court upon certiorari as provided in section two hundred and forty o f the Judicial Code. Any party required by such order o f the commission or board to cease and desist from a violation charged may obtain a review o f such order in said circuit court o f appeals by filing in the court a written petition praying that the order o f the commission or board be set aside. A copy o f such petition shall be forthwith served upon the commission or board, and thereupon the commis sion or board forthwith shall certify and file in the court a transcript o f the record as hereinbefore provided. Upon the filing o f the transcript the court shall have the same jurisdiction to affirm, set aside, or m odify the order o f the commission or board as in the case o f an applica tion by the commission or board for the enforcement o f its order, and the findings o f the commission or board as to the facts, if supported by testimony, shall in like man ner be conclusive. The jurisdiction o f the circuit court o f appeals o f the United States to enforce, set aside, or m odify orders o f the commission or board shall be exclusive. Such proceedings in the circuit court o f appeals shall be given precedence over other cases pending therein, and shall be in every way expedited. No order o f the commission or board or the judgment o f the court to enforce the same shall in any wise relieve or absolve any person from any liability under the antitrust acts. Complaints, orders, and other processes o f the commis sion or board under this section may be served by any one duly authorized by the commission or board, either (a) by delivering a copy thereof to the person to be served, or to a member o f the partnership to be served, or to the president, secretary, or other executive officer or a direc tor o f the corporation to be served; or (b) by leaving a copy thereof at the principal office or place o f business o f such person; or (c) by registering and mailing a copy thereof addressed to such person at his principal office or place o f business. The verified return by the person so serving said complaint, order, or other process setting forth the manner o f said service shall be proof o f the same, and the return post-office receipt for said complaint, order, or other process registered and mailed as aforesaid shall be proof o f the service o f the same. 40 ORGANIZATION AND POWERS. OATH REQUIRED FROM DIRECTORS. 1864 * r l unio6 2 ®®- ®ec- 51^7.— Each director, when appointed or 9 113 stat! elected, shall take an oath that he will, so far as the duty devolves on him, diligently and honestly administer the affairs o f such association, and will not knowingly violate, or willingly permit to be violated, any o f the provisions o f this title, and that he is the owner in good faith, and in his own right, o f the number o f shares o f stock required by this title, subscribed by him, or standing in his name on the books o f the association, and that the same is not hypothecated, or in any way pledged, as security fo r any loan or debt. Such oath, subscribed by the director mak ing it, and certified by the officer before whom it is taken, shall be immediately transmitted to the Comptroller o f the Currency, and shall be filed and preserved in his Office. FILLING VACANCIES. isilf cUni 06; 237. Sec. 5148.— A n y vacancy in the board shall be stat* l ° ’102*3, fiHed by appointment by the remaining directors, and a' " ’ any director so appointed shall hold his place until the next election. PROCEEDINGS WHERE NO ELECTION IS HELD ON THE PROPER DAY. 1864,* ^uni06 238. Sec. 5149.— I f, from any cause, an election o f distat ii° ioa1^ rec^ors n°t made at the time appointed, the association a * * ' shall not for that cause be dissolved, but an election may be held on any subsequent day, thirty days’ notice thereof in all cases having been given in a newspaper published in the city, town, or county in which the association is located; and if no newspaper is published in .such city, town, or county, such notice shall be published in a news paper published nearest thereto. I f the articles o f asso ciation do not fix the day on which the election shall be held, or if no election is held on the day fixed, the day for the election shall be designated by the board o f directors in their by-laws, or otherwise; or i f the directors fail to fix the day, shareholders representing two-thirds o f the shares may do so. ELECTION OF PRESIDENT OF THE BOARD. i ^ f June10|’ 239. Sec. 5150.— One o f the directors, to be chosen by sec. 3; 13 stat! thel)oard, shall be the president o f the board. l., 102. INDIVIDUAL LIABILITY OF SHAREHOLDERS. 1864* cUni06 sec. ’ 1 2 ; ri stat. l., 102. 240. Sec. 5151.— The shareholders o f every national banking association shall be held individually responsieqUally and ratably, and not one fo r another, for all contracts, debts, and engagements o f such association, to the extent o f the amount o f their stock therein, at the par value thereof, in addition to the amount invested in ORGANIZATION AND POWERS. 41 such shares; except that shareholders o f any banking association now existing under State laws, having not less than five millions o f dollars o f capital actually paid in, and a surplus o f twenty per centum on hand, both to be determined by the Comptroller o f the Currency, shall be liable only to the amount invested in their shares; and such surplus o f twenty per centum shall be kept undiminished, and be in addition to the surplus provided for in this title; and if at any time there is a deficiency in such surplus o f twenty per centum, such association shall not pay any dividends to its shareholders until the deficiency is made good; and in case o f such deficiency, the Comptroller o f the Currency may compel the asso ciation to close its business and wind up its affairs under the provisions o f chapter fo u r 1 o f this title. N ote .— See act of June 30, 1876, paragraph 521, post, for en forcement of liability prescribed by this section in cases of voluntary liquidation. INDIVIDUAL LIABILITY OF SHAREHOLDERS— LIABILITY OF SHAREHOLDERS WHO HAYE TRANSFERRED THEIR SHARES. 241. Sec 23.— The stockholders o f every national bank- 19^ t Dec. ^23, ing association shall be held individually responsible for 38^ stat.' l/, all contracts, debts, and engagements o f such association, each to the amount o f his stock therein, at the par value thereof in addition to the amount invested in such stock. The stockholders in any national banking association who shall have transferred their shares or registered the trans fer thereof within sixty days next before the date o f the failure o f such association to meet its obligations, or with knowledge o f such impending failure, shall be liable to the same extent as if they had made no such transfer, to the extent that the subsequent transferee fails to meet such liability; but this provision shall not be construed to affect in any way any recourse which such shareholders might otherwise have against those in whose names such shares are registered at the time o f such failure. EXECUTORS, TRUSTEES, ETC., NOT PERSONALLY LIABLE. 242. Sec. 5152.— Persons holding stock as executors, ad- lg£ct Q3, ministrators, guardians, or trustees, shall not be person-sec. ’ 63: 13 ally subject to any liabilities as stockholders; but the stat* L" 118, estates and funds in their hands shall be liable in like manner and to the same extent as the testator, intestate, wTard, or person interested in such trust-funds would be, if living and competent to act and hold the stock in his own name. 1 Chapter 5 of this compilation. 42 ORGANIZATION AND POWERS. NATIONAL BANKING ASSOCIATIONS TO BE DEPOSITA RIES OP PUBLIC MONETS. ^un i 0g’ 243. Sec. 5153 [as amended 1907].— A ll national banking associations, designated fo r that purpose by the Secre3 , tary o f the Treasury, shall be depositaries o f public Act. Mar. ■ seel1! ; 3 i s8tat* money 5 under such regulations as may be prescribed by l.,1448. 'th e Secretary; and they may also be employed as finani 907\' « t S ; cial agents o f the Government; and they shall perform l c ‘ i 25o.4 Stat suc^ reasonable duties, as depositaries o f public money and financial agents o f the Government, as may be re quired o f them. The Secretary o f the Treasury shall require the associations thus designated to give satisfac tory security, by the deposit o f United States bonds and otherwise, for the safe-keeping and prompt payment o f the public money deposited with them, and for the faith ful performance o f their duties as financial agents o f the Government: Provided, That the Secretary shall, on or before the first o f January o f each year, make a public statement o f the securities required during that year for such deposits. A nd every association so designated as receiver or depositary o f the public money shall take and receive at par all o f the national currency bills, by what ever association issued, which have been paid into the Government for internal revenue, or for loans or stocks: Provided, That the Secretary o f the Treasury shall dis tribute the deposits herein provided for, as far as practi cable, equitably between the different States and sections. sec. ’ 45; 13 N ote .— For other provisions relating to duties and liabilities of depositaries see following sections of the Revised Statutes of the United States: Sec. 3640. Transfer of moneys from depositaries to Treasury authorized. Sec. 3641. Transfer of postal deposits. Sec. 3642. Accounts of postal deposits. Sec. 3643. Entry of each deposit, transfer, and payment. Sec. 3644. Public moneys in Treasury and depositaries subject to draft of Treasurer. Sec. 3645. Regulations for presentment of drafts. Sec. 3646. Duplicates for lost or stolen checks authorized. Sec. 3647 and amendments. Duplicate check when officer who issued is dead. Sec. 3648 and amendments. Advances of public money pro hibited. Sec. 3649. Examination of depositaries. See also Government Depositaries, paragraphs 730-738, post. GOYERNMENT DEPOSITS IN FEDERAL RESERYE BANKS. Act Dec. 23, 244. Sec. 15.— The moneys held in the general fund o f 8813,stat.* ^ t h e Treasury, except the five per centum fund for the 265redemption o f outstanding national-bank notes and the funds provided in this act fo r the redemption o f Federal reserve notes may, upon the direction o f the Secretary o f the Treasury, be deposited in Federal reserve banks, ORGANIZATION AND POWERS. 43 which banks, when required by the Secretary o f the Treasury, shall act as fiscal agents o f the United States; and the revenues o f the Government or any part thereof may be deposited in such banks, and disbursements may be made by checks drawn against such deposits. No public funds o f the Philippine Islands, or o f the postal savings, or any Government funds, shall be de posited in the continental United States in any bank not belonging to the system established by this act: Pro vided, however, That nothing in this act shall be con strued to deny the right o f the Secretary o f the Treasury to use member banks as depositories. N ote .— Section 7 of the act approve,d April 24, 1917, known as “An act to authorize an issue of bonds to meet expenditures for the national security and defense, and, for the purpose of assist ing in the prosecution of the war, to extend credit to foreign gov ernments, and for other purposes,” authorizes the Secretary to deposit proceeds of sale of such bonds in non member banks un der certain circumstances. For full text of section 7 see page 184, post. CONVERSION OF STATE BANKS INTO NATIONAL BANK ING ASSOCIATIONS. 245. Sec. 5154.— A ny bank incorporated by special law l Act ^une10^’ o f any State or o f the United States or organized under sec. ’ 44'; ih the general laws o f any State or o f the United States and stActLfioc.12s?3, having an unimpaired capital sufficient to entitle it toi| 13.gt^ c- 8; become a national banking association under the pro- 258. visions o f the existing laws may, by the vote o f the shareholders owning not less than fifty-one per centum of the capital stock o f such bank or banking association, with the approval o f the Comptroller o f the Currency be converted into a national banking association, with any name approved by the Comptroller o f the Currency: Provided, however, That said conversion shall not be in contravention o f the State law. In such case the articles o f association and organization certificate may be exe cuted by a majority of the directors of the bank or bank ing institution, and the certificate shall declare that the owners o f fifty-one per ccntum o f the capital stock have authorized the directors to make such certificate and to change or convert the bank or banking institution into a national association. A majority o f the directors, after executing the articles o f association and the organization certificate, shall have power to execute all other papers and to do whatever may be required to make its organiza tion perfect and complete as a national association. The shares o f any such bank may continue to be for the same amount each as they were before the conversion, and the directors may continue to be directors o f the association until others are elected or appointed in accordance with the provisions o f the statutes of the United States. When the Comptroller has given to such bank or banking asso ciation a certificate that the provisions o f this A ct have ORGANIZATION AND POWERS. 44 been complied with, such bank or banking association, and all its stockholders, officers, and employees, shall have the same powers and privileges, and shall be subject to the same duties, liabilities, and regulations, in all re spects, as shall have been prescribed by the Federal R e serve A ct and by the national banking A ct for associa tions originally organized as national banking associa tions. N ote.— The act of 1864 authorized any State bank which was a stockholder in any other bank, by authority of State laws, to con tinue to hold its stock, although either bank or both might have become converted into national banks. This provision was incor porated in section 5154, United States Revised Statutes, but was stricken out in the revision of this section by the act of December 23, 1913. STATE BANKS HATING BRANCHES. 1865*c.^78%ec! 246. Sec. 5155.— It shall be law ful for any bank or ®tat* L*’ banking association organized under State laws, and hav ing branches, the capital being joint and assigned to and used by the mother bank and branches in definite propor tions, to become a national banking association in con form ity with existing laws, and to retain and keep in operation its branches, or such one or more o f them as it may elect to retain; the amount o f the circulation re deemable at the mother bank, and each branch, to be regulated by the amount o f capital assigned to and used by each. RESERYATION OF EIGHTS OF ASSOCIATIONS ORGANIZED UNDER ACT OF 1863. 1864^ ^uni 06, 247. Sec. 5156.— Nothing in this title shall effect any Itat* L2;ii813aPP°^n^ en^ ma(le, acts done, or proceedings had or commenced prior to the third day o f June, eighteen hun dred and sixty-four, in or toward the organization o f any national banking association under the act o f February twenty-five, eighteen hundred and sixty-three; but all associations which, on the third day o f June, eighteen hundred and sixty-four, were organized or commenced to be organized under that act, shall enjoy all the rights and. privileges granted, and be subject to all the duties, liabili ties, and restrictions imposed by this title, notwithstand ing all the steps prescribed by this title for the organiza tion o f associations were not pursued, i f such associations were duly organized under that act. ORGANIZATION AND POWERS. OBGANIZATION AND POWEBS. OBTAINING AND ISSUING CIRCULATING NOTES. 47 CHAPTER III. OBTAINING AND ISSUING CIRCULATING NOTES. 300. 5157. What associations are gov erned by provisions of chapters two, three, and four. 301. 5158. Registered bonds intended by the term “United States bonds.” 302. Act December 23, 1913, as amend ed. Deposit of bonds not required before issuance of certificate authorizing t h e commencement of business. 303. Act December 21, 1905. Two per cent Panama Canal bonds have all rights and privileges accorded to other two per cent bonds of the United States. 304. 5160. Increase or reduction of deposit to correspond with capital. 305. 5161. Exchange of coupon for registered bonds. 306. 5162. Manner of making trans fers of bonds. 307. 5163. Registry of transfers. 308. 5164. Notice of transfer to be given to association in terested. 300. 5165. Examination of registry and bonds. 310. 5166. Annual examination of bonds by association. 311. 5167. General provisions respect ing bonds. 312. Act June 20, 1874. Withdrawal of circulating notes on deposit of lawful money and withdrawal of bonds. 313. Act July 12, 1882. Amount of bonds required to be on deposit; reduction of amount or retirement in full of circulating notes. 314. Act July 12, 1882, and act March 4, 1907. Limitation on withdrawal of bonds; consent of Comptroller of Currency and Secretary of the Treasury neces sary. 164312°— 20------ 4 315. Act December 23, 1913. Refund ing of bonds under Fed eral reserve act; retire ment of circulating notes. 316. Act December 23, 1913. Pur chase of United States bonds by Federal reserve banks. 317. Act December 23, 1913. Issue of circulating notes to Fed eral reserve banks on se curity of United States bonds; circulating notes so issued obligations of Federal reserve bank. 318. Act December 23, 1913. Issue of Treasury gold notes of the United States in ex change for certain United States bonds. 319. 5168. Comptroller to determine if association can com mence business. 320. 5169. Certificate of authority to commence banking to be issued. 321. 5170. Publication of certificate. 322. 5171. Repealed by act July 12, 1882. 323. Act March 14, 1900, as amended. D e l i v e r y of circulating notes. 324. 5172. P r i n t i n g denominations and form of the circulat ing nbtes. 325. Act June 20, 1874. Charter num ber to be printed on notes. 326. Act March 3, 1875. Distinctive paper for printing notes. V/27. 5173. Plates and dies to be under control of the Comptrol ler ; expenses of Cur rency Bureau to be paid out of proceeds of taxes, or duties, assessed and collected on the circula tion of national banking asociations. 328. 5174. Examination of plates and dies. 329. Act October 5, 1917. Limit to issue of notes under five dollars. 49 50 OBTAINING AND ISSUING CIRCULATING NOTES. 330. 5176. Repealed by act July 12, 1882. 331. 5177. Repealed by act January 14, 1875. 332. Act of January 14, 1875. Aggre gate amount of circulat ing notes not limited. 333. 5178. Repealed by act January 14, 1875. 334. 5179. Repealed by act January 14, 1875. 335. 5180. Repealed by act January 14, 1875. 336. 5181. Repealed by act January 14, 1875. 337. 5182. For what demands na tional-bank notes may be received. 338. 5183. Issue of post notes, etc., prohibited. 339. 5184. Destroying and replacing worn-out and mutilated notes. 340. Act June 23, 1874. Maceration of national-bank notes. 341. 5185. Organization of associa tions to issue gold notes. 342. 5186. Reserve requirements for gold banks. 343. Act of February 14, 1880. Con version of national gold banks into c u r r e n c y banks. 344. 5187. Penalty for issuing circu lating ribtes to unauthor ized associations. 345. Act March 4, 1909, ■section 175, formerly section 5188, Revised Statutes. Pen alty for imitating bank circulation. Use of same for advertising purposes. 346. Act March 4, 1909, section 176, formerly section 5189, Revised Statutes. Pen alty for mutilating cir culation. WHAT ASSOCIATIONS ARE GOVERNED BY PROVISIONS OF CHAPTERS TWO, THREE, AND FOUR. gee. 5157, r. s. 300. See. 5157.— The provisions of chapters two, three, and fo u r 1 o f this title, which are expressed without re strictive words, as applying to “ national banking associ ations,” or to “ associations,” apply to all associations organized to carry on the business o f banking under any act o f Congress. N ote.— Federal reserve banks are not governed by this act, but by the Federal reserve act. REGISTERED BONDS INTENDED BY THE TERM “ UNITED STATES BONDS.” 186? cUni 06’ ®ec< 5158.— The term “ United States bonds,” as sec. 4; 13 stat! used throughout this chapter, shall be construed to mean l** 10°* registered bonds o f the United States. DEPOSIT OF BONDS NOT REQUIRED BEFORE ISSUANCE OF CERTIFICATE AUTHORIZING THE COMMENCEMENT OF BUSINESS. 1913 * secC’ 1 7 ; ®ec* — ®° muc^ o;f provisions o f section stat.' l .; fifty-one hundred and fifty-nine o f the Eevisecl Statutes Act June 21, o f the United States, and section four o f the A ct o f June 1917, sec. 9. twentieth, eighteen hundred and seventy-four, and sec tion eight o f the A ct o f July twelfth, eighteen hundred and eighty-two, and o f any other provisions o f existing statutes as require that before any national banking association shall be authorized to commence banking business it shall transfer and deliver to the Treasurer of the United States a stated amount o f United States registered bonds, and so much o f those provisions or o f 38 Chapters three, four, and five of this compilation. OBTAINING AND ISSUING CIRCtTLA*TING NOTES. 61 any other provisions o f existing statutes as require any national banking association now or hereafter organized to maintain a minimum deposit o f such bonds with the Treasurer is hereby repealed. lions.— Section 5159 referred to above is as follows: “ Every as sociation, after having complied with the provisions of this title, preliminary to the commencement of the banking business, and before it shall be authorized to commence banking business under this title, shall transfer and deliver to the Treasurer of the United States any United States registered bonds, bearing inter est, to an amount not less than thirty thousand dollars and not less than one-third of the capital stock paid in. Such bonds shall be received by the Treasurer upon deposit, aud shall be by him safely kept in his office* until they shall be otherwise disposed of, in pursuance of the provisions of this title.” (See also note under section 5160.) TWO PER CENT PANAMA CANAL BONDS HATE ALL RIGHTS AND PRIVILEGES ACCORDED TO OTHER TWO PER CENT BONDS OF THE UNITED STATES. ACT DE CEMBER 21, 1905. 303. Sec. 1.— That the two per cent bonds o f the United Act Dec. 21, States authorized by section eight o f the act entitled “ An 34°ltWs l.’, £' act to provide for the construction o f a canal connecting the waters o f the Atlantic and Pacific oceans,” approved June twenty-eight, nineteen hundred and two, shall have all the rights and privileges accorded by law to other two per cent bonds o f the United States, and every national banking association having on deposit, as provided by law, such bonds issued under the provisions o f said sec tion eight o f said act approved June twenty-eight, nine teen hundred and two, to secure its circulating notes, shall pay to the Treasurer o f the United States, in the months o f January and July, a tax o f one-fourth o f one per cent each half year upon the average amount o f such o f its notes in circulation as are based upon the deposit o f said two per cent bonds; and such taxes shall be in lieu o f ex isting taxes on its notes in circulation imposed by section fifty-two hundred and fourteen o f the Revised Statues. N ote .— Only bonds available as security for national bank circu lation are the consols of 1930 2 per cent Panama Canal bonds, and 4 per cent bonds of 1925. INCREASE OR REDUCTION OF DEPOSIT TO CORRESPOND WITH CAPITAL. 304. Sec. 5160.— [The deposit of bonds made by each as- Act June 3, sociation shall be increased as its capital may be paid up gf<?4, iq ; 10i63 or increased, so that every association shall at all times stat- L-» i°4have on deposit with the Treasurer registered United States bonds to the amou/nt of at least one-third of its capital stock actually paid iri\. A nd any association that may desire to reduce its capital or close up its business and dissolve its organization, may take up its bonds upon returning to the Comptroller its circulating notes in the proportion hereinafter required, or may take up 52 OBTAINING AND ISSUING CIRCULATING NOTES, any excess o f bonds beyond [ one-third of its capital stock], and upon which no circulating notes have been delivered. N ote .— All provisions of law requiring national banking associa tions to maintain a minimum deposit of bonds were repealed by the act of June 21, 1917. See paragraph 302 ante. Prior to the passage of that act provisions of sections 5159 and 5160 requiring national banks organized prior to December 23, 1913, to deposit bonds to an amount not less than $30,000 and not less than onethird of the capital stock paid in were held to be modified by the acts of June 20, 1874, and July 12, 1882. Section 4 of the act of June 20, 1874, which follows section 5167, provided in part that the amount of bonds on deposit for circulation should not be reduced below $50,000. That fixed the amount of bonds required to be de posited by national banks organized prior to December 23, 1913, and having a capital of over $150,000. National banks having a capital of $150,000 or less were not required to keep on deposit bonds in excess of one-fourth of their capital stock as security for their circulating notes by act of July 12, 1882, chapter 290, sec tion 8. This act follows section 5167, Revised Statutes. All na tional banks having a capital of $150,000 or less and organized prior to December 23, 1913, were required to keep on deposit bonds equal to one-fourth of their capital stock, and if any bank of such capitalization organized since December 23, 1913, desired to take out circulation it was required to deposit bonds in like amount as under the old law. Similarly all banks organized prior to Decem ber 23, 1913, with capital stock of over $150,000 were required to keep on deposit bonds equal to $50,000, and any bank of such capitalization organized since December 23, 1913, if it desired to take out circulation, was required to deposit bonds in that amount. Section 18 of the Federal Reserve act provides that after De cember 23, 1915, which is 2 years from the passage of that act, and at any time during a period of 20 years thereafter, any mem ber bank desiring to retire the whole or any part of its circulating notes, may file with the Treasurer of the United States an appli cation to sell for its account, at par and accrued interest, United States bonds securing circulation to be retired. This section fur ther provides that the Federal Reserve Board, may, in its dis cretion, require the Federal reserve banks to purchase such bonds from the banks whose applications have been filed with the Treasurer at least 10 days before the end of any quarterly period at which the Federal Reserve Board may direct the purchase to be made: Provided, That Federal reserve banks shall not be permitted to purchase an amount to exceed $25,000,000 of such bonds in any one year, and which amount shall include bonds acquired under section 4 of that act by the Federal reserve bank. EXCHANGE OF COUPON FOE EEGISTEEED BONDS. Act June 3, 305. Sec. 5161.— T o facilitate a compliance with the 1864, c iw ’ two preceding sections, the Secretary o f the Treasury is stat.' l ., 104. authorized to receive from any association, and cancel, any United States coupon bonds, and to issue in lieu thereof registered bonds o f like amount, bearing a like rate o f interest, and having the same time to run. MANNEE OF MAKING TEANSFEES OF BONDS. Act June 3, 306. Sec. 5162.— A ll transfers o f United States bonds, 1 9 ; 10Lsmade by any association under the provisions o f this l ., 105. title, shall be made to the Treasurer o f the United sec!4, stat. States in trust for the association, with a memorandum written or printed on each bond, and signed by the OBTAINING AND ISSUING CIRCULATING NOTES. 53 cashier, or some other officer o f the association making the deposit. A receipt shall be given to the association, by the Comptroller o f the Currency, or by a clerk ap pointed by him for that purpose, stating that the bond is held in trust for the association on whose behalf the transfer is made, and as security for the redemption and payment o f any circulating notes that have been or may be delivered to such association. No assignment or transfer o f any such bond by the Treasurer shall be deemed valid unless countersigned by the Comptroller o f the Currency. REGISTRY OF TRANSFERS. 307. Sec. 5163.— The Comptroller o f the Currency shall 18^ t cUni 06 keep in his office a book in which he shall cause to be secs/19-20 3 entered, immediately upon countersigning it, everystat* L* 105‘ transfer or assignment by the Treasurer o f any bonds belonging to a national banking association, presented for his signature. H e shall state in such entry the name of the association from whose accounts the transfer is made, the name o f the party to whom it is made, and the par value o f the bonds transferred. NOTICE OF TRANSFER TO BE GIVEN TO ASSOCIATION INTERESTED. 308. Sec. 5164.— The Comptroller o f the Currency shall, 18^£t *June10^ immediately upon countersigning and entering any trans- see. * 1 9 ; i;i fer or assignment by the Treasurer, o f any bonds b elon g-" tat* L-’ 10°' ing to a national banking association, advise by mail the association from whose accounts the transfer is made, o f the kind and numerical designation o f the bonds, and the amount thereof so transferred. EXAMINATION OF REGISTRY AND BONDS. 309. Sec. 5165.— The Comptroller o f the Currency shall lgAct Jun®0j*« have at all times, during office hours, access to the books sec. * 2 0 ; 1:; o f the Treasurer o f the United States for the purpose o f stat- L-» 10,)ascertaining the correctness o f any transfer or assignment o f the bonds deposited by an association, presented to the Comptroller to countersign; and the Treasurer shall have the like access to the book mentioned in section fifty-one hundred and sixty-three, during office hours, to ascertair the correctness o f the entries in the same; and the Comp troller shall also at all times have access to the bonds on deposit with the Treasurer, to ascertain their amount and condition. ANNUAL EXAMINATION OF BONDS BY ASSOCIATION. 310. Sec. 5166.— Every association having bonds depos- Act June 3, ited in the office o f the Treasurer o f the United States J®®4, 2 5 ; ]°i^ shall, once or oftener in each fiscal year, examine a n d stat. l . , 100. compare the bonds pledged by the association with the books o f the Comptroller o f the Currency and with the §4 OBTAINING AND ISSUING C IR C U IT IN G NOTES. accounts o f the association, and, i f they are found correct, to execute to the Treasurer a certificate setting forth the different kinds and the amounts thereof, and that the same are in the possession and custody o f the Treasurer at the date o f the certificate. Such examination shall be made at such time or times, during the ordinary business ^ hours, as the Treasurer and the Comptroller, respectively, * may select, and may be made by an officer or agent o f such association, duly appointed in writing for that pur pose; and Jhis certificate before mentioned shall be o f like force and validity as i f executed by the president or cashier. A duplicate o f such certificate, signed by the Treasurer, shall be retained by the association. GENERAL PROVISIONS RESPECTING BONDS. Act June 3, 311. Sec. 5167.— The bonds transferred to and deposited Jlc64, 2 6 ; 10i6^with the Treasurer o f the United States, by any assostat. l., io7. ciation, fo r the security o f its circulating notes, shall be held exclusively fo r that purpose, until such notes are redeemed, except as provided in this title. The Com p troller o f the Currency shall give to any such association powers o f attorney to receive and appropriate to its own use the interest on the bonds which it has so transferred to the Treasurer; but such powers shall become inopera tive whenever such association fails to redeem its circu lating notes. Whenever the market or cash value o f any bonds thus deposited with the Treasurer is reduced below the amount o f the circulation issued fo r the same, the Comptroller may demand and receive the amount o f such depreciation in other United States bonds at cash value, o r in money, from the association, to be deposited with the Treasurer as long as such depreciation continues. A nd the Comptroller, upon the terms prescribed by the Secretary o f the Treasury, may permit 'an exchange to be made o f any o f the bonds deposited with the Treasurer by any association, for other bonds o f the United States authorized to be received as security for circulating notes, i f he is o f opinion that such an exchange can be made without prejudice to the United States; and he may direct the return o f any bonds to the association wThich transferred the same, in sums o f not less than one thou sand dollars, upon the surrender to him and the cancella tion o f a proportionate amount o f such circulating notes: Provided, That the remaining bonds which shall have been transferred by the association offering to surrender circulating notes are equal to the amount required for the circulating notes not surrendered by such association, and that the amount o f bonds in the hands o f the Treasurer is not diminished below the amount required to be kept on deposit with him, and that there has been no failure by the association to redeem its circulating notes, nor any other violation by it. o f the provisions o f this title, and 55 OBTAINING AND ISSUING CIRCULATING NOTES. that the market or cash value o f the remaining bonds is not below the amount required fo r the circulation issued for the same. N ote.— All provisions of law requiring national banking asso ciations to maintain a minimum deposit of bonds were repealed by the act of June 21, 1917. See paragraph 302, ante. WITHDRAWAL OF CIRCULATING NOTES ON DEPOSIT OF LAWFUL MONEY AND WITHDRAWAL OF BONDS. ACT JUNE 20, 1874. 312. Sec. 4.— That any association organized under this 18^ct Jcune;?20, act, or any o f the acts o f which this is an amendment, sec. 4; is stat! desiring to withdraw its circulating notes, in whole or in L” 124, part, may, upon the deposit o f lawful money with the Treasurer o f the United States in sums o f not less than nine thousand dollars, take up the bonds which said asso ciation has on deposit with the Treasurer for the security o f such circulating notes; which bonds shall be assigned to the bank in the manner specified in the nineteenth sec tion o f the national-bank a ct; and the outstanding notes of said association, to an amount equal to the legal-tender notes deposited, shall be redeemed at the Treasury o f the United States, and destroyed as now provided by law : Provided, That the amount o f the bonds on deposit fo r circulation shall not be reduced below fifty thousand dollars. N ote.— Other sections of this act referred to under paragraphs 401 and 402, post. Section 19 of the national-bank act is incor porated in Revised Statutes, sections 5162-5164. See also note under section 5160, paragraph 304, ante. AMOUNT OF BONDS REQUIRED TO BE ON DEPOSIT; REDUCTION OF AMOUNT OR RETIREMENT IN FULL OF CIRCULATING NOTES. ACT JULY 12, 1882. 313. Sec. 8.— That national banks now organized {or Act July 12 , herafter organized) , having a capital o f one hundred ^e8c82^ £2 and fifty thousand dollars, or less, shall not be r e q u i r e d L-» to keep on deposit or deposit with the Treasurer o f the United States United States bonds in excess o f onefourth o f their capital stock as security for their circu lating notes; but such banks shall keep on deposit or deposit with the Treasurer o f the United States the amount o f bonds as herein required. A nd such o f those banks having on deposit bonds in excess o f that amount are authorized to reduce their circulation by the deposit o f lawful money as provided by law ; [provided That the amount of such circulating notes shall not in any case emceed ninety per centum of the par value of the bonds deposited as herein provided:] Provided further, That the national banks which shall hereafter make deposits o f law ful money for the retirement in full o f their circu lation shall at the time o f their deposit be assessed for the cost o f transporting and redeeming their notes then outstanding, a sum equal to the average cost o f the re- 104." 56 OBTAINING AND ISSUING CIRCULATING NOTES. demption o f national-bank notes during the preceding year, and shall thereupon pay such assessment. A nd all national banks which have heretofore made or shall hereafter make deposits o f lawful money for the reduc tion o f their circulation shall be assessed and shall pay an assessment in the manner specified in section three o f the act approved June 20, 1874, for the cost o f transport ing and redeeming their notes redeemed from such de posits subsequently to June 30, 1881. N ote.— The limitation of the circulation not to exceed ninety per cent of the bonds deposited is superseded by act March 14, 1900, which follows Revised Statutes 5171. For act June 20, 1874, section 3, mentioned in this section, see paragraph 414, post. All provisions of law requiring national banking associations to maintain a minimum deposit of bonds were repealed by the act of June 21, 1917, paragraph 302, ante. LIMITATION ON WITHDRAWAL OF BONDS— CONSENT OF COMPTROLLER OF CURRENCY AND SECRETARY OF THE TREASURY NECESSARY. 1882 * JcUly29o 314. Sec. 9.— That any national banking association sec. 9; 22 stat! now organized, or hereafter organized, desiring to withAct^Mar. 4 , draw its circulating notes, upon a deposit o f lawful 34° 7 fetat.c* l .; money with the Treasurer o f the United States, as pro1290. * ’’ vided in section four o f the act o f June twentieth, eigh teen hundred and seventh-four, or as provided in this act, is authorized to deposit law ful money and, with the consent o f the Comptroller o f the Currency and the approval o f the Secretary o f the Treasury, withdraw a proportionate amount o f the bonds held as security for its circulating notes in the order o f such deposits: Pro vided, That not more than nine millions o f dollars o f lawful money shall be deposited during any calendar month for this purpose: And provided further, That the provisions o f this section shall not apply to bonds called for redemption by the Secretary o f the Treasury, nor to withdrawal o f circulating notes in consequence thereof. REFUNDING OF BONDS UNDER THE FEDERAL RESERYE ACT; RETIREMENT OF CIRCULATING NOTES. 1913**sec°'is* ®ec* — A fter ^W0 years from the passage o f this 38 stat.’ L.’, act, and at any time during a period o f twenty years 6* thereafter, any member bank desiring to retire the whole or any part o f its circulating notes, may file with the Treasurer o f the United States an application to sell for its account, at par and accrued interest, United States bonds securing circulation to be retired. PURCHASE OF UNITED STATES BONDS BY FEDERAL RESERYE BANKS. ijAct Dec. 23, 316. The Treasurer shall, at the end o f each quarterly 38 ’stat0.’ l /, period, furnish the Federal Eeserve Board with a list o f 268,% such applications, and the Federal Reserve Board may, in its discretion, require the Federal reserve banks to pur chase such bonds from the banks whose applications have OBTAINING AND ISSUING CIRCULATING NOTES. 57 been filed with the Treasurer at least ten days before the end o f any quarterly period at which the Federal Reserve Board may direct the purchase to be made: Provided, That Federal reserve banks shall not be permitted to pur chase an amount to exceed $25,000,000 o f such bonds in any one year, and which amount shall include bonds ac quired under section four o f this act by the Federal reserve bank. Provided further, That the Federal Reserve Board shall allot to each Federal reserve bank such proportion o f such bonds as the capital and surplus o f such bank shall bear to the aggregate capital and surplus o f all the Federal reserve banks. Upon notice from the Treasurer o f the amount o f bonds so sold fo r its account, each member bank shall duly assign and transfer, in writing, such bonds to the Federal reserve bank purchasing the same, and such Federal re serve bank shall, thereupon, deposit lawful money with the Treasurer o f the United States for the purchase price o f such bonds, and the Treasurer shall pay to the member banks selling such bonds any balance due after deducting a sufficient sum to redeem its outstanding notes secured by such bonds, which notes shall be canceled and perma nently retired when redeemed. ISSUE OF CIRCULATING NOTES TO FEDERAL RESERVE BANKS ON SECURITY OF UNITED STATES BONDS; CIRCULATING NOTES SO ISSUED OBLIGATIONS OF FEDERAL RESERVE BANK. 317. The Federal reserve banks purchasing such bonds Act Dec. shall be permitted to take out an amount o f circulating 3813,stat.’ notes equal to the par value o f such bonds. 269* U pon the deposit with the Treasurer o f the United States o f bonds so purchased, or any bonds with the cir culating privilege acquired under section four o f this act, any Federal reserve bank making such deposit in the manner provided by existing law, shall be entitled to receive from the Comptroller o f the Currency circulating notes in blank, registered and countersigned as provided by law, equal in amount to the par value o f the bonds so deposited. Such notes shall be the obligations o f the Federal reserve bank procuring the same, and shall be in form prescribed by the Secretary o f the Treasury, and to the same tenor and effect as national bank notes now pro vided by law. They shall be issued and redeemed under the same terms and conditions as national bank notes, except that they shall not be limited to the amount o f the capital stock o f the Federal reserve bank issuing them. 23, ISSUE OF TREASURY GOLD NOTES OF THE UNITED STATES IN EXCHANGE FOR CERTAIN UNITED STATES BONDS. 318. Upon application o f any Federal reserve bank, ap- Act Dec. 23, proved by the Federal Reserve Board, the Secretary o f 3813,stat.’ ^ the Treasury may issue, in exchange for United States269- OBTAINING AND ISSUING CIRCULATING NOTES. two per centum gold bonds bearing the circulation privi lege, but against which no circulation is outstanding, oneyear gold notes o f the United States without the circula tion privilege, to an amount not to exceed one-half o f the two per centum bonds so tendered for exchange, and thirty-year three per centum gold bonds without the cir culation privilege fo r the remainder o f the two per cen tum bonds so tendered: Provided, That at the time o f such exchange the Federal reserve bank obtaining such one-year gold notes shall enter into an obligation with the Secretary o f the Treasury binding itself to purchase from the United States for gold at the maturity o f such one-year notes, an amount equal to those delivered in ex change for such bonds, if so requested by the Secretary, and at each maturity o f one-year notes so purchased by such Federal reserve bank, to purchase from the United States such an amount o f one-year notes as the Secretary may tender to such bank, not to exceed the amount issued to such bank in the first instance, in exchange fo r the two per centum United States gold bonds; said obliga tion to purchase at maturity such notes shall continue in force for a period not to exceed thirty years. .. For the purpose o f making the exchange herein pro vided for, the Secretary o f the Treasury is authorized to issue at par Treasury notes in coupon or registered form as he may prescribe in denominations o f one hun dred dollars, or any multiple thereof, bearing interest at the rate o f three per * centum per annunj, payable quarterly, such Treasury notes to be payable riot more than one year from the date o f their issue in gold ooiri pf the present standard value, and to be exempt as to prin cipal and interest from the payment o f all taxes and duties o f the United States except as provided by this act, as well as from taxes in any form by or under State, municipal, or local authorities. A nd fo r the same pur pose, the Secretary is authorized and empowered to issue United States gold bonds at par, bearing three per centum interest payable thirty years from date o f issue, such honds to oe o f the same general tenor and effect and to be issued under the same general terms and conditions as the United States three per centum bonds without the circulation privilege now issued and outstanding. Upon application o f any Federal reserve batik, ap proved by the Federal Reserve Board, the Secretary may issue at par such three per centum bonds in exchange fo r the. one-year gold notes herein provided for. 3 COMPTROLLER TO DETERMINE IF COMMENCE BUSINESS. j ASSOCIATION CAN 06 ’ ' 319. Sec. 5168.— Whenever a ^certificate i£ 4raiis!nitted to the Comptroller o f the Currency, as provid&f itf ;this title, and the association transmitting the $am0 igrtifies the Comptroller that at least fifty peE.cepitum o f its capi- OBTAINING AND ISSUING CIRCULATING NOTES, 59, tal stock has been duly paid in, and that such association has complied with all the provisions o f this title required to be complied with before an association shall be author ized to commence the business o f banking, the Comp troller shall examine into the condition o f such associa tion, ascertain especially the amount o f money paid in on account o f its capital, the name and place o f re§idei*c$ o f each o f its directors, and the amount o f the capital stock o f which each is the owner in good faith, and generally whether such association has complied with all the pro visions o f this title required to entitle it to engage in the business o f banking; and shall cause to be made and attested by the oaths o f a m ajority o f the directors, and by the president or cashier o f the association, a statement o f all the facts necessary to enable the Comptroller to determine whether the association is lawfully entitled to commence the business o f banking. CERTIFICATE OF AUTHORITY TO COMMENCE BANKING TO BE ISSUED. 320. Sec. 5169.— I f , upon a careful examination o f the Act June 3, facts so reported, and o f any other facts which may c o m e g e ^ ^ is l 0^ to the knowledge o f the Comptroller, whether by means o f !<*t. l., 102, a special commisison appointed by him for the purpose of inquiring into the condition o f such association, or other wise, it appears that such association is lawfully entitled to commence the business o f banking, the Comptroller shall give to such association a certificate, under his hand and official seal, that such association has complied with all the provisions required to be complied with before commencing the business o f banking, and that such'asso ciation is authorized to commence such business. But the Comptroller may withhold from an association his cer tificate authorizing the commencement o f business, when ever he has reason to suppose that the shareholders have formed the same fo r any other than the legitimate ob jects contemplated by this title. PUBLICATION OF CERTIFICATE. 321. Sec. 5170.— The association shall cause the certifi- Act June 3 , cate issued under the preceding section to be published in Jfc64’ ^ 10fy some newspaper printed in the city or county where the stat. l., 104. association is located, for at least sixty days next after the issuing thereof; or, if no newspaper is published in such city or county, then in the newspaper published nearest thereto. 322. Sec. 5171.— This section was originally section 21 of the act of June 3, 1864. It was amended by the act of March 3, 1865, and was later in corporated in the Revised Statutes as section 5171. This section 60 OBTAINING AND ISSUING CIRCULATING NOTES. was repealed by the act of July 12, 1882, and the repealing section was superseded by section 12 of the act of March 14, 1900, which follows: DELIVERY OF CIRCULATING NOTES. ACT OF MARCH 14, 1900. AS AMENDED OCTOBER 5, 1917. Act Mar. 14, 323. Sec. 12.— That upon the deposit with the Treasurer ll^i^stat slc‘, ^ e United States, by any national banking association, m 7act 0c*‘ 5* an7 k°nds the United States in the manner provided be existing law, such association shall be entitled to re ceive from the Comptroller o f the Currency circulating notes in blank, registered and countersigned as provided by law, equal in amount to the par value o f the bonds so deposited; and any national banking associations now having bonds on deposit for the security o f circulating notes, and upon which an amount o f circulating notes has been issued less than the par value o f the bonds, shall be entitled, upon due application to the Comptroller o f the Currency, to receive additional circulating notes in blank to an amount which will increase the circulating notes held by such association to the par value o f the bonds deposited, such additional notes to be held and treated in the. same way as circulating notes o f national banking associations heretofore issued, and subject to all the pro visions o f law affecting such notes: Provided, That nothing herein contained shall be construed to m odify or repeal the provision o f section fifty-one hundred and sixty-seven o f the Revised Statutes o f the United States, authorizing the Comptroller o f the Currency to require additional deposits o f bonds or o f lawful money in case the market value o f the bonds held to secure the circulat ing notes shall fall below the par value o f the circulat ing notes outstanding fo r which such bonds may be de posited as security: And provided further, That the cir culating notes furnished to national banking associations under the provisions o f this act shall be o f the denomina tions prescribed by la w : And provided further, That the total amount o f such notes issued to any such associa tion may equal at any time but shall not exceed the amount at such time o f its capital stock actually paid i n : And provided further, That under regulations to be prescribed by the Secretary o f the Treasury any national banking association may substitute the two per centum bonds issued under the provisions o f this act for any o f the bonds deposited with the Treasurer to secure circula tion or to secure deposits o f public m oney; and so much o f an act entitled “ A n act to enable national banking associations to extend their corporate existence, and fo r other purposes,” approved July twelfth, eighteen hundred and eighty-two2 as prohibits any national bank which makes any deposit o f lawful money in order to withdraw its circulating notes from receiving any in crease o f its circulation for the period o f six months from the time it made such deposit o f lawful money for OBTAINING AND ISSUING CIRCULATING NOTES. 61 the purpose aforesaid, is hereby repealed, and all other acts or parts o f acts inconsistent with the provisions o f this section are hereby repealed. PRINTING DENOMINATIONS AND FORM OF THE CIRCU LATING NOTES. 324. Sec. 5172.— That in order to furnish suitable notes lg^ t June0|» for circulation, the Comptroller o f the Currency shall, sec. ’ 2 2 ; li under the direction o f the Secretary o f the Treasury, stActLXiar.5,3, cause plates and dies to be engraved, in the best m anner1919* to guard against counterfeiting and fraudulent altera tions, and shall have printed therefrom and numbered such quantity o f circulating notes in blank, or bearing engraved signatures o f officers as herein provided, of the denominations o f $1, $2, $5, $10, $20, $50, $100, $500, and $1,000, as may be required to supply the associations en titled to receive the same. Such notes shall express upon their face that they are secured by United States bonds deposited with the Treasurer o f the United States, by the written or engraved signatures o f the Treasurer and R eg ister, and by the imprint o f the seal o f the Treasury; and shall also express upon their face the promise o f the as sociation receiving the same to pay on demand, attested by the written or engraved signatures of the president or vice president and cashier; and shall bear such devices and such other statements and shall be in such form as the Secretary o f the Treasury shall, by regulation, direct. CHARTER NUMBER TO BE PRINTED ON NOTES. JUNE 20, 1874. ACT 325. Sec. 5.— That the Comptroller o f the Currency lgAct Jcune32o, shall, under such rules and regulations as the Secretary sec. r>: is stat! o f the Treasury may prescribe, cause the charter numbers L-» 124o f the association to be printed upon all national-bank notes which may be hereafter issued by him. N ote.— Other sections of this act will be found in note under paragraphs 401 and 402, post. DISTINCTIVE PAPER FOR PRINTING NOTES. ACT MARCH 3, 1875. 326. Sec. 1.— * * * That the national-bank notes 18^ t ^ ari 3o shall be printed under the direction o f the Secretary o f sec. i ; 18 stat’ the Treasury, and upon the distinctive or special paper §J'y c3mi; bii?.n which has been, or may hereafter be, adopted by him for printing United States notes. PLATES AND DIES TO BE UNDER THE CONTROL OF THE COMPTROLLER. EXPENSES OF CURRENCY BUREAU TO BE PAID OUT OF PROCEEDS OF TAXES, OR DUTIES, ASSESSED AND COLLECTED ON THE CIRCULATION OF NATIONAL BANKING ASSOCIATIONS. 327. Sec. 5173.— The plates and special dies to be pro- lg£ct June10^ cured by the Comptroller o f the Currency for the print- sec. * 4 1 ; 1£ ing o f such circulating notes shall remain under his con- stat L*’ m * 02) OBTAINING AND ISSUING CIRCULATING NOTES. trol and direction, and the expanses necessarily incurred in: executing rthe laWs^ respecting the procuring o f such notes, and all other expenses o f the Bureau o f the Cur rency, shall be paid out o f the proceeds o f the taxes or dmfcteg &sSefe3ed[ftn& fctollfected on the cirtuM rott'of illti^nai banking associations under this title. Note.— See act ^unje'20, 1874, paragraph 414, post, and act July 12;, 1882,,paragraph 220, ante* requiring banks to pay cost of their plates. Ojk April 30, 1914, at the request of the Comptroller of the Currency, the .Secretary,of the Treasury designated the Director of Bureau of Engraving and Printing as custodian of the dies, roll’s, raind plates, eta, used for the printing of circulating notes of the Federal reserve and national banks. -. EXAMINATION OT PLATES AND DIES. v 328. Sec. 5174 [as amended 1877],— The Comptroller o f s^at!the Currency shall cause to be examined, each year, the L Act ^Feb 27 P^tes, dies, bed pieces, and other material from which the 1877, c. 69; id n&tioiial-bank circulation is printed, in whole or in part, stat. l., 252. an^ g j e ^ y g 0fgce annuaiiy a correct list of, the same. Such material as shall have been used in the printing o f the notes o f associations which are in liquidation, or have closed business, shall be destroyed, under such regulations as shall be prescribed by the Comptroller o f the Currency and approved by the Secretary o f the Treasury. The ex penses o f any such examination or destruction shall be paid out o f any appropriation made by Congress fo r the special examination o f national banks and bank-note plates. Act Mar. 3, sec73! ; i 7 LIMIT TO ISSUE OF NOTES UNDER FITE DOLLARS. Act Oct. 191’7, 5, ,329. Sec. 3. That from and after the passage o f this A ct any, national banking association, upon compliance with the provisions o f law applicable thereto, shall be en titled to receive from the Comptroller o f the Currency, or to issue or reissue, or place in circulation notes in denominations o f $1, $2, $5, $10, $20, $50, and $100 in such proportion as to each o f said denominations as the bank may elect: Provided, however, That no bank shall receive or have in circulation at any one time more than $25,000 in notes o f the denominations o f $1 and $2. N ote.— Section 5175, Revised Statutes, providing that not more than one-sixth part of the notes furnished to any association should be of a less denomination than $5 was repealed by section 2 of the act of October 5, 1917. Section 5172, Revised Statutes, as amended March 3, 1919, authorizes the issuance of notes of the denomination of $500 and $1,000. 330. Sec. 5176.— Repealed by act July 12, 1882, which in turn was superseded by act March 14, 1900. (See section 5171.) 331. Sec. 5177.— Repealed by act January 14, 1875. o b t a i & i n 'g An d isstrnTG circxtl At i i ^g ^6 tes. 63 i& G liE & ftE AMOUNT OF CIRCULATING 'NOTES; NOT LIM ITED. ACT JANUARY 14, 1875. 335}. Sec. S.— That section 5177 o f the Revised Statutes o f the United States, lim iting the aggregate amount o f circulating notes o f national banking associations, be and is hereby, repealed; and each existing banking association may increase its circulating notes in accordance ^vith exexis£ing law without respect to said aggregate lim it; and new banking associations may be organized in accordr ancef with existing law without respect to said aggregate lim it; and the provisions o f law fo r the withdrawal and redistribution o f national bank currency , among the sev eral States and Territories are hereby repealed. seel stat. l * 333. Sec. 5178.— Repealed by act January 14, 1875. 334. Sec. 5179.— Repealed by act January 14, 1875. 335. Sec. 5180.— Repealed by act January 14, 1875. 336. Sec. 5181.— . Repealed by act January. 14* 1875, FOR WHAT DEMANDS NATIONAL-BANK NOTES MAY BE RECEIVED. 337. Sec. 5182 [as amended 1919].— A ny association re*19£,ct Jan* l3» ceiving circulating notes under this title may, if its prom ise to pay such notes on demand is expressed thereon at tested by the written or engraved signatures o f the presi dent or vice president and the cashier thereof in such manner as to make them obligatory promissory notes p a y able on demand at its place o f business, issue, and circu late the same as money. Such written or engraved signa tures o f the president or vice president and the cashier o f such association may be attached to such ilotes either be fore or after the receipt o f such notes by such association. And such notes shall be received at par in all parts o f the United States in payment o f taxes, excises, public lands, and all other dues to the United States, except duties on im ports; and also for all salaries and other debts and de mands owTing by the United States to individuals, cor porations, and associations within the United States, ex cept interest on the public debt, and in redemption o f the national currency. ISSUE OF POST NOTES, ETC., PROHIBITED. 338. Sec. 5183 [as amended 1875].— No national banking c.uneio6 association shall issue post notes or any other notes to|et£t l 3^ 1^ circulate as money than such as are authorized by the Act #eb. is, provisions o f this Title. stat.'S^&b.18 64 OBTAINING AND ISSUING CIRCULATING NOTES. DESTROYING AND REPLACING WORN-OUT AND MUTI LATED NOTES. 1864* cUnio6 sec. ’ 2 4 ; 13 stat. L.f 106. ®ec* 5*84.— ^ shall ke duty ^he Comptroller o f the Currency to receive worn-out or mutilated circujating notes issued by any banking association, and also, on due p roof o f the destruction o f any such circulat ing notes, to deliver in place thereof to the association other blank circulating notes to an equal amount. Such worn-out or mutilated notes, after a memorandum has been entered in the proper books, in accordance with such regulations as may be? established by the Comptroller, as well as all circulating notes which shall have been paid or surrendered to be canceled [shall be burned to ashes] in presence o f four persons, one to be appointed by the Sec retary o f the Treasury, one by the Comptroller o f the Currency, one by the Treasurer o f the United States, and one by the association, under such regulations as the Sec retary o f the Treasury may prescribe. A certificate o f [such burning'] signed by the parties so appointed, shall be made in the books o f the Comptroller, and a duplicate thereof forwarded to the association whose notes are thus canceled. N ote.— Act June 23, 1874, provides for maceration in place of burning. MACERATION OF NATIONAL-BANK NOTES. 23, 1874. ACT JUNE 5 ain ®^®‘ * * * F or the maceration o f national bank propriation a ct notes * * * ; and that all such issues hereafter dei W I |stroyed may be destroyed by maceration instead o f burn18 stat. l , 206. jng t0 ashes, as now provided by la w ; and that so much o f sections twenty-four and forty-three o f the national currency act as requires national bank notes to be burned to ashes is hereby repealed; that the pulp from such mac erated issue shall be disposed o f only under the direction o f the Secretary o f the Treasury. su n d rv iciv ORGANIZATION NOTES. OF ASSOCIATIONS TO ISSUE GOLD 1870* JcUly282! ®^* ®ec* 5185 [as amended 1875].— Associations may be LC,25i 16 Stat‘ org anized manner prescribed by this Title for the Act Jan. 19, purpose o f issuing notes payable in g o ld ; and upon the i ! 75,stat. L.! deposit o f any United States bonds bearing interest pay302. able in gold with the Treasurer o f the United States, in the manner prescribed for other associations, it shall be lawful for the Comptroller o f the Currency to issue to the association making the deposit circulating notes o f different denominations, but none o f them less than five dollars, and not exceeding in amount eighty per centum o f the par value o f the bonds deposited, which shall express the promise o f the association to pay them, upon presentation at the office at which they are issued, in gold coin o f the United States, and shall be so redeemable. 65 OBTAINING AND ISSUING CIRCULATING NOTES. (But no such association shall have a circulation of more than one million of dollars.) N ote.— The limitation of circulation of banking associations is suing notes payable in gold was repealed by the act of January 19, 1875. RESERVE REQUIREMENTS FOR GOLD BANKS. 342. Sec. 5186.— Every association organized under th e18^ preceding section shall at all times keep on hand not lessees/ than twenty-five per centum o f its outstanding circula- 253/ tion, in gold or silver coin o f the United States; and shall receive at par in the payment o f debts the gold notes o f every other such association which at the time o f such payment is redeeming its circulating notes in gold coin o f the United States, and shall be subject to all the pro visions o f this T itle: Provided, That, in applying the same to associations organized for issuing gold notes, the terms “ lawful money ” and “ lawful money o f the United States ” shall be construed to mean gold or silver coin o f the United States; and the circulation o f such association shall not be within the limitation o f circulation men tioned in this Title. '* CONVERSION OF NATIONAL GOLD BANKS INTO CUR RENCY BANKS. ACT FEBRUARY 14, 1880. 343. That any national gold bank organized under the Act Feb. 14. provisions o f the laws o f the United States, may, in the gf®*; £ 2g6; 21 manner and subject to the provisions prescribed by sec tion fifty-one hundred and fifty-four o f the Revised Stat utes o f the United States, for the conversion o f banks in corporated under the laws o f any State, cease to be a gold bank, and become such an association as is authorized by section fifty-one hundred and thirty-three, for carrying on the business o f banking, and shall have the same pow ers and privileges, and shall be subject to the same duties, responsibilities, and rules, in all respects, as are by law prescribed for such associations: Provided, That all certificates o f organization which shall be issued under this act shall bear the date o f the original organization o f each bank respectively as a gold bank. PENALTY FOR ISSUING CIRCULATING NOTES TO UNAU THORIZED ASSOCIATIONS. 344. Sec. 5187.— No officer acting under the provisions Act June 3, o f this title shall countersign or deliver to any associa27 ; 10ia tion, or to any other company or person, any circulating stat. L-» 107. notes contemplated by this title, except in accordance with the true intent and meaning o f its provisions. Every officer who violates this section shall be deemed guilty o f a high misdemeanor, and shall be fined not more than double the amount so countersigned and delivered, and imprisoned not less than one year and not more than fifteen years. 164312°— 2 0 ------5 66 OBTAINING AND ISSUING CIRCULATING NOTES. PENALTY FOR IMITATING BANK CIRCULATION. SAME FOR ADVERTISING PURPOSES. USE OF .Act Mar. 4 , 345. Sec. 5188.— Superseded by section 175 o f the act sec09,1 75 ; 3 3d o f March 4, 1909. s t ThisL'section S e c t i o n 175. It shall not be lawful to design, engrave, originally en print, or in any manner make or execute, or to utter. acted Feb. 5, f t j •i_ j. • i j i • 1867. issue, distribute, circulate, or use any business or pro fessional card, notice, placard, circular, hand-bill, or ad vertisement in the likeness or similitude o f any circulat ing note or other obligation or security o f any banking association organized or acting under the laws o f the United States which has been or may be issued under any act o f Congress, or to write, print, or otherwise impress upon any such note, obligation, or security, any business or professional card, notice or advertisement, or any notice or advertisement o f any matter or thing what ever. W hoever shall violate any provision o f this sec tion shall be fined not more than one hundred dollars, or imprisoned not more than six months, or both. PENALTY FOR MUTILATING CIRCULATION. lono1 Mar,*9 i’ 346. Sec. 5189.— Superseded by section 176 o f the act 176 ; 35 o f March 4, 1909. St Thi^seitfon S ection 176. W hoever shall mutilate, cut, deface, disenacte0dri^June ®Sure? or Perf ° ra^ with holes, or unite or cement to3, 1864. gether, or do any other thing to any bank bill, draft, note, or other evidence o f debt, issued by any national banking association, or shall cause or procure the same to be done, with intent to render such bank oill, draft, note, or other evidence o f debt unfit to be reissued by said association, shall be fined not more than one hundred dollars, or imprisoned not more than six months, or both. sec! REGULATION OF THE BANKING BUSINESS. 67 CHAPTER IV. REGULATION OF THE BANKING BUSINESS. 400. 5190. Place of business. 401. Central reserve cities.— Explana tory note. 402. Reserve cities.— Explanatory note. 403. Act Dec. 23, 1913, as amended. Demand and time depos its defined. 404. Act Dec. 23, 1913, as amended. R ese rv e requirements— when effective. 405. Act Dec. 23, 1913, as amended. Reserve requirements for banks not in reserve cities. 406. Act Pec. 23, 1913, as amended. Reserve requirements for banks in reserve cities. 407. Act Dec. 23, 1913, as amended. Reserve requirements for banks in central reserve cities 408. Act Dec. 23, 1913, as amended. Member bank forbidden to keep on deposit with non member bank a sum in excess of 10 per cent of its own capital and surplus or to secure discounts for nonmember bank. 409. Act Dec. 23, 1913, as amended. Withdrawal of reserve by member bank. 410. Act Dec. 23, 1913, as amended. Reserve requirements— how estimated. 411. Act Dec. 23, 1913, as amended. Reserve requirements for national banks located in Alaska or outside the con tinental United States. 412. Act December 23, 1913. Redemp tion fund not counted as reserve. 413. No reserve required to be held against United States de posits. 414. Act June 20, 1874. Provisions for r edeemi ng circulation. Five per cent redemption fund. 415. Act March 3, 1875. Clerical force for redemption of circu lating notes. 416. Act July 14, 1890. Disposition of redemption account. 417. Act July 28, 1892. Redemption of lost or stolen notes and of notes not properly signed. 418. 5193. Repealed by act March 14, 1900. 419. 5194. Superseded by repeal of sec tion 5193. 420. 5195. Place for redemption of cir culating notes to be desig nated. 421. 5196. National banks to take notes of other national banks* at par. 422. 5197. Limitation upon rate of in terest w h i c h may be taken. 423. 5198. Penalty for taking unlawful interest. Jurisdiction of . suits by or against na tional banks. 424. 5199. Dividends. 425. 5200. Li mi t a t i o n of liabilities which may be incurred by any one person, company, etc. 426. 5201. Associations must not loan on or purchase their own stock. 427. 5202. Restriction on bank’s in debtedness. 428. 5203. Restriction upon use of cir culating notes. 429. 5204. Prohibition u p o n w i t hdrawal of capital. Une a r n e d dividends pro hibited. 430. 5205. Assessment for failure to pay up capital stock or for impairment of capital. 431. 5206. Prohibition agaii^t uncur rent notes. 432. 5207. United States notes not to be held as collateral. 433. Act July 12, 1882. Issue of gold certificates. 434. 5208. Penalty for falsely certify ing checks. 435. Act July 12, 1882. Punishment fo r falsely certifying checks. 436. 5209. Penalty for embezzlement, abstraction, willful mis application, false entries, etc. 437. Act January 26, 1907. National banks not permitted to make contributions in con nection with election to political office. 69 70 REGULATION OF THE BANKING BUSINESS. 438a. Member bank can not make loan or grant a gratuity to any national bank examiner. 438b. National bank examiner can not perform any services for * compensation f o r a n y bank or officer. Exam iner can not disclose the names of borrowers or collateral without first ob taining written consent of Comptroller. 438c. Penalty for officer, director, or employee of member bank who receives any commis sion or gift in connection with any loan. 438d. Purchase of securities or prop erty from one of its di rectors, or sales to a di rector by a member bank. 438e. Rate of interest paid directors, officers, or employees not to exceed that paid to other depositors. 438f. Penalty for violation of any of the provisions of section 22 of the Federal reserve act. 439. 5210. List of shareholders. 440. 5211. Reports to Comptroller of Currency. 441. Act February 26, 1881. Verifica tion of reports. 442. 5212. Report of dividends. 443. 5213. Penalty for failure to make reports. 444-445. 5214 and act March 14, 1900. Taxes on circulation pay able to the United States. 446. 5215. Half-yearly return of circu lation. 447. 5216. Penalty for failure to make return. 448. 5217. Enforcing tax on circula tion. 449. 5218. Refunding excess tax. 450. Act March 1, 1879. No tax to be paid by insolvent banks. 451. 5219. State taxation. PLACE OF BUSINESS. 400. Sec. 5190.— The usual business of each nat cuni 06 banking association shall be transacted at an office or sec. &; 13 stat! banking house located in the place specified in its organil „ ioi. zation certificate. 1864* N ote.— See act May 1, 1886, paragraph 211, ante, in reference to change in place of business. For authority of national bank to establish branches in foreign countries or dependencies of the United States, see section 25, Federal reserve act. CENTRAL RESERYE CITIES—EXPLANATORY NOTE. 401. [E a ch association organized in any o f the ci ^ planatory named in section 5191, United States Revised Statutes, was authorized by section 5195, United States Revised Statutes, to select, subject to the approval o f the Com p troller o f the Currency, an association in the city o f New Y ork where it might keep one-half o f its lawful money reserve. This section originally provided for the redemption o f circulating notes at such selected bank in that city, but all provisions other than that authorizing the keeping o f a portion o f the reserve with such bank were repealed by the act o f June 20, 1874. Since the passage o f the act o f June 21, 1917, however, a member bank can not count any balances as reserve except those due from the Federal reserve bank o f its district. Under the provisions o f section 2 o f the act o f March 3, 1887, whenever three-fourths in number o f the na tional banks located in any city o f the United States hav ing a population o f 200,000 shall have made application to the Comptroller o f the Currency, asking that such REGULATION OF THE BANKING BUSINESS. city be made a central reserve city, like the city o f New York, the Comptroller o f the Currency, with the ap proval o f the Secretary o f the Treasury, was authorized to grant such request, and under the provisions o f this section the cities o f St. Louis and Chicago were desig nated as additional central reserve cities on March 18 and May 2, 1887, respectively. The Federal reserve act confers authority upon the Federal Reserve Board to add to the number o f cities classified as central reserve cities, to reclassify existing reserve and central reserve cities, or to terminate their designation as such. (See section 11, paragraph E, Federal reserve a c t .)] N ote .— Section 5195 and section 2 of the act of March 3, 1887, heretofore referred to, are as follows: “ S ec . 5195. Each association organized in any of the cities named in section fifty-one hundred and ninety-one shall select, subject to the approval of the Comptroller of the Currency, an association in the city of New York, at which it will redeem its circulating notes at par, and may keep one-half of its lawful money reserve in cash deposits in the city of New York. But the foregoing provision shall not apply to associations organized and located in the city of San Francisco for the purpose of issuing notes payable in gold. Each association not organized within the cities named shall select, subject to the approval of the Comp troller, an association in either of the cities named, at which it will redeem its circulating notes at par. The Comptroller shall give public notice of the names of the associations selected, at which redemptions are to be made by the respective associations, and of any change that may be made of the association at which the notes of any association are redeemed. Whenever any asso ciation fails either to make the selection or to redeem its notes as aforesaid, the Comptroller of the Currency may, upon receiving satisfactory evidence thereof, appoint a receiver, in the manner provided for in section fifty-two. hundred and thirty-four, to wind up its affairs. But this section shall not relieve any association from its liability to redeem its circulating notes at its own counter, at par, in lawful money on demand.” Section 3 of the act of June 20, 1874, amending section 5195, Revised Statutes, provides— “ That so much of section thirty-two (section 5195, Revised Statutes) of said national-bank act requiring or permitting the redemption of its circulating notes elsewhere than at its own counter, except as provided for in this section, is hereby repealed.” Section 2, act of March 3, 1887, provides: “ That whenever three-fourths in number of the national banks located in any city of the United States having a population of two hundred thousand people shall make application to the Comp troller of the Currency, in writing, asking that such city may be a central reserve city, like the city of New York, in which one-half of the lawful-money reserve of the national banks located in other reserve cities may be deposited, as provided in section fifty-one hundred and ninety-five of the Revised Statutes, the Comptroller shall have authority, with the approval of the Secretary of the Treasury, to grant such request, and every bank located in such city shall at all times thereafter have on hand, in lawful money of the United States, twenty-five per centum of its deposits, as provided in section fifty-one hundred and ninety-one of the Revised Statutes.*’ 72 REGULATION OF THE BANKING BUSINESS. RESERYE CITIES— EXPLANATORY NOTE. notefplanatory 402. [Section 5191, United States Revised Statutes, names certain cities in which national banks located therein were required to have on hand in lawful money an amount equal to at least twenty-five per cent o f the aggregate amount o f their deposits, and provided that every other association should have on hand in lawful money an amount equal to fifteen per cent o f the aggre gate amount o f its deposits. Section 5191 further provided that the Comptroller o f the Currency, with the concur rence o f the Secretary o f the Treasury, might appoint a receiver for any association for failure to make good any deficiency in its reserve within thirty days after the date when the Comptroller o f the Currency has notified the association to make good the deficiency. Section 5192, United States Revised Statutes, provided that threefifths o f the reserve o f fifteen per cent required to be kept by country banks might consist o f balances due to such associations from associations approved by the Com p troller o f the Currency in one o f the reserve cities men tioned in said section. Since the passage o f the act o f June 21,1917, however, a member bank can not count any balances as reserve except those due from the Federal Reserve Bank o f its district. The follow ing are the reserve cities designated in sec tions 5191 and 5192: Albany, Baltimore, Boston, Cincinnati, Chicago, Cleve land, Detroit, Louisville, Milwaukee, New Orleans, New Y ork, Philadelphia, Pittsburgh, St. Louis, San Fran cisco, and Washington. In addition to the cities listed in the preceding para graph, the city o f Leavenworth, Kansas, was named in sections 5191 and 5192, but this designation was repealed by special act o f date March 1, 1872. The cities o f Charleston and Richmond were also named as reserve cities in section 5192, but were not included in the list o f reserve cities enumerated in section 5191. The Com p troller o f the Currency, therefore, did not approve any banks in those cities as reserve agents. On A pril 27, 1914, however, three-fourths o f the banks in Richmond having requested that that city be designated as a reserve city, it was so designated under authority o f the act o f March 3, 1887. The Comptroller o f the Currency was authorized under the act o f March 3, 1887, to designate additional reserve cities whenever three-fourths in number o f national banks located in any city o f the United States having a population o f 50,000 requested that the city in question be so designated. This limit o f population was reduced to 25,000 by the act o f March 3,1903. The city o f New Y ork listed as a reserve city in sections 5191 and 5192 was designated as a central reserve city by section 5195, and the cities o f St. Louis and Chicago REGULATION OF THE BANKING BUSINESS. named as reserve cities under sections 5191 and 5192 were designated, on March 18 and May 2,1887, respectively, as central reserve cities by the Comptroller o f the Currency with the concurrence o f the Secretary o f the Treasury, under the authority granted by the act o f March 3, 1887. In conform ity with the provisions o f the acts o f March 3, 1887, and March 3, 1903, the follow ing cities have been designated by the Comptroller as additional reserve cities: Atlanta, Brooklyn, Cedar Rapids, Columbus, D al las, Denver, Des Moines, Dubuque, Fort W orth, Galves ton, Houston, Indianapolis, Kansas City (K ans.), Kansas City (M o.), Lincoln, Los Angeles, Minneapolis, Musko gee, Oklahoma City, Omaha, Portland, Pueblo, Rich mond, Salt Lake City, San Antonio, Savannah, Seattle, Sioux City, South Omaha, Spokane, St. Joseph, St. Paul, Tacoma, Topeka, W aco, Wichita. On June 26, 1915, South Omaha was consolidated with Omaha. The Federal reserve act confers authority upon the Federal Reserve Board to add to the number o f cities classified as reserve cities, to reclassify existing reserve and central reserve cities, or to terminate their designa tion as such. (See sec. 11, paragraph E, Federal reserve act.) A cting under the authority o f this section the Federal Reserve Board has designated the follow ing additional reserve cities: Birmingham, A la.; Charleston, S. C .: Chattanooga and Nashville, T enn.; Tulsa, Okla.; and Ogden, U tah.] N ote .— Sections 5191 and 5192 have not been repealed, but the provisions with respect to specific reserve requirements for banks in the continental United States are superseded by section 19 of the Federal reserve act as amended June 21, 1917, these sections, however, remaining in full force and effect for national banks located in Alaska or in a dependency or insular possession or any part of the United States outside the continental United States, provided said national banks remain nonmember banks. The sec tions in question are as follows, the italicized portion being super seded, as far as banks in the continental United States are con cerned, by later legislation, the remaining portions of these sec tions being still in force. S ec . 5191. Every national banking association in either of the following cities: Albany, Baltimore, Boston, Cincinnati, Chicago, Cleveland, Detroit, Louisville, Milwaukee, New Orleans, New York, Philadelphia, Pittsburgh, St. Louis, San Francisco, and Washing ton,, shall at all times have on hand, in lawful money of the United States, an amount equal to at least twenty-five per centum of the aggregate amount of its notes in circulation and its de posits; and every other association shall at all times have on hand> in lawful money of the United States, an amount equal to at least fifteen per centum of the aggregate amount of its notes in circular tion, and of its deposits. Whenever the lawful money of any association in any of the cities named shall be below the amount of twenty-five per centum of its circulation and deposits and whenever the lawful money of any other association shall be (below fifteen per centum of its circulation and deposits), such associations shall not increase its liabilities by making any new loans or discounts otherwise than by dicounting or purchasing bills of exchange payable at sight, nor make any dividends of its profits until the required propor- 74 REGULATION OF THE BANKING BUSINESS. tion, between the aggregate amount of its outstanding notes of circulation and deposits and its lawful money of the United States, has been restored. And the Comptroller of the Currency may notify any association, whose lawful money reserve shall be below the amount above required to be kept on hand, to make good such reserve; and if such association shall fail for thirty days thereafter so to make good its reserve of lawful money, the Comptroller may, with the concurrence of the Secretary of the Treasury, appoint a receiver to wind up the business of the asso ciation, as provided in section fifty-two hundred and thirty-four. S ec. 5192. Three-fifths of the reserve of fifteen per centum required by the preceding section to be kept, may consist of balances due to an association, available for the redemption of its circulat ing notes, from associations approved by the Comptroller of the Currency, organized under the act of June three, eighteen hun dred and sixty-four, or under this title, and doing business in the cities of Albany, Baltimore, Boston, Charleston, Chicago, Cin cinnati, Cleveland, Detroit, Louisville, Milwaukee, New Orleans, New York, Philadelphia, Pittsburgh, Richmond, St. Louis, San Francisco, and Washington. Clearing-house certificates, repre senting specie or lawrful money specially deposited for the purpose, of any clearing-house association, shall also be deemed to be law ful money in the possession of any association belonging to such clearing house, holding and owning such certificate, within the preceding section. The provisions in section 5191 requiring reserve to be held against circulation were repealed by section 2, act of June 20, 1874, which provides “ that section 81 of the National Bank act {sections' 5191 and 5192 R. S.) be so amended that the several associations therein provided for shall not hereafter be required to keep on hand any amount of money whatever, by reason of the amount of their respective circulations; but the moneys required by said section to be kept at all times on hand shall be determined by the amount of deposits in all respects, as provided for in the said section. Additional reserve cities (act of March 8, 1908, amending act of March 8, 1887).— Sec. 1. That whenever three-fourths in num ber of the national banks located in any city of the United States having a population of twenty-five thousand people shall make application to the Comptroller of the Currency, in writing, asking that the name of the city in which such banks are located shall be added to the cities named in sections fifty-one hundred and ninety-one and fifty-one hundred and ninety-two of the Revised Statutes, the Comptroller shall have authority to grant such re quest, and every bank located in such city shall at all times there after have on hand, in lawful money of the United States, an amount equal to at least twenty-five per centum of its deposits, as provided in sections fifty-one hundred and ninety-one and fiftyone hundred and ninety-five of the Revised Statutes• BAN K RESERVES. DEMAND AND TIME DEPOSITS DEFINED. 403. Sec. 19.— Demand deposits within the meaning o f this act shall comprise all deposits payable within thirty 27ict June 2i" ^ay s? anc^ deposits shall comprise all deposits pay1917, sec? 10. ’ able after thirty days, all savings accounts and certificates o f deposit which are subject to not less than thirty days’ notice before payment, and all postal savings deposits. Act Dec. 23, 38 13’staetc; REGULATION OF THE BANKING BUSINESS. 75 RESERVE REQUIREMENTS. 404. Every bank, banking association, or trust com- Act Dec. 23, pany which is or which becomes a member of any Federal 3813’stSatc‘ XL.i reserve bank shall establish and maintain reserve bal- 27<^ct ^ ” ances with its Federal reserve bank as follow s: 1917,1 sec?eio. * RESERVE REQUIREMENTS FOR BANKS NOT IN RESERVE CITIES. 405. (a) I f not in a reserve or central reserve city, as Act Dec. 23, now or hereafter defined, it shall hold and maintain with Jl^tat.* the Federal reserve bank of its district an actual net bal- 2™ct June 21 ance equal to not less than seven per centum of the 1917, sec. 10. ’ aggregate amount of its demand deposits and three per centum of its time deposits. RESERVE CITIES. REQUIREMENTS FOR BANKS IN RESERVE 406. (b) I f in a reserve city, as now or hereafter de- Act DeCi 23, fined, it shall hold and maintain with the Federal reserve 3g13,s^^* 19 ; bank of its district an actual net balance equal to not less 270. than ten per centum of the aggregate amount of its de- 19f^ 38gsti.t! mand deposits and three per centum of its time deposits: 2i Provided, however, That if located in the outlying d is -1917, sec. 10. ’ tricts of a reserve city or in territory added to such a city Sept* 26, by the extension of its corporate charter, it may, upon the affirmative vote of five members of the Federal Re serve Board, hold, and maintain the reserve balances specified in paragraph (a) hereof. RESERVE REQUIREMENTS FOR BANKS IN CENTRAL RESERVE CITIES. 407. ( c ) I f in a central reserve city, as now or here- 19^|t Dec. 2^3, after defined, it shall hold and maintain with the Federal 38 ’stat.’ l.; reserve bank of its district an actual net balance equal t o 27i ‘ct Aug. 15, not less than thirteen per centum of the aggregate amount J91! ^ 38 ®tatof its demand deposits and three per centum of its time "’Act June 21, deposits: Provided, however, That if located in the out- 19Act ¥ept?26f lying districts of a central reserve city or in territory 191S* added to such city by the extension of its corporate char ter, it may, upon the affirmative vote of five members of the Federal Reserve Board, hold and maintain the reserve balances specified in paragraphs (a) or ( 6 ) thereof. MEMBER BANK FORBIDDEN TO KEEP ON DEPOSIT WITH NONMEMBER BANK A SUM IN EXCESS OF TEN PER CENT OF ITS OWN CAPITAL AND SURPLUS OR TO SECURE DISCOUNTS FOR NONMEMBER BANK. 408. No member bank shall keep on deposit with any 19^«t ^ec. 293: State bank or trust company which is not a member bank 38 ’stat* l.’, a sum in excess of ten per centum of its own paid-up 271# 76 REGULATION OF THE BANKING BUSINESS. 1914 ! 38 gstat! capita.l and surplus. No member bank shall act as the l., 69i*. *medium or agent o f a nonmember bank in applying for or 1917,1sec.1110.1’ receiving discounts from a Federal reserve bank under the provisions o f this act, except by permission o f the Fed eral Eeserve Board. WITHDRAWAL OF RESERVE BY MEMBER BANK. 19131 sec?* i 93; ^ e required balance carried by a member bank 38 1’stat.’ L.lwith a Federal reserve bank may, under the regulations 27Ict Aug. 15, and subject to such penalties as may be prescribed by the l 916^i38 stat Federal Eeserve Board, be checked against and withAct June 21, drawn by such member bank for the purpose o f meeting 1917, sec. io. existing liabilities: Provided, however, That no bank shall at any time make new loans or shall pay any divi dends unless and until the total balance required by law is fully restored. RESERVE REQUIREMENTS— HOW ESTIMATED. 4 1 0 . In estimating the balances required by this act stat- L >the net difference o f amounts due to and from other banks Act Aug. 15, shall be taken as the basis for ascertaining the deposits l 9,1! ^ 88 stat'against which required balances with Federal reserve 1 Q^ct June 2 i, banks shall be determined. 1917, sec. 10. 1913 * sec?' i 93; RESERYE REQUIREMENTS FOR NATIONAL BANKS LO CATED IN ALASKA OR OUTSIDE THE CONTINENTAL UNITED STATES. 1913,* sec?* i 93; 411. National banks, or banks organized under local p j stat- L-» laws, located in Alaska or in a dependency or insular posAct Aug. 15, session or any part o f the United States outside the conl 9,1! ^ 38 Stat‘ tinental United States may remain nonmember banks, m ^ sec^ o21, an(^ event maintain reserves and comply with all the conditions now provided by law regulating them; or said banks may, with the consent o f the Eeserve Board, become member banks o f any one o f the reserve districts, and shall in that event take stock, maintain reserves, and be subject to all the other provisions o f this act. REDEMPTION FUND NOT COUNTED AS RESERYE. 1913 * secC*2 0 * 38 ’stat.* l .’, act 271* ®ec‘ muc^ sections two and three o f the o f June twentieth, eighteen hundred and seventyfour, entitled “ A n act fixing the amount o f United States notes, providing for a redistribution o f the national-bank currency, and for other purposes,” as provides that the fund deposited by any national banking association with the Treasurer o f the United States for the redemption o f its notes shall be counted as a part o f its lawful reserve as provided in the act aforesaid, is hereby repealed. A nd from and after the passage o f this act such fund o f five per centum shall in no case be counted by any national banking association as a part o f its lawful reserve. REGULATION OF THE BANKING BUSINESS. 77 NO RESERVE REQUIRED TO BE HELD AGAINST UNITED STATES DEPOSITS. 413. Sec. 7.— * * * That the provisions o f section 1QAct ^Apr.^24, fifty-one hundred and ninety-one o f the Revised Statutes, as amended by the Federal reserve act and the amend ments thereof, with reference to the reserves required to be kept by national banking associations and other mem ber banks o f the Federal Reserve System, shall not apply to deposits o f public moneys by the United States in des ignated depositaries. PROVISIONS FOR REDEEMING CIRCULATION. FITE PER CENT REDEMPTION FUND. ACT JUNE 20, 1874. 414. Sec. 3.— That every association organized, or to be Jcune343 ’ organized, under the provisions o f the said act, and o f sec. a ; is stat! the several acts amendatory thereof, shall at all times 123* keep and have on deposit in the Treasury o f the United States, in lawful money o f the United States, a sum equal to five per centum o f its circulation, to be held and used for the redemption o f such circulation; [ which sum shall be counted as a part of its laivful reserve, as provided, in section tivo of this actf\ and when the circulating notes o f any such associations, assorted or unassorted, shall be presented for redemption, in sums o f one thousand dol lars, or any multiple thereof, to the Treasurer o f the United States, the same shall be redeemed in United States notes. A ll notes so redeemed shall be charged by the Treasurer o f the United States to the respec tive associations issuing the same, and he shall notify them severally, on the first day o f eacli month, or oftener, at his discretion, o f the amount o f such redemptions; and whenever such redemptions for any association shall amount to the sum o f five hundred dollars, such associa tion so notified shall forthwith deposit with the Treas urer o f the United States a sum in United States notes equal to the amount o f its circulating notes so redeemed. And all notes o f national banks worn, defaced, mutilated, or otherwise unfit for circulation shall, when received by any assistant treasurer, or at any designated depository o f the United States, be forwarded to the Treasurer o f the United States for redemption as provided herein. A nd when such redemptions have been so reimbursed, the circulating notes so redeemed shall be forwarded to the respective associations by which they were issued; but if any o f such notes are worn, mutilated, defaced, or ren dered otherwise unfit for use, they shall be forwarded to the Comptroller o f the Currency and destroyed and re placed as now provided by la w : Provided, That each o f said associations shall reimburse to the Treasury the charges for transportation, and the costs for assorting such notes; and the associations hereafter organized shall 78 REGULATION OF THE BANKING BUSINESS. also severally reimburse to the Treasury the cost o f en graving such plates as shall be ordered by each associa tion, respectively; and the amount assessed upon each association shall be in proportion to the circulation re deemed, and be charged to the fund on deposit with the Treasurer: And provided further, That so much o f sec tion thirty-two o f said national-bank act requiring or permitting the redemption o f its circulating notes else where than at its own counter except as provided for in this section, is hereby repealed. N ote.— Under section 4 of the act of June 20, 1874, chapter 343, a national banking association, desiring to withdraw its circulat ing notes and take up the bonds deposited with the United States Treasurer as security therefor, may do so by depositing with the Treasurer the required amount in lawful money, whether this consists of coin or of legal-tender notes. The Treasury, while privileged under sections 3 and 4 of that act to redeem such cir culation in United States notes, has also the right to redeem the same circulation in coin. (Opinion Attorney General, vol. 17, 121.) Section 32 of national-bank act is section 5195, Revised Statutes. The provision permitting the redemption fund to be counted as part of the lawful reserve was repealed by section 20 of the Federal reserve act. Other sections of act of June 20, 1874, Section 1 precedes Revised Statutes, 5133. Section 2. See note under paragraph 402, ante. Section 4 follows Revised Statutes, 5167. Section 5 follows Revised Statutes, 5172. Section 6 relates to United States notes only. Sections 7-9 superseded by act of January 14, 1875, which follows, Revised Statutes, 5177. CLERICAL FORCE FOR REDEMPTION OF CIRCULATING NOTES. ACT MARCH 3, 1875. 1875^ i i a stat’ cari7 into effect the provisions o f section three o f the act entitled “ A n act fixing the amount c i vn Sappro- ° f United States notes, providing for a redistribution o f priation act. the national-bank currency, and for other purposes,” approved June twentieth, eighteen hundred and seventyfour, the Secretary o f the Treasury is authorized to ap point the follow ing force, to be employed under his direc tion, namely: In the Office o f the Treasurer: * * * In the Office o f the Comptroller o f the Currency * * * And at the end o f each month, the Secretary o f the Treas ury shall reimburse the Treasury to the full amount paid out under the provisions o f this section by transfer o f said amount from the deposit o f the national banking as sociations with the Treasury o f the United States; and at the end o f each fiscal year he shall transfer from said deposit to the Treasury o f the United States such sum as may have been actually expended under his direction fo r stationery, rent, fuel, light, and other necessary inci dental expenses which have been incurred in carrying l ., 399; part REGULATION OF THE BANKING BUSINESS. 79 into effect the provisions o f the said section o f the abovenamed act. N ote.— The appropriation bill for each year fixes the number and compensation of the clerks employed in the offices of the Treasurer of the United States and Comptroller of the Currency in connection with the redemption of circulating notes. DISPOSITION OF REDEMPTION ACCOUNT. 1890. ACT JULY 14, 416. Sec. 6.— That upon the passage o f this act the lg^ !t c"ly7o|; balances standing with the Treasurer o f the United sec. 6; 26 stat States to the respective credits o f national banks for de- L" 289* posits made to redeem the circulating notes o f such banks, and all deposits thereafter received for like pur pose, shall be covered into the Treasury as a miscellane ous receipt, and the Treasury o f the United States shall redeem from the general cash in the Treasury the circu lating notes o f said banks which may come into his pos session subject to redemption; and upon the certificate o f the Comptroller o f the Currency that such notes have been received by him and that they have been destroyed and that no new notes will be issued in their place, reim bursement o f their amount shall be made to the Treas urer, under such regulations as the Secretary o f the Treasury may proscribe, from an appropriation hereby created, to be known as “ national-bank notes; Redemp tion account,” but the provisions o f this act shall not apply to the deposits received under section three o f the act o f June twentieth, eighteen hundred and seventyfour, requiring every national bank to keep in lawful money with the Treasurer o f the United States a sum equal to five per centum o f its circulation, to be held and used for the redemption o f its circulating notes: and the balance remaining o f the deposits so covered shall, at the close o f each month, be reported on the monthly public debt statement as debt o f the United States bearing no interest. N ote.— The other sections of this act relate to the purchase of silver bullion and issue of Treasury notes. REDEMPTION OF LOST OR STOLEN NOTES, AND OF NOTES NOT PROPERLY SIGNED. ACT JULY 28, 1892. 417. That the provisions o f the Revised Statutes o f the Act July United States, providing for the redemption o f national l ., 322. bank notes, shall apply to all national bank notes that have been or may be issued to, or received by, any na tional bank, notwithstanding such notes may have been lost by or stolen from the bank and put in circulation without the signature or upon the forged signature o f the president or vice president and cashier. m, a * 80 REGULATION OF THE BANKING BUSINESS. 418. Sec. 5193.— Repealed by act March 14, 1900. N ote.— This section as enacted June 8, 1872 (17 Stat. L., 337), authorized the Secretary of the Treasury to receive on deposit from national banking associations United States notes in sums of not less than ten thousand dollars and to issue certificates therefor payable on demand in denominations of not less than five thousand dollars. This was repealed by act March 14, 1900, section 6, paragraph 752, post, which provides for issue of gold certificates payable to order in denominations of ten thousand dollars. 419. Sec. 5194.— Dependent on 5193 and superseded by its repeal. PLACE FOR REDEMPTION OF CIRCULATING NOTES TO BE DESIGNATED. 420. Sec. 5195.— See note under paragraph 401, ante. NATIONAL BANKS TO TAKE NOTES OF OTHER NATIONAL BANKS AT PAR. igAct June1Q|» 421. Sec. 5196.— Every national banking association s eV 3 2 ; 13 formed or existing under this Title; shall take and receive StActIjui1y)9i 2>at Pa r 5 f ° r any debt or liability to it, any and all notes or 1870, c. 282^ bills issued by any law fully organized national banking l.?‘ 253.16 tat*association. But this provision shall not apply to any association organized for the purpose o f issuing notes payable in gold. LIMITATION UPON RATE OF INTEREST WHICH MAY BE TAKEN. 1864 * f^ioe* ®ec* &197.— A ny association may take, receive, s e c.’ 3 0 1 3 reserve, and charge on any loan or discount made, or upon stat. l . , 108. n 0 £e? k m 0 f exchange, or other evidences o f debt, interest at the rate allowed by the laws o f the State, T er ritory, or District where the bank is located, and no more, except that where by the laws o f any State a different rate is limited fo r banks o f issue organized under State laws, the rate so limited shall be allowed for associations organized or existing in any such State under this Title. W hen no rate is fixed by the laws o f the State, or Terri tory, or District, the bank may take, receive, reserve, or charge a rate not exceeding seven per centum, and such interest may be taken in advance, reckoning the days for which the note, bill, or other evidence o f debt has to run. A nd the purchase, discount, or sale o f a bona fide bill o f exchange, payable at another place than the place o f such purchase, discount, or sale, at not more than the current rate o f exchange for sight drafts in addition to the in terest, shall not be considered as taking or receiving a greater rate o f interest. any 81 BEGULATION OP THE BANKING BUSINESS. PENALTY FOB TAKING UNLAWFUL INTEREST. JURISDICTION OF SUITS BY OB AGAINST NATIONAL BANKS. Act June 3, Wi i Stat. L 108. 423. Sec. 5198 [as amended 1875].— The taking, receiv- 1375,‘ cl o; m ing, reserving, or charging a rate o f interest greater than stat- L » 320* is allowed by the preceding section, when knowingly done, shall be deemed a forfeiture o f the entire interest which the note, bill, or other evidence o f debt carries with it, or which has been agreed to be paid thereon. In case the greater rate o f interest has been paid, the person by whom it has been paid, or his legal representative, may recover back, in an action in the nature o f an action o f debt, twice the amount o f the interest thus paid from the association taking or receiving the same; provided such action is commenced within two years from the time the usurious transaction occurred. That suits, actions, and proceedings against any association under this Title may be had in any circuit, district, or territorial court o f the United States held within the district in which such asso ciation may be established, or in any State, county, or municipal court in the county or city in which said asso ciation is located having jurisdiction in similar cases. N o t e .— Additional provisions relating to jurisdiction of actions by and against national banks are contained in act July 12, 1882, paragraph 218, ante, and act of August 13, 1888, paragraph 214, ante. See also section 24, judiciary act passed March 3, 1911, paragraph 701, post, and section 736, Revised Statutes of the United States, paragraph 702, post, as to jurisdiction of district courts to enjoin Comptroller under section 5237, Revised Statutes, United States. DIVIDENDS. 424. Sec. 5199.— The directors o f any association may Act June semiannually, declare a dividend o f so much o f the net 1I6*/ 3 3 . profits o f the association as they shall judge expedient; stat. l.,Y o 9 . but each association shall, before the declaration o f a dividend, carry one-tenth part o f its net profits o f the preceding half year to its surplus fund until the same shall amount to twenty per centum o f its capital stock. 3, 1 LIMITATION OF LIABILITIES WHICH MAY BE INCURRED BY ANY ONE PERSON, COMPANY, ETC. 425. Sec. 5200 [as amended 1919],— The total liabilities Act to any association o f any person or o f any company, co r-1919' poration, or firm for money borrowed, including in the liabilities o f a company or firm the liabilities o f the sev Oct. 22, BEGULATION OF THE BANKING BUSINESS. eral members thereof, shall at no time exceed 10 per centum o f the amount o f the capital stock o f such asso ciation, actually paid in and unimpaired, and 10 per centum o f its unimpaired surplus fu n d : Provided, how ever• That (1) the discount o f bills o f exchange drawn in good faith against actually existing values, including drafts and bills o f exchange secured by shipping docu ments conveying or securing title to goods shipped, and including demand obligations when secured by docu ments covering commodities in actual process o f ship ment, and also including bankers’ acceptances o f the kinds described in section 13 o f the Federal reserve act, (2) the discount o f commercial or business paper actually owned by the person, company, corporation, or firm negotiating the same, (3) the discount o f notes secured by shipping documents, warehouse receipts, or other such documents conveying or securing title covering readily marketable nonperishable staples, including live stock, when the actual market value o f the property securing the obliga tion is not at any time less than 115 per centum o f the face amount o f the notes secured by such documents and when such property is fully covered by insurance, and (4) the discount o f any note or notes secured by not less than a like face amount o f bonds or notes o f the United States issued since A pril 24, 1917, or certificates o f in debtedness o f the United States, shall not be considered as money borrowed within the meaning o f this section. The total liabilities to any association, o f any person or o f any corporation, or firm, or company, or the several members thereof upon any note or notes purchased or dis counted by such association and secured by bonds, notes, or certificates o f indebtedness as described in (4) hereof shall not exceed (except to the extent permitted by rules and regulations prescribed by the Comptroller o f the Currency, with the approval o f the Secretary o f the Treasury) 10 per centum o f such capital stock and sur plus fund o f such association and the total liabilities to any association o f any person or o f any corporation, or firm, or company, or the several members thereof for money borrowed, including the liabilities upon notes secured in the manner described under (3) hereof, except transactions (1 ), (2 ), and (4 ), shall not at any time ex ceed 25 per centum o f the amount o f the association’s paid-in and unimpaired capital stock and surplus. The exception made under (3) hereof shall not apply to the notes o f any one person, corporation or firm or company, REGULATION OF THE BANKING BUSINESS. 83 or the several members thereof fo r more than six months in any consecutive twelve months. N o t e .— See Act March 3, 1919. “ Victory Liberty Loan Act,” section 1, which provides that the word “ bonds,” where it ap pears in section 5200 of the Revised Statutes, as amended, shall be deemed to include notes issued under the “ Victory Liberty Loan Act.” ASSOCIATIONS MUST NOT LOAN ON OR PURCHASE THEIR OWN STOCK. 426. Sec. 5201.— No association shall make any loan or Act June 3, discount on the security o f the shares o f its own capitals®6*’ 3*5; 10i3 stock, nor be the' purchaser or holder o f any such shares,stat* L* 110* unless such security or purchase shall be necessary to prevent loss upon a debt previously contracted in good faith ; and stock so purchased or acquired shall, within six months from the time o f its purchase, be sold or dis posed o f at public or private sale; or, in default thereof, a receiver may be appointed to close up the business o f the association, according to section fifty-two hundred and thirty-four. RESTRICTION ON BANK’S INDEBTEDNESS. 427. Sec. 5202 [as amended 1919].— No national banking lgAct J™*ese3> association shall at any time be indebted, or in any way 36; 13’ stat. lc; liable, to an amount exceeding the amount o f its capital UACt Dec. 23, stock at such time actually paid in and remaining un- gJJ diminished by losses or otherwise, except on account o f Act Apr.' 5, demands o f the nature follow in g: 19^ct 0 ct. 22, First. Notes o f circulation. 1919Second. Moneys deposited with or collected by the asso ciation. Third. Bills o f exchange or drafts drawn against money actually on deposit to the credit o f the association, or due thereto. Fourth. Liabilities to the stockholders o f the associa tion for dividends and reserve profits. Fifth. Liabilities incurred under the provisions o f the Federal Reserve Act. Sixth. Liabilities incurred under the provisions o f the W ar Finance Corporation Act. Seventh. Liabilities created bv the indorsement o f ac cepted bills o f exchange payable abroad actually owned by the indorsing bank and discounted at home or abroad. 84 REGULATION OF THE BANKING BUSINESS. RESTRICTION UPON USE OF CIRCULATING NOTES. 185 % * cUni 06 ®ec# ®®>3.— No association shall, either directly or s e c.’ 3 7 ; li indirectly, pledge or hypothecate any o f its notes or cirstat. l . , no. cui ation, fo r the purpose o f procuring money to be paid in on its capital stock, or to be used in its banking oper ations, or otherwise; nor shall any association use its cir culating notes, or any part thereof, in any manner or form , to create or increase its capital stock. PROHIBITION UPON WITHDRAWAL OF CAPITAL. EARNED DIVIDENDS PROHIBITED. UN 1864 * cUni06 ^ec‘ association, or any member thereof, sec/ 3 8 ; li shall, during the time it shall continue its banking opstat. l ., no. erations, withdraw, or permit to be withdrawn, either in the form o f dividends or otherwise, any portion o f its capital. I f losses have at any time been sustained by any such association, equal to or exceeding its undivided profits then on hand, no dividend shall be m ade; and no dividend shall ever be made by any association, while it continues its banking operations, to an amount greater than its net profits then on hand, deducting therefrom its losses and bad debts. A ll debts due to any association, on which interest is past due and unpaid for a period o f six months, unless the same are well secured, and in proc ess o f collection, shall be considered bad debts within the meaning o f this section. But nothing in this section shall prevent the reduction o f the capital stock o f the as sociation under section fifty-one hundred and fortythree. ASSESSMENT FOR FAILURE TO PAY UP CAPITAL frTOCK OR FOR IMPAIRMENT OF CAPITAL. Act Mar. 3, 430. Sec. 5205 [as amended 1876].— Every association secPi; 17 s2tat! which shall have failed to pay up its capitai stock, as reL*A6ct3june 30 <luire(l by law, and every association whose capital stock 187V % 156’ shall have become impaired by losses or otherwise, shall. l.% 4! 1 Stat within three months after receiving notice thereof from the Comptroller o f the Currency, pay the deficiency in the capital stock, by assessment upon the shareholders pro rata for the amount o f capital stock held by each; and the Treasurer o f the United States shall withhold the interest upon all bonds held by him in trust for any such association, upon notification from the Comptroller o f the Currency, until otherwise notified by him. I f any such association shall fail to pay up its capital stock, and shall refuse to go into liquidation, as provided by law, for three months after receiving notice from the Comp troller, a receiver may be appointed to close up the busi ness o f the association, according to the provisions o f section fifty-two hundred and thirty-fou r: And pro vided, That if any shareholder or shareholders o f such bank shall neglect or refuse, after three months’ notice, to REGULATION OF THE BANKING BUSINESS. 85 pay the assessment, as provided in this section, it shall be the duty o f the board o f directors to cause a sufficient amount o f the capital stock o f such shareholder or share holders to be sold at public auction (after thirty days’ notice shall be given by posting such notice o f sale in the office o f the bank, and by publishing such notice in a news paper o f the city or town in which the bank is located, or in a newspaper published nearest thereto), to make good the deficiency, and the balance, if any, shall be returned to such delinquent shareholder or shareholders. PROHIBITION AGAINST UNCURRENT NOTES. 431. Sec. 5206.— No association shall at any time p a y 18^ cUneioo! out on loans or discounts, or in purchasing drafts or bills |e c.’ o f exchange, or in payment o f deposits, or in any other a ’ " mode pay or put in circulation, the notes o f any bank or banking association which are not, at any such time, receivable, at par, on deposit, and in payment o f debts by the association so paying out or circulating such notes; nor shall any association knowingly pay out or put in circulation any notes issued by any bank or banking asso ciation which at the time o f such paying out or putting in circulation is not redeeming its circulating notes in law ful money o f the United States. UNITED STATES NOTES NOT TO BE HELD AS COLLAT ERAL. 432. Sec. 5207.— No association shall hereafter offer or 18g9* CF3 2 . receive United States notes or national-bank notes a s stat-’ L » 27’°* security or as collateral security for any loan o f money, or for a consideration agree to withhold the same from use, or offer or receive the custody or promise o f custody o f such notes as security, or as collateral security, or consideration for any loan o f money. A ny association offending against the provisions o f this section shall be deemed guilty o f a misdemeanor, and shall be fined not more than one thousand dollars and a further sum equal to one-third o f the money so loaned. The officer or offi cers o f any association who shall make any such loan shall be liable for a further sum equal to one-quarter o f the money loaned; and any fine or penalty incurred by a violation o f this section shall be recoverable for the bene fit o f the party bringing such suit. ISSUE OF GOLD CERTIFICATES. ACT JULY 12, 1882. 433. Sec. 12.— That the Secretary o f the Treasury is Act July 12, authorized and directed to receive deposits o f gold coin 2282,stat.‘ "l.*, * * * and issue certificates therefor * * *. S u c h 165certificates * * * , when held by any national bank ing association, shall be counted as part o f its lawful reserve; and no national banking association shall be a 86 REGULATION OF THE BANKING BUSINESS. member o f any clearing house in which such certificates shall not be receivable in the settlement o f clearing-house balances: * * * A n d the provisions o f section fiftytwo hundred and seven o f the Revised Statutes shall be applicable to the certificates herein authorized and di rected to be issued. N ote.— This section given in full, paragraph 729, post. See also currency act of March 14, 1900, as amended March 4, 1907, March 2, 1911, and June 12, 1916, paragraph 754, post, relating to gold certificates, and making ten dollars lowest denomination. PENALTY FOR FALSELY CERTIFYING CHECKS. 1 8»% ¥ fi’;1!k . 434- Sec- 5208‘— It shall be unlawful for any officer, stat.’ C 335 director, agent, or employee o f any Federal reserve bank, 1918. ep ’ or o f any member bank as defined in the act o f December twenty-third, nineteen hundred and thirteen, known as the Federal reserve act, to certify any check drawn upon such Federal reserve bank or member bank unless the person, firm, or corporation drawing the check has on deposit with such Federal reserve bank or member bank, at the times such check is certified, an amount o f money not less than the amount specified in such check. A n y check so certified by a duly authorized officer, director, agent, or employee shall be a good and valid obligation against such Federal raserve bank or member bank; but the act o f any officer, director, agent, or employee o f any such Federal reserve bank or member bank in violation o f this section shall, in the discretion o f the Federal Ee serve Board, subject such Federal reserve bank to the penalties imposed by section eleven, subsection (h ), o f the Federal reserve act, and shall subject such member bank i f a national bank to the liabilities and proceedings on the part o f the Comptroller o f the Currency provided for in section fifty-two hundred and thirty-four, Revised Statutes, and shall, in the discretion o f the Federal Re serve Board, subject any other member bank to the penal ties imposed by section nine o f said Federal reserve act fo r the violation o f any o f the provisions o f said act. A n y officer, director, agent, or employee o f any Federal reserve bank or member bank who shall w illfully violate the provisions o f this section, or who shall resort to any device, or receive any fictitious obligation, directly or collaterally, in order to evade the provisions thereof, or who shall certify a check before the amount thereof shall have been regularly entered to the credit o f the drawer upon the books o f the bank, shall be deemed guilty o f a misdemeanor and shall, on conviction thereof in any dis trict court o f the United States, be fined not more than $5,000, or shall be imprisoned for not more than five years, or both, in the discretion o f the court. REGULATION OF THE BANKING BUSINESS. PUNISHMENT FOR FALSELY CERTIFYING CHECKS. JULY 12, 1882. 87 ACT 435. Sec. 13.— Superseded by act of Sept. 26, 1918. PENALTY FOR EMBEZZLEMENT, ABSTRACTION, WILLFUL MISAPPLICATION, FALSE ENTRIES, ETC. 436. Sec. 5209.— Any officer, director, agent, or em- Act June s, ployee of any Federal reserve bank, or of any member seV 55; 1 i:j bank as defined in the act of December twenty-third, stAct LAPr.16G, nineteen hundred and thirteen, known as the Federal rey ;™ serve act, who embezzles, abstracts, or w illfully misap- Act July 8, plies any of the moneys, funds, or credits of such Federal if 7% tat. 22l.;, reserve bank or member bank, or who, without authority 195.^ ^ from the directors of such Federal reserve bank or mem-1918. ep ‘ ’ ber bank, issues or puts in circulation any of the notes of such Federal reserve bank 01* member bank, or who, without such authority, issues or puts forth any certifi cate of deposit, draws any order or bill of exchange, makes any acceptance, assigns any note, bond, draft, bill of exchange, mortgage, judgment, or decree, or who makes any false entry in any book, report, or statement of such Federal reserve bank or member bank, with intent in any case to injure or defraud such Federal reserve bank or member bank, or any other company, body politic or corporate, or any individual person, or to deceive any officer of such Federal reserve bank or member bank, or the Comptroller of the Currency, or any agent or exam iner appointed to examine the affairs of such Federal reserve bank or member bank, or the Federal Reserve B o ard ; and every receiver of a national banking associa tion who, with like intent to defraud or injure, embezzles, abstracts, purloins, or w illfully misapplies any of the* moneys, funds, or assets of his trust, and every person 1 who, with like intent, aids or abets any officer, director, agent, employee, or receiver in any violation of this sec tion shall be deemed guilty of a misdemeanor, and upon conviction thereof in any district court of the United States shall be fined not more than $5,000 or shall be imprisoned for not more than five years, or both, in the discretion of the court. A ny Federal reserve agent, or any agent or employee of such Federal reserve agent, or of the Federal Reserve Board, who embezzles, abstracts, or w illfully misapplies any moneys, funds, or securities intrusted to his care, or without complying with or in violation of the provisions of the Federal reserve act, issues or put in circulation any Federal reserve notes shall be guilty of a misdemeanor and upon conviction in any district court of the United States shall be fined not more than $5,000 or imprisoned for not more than five years, or both, in the discretion o f the court. 88 REGULATION OF THE BANKING BUSINESS. NATIONAL BANKS NOT PERMITTED TO MAKE CONTRIBU TIONS IN CONNECTION WITH ELECTION TO POLITICAL OFFICE. ACT JANUARY 26, 1907. Act Jan. 26, 437. That it shall be unlawful fo r any national bank, or l.,° 8 &4?4 Stat’ any corporation organized by authority o f any laws o f Congress, to make a money contribution in connection with any election to any political office. It shall also be unlawful for any corporation whatever to make a money contribution in connection with any election at which Presidential and Vice-Presidential electors or a Repre sentative in Congress is to be voted for or any election by any State legislature o f a United States Senator. Every corporation which shall make any contribution in viola tion o f the foregoing provisions shall be subject to a fine not exceeding five thousand dollars, and every officer or director o f any corporation who shall consent to any con tribution by the corporation in violation o f the foregoing provisions shall upon conviction be punished by a fine o f not exceeding one thousand and not less than two hun dred and fifty dollars, or by imprisonment for a term o f not more than one year, or both such fine and imprison ment in the discretion o f the court. MEMBER BANK CAN NOT MAKE LOAN OR GRANT A GRA TUITY TO ANY NATIONAL BANK EXAMINER. 1913 * Dec' 23i 438a. No member bank and no officer, director, or em381 'stat/ 2L.|ployee thereof shall hereafter make any loan or grant 27Act June 21 any gratuity to any bank examiner. A ny bank officer, *9^7,t sec.^ii. ’ director, or employee violating this provision shall be 1918. ept* 20, deemed guilty o f a misdemeanor and shall be impris oned not exceeding one year or fined not more than $5,000, or both; and may be fined a further sum equal to the money so loaned or gratuity given. A ny examiner accepting a loan or gratuity from any bank examined by him or from an officer, director, or employee thereof shall be deemed guilty o f a misde meanor and shall be imprisoned one year or fined not more than $5,000, or both, and may be fined a further sum equal to the money so loaned or gratuity given, and shall forever thereafter be disqualified from holding office as a national bank examiner. NATIONAL BANK EXAMINER CAN NOT PERFORM ANY SERYICE FOR COMPENSATION FOR ANY BANK OR OFFICER. EXAMINER CAN NOT DISCLOSE THE NAMES OF BORROWERS OR COLLATERAL WITHOUT FIRST OBTAINING WRITTEN CONSENT OF COMPTROLLER. secC*22 * 438b. No national bank examiner shall perform any other service for compensation while holding such office 27lct June 21, f ° r any bank or officer, director, or employee thereof. 19Ict S eV W exam^ner? Public or private, shall disclose the 1918. ep ' ' names o f borrowers or the collateral for loans o f a mem ber bank to other than the proper officers o f such bank 1913* 38 'stat/ l/, REGULATION OF THE BANKING BUSINESS. 89 without first having obtained the express permission in writing from the Comptroller o f the Currency, or from the board o f directors o f such bank, except when ordered to do so by a court o f competent jurisdiction, or by direc tion o f the Congress o f the United States, or o f either House thereof, or any committee o f Congress, or o f either House duly authorized. A ny bank examiner violating the provisions o f this subsection shall be imprisoned not more than one year or fined not more than $5,000, or both. PENALTY FOR OFFICER, DIRECTOR, OR EMPLOYEE OF MEMBER BANK WHO RECEIVES ANY COMMISSION OR GIFT IN CONNECTION WITH ANY LOAN. 438c. Except as herein provided, any officer, director, 19^3ct ^ c- 2223: employee, or attorney o f a member bank who stipulates p stat.' l . ’, for or receives or consents or agrees to receive any fee, Act June 21, commission, gift, or thing o f value from any person, 19^t iept/ie, firm, or corporation, for procuring or endeavoring to pro- 1918. cure for such person, firm, or corporation, or for any other person, firm, or corporation, any loan from or the purchase or discount o f any paper, note, draft, check, or bill o f exchange by such member bank shall be deemed guilty o f a misdemeanor and shall be imprisoned not more than one year or fined not more than $5,000, or both. PURCHASE OF SECURITIES OR PROPERTY FROM ONE OF ITS DIRECTORS, OR SALES TO A DIRECTOR BY A MEM BER BANK. 438d. A ny member bank may contract for, or purchase 19^ * ^ c- 2223: from, any o f its directors or from any firm o f which any 38 ’stat.* l.| o f its directors is a member, any securities or other p r o p - 27Act June 21, erty, when (and not otherwise) such purchase is made in 19^ ’t lept1^* the regular course o f business upon terms not less fa v o r - 1918. able to the bank than those offered to others, or when such purchase is authorized by a majority o f the board o f directors not interested in the sale o f such securities or property, such authority to be evidenced by the a f firmative vote or written assent o f such directors: Pro vided, however, That when any director, or firm o f which any director is a member, acting for or on behalf o f others, sells securities or other property to a member bank, the Federal Reserve Board by regulation may, in any or all cases, require a full disclosure to be made, on forms to be prescribed by it, o f all commissions or other considerations received, and whenever such director or firm, acting in his or its own behalf, sells securities or other property to the bank the Federal Reserve Board, by regulation, may require a full disclosure o f all profit realized from such sale. A ny member bank may sell securities or other prop erty to any o f its directors, or to a firm o f which any of 90 REGULATION OF THE BANKING BUSINESS, its directors is a member, in the regular course o f busi ness on terms not more favorable to such director or firm than those offered to others, or when such sale is author ized by a m ajority o f the board o f directors o f a member bank to be evidenced by their affirmative vote or written assent: Provided, however, That nothing in this subsec tion contained shall be construed as authorizing member banks to purchase or sell securities or other property which such banks are not otherwise authorized by law to purchase or sell. RATE OF INTEREST PAID DIRECTORS, OFFICERS, OR EMPLOYEES NOT TO EXCEED THAT PAID TO OTHER DEPOSITORS. 1913* sec?* 2 2 1 438e. No member bank shall pay to any director, officer, 3|2 ’stat.’ l . ' attorney, or employee a greater rate o f interest on the Act June 21, deposits o f such director, officer, attorney, or employee 19lct Sept 126 ^ an that Pa^ other depositors on similar deposits 1918. ’ 'w ith such member bank. PENALTY FOR VIOLATION OF ANY OF THE PROVISIONS OF SECTION 22 OF THE FEDERAL RESERVE ACT. 1913,* sec?* 22*; ^38f. I f the directors or officers o f 382 'stat.* l .) shall knowingly violate or permit any any member bank o f the agents, offiAct June 2if cers, or directors o f any member bank to violate any o f 19Ict Sept/^e, provisions o f this section or regulations o f the board 1918. * ' made under authority thereof, every director and officer participating in or assenting to such violation shall be held liable in his personal and individual capacity for all damages which the member bank, its shareholders, or any other persons shall have sustained in consequence o f such violation. LIST OF SHAREHOLDERS. 1864,4 cUni06 ^39. Sec. 5210.— The president and cashier o f every stat l4^ in 1^nati°nal banking association shall cause to be kept at all times a? full ancl correct list o f the names and residences o f all the shareholders in the association, and the number o f shares held by each, in the office where its business is transacted. Such list shall be subject to the inspection o f all the shareholders and creditors o f the association, and the officers authorized to assess taxes under State authority, during business hours o f each day in which business may be legally transacted. A copy o f such list, on the first M onday o f July o f each year, verified by the oath o f such president or cashier, shall be transmitted to the Comptroller o f the Currency. REPORTS TO COMPTROLLER OF THE CURRENCY. 1864* cUni06 s e c / 34 ; id stat. l., 109. ®eo* tas amended 1877].— E very association shall make to the Comptroller o f the Currency not less £han five reports during each year, according to the form REGULATION OF THE BANKING BUSINESS. which may be prescribed by him, verified by the oath or affirmation o f the president or cashier o f such association, and attested by the signature o f at least three o f the directors. Each such report shall exhibit, in detail and under appropriate heads, the resources and liabilities o f the association at the close o f business on any past day by him specified; and shall be transmitted to the Comptrol ler within five days after the receipt o f a request or requi sition therefor from him, and in the same form in which it is made to the Comptroller shall be published in a newspaper published in the place where such association is established, or if there is no newspaper in the place, then in the one published nearest thereto in the same county, at the expense o f the association; and such proof o f publication shall be furnished as may be required by the Comptroller. The Comptroller shall also have power to call fo r special reports from any particular association whenever in his judgment the same are necessary in order to a full and complete knowledge o f its condition. 91 ^ ari3<j; stat' Act Feb. 27, £;t62&.19 N ote.— Section 713 of the Code of Laws of the District of Colum bia provides: “ That all publications authorized or required by said section fifty-two hundred and eleven of the Revised Statutes, and all other publications authorized or required by existing law to be made in the District of Columbia, shall be printed in two or more daily newspapers of general circulation, published in the City of Washington, one of which shall be a morning newspaper.” The Federal Reserve Board is authorized by section 11 of the Federal reserve act to examine at its discretion the accounts, books, and affairs of each Federal reserve bank and of each mem ber bank and to require such statements and reports as it may deem necessary. VERIFICATION OF REPORTS. ACT FEBRUARY 26, 1881. 441. That the oath or affirmation required by section fifty-two hundred and eleven o f the Revised Statutes, verifying the returns made by national banks to the Comptroller o f the Currency, when taken before a notary public properly authorized and commissioned by the State in which such notary resides and the bank is lo cated, or any other officer having an official seal, author ized in such State to administer oaths, shall be a sufficient verification as contemplated by said section fifty-two hun dred and eleven: Provided, That the officer administering the oath is not an officer o f the bank. Btat/ l „ 352. REPORT OF DIVIDENDS. 442. Sec. 5212.— In addition to the reports required by 18f^t ^ari 3o; the preceding section, each association shall report to the ^ c,32;715 stat* Comptroller o f the Currency, within ten days after de- ** darin g any dividend, the amount o f such dividend, and the amount o f net earnings in excess o f such dividend. Such reports shall be attested by the oath o f the president or cashier o f the association. 92 REGULATION OF THE BANKING BUSINESS. PENALTY FOR FAILURE TO MAKE REPORTS. 1869* cIari 30* ®ec* 5213.— Every association which fails to make secs.’ i,c*2 ; l i and transmit any report required under either o f the two stat. l ., 326. preceding sections shall be subject to a penalty o f one hundred dollars fo r each day after the periods, respec tively, therein mentioned, that it delays to make and transmit its report. Whenever any association delays or refuses to pay the penalty herein imposed, after it has been assessed by the Comptroller o f the Currency, the amount thereof may be retained by the Treasurer o f the United States, upon the order o f the Comptroller o f the Currency, out o f the interest, as it may become due to the association, on the bonds deposited with him to secure circulation. A ll sums o f money collected for penalties under this section shall be paid into the Treasury o f the United States. TAXES PAYABLE TO THE UNITED STATES. Sec. 5214, u. 444. Sec. 5214.— In lieu o f all existing taxes, every asso^ Act^June 3, ciation shall pay to the Treasurer o f the United States, se6c* 4 i * 10i6^ n ^ e months o f January and July, a duty o f onestat. l ., in . half o f one per centum each half year upon the average amount o f its notes in circulation, [ and a duty of one- quarter of one per centum each half year upon the aver age amownt of its deposits, and a duty of one-quarter of one per centum each half year on the average amount of its capital stock, beyoTid the amount invested in United States bonds]. 1900* sec^is* ^ec* 31 stat. l ., 49! having on — That every national banking association deposit, as provided by law, bonds o f the United States bearing interest at the rate o f two per centum per annum, issued under the provisions o f this Act, to secure its circulating notes, shall pay to the Treasurer o f the United States, in the months o f Janu ary and July, a tax o f one-fourth o f one per centum each half year upon the average amount o f such o f its notes in circulation as are based upon the deposit o f said two per centum bonds; and such taxes shall be in lieu o f existing taxes on its notes in circulation imposed by section fifty-two hundred and fourteen o f the Revised Statutes. N ote.— The provisions of section 5214, covering taxes on the average amount of deposits and capital, were repealed by the act of March 3, 1883. The 2 per cent Panama Canal bonds were given all rights and privileges accorded to other 2 per cent bonds of the United States by the act of December 21, 1905. On May 30, 1908, section 5214 was reenacted so as to cover the provisions of the original section as modified by the acts of March 3, 1883, March 14, 1900, and December 21, 1905, and in addition thereto there was added provisions for the taxation of the additional circulation issued under the act. The act of May 30, 1908, however, expired on June 30, 1914, and while it was ex tended by section 27 of the act of December 23, 1913, to June 30, 1915, it was expressly provided in the latter act that on the REGULATION OF THE BANKING BUSINESS. 93 expiration of the act of May 30, 1908, section 5214 should be re enacted to read as such section read prior to May 30,1908. The acts of December 23, 1913, and August 4, 1914, amended the provisions in this section of the act of May 30, 1908, relative to the taxa tion of emergency currency. All the provisions for the emer gency currency expired on June 30, 1915. The following is section 5214 as it stood prior to the expiration of the Emergency Currency Act on June 30, 1915, with all amend ments : “ S ec . 5214. National banking associations having on deposit bonds of the United States, bearing interest at the rate of two per centum per annum, including the bonds issued for the con struction of the Panama Canal, under the provisions of section eight of ‘An Act to provide for the construction of a canal con necting the waters of the Atlantic and Pacific oceans,’ approved June twenty-eighth, nineteen hundred and twTo, to secure its circulating notes, shall pay to the Treasury of the United States, in the months of January and July, a tax of one-fourth of one per centum each half year upon the average amount of such of its notes in circulation as are based upon the deposit of such bonds; and such associations having on deposit bonds of the United States bearing interest at a rate higher than two per centum per annum shall pay a tax of one-half of one per centum each half year upon the average amount of such of its notes in circula tion as are based upon the deposit of such bonds. “ National banking associations having circulating notes secured otherwise than by bonds of the United States, shall pay for the first three months a tax at the rate of three per centum per annum upon the average amount of such of their notes in circulation as are based upon the deposit of such securities, and afterwTards an additional tax rate of one-half of one per centum per annum for each month until a tax of six per centum per annum is reached, and thereafter such tax of six per centum per annum upon the average amount of such notes. Every national banking associa tion having outstanding circulating notes secured by a deposit of other securities than United States bonds shall make monthly returns, under oath of its president or cashier, to the Treasurer of the United States, in such form as the Treasurer may prescribe, of the average monthly amount of its notes so secured in circula tion ; and it shall be the duty of the Comptroller of the Currency to cause such reports of notes in circulation to be verified by examination of the bank’s records. The taxes received on circu lating notes secured otherwise than by bonds of the United States shall be paid into the Division of Redemption of the Treasury and credited and added to the reserve fund held for the redemption of United States and other notes.” HALF-YEARLY RETURN OF CIRCULATION capital stock']. [deposits and 446. Sec. 5215.— In order to enable the Treasurer t o 18£|t assess the duties imposed by the preceding section, each s e c.’ 4 1 ; li association shall, within ten days from the first days o f stat* L,» m * January and July o f each year, make a return, under the oath o f its president or cashier, to the Treasurer o f the United States, in such form as the Treasurer may pre scribe, o f the average amount o f its notes in circulation, \ancl of the average amount of its deposits, and of the average amount of its capital stock, beyond the amount invested in United States bonds], fo r the six months next preceding the most recent first day o f January or July. Every association which fails so to make such return shall be liable to a penalty o f two hundred dollars, to be 94 REGULATION OF THE BANKING BUSINESS. collected either out o f the interest as it may become due such association on the bonds deposited with the Treas urer, or, at his option, in the manner in which penalties are to be collected o f other corporations under the laws o f the United States. N ote .—The taxes on the average amount of deposits and capital stock were repealed by the act of March 3,1883. PENALTY FOR FAILURE TO MAKE RETURN. Act Jane 3, 447. Sec. 5216.— Whenever any association fails to make s e6c / 4 i ; 10i5 the half-yearly return required by the preceding section,. stat l., in . the duties to be paid by such association shall be assessed upon the amount o f notes delivered to such association by the Comptroller o f the Currency, [ and upon the high est amount of its deposits and capital stock, to be ascer tained in such manner as the Treasurer may deem best.'] N ote .—See note under section 5215 stating that tax on deposits and capital stock had been repealed. ENFORCING TAX ON CIRCULATION. Act June 3, 448. Sec. 5217.— Whenever an association fails to pay sec/ 4 i ; 1(5&the duties imposed by the three preceding sections, the stat. l., in . gums due may be collected in the manner provided fo r the collection o f United States taxes from other corpora tions ; or the Treasurer may reserve the amount out o f the interest, as it may become due, on the bonds deposited with him by such defaulting association. REFUNDING EXCESS TAX. 'MaRreS20lui 867n ®ec# 5218 —In all cases where an association has No. ’ 4 9 ; i i paid or may pay in excess o f what may be or has been asaamended7in found due from it, on account o f the duty required to be r. s. 5218. paid to the Treasurer o f the United States, the associa tion may state an account therefor, which, on being certi fied by the Treasurer o f the United States, and found correct by the First Comptroller o f the Treasury, shall be refunded in the ordinary manner by warrant on the Treasury. NO TAX TO BE PAID BY INSOLYENT BANKS. 1, 1879. ACT MARCH ®e c * whenever and after any bank has i ue 1879, s2£ ceased to do business by reason o f insolvency or banki l l .20 stat' L" ruptcy, no tax shall be assessed or collected, or paid into the Treasury o f the United States, on account o f such bank, which shall diminish the assets thereof necessary fo r tne full payment o f all its depositors; and such tax shall be abated from such national banks as are found by the Comptroller o f the Currency to be insolvent; * * *. nue te«ictal Mar" REGULATION OF THE BANKING BUSINESS. 95 STATE TAXATION. 451. Sec. 5219.— Nothing herein shall prevent all the 1S^ cUni 06 shares in any association from being included in the valu- s e c.’ 4 i ; 13 at ion o f the personal property o f the owner or holder o f stict.Ltfeb* 10, such shares, in assessing taxes imposed by authority o f £• 15 the State within which the association is located; but the legislature o f each State may determine and direct the manner and place o f taxing all the shares o f national banking associations located within the State, subject only to the two restrictions, that the taxation shall not be at a greater rate than is assessed upon other moneyed capital in the hands o f individual citizens o f such State, and that the shares o f any national banking association owned by nonresidents o f any State shall be taxed in the city or town where the bank is located, and not elsewhere. Nothing herein shall be construed to exempt the real property o f associations from either State, county, or mu nicipal taxes, to the same extent, according to its value, as other real property is taxed. DISSOLUTION AND RECEIVERSHIP. 164312°— 20------7 97 CHAPTER V. DISSOLUTION AND RECEIVERSHIP. 500. 5220. Two-thirds vote required for liquidation. 501. 5221. Notice of voluntary liqui dation. 502. 5222. Deposit of lawful money to redeem circulation. 503. 5223. No deposit required for consolidation. 503a. Act November 7, 1918. Consoli dation of national banks. 504. 5224. Reassignment of bonds and redemption of notes of liquidating banks. 505. Act June 20, 1874. Duty of Treasurer, A s s i s t a n t Treasurer, etc., to return notes of failed or liquidat ing banks to Treasury for redemption. 506. 5225. Destruction of redeemed notes. 507. 5226. Protest of bank circulation. 508. 5227. Bonds forfeited if circula tion is dishonored. Exa m i n a t i o n by special agent. 509. 5228. Suspension of business after default. 510. 5229. Notice to present circula tion for redemption. Cancellation of bonds. 511. 5230. Sale of bonds at auction. First lien for redeeming circulation. 512. 5231. Bonds may be sold at pri vate sale. 513. 5232. Disposal of r e d e e m e d notes. Regulations for redemption records. 514. 5233. Redeemed notes to be can celed. 515. 5234. Appointment and duties of receivers. 516. 5235. Notice to creditors of in solvent banks to present claims. 517. 5236. Dividends. Distribution of assets of insolvent banks. 518. 5237. When bank may enjoin fur ther proceedings. 519. 5238. Fees and expenses. 520. Act June 30, 1876. When re ceiver may be appointed. 521. Act June 30, 1876. Creditor’s bill against shareholders. 522. Act June 30, 1876, as amended 1892. 1897. Appoint ment, qualification, and duties of shareholders’ agent. 523. Act March 29, 1886. Receiver may purchase property to protect his trust. 524. Act March 29, 1886. Approval of request. 525. Act March 29, 1886. Payment. 526. 5239. Penalty for violation of this title. Forfeiture of charter. Individual lia bility of directors. 527. 5240. Appointment of examiners. Compensation. 528. 5241. Limitation of visitorial powers. 529. 5242. Transfers, when void. Il legal preference of credi tors. 530. 5243. Use of the title “ Na tional.” TWO-THIRDS TOTE REQUIRED FOR LIQUIDATION. 500. Sec. 5220.— A ny association may go into liquida-18^ cUnio6! tion and be closed by the vote o f its shareholders o w n i n g see ’ 4 2 ; 13 two-thirds o f its stock. 8tat L- 112‘ N ote .— For enforcement of shareholders’ liability when bank is in liquidation see act of June 30, 1876, following Revised Statutes, 5238. NOTICE OF VOLUNTARY LIQUIDATION. 501. Sec. 5221.— Whenever a vote is taken to go in to is f^ l unei06; liquidation it shall be the duty o f the board o f d i r e c t o r s ^ 42 ,-^ 1 3 to cause notice o f this fact to be certified, under the seal 100 DISSOLUTION AND RECEIVERSHIP. o f the association, by its president or cashier, to the Comptroller o f the Currency, and publication thereof to be. made fo r a period o f two months in a newspaper pub lished in the city o f New York, and also in a newspaper published in the city or town in which the association is located, or i f no newspaper is there published, then in the newspaper published nearest thereto, that the association is closing up its affairs, and n otifying the holders o f its notes and other creditors to present the notes and other claims against the association for payment. DEPOSIT OF LAWFUL MONEY TO REDEEM CIRCULATION. Act Juno 3, 502. Sec. secs4, 42, 4°36; the vote to 5222.— W ithin six months from the date o f go into liquidation, the association shall dei32 stat. l., posit with the Treasurer o f the United States, lawful Act July 14, money o f the United States sufficient to redeem all its W °’stat. 25l.; outstanding circulation. The Treasurer shall execute 274* duplicate receipts for money thus desposited and deliver one to the association and the other to the Comptroller o f the Currency, stating the amount received by him, and the purpose for which it has been received; and the money shall be paid into the Treasury o f the United States, and placed to the credit o f such association upon redemption account. NO DEPOSIT REQUIRED FOR CONSOLIDATION. 1870 1 c1112574: ®ec* 5 ^ 3 .— A n association which 16 stat. L.j winding up its business for the purpose 274, is in good faith o f consolidating with another association shall not be required to deposit lawful money for its outstanding circulation; but its as sets and liabilities shall be reported by the association with which it is in process o f consolidation. CONSOLIDATION OF NATIONAL BANKS. 1918.* Nov 7* — That any two or more national banking associa tions located within the same county, city, town, or village may, with the approval o f the Comptroller o f the Cur rency, consolidate into one association under the charter o f either existing banks, on such terms and conditions as may be law fully agreed upon by a m ajority o f the board o f directors o f each association proposing to consolidate, and be ratified and confirmed by the affirmative vote o f the shareholders o f each such association owning at least two-thirds o f its capital stock outstanding, at a meeting to be held on the call o f the directors after publishing notice o f the time, place, and object o f the meeting for four consecutive weeks in some newspaper published in the place where the said association is located, and i f no newspaper is published in the place, then in a paper published nearest thereto, and after sending such notice to each shareholder o f record by registered mail at least ten days prior to said m eeting: Provided, That the capital stock o f such consolidated association shall not be less DISSOLUTION AND RECEIVERSHIP. 101 than that required under existing law for the organization o f a national bank in the place in which it is located: And provided further, That when such consolidation shall have been effected and approved by the comptroller any shareholder o f either o f the associations so consoli dated who has not voted for such consolidation may give notice to the directors o f the association in which he is interested within twenty days from the date o f the cer tificate o f approval o f the comptroller that he dissents from the plan o f consolidation as adopted and approved, whereupon he shall be entitled to receive the value o f the shares so held by him, to be ascertained by an appraisal made by a committee o f three persons, one to be selected by the shareholder, one by the directors, and the third by the two so chosen; and in case the value so fixed shall not be satisfactory to the shareholder he may within five days after being notified o f the appraisal appeal to the Comp troller o f the Currency, who shall cause a reappraisal to be made, which shall be final and binding; and if said reappraisal shall exceed the value fixed by said committee, the bank shall pay the expenses o f the reappraisal; other wise the appellant shall pay said expenses, and the value so ascertained and determined shall be deemed to be a debt due and be forthwith paid to said shareholder from said bank, and the share so paid shall be surrendered and after due notice sold at public auction within thirty days after the final appraisement provided for in this Act. Sec. 2. That associations consolidating with another association under the provisions o f this A ct shall not be required to deposit lawful money for their outstanding circulation, but their assets and liabilities shall be re ported by the association with which they have consoli dated. A nd all the rights, franchises, and interests o f the said national bank so consolidated in and to every species o f property, personal and mixed, and choses in action thereto belonging, shall be deemed to be transferred to and vested in such national bank into which it is con solidated without any deed or other transfer, and the said consolidated national bank shall hold and enjoy the same and all rights o f property, franchises, and interests in the same manner and to the same extent as was held and enjoyed by the national bank so consolidated there with. REASSIGNMENT OF BONDS AND REDEMPTION OF NOTES OF LIQUIDATING BANKS. 504. Sec. 5224 [as amended 1875].— Whenever a cUnio6’ cient deposit o f lawful money to redeem the outstanding s e c.’ 42; 13 circulation o f an association proposing to close its busi- stAct LFebn i8, ness has been made, the bonds deposited by the associa- J|70>gt£ 8£ ; tion to secure payment o f its notes shall be reassigned to 320. a ’ it, in the manner prescribed by section fifty-one hundred and sixty-two. A nd thereafter the association and its 102 DISSOLUTION AND RECEIVERSHIP. shareholders shall stand discharged from all liabilities upon the circulating notes, and those notes shall be re deemed at the Treasury o f the United States. A nd if any such bank shall fail to make the deposit and take up its bonds for thirty days after the expiration o f the time specified, the Comptroller o f the Currency shall have power to sell the bonds pledged fo r the circulation o f said bank, at public auction in New Y ork City, and, after providing fo r the redemption and cancellation o f said circulation and the necessary expenses o f the sale, to pay over any balance remaining to the bank or its legal represci tatives. DUTY OF TREASURER, ASSISTANT TREASURERS, ETC., TO RETURN NOTES OF FAILED OR LIQUIDATING BANKS TO TREASURY FOR REDEMPTION. ACT JUNE 20, 1874. 1874,* Jcune343, 505. Sec, 8.— * * * A nd it shall be the duty o f the Ia?*12b.*8 ^tat*Treasurer, assistant treasurers, designated depositaries, and national bank depositaries o f the United States * * * to assort and return to the Treasury fo r re demption the notes o f such national banks as have failed, or gone into voluntary liquidation fo r the purpose o f w inding up their affairs, and o f such as shall hereafter so fail or go into liquidation. DESTRUCTION OF REDEEMED NOTES. 1864* cUD106; 506. Sec. 5225 [as amended 1877] .— Whenever the Treasitat' L * \i2 * urer has redeemed any o f the notes o f an association Act. Feb. 27, which has commenced to close its affairs under the five stat/ l.,625;219 preceding sections, he shall cause the notes to be mu tilated and charged to the redemption account o f the association; and all notes so redeemed by the Treasurer shall, every three months, be certified to and [ burned] in the manner prescribed in section fifty-one hundred and eighty-four. N ote.— See act of June 23, 1874, following Revised Statutes, sec tion 5184, directing that bank notes be macerated and not burned. PROTEST OF BANK CIRCULATION. 507. Sec. 5226.— Whenever any national banking cUn106’ ciati°n f a^s to redeem in the lawful money o f the United s e o.’ 46; li States any o f its circulating notes, upon demand o f paystat. l., ii3. ment duly made during the usual hours o f business, a t‘the office o f such association, or at its designated place o f re demption, the holder may cause the same to be protested, in one package, by a notary public, unless the president or cashier o f the association whose notes are presented for payment, \or the president or cashier of the association at the place at which they are redeemable~\ offers to waive demand and notice o f the protest, and, in pursuance o f 1864* DISSOLUTION AND RECEIVERSHIP. 103 such offer, makes, signs, and delivers to the party mak ing such demand an admission, in writing, stating the time o f the demand, the amount demanded, and the fact o f the nonpayment thereof. The notary public, on mak ing such protest, or upon receiving such admission, shall forthwith forw ard such admission or notice o f protest to the Comptroller o f the Currency, retaining a copy there of. I f, however, satisfactory proof is produced to the notary public that the payment o f the notes demanded is restrained by order o f any court o f competent juris diction, he shall not protest the same. When the holder o f any notes causes more than one note or package to be protested on the same day, he shall not receive pay fo r more than one protest. N ote .— Circulation redeemable only at Treasury or over own counter. Designated places of redemption have not existed since act June 20, 1874. (See note under paragraph 401, ante.) BONDS FORFEITED IF CIRCULATION IS DISHONORED. EXAMINATION BY SPECIAL AGENT. 508. Sec. 5227.— On receiving notice that any national 18^ cUne10g* banking association has failed to redeem any o f its circu- s e c.’ 4 7 ; li lating notes, as specified in the preceding section, the stat L,> 114, Comptroller o f the Currency, with the concurrence o f the Secretary o f the Treasury, may appoint a special agent, o f whose appointment immediate notice shall be given to such association, who shall immediately proceed to ascer tain whether it has refused to pay its circulating notes in the law ful money o f the United States, when demanded, and shall report to the Comptroller the fact so ascer tained. I f, from such protest, and the report so made, the Comptroller is satisfied that such association has re fused to pay its circulating notes and is in default, he shall, within thirty days after he has received notice o f such failure, declare the bonds deposited by such associa tion forfeited to the United States, and they shall there upon be so forfeited. SUSPENSION OF BUSINESS AFTER DEFAULT. 509. Sec. 5228 [as amended 1875].— A fter a default o n 18^ cUne10;j’ the part o f an association to pay any o f its circulating s e c / 46; l.j notes has been ascertained by the Comptroller, and notice fit*' Feb. 11ih, thereof has been given by him to the association, it shall £• 832;018 not be lawful for the association suffering the same to pay out any o f its notes, discount any notes or bills, or otherwise prosecute the business o f banking, except to receive and safely keep money belonging to it, and to deliver special deposit^. 104 DISSOLUTION AND RECEIVERSHIP. NOTICE TO PRESENT CIRCULATION FOR REDEMPTION. CANCELLATION OF BONDS. 1864,* cUneioi; ®ec# 5229.— Immediately upon declaring the bonds s e c.’ 4 7 ; 13 o f an association forfeited for nonpayment o f its notes, stat. ii4. Comptroller shall give notice, in such manner as the Secretary o f the Treasury shall, by general rules or other wise, direct, to the holders o f the circulating notes o f such association, to present them fo r payment at the Treasury o f the United States; and the same shall be paid as pre sented in law ful money o f the United States, whereupon the Comptroller may, in his discretion, cancel an amount o f bonds pledged by such association equal at current market rates, not exceeding par, to the notes paid. SALE OF BONDS AT AUCTION. ING CIRCULATION. FIRST LIEN FOR REDEEM Act June 3, 511. Sec. 5230.— Whenever the Comptroller has become sec6s4’ 47, 4O80; satisfied, by the protest or the waiver and admission 13^ stat. l . , specified in section fifty-two hundred and twenty-six, or by the report provided for in section fifty-tw o hundred and twenty-seven, that any association has refused to pay its circulating notes, he may, instead o f canceling its tyonds, cause so much o f them as may be necessary to redeem its outstanding notes to be sold at public auction in the city o f New York, after giving thirty days’ notice o f such sale to the association. F or any deficiency in the proceeds o f all the bonds o f an association, when thus sold, to reimburse to the United States the amount expended in paying the circulating notes o f the associa tion, the United States shall have a paramount lien upon all its assets; and such deficiency shall be made good out o f such assets in preference to any and all other claims whatsoever, except the necessary costs and expenses o f administering the same. BONDS MAY BE SOLD AT PRIYATE SALE. 1864* cuni 06 ®ec* Comptroller may, i f he deems it s e c/ 4 9 ; 13 for the interest o f the United States, sell at private sale stat. l „ 114. a 0£ fas bonds o f an association shown to have made default in paying its notes, and receive therefor either money or the circulating notes o f the association. But no such bonds shall be sold by private sale for less than par, nor fo r less than the market value thereof at the time o f sale; and no sales o f any such bonds, either public or private, shall be complete until the transfer o f the bonds shall have been made with the formalities pre scribed by sections fifty-one hundred and sixty-two, fifty-one hundred and sixty-three, and fifty-one hundred and sixty-four. DISSOLUTION AND RECEIVERSHIP. 105 DISPOSAL OF REDEEMED NOTES; REGULATIONS TOR REDEMPTION RECORDS. 513. Sec. 5232.— The Secretary of the Treasury may, lgAct ^une1(3, from time to time, make such regulations respecting the s e c/ 4 7 ; 1$ disposition to be made o f circulating notes after presen- stat- L*» 114* tation at the Treasury o f the United States fo r payment, and respecting the perpetuation o f the evidence o f the payment thereof, as may seem to him proper. REDEEMED NOTES TO BE CANCELED. 514. Sec. 5233.— A ll notes o f national banking associa- lgAct June 3, tions presented at the Treasury o f the United States for s e c.’ 4 7 ; i6d payment shall, on being paid, be canceled. stat* L,» 114* APPOINTMENT AND DUTIES OF RECEIVERS. 515. Sec. 5234. — On becoming satisfied, as specified in lg£ct June10|» sections fifty-tw o hundred and twenty-six and fifty-two s e c.’ 5 0 ; li hundred and twenty-seven, that any association has re- stat* L'* 114* fused to pay its circulating notes as therein mentioned, and is in default, the Comptroller o f the Currency may forthwith appoint a receiver, and require o f him such bond and security as he deems proper. Such receiver, under the direction o f the Comptroller, shall take pos session o f the books, records, and assets o f every descrip tion o f such association, collect all debts, dues, and claims belonging to it, and, upon the order o f a court o f record o f competent jurisdiction, may sell or compound all bad or doubtful debts, and, on a like order, may sell all the real and personal property o f such association, on such terms as the court shall direct; and may, if necessary to pay the debts o f such association, enforce the individual liability o f the stockholders. Such receiver shall pay over all money so made to the Treasurer o f the United States, subject to the order o f the Comptroller, and also make report to the Comptroller o f all his acts and pro ceedings. Provided, That the Comptroller may, if he Act May 15, deems proper, deposit any o f the money so made in any Stat regular Government depositary, or in any State or national bank either o f the city or town in which the insolvent bank was located, or o f a city or town as adja cent thereto as practicable; if such deposit is made he shall require the depositary to deposit United States bonds or other satisfactory securities with the Treasurer o f the United States for the safe-keeping and prompt payment o f the money so deposited. Such depositary shall pay upon such money interest at such rate as the Comptroller may prescribe, not less, however, than two per centum per annum upon the average monthly amount o f such deposits. N ote.— Other provisions authorizing the appointment of re ceivers of national banks and relating to powers and duties of receivers and agents will be found in the act of June 30, 1876, as 106 DISSOLUTION AND BECEIVERSHIP. amended August 3, 1892, and March 2, 1897, and the act of March 29, 1886. Both these acts are set forth following section 5238, Revised Statutes. A receiver may also be appointed, under the provisions of sec tion 5234 of the Revised Statutes of the United States, for the following violations of law: Where the capital stock of a national bank has not been fully paid in and it is thus reduced below the legal minimum and remains so for thirty days. (Sec. 5141, R. S.) For failure. to make good the lawful money reserve within thirty days after notice. (Sec. 5191, R. S.) Where a bank purchases or acquires its own stock to prevent loss upon a debt previously contracted in good faith, and the same is not sold or disposed of within six months from the time of its purchase. (Sec. 5201, R. S.) For failure to make good any impairment in its capital stock and refusing to go into liquidation within three months after receiving notice. (Sec. 5205, R. S.) For false certification of checks by any officer, clerk, or agent. (Sec. 5208, R. S.) NOTICE TO CREDITORS OF INSOLVENT BANKS TO PRE SENT CLAIMS. 1864* cUni06 ®ec< — ^ e Comptroller shall, upon appoints e c.’ so; 13 ing a receiver, cause notice to be given, by advertisement stat. l ., 114. j n newspapers as he may direct, for three consecu tive months, calling on all persons who may have claims against such association to present the same, and to make legal proof thereof. DIVIDENDS; DISTRIBUTION OF ASSETS OF INSOLVENT BANKS. 1864^ cUnioi; ®ec* 5236.— From time to time, after fu ll provision stat *L5^ii413 ^as keen made for refunding to the United States a ’ '* * any deficiency in redeeming the notes of such association, the Comptroller shall make a ratable dividend of the money so paid over to him by such receiver on all such claims as may have been proved to his satisfaction or ad judicated in a court of competent jurisdiction, and, as the proceeds of the assets of such association are paid over to him, shall make further dividends on all claims previously proved or adjudicated; and the remainder of the proceeds, if any, shall be paid over to the shareholders of such association or their legal representatives, in pro portion to the stock by them respectively held. WHEN BANK MAY ENJOIN FURTHER PROCEEDINGS. 1864* cUneioi’ ®ec‘ ®^37.— Whenever an association against which sec.’ 50; 13 proceedings have been instituted, on account of any alstat. l . , i i 4. Jege(j refusal to redeem its circulating notes as aforesaid, denies having failed to do so, it may, at any time within ten days after it has been notified of the appointment of an agent, as provided in section fifty-two hundred and twenty-seven, apply to the nearest circuit, or district, or Territorial court of the United States to enjoin further proceedings in the premises; and such court, after citing DISSOLUTION AND RECEIVERSHIP. 107 the Comptroller of the Currency to show cause why fur ther proceedings should not be enjoined, and after the decision of the court or finding of a jury that such asso ciation has not refused to redeem its circulating notes, when legally presented, in the lawful money of the United States, shall make an order enjoining the Comp troller, and any receiver acting under his direction, from all further proceedings on account of such alleged refusal. N ote .— See also sections 24, judiciary act passed March 31,1911, and 736, Revised Statutes, paragraphs 701 and 702, post. FEES AND EXPENSES. 519. Sec. 5238.— A ll fees for protesting the notes issued £ct June10|’ by any national banking association shall be paid by the s e c.’ 5i ; li person procuring the protest to be made, and such asso-stat* Li* 115, ciation shall be liable therefor; but no part of the bonds deposited by such association shall be applied to the pay ment of such fees. A ll expenses of any preliminary or other examinations into the condition of any association shall be paid by such association. A ll expenses of any receivership shall be paid out of the assets of such asso ciation before distribution of the proceeds thereof. WHEN RECEIVER MAY BE APPOINTED. 1876. ACT JUNE 80, 520. Section 1.— That whenever any national banking J<?nei 56| association shall be dissolved, and its rights, privileges,^. U 19 stat! and franchises declared forfeited, as prescribed in section ** fifty-two hundred and thirty-nine of the Revised Statutes of the United States, or whenever any creditor of any national banking association shall have obtained a judg ment against it in any court of record, and made appli cation, accompanied by a certificate from the clerk of the court stating that such judgment has been rendered and has remained unpaid for the space of thirty days, or whenever the Comptroller shall become satisfied of the insolvency of a national banking association, he may, after due examination of its affairs, in either case, appoint a receiver, who shall proceed to close up such association, and enforce the personal liability of the shareholders, as provided in section fifty-two hundred and thirty-four of said statutes. CREDITOR’S BILL AGAINST SHAREHOLDERS. 80, 1876. ACT JUNE 521. Sec. 2.— That when any national banking associa- lgAct Jcune1|§» tion shall have gone into liquidation under the provisions sec. 2; 19 stat! of section five thousand two hundred and twenty of L,» 63* said statutes, the individual liability of the shareholders provided for by section fifty-one hundred and fifty-one of said statutes may be enforced by any creditor of such association, by bill in equity, in the nature of a creditor’s 108 DISSOLUTION AND RECEIVERSHIP. bill, brought by such creditor on behalf of himself and of all other creditors of the association, against the share holders thereof , in any court of the United States having original jurisdiction in equity for the district in which such association may have been located or established. APPOINTMENT, QUALIFICATION, AND DUTIES OF SHARE HOLDERS’ AGENT. ACT JUNE 30, 1876, AS AMENDED 1892, 1897. 1876* JcUneiic ^ec* — ^hat whenever any association shall have stat! been or shall be placed in the hands of a receiver, as proam ended’ Aug!vide(l section fifty-two hundred and thirty-four and itat 18l 2, 3457 °ther sections of the Revised Statutes of the United a n d j M ar. 2! States, and when, as provided in section fifty-two hunl 8,960<>!9 Stat' dred an(l thirty-six thereof, the Comptroller of the Cur rency shall have paid to each and every creditor of such association, not including shareholders who are creditors of such association, whose claim or claims as such creditor shall have been proved or allowed as therein prescribed, the full amount of such claims, and all expenses of the receivership and the redemption of the circulating notes of such association shall have been provided for by de positing lawful money of the United States with the Treasurer of the United States, the Comptroller of the Currency shall call a meeting of the shareholders of such association by giving notice thereof for thirty days in a newspaper published in the town, city, or county where the business of such association was carried on, or if no newspaper is there published, in the newspaper published nearest thereto. A t such meeting the shareholders shall determine whether the receiver shall be continued and shall wind up the affairs of such association, or whether an agent shall be elected for that purpose, and in so de termining the said shareholders shall vote by ballot, in person or by prqxy, each share of stock entitling the holder to one vote, and the majority of the stock in value and number of shares shall be necessary to determine whether the said receiver shall be continued, or whether an agent shall be elected. In case such majority shall determine that the said receiver shall be continued, the said receiver shall thereupon proceed with the execution of his trust, and shall sell, dispose of, or otherwise collect the assets of the said association, and shall possess all the powers and authority, and be subject to all the duties and liabilities originally conferred or imposed upon him by his appointment as such receiver, so far as the same remain applicable. In case the said meeting shall, by the vote o f a majority of the stock in value and number of shares, determine that an agent shall be elected, the said meeting shall thereupon proceed to elect an agent, voting by bal lot, in person or by proxy, each share of stock entitling the holder to one vote, and the person who shall receive votes representing at least a majority of stock in value sec. 3 ; lb DISSOLUTION AND RECEIVERSHIP. and number shall be declared the agent for the purposes hereinafter provided; and whenever any of the share holders of the association shall, after the election of such agent, have executed and filed a bond to the satisfaction of the Comptroller of the Currency, conditioned for the payment and discharge in full of each and every claim that may thereafter be proved and allowed by and before a competent court, and for the faithful performance of all and singular the duties of such trust, the Comptroller and the receiver shall thereupon transfer and deliver to such agent all the undivided or uncollected or other as sets of such association then remaining in the hands or subject to the order and control of said Comptroller and said receiver, or either of them ; and for this purpose said Comptroller and said receiver are hereby severally em powered and directed to execute any deed, assignment, transfer, or other instrument in writing that may be nec essary and proper; and upon the execution and delivery of such instrument to the said agent the said Comptroller and the said receiver shall by virtue of this act be dis charged from any and all liabilities to such association and to each and all the creditors and shareholders thereof. Upon receiving such deed, assignment, transfer, or other instrument the person elected such agent shall hold, control, and dispose of the assets and property of such association which he may receive under the terms hereof for the benefit of the shareholders of such association, and he may, in his own name, or in the name of such association, sue and be sued and do all other lawful acts and things necessary to finally settle and distribute the assets and property in his hands, and may sell, compro mise, or compound the debts due to such association, with the consent and approval of the circuit or district court of the United States for the district where the business of such association was carried on, and shall at the conclu sion of his trust render to such district or circuit court a full account of all his proceedings, receipts, and expendi tures as such agent, which court shall, upon due notice, settle and adjust such accounts and discharge said agent and the sureties upon said bond. And in case any such agent so elected shall refuse to serve, or die, resign, or be removed, any shareholder may call a meeting of the shareholders of such association in the town, city, or vil lage where the business of the said association was car ried on, by giving notice thereof for thirty days in a newspaper published in said town, city, or village, or if no newspaper is there published, in the newspaper pub lished nearest thereto, at which meeting the shareholders shall elect an agent, voting by ballot, in person or by proxy, each share of stock entitling the holder to one vote, and when such agent shall have received votes rep resenting at least a majority of the stock in value and number of shares, and shall have executed a bond to the 110 DISSOLUTION AND RECEIVERSHIP. shareholders conditioned for the faithful performance o f his duties, in the penalty fixed by the shareholders at said meeting, with two sureties, to be approved by a judge o f a court o f record, and file said bond in the office o f the clerk o f a court o f record in the county where the business o f said association was carried on, he shall have all the rights, powers, and duties o f the agent first elected as hereinbefore provided. A t any meeting held as here inbefore provided administrators or executors o f de ceased shareholders may act and sign as the decedent might have done if living, and guardians o f minors and trustees o f other persons may so act and sign fo r their ward or wards or cestui que trust. The proceeds o f -the assets or property o f any such association which may be undistributed at the time o f such meeting or may be sub sequently received shall be distributed as follow s: First. T o pay the expenses o f the execution o f the trust to the date o f such payment. Second. T o repay any amount or amounts which have been paid in by any shareholder or shareholders o f such association upon and by reason o f any and all assess ments made upon the stock o f such association by the order o f the Comptroller o f the Currency in accordance with the provisions o f the statutes o f the United States; and Third. The balance ratably among such stockholders, in proportion to the number o f shares held and owned by each. Such distribution shall be made from time to time as the proceeds shall be received and as shall be deemed advisable by the said Comptroller or said agent. N ote .— Other sections of act June 30, 1876: Section 4 amends Revised Statutes, 5205. Section 5 relates to counterfeit notes. Section 6 relates to savings banks and trust companies, organ ized under act of Congress. RECEITER MAY PURCHASE PROPERTY TO PROTECT HIS TRUST. ACT MARCH 29, 1886. — That whenever the receiver o f any nai ; 24Cstat. L.,tional bank duly appointed by the Comptroller o f the 8# Currency, and who shall have duly qualified and entered upon the discharge o f his trust, shall find it in his opinion necessary, in order to fu lly protect and benefit his said trust, to the extent o f any and all equities that such trust may have in any property, real or personal, by reason o f any bond, mortgage, assignment, or other proper legal claim attaching thereto, and which said property is to be sold under any execution, decree o f foreclosure, or proper order o f any court o f jurisdiction, he may certify the facts in the case, together with his opinion as to the value o f the property to be sold, and the value o f the equity his said trust may have in the same, to the Comptroller o f the Currency, together with a request for the right and i 8 8 ? c M2 8 's e c ’ DISSOLUTION AND RECEIVERSHIP. I ll authority to use and employ so much of the money of said trust as may be necessary to purchase such property at such sale. APPROVAL OF REQUEST. ACT MARCH 29, 1386. 524. Sec. 2.— That such request, if approved by the Act. Mar 29, Comptroller of the Currency, shall be, together with the 28;82kcstat.SLi; certificate of facts in the case, and his recommendation as 8to the amount of money which, in his judgment, should be so used and employed, submitted to the Secretary of the Treasury, and if the same shall likewise be approved by him, the request shall be by the Comptroller of the Cur rency allowed, and notice thereof, with copies of the re quest, certificate of facts, and indorsement of approvals, shall be filed with the Treasurer of the United States. PAYMENT. ACT MARCH 29, 1886. 525. Sec. 3.— That whenever any such request shall be iss^c^l'sec’ allowed as hereinbefore provided, the said Comptroller of 3 ; 24 stat. l.| the Currency shall be, and is, empowered to draw upon * and from such funds of any such trust as may be depos ited with the Treasurer of the United States for the benefit of the bank in interest, to the amount as may be recommended and allowed and for the purpose for which such allowance was made: Provided, however, That all payments to be made for or on account of the purchase of any such property and under any such allowance shall be made by the Comptroller of the Currency direct, with the approval of the Secretary of the Treasury, for such pur pose only and in such manner as he may determine and order. PENALTY FOR VIOLATION OF THIS TITLE; FORFEITURE OF CHARTER; INDIVIDUAL LIABILITY OF DIRECTORS. 526. Sec. 5239.— I f -the directors of any national bankcUnioi’ ing association shall knowingly violate, or knowingly s e c.’ 53; li permit any of the officers, agents, or servants of the asso- stat* L*’ 116‘ ciation to violate any of the provisions of this title, all the rights, privileges, and franchises of the association shall be thereby forfeited. Such violation shall, how ever, be determined and adjudged by a proper circuit, district, or Territorial court of the United States, in a suit brought for that purpose by the Comptroller of the Currency, in his own name, before the association shall be declared dissolved. And in cases of such violation, every director who participated in or assented to the same shall be held liable in his personal and individual capacity for all damages which the association, its shareholders, or any other person, shall have sustained in consequence of such violation. 112 DISSOLUTION AND RECEIVERSHIP. APPOINTMENT OF EXAMINEES, COMPENSATION. 1864,* c!*n<106* ®^7. Sec. 5240 [as amended 1913].— The Comptroller o f stat* L^ne 1^ * 10 Currency, with the approval o f the Secretary o f the Act Feb. 19 , Treasury, shall appoint examiners, who shall examine stat.’ £, 32b.18 e v e ry member bank at least twice in each calendar year 19i3# t £ecc-A3.’ and oftener if considered necessary: Provided, however, 38 ’stat.' L.’. T hat the Federal Eeserve Board may authorize exam271* ination by the State authorities to be accepted in the case of State banks and trust companies and may at any time direct the holding of a special examination of State banks or trust companies that are stockholders in any Federal reserve bank. The examiner making the examination of any national bank, or of any other mem ber bank, shall have power to make a thorough exami nation of all the affairs of the bank, and in doing so he shall have power to administer oaths and to examine any of the officers and agents thereof under oath and shall make a fu ll and detailed report o f the condition of said bank to the Comptroller of the Currency. The Federal Eeserve Board, upon the recommendation of the Comptroller of the Currency, shall fix the salaries of all oank examiners and make report thereof to Con gress. The expense of the examinations herein provided for shall be assessed by the Comptroller of the Currency upon the banks examined in proportion to assets or re sources held by the banks upon the dates of examination o f the various banks. In addition to the examinations made and conducted by the Comptroller of the Currency, every Federal reserve bank may, with the approval of the Federal reserve agent or the Federal Eeserve Board, provide for special exami nation of member banks within its district. The expense of such examinations shall be borne by the bank ex amined. Such examinations shall be so conducted as to inform the Federal reserve bank of the condition of its member banks and of the lines of credit which are being extended by them. Every Federal reserve bank shall at all times furnish to the Federal Eeserve Board such in formation as may be demanded concerning the condition of any member bank within the district of the said Federal reserve bank. No bank shall be subject to any visitatorial powers other than such as are authorized by law, or vested in the courts of justice or such as shall be or shall have been exercised or directed by Congress, or by either House thereof or by any committee of Congress or of either House duly authorized. The Federal Eeserve Board shall, at least once each year, order an examination of each Federal reserve bank, and upon joint application of ten member banks the Federal Eeserve Board shall order a special examination and report of the condition of any Federal reserve bank. DISSOLUTION AND BECEIVEBSHEP. 113 LIMITATION OF YISITORIAL POWEBS. 528. Sec. 5241.— No association shall be subject to any lgAet .TuneQ3, visitorial powers other than such as are authorized by s e c .’ 5 4 ; 1.4 this Title, or are vested in the courts of justice. stat L’’ 11G' N ote .— See also the fourth paragraph in section 5240, im m edi ately preceding. TRANSFERS, WHEN YOID; ILLEGAL PREFERENCE OF CREDITORS. 529. Sec. 5242.— A ll transfers of the notes, bonds, bills lgAct June10|* of exchange, or other evidences of debt owing to any sec/ 52; li national bunking association, or of deposits to its credit ; stat- L*» 115* all assignments of mortgages, sureties on real estate, or o f judgments or decrees in its favor; all deposits o f money, bullion, or other valuable thing for its use, or fo r the use o f any o f its shareholders or creditors; and all payments o f money to either, made after the commission o f an act o f insolvency, or in contemplation thereof, made with a view to prevent the application o f its assets in the manner prescribed by this chapter, or with a view to the preference o f one creditor to another, except in payment o f its circulating notes, shall be utterly null and void ; and no attachment, injunction or execution, shall be is sued against such association or its property before final judgment in any suit, action, or proceeding, in any State, county, or municipal court. USE OF THE TITLE “ NATIONAL.” 530. Sec. 5243.— A ll banks not organized and transact- Act Mar. 3, ing business under the national currency laws, or under geZV, 17 stat! this Title, and all persons or corporations doing the busi- L-» 603ness o f bankers, brokers, or savings institutions, except savings banks authorized by Congress to use the word “ national ” as a part o f their corporate name, are pro hibited from using the word “ national ” as a portion o f the name or title o f such bank, corporation, firm, or partnership; and any violation o f this prohibition com mitted after the third day o f September, eighteen hun dred and seventy-three, shall subject the party charge able therewith tc a penalty o f fifty dollars for each day during which it is committed or repeated. 164312°—20------8 114 DISSOLUTION AND EECE1VEBSHIP. FEDERAL RESERVE ACT. CHAPTER VI. THE FEDERAL RESERVE ACT. A s amended by the acts approved August 4 and August 15, 1914, March 3, 1915, September 7, 1916, June 21, 1917, and March 3, 1919. 600. 601. 602. Title of act. Definition of terms. Federal reserve districts— or ganization committee. 602a. Authority of committee. 602b. Acceptance of terms of act. 602c. Subscriptions to capital stock. 602d. Responsibility of shareholders. 602e. Failure of national banks to ac cept terms of act— penalty. 602f. Failure of national banks to become member banks— pen alty. 602g. Public subscriptions— when ac cepted. 6021i. Limit to stock held by any in dividual copartnership or cor poration other than a mem ber bank. Public stock, how transferable. 602i. Allotment of stock to United States. 602j. Voting power. 602k. Transfer of stock. (>021. Minimum capital of Federal re serve bank. 602m. Reserve cities, status of. 602n. Authority of organization com mittee to employ assistants. 603. Branches of Federal reserve banks. 604. Organization of Federal reserve banks. Application for stock by national banks. 604a. Organization certificate. 604b. Powers of Federal reserve banks. 604c. Directors of Federal reserve banks. 604d. Classification of directors. 604e. Election of class A and class B directors. 604f. Appointment of class O direc tors. Federal reserve agent, duties of. 604g. Compensation of directors. 604h. Organization of Federal reserve banks. Authority of organi zation committee. 604i. First meeting of directors. Des ignation of terms of office. 605. Increase and decrease of capital stock. 605a. Stock not transferable. 605b. Increase of capital stock. 605c. Applications for capital stock. 603d. Certificate of increase in stock of Federal reserve bank. 605e. Reduction of capital stock. 606. Insolvency of member bank. (KF Division of earnings. 607a. Tax exemptions. 608. Conversion of State banks into national banks. 609. State banks may subscribe. 609a. Applications for membership. G09b. Regulations and restrictions. 609c. Member banks required to make reports to Federal Reserve Board and subject to exami nation by examiners ap pointed by the board and such banks’ officers, agents, and em ployees subject to penalties of section 5209. 609d. Failure to comply with regula tions— penalty. 609e. Withdrawal from membership in Federal reserve bank by State bank oi* trust company. 609f. Amount of capital required to enable State bank to become member bank. 609g. Rights, powers, and liabilities of State banks which become member banks. 610. Appointment, compensation, and qualification of members of Federal Reserve Board. 610a. Governor and vice governor; officers; qualification of mem bers. 610b. Provision for expenses. 610c. First meeting of board; Secre tary of Treasury chairman of board. 117 118 the federal 610(1. Member of Federal Reserve Board not to be officer, direc tor, or stockholder in any banking institution or trust company. 610e. Vacancies on board— how filled. 610f. Powers of Secretary of Treas ury. 610g. Federal Reserve Board to make annual report to Speaker of the House of Representatives. 61 Oh. Comptroller of the Currency. 611. Powers of Federal Reserve Board. 611a. Examination of books of Fed eral reserve banks and mem ber banks. Board may re quire reports. 611b. Rediscounts. 611c. Suspension of reserve require ments. 611 d. Issue and retirement of Fed eral reserve notes. 611e. Reserve cities. 611f. Suspension or removal of offi cer or director of a Federal reserve bank. 611 g. Writing off doubtful or worth less assets. 611h. Suspension of operations of Federal reserve bank. 611i. Requirement of bonds from Federal reserve agents and authority to make necessary regulations under this act. 611j. General supervision. 611k. Permit to national banks to act as trustee, executor, admin istrator, or registrar of stocks and bonds. 6111. Employment of a t t o r n e y s , clerks, etc., and provisions for payment of salaries. 611m. Discount by Federal reserve bank of paper secured by United States bonds issued since April 24, 1917. 612. Federal advisory council. 612a. Powers of Federal advisory council. 613. P o w e r s of Federal reserve banks. 613a. Rediscounts— notes, drafts, and bills of exchange. 613b. Acceptances a n d limitations thereof. 613c. Exceptions as to limit of indebt edness. Power to act as in surance agent, as real-estate loan broker, and to accept drafts, etc. 614. Open-market operations. 615. Government deposits. 616. Federal reserve notes author ized. 616a. Applications for Federal reserve notes.— Collateral security. RESERVE ACT. 616b. Reserve requirements for Fed eral reserve banks. 616c. Issue and redemption of Fed eral reserve notes. No Fed eral reserve bank permitted to pay out notes issued through another Federal reserve bank. 616d. Deposits of gold with Treasurer for redemption of Federal re serve notes. 616e. Federal Reserve Board may grant or reject application of Federal reserve bank for Fed eral reserve notes. Federal reserve notes first lien on all the assets of the bank. *616f. Reduction of note issues. 616g. Substitution of collateral. 616h. Preparation of Federal reserve notes. Plates and dies to be under control of Comptroller of Currency. Where notes are to be deposited. 616i. Appropriation for expense of printing national-bank notes may be used for printing Fed eral reserve notes. 616j. When Federal reserve bank shall receive checks and drafts on deposit at par. 616k. Charges for collection and for sale of exchange. 6161. Federal Reserve Board may ex ercise functions of a clearing house and may require Fed eral reserve banks to exercise such functions. 616m. Secretary of the Treasury to re ceive deposits of gold coin or gold certificates w i t h t h e Treasurer or Assistant Treas urer of the United States when tendered by any Federal re serve bank or Federal reserve agent for credit to its or his account with the Federal Re serve Board. 617. National banks not required to make deposit of United States bonds prior to commencement of business. 618. Refunding bonds. Retirement of circulating notes. 618a. P u r c h a s e of United States bonds by F e d e r a l reserve banks. 618b. Issue of circulating notes to Federal reserve banks on se curity of United States bonds. Circulating notes so issued obligations of Federal reserve bank. 618c. Issue of one-year gold notes and 3 per cent bonds of the United States in exchange for 2 per cent United States bonds. THE FEDERAL RESERVE ACT. 618d. Exchange of 3 per cent bonds ■for one-year gold notes. 619. Bank reserves. Demand and time deposits defined. Reserve requirements, when effective. 619a. Reserve requirements for banks not in reserve cities. 619b. Reserve requirements for banks in reserve cities. 619c. Reserve requirements for banks in central reserve cities. 619d Member bank forbidden to keep on deposit with nonmember bank a sum in excess of 10 per cent of its own capital and surplus or to secure discounts for nonmember bank. 619e. Withdrawal of reserve by mem ber bank. 619f. Reserve requirement, how esti mated. 619g. Reserve requirements for na* tional banks located in Alaska or o u t s i d e the continental United States. 620. Redemption fund with Treas urer not to be counted as re serve. 621. Bank examinations. Appoint ment and powers of examin ers. Acceptance of reports of examinations by State au thority. 621a. Salaries of bank examiners. 621b. Examinations by Federal re serve bank. 621c. Examinations of Federal re serve banks. 622a. Member bank can not make loan or grant a gratuity to any national bank examiner. 622b. National bank examiner can not perform any service for compensation for any bank or 622c. 622d. 622e. 622f. 623. 624. 625. 626. 627. 627a. 628. 119 officer. Examiner can not disclose the names of bor rowers or collateral without first obtaining written con sent of Comptroller. Penalty for officer, director, or employee of member bank who receives any commission or gift In connection with any loan. Purchase of securities or prop erty from one of its directors, or sales to a director by a member bank. Rate of interest paid directors, officers, or employees not to exceed that paid to other de positors. Penalty for violation of any of the provisions of section 22 of the Federal reserve act. Liability of stockholders of na tional banks. Loans on real estate. Foreign branches. Repeal of provisions of law in consistent with the provisions of the Federal reserve act. Act of May 30, 1908, extended to June 30, 1915. Reenact ment of certain sections of Revised Statutes. Rate of taxation on circulating notes secured otherwise than by bonds of the United States. When Secretary of Treasury authorized to sus pend limitations of act of May 30, 1908. Reduction of capital of national banks. 629. 630. Invalidation of clause, etc., in act not to invalidate remain der of act. Reservation of right to amend or repeal. TITLE OF ACT. 600. Be it enacted by the Senate and House of Representatives of the United States of America in Congresses assembled, That the short title o f this A ct shall be th e 251, ^ec. 23^ s ta t.' l.| “ Federal Reserve A ct.” DEFINITION OF TERMS. 601. Wherever the word “ b an k ” is used in this Act, Act. Dec. 23, the word shall be held to include State bank, banking 38 stat?' l.! assogiation, and trust company, except where national251* banks or fe d e ra l reserve banks are specifically referred to. 120 THE FEDERAL RESERVE ACT. The terms “ national b a n k ” and * national banking association ” used in this Act shall be held to be synony mous and interchangeable. The term “ member ban k ” shall be held to mean any national bank, State bank, or bank or trust company which has become a member o f one o f the reserve banks created by this Act. The term “ board ” shall be held to mean Federal Eeserve B oa rd ; the term “ district ” shall be held to mean Federal reserve district; the term “ reserve ban k ” shall be held to mean Federal reserve bank. FEDERAL RESERVE MITTEE. Act Dec. 1913, s e c . 38 Stat. 251. DISTRICTS— ORGANIZATION COM- 602. Sec. 2.— A s soon as practicable, the Secretary o f L.lthe Treasury, the Secretary o f Agriculture and the Comptroller o f the Currency, acting as “ The Reserve Bank Organization Committee,” shall designate not less than eight nor more than twelve cities to be known as Federal reserve cities, and shall divide the continental United States,, excluding Alaska, into districts, each dis trict to contain only one o f such Federal reserve cities. The determination o f said organization committee shall not be subject to review except by the Federal Eeserve Board when organized: Provided, That the districts shall be apportioned with due regard to the convenience and customary course o f business and shall not neces sarily be coterminous with any State or States. The dis tricts thus created may be readjusted and new districts may from time to time be created by the Federal Eeserve Board, not to exceed twelve in all. Such districts shall be known as Federal reserve districts and may be desig nated by number. A m ajority o f the organization com mittee shall constitute a quorum with authority to act. AUTHORITY OF COMMITTEE. Act Dec. 23, 3813’stat?’ l/, 252* 602a. Said organization committee shall be authorized to employ counsel and expert aid, to take testimony, to send for persons and papers, to administer oaths, and to make such investigation as may be deemed necessary by the said committee in determining the reserve districts and in designating the cities within such districts where such Federal reserve banks shall be severally located. The said committee shall supervise the organization in each o f the cities designated o f a Federal reserve bank, which shall include in its title the name o f the city in which it is situated, as “ Federal Eeserve Bank o f Chicago.” ACCEPTANCE OF TERMS OF ACT. Act Dec. 23, 38 13’statc‘ 252. * 602b. Under regulations to be prescribed by the organi- l ' za^ on committee, every national banking association in ” the United States is hereby required, and every eligible bank in the United States and every trust company THE FEDERAL RESERVE ACT. 121 within the District o f Columbia, is hereby authorized to signify in writing, within sixty days after the passage o f this act, its acceptance o f the terms and provisions hereof. SUBSCRIPTIONS TO CAPITAL STOCK. 602c. When the organization committee shall h a v e ^ c t Dec. 23, designated the cities in which Federal reserve banks are 38 stat.’ u| to be organized, and fixed the geographical limits o f the 252* Federal reserve districts, every national banking asso ciation within that district shall be required within thirty days after notice from the organization commit tee, to subscribe to the capital stock o f such Federal reserve bank in a sum equal to six per centum o f the paid-up capital stock and surplus o f such bank, onesixth o f the subscription to be payable on call of the organization committee or o f the Federal Reserve Board, one-sixth within three months and one-sixth within six months thereafter, and the remainder o f the subscrip tion, or any part thereof, shall be subject to call when deemed necessary by the Federal Reserve Board, said payments to be in gold or gold certificates. RESPONSIBILITY OF SHAREHOLDERS. 602d. The shareholders o f every Federal reserve bank ^ 13 * g|c.‘ 2£\ shall be held individually responsible, equally and ratastat- L » bly, and not one for another, for all contracts, debts, and engagements o f such bank to the extent o f the amount o f their subscriptions to such stock at the par value thereof in addition to the amount subscribed, whether such subscriptions have been paid up in whole or in part, under the provisions o f this Act. FAILURE OF NATIONAL BANKS TO ACCEPT TERMS OF ACT— PENALTY. 602e. A ny national bank failing to signify its accept- 19^ t 223: ance o f the terms o f this A ct within the sixty days afore- 38^ ’s ta t.’ l . ! said, shall cease to act as a reserve agent, upon thirty days’ notice, to be given within the discretion o f the said organization committee or o f the Federal Reserve Board. FAILURE OF NATIONAL BANKS TO BECOME MEMBER BANKS— PENALTY. 602f. Should any national banking association in the Act Dec. 23, United States now organized fail within one year after 38 'stat?’ l.; the passage o f this Act to become a member bank or f a i l 252, to comply with any o f the provisions o f this A ct appli cable thereto, all o f the rights, privileges, and franchises o f such association granted to it under the national-bank Act, or under the provisions o f this Act, shall be thereby 122 THE FEDERAL RESERVE ACT. forfeited. A ny noncompliance with or violation o f this A ct shall, however, be determined and adjudged by any court o f the United States o f competent jurisdiction in a suit brought for that purpose in the district or territory in which such bank is located, under direction o f the Federal Reserve Board, by the Comptroller o f the Cur rency in his own name before the association shall be declared dissolved. In cases o f such noncompliance or violation, other than the failure to become a member bank under the provisions o f this A ct, every director who participated in or assented to the same shall be held liable in his persona] or individual capacity for all dam ages which said bank, its shareholders, or any other person shall have sustained in consequence o f such violation. Such dissolution shall not take away or impair any remedy against such corporation, its stockholders or officers, fo r any liability or penalty which shall have been previously incurred. PUBLIC SUBSCRIPTIONS— WHEN ACCEPTED. Act Dec. 602g. Should 1913, sec. 223: 38 Stat. l.; o f said Federal 253. the subscriptions by banks to the stock reserve banks or any one or more o f them be, in the judgment o f the organization committee, in sufficient to provide the amount o f capital required there for, then and in that event the said organization com mittee may, under conditions and regulations to be pre scribed by it, offer to public subscription at par such an amount o f stock in said Federal reserve banks, or any one or more o f them, as said committee shall determine, subject to the same conditions as to payment and stock liability as provided fo r member banks. LIMIT TO STOCK HELD BY ANY INDIVIDUAL, COPART NERSHIP, OR CORPORATION OTHER THAN A MEMBER BANK. PUBLIC STOCK, HOW TRANSFERABLE. Act Dec. 23, 602h. No individual, copartnership, or corporation 1913, sec. L.j other than a member bank o f its district shall be per 38 Stat. 253. mitted to subscribe fo r or to hold at any time more than $25,000 par value o f stock in any Federal reserve bank. Such stock shall be known as public stock and may be transferred on the books o f the Federal reserve bank by the chairman o f the board o f directors o f such bank. ALLOTMENT OF STOCK TO UNITED STATES. Act Dec. 23: 602i. Should the 1913, sec. 38 Stat. l .; public to the stock 253. total subscriptions by banks and the o f said Federal reserve banks, or any one or more o f them, be, in the judgment o f the organiza tion committee, insufficient to provide the amount o f capital required therefor, then and in that event the said organization committee shall allot to the United States such an amount o f said stock as said committee shall de- THE FEDERAL RESERVE ACT. 123 termine. Said United States stock shall be paid for at par out o f any money in the Treasury not otherwise ap propriated, and shall be held by the Secretary o f the Treasury and disposed o f for the benefit o f the United States in such manner, at such times, and at such price, not less than par, as the Secretary o f the Treasury shall determine. VOTING POWER. 602j. Stock not held by member banks shall not be en- 19^ t Dec. 2^3, titled to voting power. 38^ stat.' L\ TRANSFER OF STOCK. 602k. The Federal Reserve Board is hereby Dec- 23: powered to adopt and promulgate rules and regulations 38 stat.c‘ L\ governing the transfers o f said stock. 253* MINIMUM CAPITAL OF FEDERAL RESERVE BANK. 6021. No Federal reserve bank shall commence business 19^ ®ec. 2g: with a subscribed capital less than $4,000,000. |8^ stat. * l.| RESERVE CITIES, STATUS OF. 602m. The organization o f reserve districts and Federal 23: reserve cities shall not be construed as changing the ||3 stat. ’ l.| present status o f reserve cities and central reserve cities, except in so far as this A ct changes the amount o f reserves that may be carried with approved reserve agents located therein. AUTHORITY OF ORGANIZATION COMMITTEE TO EMPLOY ASSISTANTS. 602n. The organization committee shall have power to 19^ct Dec. 2^3, appoint such assistants and incur such expenses in carry- 38 * stat.* l| ing out the provisions o f this A ct as it shall deem neces- 253, sary, and such expenses shall be payable by the Treasurer o f the United States upon voucher approved by the Secre tary o f the Treasury, and the sum o f $100,000, or so much thereof as may be necessary, is hereby appropri ated, out o f any moneys in the Treasury not otherwise appropriated, fo r the payment o f such expenses. BRANCH OFFICES. BRANCHES OF FEDERAL RESERVE BANKS. 603. Sec. 3.— The Federal Reserve Board may permit or Act Dec. 23, require any Federal reserve bank to establish branch ss^’stat0, iii banks within the Federal reserve district in which it i s 253ct June 21 located or within the district o f any Federal reserve bank 19 17 , 'soc. 1 j which may have been suspended. Such branches, su b- 132, fhap. 32"” 124 THE FEDERAL RESERVE ACT. ject to such rules and regulations as the Federal Reserve Board may prescribe, shall be operated under the super vision o f a board o f directors to consist o f not more than seven nor less than three directors, o f whom a m ajority o f one shall be appointed by the Federal reserve bank o f the district, and the remaining directors by the Federal Reserve Board. Directors o f branch banks shall hold office during the pleasure o f the Federal Reserve Board. FEDERAL RESERVE BANKS. ORGANIZATION OF FEDERAL RESERVE BANKS. CATION FOR STOCK BY NATIONAL BANKS. APPLI- Act Dec. 23f 604. Sec. 4.— When the organization committee shall 1913, sec. 38 Stat. L.’, have established Federal reserve districts as provided in 254. section two o f this A ct, a certificate shall be filed with the Comptroller o f the Currency showing the geographical limits o f such districts and the Federal reserve city designated in each o f such districts. The Comptroller o f the Currency shall thereupon cause to be forwarded to each national bank located in each district, and to such other banks declared to be eligible by the organization committee which may apply therefor, an application blank in form to be approved by the organization com mittee, which blank shall contain a resolution to be adopted by the board o f directors o f each bank executing such application, authorizing a subscription to the capital stock o f the Federal reserve bank organizing in that dis trict in accordance with the provisions o f this Act. ORGANIZATION CERTIFICATE. Act Dec. 1913, sec. 38 Stat. 254. 604a. When the minimum amount o f capital stock preL.’, scribed by this A ct for the organization o f any Federal reserve bank shall have been subscribed and allotted, the organization committee shall designate any five banks o f those whose applications have been received, to execute a certificate o f organization, and thereupon the banks so designated shall, under their seals, make an organization certificate which shall specifically state the name o f such Federal reserve bank, the territorial extent o f the district over which the operations o f such Federal reserve bank are to be carried on, the city and State in which said bank is to be located, the amount o f capital stock and the number o f shares into which the same is divided, the name and place o f doing business o f each bank executing such certificate, and o f all banks which have subscribed to the capital stock o f such Federal re serve bank and the number o f shares subscribed by each, and the fact that the certificate is made to enable those banks executing same, and all banks which have sub scribed or may thereafter subscribe to the capital stock o f such Federal reserve bank, to avail themselves o f the advantages o f this Act. THE FEDERAL RESERVE ACT. 125 The said organization certificate shall be acknowl edged before a judge o f some court o f record or notary p u blic; and shall be, together with the acknowledgement thereof, authenticated by the seal o f such court, or no tary, transmitted to the Comptroller o f the Currency, who shall file, record and carefully preserve the same in his office. POWERS OF FEDERAL RESERYE BANKS. 604b. Upon the filing o f such certificate with the 1QA c t Dec. 23 Comptroller o f the Currency as aforesaid, the said Fed- 38 ’stat?' u\ eral reserve bank shall become a body corporate, and as 254# such, and in the name designated in such organization certificate, shall have power— First. T o adopt and use a corporate seal. Second. T o have succession fo r a period o f twenty years from its organization unless it is sooner dissolved by an A ct o f Congress, or unless its franchise becomes forfeited by some violation o f law. Third. T o make contracts. Fourth. T o sue and be sued, complain and defend, in any court o f law or equity. - Fifth. T o appoint by its board o f directors such offi cers and employees as are not otherwise provided for in this act, to define their duties, require bonds o f them and fix the penalty thereof, and to dismiss at pleasure such officers or employees. Sixth. T o prescribe by its board o f directors, by-laws, not inconsistent with law, regulating the manner in which its general business may be conducted, and the privileges granted to it by law may be exercised and enjoyed. Seventh. T o exercise by its board o f directors, or duly authorized officers or agents, all powers specifically granted by the provisions o f this act and such incidental powers as shall be necessary to carry on the business o f banking within the limitations prescribed by this act. Eighth.1 Upon deposit with the Treasurer o f the United States o f any bonds o f the United States in the manner provided by existing law relating to national banks, to receive from the Comptroller o f the Currency circulating notes in blank, registered and countersigned as provided by law, equal in amount to the par value o f the bonds so deposited, such notes to be issued under the same conditions and provisions o f law as relate to the issue o f circulating notes o f national banks secured by bonds o f the United States bearing the circulating priv ilege, except that the issue o f such notes shall not be limited to the capital stock o f such Federal reserve bank. 1 See section 18. Also section 5 of act approved Apr. 23, 1918, authorizing issuance of Federal Reserve Bank notes in any de nominations (including $1 and $2) against security of United States certificates of indebtedness. 126 THE FEDERAL RESERVE ACT. But no Federal reserve bank shall transact any business except such as is incidental and necessarily preliminary to its organization until it has been authorized by the Comptroller o f the Currency to commence business under the provisions o f this act. DIRECTORS OF FEDERAL RESERVE BANKS. 604c. Every Federal reserve bank shall be conducted L ’ im(^er the supervision and control o f a board o f directors. The board o f directors shall perform the duties usually appertaining to the office o f directors o f banking associa tions and all such duties as are prescribed by law. Said board shall administer the affairs o f said bank fairly and impartially and without discrimination in favor o f or against any member bank or banks and shall, subject to the provisions o f law and the orders o f the Federal Reserve Board, extend to each member bank such discounts, advancements and accommodations as may be safely and reasonably made with due regard for the claims and demands o f other member banks. 1913 * sec.' 43; 255 Stat’ CLASSIFICATION OF DIRECTORS. 1913* ?ec.' 243; 604d. 38 stat. ’ l .’, inafter 2B5* Such board o f directors shall be selected as herespecified and shall consist o f nine members, holding office fo r three years, and divided into three classes, designated as classes A , B, and C. Class A shall consist o f three members, who shall be chosen by and be representative o f the stock-holding banks. Class B shall consist o f three members, who at the time o f their election shall be actively engaged in their dis trict in commerce, agriculture or some other industrial pursuit. Class C shall consist o f three members who shall be designated by the Federal Reserve Board. W hen the necessary subscriptions to the capital stock have been obtained for the organization o f any Federal reserve bank, the Federal Reserve Board shall appoint the class C directors and shall designate one o f such directors as chairman o f the board to be selected. Pending the desig nation o f such chairman, the organization committee shall exercise the powers and duties appertaining to the office o f chairman in the organization o f such Federal reserve bank. No Senator or Representative in Congress shall be a member o f the Federal Reserve Board or an officer or a director o f a Federal reserve bank. No director o f class B shall be an officer, director, or employee o f any bank. No director o f class C shall be an officer, director, employee, or stockholder o f any bank. THE FEDERAL RESERVE ACT. 127 ELECTION OF CLASS A AND CLASS B DIRECTORS. 604e. Directors o f class A and class B shall be chosen 19^ 243: in the follow ing m anner: ||6 stat. l .*, The Federal Reserve Board shall classify the member banks o f the district into three general groups or divi sions, designating each group by number. Each group shall consist as nearly as may be o f banks o f similar capitalization. Each member bank shall be permitted to Act gept 2e, nominate to the chairman o f the board o f directors o f 1918« the Federal reserve bank o f the district one candidate for director o f class A and one candidate for director o f class B. The candidates so nominated shall be listed by the chairman, indicating by whom nominated, and a copy o f said list shall, within fifteen days after its completion, be furnished by the chairman to each member bank. Each member bank by a resolution o f the board or by an amendment to its by-laws shall authorize its president, cashier, or some other officer to cast the vote o f the mem ber bank in the elections o f class A and class B directors. W ithin fifteen days after receipt o f the list o f candi dates the duly authorized officer o f a member bank shall certify to the chairman his first, second, and other choices fo r director o f class A and class B, respectively, upon a preferential ballot upon a form furnished by the chair man o f the board o f directors o f the Federal reserve bank o f the district. Each such officer shall make a cross opposite the name o f the first, second, and other choices for a director o f class A and for a director o f class B, but shall not vote more than one choice for any one candidate. No officer or director o f a member bank shall be eligible to serve as a class A director unless nomi nated and elected by banks which are members o f the same group as the member bank o f which he is an officer or director. A n y person who is an officer or director o f more than one member bank shall not be eligible fo r nomination as a class A director except by banks in the same group as the bank having the largest aggregate resources o f any o f those o f which such person is an officer or director. A n y candidate having a m ajority o f all votes cast in the column o f first choice shall be declared elected. I f no candidate have a majority o f all the votes in the first column, then there •shall be added together the votes cast by the electors fo r such candidates in the second col umn and the votes cast fo r the several candidates in the first column. I f any candidate then have a m ajority o f the electors voting, by adding together the first and second choices, he shall be declared elected. I f no can didate have a m ajority o f electors voting when the first and second choices shall have been added, then the votes cast in the third column for other choices shall be added together in like manner, and the candidate then having 128 THE FEDERAL RESERVE ACT. the highest number o f votes shall be declared elected. A n immediate report o f election shall be declared. APPOINTMENT OF CLASS C DIRECTORS. SERVE AGENTS, DUTIES OF. FEDERAL RE’ 1913! ?lc.’ 43; 604f. Class C directors shall be appointed by the FedStat‘ L*’ eral R eserve Board. They shall have been for at least two years residents o f the district for which they are ap pointed, one o f whom shall be designated by said board as chairman o f the board o f directors o f the Federal rem'Tsec11! 21’ serve bank and as ‘ Federal reserve agent.’ H e shall be a person o f tested banking experience, and in addition to his duties as chairman o f the board o f directors o f the Federal reserve bank he shall be required to maintain, under regulations to be established by the Federal E e serve Board, a local office o f said board on the premises o f the Federal reserve bank. He shall make regular re ports to the Federal Eeserve Board and shall act as its official representative for the performance o f the func tions conferred upon it by this act. He shall receive an annual compensation to be fixed by the Federal Eeserve Board and paid monthly by the Federal reserve bank to which he is designated. One o f the directors o f class C shall be appointed by the Federal Eeserve Board as deputy chairman to exercise the powers o f the chairman o f the board when necessary. In case o f the absence o f the chairman and deputy chairman, the third-class C director shall preside at meetings o f the board. Subject to the approval o f the Federal Eeserve Board, the Federal reserve agent shall appoint one or more, as sistants. Such assistants, who shall be persons o f tested banking experience, shall assist the Federal reserve agent in the performance o f his duties and shall also have power to act in his name and stead during his absence or disability. The Federal Eeserve Board shall require such bonds o f the assistant Federal reserve agents as it may deem necessary fo r the protection o f the United States. Assistants to the Federal reserve agent shall re ceive an annual compensation, to be fixed and paid in the same manner as that o f the Federal reserve agent. 2I0 COMPENSATION OF DIRECTORS. 604ff. Directors o f Federal reserve banks shall receive, S6C 4' • T • • T T ’stat.* L.’, in addition to any compensation otherwise provided, a 257, reasonable allowance fo r necessary expenses in attend ing meetings o f their respective boards, which amount shall be paid by the respective Federal reserve banks. A n y compensation that may be provided by boards o f directors o f Federal reserve banks fo r directors, officers or employees shall be subject to the approval -of the Fed eral Eeserve Board. Act Dec. 23 19 13 38 129 THE FEDERAL RESERVE ACT. ORGANIZATION OF FEDERAL RESERVE BANKS. THORITY OF ORGANIZATION COMMITTEE. AU 604h. The Reserve Bank Organization Committee may, ^ec. 2*\ in organizing Federal reserve banks, call such meetings 38 fetat. ‘ u\ o f bank directors in the several districts as may be neces sary to carry out the purposes o f this Act, and may exercise the functions herein conferred upon the chair man o f the board o f directors o f each Federal reserve bank pending the complete organization o f such bank. FIRST MEETING OF TERMS OF OFFICE. DIRECTORS. DESIGNATION OF 604i. A t the first meeting o f the full board o f directors lgAct Dec. 23, o f each Federal reserve bank, it shall be the duty o f the 38 ’stat?* L.J directors o f classes A , B and C, respectively, to designate 257# one o f the members o f each class whose term o f office shall expire in one year from the first o f January nearest the date o f such meeting, one whose term o f office shall expire at the end o f two years from said date, and one whose term o f office shall expire at the end o f three years from said date. Thereafter every director o f a Federal reserve bank chosen as hereinbefore provided shall hold office fo r a term o f three years. Vacancies that may occur in the several classes o f directors o f Federal reserve banks may be filled in the manner provided for the origi nal selection o f such directors, such appointees to hold office fo r the unexpired terms o f their predecessors. STOCK ISSUES; INCREASE AND DECREASE OF CAPITAL. INCREASE AND DECREASE OF CAPITAL STOCK. 605. Sec. 5.— The capital stock o f each Federal reserve 253: bank shall be divided into shares o f $100 each. The out- 38^ stat.* L.I standing capital stock shall be increased from time to 0 ’ time as member banks increase their capital stock and surplus or as additional banks become members, and may be decreased as member banks reduce their capital stock or surplus or cease to be members. STOCK NOT TRANSFERABLE. 605a. Shares o f the capital stock o f Federal reserve 19Act Dec. banks owned by member banks shall not be transferred 38 stat°‘ or hypothecated. 257- 23, l .;, INCREASE OF CAPITAL STOCK. 605b. When a member bank increases its capital stock 19^gt Dec. 23, or surplus, it shall thereupon subscribe for an additional 38 ’stat0* l .! amount o f capital stock o f the Federal reserve bank o f 257# its district equal to six per centum o f the said increase, one-half o f said subscription to be paid in the manner hereinbefore provided fo r original subscription, and oneh alf subject to call o f the Federal Eeserve Board. 164312°— 20------ 9 130 THE FEDERAL RESERVE ACT. APPLICATIONS FOR CAPITAL STOCK. Act Dec. 1913, sec. 38 Stat. 257. 2^3, 605c. A bank applying for stock in a Federal reserve l.| bank at any time after the organization thereof must sub scribe fo r an amount o f the capital stock o f the Federal reserve bank equal to six per centum o f the paid-up capi tal stock and surplus o f said applicant bank, paying therefor its par value plus one-half o f one per centum a month from the period o f the last dividend. CERTIFICATE OF INCREASE IN STOCK OF FEDERAL RE SERYE BANK. Act Dec. 1913, sec. 38 Stat. 257. 253» l .’, 605d. When the capital stock o f any Federal reserve bank shall have been increased either on account o f the increase o f capital stock o f member banks or on account o f the increase in the number o f member banks, the board o f directors shall cause to be executed a certificate to the Comptroller o f the Currency showing the increase in capital stock, the amount paid in, and by whom paid. REDUCTION OF CAPITAL STOCK. Act Dec. 1913, sec. 38 Stat. 257. 2g3: l /, 605e. When a member bank reduces its capital stock it shall surrender a proportionate amount o f its holdings in the capital o f said Federal reserve bank, and when a member bank voluntarily liquidates it shall surrender all o f its holdings o f the capital stock o f said Federal reserve bank and be released from its stock subscription not pre viously called. In either case the shares surrendered shall be canceled and the member bank shall receive in payment therefor, under regulations to be prescribed by the Federal Eeserve Board, a sum equal to its cash-paid subscriptions on the shares surrendered and one-half o f one per centum a month from the period o f the last divi dend, not to exceed the book value thereof, less any lia bility o f such member bank to the Federal reserve bank. INSOLYENCY OF MEMBER BANK. Act Dec. 23, 1913, sec. 38 Stat. L.j 258. 606. Sec. 6.— I f any member bank shall be declared insolvent and a receiver appointed therefor, the stock held by it in said Federal reserve bank shall be canceled, with out impairment o f its liability, and all cash-paid sub scriptions on said stock, with one-half o f one per centum per month from the period o f last dividend, not to ex ceed the book value thereof, shall be first applied to all debts o f the insolvent member bank to the Federal re serve bank, and the balance, if any, shall be paid to the receiver o f the insolvent bank. Whenever the capital stock o f a Federal reserve bank is reduced, either on ac count o f a reduction in capital stock o f any member bank or o f the liquidation or insolvency o f such bank, the board o f directors shall cause to be executed a certificate to the Comptroller o f the Currency showing such reduc tion o f capital stock and the amount repaid to such bank. THE FEDERAL RESERVE ACT. 131 DIVISION OF EARNINGS. 607. Sec. 7.— A fter all necessary expenses o f a Federal 19^jt ^ec. 2^3, reserve bank have been paid or provided for, the stock- 38 statc' l.\ holders shall be entitled to receive an annual dividend o f 258’ six per centum on the paid-in capital stock, which divi dend shall be cumulative. A fter the aforesaid dividend claims have been fully 19^ Mar# 3» met, the net earnings shall be paid to the United States as a franchise tax except that the whole o f such net earnings, including those for the year ending December thirty-first, nineteen hundred and eighteen, shall be paid into a surplus fund until it shall amount to one hundred per centum o f the subscribed capital stock o f such bank, and that thereafter ten per centum o f such earnings shall be paid into the surplus. The net earnings derived by the United States from Federal reserve banks shall, in the discretion o f the Secre tary, be used to supplement the gold reserve held against outstanding United States notes, or shall be applied to the reduction o f the outstanding bonded indebtedness o f the United States under regulations to be prescribed by the Secretary o f the Treasury. Should a Federal reserve bank be dissolved or go into liquidation, any surplus re maining, after the payment o f all debts, dividend require ments as hereinbefore provided, and the par value o f the stock, shall be paid to and become the property o f the United States and shall be similarly applied. TAX EXEMPTIONS. 607a. Federal reserve banks, including the capital stock 19^ t Dec. and surplus therein, and the income derived therefrom 38 ’stat.’ shall be exempt from Federal, State, and local taxation,258, except taxes upon real estate. 23, l .) CONVERSION OF STATE BANKS INTO NATIONAL BANKS. 608. Sec. 8.— Section fifty-one hundred and fifty-four, lg^|t ^un^0|» United States Revised Statutes, is hereby amended to sec. ’ 44; 13 read as fo llo w s: StActLDec.1223, A ny bank incorporated by special law o f any State or 3sls’st2Sf" l.; o f the United States or organized under the general laws 258. o f any State or o f the United States and having an unim paired capital sufficient to entitle it to becpme a national banking association under the provisions o f the existing laws may, v y the vote o f the shareholders owning not less than fifty-one per centum o f the capital stock o f such bank or banking association, with the approval o f tho Comptroller o f the Currency be converted into a national banking association, with any name approved by the Comptroller o f the Currency: Provided, however, That 132 THE FEDERAL RESERVE ACT. said conversion shall not be in contravention o f the State law. In such case the articles o f association and organi zation certificate may be executed by a m ajority o f the directors o f the bank or banking institution, and the cer tificate shall declare that the owners o f fifty-one per centum o f the capital stock have authorized the directors to make such certificate and to change or convert the bank or banking institution into a national association. A m ajority o f the directors, after executing the articles o f association and the organization certificate, shall have ower to execute all other papers and to do whatever may e required to make its organization perfect and com plete as a national association. The shares o f any such bank may continue to be for the same amount each as they were before the conversion, and the directors may con tinue to be the directors o f the association until others are elected or appointed in accordance with the provisions o f the statutes o f the United States. When the Comptroller has given to such bank or banking association a certificate that the provisions o f this A ct have been complied with, such bank or banking association, and all its stockholders, officers, and employees, shall have the same powers and privileges, and shall be subject to the same duties, lia bilities, and regulations, in all respects, as shall have been prescribed by the Federal Reserve A ct and by the national banking A ct for associations originally organized as national banking associations. E STATE RANKS AS MEMBERS. STATE BANKS MAT SUBSCRIBE. Act Dec. 23, 609. Sec. 9.— A n y bank incorporated by special law o f 3813,statc* ujany State, or organized under the general laws o f any 25Act June 21 State or 0;f the United States, desiring to become a mem1917 , sec. 3 •ber o f the Federal Reserve System, may make application 232. Stat* Lmto the Federal Reserve Board, under such rules and regu lations as it may prescribe, for the right to subscribe to the stock o f the Federal reserve bank organized within the district in which the applying bank is located. Such application shall be fo r the same amount o f stock that the applying bank would be required to subscribe to as a national bank. The Federal Reserve Board, subject to such conditions as it may prescribe, may permit the applying bank to become a stockholder o f such Federal reserve bank. APPLICATIONS FOR MEMBERSHIP. 1913*seceC9 233£ 609a. stat.* L .,' 259. Reserve acting upon such applications the Federal Board shall consider the financial condition o f 1917* sec?e321, the applying bank, the general character o f its manage ment, and whether or not the corporate powers exercised are consistent with the purposes o f this act. THE FEDERAL RESERVE ACT. 133 Whenever the Federal Reserve Board shall permit the applying bank to become a stockholder in the Fed eral reserve bank o f the district its stock subscription shall be payable on call o f the Federal Reserve Board, and stock issued to it shall be held subject to the pro visions o f this act. REGULATIONS AND RESTRICTIONS. 609b. A ll banks admitted to membership under authority o f this section shall be required to comply with the stat.* l 8,c'259. reserve and capital requirements o f this act and to con form to those provisions o f law imposed on national 19i 7 *Sec.n! . 21, banks which prohibit such banks from lending on or purchasing their own stock, which relate to the with drawal or impairment o f their capital stock, and which relates to the payment o f unearned dividends. MEMBER BANKS REQUIRED TO MAKE REPORTS TO FEDERAL RESERVE BOARD AND SUBJECT TO EXAMINA TION BY EXAMINERS APPOINTED BY THE BOARD AND SUCH BANKS’ OFFICERS, AGENTS, AND EMPLOYEES SUBJECT TO PENALTIES OF SECTION 5200. 609c. Such banks and the officers, agents, and employees 19^jjt Dec. 2^3, thereof shall also be subject to the provisions o f and t o 38 stat.’ l.’, the penalties prescribed by section fifty-two hundred and 260, nine o f the Revised Statutes, and shall be required to Act June 21 make reports o f condition and o f the payment o f d iv i- 1917, sec. 3. ' dends to the Federal reserve bank o f which they become a member. Not less than three o f such reports shall be made annually on call o f the Federal reserve bank on dates to be fixed by the Federal Reserve Board. Failure to make such reports within ten days after the date they are called for shall subject the offending bank to a penalty o f $100 a day for each day that it fails to transmit such report; such penalty to be collected by the Federal re serve bank by suit or otherwise. As a condition o f membership such banks shall like wise be subject to examinations made by direction o f the Federal Reserve Board or o f the Federal reserve bank by examiners selected or approved by the Federal Reserve Board. Whenever the directors o f the Federal reserve bank shall approve the examinations made by the State authorities, such examinations and the reports thereof may be accepted in lieu o f examinations made by exam iners selected or approved by the Federal Reserve B oard: Provided, however, That when it deems it necessary the board may order special examinations by examiners o f its own selection and shall in all cases approve the form o f the report. The expenses o f all examinations, other than those made by State authorities, shall be assessed against and paid by the banks examined. 134 THE FEDERAL RESERVE ACT. FAILURE TO COMPLY WITH REGULATIONS— PENALTY. Act Dec. 23, 609d. I f at any time it shall appear to the Federal Re1913, sec. 38 Stat. L .’, serve Board that a member bank has failed to com ply 260. with the provisions o f this section or the regulations o f Act June 21>the Federal Reserve Board 1917, sec. 2 ’ shall be within the power o f made pursuant thereto, it the board after hearing to require such bank to surrender its stock in the Federal reserve bank and to forfeit all rights and privileges o f membership. The Federal Reserve Board may restore membership upon due p roof o f compliance with the con ditions imposed by this section. WITHDRAWAL FROM MEMBERSHIP IN FEDERAL RE SERVE BANK BY STATE BANK OR TRUST COMPANY. Act June 1917, sec. 3 21» 609e. A n y State bank or trust company desiring to withdraw from membership in a Federal reserve, bank may do so, after six months’ written notice shali have been filed with the Federal Reserve Board, upon the sur render and cancellation o f all o f its holdings o f capital stock in the Federal reserve bank: Provided, however, That no Federal reserve bank shall, except under express authority o f the Federal Reserve Board, cancel within the same calendar year more than twenty-five per centum o f its capital stock for the purpose o f effecting voluntary withdrawals during that year. A ll such applications shall be dealt with in the order in which they are filed with the board. Whenever a member bank shall surrender its stock holdings in a Federal reserve bank, or shall be ordered to do so by the Federal Reserve Board, under authority o f law, all o f its rights and privileges as a member bank shall thereupon cease and determine, and after due provision has been made for any indebtedness due or to become due to the Federal reserve bank it shall be entitled to a refund o f its cash paid subscription with interest at the rate o f one-half o f one per centum per month from date o f last dividend, if earned, the amount refunded in no event to exceed the book value o f the stock at that time, and shall likewise be entitled to repayment o f deposits and o f any other balance due from the Fed eral reserve bank. AMOUNT OF CAPITAL REQUIRED TO ENABLE STATE BANK TO BECOME MEMBER BANK. Act Dec. 23, 6O0f. No applying bank shall be admitted to member1913, sec. 38 Stat. l/, ship in a Federal reserve bank unless it possesses a paid259. Act June 21 up, unimpaired capital sufficient to entitle it to become a 1917, sec. < *national banking association in the place where it is situ ated under the provisions o f the national-bank act. THE FEDERAL RESERVE ACT. RIGHTS, POWERS, AND LIABILITIES OF STATE BANKS WHICH BECOME MEMBER BANKS. 609g. Banks becoming members o f the Federal Reserve System under authority o f this section shall be subject to the provisions o f this section and to those o f this act which relate specifically to member banks, but shall not be subject to examination under the provisions o f the first two paragraphs o f section fifty-two hundred and forty o f the Revised Statutes as amended by scction twenty-one o f this act.1 Subject to the provisions o f this act and to the regulations o f the board made pursuant thereto, any bank becoming a member o f tho Federal Reserve System shall retain its full charter and statutory rights as a State bank or trust company, and may con tinue to exercise all corporate powers granted it by the State in which it was created, and shall be entitled to all privileges o f member banks: Provided, however, That no Federal reserve bank shall be permitted to discount for any State bank or trust company notes, drafts, or bills o f exchange o f any one borrower who is liable for borrowed money to such State bank or trust company in an amount greater than ten per centum o f the capital and surplus o f such State bank or trust company, but the discount of bills o f exchange drawn against actually existing value and the discount o f commercial or business paper actually owned by the person negotiating the same shall not be considered as borrowed money within the meaning o f this section. The Federal reserve bank, as a condition o f the discount o f notes, drafts, and bills of exchange for such State bank or trust company, shall require a certificate or guaranty to the effect that the borrower is not liable to such bank in excess o f the amount provided by this sec tion, and will not be permitted to become liable in excess o f this amount while such notes, drafts, or bills o f ex change are under discount with the Federal reserve bank. It shall be unlawful for any officer, clerk, or agent of any bank admitted to membership under authority of this section to certify any check drawn upon such bank unless the person or company drawing the check has on deposit therewith at the time such check is certified an amount o f money equal to the amount specified in such check. A ny check so certified by duly authorized officers shall be a good and valid obligation against such bank, but the act of any such officer, clerk, or agent in violation of this section may subject such bank to a forfeiture o f its mem bership in the Federal Reserve System upon hearing by the Federal Reserve Board. 1Amending section 21 o£ this act. 135 136 THE FEDERAL RESERVE ACT. F ederal E eserve B oard. APPOINTMENT, COMPENSATION, AND QUALIFICATION OF MEMBERS OF FEDERAL RESERVE BOARD. loisf sDecC* io3; ^ Federal Eeserve Board is hereby cre38 stat.* L.lated which shall consist o f seven members, including 260, the Secretary o f the Treasury and the Comptroller o f the Currency, who shall be members ex officio, and five mem bers appointed by the President o f the United States, by and with the advice and consent o f the Senate. In selecting the five appointive members o f the Federal E e serve Board, not more than one o f whom shall be selected from any one Federal reserve district, the President shall have due regard to a fair representation o f the different commercial, industrial and geographical divisions o f the country. The five members o f the Federal Eeserve Board appointed by the President and confirmed as afore said shall devote their entire time to the business o f the Federal Eeserve Board and shall each receive an annual salary o f $12,000, payable monthly together with actual necessary traveling expenses, and the Comptroller o f the Currency, as ex officio member o f the Federal Eeserve Board, shall, in addition to the salary now paid him as Comptroller o f the Currency, receive the sum o f $7,000 annually fo r his services as a member o f said board. Act Mar. 3, The Secretary o f the Treasury and the Comptroller of 1919# the Currency shall be ineligible during the time they are in office and for two years thereafter to hold any office, position, or employment in any member bank. The ap pointive members o f the Federal Eeserve Board shall be ineligible during the time they are in office and for two years thereafter to hold any office, position, or employ ment in any member bank, except that this restriction shall not apply to a member who has served the full term fo r which he was appointed. O f the five members thus appointed by the President at least two shall be persons experienced in banking or finance. One shall be desig nated by the President to serve for two, one for four, one fo r six, one for eight, and one fo r ten years, and there after each member so appointed shall serve for a term o f ten years unless sooner removed for cause by the Presi dent. GOVERNOR AND VICE GOVERNOR; OFFICERS; QUALIFI CATION OF MEMBERS. 610a. O f the five persons thus appointed, one shall be L.’, designated by the President as governor and one as vice governor o f the Federal Eeserve Board. The governor o f the Federal Eeserve Board, subject to its supervision, shall be the active executive officer. The Secretary o f i 9 i 3fc secC* i2<?! 38 'stat 26°* 1 See section ‘5209, Revised Statutes, as amended by act of Sept. 26, 1918 (p. 88 ante), for penalty for false certification of checks by officers of Federal reserve banks and national banks. THE FEDERAL RESERVE ACT. 137 the Treasury may assign offices in the Department o f the Treasury for the use o f the Federal Eeserve Board. Each member o f the Federal Reserve Board shall within fifteen days after notice of appointment make and subscribe to the oath o f office. PROVISION FOR EXPENSES. 610b. The Federal Reserve Board shall have power to Act Dec. 23, levy semiannually upon the Federal reserve banks, in pro- 38 13,stSat.’ portion to their capital stock and surplus, an assessment 26i. sufficient to pay its estimated expenses and the salaries o f its members and employees for the half year succeed ing the levying o f such assessment, together with any deficit carried forw ard from the preceding half year. FIRST MEETING OF BOARD. CHAIRMAN OF BOARD. SECRETARY OF TREASURY 610c. The first meeting o f the Federal Reserve Board Act Dec. 23, shall be held in Washington, District o f Columbia, as soon 3813’stat "l.’, as may be after the passage o f this act, at a date to b e 261* fixed by the Reserve Bank Organization Committee. The Secretary o f the Treasury shall be ex officio chairman o f the Federal Reserve Board. MEMBER OF FEDERAL RESERVE BOARD NOT TO BE OFFICER, DIRECTOR, OR STOCKHOLDER IN ANY BANK ING INSTITUTION OR TRUST COMPANY. 610d. No member o f the Federal Reserve Board shall Act Dec. be an officer or director o f any bank, banking institution, 38 13’stat.c' trust company, or Federal reserve bank nor hold stock261in any bank, banking institution, or trust com pany; and before entering upon his duties as a member o f the Fed eral Reserve Board he shall certify under oath to the Secretary o f the Treasury that he has complied with this requirement. 23, l .’, VACANCIES ON BOARD— HOW FILLED. 610e. Whenever a vacancy shall occur, other than by Act Dec. 23, expiration of term, among the five members o f the Federal 3813,stat.’ "l.) Reserve Board appointed by the President, as above p r o -261vided, a successor shall be appointed by the President, with the advice and consent o f the Senate, to fill such vacancy, and when appointed he shall hold office for the unexpired term o f the member whose place he is selected to fill. The President shall have power to fill all vacancies that may happen on the Federal Reserve Board during the recess o f the Senate, by granting commissions which shall expire thirty days after the next session o f the Senate convenes. POWERS OF SECRETARY OF TREASURY. 610f. Nothing in this A ct contained shall be construed 19^ as taking away any powers heretofore vested by law in 38 'stat.* the Secretary o f the Treasury which relate to the super-261, l .’, 138 THE FEDERAL EESERVE ACT. vision, management, and control o f the Treasury Depart ment and bureaus under such department, and wherever any power vested by this A ct in the Federal Eeserve Board or the Federal reserve agent appears to conflict with the powers o f the Secretary o f the Treasury, such powers shall be exercised subject to the supervision and control o f the Secretary. FEDERAL RESERVE BOARD TO MAKE ANNUAL REPORT TO SPEAKER OF THE HOUSE OF REPRESENTATIVES. Act Dec. 1913, sec. 38 Stat. 261. 610g. The Federal Reserve Board shall annually make L-’»a full report o f its operations to the Speaker o f the House o f Representatives, who shall cause the same to be printed for the information o f the Congress. COMPTROLLER OF THE CURRENCY. Act Dec. 610h. 1913, sec. ^o3: 38 Stat. l.! Revised 261. Section three hundred and twenty-four o f the Statutes o f the United States shall be amended so as to read as follow s: There shall be in the Depart ment o f the Treasury a bureau charged with the execu tion o f all laws passed by Congress relating to the issue and regulation o f national currency secured by United States bonds and, under the general supervision o f the Federal Reserve Board, o f all Federal reserve notes, the chief officer o f which bureau shall be called the Comp troller o f the Currency and shall perform his duties under the general directions o f the Secretary o f the Treasury. POWERS OF FEDERAL RESERVE BOARD. Act Dec. 1913, sec. 38 Stat. 261. u; 611. Sec. 11.— The Federal Reserve Board shall be auL-» thorized and em powered: EXAMINATION OF BOOKS OF FEDERAL RESERVE BANKS AND MEMBER BANKS BY FEDERAL RESERVE BOARD. BOARD MAY REQUIRE REPORTS. Act Dec. 2®: 611a. (a) T o examine at its discretion 1913, sec. 38 Stat. l .’, books and affairs o f each Federal reserve 261. the accounts, bank and o f each member bank and to require such statements and reports as it may deem necessary. The said board shall publish once each week a statement showing the condi tion o f each Federal reserve bank and a consolidated statement for all Federal reserve banks. Such state ments shall show in detail the assets and liabilities o f the Federal reserve banks, single and combined, and shall furnish full inform ation regarding the character o f the money held as reserve and the amount, nature and maturities o f the paper and other investments owned or held by Federal reserve banks. 139 THE FEDERAL RESERVE ACT. REDISCOUNTS. 611b. (&) T o permit, or, on the affirmative vote o f a t 19^ least five members o f the Reserve Board to req u ire 38 Federal reserve banks to rediscount the discounted paper o f other Federal reserve banks at rates o f interest to be fixed by the Federal Reserve Board. 'stat. l /, SUSPENSION OF RESERVE REQUIREMENTS. 611c. (c) T o suspend for a period not exceeding thirty 19^ days, and from time to time to renew such suspension for 38^ periods not exceeding fifteen days, any reserve require ment specified in this a ct: Provided, That it shall estab lish a graduated tax upon the amounts by which the reserve requirements o f this A ct may be permitted to fall below the level hereinafter specified: And provided fur ther*, That when the gold reserve held against Federal reserve notes falls below forty per centum, the Federal Reserve Board shall establish a graduated tax o f not more than one per centum per annum upon such defi ciency until the reserves fall to thirty-two and one-half per centum, and when said reserve falls below thirty-two and one-half per centum, a tax at the rate increasingly o f not less than one and one-half per centum per annum upon each two and one-half per ctntum or fraction thereof that such reserve falls below thirty-two and onehalf per centum. The tax shall be paid by the reserve bank, but the reserve bank shall add an amount equal to said tax to the rates o f interest and discount fixed by the Federal Reserve Board. ***• ’stat. L.*f ISSUE AND RETIREMENT OF FEDERAL RESERVE NOTES. 611d. (d) To supervise and regulate through the bureau Act Dec. under the charge o f the Comptroller o f the Currency the 38 1 stat0.’ issue and retirement o f Federal reserve notes, and to pre- 262# scribe rules and regulations under which such notes may be delivered by the Comptroller to the Federal reserve agents applying therefor. 23, l .’, RESERVE CITIES. 611e. (e) T o add to the number o f cities classified as 1{Act Dec. reserve and central reserve cities under existing law in 38 stat.' which national banking associations are subject to th e 262, reserve requirements set forth in section twenty o f this act; or to reclassify existing reserve and central reserve cities or to terminate their designation as such. 23, l /, SUSPENSION OR REMOVAL OF OFFICER OR DIRECTOR OF A FEDERAL RESERVE BANK. 61 If. ( / ) T o suspend or remove any officer or director Act Dec. 23, o f any Federal reserve bank, the cause o f such removal 3813,stat.' ^.i to be forthwith communicated in writing by the F ederal262* Reserve Board to the removed officer or director and to said bank. 140 THE FEDERAL RESERVE ACT. WRITING OFF DOUBTFUL OR WORTHLESS ASSETS. m i* secC‘ ii; 611g. ( 9 ) T o require the writing off o f doubtful or 38 stat.' l .) worthless assets upon the books and balance sheets o f 262' Federal reserve banks. SUSPENSION OF OPERATIONS OF FEDERAL RESERVE BANK. 1913* ?ecC‘ ii\ 61 lh. ( h ) T o suspend, for the violation o f any o f the 38 ’stat.' l.| provisions o f this Act, the operations o f any Federal re262‘ serve bank, to take possession thereof, administer the same during the period o f suspension, and, when deemed advisable, to liquidate or reorganize such bank. REQUIREMENT OF BONDS FROM FEDERAL RESERVE AGENTS AND AUTHORITY TO MAKE NECESSARY REGU LATIONS UNDER THIS ACT. lots* secC* i i : 611i. ( i) T o require bonds o f Federal reserve agents, 38 stat.' l.’ to make regulations for the safeguarding o f all collateral, 262‘ bonds, Federal reserve notes, money or property o f any kind deposited in the hands o f such agents, and said board shall perform the duties, functions, or services specified in this Act, and make all rules and regulations necessary to enable said board effectively to perform the same. GENERAL SUPERVISION. Ec0, i i 61 lj. (j) T o exercise general supervision over said 38 ’stat.’ l .’, Federal reserve banks. 1913* 262. PERMIT TO NATIONAL BANKS TO ACT AS TRUSTEE, E X ECUTOR, ADMINISTRATOR, OR REGISTRAR OF STOCKS AND BONDS. i i 1 611k. ( k ) To grant by special permit to national banks stat! l.) applying therefor, when not in contravention of State or 26l'ct sept. 26, l° cal law5 the right to act as trustee, executor, adminis1913* secC‘ 38 1918. *trator, registrar of stocks and bonds, guardian of estates, assignee, receiver, committee of estates of lunatics, or in any other fiduciary capacity in which State banks, trust companies, or other corporations which come into com petition with national banks are permitted to act under the laws of the State in which the national bank is located. Whenever the laws o f such State authorize or permit the exercise o f any or all o f the foregoing powers by State banks, trust companies, or other corporations which compete with national banks, the granting to and the exercise o f such powers by national banks shall not be deemed to ba in contravention o f State or local law within the meaning o f this Act. National banks exercising any or all of the powers enumerated in this subsection shall segregate all assets THE FEDERAL RESERVE ACT. held in any fiduciary capacity from the general assets o f the bank and shall keep a separate set o f books and rec ords showing in proper detail all transactions engaged in under authority o f this subsection. Such books and records shall be open to inspection by the State authori ties to the same extent as the books and records o f cor porations organized under State law which exercise fidu ciary powers, but nothing in this A ct shall be construed as authorizing the State authorities to examine the books, records, and assets o f the national bank which are not held in trust under authority o f this subsection. No national bank shall receive in its trust department deposits o f current funds subject to check or the deposit o f checks, drafts, bills o f exchange, or other items for collection or exchange purposes. Funds deposited or held in trust by the bank awaiting investment shall be carried in a separate account and shall not be used by the bank in the conduct o f its business unless it shall first set aside in the trust department United States bonds or other securities approved by the Federal Reserve Board. In the event o f the failure o f such bank the owners o f the funds held in trust for investment shall have a lien on the bonds or other securities so set apart in addition to their claim against the estate o f the bank. Whenever the laws of a State require corporations act ing in a fiduciary capacity, to deposit securities with the State authorities for the protection of private or court trusts, national banks so acting shall bo required to make similar deposits and securities so deposited shall be held for the protection of private or court trusts, as provided by the State law. National banks in such cases shall not be required to execute the bond usually required o f individuals if State corporations under similar circumstances are exempt from this requirement. National banks shall have power to execute such bond when so required by the laws o f the State. In any case in which the laws o f a State require that a corporation acting as trustee, executor, administrator, or in any capacity specified in this section, shall take an oath or make an affidavit, the president, vice president, cashier, or trust officer o f such national bank may take the necessary oath or execute the necessary affidavit. It shall be unlawful for any national banking associa tion to lend any officer, director, or employee any funds held in trust under the powers conferred by this section. A ny officer, director, or employee making such loan, or to whom such loan is made, may be fined not more than $5,000, or imprisoned not more than five years, or may be both fined and imprisoned, in the discretion o f the court. In passing upon applications for permission to exercise the powers enumerated in this subsection, the Federal 142 THE FEDERAL RESERVE ACT. Reserve Board may take into consideration the amount o f capital and surplus o f the applying bank, whether or not such capital and surplus is sufficient under the cir cumstances o f the case, the needs o f the community to be served, and any other facts and circumstances that seem to it proper, and may grant or refuse the application accordingly: Provided, l h a t no permit shall be issued to any national banking association having a capital and surplus less than the capital and surplus required by State law o f State banks, trust companies, and corpora tions exercising such powers. EMPLOYMENT OF ATTORNEYS, CLERKS, ETC., AND PRO VISION FOR PAYMENT OF SALARIES. 191? secC' n3: 611-1. (I) T o employ such attorneys, experts, assistants, 38 stat0.' l.; clerks, or other employees as may be deemed necessary to 262, conduct the business o f the board. A ll salaries and fees shall be fixed in advance by said board and shall be paid in the same manner as the salaries o f the members o f said board. A ll such attorneys, experts, assistants, clerks, and other employees shall be appointed without regard to the provisions o f the act o f January sixteenth, eighteen hundred and eighty-three (volume twenty-two. United States Statutes at Large, page four hundred and three), and amendments thereto, or any rule or regulation made in pursuance thereof: Provided, That nothing herein shall prevent the President from placing said employees in the classified service. DISCOUNT BY FEDERAL RESERYE BANK OF PAPER SE CURED BY UNITED STATES BONDS ISSUED SINCE AfcRIL 24, 1017. 1919.* Mar* 3* (m ) U pon the affirmative vote o f not less than . five o f its members, the Federal Reserve Board shall have power to permit Federal reserve banks to discount for any member bank notes, drafts, or bills, o f exchange bearing the signature or endorsement o f any one borrower in excess o f the amount permitted by section nine and section thir teen o f this act, but in no case to exceed twTenty per centum o f the member bank’s capital and surplus: Pro vided, however, That all such notes, drafts, or bills o f exchange discounted for any member bank in excess o f the amount permitted under such sections shall be se cured by not less than a like face amount o f bonds or notes or the United States issued since A p ril twentyfourth, nineteen hundred and seventeen, or certificates o f indebtedness o f the United States: Provided further, That the provisions o f this subsection (m ) shall not be operative after December thirty-first, nineteen hundred and twenty. THE FEDERAL RESERVE ACT. 143 FEDERAL ADVISORY COUNCIL. 612. Sec. 12.— There is hereby created a Federal A d - 19^ 223: visory Council, which shall consist o f as many members 38 stat.* l.*, as there are Federal reserve districts. Each Federal re- 26 ' serve bank by its board o f directors shall annually select from its own Federal reserve district one member o f said council, who shall receive such compensation and allow ances as may be fixed by his board o f directors subject to the approval o f the Federal Reserve Board. The meet ings o f said advisory council shall be held at W ashing ton, District o f Columbia, at least four times each year, and o f tenor if called by the Federal Reserve Board. The council may in addition to the meetings above provided for hold such other meetings in Washington, District o f Columbia, or elsewhere, as it may deem necessary, may select its own officers and adopt its own methods o f pro cedure, and a majority of its members shall constitute a quorum for the transaction o f business. Vacancies in the council shall be filled by the respective reserve banks, and members selected to fill vacancies, shall serve for the un expired term. POWERS OF FEDERAL ADVISORY COUNCIL. 612a. The Federal Advisory Council shall have power, ]0^ct Dec 23, by itself or through its officers, ( 1 ) to confer directly with :*« 1 stat. l .’, the Federal Reserve Board on general business condi- 263, tions; (2) to make oral or written representations con cerning matters within the jurisdiction o f said board; (3) to call for information and to make recommendations in regard to discount rates, rediscount business, note is sues, reserve conditions in the various districts, the pur chase and sale o f gold or securities by reserve banks, open-market operations by said banks, and the general affairs o f the reserve banking system. POWERS OF FEDERAL RESERVE BANKS. 613. Sec. 13.— A ny Federal reserve bank may receive 19^ ^5* 233: from any o f its member banks, and from the United 3»# stat.* l.I States,1 deposits' o f current funds in lawful money, 26ACt Sept. 7, national-bank notes, Federal reserve notes, or checks, L91?g239 Stat’ and drafts, payable upon presentation, and also, for Act June 21 , collection, maturing notes and bills; or, solely for p u r -1917, sec* 4* poses o f exchange or o f collection, may receive from other Federal reserve banks deposits o f current funds in lawful money, national-bank notes, or checks upon other Federal reserve banks, and checks and drafts, pay able upon presentation within its district, and maturing notes and bills payable within its district; or, solely for 1 Under authority of war finance act, approved Apr. 5, 1918, as amended by act of Mar. 3, 1919, may receive deposits from War Finance Corporation. 144 THE FEDERAL RESERVE ACT. the purposes o f exchange or o f collection, may receive from any nonmember bank or trust company deposits o f current funds in lawful money, national-bank notes, Federal reserve notes, checks and drafts payable upon presentation, or maturing notes and bills: Provided, Such nonmember bank or trust company maintains with the Federal reserve bank o f its district a balance sufficient to offset the items in transit held for its account by the Federal reserve bank: Provided, further, That nothing in this or any other section o f this act shall be construed as prohibiting a member or nonmember bank from mak ing reasonable charges, to be determined and regulated by the Federal Reserve Board, but in no case to exceed 10 cents per $100 or fraction thereof, based on the total o f checks and drafts presented at any one time, fo r col lection or payment o f checks and drafts and remission therefor by exchange or otherwise; but no such charges shall be made against the Federal reserve banks. REDISCOUNTS — NOTES, DRAFTS, AND BILLS CHANGE. OF EX- 1913* i33; 813a. U pon the indorsement o f any o f its member ||3 stat L *banks, which shall be deemed a waiver o f demand, notice Act sept. 7 , and protest by such bank as to its own indorsement exStat*clusively, any Federal reserve bank may discount notes, drafts, and bills o f exchange arising out o f actual com mercial transactions; that is, notes, drafts, and bills o f exchange issued or drawn fo r agricultural, industrial, or commercial purposes, or the proceeds o f which have been used, or are to be used, fo r such purposes, the Federal Reserve Board to have the right to determine or define the character o f the paper thus eligible for discount, within the meaning o f this Act. Nothing in this A ct contained shall be construed to prohibit such notes, drafts, and bills o f exchange, secured by staple agricul tural products, or other goods, ware's, or merchandise from being eligible fo r such discount; but such definition shall not include notes, drafts, or bills covering merely investments or issued or drawn fo r the purpose o f carry ing or trading in stocks, bonds, or other investment securities, except bonds and notes o f the Government o f the United States.1 Notes, drafts, and bills admitted to discount under the terms o f this paragraph must have a maturity at the time o f discount o f not more than ninety days, exclusive o f days o f grace: Provided , That notes, drafts, and bills drawn or issued for agricultural pur poses or based on live stock and having a maturity not exceeding six months, exclusive o f days o f grace, may be discounted in an amount to be limited to a percentage o f the assets o f the Federal reserve bank, to be ascer tained and fixed by the Federal Reserve Board. 1 Or bonds of the War Finance Corporation. Apr. 5, 1918. See act approved THE FEDERAL RESERVE ACT. 145 The aggregate o f such notes, drafts, and bills bearing the signature or indorsement o f any one borrower, whether a person, company, firm, or corporation, rediscounted fo r any one bank shall at no time exceed ten per centum o f the unimpaired capital and surplus o f said bank; but this restriction shall not apply to the discount o f bills o f ex change drawn in good faith against actually existing values. ACCEPTANCES AND LIMITATIONS THEREOF. 613b. A ny Federal reserve bank may discount accept- Act Dec. a , ances o f the kinds hereinafter described, which have a 38 'stat l.S maturity at the time o f discount o f not more than three 26£-ct Mar 3 months’ sight, exclusive o f days o f grace, and which are 38 stat! indorsed by at least one member bank. *Act Sept. 7, Any member bank may accept drafts or bills o f exStat' change drawn upon it having not more than six months ^ c t June 21, sight to run, exclusive o f days o f grace, which grow out ’ 8ec o f transactions involving the importation or exporta tion o f g ood s; or which grow out o f transactions involv ing the domestic shipment o f goods provided shipping documents conveying or securing title are attached at the time o f acceptance; or which are secured at the time o f acceptance by a warehouse receipt or other such document conveying or securing title covering readily marketable staples. No member bank shall accept, whether in a foreign or domestic transaction, for any one person, company, firm, or corporation to an amount equal at any time in the aggregate to more than ten per centum o f its paid-up and unimpaired capital stock and surplus, unless the bank is secured either by attached documents or by some other actual security growing out o f the same transaction as the acceptance; and no bank shall accept such bills to an amount equal at any time in the aggregate to more than one-half o f its paid-up and unimpaired capital stock and surplus: Provided, however, That the Federal Reserve Board, under such general regulations as it may prescribe, which shall apply to all banks alike regardless o f the amount o f capital stock and surplus, may authorize any member bank to accept such bills to an amount not exceeding at any time in the aggregate one hundred per centum o f its paid-up and unimpaired capital stock and surplus: Provided further, That the aggregate o f acceptances growing out o f domestic transactions shall in no event exceed fifty per centum o f such capital stock and surplus. A n y Federal reserve bank may make advances to its member banks on their promissory notes for a period not exceeding fifteen days at rates to be established by such Federal reserve banks, subject to the review and determi nation o f the Federal Reserve Board, provided such promissory notes are secured by such notes, drafts, bills o f exchange, or bankers’ acceptances as are eligible fo r 164312 °— 20 ------- 10 146 THE FEDERAL RESERVE ACT. rediscount or fo r purchase by Federal reserve banks under the provisions o f this Act, or by the deposit or pledge o f bonds or notes o f the United States.1 EXCEPTIONS AS TO LIMIT OF INDEBTEDNESS. POWER TO ACT AS INSURANCE AGENT, AS REAL ESTATE LOAN BROKER, AND TO ACCEPT DRAFTS, ETC. a9Act Dec. 23 , 613c. Section fifty-two hundred and two o f the Revised Statutes o f the United States is hereby amended so as to 264* read as follow s: No national banking association shall at any time be indebted, or in any way liable, to an amount exceeding the amount o f its capital stock at such time actually paid in and remaining undiminished by losses or otherwise, except on account o f demands o f the nature fo llo w in g : First. Notes o f circulation. Second. Moneys deposited writh or collected by the association. Third. Bills o f exchange or drafts drawn against money actually on deposit to the credit o f the association, or due thereto. Fourth. Liabilities to the stockholders o f the associa tion for dividends and reserve profits. Fifth. Liabilities incurred under the provisions o f the Federal reserve A ct.2 1916* 39Pstat! The discount and rediscount and the purchase and sale l ., 753. by any Federal reserve bank o f any bills receivable and o f domestic and foreign bills o f exchange, and o f accept ances authorized by this A ct, shall be subject to such restrictions, limitations, and regulations as may be im posed by the Federal Reserve Board. That in addition to the powers now vested by law in national banking associations organized under the laws o f the United States any such association located and do ing business in any place the population o f which does not exceed five thousand inhabitants, as shown by the last preceding decennial census, may, under such rules and regulations as may be prescribed by the Comptroller o f the Currency, act as the agent for any fire, life, or other insurance company authorized by the authorities o f the State in which said bank is located to do business in said State, by soliciting and selling insurance and collecting premiums on policies issued by such com pany; and may receive fo r services so rendered such fees or commissions as may be agreed upon between the said association and the insurance company fo r which it may act as agent; and may also act as the broker or agent for others in making or procuring loans on real estate located within 38 stat l .’, 1 Or by bonds and notes of War Finance Corporation. See sec tion 13, War Finance Corporation Act, approved Apr. 5. 1918. 2 Also liabilities incurred under the provisions of the War Finance Corporation Act. See section 20, War Finance Corpora tion Act, approved Apr. 5, 1918. THE FEDERAL RESERYE ACT. 147 one hundred miles o f the place in which said bank may be located, receiving for such services a reasonable fee or commission: Provided, however, That no such bank shall in any case guarantee either the principal or inter est o f any such loans or assume or guarantee the payment o f any premium on insurance policies issued through its agency by its principal: And provided further, That the bank shall not guarantee the truth o f any statement made by an assured in filing his application for insur ance. A ny member bank may accept drafts or bills o f ex change drawn upon it having not more than three months’ sight to run, exclusive o f days o f grace, drawn under regulations to be prescribed by the Federal Reserve Board by banks or bankers in foreign countries or dependencies or insular possessions o f the United States fo r the pur pose o f furnishing dollar exchange as required by the usages o f trade in the respective countries, dependencies, or insular possessions. Such drafts or bills may be ac quired by Federal reserve banks in such amounts and subject to such regulations, restrictions, and limitations as may be prescribed by the Federal Reserve B oard: Provided, however, That no member bank shall accept such drafts or bills o f exchange referred to this para graph for any one bank to an amount exceeding in the aggregate ten per centum o f the paid-up and unimpaired capital and surplus the accepting bank unless the draft or bill o f exchange is accompanied by documents conveying or securing title or by some other adequate security: Provided further, That no member bank shall accept such drafts or bills in an amount exceeding at any time the aggregate o f one-half o f its paid-up and unim paired capital and surplus. OPEN MARKET OPERATIONS. 614. Sec. 14.— A ny Federal reserve bank may, under Act Dec. 23, rules and regulations prescribed by the Federal Reserve 3813’stat.‘ Board, purchase and sell in the open market, at home or 264^ t ^ abroad, either from or to domestic or foreign banks, firms, 1916; 39Pstat! corporations, or individuals, cable transfers and bankers’ L” 754, acceptances and bills o f exchange o f the kinds and ma turities by this A ct made eligible fo r rediscount, with or without the indorsement o f a member bank. Every Federal reserve bank shall have power: (a) To deal in gold coin and bullion at home or abroad, to make loans thereon, exchange Federal reserve notes for gold, gold coin, or gold certificates, and to contract for loans o f gold coin or bullion, giving therefor, when neces sary, acceptable security, including the hypothecation o f United States bonds or other securities which Federal reserve banks are authorized to h old; 148 THE FEDERAL RESERVE ACT. (b) T o buy and sell, at home or abroad, bonds and notes o f the United States, and bills, notes, revenue bonds, and warrants with a maturity from date o f purchase o f not exceeding six months, issued in anticipation o f the col lection o f taxes or in anticipation o f the receipt o f assured revenues by any State, county, district, political subdivi sion, or municipality in the continental United States, in cluding irrigation, drainage and reclamation districts, such purchases to be made in accordance with rules and regulations prescribed by the Federal Reserve Board ; ( c) T o purchase from member banks and to sell, with or without its indorsement, bills o f exchange arising out o f commercial transactions, as hereinbefore defined; ( d ) T o establish from time to time, subject to review, and determination o f the Federal Reserve Board, rates o f discount to be charged by the Federal reserve bank fo r each class o f paper, which shall be fixed with a view o f accommodating commerce and business; Act June 21 , ( e ) T o establish accounts with other Federal reserve 1917, sec. 6. banks for exchange purposes and, with the consent or upon the order and direction o f the Federal Reserve Board and under regulations to be prescribed by said board, to open and maintain accounts in foreign coun tries, appoint correspondents, and establish agencies in such countries wheresoever it may be deemed best for the purpose o f purchasing, selling, and collecting bills o f exchange, and to buy and sell, w ith e r without its indorse ment, through such correspondents or agencies, bills o f exchange (or acceptances) arising out o f actual commer cial transactions which have not more than ninety days to run, exclusive o f days o f grace, and which bear the signature o f two or more responsible parties, and, with the consent o f the Federal Reserve Board, to open and maintain banking accounts fo r such foreign correspond ents or agencies. Whenever any such account has been opened or agency or correspondent has been appointed by a Federal reserve bank, with the consent o f or under the order and direction o f the Federal Reserve Board, any other Federal reserve bank may, with the consent and approval o f the Federal Reserve Board, be permitted to carry on or conduct, through the Federal reserve bank 0 7 ning such account or appointing such agency or correspondent, any transaction authorized by this sec tion under rules and regulations to be prescribed by the board GOVERNMENT DEPOSITS. i 0Act Dec. 23 , 615. Sec. 15.— The moneys held in the general fund o f 38 ’stat.* l/, the Treasury, except the five per centum fund for the re265' demption o f outstanding national-bank notes and the funds provided in this act fo r the redemption o f Federal reserve notes may, upon the direction o f the Secretary o f THE FEDERAL RESERVE ACT. 149 the Treasury, be deposited in Federal reserve banks, which banks, when required by the Secretary o f the Treasury, shall act as fiscal agents o f the United States;1 and the revenues o f the Government or any part thereof may be deposited in such banks, and disbursements may be made by checks drawn against such deposits. No public funds o f the Philippine Islands, or o f the postal savings, or any Government funds, shall be de posited in the continental United States in any bank not belonging to the system established by this a c t :2 Pro vided, however, That nothing in this act shall be con strued to deny the right o f the Secretary o f the Treasury to use member banks as depositories. NOTE ISSUES. FEDERAL RESERVE NOTES AUTHORIZED. 616. Sec. 16.— Federal reserve notes, to be issued at the 19^ discretion o f the Federal Reserve Board for the purpose 3g ’stat.’ l.; o f making advances to Federal reserve banks through the “ * Federal reserve agents as hereinafter set forth and fo r no other purpose, are hereby authorized. The said notes shall be obligations o f the United States and shall be re ceivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in gold on demand at the Treasury Department o f the United States, in the city o f Washington, District o f Columbia, or in gold or lawful money at any Federal reserve bank. COLLATERAL SECURITY. APPLICATIONS FOR FEDERAL RESERVE NOTES. 616a. A ny Federal reserve bank may make application 19^ct Dec. 2^3, to the local Federal reserve agent fo r such amount o f the 38 'stat/ l.; Federal reserve notes hereinbefore provided for as it may 26 Act Sept. 7 , require. Such application shall be accompanied with a J?1^ 39 s*attender to the local Federal reserve agent o f collateral in Act June 21, amount equal to the sum o f the Federal reserve notes1917, sec> 7* thus applied fo r and issued pursuant to such application. The collateral security thus offered shall be notes, drafts, bills o f exchange, or acceptances acquired under the pro visions o f section thirteen o f this act, or bills o f exchange indorsed by a member bank o f any Federal reserve dis1Under War Finance Corporation act approved Apr. 5, 1918, as amended by act of Mar. 3, 1919, Federal reserve banks may also act as fiscal agents of the War Finance Corporation. * Under section 7 of the act approved Apr. 24, 1917, section 8 of the act approved Sept 24, 1917, and section 8 of the act approved Apr. 4, 1918, the proceeds of sale of Liberty bonds of the first, second, and third issues may be deposited in nonmember banks. The act of May 18, 1916, amending the postal savings act, author izes the deposit of postal savings funds in nonmember banks. 150 THE FEDERAL RESERVE ACT. trict and purchased under the provisions o f section fou r teen o f this act, or bankers’ acceptances purchased under the provisions o f said section fourteen, or gold or gold certificates; but in no event shall such collateral security, whether gold, gold certificates, or eligible paper, be less than the amount o f Federal reserve notes applied for.1 The Federal reserve agent shall each day notify the F ed eral Reserve Board o f all issues and withdrawals o f Fed eral reserve notes to and by the Federal reserve bank to which he is accredited. The said Federal Reserve Board may at any time call upon a Federal reserve bank fo r additional security to protect the Federal reserve notes issued to it. RESERVE BANKS. REQUIREMENTS FOR FEDERAL RESERVE 1913* secC' iq: 616b. Every Federal reserve bank shall maintain re38 ’stat.* l .) serves in gold or lawful money o f not less than thirty26Act June 2 i, fiye Per centum against its deposits and reserves in gold 1917, sec. 7. ’ o f not less than forty per centum against its Federal re serve notes in actual circulation: Provided, however, That when the Federal reserve agent holds gold or gold certificates as collateral for Federal reserve notes issued to the bank such gold or gold certificates shall be counted as part o f the gold reserve which such bank is required to maintain against its Federal reserve notes in actual circulation. ISSUE AND REDEMPTION OF FEDERAL RESERVE NOTES. NO FEDERAL RESERVE BANK PERMITTED TO PAY OUT NOTES ISSUED THROUGH ANOTHER FEDERAL RESERVE BANK. Act Dec. 23, 616c. Notes so paid out shall bear upon their faces a distinctive letter and serial number which shall be as26\ct June 21 by the Federal Reserve Board to each Federal 1917, sec. 7. 'reserve bank. Whenever Federal reserve notes issued through one Federal reserve bank shall be received by another Federal reserve bank, they shall be promptly re turned for credit or redemption to the Federal reserve bank through which they were originally issued or, upon direction o f such Federal reserve bank, they shall be fo r warded direct to the Treasurer o f the United States to be retired. No Federal reserve bank shall pay out notes issued through another under penalty o f a tax o f ten per centum upon the face value o f notes so paid out. Notes presented for redemption at the Treasury o f the United States shall be paid out o f the redemption fund and re turned to the Federal reserve banks through which they were originally issued, and thereupon such Federal re3813’stat.' 1 Under section 13 of War Finance Corporation act approved Apr. 5, 1918, notes secured by War Finance Corporation bonds may be used to same extent as collateral, as notes secured by United States bonds. THE FEDERAL RESERVE ACT. 151 serve bank shall, upon demand o f the Secretary o f the Treasury, reimburse such redemption fund in lawful money or, if such Federal reserve notes have been re deemed by the Treasurer in gold or gold certificates, then such funds shall be reimbursed to the extent deemed necessary by the Secretary o f the Treasury in gold or gold certificates, and sucli Federal reserve bank shall, so long as any o f its Federal reserve notes remain outstand ing, maintain with the Treasurer in gold an amount suffi cient in the judgment o f the Secretary to provide for all redemptions to be made by the Treasurer. Federal re serve notes received by the Treasurer otherwise than for redemption may be exchanged for gold out o f the re demption fund hereinafter provided and returned to the reserve bank through which they were originally issued, or they may be returned to such bank for the credit o f the United States. Federal reserve notes unfit for circu lation shall be returned by the Federal reserve agents to the Comptroller o f the Currency for cancellation and destruction. DEPOSITS OF GOLD WITH TREASURER FOR REDEMPTION OF FEDERAL RESERVE NOTES. 616d. The Federal Eeserve Board shall require each ^ jj* ®®cFederal reserve bank to maintain on deposit in the Treas- 38 ’stat.' l . ’, ury o f the United States a sum in gold sufficient in th e26ict June 21, judgment o f the Secretary o f the Treasury for the r e -1917» sec- 7demption o f the Federal reserve notes issued to such bank, but in no event less than five per centum o f the total amount o f notes issued less the amount o f gold or gold certificates held by the Federal reserve agent as collateral security; but such deposit o f gold shall be counted and included as part o f the forty per centum reserve herein before required. FEDERAL RESERVE BOARD MAY GRANT OR REJECT APPLICATION OF FEDERAL RESERVE BANK FOR FED ERAL RESERVE NOTES. FEDERAL RESERVE NOTES FIRST LIEN ON ALL THE ASSETS OF THE BANK. 616e. The board shall have the right, acting through 19^<jt Dec. 23, the Federal reserve agent, to grant in whole or in part, 38 ’stat.' l.| or to reject entirely the application o f any Federal r e -2GACt June 2i, serve bank for Federal reserve notes; but to the extent1917* sec- 7* that such application may be granted the Federal Eeserve Board shall, through its local Federal reserve agent, sup ply Federal reserve notes to the banks so applying, and such bank shall be charged with the amount o f notes issued to it and shall pay such rate o f interest as may be established by the Federal Eeserve Board on only that amount o f such notes which equals the total amount o f its outstanding Federal reserve notes less the amount o f gold or gold certificates held by the Federal reserve agent as collateral security. Federal reserve notes issued to any 152 THE FEDERAL RESERVE ACT. such bank shall, upon delivery, together with such notes o f such Federal reserve bank as may be issued under sec tion eighteen o f this act upon security o f United States two per centum Government bonds, become a first and paramount lien on all the assets o f such bank. SEDUCTION OF NOTE ISSUES. 616f. A n y Federal reserve bank may at any time reduce liability fo r outstanding Federal reserve notes by 26ict June 21 depositing w*th the Federal reserve agent its Federal re1917, aec?e7. *serve notes, gold, gold certificates, or lawful money o f the United States. Federal reserve notes so deposited shall not be reissued, except upon compliance with the condi tions o f an original issue. The Federal reserve agent shall hold such gold, gold certificates, or lawful money available exclusively fo r ex change fo r the oustanding Federal reserve notes when offered by the reserve bank o f which he is a director. Upon the request o f the Secretary o f the Treasury the Federal Reserve Board shall require the Federal reserve agent to transmit to the Treasurer o f the United States so much o f the gold held by him as collateral security fo r Federal reserve notes as may be required for the exclusive purpose o f the redemption o f such Federal reserve notes, but such gold when deposited with the Treasurer shall be counted and considered as if collateral security on deposit with the Federal reserve agent. Act Dec. 23, 38 18’statc.* XL.| its SUBSTITUTION OF COLLATERAL. 616g. A n y Federal reserve bank may at its discretion *l ' w^hdraw collateral deposited with the local Federal re" serve agent fo r the protection o f its Federal reserve notes 1917,4 sec?e7.21, issued to it and shall at the same time substitute therefor other collateral o f equal amount with the approval o f the Federal reserve agent under regulations to be prescribed by the Federal Reserve Board. A n y Federal reserve bank may retire any o f its Federal reserve notes by depositing them with the Federal reserve agent or with the Treasurer o f the United States, and such Federal reserve bank shall thereupon be entitled to receive back the collateral de posited with the Federal reserve agent for the security o f such notes. Federal reserve banks shall not be required to maintain the reserve or the redemption fund hereto fore provided fo r against Federal reserve notes which have been retired. Federal reserve notes so deposited shall not be reissued except upon compliance with the conditions o f an original issue. A ll Federal reserve notes and all gold, gold certificates, and lawful money issued to or deposited with any Fed eral reserve agent under the provisions o f the Federal re serve act shall hereafter be held fo r such agent, under Act Dec. 23, 38 13'stat * 267. ‘ THE FEDERAL RESERVE ACT. 153 such rules and regulations as the Federal Reserve Board may prescribe, in the joint custody o f himself and the Federal reserve bank to which he is accredited. Such agent and such Federal reserve bank shall be jointly liable fo r the safe-keeping o f such Federal reserve notes, gold, gold certificates, and lawful money. Nothing herein contained, however, shall be construed to prohibit a Federal reserve agent from depositing gold or gold certificates with the Federal Reserve Board, to be held by such board subject to his order, or with the Treasurer 0 1 the United States for the purposes authorized by law. PREPARATION OF FEDERAL RESERVE NOTES. PLATES AND DIES TO BE UNDER CONTROL OF COMPTROLLER OF CURRENCY. WHERE NOTES ARE TO BE DEPOSITED. 616h. In order to furnish suitable notes fo r circulation Act Dec. 23, as Federal reserve notes, the Comptroller o f the Cur- S813pstat/ ^ rency shall, under the direction o f the Secretary o f the 267^ct Se t 26* Treasury, cause plates and dies to be engraved in the m s fs e c fi * best manner to guard against counterfeits and fraudu lent alterations, and shall have printed therefrom and numbered such quantities o f such notes o f the denomina tions o f $5, $10, $20, $50, $100, $500, $1,000, $5,000, $10,000, as may be required to supply the Federal reserve banks. Such notes shall be in form and tenor as directed by the Secretary o f the Treasury under the provisions o f this A ct and shall bear the distinctive numbers o f the several Federal reserve banks through which they are issued. W hen such notes have been prepared, they shall be deposited in the Treasury, or in the subtreasury or mint o f the United States nearest the place o f business o f each Federal reserve bank and shall be held for the use o f such bank subject to the order o f the Comptroller o f the Currency for their delivery, as provided by this Act. The plates and dies to be procured by the Comptroller o f the Currency for the printing o f such circulating notes shall remain under his control and direction, and the expenses necessarily incurred in executing the laws relating to the procuring o f such notes, and all other expenses incidental to their issue and retirement, shall be paid by the Federal reserve banks, and the Federal Reserve Board shall include in its estimate o f expenses levied against the Federal reserve banks a sufficient amount to cover the expenses herein provided for. The examination o f plates, dies, bed pieces, and so forth, and regulations relating to such examination o f plates, dies, and so forth, o f national-bank notes provided for in section fifty-one hundred and seventy-four Revised Statutes, is hereby extended to include notes herein pro vided for. 154 THE FEDERAL RESERVE ACT. APPROPRIATION FOR EXPENSE OF PRINTING NATIONALBANK NOTES MAY BE USED FOR PRINTING FEDERAL RESERYE NOTES. Act Dec. 1913, sec. 38 Stat. 267. ^: 616i. A n y appropriation heretofore made out o f the L-! general funds .of the Treasury fo r engraving plates and dies, the purchase o f distinctive paper, or to cover any other expense in connection with the printing o f na tional-bank notes or notes provided for by the A ct o f May thirtieth, nineteenth hundred and eight, and any distinctive paper that may be on hand at the time o f the passage o f this A ct may be used in the discretion o f the Secretary for the purposes o f this A ct, and should the appropriations heretofore made be insufficient to meet the requirements o f this A ct in addition to circulating notes provided fo r by existing law, the Secretary is here by authorized to use so much o f any funds in the Treas ury not otherwise appropriated for the purpose o f fu r nishing the notes aforesaid: Provided, however, That nothing in this section contained shall be construed as exempting national banks or Federal reserve banks from their liability to reimburse the United States for any ex penses incurred in printing and issuing circulating notes. WHEN FEDERAL RESERYE BANK SHALL RECEIVE CHECKS AND DRAFTS ON DEPOSIT AT PAR. Act Dec. 1913, sec. 38 Stat. 268. ^ : 616j. Every Federal reserve bank shall receive on deLi posit at par from member banks or from Federal reserve banks checks and drafts drawn upon any o f its depos itors, and when remitted by a Federal reserve bank, checks and drafts drawn by any depositor in any other Federal reserve bank or member bank upon funds to the credit o f said depositor in said reserve bank or member bank. CHARGES FOR CHANGE. Act Dec. 1913, sec. 38 Stat. 268. 23. l .’, COLLECTION AND FOR SALE OF EX 616k. Nothing herein contained shall be construed as prohibiting a member bank from charging its actual expense incurred in collecting and remitting funds, or for exchange sold to its patrons. The Federal Eeserve Board shall, by rule, fix the charges to be collected by the member banks from its patrons whose checks are cleared through the Federal reserve bank and the charge which may be imposed for the service o f clearing or col lection rendered by the Federal reserve bank. FEDERAL RESERYE BOARD MAY EXERCISE FUNCTIONS OF A CLEARING HOUSE AND MAY REQUIRE FEDERAL RESERYE BANKS TO EXERCISE SUCH FUNCTIONS. 6161. The Federal Eeserve Board shall make and pro mulgate from time to time regulations governing the transfer o f funds and charges therefor among Federal THE FEDERAL RESERVE ACT. 155 reserve banks and their branches, and may at its dis cretion exercise the functions o f a clearing house for such Federal reserve banks, or may designate a Federal reserve bank to exercise such functions, and may also require each such bank to exercise the functions o f a clearing house for its member banks. SECRETARY OF THE TREASURY TO RECEIVE DEPOSITS OF GOLD COIN OR GOLD CERTIFICATES W ITH THE TREASURER OR ASSISTANT TREASURER OF UNITED STATES WHEN TENDERED BY ANY FEDERAL RESERVE BANK OR FEDERAL RESERVE AGENT FOR CREDIT TO ITS OR HIS ACCOUNT W ITH THE FEDERAL RESERVE BOARD. 616m. That the Secretary o f the Treasury is hereby authorized and directed to receive deposits o f gold coin or o f gold certificates with the Treasurer or any assistant treasurer o f the United States when tendered by any Federal reserve bank or Federal reserve agent for credit to its or his account with the Federal Reserve Board. The Secretary shall prescribe by regulation the form o f receipt to be issued by the Treasurer or Assistant Treas urer to the Federal reserve bank or Federal reserve agent making (lie deposit, and a duplicate o f such receipt shall be delivered to the Federal Reserve Board by the Treas urer at Washington upon proper advices from any as sistant treasurer that such deposit has been made. De posits so made shall be held subject to the orders o f the Federal Reserve Board and shall be payable in gold coin or gold certificates on the order o f the Federal Reserve Board to any Federal reserve bank or Federal reserve agent at the "Treasury or at the Subtreasury o f the United States nearest the place o f business o f such Federal reserve bank or such Federal reserve agent: Pro vided, however, That any expense incurred in shipping gold to or from the Treasury or sub treasuries in order to make such payments, or as a result o f making such pay ments, shall be paid by the Federal Reserve Board and assessed against the Federal reserve banks. The order used by the Federal Reserve Board in making such pay ments shall be signed by the governor or vice governor, or such other officers or members as the board may by regulation prescribe. The form o f such order shall be approved by the Secretary o f the Treasury. The expenses necessarily incurred in carrying out these provisions, including the cost o f the certificates or re ceipts issued for deposits received, and all expenses inci dent to the handling o f such deposits shall be paid by the Federal Reserve Board and included in its assess ments against the several Federal reserve banks. Gold deposits standing to the credit o f any Federal reserve bank with the Federal Reserve Board shall, at the option o f said bank, be counted as part o f the lawful reserve which it is required to maintain against outstand- Act June 21 , *sec* * THE FEDERAL RESERVE ACT. 156 ing Federal reserve n/>tes, or as part o f the reserve it is required to maintain against deposits. Nothing in this section shall be construed as amend ing section six o f the act o f March fourteenth, nineteen hundred, as amended by the acts o f March fourth, nine teen hundred and seven, March second, nineteen hundred and eleven, and June twelfth, nineteen hundred and six teen, nor shall the provisions o f this section be construed to apply to the deposits made or to the receipts or cer tificates issued under those acts. NATIONAL BANKS NOT REQUIRED TO MAKE DEPOSIT OF UNITED STATES BONDS PRIOR TO COMMENCEMENT OF BUSINESS. see' ii* much provisions o f section 38 'stat!' l/, fifty-one hundred and fifty-nine o f the Revised Statutes 26ict June 21, the United States, and section four o f the act o f June 1917, sec. 9. " twentieth, eighteen hundred and seventy-four, and sec tion eight o f the act o f July twelfth, eighteen hundred and eighty-two, and o f any other provisions o f existing statutes as require that before any national banking asso ciation shall be authorized to commence banking busi ness it shall transfer and deliver to the Treasurer o f the United States a stated amount o f United States regis tered bonds, and so much o f those provisions or o f any other provisions o f existing statutes as require any na tional banking association now or hereafter organized to maintain a minimum deposit o f such bonds with the Treasurer is hereby repealed. 191? REFUNDING BONDS. RETIREMENT OF CIRCULATING NOTES. 191? secC‘ is* 38 ’stat.* L.’, A ct, Sec. 18.— A fter two years from the passage o f this and at any time during a period o f twenty years thereafter, any member bank desiring to retire the whole or any part o f its circulating notes, may file with the Treasurer o f the United States an application to sell for its account, at par and accrued interest, United States bonds securing circulation to be retired. 208‘ PURCHASE OF UNITED STATES BONDS BY FEDERAL RESERVE BANKS. m3* secC* is* 38 268‘ ’stat.* l .) The Treasurer shall, at the end o f each quarterly period, furnish the Federal Reserve Board with a list o f such applications, and the Federal Reserve Board may, in its discretion, require the Federal reserve banks to purchase such bonds from the banks whose applications nave been filed with the Treasurer at least ten days before the end o f any quarterly period at which the Federal Reserve Board may direct the purchase to be made: Provided, That Federal reserve banks shall not be per mitted to purchase an amount to exceed $25,000,000 o f guch bonds in any one year, and which amount shall THE FEDERAL RESERVE ACT. 157 include bonds acquired under section four o f this A ct by the Federal reserve bank. Provided further, That the Federal Reserve Board shall allot to each Federal reserve bank such proportion o f such bonds as the capital and surplus o f such bank shall bear to the aggregate capital and surplus o f all the Federal reserve banks. U pon notice from the Treasurer o f the amount o f bonds so sold for its account, each member bank shall duly assign and transfer, in writing, such bonds to the Federal reserve bank purchasing the same, and such Federal reserve bank shall, thereupon, deposit lawful money with the Treasurer o f the United States for the purchase price o f such bonds, and the Treasurer shall pay to the member bank selling such bonds any balance due after deducting a sufficient sum to redeem its outstanding notes secured by such bonds, which notes shall be canceled and perma nently retired when redeemed. ISSUE OF CIRCULATING NOTES TO FEDERAL RESERTE BANKS ON SECURITY OF UNITED STATES BONDS. CIR CULATING NOTES SO ISSUED OBLIGATIONS OF FEDERAL RESERYE BANK. 618b. The Federal reserve banks purchasing such bonds igAct Dec. 23, shall be permitted to take out an amount o f circulating 38 ’stat.' l.| notes equal to the par value o f such bonds. 269, Upon the deposit with the Treasurer o f the United States o f bonds so purchased, or any bonds with the cir culating privilege acquired under section four o f this act, any Federal reserve bank making such deposit in the manner provided by existing law, shall be entitled to receive from the Comptroller o f the Currency circulating notes in blank, registered and countersigned as provided by law, equal in amount to the par value o f the bonds so deposited.1 Such notes shall be the obligations o f the Federal reserve bank procuring the same, and shall be in form prescribed by the Secretary o f the Treasury, and to the same tenor and effect as national-bank notes now provided by law. They shall be issued and redeemed under the same terms and conditions as national-bank notes except that they shall not be limited to the amount o f the capital stock o f the Federal reserve bank issuing them. ISSUE OF ONE-YEAR GOLD NOTES AND THREE PER CENT BONDS OF THE UNITED STATES IN EXCHANGE FOR TWO PER CENT UNITED STATES BONDS. 618c. Upon application o f any Federal reserve bank, 19^ is3; approved by the Federal Reserve Board, the Secretary 38^ stat. l.\ o f the Treasury may issue, in exchange for United States 1Under act of Apr. 23, 1918, Federal reserve banks may issue Federal reserve bank notes in any denominations, including $1 and $2, against the security of United States certificates of in debtedness to the extent permitted by that act. THE FEDERAL RESERVE ACT. two per centum gold bonds bearing the circulation privi lege, but against which no circulation is outstanding, one-year gold notes o f the United States without the circulation privilege, to an amount not to exceed onehalf o f the two per centum bonds so tendered for ex change, and thirty-year three per centum gold bonds without the circulation privilege for the remainder o f the two per centum bonds so tendered: Provided, That at the time o f such exchange the Federal reserve bank ob taining such one-year gold notes shall enter into an obli gation with the Secretary o f the Treasury binding itself to purchase from the United States for gold at the ma turity o f such one-year notes, an amount equal to those delivered in exchange for such bonds, if so requested by the Secretary, and at each maturity o f one-year notes so purchased by such Federal reserve bank, to purchase from the United States such an amount o f one-year notes as the Secretary may tender to such bank, not to exceed the amount issued to such bank in the first instance, in exchange for the two per centum United States gold bonds; said obligation to purchase at maturity such notes shall continue in force for a period not to exceed thirty years. F or the purpose o f making the exchange herein pro vided for, the Secretary o f the Treasury is authorized to issue at par Treasury notes in coupon or registered form as he may prescribe in denominations o f one hundred dollars, or any multiple thereof, bearing interest at the rate o f three per centum per annum, payable quarterly, such Treasury notes to be payable not more than one year from the date o f their issue in gold coin o f the present standard value, and to be exempt as to principal and interest from the payment o f all taxes and duties o f the United States except as provided by this act, as well as from taxes in any form by or under State, municipal, or local authorities. A nd for the same purpose, the Secre tary is authorized and empowered to issue United States gold bonds at par, bearing three per centum interest pay able thirty years from date o f issue, such bonds to be o f the same general tenor and effect and to be issued under the same general terms and conditions as the United States three per centum bonds without the circulation privilege now issued and outstanding EXCHANGE OF THREE PER CENT BONDS FOR ONE-YEAR GOLD NOTES. 618d. U pon application o f any Federal approved by the Federal Reserve Board, may issue at par such three per centum change for the one-year gold notes herein reserve bank, the Secretary bonds in ex provided for. THE FEDERAL RESERVE ACTBANK 159 RESERVES. DEMAND AND TIME DEPOSITS DEFINED— RESERVE RE QUIREMENTS— WHEN EFFECTIVE. 619. Sec. 19.— Demand deposits within the meaning o f 19^ this act shall comprise all deposits payable within thirty |«Q ’stat.* l.\ days, and time deposits shall comprise all deposits pay- A ct June 21, able after thirty days, all savings accounts and ce r-1917» sec- 10* tificates o f deposit which are subject to not less than thirty days’ notice before payment, and all postal savings deposits.1 Every bank, banking asociation, or trust company which is or which becomes a member o f any Federal re serve bank shall establish and maintain reserve balances with its Federal reserve bank as follow s: RESERVE REQUIREMENTS FOR BANKS NOT IN RESERVE CITIES. 619a. (a) I f not in a reserve or central reserve city, 1QA ct Dec. 23, as now or hereafter defined, it shall hold and maintain 38 stat.' with the Federal reserve bank o f its district an actual net27Jct June 2if balance equal to not less than seven per centum o f theiai?. sec. 1 0 / aggregate amount o f its demand deposits and three per centum o f its time deposits. RESERVE CITIES. REQUIREMENTS FOR BANKS IN RESERVE 619b. (&) I f in a reserve city, as now or hereafter 19^jjt Dec. 2^3, defined, it shall hold and maintain with the Federal 38 ’stat.' l.\ reserve bank o f its district an actual net balance equal t o 27ACt Aug. 15, not less than ten per centum o f the aggregate amount o f Jf166i38 ^tat’ its demand deposits and three per centum o f its time A ct June 21, deposits: Provided, however, That if located in the outly- 19ilt lept.^e, ing districts o f a reserve city or in territory added to such 1918>sec* a city by the extension o f its corporate charter, it may, upon the affirmative vote o f five members o f the Federal Reserve Board, hold and maintain the reserve balances specified in paragraph (a) hereof. RESERVE REQUIREMENTS FOR BANKS IN CENTRAL RE SERVE CITIES. 619c. (c) I f in a central reserve city, as now or here- A ct Dec. 23, after defined, it shall hold and maintain with the Federal 3813,stat 2l.! reserve bank o f its district an actual net balance equal 27^ct ^ 15’ to not less than thirteen per centum o f the aggregate 1914; 38 stat amount o f its demand deposits and three per centum o f ^ A ct^ J u n e 21, its time deposits: Provided, however, That if located i n 19^7»t the outlying districts o f a central reserve city or in te r r i- 1918, secfi ' 1 Government deposits other than postal savings deposits are not subject to reserve requirements. See section 7 of First Lib erty Bond act, approved Apr. 24,1917; section 8 of Second Liberty Bond act, approved Sept. 24, 1917, and section 8 of Third Liberty Bond act, approved Apr. 4, 1918. 160 THE FEDERAL RESERVE ACT. tory added to such city by the extension o f its corporate charter, it may, upon the affirmative vote o f five members o f the Federal Eeserve Board, hold and maintain the reserve balances specified in paragraphs (a) or (&) thereof. MEMBER BANK FORBIDDEN TO KEEP ON DEPOSIT WITH NONMEMBER BANK A SUM IN EXCESS OF TEN PER CENT OF ITS OWN CAPITAL AND SURPLUS OR TO SE CURE DISCOUNTS FOR NONMEMBER BANK. 1913! sec?' i29 ; 619d. No member bank shall keep on deposit with any 38 ’stat.* L.j State bank or trust company which is not a member bank Act Aug. 15, a sum in excess o f ten per centum o f its own paid-up L ^ liif8 stat'capital and surplus. No member bank shall act as the 1017tsecI1io21, me(^ um or ag ent a nonmember bank in applying fo r ’ sec* ’ or receiving discounts from a Federal reserve bank under the provisions o f this A ct, except by permission o f the Federal Eeserve Board. WITHDRAWAL OF RESERVE BY MEMBER BANK. 1913* se?’ 38 'stat.* 19: ®l®e. The required balance carried by a member bank l .’, with a Federal reserve bank may, under the regulations 27Ict. Aug. 15, and subject to such penalties as may be prescribed by the L91e6i38 ®tat-Federal Eeserve Board, be checked against and with"A ct June 2 i, drawn by such member bank fo r the purpose o f meeting 1017, sec. 10. existing liabilities: Provided, however, That no bank shall at any time make new loans or shall pay any divi dends unless and until the total balance required by law is fully restored. RESERVE REQUIREMENT— HOW ESTIMATED. lfiAct i>ec. 23, 619f. In estimating the balances required by this A ct, 38 'stat.* L.’f the net difference o f amounts due to and from other 27ic t Aug. 15, banks shall be taken as the basis fo r ascertaining the l 91 6&238 ®tat*deposits against which required balances with Federal Act June 21, reserve banks shall be determined. 1017, sec. 10. RESERVE REQUIREMENTS FOR NATIONAL BANKS LO CATED IN ALASKA OR OUTSIDE THE CONTINENTAL UNITED STATES. 101? 10; 619S- National banks, or banks organized under local 88 'stat.* l .’, laws, located in Alaska or in a dependency or insular 27ic t Aug. 15, possession or any part o f the United States outside the l?16&238 Stat*continental United States may remain nonmember banks, ’Act June 21, and shall in that event maintain reserves and com ply 101 , sec. . con(jitions now provided by law regulating them ; or said banks may, with the consent o f the Eeserve Board, become member banks o f any one o f the reserve districts, and shall in that event take stock, maintain reserves, and be subject to all the other provisions o f this act THE FEDERAL RESERVE ACT. REDEMPTION FUND WITH COUNTED AS RESERYE. TREASURER 161 NOT TO BE 620. Sec. 20.— So much o f sections two and three o f the JJ®* 2208: A ct o f June twentieth, eighteen hundred and s e v e n ty - 38 ’stat L.| four, entitled “ A n A ct fixing the amount o f United States notes, providing for a redistribution o f the national-bank currency, and for other purposes,” as provides that the fund deposited by any national banking association with the Treasurer o f the United States for the redemption o f its notes shall be counted as a part o f its lawful reserve as provided in the A ct aforesaid, is hereby repealed. A nd from and after the passage o f this A ct such fund o f five per centum shall in no case be counted by any national banking association as a part o f its lawful reserve. BANK EXAMINATIONS. APPOINTMENT AND POWERS OF EXAMINERS— ACCEPTANCE OF REPORTS OF EXAMINATIONS BY STATE AUTHORITY. 621. Sec. 21.— Section fifty-two hundred and forty, United States Revised Statutes, is amended to read as 38 stat.* fo llo w s: 271‘ The Comptroller o f the Currency, with the approval o f the Secretary o f the Treasury, shall appoint examiners who shall examine every member ban k1 at least twice in each calendar year and oftener if considered necessary: Provided, however, That the Federal Reserve Board may authorize examination by the State authorities to be accepted in the case o f State banks and trust companies and may at any time direct the holding o f a special ex amination o f State banks or trust companies that are stockholders in any Federal reserve bank. The examiner making the examination o f any national bank, or o f any other member bank, shall have power to make a thorough examination o f all the affairs o f the bank, and in doing so he shall have power to administer oaths and to examine any o f the officers and agents thereof under oath and shall make a full and detailed report o f the condition o f said bank to the Comptroller o f the Currency. l .) SALARIES OF BANK EXAMINERS. 621a. The Federal Reserve Board, upon the r e c o m - 19Act Dec. 23, mendation o f the Comptroller o f the Currency, shall fix 38 ’stat.' l.; the salaries o f all bank examiners and make report thereof 272# to Congress. The expense o f the examinations herein provided fo r shall be assessed by the Comptroller o f the Currency upon the banks examined in proportion to assets or resources held by the banks upon the dates o f examination o f the various banks. 1 Except banks admitted to membership in the system under au thority of section 9 of this act. See section 9 of this act as amended by act approved June 21, 1917. 164312°—20------ 11 162 THE FEDERAL EESERVE ACT. EXAMINATIONS BY FEDERAL RESERVE BANK. 1913! sec? 2 1 ; 621b. In addition to the examinations made and con112 stat* L-» ducted by the Comptroller o f the Currency, every Fed eral reserve bank may, with the approval o f the Federal reserve agent or the Federal Reserve Board, provide for special examination o f member banks within its district. The expense o f such examinations shall be borne by the bank examined. Such examinations shall be so con ducted as to inform the Federal reserve bank o f the con dition o f its member banks and o f the lines o f credit which are being extended by them. Every Federal re serve bank shall at all times furnish to the Federal R e serve Board such inform ation as may be demanded con cerning the condition o f any member bank wTithin the district o f the said Federal reserve bank. No bank shall be subject to any visitatorial powers other than such as are authorized by law, or vested in the courts o f justice or such as shall be or shall have been exercised or directed by Congress, or by either House thereof or by any committee o f Congress or o f either House duly authorized. EXAMINATIONS OF FEDERAL RESERVE BANKS. 1913* secC’ 2 i : Federal Reserve Board shall, at least once 38 'stat.’ l .’, each year, order an examination o f each Federal reserve 272, bank, and upon joint application o f ten member banks the Federal Reserve Board shall order a special examina tion and report o f the condition o f any Federal reserve bank. MEMBER BANK CAN NOT MAKE LOAN OR GRANT A GRATUITY TO ANY NATIONAL BANK EXAMINER. 622. Sec. 22a.— No member bank and no officer, direc1 Act Dec. 23 , 38 ’stat.’ l .’, tor, or employee thereof shall hereafter make any loan or 27Act se t 26 Srant an7 gratuity to any bank examiner. A ny bank 1918, sec?5. ’ officer, director, or employee violating this provision shall be deemed guilty o f a misdemeanor and shall be imprisoned not exceeding one year or fined not more than $5,000, or b oth ; and may be fined a further sum equal to the money so loaned or gratuity given. A ny examiner accepting a loan or gratuity from any bank examined by him or from an officer, director, or employee thereof shail be deemed guilty o f a misdemeanor and shall be im prisoned one year or fined not more than $5,000, or both, and may be fined a further sum equal to the money so loaned or gratuity given, and shall forever thereafter be disqualified from holding office as a national-bank examiner. THE FEDERAL RESERVE ACT. 163 NATIONAL BANK EXAMINER CAN NOT PERFORM ANT SERVICE FOR COMPENSATION FOR ANY BANK OR OFFICER. EXAMINER CAN NOT DISCLOSE THE NAMES OF BORROWERS, OR COLLATERAL WITHOUT FIRST OBTAINING WRITTEN CONSENT OF COMPTROLLER. 622b. No national bank examiner shall perform any igAct ^Sept. 26, other service for compensation while holding such office * sec’ for any bank or officer, director, or employee thereof. No examiner, public or private, shall disclose tho names o f borrowers or the collateral for loans o f a mem ber bank to other than the proper officers o f such bank without first having obtained the express permission in writing from the Comptroller o f the Currency, or from the board o f directors o f such bank, except when ordered to do so by a court o f competent jurisdiction, or by direction o f the Congress o f the United States, or o f either House thereof, or any committee o f Congress, or o f either House duly authorized. Any bank examiner violating the provisions o f this subsection shall be im prisoned not more than one year or fined not more than $5,000, or both. PENALTY FOR OFFICER, DIRECTOR, OR EMPLOYEE OF MEMBER BANK WHO RECEIVES ANY COMMISSION OR GIFT IN CONNECTION WITH ANY LOAN. 622c. Except as herein provided, any officer, director Act Sept. 26, employee, or attorney o f a member bank who stipulates1918, sec* 5* for or receives or consents or agrees to receive any fee, commission, gift, or thing o f value from any person, firm, or corporation, for procuring or endeavoring to procure for such person, firm, or corporation, or for any other person, firm, or corporation, any loan from or the pur chase or discount o f any paper, note, draft, check, or bill o f exchange by such member bank shall be deemed guilty o f a misdemeanor and shall be imprisoned not more than one year or fined not more than $5,000, or both. PURCHASE OF SECURITIES OR PROPERTY FROM ONE OF ITS DIRECTORS, OR SALES TO A DIRECTOR BY A MEM BER BANK. 622d. A n y member bank may contract for, or purchase Act Sept. 20, from, any o f its directors or from any firm o f which a n y 1918, sec* 5* o f its directors is a member, any securities or other property, when (and not otherwise) such purchase is made in the regular course o f business upon terms not less favorable to the bank than those offered to others, or when such purchase is authorized by a majority o f the board o f directors not interested in the sale o f sucli securities or property, such authority to be evidenced by the affirmative vote or written assent o f such directors: Provided, however, That when any director, or firm o f which any director is a member, acting fo r or on behalf 164 THE FEDERAL RESERVE ACT. o f others, sells securities or other property to a member bank, the Federal Reserve Board by regulation may, in any or all cases, require a full disclosure to be made, on forms to be prescribed by it, o f all commissions or other considerations received, and whenever such director or firm, acting in his or its own behalf, sells securities or other property to the bank the Federal Reserve Board by regulation, may require a full disclosure o f all profit realized from such sale. A ny member bank may sell securities or other property to any o f its directors, or to a firm o f which any o f its directors is a member, in the regular course o f business on terms not more favorable to such director or firm than those offered to others, or when such sale is author ized by a m ajority o f the board o f directors o f a member bank to be evidenced by their affirmative vote or written assent: Provided, however, That nothing in this subsec tion contained shall be construed as authorizing member banks to purchase or sell securities or other property which such banks are not otherwise authorized by law to purchase or sell. KATE OF INTEREST PAID DIRECTORS, OFFICERS, OR EMPLOYEES NOT TO EXCEED THAT PAID TO OTHER DEPOSITORS. m s,4 lee*'i?’ 622e. No member bank shall pay to any director, officer, attorney, or employee a greater rate o f interest on the deposits o f such director, officer, attorney, or employee than that paid to other depositors on similar deposits with such member bank. PENALTY FOR VIOLATION OF ANY OF THE PROVISIONS OF SECTION 22 OF THE FEDERAL RESERVE ACT. 1918,Recife.26, 622f. I f the directors or officers o f any member bank shall knowingly violate or permit any o f the agents, officers, or directors o f any member bank to violate any o f the provisions o f this section or regulations o f the board made under authority thereof, every director and officer participating in or assenting to such violation shall be held liable in his personal and individual ca pacity fo r all damages which the member bank, its share holders, or any other persons shall have sustained in con sequence o f such violation. LIABILITY OF STOCKHOLDERS OF NATIONAL BANKS. sec?’ 2 3 ; ®^3. Sec. 23.— The stockholders o f every national bank- Stat* L' associati°n shall be held individually responsible fo r all contracts, debts, and engagements o f such association, each to the amount o f his stock therein, at the par value thereof in addition to the amount invested in such stock. The stockholders in any national banking association who shall have transferred their shares or registered the transfer thereof within sixty days next before the date o f 1913? 273 THE FEDERAL RESERVE ACT. 165 the failure o f such association to meet its obligations, op with knowledge o f such impending failure, shall be liable to the same extent as if they had made no such transfer, to the extent that the subsequent transferee fails to meet such liability; but this provision shall not be con strued to affect in any way any recourse which such shareholders might otherwise have against those in whose names such shares are registered at the time o f such failure. LOANS ON REAL ESTATE. 624. Sec. 24.— Any national banking association not 2248: situated in a central reserve city may make loans secured 38^ 'stat. l /, by improved and unencumbered farm land situated with- Act Sept. 7, in its Federal reserve district or within a radius of one^91? ^ 9 stat* hundred miles of the place in which such bank is located, irrespective of district lines, and may also make loans se cured by improved and unencumbered real estate located within one hundred miles of the place in which such bank is located, irrespective of district lines: but no loan made upon the security of such farm land snail be made for a longer time than five years, and no loan made upon the security of such real estate as distinguished from farm land shall be made for a longer time than one year nor shall the amount of any such loan, whether upon such farm land or upon such real estate, exceed fifty per centum of the actual value of the property offered as se curity. Any such bank may make such loans, whether secured by such farm land or such real estate, in an ag gregate sum equal to twenty-five per centum of its capital an(f surplus or to one-third of its time deposits and such banks may continue hereafter as heretofore to receive time deposits and to pay interest on the same. The Federal Eeserve Board shall have power from time to time to add to the list of cities in which national banks shall not be permitted to make loans secured upon real estate in the manner described in this section. FOREIGN BRANCHES. 625. Sec. 25 [as amended 1919].— Any national banking Act Dec. 23, association possessing a capital and surplus of $ 1 ,0 0 0 ,0 0 0 3813,stat.' l . ! or more may file application with the Federal Reserve273* Board for permission to exercise, upon such conditions Act# Sept 7f and under such regulations as may be prescribed by the Jf1^ 39 s*atsaid board, either or both of the following powers: First. To establish branches in foreign countries or Act Sept. 17, dependencies or insular possessions of the United States 1919, for the furtherance of the foreign commerce of the United States, and to act if required to do so as fiscal agents of the United States. Second. To invest an amount not exceeding in the aggregate ten per centum of its paid-in capital stock and THE FEDERAL RESERVE ACT. surplus in the stock o f one or more banks or corporations chartered or incorporated under the laws o f the United States or o f any State thereof , and principally engaged in international or foreign banking, or banking in a depend ency or insular possession o f the United States either directly or through the agency, ownership, or control o f local institutions m foreign countries, or in such depend encies or insular possessions. Until January 1, 1921, any national banking association, without regard to the amount o f its capital and surplus, may file application with the Federal Reserve Board for permission, upon such conditions and under such regulations as may be pre scribed by said board, to invest an amount not exceeding in the aggregate 5 per centum o f its paid-in capital and surplus in the stock o f one or more corporations chartered or incorporated under the laws o f the United States or o f any State thereof and, regardless o f its location, princi- engaged in such phases of international or foreign Eally nancial operations as may be necessary to facilitate the export of goods, wares, or merchandise from the United States or any of its dependencies or insular possessions to any foreign country: Provided, however, That in no event shall the total investments authorized by this section by any one national bank exceed 10 per centum o f its capital and surplus. Such application shall specify the name and capital o f the banking association filing it, the powers applied for, and the place or places where the banking or financial operations proposed are to be carried on. The Federal Reserve Board shall have power to approve or to reject such application in whole or in part i f for any reason the granting o f such application is deemed inexpedient, and shall also have power from time to time to increase or decrease the number o f places where such banking opera tions may be carried on. Every national banking association operating foreign branches shall be required to furnish inform ation con cerning the condition o f such branches to the Com p troller o f the Currency upon demand, and every member bank investing in the capital stock o f banks or corpora tions described above shall be required to furnish in for mation concerning the condition o f such banks or cor porations to the Federal Reserve Board upon demand, and the Federal Reserve Board may order special exami nations o f the said branches, banks, or corporations at such time or times as it may deem best. B efore any national bank shall be permitted to pur chase stock in any such corporation the said corporation shall enter into an agreement or undertaking with the Federal Reserve Board to restrict its operations or con duct its business in such manner or under such limita tions and restrictions as the said board may prescribe for the place or places wherein such business is to be con ducted. I f at any time the Federal Reserve Board shall THE FEDERAL RESERVE ACT. 167 ascertain that the regulations prescribed by it are not being complied with, said board is hereby authorized and empowered to institute an investigation o f the matter and to send for persons and papers, subpoena witnesses, and administer oaths in order to satisfy itself as to the actual nature o f the transactions referred to. Should such in vestigation result in establishing the failure o f the cor poration in question, or o f the national bank or banks which may be stockholders therein, to comply with the regulations laid down by the said Federal Reserve Board, such national banks may be required to dispose o f stock holdings in the said corporation upon reasonable notice. Every such national banking association shall conduct the accounts o f each foreign branch independently o f the accounts o f other foreign branches established by it and o f its home office, and shall at the end o f each fiscal period transfer to its general ledger the profit or loss accrued at each branch as a separate item. Any director or other officer, agent, or employee o f any member bank may, with the approval o f the Federal Reserve Board, be a director or other officer, agent, or employee o f any such bank or corporation above men tioned in the capital stock o f which such member bank shall have invested as hereinbefore provided, without being subject to the provisions o f section eight o f the A ct approved October fifteenth, nineteen hundred and fourteen, entitled “ A n A ct to supplement existing laws against unlawful restraints and monopolies, and for other purposes.” BANKING CORPORATIONS AUTHORIZED TO DO FOREIGN BANKING BUSINESS. 625a. Sec. 25 (a).— Corporations to be organized for thc^®* Dec- 24» purpose o f engaging in international or foreign banking or other international or foreign financial operations, or in banking or other financial operations in a dependency or insular possession o f the United States, either di rectly or through the agency, ownership, or control o f local institutions in foreign countries, or in such de pendencies or insular possessions as provided by this sec tion, and to act when required by the Secretary o f the Treasury as fiscal agents o f the United States, may be formed by any number o f natural persons, not less in any case than five. Such persons shall enter into articles o f association which shall specify in general terms the objects for which the association is formed and may contain any other provisions not inconsistent with law which the association may see fit to adopt for the regulation o f its business and the conduct o f its affairs. Such articles o f association shall be signed by all o f the persons intending to participate in the organization o f the corporation and, thereafter, shall be forwarded to the Federal Reserve Board and shall be filed and pre served in its office. The persons signing the said articles 168 THE FEDERAL RESERVE ACO?. o f association shall, under their hands, make an organi zation certificate which shall specifically state: First. The name assumed by such corporation, which shall be subject to the approval o f the Federal Reserve Board. Second. The place or places where its operations are to be carried on. Third. The place in the United States where its home office is to be located. Fourth. The amount o f its capital stock and the num ber o f shares into which the same shall be divided. Fifth. The names and places o f business or residence o f the persons executing the certificate and the number o f shares to which each has subscribed. Sixth. The fact that the certificate is made to enable the persons subscribing the same, and all other persons, firms, companies, and corporations, who or which may thereafter subscribe to or purchase shares o f the capital stock o f such corporation, to avail themselves o f the ad vantages o f this section. The persons signing the organization certificate shall duly acknowledge the execution thereof before a judge o f some court o f record or notary public, who shall certify thereto under the seal o f such court or notary, and thereafter the certificate shall be forwarded to the Federal Reserve Board to be filed and preserved in its office. U pon duly making and filing articles o f asso ciation and an organization certificate, and after the Federal Reserve Board has approved the same and issued a permit to begin business, the association shall become and be a body corporate, and as such and in the name designated therein shall have power to adopt and use a corporate seal, which may be changed at the pleasure o f its board 0 1 directors; to have succession for a period o f twenty years unless sooner dissolved by the act o f the shareholders owning two-thirds o f the stock or by an act o f Congress or unless its franchises become forfeited by some violation o f la w ; to make contracts; to sue and be sued, complain, and defend in any court o f law or equity; to elect or appoint directors, all o f whom shall be citizens o f tjhe United States; and, by its board o f direc tors, to appoint such officers and employees as may be deemed proper, define their authority and duties, require bonds o f them, and fix the penalty thereof, dismiss such officers or employees, or any thereof, at pleasure and ap point others to fill their places; to prescribe, by its board o f directors, by-laws not inconsistent with law or with the regulations o f the Federal Reserve Board regulating the manner in which its stock shall be transferred, its directors elected or appointed, its officers and employees appointed, its property transferred, and the privileges granted to it by law exercised and enjoyed. Each corporation so organized shall have power, under such rules and regulations as the Federal Reserve Board may prescribe: Th e f e d e r a l r e se r v e a c t . (a) To purchase, sell, discount, and negotiate, with or without its indorsement or guaranty, notes, drafts, checks, bills of exchange, acceptances, including bank ers5 acceptances, cable transfers, and other evidences of indebtedness; to purchase and sell, with or without its indorsement or guaranty, securities, including the obli gations of the United States or of any State thereof but not including shares of stock in any corporation except as herein provided; to accept bills or drafts drawn upon it subject to such limitations and restrictions as the Fed eral Reserve Board may impose; to issue letters o f credit; to purchase and sell coin, bullion, and exchange; to borrow and to lend money; to issue debentures, bonds, and promissory notes under such general conditions as to security and such limitations as the Federal Reserve Board may prescribe, but in no event having liabilities outstanding thereon at any one time exceeding ten times its capital stock and surplus; to receive deposits outside of the United States and to receive only such deposits within the United States as may be incidental to or for the purpose of carrying out transactions in foreign coun tries or dependencies or insular possessions of the United States; and generally to exercise such powers as are in cidental to the powers conferred by this act or as may be usual, in the determination of the Federal Reserve Board, in connection with the transaction of the business of banking or other financial operations in the countries, colonies, dependencies, or possessions in which it shall transact business and not inconsistent with the powers specifically granted herein. Nothing contained in this section shall be construed to prohibit the Federal Reserve Board, under its power to prescribe rules and regula tions, from limiting the aggregate amount of liabilities of any or all classes incurred by the corporation and outstanding at any one time. Whenever a corporation organized under this section receives deposits in the United States authorized by this section it shall carry reserves in such amounts as the Federal Reserve Board may prescribe, but in no event less than 10 per centum of its deposits. (b) To establish and maintain for the transaction of its business branches or agencies in foreign countries, their dependencies or colonies, and in the dependencies or insular possessions of the United States, at such places as may be approved by the Federal Reserve Board and under such rules and regulations as it may prescribe, in cluding countries or dependencies not specified in the original organization certificate. (c) W ith the consent of the Federal Reserve Board to purchase and hold stock or other certificates of owner ship in any other corporation organized under the pro visions of this section, or under the laws of any foreign country or a colony or dependency thereof, or under the laws of any State, dependency, or insular possession of the United States but not engaged in the general business THE FEDERAL RESERVE ACT. o f buying or selling goods, wares, merchandise or com modities in the United States, and not transacting any business in the United States except such as in the ju d g ment o f the Federal Reserve Board may be incidental to its international or foreign business: Provided, however, That, except with the approval o f the Federal Reserve Board, no corporation organized hereunder shall invest in any one corporation an amount in excess o f 10 per centum o f its own capital and surplus, except in a cor poration engaged in the business o f banking, when 15 per centum o f its capital and surplus may be so invested: Provided further, That no corporation organized here under shall purchase, own, or hold stock or certificates o f ownership in any other corporation organized here under or under the laws o f any State which is in sub stantial competition therewith, or which holds stock or certificates o f ownership in corporations which are in substantial competition with the purchasing corporation. Nothing contained herein shall prevent corporations organized hereunder from purchasing and holding stock in any corporation where such purchase shall be neces sary to prevent a loss upon a debt previously contracted in good faith ; and stock so purchased or acquired in corporations organized under this section shall within six months from such purchase be sold or disposed o f at public or private sale unless the time to so dispose o f same is extended by the Federal Reserve Board. No corporation organized under this section shall carry on any part o f its business in the United States except such as, in the judgment o f the Federal Reserve Board, shall be incidental to its international or foreign busi ness : And provided further, That except such as is inci dental and preliminary to its organization no such cor poration shall exercise any o f the powers conferred by this section until it has been duly authorized by the Federal Reserve Board to commence business as a cor poration organized under the provisions o f this section. No corporation organized under this section shall engage in commerce or trade in commodities except as specifically provided in this section, nor shall it either directly or indirectly control or fix or attempt to control or fix the price o f any such commodities. The charter o f any corporation violating this provision shall be sub ject to forfeiture in the manner hereinafter provided m this section. It shall be unlawful for any director, officer, agent, or employee o f any such corporation to use or to conspire to use the credit, the funds, or the power o f the corporation to fix or control the price o f any such commodities, and any such person violating this provi sion shall be liable to a fine o f not less than $1,000 and not exceeding $5,000 or imprisonment not less than one year and not exceeding five years, or both, in the discre tion o f the court. No corporation shall be organized under the provisions o f this section with a capital stock o f less than $2,000,000, THE FEDERAL RESERVE ACT. one-quarter o f which must be paid in before the corpora tion may be authorized to begin business, and the re mainder o f the capital stock o f such corporation shall be paid in installments o f at least 10 per centum on the whole amount to which the corporation shall be limited as frequently as one installment at the end o f each suc ceeding two months from the time o f the commencement o f its business operations until the whole o f the capital stock shall be paid in. The capital stock o f any such corporation may be increased at any time, with the ap proval o f the Federal Reserve Board, by a vote o f twothirds o f its shareholders or by unanimous consent in writing o f the shareholders without a meeting and with out a Formal vote, but any such increase o f capital shall be fully paid in within ninety days after such approval; and may be reduced in like manner, provided that in no event shall it be less than $2,000,000. No corporation, except as herein provided, shall during the time it shall continue its operations withdraw or permit to be with drawn, either in the form o f dividends or otherwise, any portion o f its capital. A ny national banking asso ciation may invest in the stock o f any corporation or ganized under the provisions o f this section, but the ag gregate amount o f stock held in all corporations engaged in business o f the kind described in this section and in section 25 o f the Federal Reserve A ct as amended shall not exceed 10 per centum o f the subscribing bank’s capi tal and surplus. A m ajority o f the shares o f the capital stock o f any such corporation shall at all times be held and owned by citizens o f the United States, by corporations the con trolling interest in which is owned by citizens o f the United States, chartered under the laws o f the United States or o f a State o f the United States, or by firms or companies, the controlling interest in which is owned by citizens o f the United States. The provisions o f section 8 o f the act approved October 15, 1914, entitled ‘An act to supplement existing laws against unlawful restraints and monopolies, and for other purposes,’ as amended by the acts o f May 15, 1910, and September 7, 1916, shall be construed to apply to the directors, other officers, agents, or employees o f corporations organized under the pro visions o f this section: Provided, however, That nothing herein contained shall (1) prohibit any director or other officer, agent or employee o f any member bank, who has procured the approval o f the Federal Reserve Board from serving at the same time as a director or other offi cer, agent or employee o f any corporation organized under the provisions o f this section in whose capital stock such member bank shall have invested; or (2) pro hibit any director or other officer, agent, or employee o f any corporation organized under the provisions o f this section, who has procured the approval o f the Federal Reserve Board, from serving at the same time as a direc tor or other officer, agent or employee o f any other cor £H E FEDERAL RESERVE ACT. poration in whose capital stock such first-mentioned cor poration shall have invested under the provisions of this section. No member of the Federal Reserve Board shall be an officer or director of any corporation organized under the provisions of this section, or of any corporation en gaged in similar business organized under the laws of any State, nor hold stock in any such corporation, and beiore entering upon his duties as a member of the Fed eral Reserve Board he shall certify under oath to the Secretary of the Treasury that he has complied with this requirement. Shareholders in any corporation organized under the provisions of this section shall be liable for the amount o f their unpaid stock subscriptions. No such corporation shall become a member of any Federal reserve bank. Should any corporation organized hereunder violate or fa il to comply with any of the provisions of this section, all of its rights, privileges, and franchises derived here from may thereby be forfeited. Before any such cor>oration shall be declared dissolved, or its rights, privieges, and franchises forfeited, any noncompliance with, or violation of such laws shall, however, be determined and adjudged by a court of the United States of com petent jurisdiction, in a suit brought for that purpose in the district or territory in which the home office of such corporation is located, which suit shall be brought by the United States at the instance of the Federal Reserve Board or the Attorney General. Upon adjudication of such noncompliance or violation, each director and offi cer who participated in, or assented to, the illegal act or acts, shall be liable in his personal or individual capacity for all damages which the said corporation shall have sustained in consequence thereof. No dissolution shall take away or impair any remedy against the corporation, its stockholders, or officers for any liability or penalty previously incurred. A n y such corporation may go into voluntary liquida tion and be closed by a vote of its shareholders owning two-thirds of its stock. Whenever the Federal Reserve Board shall become satisfied of the insolvency of any such corporation, it may appoint a receiver who shall take possession of all o f the property and assets of the corporation and exer cise the same rights, privileges, powers, and authority with respect thereto as are now exercised by receivers of national banks appointed by the Comptroller of the Currency of the United States: Provided, however, That the assets of the corporation subject to the laws of other countries or jurisdictions shall be dealt with in accord ance with the terms o f such laws. Every corporation organized under the provisions of this section shall hold a meeting of its stockholders an nually upon a date fixed in its by-laws, such meeting to be held at its home office in the United States. Every { THE FEDERAL RESERVE ACT. such corporation shall keep at its home office books con taining the names of all stockholders thereof, and the names and addresses of the members of its board of di rectors, together with copies of all reports made by it to the Federal Eeserve Board. Every such corporation shall make reports to the Federal Reserve Board at such times and in such form as it may require; and shall be subject to examination once a year and at such other times as may be deemed necessary by the Federal Reserve Board bv examiners appointed by the Federal Reserve Board, the cost of such examinations, including the com pensation of the examiners, to be fixed by the Federal Kesefrve Board and to be paid by the corporation examined. The directors of any corporation organized under the provisions of this section may, semiannually, declare a dividend of so much of the net profits of the corporation as they shall judge expedient; but each corporation shall, before the declaration of a dividend, carry one-tenth of its net profits of the preceding half year to its surplus fund until the same shall amount to 20 per centum of its capital stock. A n y corporation organized under the provisions of this section shall be subject to tax by the State within which its home office is located in the same manner and to the same extent as other corporations organized under the laws of that State which are transacting a similar char acter of business. The shares of stock m such corpora tion shall also be subject to tax as the personal property of the owners or holders thereof in the same manner and to the same extent as the shares of stock in similar State corporations. A n y corporation organized under the provisions of this section may at any time within the two years next previous to the date of the expiration of its corporate existence, by a vote of the shareholders owning twothirds of its stock, apply to the Federal Reserve Board for its approval to extend the period of its corporate existence for a term of not more than twenty years, and upon certified approval of the Federal Reserve Board such corporation shall have its corporate existence for such extended period unless sooner dissolved by the act of the shareholders owning two-thirds of its stock, or by an A ct of Congress or unless its franchise becomes for feited by some violation of law. Any bank or banking institution, principally engaged in foreign business, incorporated by special law of any State or of the United States or organized under the general laws of any State or of the United States and having an unimpaired capital sufficient to entitle it to become a corporation under the provisions of this sec tion may, by the vote of the shareholders owning not less than two-thirds of the capital stock of such bank or banking association, with the approval of the Federal Reserve Board, be converted into a Federal corporation THE FEDERAL RESERVE ACT. o f the kind authorized by this section with any name approved by the Federal Reserve B oard: Provided, how ever, That said conversion shall not be in contravention o f the State law. In such case the articles o f association and organization certificate may be executed by a ma jority o f the directors o f the bank or banking institution, and the certificate shall declare that the owners o f at least two-thirds o f the capital stock have authorized the directors to make such certificate and to change or con vert the bank or banking institution into a Federal cor poration. A majority o f the directors, after executing the articles o f association and the organization certifi cate, shall have power to execute all other papers and to do whatever may be required to make its organization perfect and complete as a Federal corporation. The shares o f any such corporation may continue to be for the same amount each as they were before the conver sion, and the directors may continue to be directors o f the corporation until others are elected or appointed in accordance with the provisions o f this section. W hen the Federal Reserve Board has given to such corpora tion a certificate that the provisions o f this section have been complied wTith, such corporation and all its stock holders, officers, and employees, shall have the same pow ers and privileges, and shall be subject to the same duties, liabilities, and regulations, in all respects, as shall have been prescribed by this section for corporations origi nally organized hereunder. Every officer, director, clerk, employee, or agent o f any corporation organized under this section who embezzles, abstracts, or w illfully misapplies any o f the moneys, funds, credits, securities, evidences o f indebtedness or assets o f any character o f such corporation; or who, without authority from the directors, issues or puts forth any certificate o f deposit, draws any order or bill o f exchange, makes any acceptance, assigns any note, bond, debenture, draft, bill o f exchange, mortgage, judgment, or decree; or who makes any false entry in any book, re port, or statement o f such corporation with intent, in either case, to injure or defraud such corporation or any other company, body politic or corporate, or any indi vidual person, or to deceive any officer o f such corpora tion, the Federal Reserve Board, or any agent or ex aminer appointed to examine the affairs o f any such corporation; and every receiver o f any such corporation and every clerk or employee o f such receiver who shall embezzle, abstract, or w illfully misapply or w rongfully convert to his own use any moneys, funds, credits, or assets o f any character which may come into his posses sion or under his control in the execution o f his trust or the performance o f the duties o f his employment; and every such receiver or clerk or employee o f such receiver who shall, with intent to injure or defraud any person, body politic or corporate, or to deceive or mislead the Federal Reserve Board, or any agent or examiner ap THE FEDERAL RESERVE ACT. 175 pointed to examine the affairs o f such receiver, shall make any false entry in any book, report, or record o f any matter connected with the duties o f such receiver; and every person who with like intent aids or abets any officer, director, clerk, employee, or agent o f any corpora tion organized under this section, or receiver or clerk or employee o f such receiver as aforesaid in any violation o f this section, shall upon conviction thereof be impris oned for not less than two years nor more than ten years, and may also be fined not more than $5,000, in the dis cretion o f the court. Whoever being connected in any capacity with any corporation organized under this section represents in any way that the United States is liable for the payment o f any bond or other obligation, or the interest thereon, issued or incurred by any corporation organized here under, or that the United States incurs any liability in respect o f any act or omission o f the corporation, shall be punished by a fine o f not more than $10,000 and by im prisonment for not more than five years. REPEAL OF PROVISIONS OF LAW INCONSISTENT WITH THE PROVISIONS OF THE FEDERAL RESERVE ACT. 626. Sec. 26.— A ll provisions o f law inconsistent with ^ A c t Dec. or superseded by any o f the provisions o f this A ct are to as ’stat.* that extent and to that extent only hereby repealed: 274. Provided, Nothing in this A ct contained shall be con strued to repeal the parity provision or provisions con tained in an A ct approved March fourteenth, nineteen hundred, entitled “ An Act to define and fix the standard o f value, to maintain the parity o f all forms o f money issued or coined by the United States, to refund the public debt, and for other purposes,” and the Secretary o f the Treasury may, for the purpose o f maintaining such parity and to strengthen the gold reserve, borrow gold on the security o f United States bonds authorized by section two o f the A ct last referred to or for one-vear gold notes bearing interest at a rate o f not to exceed three per centum per annum, or sell the same if necessary to obtain gold. When the funds o f the Treasury on hand justify, he may purchase and retire such outstanding bonds and notes. 23, l. | ACT OF MAY 80, 1908, EXTENDED TO JUNE 30, 1915. REENACTMENT OF CERTAIN SECTIONS OF REVISED STATUTES. 627. Sec. 27.— The provisions o f the A ct o f May thir- 19Act Dec. 2S, tieth, nineteen hundred and eight, authorizing national 38 stat.* l . ’, currency associations, the issue o f additional national- 27i ct Aug. 4, bank circulation, and creating a National Monetary Com- l91^ * 8 Stat* mission, which expires by limitation under the terms o f such A ct on the thirtieth day o f June, nineteen hundred and fourteen, are hereby extended to June thirtieth, nine teen hundred, and fifteen, and sections fifty-one hundred 176 THE FEDERAL RESERVE ACT. and fifty-three, fifty-one hundred and seventy-two, fiftyone hundred and ninety-one, and fifty-two hundred and fourteen of the Revised Statutes of the United States, which were amended by the A ct of May thirtieth, nine teen hundred and eight, are hereby reenacted to read as such sections read prior to May thirtieth, nineteen hun dred arid eight, subject to such amendments or modifica tions as are prescribed in this A c t : BATE OF TAXATION ON CIRCULATING NOTES SECURED OTHERWISE THAN BY BONDS OF THE UNITED STATES. WHEN SECRETARY OF TREASURY AUTHORIZED TO SUSPEND LIMITATIONS OF ACT OF MAY 30, 1908. 1013 ,1 1 sec?’ 27; 627a. Provided , however, That section nine of the A ct 38^ ’stat.’ l . ’ first referred to in this section is hereby amended so as to Act Aug. 4, change the tax rates fixed in said A ct by making the por- 8 ’ tion applicable thereto read as follow s: National banking associations having circulating notes secured otherwise than by bonds of the United States, shall pay for the first three months a tax at the rate o i three per centum per annum upon the average amount of such of their notes in circulation as are based upon the deposit of such securities, and afterwards an addi tional tax rate of one-half of one per centum per annum for each month until a tax of six per centum per annum is reached, and thereafter such tax of six per centum per annum upon the average amount of such notes: P ro vided further, That whenever in his judgment he may deem it desirable, the Secretary of the Treasury shall have power to suspend the limitations imposed by sec tion one and section three of the A ct referred to in this section, which prescribe that such additional circulation secured otherwise than by bonds of the United States shall be issued only to National banks having circulating notes outstanding secured by the deposit of bonds of the United States to an amount not less than forty per centum of the capital stock of such banks, and to suspend also the conditions and limitations of section five of said A ct except that no bank shall be permitted to issue circu lating notes in excess of one hundred and twenty-five per centum of its unimpaired capital and surplus. He shall require each bank and currency association to maintain on deposit in the Treasury of the United States a sum in gold sufficient in his judgment for the redemption of such notes, but in no event less than five per centum. He may permit National banks, during the period for which such provisions are suspended, to issue additional circula tion under the terms and conditions of the A ct referred to as herein amended: Provided further, T hat the Secre tary of the Treasury, in his discretion, is further author ized to extend the benefits o f this A ct to all qualified State tmnks and trust companies, which have joined the Federal reserve system, or which may contract to join within fifteen days after the passage of this Act. THE FEDERAL RESERVE ACT. 177 REDUCTION OF CAPITAL OF NATIONAL BANKS. 628. Sec. 28.— Section fifty-one hundred and forty-three 19ig* 2c?’ $i\ o f the Revised Statutes is hereby amended and reenacted 38^ ’stat. u, to read as follow s: A ny association formed under this title may, by the vote o f shareholders owning two-thirds o f its capital stock, reduce its capital to any sum not be low the amount required by this title to authorize the formation o f associations; but no such reduction shall be allowable which will reduce the capital o f the association below the amount required for its outstanding circula tion, nor shall any reduction be made until the amount o f the proposed reduction has been reported to the Comp troller o f the Currency and such reduction has been ap proved by the said Comptroller o f the Currency and by the Federal Reserve Board, or by the organization com mittee pending the organization o f the Federal Reserve Board. INVALIDATION OF CLAUSE, ETC., IN ACT NOT TO INVALI DATE REMAINDER OF ACT. 629. Sec. 29.— I f any clause, sentence, paragraph, or 1QAct Dec. 23, part o f this A ct shall for any reason be adjudged by any 38 ’stat.’ court o f competent jurisdiction to be invalid, such judg- 275* ment shall not affect, impair, or invalidate the remainder o f this Act, but shall be confined in its operation to the clause, sentence, paragraph, or part thereof directly in volved in the controversy in which such judgment shall have been rendered. RESERVATION OF RIGHT TO AMEND OR REPEAL. •i _ _ _ . Act Dec. 23, 630. Sec. 30.— The right to amend, alter, or repeal this 3i9i3^sec 30; A ct is hereby expressly reserved. 275. a 164312°— 20------ 12 THE FEDERAL RESERVE ACT. ACTS OF GENERAL NATURE. 178 CHAPTER VII. A C T S O F A G E N E R A L N A T U R E A N D S E C T IO N S O F T H E R E V IS E D S T A T U T E S , N O T IN C L U D E D IN T H E N A T IO N A L B A N K A C T , A F F E C T I N G N A T IO N A L BANKS. 700. District attorney to conduct suits when United States is a party. 701. Jurisdiction of district court to en join Comptroller. 702. Where such proceedings must be brought. 703. Sealed certificates of Comptroller competent evidence. 704. Certified copy of organization cer tificate as evidence. 705-715. Tax on State bank circulation. 716-717. Tax on United States and na tional bank notes. 718. Restrictions on notes less than one dollar. 719-729. Legal tender. 730-738. Government depositaries. 739-748. Offenses against the currency. 749-762. Currency act March 14, 1900. 763-766. Act March 4, 1907. 767-768. Panama Canal bonds. 769-770. Certified checks when receiva ble for duties and taxes. 771. Subscriptions to Red Cross. ALL SUITS UNDER BANKING LAW IN WHICH THE UNITED STATES OR ANY OF ITS OFFICERS OR AGENTS ARE PARTIES TO BE CONDUCTED BY DISTRICT ATTOR NEYS UDER THE SUPERVISION OF THE SOLICITOR OF THE TREASURY. 700. Sec. 380.— All suits and proceedings arising out of the provisions of law governing national banking associations, in which the United States or any of its officers or agents shall be parties, shall be conducted by the district attorneys of the several districts under the direction and supervision of the Solicitor of the Treasury. 18£3C* 5|c*e-c 25, 55. i2 Stat.L.,68o. igM^.iwJSo.5^ 13stat*L*»116* N o t e . —The United States Supreme Court decided in the case of Gibson v. Peters (150 U. S., 342) that a district attorney could not receive any compensation for services in conducting a suit arising out of the provisions of the national banking laws in which the United States or any of its officers or agents are parties. JURISDICTION OF DISTRICT COURT TO ENJOIN COMP TROLLER. 701. Sec. 24.— The district court shall have original 5i i K ! 9}1 • • i* 11 S8C.44, o v o ta liii*! j unsdiction as iollow s: 1092. Sixteenth. Of all cases commenced by the United States, or by direction of any officer thereof, against any national banking association, and cases for winding up the affairs of any such bank; and of all suits brought by any banking association established in the district for which the court is held, under the provisions of title “ National Banks,” Revised Statutes, to enjoin the Comptroller of the Currency, or any receiver acting under his direction, as provided by said title. And all national banking associations established under the laws of the United States shall, for the purposes of all other actions by or against them, real, personal, or mixed, and all suits 181 ACTS OF GENERAL NATURE. 182 in equity, be deemed citizens of the States in which they are respectively located. N o t e .—Proceedings to enjoin Comptroller are those authorized by section 5237, United States Revised Statutes. Until the passage of the act of March 3, 1911, the circuit courts had this jurisdiction under sec tion 629, United States Revised Statutes. WHERE SUCH PROCEEDINGS MUST BE BROUGHT. iM 4Ctc.io 6 esecs’ 60,57; 13 stat. l ., 115, lie. ®eCf 7**6.— ^ proceedings by any national banking association to enjoin the Comptroller of the Currency, under the provisions of any law relating to national banking associations, shall be had in the district where such association is located. SEALED CERTIFICATES OF COMPTROLLER COMPETENT EVIDENCE. 1864*0 iSmc 2 13 stat. l .’ ioo.‘ ’ Sec. 884.— Every certificate, assignment, and conveyance executed by the Comptroller of the Currency, in ursuance of law, and sealed with his seal of office, shall e received in evidence in all places and courts; and all copies of papers in his office, certified by him and authen ticated by the said seal, shall in all cases be evidence equally with the originals. An impression of such seal directly on the paper shall be as valid as if made on wax or wafer. E CERTIFIED COPY OF ORGANIZATION CERTIFICATE AS EVIDENCE. 1864*0 lolTsec 613stat. l.,*ioi.* ’ Sec. 885.— Copies of the organization certificate of any national banking association, duly certified by the Comptroller of the Currency, and authenticated by his seal of office, shall be evidence in all courts and places within the jurisdiction of the United States of the exist ence of the association, and of every matter which could be proved by the production of the original certificate. T A X ON STATE B AN K CIRCU LATIO N . TAX ON CIRCULATION. 705. Sec. 3408.— N o t e .— The tax on circulation was originally provided for in the act of June 30, 1864. The taxation provisions were amended by section 6 of the act of March 3,1865, by section 9 of the act of July 13, 1866, and by the act of June 6,1872, section 37. The provisions as thus amended were incorporated in the Revised Statutes as section 3408. This sec tion included three subsections, the first imposing a tax on deposits, the second on capital, and the third on circulation of banking institu tions. The first and second subsections of this section were repealed by the act of March 3,1883, and the third subsection was superseded by the act of February 8, 1875. CIRCULATION—WHEN EXEMPTED FROM TAX. c mo ’ i418?i ®ec* 3411.— Whenever the outstanding circulation stst/L. 486.' of any bank, association, corporation, company, or person i866Ctc. iw ls e c 1*); is reduced to an amount not exceeding five per centum of 14 sUt. L.’f 146. ^he chartered or declared capital existing at the time the same was issued, said circulation shall be free from taxa- 183 ACTS OF GENERAL NATURE. tion; and whenever any bank which has ceased to issue notes for circulation deposits in the Treasury of the United States, in lawful money, the amount of its outstanding circulation, to be redeemed at par, under such regulations as the Secretary of the Treasury shall prescribe, it shall be exempt from any tax upon such circulation. 707. Secs. 3412, 3413.— Superseded by act February 8, 1875. TAX ON CIRCULATION—ACT FEBRUARY 8, 1875. 708. Sec. 19.— That every person, firm, association c other than national bank associations, and every corpora- s'tat.X 311.' tion, State bank, or State banking association, shall pay a tax of ten per centum on the amount of their own notes used for circulation and paid out by them. TAX ON NOTES OF STATE BANKS, MUNICIPAL CORPO RATIONS, ETC., USED AS CIRCULATION AND PAID OUT BY BANKS. ACT FEBRUARY 8, 1875. 709. Sec. 20.— That every such person, firm, associa-n ^ •^1.87,5j ni i i i i - i * • c. 36, sec. 20; 18 tion, corporation, State bank, or State banking associa- stat. l., 311. tion, and also every national banking association, shall pay a like tax of ten per centum on the amount of notes of any person, firm, association other than a national banking association, or of any corporation, State bank, or State banking association, or of any town, city, or munici pal corporation, used for circulation and paid out by them. BANKS' RETURNS; PAYMENT OF TAX PENALTIES. FEBRUARY 8, 1875. ACT 710. Sec. 21.— That the amount of such circulating se^ 2l Fi8bstit8if' notes, and of the tax due thereon, shall be returned, and 311! the tax paid at the same time, and in the same manner, and with like penalties for failure to return and pay the same, as provided by law for the return and payment of taxes on deposits, capital, and circulation, imposed by the existing provisions of internal-revenue law. SEMIANNUAL RETURN BY BANKS. 711. Sec. 3414.— A true and complete return of the 18^ctc Jj“ e monthly amount of circulation, [of deposits, and of capi- 110;'13 ‘ stat. l.', tal], as aforesaid, and of the m onthly amount of notes of 27Act July 13, persons, town, city, or municipal corporations, State banks, or State banking associations paid out as aforesaid Act *Mar. 26, for the previous six months, shall be made and rendered in Jsstat.*I’. X ' 2’ duplicate on the first day of December and the first day 18^ctc ^ of June, by each of such banks, associations, corporations, 37; ' 17*stat. l .‘, companies, or persons, with a declaration annexed thereto, ^Act Dec 24, under the oath of such person, or of the president or Jf|{act* j|; 5; cashier of such bank, association, corporation, or com pany, in such form and manner as may be prescribed by the Commissioner of Internal Revenue, that the same contains a true and faithful statement of the amounts 184 ACTS OF GENERAL NATURE. subject to tax, as aforesaid; and one copy shall be trans mitted to the collector of the district in which any such bank, association, corporation, or company is situated, or in which such person has his place of business, and one copy to the Commissioner of Internal Revenue. N ote .—Italicized words repealed b y act March 3, 1883. “ That the taxes herein specified imposed by the laws now in force be, and the same are hereby, repealed, as hereinafter provided, namely: On capital and deposits of banks, bankers, and national banking associations, except such taxes as are now due and payable.” FAILURE TO MAKE RETURN. MATE. COMMISSIONER TO ESTI sw. Sec. 3415.— In default of the returns provided in no;' 13 sta{. l.* the preceding section, the amount of circulation, [deposit, 27Act July 13, capital], and notes of persons, towns, city, and municipal Ifstat xl *we9; corporations, State banks, and State banking associations Act *d «c. 24, paid out, as aforesaid, shall be estimated by the Commis£ , 4<S.2: sioner of Internal Revenue, upon the best information he can obtain. And for any refusal or neglect to make return and payment, any such bank, association, corpora tion, company, or person so in default shall pay a penalty of two hundred dollars, besides the additional penalty and forfeitures provided in other cases. N ote .—See note under preceding section. STATE BANKS CONVERTED INTO NATIONAL BANKS; RETURNS, HOW MADE. c stat/L., 486. * i866Ctc. 14stat. l . ' 1*6. ®ec* 3416.— Whenever any State bank or banking association has been converted into a national banking association, and such national banking association has assumed the liabilities of such State bank or banking association, including the redemption of its bills, by any agreement or understanding whatever with the representa tives of such State bank or banking association, such national banking association shall be held to make the required return and payment on the circulation outstand ing, so long as such circulation shall exceed five per centum of the capital before such conversion of such State bank or banking association. TAX PROVISIONS RESTRICTED. iuwctc.Ji73® s®cl ^14:. Sec. 3417 [as amended 1875].— The provisions of no;'13 sut. l.\ this chapter relating to the tax on the [deposits, capital, mAct July 13, and] circulation of banks and to their returns, except as 9^1 statjl' 146*contained in sections thirty-four hundred and ten, thirty’Act Fib.* is) four hundred and eleven, thirty-four hundred and twelve, 18Stat’ thirty-four hundred and thirteen, and thirty-four hun dred and sixteen, and such parts of sections thirty-four hundred and fourteen and thirty-four hundred and fif teen as relate to the tax of ten per centum on certain notes, shall not apply to associations which are taxed under and b y virtue o f Title “ National Banks.” N ote .—See note under section 3414 stating that taxes on deposits and capital were repealed by act March 3, 1883. ACTS OF GENERAL NATURE. TAXES ON INSOLVENT BANKS. 185 ACT MARCH 1, 1879. 715. Sec. 22.— That whenever and after any bank has c ceased to do business by reason of insolvency or bank- stat. L, 351. ' ruptcy, no tax shall be assessed or collected, or paid into the Treasury of the United States, 011 account of such bank, which shall diminish the assets thereof necessary for the full payment of all its depositors; and such tax shall be abated from such national banks as are found by the Comptroller of the Currency to be insolvent; and the Commissioner of Internal Revenue, when the facts shall so appear to him, is authorized to remit so much of said tax against insolvent State and savings banks as shall be found to affect the claims of their depositors. N o t e .—Part of section omitted superseded by act of March 3, 1883. TA X ON UNITED STATES AND NATIONAL BANK NOTES. OBLIGATIONS OF UNITED STATES EXEMPT FROM TAXA TION. 716. Sec. 3701.— All stocks, bonds, Treasury notes, and 18£2ctc other obligations of the United States, shall be exempt 12 dt&t. L, 34a! from taxation by or under State or municipal or local £ct73?a^ ' IfS authority. sec. 1; 13 Stat. L., 13. Act June 30,1864, c. 172, sec. 1; 13 Stat. L., 218. Act Jan. 28, 1865, c. 22, sec. 1; 13 Stat. L., 425. Act Mar. 3,1865, c. 77, sec. 2; 13 Stat. L., 469. Act July 14, 1870, c. 256, sec. 1; 16 Stat. L., 272. NATIONAL-BANK NOTES AND NOTES AND CERTIFICATES OF THE UNITED STATES CIRCULATING AS CURRENCY SUBJECT TO STATE TAXATION. ACT AUGUST 13,1894. 717. Sec. 1.— That circulating notes of national bank- 18^cts^ ugi. ^5 ing associations and United States legal-tender notes and stat. l . , 278. ’ other notes and certificates of the United States payable on demand and circulating or intended to circulate as currency and gold, silver or other coin shall be subject to taxation as money on hand or on deposit under the laws of any State or Territory: Provided, That any such taxation shall be exercised in the same manner and at the same rate that any such State or Territory shall tax money or currency circulating as money within its jurisdiction. S e c. 2. That the provisions of this act shall not be 18^ct ^ deemed or held to change existing laws in respect of the stat. l ., m ’ taxation of national banking associations. RESTRICTIONS ON NOTES LESS THAN ONE DOLLAR. 718. Sec. 3583.— Superseded by section 178, act March 4, 1909. S ec. 178. No person shall make, issue, circulate, or lg** pay out any note, check, memorandum, token, or other obligation for a less sum than one dollar, intended to c. 321 circulate as money or to be received or used in lieu of statlawful money of the United States; and every person so offending shall be fined not more than five hundred dol lars, or imprisoned not more than six months, or both. N o t e .— This restriction is held to apply only to checks issued for the purpose of circulating as money and not to checks issued in the ordinary course of business. s £ '“ife; 35 1122« 186 ACTS OF GENERAL NATURE. LEGAL TEN DER. FOREIGN COINS. 1857*0. 5 6 mc 2\* 11 stat. l ! , 163. ’ ®ec. 3584.— No foreign gold or silver coins shall be a legal tender in payment of debts. Note.—The coinage by the government of Philippine Islands of the various silver and minor coins for use in the islands is authorized and the legal-tender quality of such coins as well as of the gold coins of the United States in the islands is prescribed by the act of July 1, 1902, c. 1369, secs. 76-83; 32 Stat. L., 710; and the act of March 2, 1903, c. 980, sec. 4; 32 Stat. L., 953. GOLD COIN OF THE UNITED STATES. israfc/m, se£ 14; *17 stat. L.‘, ^ ^ 0 . Sec. 3585.— The gold coins of the United States shall be a legal tender in all payments at their nominal value when not below the standard weight and limit of tolerance provided b y law for the single piece, and when, reduced in weight below such standard and tolerance, shall be a legal tender at valuation in proportion to their actual weight. 721. Sec. 3586.— [Superseded by res. July 22, 1876, No. 17, sec. 2; act Feb. 28, 1878, c. 20, sec. 1; act June 9, 1879, c. 12, sec. 3.] AUTHORIZING COINAGE OF STANDARD SILVER DOLLARS AND MAKING THEM LEGAL TENDER. ACT OF FEB RUARY 28, 1878. 1878*0. M^sec.2?! 20 stat. l ’., 25. ’ ^ 2 . Sec. I.— 1That there shall be coined, at the several mints of the United States, silver dollars of the weight of 412J grains Troy of standard silver, as provided in the act of January 18, 1837, on which shall be the devices and superscriptions provided b y said act; which coins together with all silver dollars heretofore coined b y the United States, of like weight and fineness, shall be a legal tender, at their nominal value, for all debts and dues public and private, except where otherwise ex pressly stipulated in the contract. SUBSIDIARY SILVER COINS. 1879*0 ACT JUNE 9, 1879. i^ec. 3* ?23. Sec. 3.— That the present silver coins of the United 8. * ’ States of smaller denominations than one dollar shall hereafter be a legal tender in all sums not exceeding ten dollars in full payment of all dues public and private. 21 stat. l ! , MINOR COINS. i 873Ctc Fm, sec! 16; 17 ‘ stat. l . ‘, ^ ^ 4 . Sec. 3587.— The minor coins of the United States shall be a legal tender, at their nominal value for any amount not exceeding twenty-five cents in any one pay ment. UNITED STATES NOTES. ^®5. Sec. 3588.— United States notes shall be lawful money, and a legal tender in payment of all debts, public i 862^c. 142, sec.^i; and private, within the United States, except for duties Res Jan i7’i863* on imPorts and interest on the public debt. i 862*c. S baec*ij 12 stat. l.\ 345. ’ No. 9,12 Stat. L .’ 823. Act Mar. 3,1863, c. 73, sec. 3; 12 Stat. L., 711. 187 ACTS OF GENERAL NATURE. DEMAND TREASURY NOTES. Act July 17, 726. Sec. 3589.— Demand Treasury notes authorized by the act o f July 17, 1861, chapter 5 , and the act o f Febru- Act Feb. 12, ary 12, 1862, chapter 20, shall be lawful money and a stat/ CL, W legal tender in like manner as United States notes. ^ CF|3*. “ j; 1; 12 Stat. L., 345. Act Mar. 17, 1862, c. 46, sec. 2; 12* Stat. L., 37.* INTEREST-BEARING NOTES. 727. Sec. 3590.— Treasury notes issued under the au thority o f the acts o f March 3,1863, chapter 73, and June 30, 1864, chapter 172, shall be legal tender to the same extent as United States notes, for their face value, ex- Act Mar. 3. eluding interest: Provided, That Treasury notes issued 2®1 under the act last named shall not be a legal tender in 710.^ ^ payment or redemption o f any notes issued by any bank, 1864, c!nei 72,* banking association, or banker, calculated and intended L .^ 2i k 13 S ta t* to circulate as money. FOR WHAT DEMANDS NATIONAL-BANK NOTES MAY BE RECEIYED. 728. Sec. 5182.— N —See section 5182, national-bank act, paragraph 337, ante. ote. GOLD CERTIFICATES. ACT JULY 12, 1882. A T _ A ct Ju ly 12, 729. Sec. 12.— That the Secretary o f the Treasury is |8|^t s£c- ^ authorized and directed to receive deposits o f gold coin a ' *’ with the Treasurer or assistant treasurers o f the United States, in sums o f not less than twenty dollars, and to issue certificates therefor in denominations o f not less than twenty dollars each, corresponding with the de nominations o f United States notes. The coin deposited for or representing the certificates o f deposits shall be retained in the Treasury for the payment o f the same on demand. Said certificates shall be receivable for cus toms, taxes, and all public dues, and when so received may be reissued; and such certificates, as also silver cer tificates, when held by any national banking association, shall be counted as part o f its lawful reserve; and no national banking association shall be a member o f any clearing house in which such certificates shall not be re ceivable in the settlement o f clearing-house balances: Provided, That the Secretary o f the Treasury shall sus pend the issue o f such gold certificates whenever the amount o f gold coin and gold bullion in the Treasury reserved for the redemption o f United States notes falls below one hundred millions o f dollars; and the provi sions o f section fifty-two hundred and seven o f the Re vised Statutes shall be applicable to the certificates herein authorized and directed to be issued. 730. Sec. 1.— That gold certificates o f the United 19^9ct Dec* 24* States payable to bearer on demand shall be and are hereby made legal tender in payment o f all debts and dues, public and private. 188 ACTS OF GENERAL NATURE. Sec. 2. That all acts or parts o f acts which are incon sistent with this act are hereby repealed. N o t e .—See section 6 of the currency act of March 14, 1900, as amended March 4,1907, March 2,1911, and June 12,1916, paragraph 754, post, for additional provisions relating to gold certificates and making $10 lowest denomination. Gold and silver certificates are not legal tender, but are receivable for all public dues. GOVERNMENT DEPOSITARIES. DUTY OF DISBURSING OFFICERS. Act 730. Sec. 3620 [as amended 1877].— I t shall be the duty lec. i ; 14 stat! o f every disbursing officer having any public money in- L”Act* Peb 27, trusted to him for disbursement, to deposit the same with 18c 7i 19 stat* Treasurer or some one o f the assistant treasurers o f L^'249.1 ta the United States, and to draw fo r the same only as it may be required for payments to be made by him m pur suance o f la w ; and draw fo r the same only in favor o f the persons to whom payment is made, and all transfers from the Treasurer o f the United States to a disbursing officer shall be by draft or warrant on the Treasury or an assistant treasurer o f the United States. In places, however, where there is no Treasurer or assistant treas urer, the Secretary o f the Treasury may, when he deems it essential to the public interest, specially authorize in writing the deposit o f such public money in any other public depository, or, in writing, authorize the same to be kept in any other manner, and under such rules and regulations as he may deem most safe and effectual to facilitate the payments to public creditors. N ote.— See also act March 2, 1907, 34 Stat. L., 1166, author izing Army officers to keep in their possession restricted amounts of public funds. See also act December 23, 1913, section 15, para graph 734, post. PROVISIONS FOR DEPOSIT BY CERTAIN POSTMASTERS. Act Mar. 3, 731. Sec. 3847 [as amended 1908].— A ny postmaster, i?73,stat. 27l.! having public money belonging to the'Government, at an 60Act May 27 within a city or town where there is no Treasurer or 1908 .r t xc.. i . 206 ; Assistant Treasurer o f the / United OStates, or designated OF r 415. * ’’ depositary, may deposit the same temporarily, at his own risk and in his official capacity, in any national or State bank in the State in which the said postmaster resides, or in which his office is located, or within a reasonable radius o f his post office in an adjacejit State, but no authority or permission is or shall be given for the pay ment to or receipt by a postmaster or any other person, o f interest, directly or indirectly, on any deposit made as herein described. MISAPPROPRIATING POSTAL FUNDS OR PROPERTY; PUNISHMENT FOR; PRIMA FACIE EVIDENCE; DEPOS ITS, ETC., PERMITTED. 732. Sec. 4046.— (Originally enacted June 8, 1872.) Superseded by sec. 225, act of March 4, 1909. ACTS OF GENERAL NATURE. 189 Sec. 225.— Whoever, being a postmaster or other per- 19^ctc se£ son employed in or connected with any branch o f the 225; 35’ stat. l . ; postal service, shall loan, use, pledge, hypothecate, or 1133‘ convert to his own use, or shall deposit in any bank, or exchange for other funds or property, except as author ized by law, any money or property coming into his hands or under his control in any manner whatever, in the exe cution or under color o f his office, employment, or service, whether the same shall be the money or property of the United States or not; or shall fail or refuse to remit to or deposit in the Treasury of the United States or in a desig nated depository, or to account for or turn over to the proper officer or agent, any such money or property, when required so to do by law or the regulations of the Post Office Department, or upon demand or order of the Postmaster Genera1 111 or through a duly authorized officer deemed guilty of embezzlement; and every such person, as well as every other person advising or knowingly participating therein, shall be fined in a sum equal to the amount or value of the money or property embezzled, or imprisoned not more than ten years, or both. A ny failure to produce or to pay over any such money or property, when required so to do as above provided, shall be taken to be prima facie evi dence of such embezzlement; and upon the trial of any indictment against any person for such embezzlement, it shall be prima facie eviaence of a balance against him to produce a transcript from the account books of the Audi tor for the Post Office Department. But nothing herein shall be construed to prohibit any postmaster depositing, under the direction of the Postmaster General, m a na tional bank designated by the Secretary of the Treasury for that purpose, to his own credit as postmaster, any funds in his charge, nor prevent his negotiating drafts or other evidences of debt through such bank, or through United States disbursing officers, or otherwise, when in structed or required so to do by the Postmaster General, for the purpose of remitting surplus funds from one post office to another. NATIONAL BANKING ASSOCIATIONS TO BE DEPOSITA RIES OF PUBLIC MONEYS. 733. Sec. 5153 [as amended 1907].— N o t e .— See section 5153 under “ National-bank act.,? GOVERNMENT DEPOSITS. 734. Sec. 15.— The moneys held in the general fund of the Treasury, except the five per centum fund for the l.,*265.’ redemption of outstanding national-bank notes and the funds provided in this A ct for the redemption of Federal reserve notes may, upon the direction of the Secretary of the Treasury, be deposited in Federal reserve banks, which banks, when required by the Secretary of the Treasury, shall act as fiscal agents of the United States; and the revenues of the Government or any part thereof may be 190 ACTS OF GENERAL NATURE. deposited in such banks, and disbursements may be made by checks drawn against such deposits. No public funds o f the Philippine Islands, or o f the postal savings, or any Government funds, shall be de posited in the continental United States in any bank not belonging to the system established by this A c t: Provided, however, That nothing in this A ct shall be con strued to deny the right of the Secretary of the Treasury to use member banks as depositories. DEPOSIT OF PROCEEDS ARISING FROM SALE OF BONDS, NO RESERVE REQUIRED TO BE KEPT AGAINST UNITED STATES DEPOSITS. i9nctsecA?r* 241 735. Sec. 7.— That the Secretary of the Treasury, in his discretion, is hereby authorized to deposit in such banks and trust companies as he may designate the proceeds, or any part thereof, arising from the sale of the bonds and certificates o f indebtedness authorized by this Act, or the bonds previously authorized as described in section four of this Act, and such deposits may bear such rate of in terest and be subject to such terms and conditions as the Secretary of the Treasury may prescribe: Provided, That the amount so deposited shall not in any case exceed the amount withdrawn from any such bank or trust com pany and invested in such bonds or certificates of indebt edness plus the amount so invested by such bank or trust company, and such deposits shall be secured in the manner required for other deposits by section fifty-one hundred and fifty-three, Revised Statutes, and amend ments thereto: Provided further. That the provisions of section fifty-one hundred and ninety-one of the Revised Statutes, as amended by the Federal Reserve A ct and the amendments thereof, with reference to the reserves re quired to be kept by national banking associations and other member banks of the Federal Reserve System, shall not apply to deposits of public moneys by the United States in designated depositaries. GOVERNMENT DEPOSITS IN FEDERAL LAND BANKS. i s o c Uly6; *39 stat*. l ., 3d5.’ ^ 6 . Sec. 6 . — That all Federal land banks and joint stock land banks organized under this Act, when designated for that purpose by the Secretary of the Treasury, shall be depositaries of public money, except receipts from cus toms, under such regulations as may be prescribed by said Secretary; and they may also be employed as finan cial agents of the Government; and they shall perform all su<3i reasonable duties, as depositaries of public money and financial agents of the Government, as may be re quired of them. And the Secretary of the Treasury shall require of the Federal land banks and joint stock land banks thus designated satisfactory security, by the deposit of United States bonds or otherwise, for the safekeeping and prompt payment of the public money deposited with them, and for the faithful performance of their duties as financial agents of the Government. No Government ACTS OF GENERAL NATURE. 191 funds deposited under the provisions o f this section shall be invested in mortgage loans or farm loan bonds. PENALTY FOE UNAUTHORIZED DEPOSIT OF PUBLIC MONEY. 737. Sec. 5488.— Originally enacted Juno 34, 1860, see 14 Stat. L. 64. by sec. 87 o f the act o f March 4, 1909. Superseded Sec. 87.— Whoever, being a disbursing officer of the gJJl United States, or a person acting as such, shall in any 2; stat. t<n'. manner convert to his own use, or loan with or without 1909?c. am, interest, or deposit in any place or in any manner, except JJjg36 statas authorized b y law, any public money intrusted to him; or shall, for any purpose not proscribed by law, withdraw from the Treasurer or any assistant treasurer, or any au thorized depositary, or transfer, or apply, any portion of the public money intrusted to him, shall be deemed guilty of an embezzlement of the money so converted, loaned, deposited, withdrawn, transferred, or applied, and shall be fined not more than the amount embezzled, or imprisoned not more than ten years, or both. N ote .— Sections 5489 to 5496 do not refer to national banks. PENALTY FOR UNAUTHORIZED RECEIPT OR USE OF PUBLIC MONEY. 738. Sec. £497.— Originally enacted June 14, 1866 (14 Stat. L. 65), and amended by act of February 3,1879 (20 Stat. L. 280). Superseded by sec. 96 of the act of March 4, 1909. Sec. 96.— Every banker, broker, or other person not an 19^ctsecMaj6. ^ authorized depositary of public moneys, who shall know- stat. l.,are.' ingly receive from any disbursing officer, or collector of internal revenue, or other agent of the United States, any public money on deposit, or by way of loan or accommo dation, with or without interest, or otherwise than in pay ment of a debt against the United States, or shall use, transfer, convert*, appropriate, or apply any portion of the public m oney for any purpose not prescribed by law; and every president, cashier, teller, director, or other officer of any bank or banking association who shall violate any provision of this section is guilty of embezzlement of the public money so deposited, loaned, transferred, used, con verted, appropriated, or applied, and shall be fined not more than the amount embezzled, or imprisoned not more than ten years, or both. N ote .—For duties and liabilities of depositaries see note under sec. 5153, paragraph 243, ante. OFFENSES AGAINST THE CURRENCY. OBLIGATION OR OTHER SECURITY OF THE UNITED STATES DEFINED. 739. Sec. 147.— The wrords “ obligation or other security 19^ctc sec of the United States” shall be held to mean all bonds, cer- 147;*35’ stat. l .; tificates of indebtedness, national-bank currency, cou- ^c5*54i3^ s . des pons, United States notes, Treasury notes, gold c e r t i f i - ^ ^ ’1^ 1^ silver certificates, fractional notes, certificates of ism. Digitized forcates, FRASER 192 ACTS OF GENERAL NATURE. deposit, bills, checks, or drafts fo r money, drawn by or upon authorized officers o f the United States, stamps and other representatives o f value, o f whatever denomination, which have been or may be issued under any A ct o f Congress. FORGING OR COUNTERFEITING SECURITIES; PUNISH MENT FOR. wojjfc. an* sec! *^0. Sec. 148.— Whoever, with intent to defraud, shall 148;'35*sta{. L.', falsely make, forge, counterfeit, or alter any obligation or 8ec5'54u“S r^ other security of the United States shall be fined not more wiacte^ June'U ^ a n ^ve thousand dollars and imprisoned not more than 1864. ’ fifteen years. COUNTERFEITING NATIONAL-BANK NOTES; MENT FOR. PUNISH i909Ctc 321 *sec* ®ec* — W hoever shall falsely make, forge, or i49;'35'sta£ ^.counterfeit, or cause or procure to be made, forged, or sec. 5415, IRj 3des counterfeited, or shall willingly aid or assist in falsely enacted Feb .125 making, forging, or counterfeiting, any note in imitation 1863. Reenacted of; or purporting to be in imitation of, the circulating June 3, 1864. notes issued b y any banking association now or hereafter authorized and acting under the laws of the United States; or whoever shall pass, utter, or publish, or attempt to pass, utter, or publish, any false, forged, or counterfeited note, purporting to be issued by any such association do ing a oanking business, knowing tne same to be falsely made, forged, or counterfeited; or whoever shall falsely alter, or cause or procure to be falsely altered, or shall willingly aid or assist in falsely altering, any such circulat ing notes, or shall pass, utter, or publish, or attempt to pass, utter, or publish as true, any falsely altered or spurious circulating note issued, or purporting to have been issued, b y any such banking association, knowing the same to be falsely altered or spurious, shall be fined not more than one thousand dollars and imprisoned not more than fifteen years. USING PLATES TO PRINT NOTES WITHOUT AUTHORITY, ETC.; DISTINCTIVE PAPER WITHOUT AUTHORITY; PUNISHMENT FOR. isrof c. an,' sec! ®ec* 1®®*— Whoever, having control, custody, or uo; V st&t. l .*, possession of any plate, stone, or other thing, or any part sec6*543o?Sfsdes thereof, from which has been printed, or which may be enactecf June 3<? prepared by direction of the Secretary of the Treasury for 1864. * the purpose of printing, any obligation or other security of the United States, shall use such plate, stone, or other thing, or any part thereof, or knowingly suffer the same to be used for the purpose of printing any such or similar ob ligation or other security, or any part thereof, except as may be printed for the use of the United States b y order of the proper officer thereof; or whoever by any way, art, or means shall make or execute, or cause or procure to be made or executed, or shall assist in making or executing any plate, stone, or other thing in the likeness of any plate designated for the printing of such obligation or other se curity; or whoever shall sell any such plate, stone, or other thing, or bring into the United States or any place subject ACTS OF GENEKAL NATURE. 193 to the jurisdiction thereof, from any foreign place, any such plato, stone, or other thing, except under the direc tion of the Secretary of the Treasury or other proper offi cer, or with any other intent, in either case, than that such plate, stone, or othor thing be used for the printing of the obligations or other securities of the United States; or whoever shall have in his control, custody, or possession any plate, stone, or other thing in any manner made after or in the similitude of any plate, stone, or other thing, from which any such obligation or other security has been printed, with intent to use such plate, stone, or other thing, or to suffer the same to be used in forging or coun terfeiting any such obligation or other security, or any part thereof; or whoever shall have in his possession or custody, except under authority from the Secretary of the Treasury or other proper officer, any obligation or other security made or executed, in whole or in part, after the similitude of any obligation or other security issued under the authority of the United States, with intent to sell or otherwise use the same; or whoever shall print, photo graph, or in any other manner make or execute, or cause to be printed, photographed, made, or executed, or shall aid in printing, photographing, making, or executing any engraving, photograph, print, or impression in the like ness of any such obligation or other security, or any part thereof, or shall sell any such engraving, photograph, print, or impression, except to the United States, or shall bring into the United States or any place subject to the jurisdiction thereof, from any foreign place any such en graving, photograph, print, or impression, except by direc tion of some proper officer of the United States; or who ever shall have or retain in his control or possession, after a distinctive paper has been adopted by the Secretary of the Treasury for the obligations and othor securities of the United States, any similar paper adapted to the making of any such obligation or other security, except under the authority of the Secretary of the Treasury or some other proper officer of the United States, shall be fined not more than five thousand dollars, or imprisoned not more than fifteen years, or both. UTTERING, ETC., FORGED OBLIGATIONS; PUNISHMENT FOR. 743. Sec. 151.— Whoever, with intent to defraud, shall 19^ f c. ^2Y' sec! pass, utter, publish, or sell, or attempt to pass, utter, pub- isi.-V sta£ l.*, lish, or sell, or shall bring into the United States or any sec6543Si??i.rss.des place subject to the jurisdiction thereof, with intent to enwtidjSnV^ pass, publish, utter, or sell, or shall keep in possession or 1864. conceal with like intent, any falsely made, forged, coun terfeited, or altered obligation or other security of the United States, shall be fined not more than five thousand dollars and imprisoned not more than fifteen years. 164312°— 20------ 13 ACTS OF GENERAL NATURE. 194 TAKING IMPRESSIONS OF TOOLS, IMPLEMENTS, ETC.; PUNISHMENT FOR. 1909*0. a a ’ sec! JSec* — W h o e v e r , w ith o u t a u th o r ity fr o m th e i 52; V s t a f . l . ‘, U n i t e d S t a t e s , s h a l l t a k e , p r o c u r e , o r m a k e , u p o n l e a d , E k S W * fo il, w a x , p la s t e r , p a p e r , o r a n j oth er su b sta n ce or m a te - e n ^ jt i/V e b 11/ a n im p r e s s io n , s t a m p , o r im p r in t o f, fr o m , o r b y t h e 1867. ' * u s e o f a n y b e d p la t e , b e d p ie c e , d ie , r o ll, p la t e , s e a l, t y p e , o r o th e r t o o l, im p le m e n t, in s tr u m e n t, o r th in g u s e d o r fitte d o r in t e n d e d t o b e u s e d in p r in t in g , s t a m p in g , o r im p r e s s in g , o r in m a k in g o t h e r t o o ls , im p le m e n t s , in s tr u m e n t s , o r t h in g s t o b e u s e d o r fit t e d o r in t e n d e d t o b e u s e d in p r in t in g , s t a m p in g , o r im p r e s s in g a n y k in d o b lig a tio n or oth er s e c u r ity a u th o r iz e d o r h e re a fte r to of th e o r d e s c r ip tio n U n ite d b e a u th o r iz e d by S ta te s of now th e U n ite d S ta te s , o r c ir c u la tin g n o t e o r e v id e n c e o f d e b t o f a n y b a n k in g a s s o c ia t io n u n d e r t h e la w s t h e r e o f, s h a ll b e fin e d n o t m o r e th a n fiv e th o u s a n d d o lla r s , o r im p r is o n e d n o t m o r e th a n te n y e a rs, o r b o th . HAVING UNLAWFUL POSSESSION PUNISHMENT FOR. OF IMPRESSIONS; 1909*c a a ’ sec! ®e c * — W h o e v e r , w it h in t e n t t o d e fr a u d , s h a ll 153;'35' stai!. l . ’, h a v e i n h i s p o s s e s s i o n , k e e p i n g , c u s t o d y , o r c o n t r o l , w i t h sec.75 4 3 3 ^ ^ s f 68 o u t a u t h o r i t y f r o m t h e U n i t e d S t a t e s , a n y i m p r i n t , s t a m p , e n a c t© /^ e b !1/ or imPression, t a k e n o r m a d e u p o n a n y s u b s t a n c e o r m a t e 1867. * ’ r ia l w h a ts o e v e r , o f a n y t o o l, im p le m e n t , in s tr u m e n t , o r th in g , u s e d , o r fit t e d o r in t e n d e d t o b e u s e d , f o r a n y o f t h e p u r p o s e s m e n t io n e d in t h e p r e c e d in g s e c t i o n ; o r w h o e v e r , w it h in t e n t t o d e fr a u d , s h a ll s e ll, g iv e , o r d e l i v e r a n y s u c h im p r in t , s t a m p , o r im p r e s s io n t o a n y o t h e r p e r s o n , s h a ll b e fin e d n o t m o r e t h a n fiv e t h o u s a n d d o lla r s , o r im p r is o n e d n o t m o re th a n ten y ea rs, or b o th . DEALING IN COUNTERFEIT SECURITIES; PUNISHMENT FOR. 19^*0. an * sec! S ec* — W hoever 154;’ 35' sta£ l . ‘, t r a n s f e r , r e c e i v e , o r d e l i v e r s h a ll b u y , s e ll, e x c h a n g e , a n y fa ls e , fo r g e d , c o u n t e r - fe it e d , o r a lte r e d o b lig a t io n o r o t h e r s e c u r it y o f th e U n it e d enactedg iFeb.U / S t a t e s , o r c i r c u l a t i n g n o t e o f a n y b a n k i n g a s s o c i a t i o n o r 1867. * ' g a n iz e d o r a c t in g u n d e r t h e la w s t h e r e o f, w h ic h h a s b e e n o r m a y h e r e a fte r b e is s u e d b y v ir t u e o f a n y A c t o f C o n g re ss, w ith th e in te n t th a t th e s a m e b e p a s s e d , p u b lis h e d , o r u s e d as tr u e a n d g e n u in e , s h a ll b e fin e d n o t m o r e t h a n fiv e th o u s a n d d o lla r s , o r im p r is o n e d n o t m o r e t h a n ten years, or b oth . CIRCULATING BILLS OF EXPIRED BANKS; PUNISHMENT FOR; CIRCULATION PERMITTED. 1909*0 32?' sec! ®e c ' a^ ca ses w h e re th e ch a rte r o f a n v c o r174; V staf l . ’ p o r a t i o n w h i c h h a s b e e n o r m a y b e c r e a t e d b y A c t o f C o n g re s s h a s e x p ir e d o r m a y h e r e a fte r e x p ir e , if a n y d ir e c t o r , eaactw iJuiy ^ ° f f i c e r > o r a g © n t o f t h e c o r p o r a t i o n , o r a n y t r u s t e e t h e r e o f , 1838. ' o r a n y a g e n t o f s u c h t r u s t e e , o r a n y p e r s o n h a v in g in h is p o s s e s s io n o r u n d e r h is c o n t r o l t h e p r o p e r t y o f th e c o r p o - ACTS OF GENERAL NATURE. 195 ration for the purpose of paying or redeeming its notes and obligations, shall knowingly issue, reissue, or utter as money, or in any other way knowingly put in circulation any bill, note, check, draft, or other security purporting to have been made by any such corporation whose charter has expired, or by any officer thereof, or purporting to have been made under authority derived therefrom, or if any person shall knowingly aid in any such act, he shall be fined not more than ten thousand dollars, or imprisoned not more than five years, or both. But nothing herein shall be construed to make it unlawful for any person, not being such director, officer, or agent of the corporation, or any trustee thereof, or any agent of such trustee, or any person having in his possession or under his control the property of the corporation for the purpose hereinbefore set forth, who has received or may hereafter receive such bill, note, check, draft, or other security, bona fide and in the ordinary transactions of business, to utter as money or otherwise circulate the same. FRAUDULENT NOTES TO BE SO MARKED BY UNITED STATES OFFICERS AND OFFICERS OF NATIONAL BANKS. ACT JUNE 30, 1876. 748. Sec. 5.— That all United States officers charged with the receipt or disbursement of public moneys, and stat'. l ., k all officers of national banks, shall stamp or write in plain letters the word “ counterfeit” “ altered” or “ worthless,” upon all fraudulent notes issued in the form of, and in tended to circulate as money, which shall be presented at their places of business; and if such officer shall wrong fully stamp any genuine note of the United States, or of the national banks, they shall, upon presentation, redeem such notes at the face value thereof. ’ CURRENCY ACT, APPROVED MARCH 14, 1900. 749. Section 1. Gold dollar declared to be standard unit of value. 750. Sec. 2. Secretary of Treasury to set apart and maintain gold reserve of one hundred and fifty million dollars in gold coin and bullion for the redemption of United States notes and notes issued under the act of July 14, 1890. May sell bonds to replenish re serve. 751. Sec. 3. Silver dollar to remain legal tender. 752. Sec. 4. Divisions of issue and edemption established. 753. Sec. 5. When silver dollars are coined from bullion purchased under act of July 14, 1890, an equal amount of Treasury notes to be canceled and silver certifi cates issued. 754 Sec. 6. Issue of gold certificates. Issue of gold certificates payable to order. 755. Sec. 7. Issue of silver certificates. 756. Sec. 8. Subsidiary silver coinage. 757. Sec. 9. Recoinage of uncurrent sub sidiary silver coin. 758. Sec. 10. Amends section 5138, Re vised Statutes. (See said sec tion under national-bank act.) 759. Sec. 11. Refunding of United States bonds. 760. Sec. 13. This section is inserted in national-bank act following sec tion 5171, which it supersedes. 761. Sec. 13. See sec. 5214, Revised Stat utes, under national-bank act. 762. Sec. 14. International bimetallism. An Act To define and fix the standard of value, to maintain the parity of all forms of money issued or coined by the United States, to refund the public debt, and for other purposes. 196 ACTS OF GENERAL NATURE. GOLD DOLLAR DECLARED TO BE STANDARD UNIT OP VALUE. Act Mar. 1900, sec. 1; Stat. L., 45. 749. Be it enacted by the Senate and House of Repre sentatives of the United States of ’ America in Congress assembled,, That the dollar consisting of twenty-five and eight-tenths grains of gold nine-tenths fine, as established by section thirty-five hundred and eleven of the Revised Statutes of the United States, shall be the standard unit of value, and all forms of money issued or coined by the United States shall be maintained at a parity of value with this standard, and it shall be the duty of the Secre tary of the Treasury to maintain such parity. SECRETARY OF TREASURY TO SET APART AND MAIN TAIN A GOLD RESERVE OF ONE HUNDRED AND FIFTY MILLION DOLLARS IN GOLD COIN AND BULLION FOR THE REDEMPTION OF UNITED STATES NOTES AND NOTES ISSUED UNDER ACT OF JULY 14, 1890. MAY SELL BONDS TO REPLENISH RESERVE. Act Mar. 1900, sec. 2; Stat. L., 45. 750. Sec. 2.— That United States notes, and Treasury notes issued under the A ct of July fourteenth, eighteen hundred and ninety, when presented to the Treasury for redemption, shall be redeemed in gold coin of the stand ard fixed in the first section of this Act, and in order to secure the prompt and certain redemption of such notes as herein provided it shall be the duty of the Secretary of the Treasury to set apart in the Treasury a reserve fund of one hundred and fifty million dollars in gold coin and bullion, which fund shall be used for such redemption purposes only, and whenever and as often as any of said notes shall be redeemed from said fund it shall be the duty of the Secretary of the Treasury to use said notes so redeemed to restore and maintain such reserve fund in the manner following, to w^it: First, by exchanging the notes so redeemed for any gold coin in the general fund of the Treasury; second, by accepting deposits of gold coin at the Treasury or at any subtreasury in exchange for the United States notes so redeemed; third, by procuring gold coin by the use of said notes, in accordance with the pro visions of section thirty-seven hundred of the Revised Statutes of the United States. If the Secretary of the Treasury is unable to restore and maintain the gold coin in the reserve fund by the foregoing methods, and the amount of such gold coin and bullion in said fund shall at any time fall below one hundred million dollars, then it shall be his duty to restore the same to the maximum sum of one hundred and fifty million dollars by borrowing money on the credit of the United States, and for the debt thus incurred to issue and sell coupon or registered bonds of the United States, in such form as he may pre scribe, in denominations of fifty dollars or any multiple thereof, bearing interest at the rate of not exceeding three er centum per annum, payable quarterly, such bonds to e payable at the pleasure of the United States after one year from the date of their issue, and to be payable, prin- E ACTS OF GENERAL NATURE. 197 cipal and interest, in gold coin of the present standard value, and to be exempt from the payment of all taxes or duties of the United States, as well as from taxation in any form by or under State, municipal, or local author ity ; and the gold coin received from the sale of said bonds shall first be covered into the general fund of the Treas ury and then exchanged, in the manner hereinbefore pro vided, for an equal amount of the notes redeemed and held for exchange, and the Secretary of the Treasury may, in his discretion, use said notes in exchange for gold, or to purchase or redeem any bonds of the United States, or for any other lawful purpose the public in terests may require, except that they shall not be used to meet deficiencies in the current revenues. That United States notes when redeemed in accordance with the pro visions of this section shall be reissued, but shall be held in the reserve fund until exchanged for gold, as herein )rovided; and the gold coin and bullion in the reserve und, together with the redeemed notes held for use as provided in this section, shall at no time exceed the maximum sum of one hundred and fifty million dollars. J N ote.— Section 7 of the Federal reserve act provides that the net earnings derived by the United States from Federal reserve banks shall, in the discretion of the Secretary, be used to supplement the gold reserve held against outstanding United States notes, or shall be applied to the reduction of the outstanding bonded indebtedness of the United States under regulations to be prescribed by the Secretary of the Treasury. SILVER DOLLAR TO REMAIN LEGAL TENDER. 751. Sec. 3.— That nothing contained in this A ct shall ^ be construed to effect the legal-tender quality as now pro- stat. l., 46.’ vided b y law of the silver dollar, or of any other money coined or issued by the United States. DIVISIONS OF ISSUE AND REDEMPTION ESTABLISHED. 752. Sec. 4.— That there be established in the Treasury 19^ct ^ Department, as a part of the office of the Treasurer of the stat l . , 46. ’ United States, divisions to be designated and known as the division of issue and the division of redemption, to which shall be assigned, respectively, under such regula tions as the Secretary of the Treasury may approve, all records and accounts relating to the issue and redemption of United States notes, gold certificates, silver certificates, and currency certificates. There shall be transferred from the accounts of the general fund of the Treasury of the United States, and taken up on the books of said di visions, respectively, accounts relating to the reserve fund for the redemption of United States notes and Treasury notes, the gold coin held against outstanding gold certifi cates, the United States notes held against outstanding currency certificates, and the silver dollars held against outstanding silver certificates, and each of the funds rep resented by these accounts shall be used for the redemp tion of the notes and certificates for which they are respectively pledged, and shall be used for no other pur pose, the same being held as trust funds. ACTS OP GENERAL NATURE. WHEN SILVER DOLLARS ARE COINED FROM BULLION PURCHASED UNDER ACT OP JULY 14, 1890, AN EQUAL AMOUNT OF TREASURY NOTES TO BE CANCELED AND SILVER CERTIFICATES ISSUED. l34{ 753. Sec. 5.— That it shall be the duty of the Secretary of the Treasury, as fast as standard silver dollars are coined under the provisions of the Acts of July four teenth, eighteen hundred and ninety, and June thirteenth, aighteen hundred and ninety-eight, from bullion pur chased under the A ct of July fourteenth, eighteen hun dred and ninety, to retire and cancel an equal amount of Treasury notes whenever received into the Treasury, either b y exchange in accordance with the provisions of this A ct or in the ordinary course of business, and upon the cancellation of Treasury notes silver certificates shall be issued against the silver dollars so coined. ISSUE OF GOLD CERTIFICATES. ISSUE OF GOLD CER TIFICATES PAYABLE TO ORDER. ^ 754. Sec. 6 [as amended by acts of March 4,1907, March 2, 1911, and June 12, 1916].— That the Secretary of the Treasl!; ury is hereby authorized and directed to receive deposits of 2 gold coin with the Treasurer, or any assistant treasurer of l.; the United States, in sums of not less than twenty dollars, 12, and to issue gold certificates therefor in denominations L >of not less than ten dollars, and the coin so deposited shall be retained in the Treasury and held for the payment of such certificates on demand, and used for no other pur pose. Such certificates shall be receivable for customs, taxes, and all public dues, and when so received may be reissued, #and when held by any national banking asso ciation may be counted as a part of its lawful reserve: Provided, That whenever and so long as the gold coin and bullion held in the reserve fund m the Treasury for the redemption of United States notes and Treasury notes shall fall and remain below one hundred million dollars the authority to issue certificates as herein pro vided shall be suspended: And provided further, That whenever and so long as the aggregate amount of United States notes and silver certificates in the general fund of the Treasury shall exceed sixty million dollars the Secre tary of the Treasury may, in his discretion, suspend the issue of the certificates herein provided for: And pro vided further, That of the amount of such outstanding certificates one-fourth at least shall be in denominations of fifty dollars or less: And provided further. That the Secretary of the Treasury may, in his discretion, issue such certificates in denominations of ten thousand dollars, payable to order: And provided further, That the Secre tary of the Treasury may, in his discretion, receive, with the assistant treasurer in New York and the assistant treasurer in San Francisco, deposits of foreign gold coin at their bullion value in amounts of not less than one thousand dollars in value and issue gold certificates there- ACTS OF GENERAL NATURE. 199 for of the description herein authorized: And provided further, That the Secretary of the Treasury may, in his discretion, receive, with the Treasurer or any assistant treasurer of the United States, deposits of gold bullion bearing the stamp of the coinage mints of the United States, or the assay office in New York, certifying their weight, fineness, and value, in amounts of not less than one thousand dollars in value, and issue gold certificates therefor of the description herein authorized. But the amount of gold bullion and foreign coin so held shall not at any time exceed two thirds of the total amount of gold certificates at such time outstanding. And section fiftyone hundred and ninety-three of the Revised Statutes of the United States is hereby repealed. ISSUE OF SILVER CERTIFICATES. 755. Sec. 7.— That hereafter silver certificates shall be 19^ctse“ arf ^ issued only of denominations of ten dollars and under, stat. l „ 47. ’ except that not exceeding in the aggregate ten per centum of the total volume of said certificates, in the discretion of the Secretary of the Treasury, may be issued in denom inations of twenty dollars, fifty dollars, and one hundred dollars; and silver certificates of higher denomination than ten dollars, except as herein provided, shall, when ever received at the Treasury or redeemed, be retired and canceled, and certificates of denominations of ten dollars or less shall be substituted therefor, and after such sub stitution, in w^hole or in part, a like volume of United States notes of less denomination than ten dollars shall from time to time be retired and canceled, and notes of denominations of ten dollars and upward shall be reis sued in substitution therefor, with like qualities and re strictions as those retired and canceled. N o t e . — The act of February 28, 1878, authorized the issue of silver certificates in sums of not less than ten dollars. The act of March 3, 1887, authorized the issue of one, two, and five dollar certificates. This section supersedes these acts as to all new issues. SUBSIDIARY SILVER COINAGE. 756. Sec. 8.— That the Secretary of the Treasury is 1Q^ct hereby authorized to use, at his discretion, any silver stat. l „ bullion in the Treasury of the United States purchased under the A ct of July fourteenth, eighteen hundred and ninety, for coinage into such denominations of subsidiary silver coin as may be necessary to meet the public require ments for such coin: Provided, That the amount of sub sidiary silver coin outstanding shall not at any time ex ceed in the aggregate one hundred millions of dollars. Whenever any silver bullion purchased under the Act of July fourteenth, eighteen hundred and ninety, shall be used in the coinage of subsidiary silver coin, an amount of Treasurv notes issued under said A ct equal to the cost of the bullion contained in such coin shall be canceled and not reissued. ^ 4 7 .' 200 a c t s of general nature. RECOINAGE OF UfrCURRENT SUBSIDIARY SILVER COIN. woo* sec*8®; a ®ec* ®*— That the Secretary of the Treasury is stat. l., k * hereby authorized and directed to cause all worn and uncurrent subsidiary silver coin of the United States now in the Treasury, and hereafter received, to be recoined, and to reimburse the Treasurer of the United States for the difference between the nominal or face value of such coin and the amount the same will produce in new coin from any moneys in the Treasury not otherwise appro priated. 758. Sec. 10.— Amends section 5138, Revised Statutes. National-bank act.) (See said section under REFUNDING OF UNITED STATES BONDS. i90t)Ctsec^ii; si ^9* Sec. 11.— That the Secretary of the Treasury is k ' hereby authorized to receive at the Treasury any of the outstanding bonds of the United States bearing interest at five per centum per annum, payable February first, nineteen hundred and four, and any bonds of the United States bearing interest at four per centum per annum, payable July first, nineteen hundred and seven, and any bonds of the United States bearing interest at three per centum per annum, payable August first, nineteen hun dred and eight, and to issue in exchange therefor an equal amount of coupon or registered bonds of the United States in such form as he may prescribe, in denomina tions of fifty dollars or any multiple thereof, bearing interest at the rate of two per centum per annum, payable quarterly, such bonds to be payable at the pleasure of tne United States after thirty years from the date of their issue, and said bonds to be payable, principal and interest, in gold coin of the present standard value, and to be exempt from the payment of all taxes or duties of the United States, as well as from taxation in any form by or under State, municipal, or local authority: Provided, That such outstanding bonds may be received in exchange at a valuation not greater than their present worth to yield an income of two and one-quarter per centum per annum ; and in consideration of the reduction of interest effected, the Secretary of the Treasury is au thorized to pay to the holders of the outstanding bonds surrendered for exchange, out of any money in the Treas ury not otherwise appropriated, a sum not greater than the difference between their present worth, computed as aforesaid, and their par value, and the payments to be made hereunder shall be held to be payments on account of the sinking fund created by section thirty-six hundred and ninety-four of the Revised Statutes: And provided further, That the two per centum bonds to be issued un der the provisions of this A ct shall be issued at not less than par, and they shall be numbered consecutively in the order of their issue, and when payment is made the stat. l . , ACTS OF GENERAL NATURE. 201 last numbers issued shall be first paid, and this order shall be followed until all the bonds are paid, and whenever any of the outstanding bonds are called for payment in* terest thereon shall cease three months after such call; and there is hereby appropriated out of any money in the Treasury not otherwise appropriated, to effect the exchanges of bonds provided for in this Act, a sum not exceeding one-fifteenth of one per centum of the face value of said bonds, to pay the expense of preparing and issuing the same and other expenses incident thereto. 760. Sec. 12.— This section is inserted in the national-bank act following section 5171 wh^ch it supersedes. 761. Sec. 13.— See paragraph 445. INTERNATIONAL BIMETALLISM. 762. Sec. 14.— That the provisions of this A ct are not 19^ctse^ai4. ^ intended to preclude the accomplishment of inter- stat. l ., 49. ’ national bimetallism whenever conditions shall make it expedient and practicable to secure the same by concur rent action of the leading commercial nations of the world and at a ratio which shall insure permanence of relative value between gold and silver. ACT MARCH 4, 1907. 763. Sec. 1. Amends section 6 of act of March 14, 1900. 764. Sec. 2. Issue of Treasury notes. 765. Sec. 3. Amends section 5153 of the Revised Statutes. 766. Sec. 4. Amends section 9 of act of July 12, 1882. The amended section follows section 5167 of the Revised Statutes. 763. Sec. 1, Act March 4, 1907. Amends section 6 of act of March 14, 1900. This amended section is incorporated in said act, paragraph 754, ante. ISSUE OF TREASURY NOTES. ACT MARCH 4, 1907. 764. Sec. 2.— That whenever and so long as the outse^^: standing silver certificates of the denominations of one stat. l . , i289. dollar, two dollars, and five dollars, issued under the provisions of section seven of an Act entitled “ An Act to define and fix the standard of value, to maintain the parity of all forms of money issued or coined by the United States, to refund the public debt, and for other purposes,” approved March fourteenth, nineteen hun dred, shall be, in the opinion of the Secretary of the Treasury, insufficient to meet the public demand there for, he is hereby authorized to issue United States notes of the denominations of one dollar, two dollars, and five dollars, and upon the issue of United States notes of such denominations an equal amount of United States notes of higher denominations shall be retired and canceled: Pro vided, however, That the aggregate amount of United States notes at any time outstanding shall remain as at ACTS OF GENERAL NATURE. 202 present fixed b y law: And provided further, That nothing in this A ct shall be construed as affecting the right of any national bank to issue one-third in amount of its circu lating notes of the denomination of five dollars, as now provided b y law. 765. Sec. 3.— Amends section 5153, Revised Statutes, paragraph 243, ante. 766. Sec. 4.— Amends section 9 of act of July 12, 1882, as amended by act of March 14, 1900. See paragraph 314, ante. PANAM A CANAL BOND S. PANAMA CANAL BONDS—ADDITIONAL ISSUE AUTHOR IZED AT RATE OF INTEREST NOT TO EXCEED 3 PER CENT PER ANNUM. i9^ f secAU39; k sta£,L., 117.’ 767. Sec. 39.— That the Secretary of the Treasury is hereby authorized to borrow on the credit of the United States, from time to time, as the proceeds may be required to defray expenditures on account of the Panama Canal and to reimburse the Treasury for such expenditures already made and not covered b y previous issues of bonds, the sum of two hundred and ninety million five hundred and sixty-nine thousand dollars (which sum together with the eighty-four million six hundred and thirty-one thousand nine hundred dollars already borrowed upon issues of two per cent bonds under section eight of the A ct of June twenty-eight, nineteen hundred and two, equals the estimate of the Isthmian Canal Commission to cover the entire cost of the Canal from its inception to its completion), and to prepare and issue therefor coupon or registered bonds of the United States in such form as he may prescribe, and in denominations of one hundred dollars, five hundred dollars, and one thousand dollars, payable fifty years from the date of issue, and bearing interest payable quarterly in gold coin at a rate not ex ceeding three.per centum per annum; and the bonds herein authorized shall be exempt from all taxes or duties of the United States, as well as from taxation in any form by* or under State, municipal, or local authority: Pro vided, That said bonds may be disposed of by the Secre tary of the Treasury at not less than par, under such regulations as he m ay prescribe, giving to all citizens of the United States an equal ( therefor, but no commissions thereon; and a sum not exceeding one-tenth of one per centum of the amount of the bonds herein authorized is hereby appropriated, out of any money in the Treasury not otherwise appropriated, to pay the expenses of pre paring, advertising, and issuing the same; and the au thority contained in section eight of the A ct of June twenty-eight, nineteen hundred and two, for the issue of bonds bearing interest at two per centum per annum, is hereby repealed. 203 ACTS OF GENERAL NATURE. PANAMA CANAL BONDS ISSUED UNDER ACT OP AUGUST 5, 1909, NOT RECEIVABLE AS SECURITY FOR THE ISSUE OF CIRCULATING NOTES TO NATIONAL BANKS. 768. Be it enacted by the Senate and House of Repre- Act Mar. sentatives of the United States of America in Congress stat. l?,’ 1013.' assembled, That the Secretary of the Treasury be, and he is hereby, authorized to insert in the bonds to be issued by him under section thirty-nine of an A ct entitled ‘ ‘An Act to provide revenue, equalize duties, and encourage the industries of the United States, and for other pur poses,” approved August fifth, nineteen hundred and nine, a provision that such bonds shall not be receivable by the Treasurer of the United States as security for the issue of circulating notes to national banks; ana the bonds containing such provision shall not be receivable for that purpose. C E R T IF IE D CH ECKS W HEN R E C E IV A B L E FOR D U T IE S AND TAXES. CERTIFIED CHECKS DRAWN ON NATIONAL AND STATE BANKS RECEIVABLE FOR DUTIES ON IMPORTS AND INTERNAL TAXES. ACT MARCH 2, 1911. 769. Be it enacted by the Senate and House of Repre sentatives of the United States of America in Congress assembled, That it shall be lawful for collectors of customs and of internal revenue to receive for duties on imports and internal taxes certified checks drawTn on na tional and State banks, and trust companies during such time and under such regulations as the Secretary of the Treasury may prescribe. No person, however, who may be indebted to the United States on account of duties on imports or internal taxes who shall have tendered a cer tified check or checks as provisional payment for such duties or taxes, in accordance with the terms of this Act, shall be released from the obligation to make ultimate payment thereof until such certified check so received has been duly paid; and if any such check so received is not duly paid by the bank on which it is drawn and so certi fying, the United States shall, in addition to its right to exact payment from the party originally indebted there for, have a lien for the amount of such check upon all the assets of such bank; and such amount shall be paid out of its assets in preference to any or all other claims whatso ever against said bank, except the necessary costs and ex penses of administration and the reimbursement of the United States for the amount expended in the redemption of the circulating notes of such bank. Sec. 2. That this A ct shall be effective on and after June first, nineteen hundred and eleven. CERTIFIED CHECKS—WHEN RECEIVABLE FOR DUTIES AND TAXES. ACT MARCH 3, 1913. 770. Be it enacted by the Senate and House of Repre sentatives of the United States of America in Congress Act Mar. stat. l? ,'9J5! ’ 204 ACTS OF GENERAL NATURE. w w f c.Mu 9 37 assembled, That it shall be lawful for collecting officers stac. l ‘., 733* to receive certified checks drawn on national and State banks and trust companies, during such time and under such regulations as the Secretary of the Treasury may prescribe, in payment for duties on imports, internal taxes, and all public dues, including special customs deposits; and the A ct of March second, nineteen hundred and eleven, entitled “ A n A ct to authorize the receipt of certi fied checks for duties on imports and internal taxes,” is hereby amended accordingly. AMERICAN NATIONAL RED CROSS. NATIONAL BANKS AUTHORIZED TO SUBSCRIBE TO AMERICAN NATIONAL RED CROSS DURING THE WAR. 19^ 771. Be it enacted by the Senate and House of Repre sentatives of the United States of America in Congress assembled, That during the continuance of the state of May 22> war now existing it shall be lawful for any national bank ing association to contribute to the American National R ed Cross, out of any net profits otherwise available under the law for the declaration of dividends, such sum or sums as the directors of said association shall deem expedient. Each association shall report to the Comp troller of the Currency within ten days after the making of any such contribution, the amount of such contribu tion, and the amount of net earnings in excess of such contribution. Such report shall be attested by the presi dent or cashier of the association in like manner as the report of the declaration of any dividend. S ec 2 . That all sums so contributed shall be utilized b y the American National R ed Cross in furnishing vol unteer aid to the sick and wounded of the combatant armies, the voluntary relief of the Arm y and N avy of the United States, and the relief and mitigation of the suffer ing caused by the war to the people of the United States and their allied nations. SPECIAL ACTS. 205 CHAPTER VIII. SPECIAL ACTS RELATING TO NATIONAL BANKS. 800. Act April 12,1900. National bank ing laws applicable to Porto Rico. 801. Act April 30, 1900. National bank ing laws applicable to Hawaii. 802. Granting Fifth-Third National Bank of Cincinnati, Ohio, the right to use original charter No. 20. 803. Special acts authorizing change of name or location of national banks. NATIONAL BANKING LAWS APPLICABLE TO PORTO RICO. ACT APRIL 12, 1900. 800. Sec. 14.— That the statutory laws of the U n itedsecJ^istatx!; States not locally inapplicable, except as hereinbefore or sa hereinafter otherwise provided, shall have the same force and effect in Porto Rico as in the United States, except the internal-revenue laws, which, in view of the pro visions of section 3, shall not have force and effect in Porto Rico. Note.—The Attorney General of the United States in an opinion rendered June 2, 1900, held “ There seems to be in the structure of the national banking laws no general provisions which can not be carried into force and effect in Porto Rico equally with all of the various States and Territories to which the laws were originally applied. I can find no reason to hold that the statutes relative to the organization and pow ers of national banks have not, by section 14 of the Porto Rican act, above referred to, been extended to that island. The language of that section is broad enough, and in my opinion does authorize the organ ization and carrying on of national banks in Porto Rico.” NATIONAL BANKING LAWS APPLICABLE TO HAWAII. ACT APRIL 30, 1900. 801. Sec. 5.— That the Constitution, and except as herein otherwise provided, all the laws of the United States which are not locally inapplicable, shall have the same force and effect within the said Territory as else where in the United States: Provided, That sections eighteen hundred and fifty and eighteen hundred and ninety of the Revised Statutes of the United States shall not apply to the Territory of Hawaii. S6£pf,:. stat l ., 'mi Note.—The Attorney General of the United States in an opinion rendered June 23, 1900, held “ That the act of April 30, 1900, * * * extended the national banking acts to the Territory of Hawaii, and would authorize the Comptroller to grant permission for the organiza tion of national banks therein. (See my opinion of June 2, 1900, rela tive to the same question as applied to Porto Rico.) But I do not think that the provisions of section 5154 apply to banks existing in Hawaii prior to the passage of the act of April 30, 1900. Sections 5154 and 5155 seem, by their especial terms, to refer only to banking institutions organ ized under special or general laws of a State, and do not seem to apply at all to banks organized under the laws of any Territory. I think the object of these two sections was to enable the banks that were previously strictly State institutions to become national corporations, and the operation of the act in that respect is to be so restricted." 207 208 SPECIAL ACTS. GRANTING FIFTH-THIRD NATIONAL BANK, OF CINCIN NATI, OHIO, THE RIGHT TO USE ORIGINAL CHARTER NUMBER TWENTY. Act Feb. 1913; 37 Stat 1378. 802. Be it enacted by the Senate and House o f Repre sentatives o f the United States o f America in Congress assembled, That the Comptroller of the Currency be, and he is hereby, authorized and directed to issue to the FifthThird National Bank, of Cincinnati, Ohio, charter num bered twenty in lieu of their present charter numbered twenty-seven hundred and ninety-eight, said charter numbered twenty being the original charter number of the Third National Bank, of Cincinnati, Ohio, which bank, was merged and consolidated with the Fifth National Bank, of Cincinnati, Ohio, in the year nineteen hundred and eight, under the name of the Fifth-Third National Bank, of Cincinnati, Ohio, said consolidated bank having succeeded to all the assets, good will, rights, privileges, and emoluments of the said Third National Bank, of Cincinnati, Ohio. SPECIAL ACTS AUTHORIZING CHANGE OF NAME OR LOCATION. ACT JUNE 7, 1872. A ct June 1872, sec. 1; Stat. L., 281. Act June 1872, sec. 2; Stat. L., 282. Act June 1872, sec. 3; 8tat. L., 282. A ct June 1872, sec. 4: Stat. L., 282. 803. Sec. 1.— That the First National Bank of An napolis, now located in the city of Annapolis and State of Maryland, is hereby authorized to change its location to the city of Baltimore, in said State. Whenever the stockholders representing three-fourths of the capital of said bank, at a meeting called for that purpose, deter mine to make such change, the president and cashier shall execute a certificate, under the corporate seal of the bank, specifying such determination, and shall cause the same to be recorded in the office of the Comptroller of the Cur rency, and thereupon such change of location shall be effected, and the operations of discount and deposit of said bank shall be carried on in the city of Baltimore. ^ S e c . 2. That nothing in this act contained shall be so construed as in any manner to release the said bank from any liability or affect any action or proceeding in law in which the said bank may be a party or interested. And when such change shall have been determined upon, as aforesaid, notice thereof and of such change shall be published in two weekly papers in the city of Annapolis not less than four weeks. Sec. 3. That whenever the location of said bank shall have been changed from the city of Annapolis to the city of Baltimore, in accordance with the first section of this act, its name shall be changed to The Traders’ National Bank of Baltimore, if the board of directors of said bank shall accept the new name by resolution of the board, and cause a copy of such resolution, duly authenticated, to be filed with the comptroller of the currency. Sec. 4. That all the debts, demands, liabilities, rights, privileges, and powers of the First National Bank of Annapolis shall devolve upon the Traders’ National SPECIAL ACTS. Bank of Baltimore whenever such change of name is effected. S e c . 5. That this act shall take effect and be in force from and after its passage. N o t e . —Acts of a similar nature to the one preceding have been enacted by Congress for the following purposes: Authorizing The Manufacturers’ National Bank of New York to change its location from the city of New York to the city of Brooklyn. (Approved July 27, 1868.) Authorizing The City National Bank of New Orleans, Louisiana, to change its name to The Germania National Bank of New Orleans (Approved March 1, 1869.) Authorizing The Second National Bank of Plattsburgh, New York, to change its name to The Vilas National Bank of Plattsburgh. (Approved March 1, 1869.) Authorizing The First National Bank of Delhi, New York, to change its location and name to The First National Bank of Port Jervis, New York. (Approved May 5, 1870.) Authorizing The First National Bank of Fort Smith, Arkansas, to change its location and name to the First National Bank of Camden, Arkansas. (Approved July 1, 1870.) Authorizing the Jersey Shore National Bank, Pennsylvania, to change its location and name to The Williamsport National Bank, Pennsylvania. (Approved December 22, 1870.) Authorizing the Worcester County National Bank of Blackstone, Massachusetts, to change its location and name to The Franklin National Bank, Massachusetts. (Approved February 9, 1871.) Authorizing The Farmers’ National Bank of Fort Edward, New York, to change its location and name to The North Granville National Bank, New York. (Approved February 18, 1871.) Authorizing The Worthington National Bank of Cooperstown, New York, to change its location and name to The First National Bank of Oneonta, New York. (Approved February 27, 1871.) Authorizing The Warren National Bank of South Danvers, Massa chusetts, to change its name to The Warren National Bank of Peabody, Massachusetts. (Approved March 12, 1872.) Authorizing The First National Bank of Seneca, Illinois, to changeits location and name to The First National Bank of Morris, Illinois. (Two acts, approved April 5, 1872, and June 18, 1874.) Authorizing The Railroad National Bank oi Lowell, Massachusetts, to change its location and name to The Railroad National Bank of Boston, Massachusetts. (Approved May 31, 1872.) Authorizing The National Bank of Lyons, Michigan, to change its location and name to The Second National Bank of Ionia, Michigan. (Approved December 24, 1872.) Authorizing The East Chester National Bank of Mount Vernon, New York, to change its location and name to The German National Bank of Evansville, Indiana. (Approved January 11, 1873.) Authorizing The First National Bank of Newnan, Georgia, to change its location and name to The National Bank of Commerce, Atlanta, Georgia. (Approved January 23, 1873.) Authorizing The First National Bank of Watkins, New York, to change its location and name to The First National Bank of Penn Yan, New York. (Approved February 19, 1873.) Authorizing The National Bank of Springfield, Missouri, to change its name to The First National Bank of Springfield Missouri. (Ap proved March 3, 1873.) Authorizing The Kansas Valley National Bank of Topeka, Kansas, to change its name to The First National Bank of Topeka, Kansas. ( Approved March 3, 1873.) Authorizing The First National Bank of Saint Anthony, Minnesota, to change its location and name to The Merchants' National Bank of Minneapolis, Minnesota. (Approved January 8, 1874.) Authorizing The Second National Bank of Havana, New York, to change its name to The Havana National Bank of Havana, New York. (Approved January 9, 1874.) 10-1312°— 20------ 14 209 A ct June 7, 1872, sec. 5; 17 Stat. L., 282. SPECIAL ACTS. 210 Authorizing The Passaic County National Bank of Paterson, New Jersey, to change its name to The Second National Bank of Paterson, New Jersey. (Approved April 15, 1874.) Authorizing The Citizens National Bank of Hagerstown, Maryland, to change its location and name to The Citizens’ National Bank of Washington City, District of Columbia. (Approved May 1, 1874.) Authorizing The Irasburg National Bank of Orleans, at Irasburg, Vermont, to change its location and name to The Barton National Bank, Vermont. (Approved June 3, 1874.) Authorizing The Farmers’ National Bank of Greensburg, Pennsyl vania, to change its location and name to The Fifth National Bank of Pittsburg, Pennsylvania. (Approved June 23, 1874.) Authorizing The Citizens’ National Bank of Sanbomton, New Hamp shire, to change its name to The Citizens’ National Bank of Tilton, New Hampshire. (Approved February 19, 1875.) Authorizing the Second National Bank of Jamestown, New York, to change its name to The City National Bank of Jamestown, New York. (Approved March 3, 1875.) Authorizing The Second National Bank of Watkins, New York, to change its name to The Watkins National Bank, New York. (Ap proved March 3, 1875.) Authorizing The Slater National Bank of North Providence, Rhode Island, to change its name to The Slater National Bank of'Pawtucket, Rhode Island. (Approved March 3, 1875.) . Authorizing The Auburn City National Bank of Auburn, New York, to be consolidated with The First National Bank of Auburn, New York. (Approved March 3, 1875.) Authorizing The Miners’ National Bank of Braid wood, Illinois, to change its location and name to The Commercial National Bank of Wil mington, Illinois. (Approved January 31, 1878.) Authorizing The Windham National Bank, Windham, Connecticut, to change its location to the village of Willimantic, Connecticut. (Approved February 10, 1879.) Authorizing the National Bank of Commerce of Cincinnati, Ohio, to change its name to The National Lafayette and Bank of Commerce. (Approved April 29, 1879.) Authorizing the City National Bank of Manchester, New Hampshire, to change its name to The Merchants’ National Bank of Manchester. (Approved June 11, 1880.) Authorizing The Blue Hill National Bank of Dorchester, Massachu setts, to change its location and name to the Blue Hill National Bank of Milton, Massachusetts. (Approved January 13, 1881.) Authorizing The First National Bank of Meriden, West Meriden, Connecticut, to change its name to The First National Bank of Meriden, Connecticut. (Approved March 1, 1881.) Authorizing The National Mechanics’ Banking Association of New York, New York, to change its name to Wall Street National Bank. (Approved February 14, 1882.) Authorizing The Lancaster National Bank of Lancaster, Massachu setts, to change its location and name to The Lancaster National Bank of Clinton, Massachusetts. (Approved February 25, 1882.) Authorizing the National Bank of Kutztown, Pennsylvania, to change its location and name to The Keystone National Bank of Reading, Pennsylvania. (Approved June 27, 1882.) Joint resolution authorizing The National Bank of Winterset, Iowa, to change its name to The First National Bank of Winterset, Iowa. (Approved January 18, 1883.) Authorizing The Second National Bank of Xenia, Ohio, to increase its capital stock. (Approved February 17, 1883.) Authorizing The First National Bank of West Greenville, Pennsyl vania, to change its name to The First National Bank of Greenville, Pennsylvania. (Approved February 26, 1883.) Authorizing The West Waterville National Bank of Oakland, Maine, to change its title to The Messalonskee National Bank of Oakland, Maine. (Approved April 15, 1884.) Authorizing the Hillsborough National Bank, of Hillsboro, Ohio, to change its name to The First National Bank of Hillsborough, Ohio, (Approved December 18, 1884.) SPECIAL ACTS. Authorizing The Slater National Bank of North Providence, Rhode Island, to change its name. (Approved January 8, 1885.) Authorizing tne First National Bank of Omaha, Nebraska, to increase its capital stock. (Approved January 10, 1885.) Authorizing The National Bank of Bloomington, Illinois, to change its name to the First National Bank of Bloomington, Illinois. (Ap proved January 27, 1885.) Authorizing The Manufacturers’ National Bank of New York to change its name to The Manufacturers’ National Bank of Brooklyn, New York. (Approved February 20, 1885.) Authorizing The Commercial National Bank of Chicago, Illinois, to increase its capital stock. (Approved February 28, 1885.) Authorizing The First National Bank of Larned, Kansas, to increase ita capital stock. (Approved March 3, 1885.) Authorizing The First National Bank of Fort Benton, Montana, to change its location and name. (Approved December 18, 1890.) Authorizing the National Safe Deposit Company of Washington to change its title to The National Safe Deposit, Savings and Trust Com pany of the District of Columbia. (Approved February 18, 1892.) Authorizing a national bank of Cnicago, Illinois, to establish a branch office upon the grounds of the World’s Columbian Exposition, (Approved May 12, 1892.) Authorizing The First National Bank of Sprague, Washington, to change ita location and name. (Approved March 20, 1896.) Authorizing the Interstate National Bank of Kansas City, Kansas, to change its location. (Approved March 2, 1897.) Authorizing any bank or trust company located in the State of Mis souri to conduct a banking office on tne Louisiana Exposition grounds at St. Louis, Mo. (Approved March 3, 1901.) Authorizing The American National Bank of Graham, Virginia, to change its location and name. (Approved February 15, 1906.) Authorizing the National Safe Deposit SavingB and Trust Company of the District of Columbia to change its title to National Savings and Trust Company. ■ (Approved January 31, 1907.) 211 212 SPECIAL ACTS. OPINIONS OF THE ATTORNEY GENERAL. 213 CHAPTER IX. OPINIONS OF THE ATTO RN EY GENERAL ON GUARANTY LAW S OF OKLA HOMA AND KANSAS, AND ON THE INSURANCE OF BAN K DEPOSITS. 900. Opinion of Attorney General of United States on Oklahoma deposit guaranty law. 901. Opinion of Attorney General of United States on Kansas de posit guaranty law. 902. Opinion of Attorney General of the United States on power of a national bank to enter into a contract with an insurance com pany guaranteeing the solvency of the bank. 903. Opinion of Attorney General of United States on power of a national bank to make a con tract with an insurance com pany by which the company insures and guarantees • each depositor in the bank the full payment of his deposit therein. THE OKLAHOMA DEPOSIT GUARANTY LAW. 900. The Attorney General of the United States, in an opinion rendered July 28, 1908, said: The business of insuring deposits is a wholly separate business from that of banking * * *. A national bank has no power to guarantee the obligations of a third party, unless in connection with the sale or transfer of its own property and as an incident to the business of the bank * * *. But a contract guaranteeing the payment by another corporation or individual of obligations in nowise connected with the business of the bank is entirely ultra vires. I hold * * * that it is illegal for the officers of a national bank to enter into any such agreement as that con templated by section 4 of the Oklahoma statutes, and any willful action to this effect on the part of any national bank is sufficient cause for the forfeiture of charter. THE KANSAS DEPOSIT GUARANTY LAW. 901. The Attorney General of the United States, in an opinion rendered April 6, 1909, said: The question of the power of a national bank to avail of the invita tion extended to it by this act involves primarily a consideration of the nature of the agreement contemplated by it. Attorney General Bonaparte, in an opinion rendered to the Secretary of the Treasury, under date of July 28, 1908, considering an act of the Legislature of the State of Oklahoma (27 Op. A. G., p. 38), determined that a national bank could not lawfully enter into the plan or scheme contemplated bv that act, because it involved essentially a guaranty to the depositors of all State banks in Oklahoma, and other national banks in that State which might accept the terms of the law, that their respective depos itors should be paid in full; a contract wnich he deemed to be clearly ultra vires. The act now under consideration attempts to avoid this objection by limiting the amount for which any bank may become liable, but within such limitation the same principle is involved, for to the extent of the contribution and liability required by the statute each bank becomes liable to creditors of the other banks which are parties to the plan. But even if a proper construction of the act would, as contended, make it a guaranty by each bank of payments to its own depositors, ana not a general guaranty within the limits of contribution prescribed by the act, of all deposits in all the banks which are parties to the scheme, nevertheless I am strongly of the opinion that a national bank is with out corporate power to expend its moneys for the purpose of providing insurance that its depositors shall be paid in full. It may, of coursfe, insure its own property against loss or destruction; it may insure itself against loss of property through theft or other dishonesty, but the appli- 215 216 OPINIONS OF THE ATTORNEY GENERAL. cation of its funds for the purpose of securing a collateral guaranty by third parties that it will pay in full its debts to its depositors is, it appears to me, beyond its corporate power. Such contract would fall within the principles asserted in Commer cial National Bank v. Pirie (82 Fed., 799), Bowen v. Needles National Bank (94 Fed., 925), for if, as is well established, a national bank has no power to guarantee the obligation of another, it certainly has no power to employ another to guarantee its own obligation to a third person. POWER OP NATIONAL BANK TO ENTER INTO A CONTRACT WITH AN INSURANCE COMPANY GUARANTEEING THE SOLVENCY OF THE BANK. 902. The Attorney General of the United States, in an opinion rendered May 7, 1909, said: Replying to yours of the 29th ultimo, in which, at the request of the Comptroller of the Currency, you ask for an opinion as to the power of a national bank to enter into a contract with an insurance company guaranteeing the solvency of the bank, and transmitting to me a form of policy which is proposed to be issued by an insurance company pro posed to be organized, I beg to say that, as a general principle, I have no doubt that it is entirely within the powers of a national bank to contract for the insurance of its assets against loss. The form of the proposed policy submitted in your letter is somewhat peculiar. It purports to insure to the bank the payment of “ a sum of money suffi cient to indemnify the bank for any and all losses suffered by it by reason of theft, embezzlement, losses in realizing upon loans and in vestments, shrinkage in value of assets or otherwise, in an amount equal to but not exceeding the net excess of its obligations, other than by reason of the stock of the bank, over the total aggregate value of the assets of the bank thus reduced by such losses; provided that there shall be included in the assets of the bank all net sums which have been realized by reason of the additional liability of the stockholders of the bank.” Such contract is, in effect, an agreement to pay to the bank any defi ciency in its assets upon ultimate realization necessary to enable it to pay all of its liabilities of every kind. The policy is to run for a period of three months, but to be renewable thereafter for periods of three months each with the consent of the insurance company, and at such premiums as the insurance company may fix at least one month before the expiration of the then current term of the insurance, the premium in every case to be a percentage of the average indebtedness of the bank during the period covered by such renewal, with the provision that, if such rate shall be in excess of one-sixteenth of 1 per cent upon such average indebtedness, then and in such event the insurance company shall be liable to account to the bank for the application of such pre mium paid by the bank in excess of one-sixteenth of 1 per cent. ‘ ‘ which excess shall be applicable only to the payment of actual losses incurred by the company by reason of claims under this and similar policies, and any excess over such extra claims shall be divided pro rata among the banks paying such extra rate of premium as a participation in the prof its dunng which period such extra rate of premium has been paid.” It is somewhat uncertain precisely what this paragraph means and what its effect may be. It seems to me to be objectionable as com mitting the bank to a profit-sharing feature, which might be contended to entail a corresponding liability for losses; and, as the attorney for the promoters of the proposed insurance company informs me that this is not regarded as an essential part of the plan, I should advise that it had better be eliminated from the policy. Another provision contained in the policy subjects the bank to a periodical examination by the examiners of the insurance company without notice and at such times as the company may elect, one of such examinations to be within each period of six months covered by the policy and all renewals thereof. This period is probably inadver tently placed at six months, as the policy is proposed to be written for periods of three months only. Aside from that, I very much question the legality of this clause, or at least its enforceability. Section 5241 of the Kevised Statutes provides that, “ No association shall be subject OPINIONS OF THE ATTORNEY GENERAL. to any visitorial powers other than such as are authorized by this title, or are vested in the courts of justice/1 While this statute does not prohibit the bank from permitting an examination of its books, in my opinion it does operate to prohibit it from obligating itself to permit sucn examination; and if the covenant to insure can be considered as in any respect dependent upon this agreement to permit examinations, it might be vitiated by the unlaw ful provision. I should advise that the clause be reframed so as to make it clear that the agreement to insure is not dependent upon the failure to permit the examination, although it might be stipulated that in case, at any time, the examiner of the company should not be allowed access to the books of the bank for the purpose of making an examination the company should have the option, upon reasonable notice, to terminate the contract. In my opinion, therefore, it is a matter for the discretion of the directors and officers of a bank to determine whether or not they will enter into any such contract in any given instance, this discretion to be exercised in view of the solvency and general financial condition of the company making the insurance and the reasonableness of the rate of premium; and the form of the policy being modified to conform to the foregoing suggestions, I see no legal reason why a bank may not enter into it. POWER OF A NATIONAL BANK TO MAKE A CONTRACT WITH AN INSURANCE COMPANY BY WHICH THE COM PANY INSURES AND GUARANTEES EACH DEPOSITOR IN THE BANK THE FULL PAYMENT OF HIS DEPOSIT THEREIN. 903. The Attorney General of the United States, in an opinion rendered March 31, 1915, said: I have the honor to acknowledge the receipt of your letter of Feb ruary 12, 1915, inclosing letter of the Comptroller of the Currency, opinion of the Acting Solicitor of the Treasury, and brief filed with the Comptroller on behalf of a guaranty company and certain national banks, in which the question is raised as to whether a national bank may enter into a contract with a guaranty company under which, in consideration of premiums paid by the bank, the company “ insures and guarantees each depositor in the bank the full payment of his de posit therein.” You ask my opinion upon this question. In my opinion, it is within the power of a national bank to enter into such a contract. The law confers upon national banks such incidental powers as are required to meet all legitimate demands of the banking business, and to enable them to conduct their affairs safely and prudently within the scope of their charters. Section 5136, Revised Statutes; First National Bank v. National Exchange Bank (92 U. S. 122, 127). The power to give security for deposits seems to be recognized by section 5153, Revised Statutes, as among these incidental powers. The section last mentioned, after providing that all associations created under the act, shall, when so designated by the Secretary of the Treasury, be deposi taries, further provides that “ The Secretary of the Treasury shall re quire the associations thus designated to give satisfactory security, by the deposit of United States bonds and otherwise, for the safe keeping and prompt payment of the public money deposited with them,” etc. It is believed that this section is more reasonably construed as a recog nition of the existence of the power on the part of national banks to give security for deposits than as a grant by implication of authority to give security for Government deposits alone. The power of banks to give security for deposits or for payment of their debts has been frequently recognized. It has been held that the property of a bank may be pledged as security for a debt ( United States v. Robertson (1831), 5 Pet., 641, 650); that a bond with sureties may be given to prevent depositors from withdrawing their accounts ( Wylie v. Commercial & Farmers' Bank (1902), 41 S. E., 504, 509; 63 S. C., 406); and that a national bank may give its bond with sureties to secure a deposit of State funds (State of Nebraska v. First National Bank of Orleans (1898), 88 Fed., 947, 951). 217 218 OPINIONS OF THE ATTORNEY GENERAL. The power to contract for guaranteeing or securing depositors arises from the nature of the relation existing between the banks and their depositors. The relation created between the bank and a depositor by the receipt of deposits is that of debtor and creditor. (National Bank v. Millard (1869), 10 Wall., 152, 155; Davis v. Elmira Savings Bank (1896), 161 U .S ., 275, 288.) The power to receive deposits, expressly granted to every national bank (sec. 5136, R. S.), is, of course, indispensible to the conduct of the business of banking: and the extent of its exercise is in a degree the measure of the success of the bank. The of depositors, or the belief tliat their deposits are secure. Loss of such confidence on the part of depositors is usually attended with loss and inconvenience to tnem, to the bank, and to the public. The law ac cordingly imposes upon the bank an imperative duty not only to repay deposits but to keep them secure. For the protection of depositors, its revenues and property are pledged, its stockholders are made subject to a double liability, and its directors may be held liable for a viola tion of their duties. The means by which depositors are to be protected and secured are not expressly limited or restricted by statute. A large discretion is left to the officers and directors. They may use such means for the purpose as are not prohibited by or inconsistent with the provisions of the law and as they may reasonably find to be suitable and proper and not incon sistent with the prudent conduct of the affairs of the bank within the scope of its charter. “ Whatever protects the depositors,” it has been said, “ protects the bank, because it assures confidence in the bank.” (Noble State Bank v. Haskell (1908), 22 Okla., 48, 89.) A contract of insurance or guaranty, such as described in the ques tion submitted, may afford protection to depositors by securing the per formance of an obligation on the part of the bank which otherwise might not be performed. And it is not unreasonable to believe that such a contract, at the same time, may prove valuable to the bank be cause of the confidence it may assure. No reason is perceived for pro hibiting a national bank, in the discretion of its directors, from so se curing its depositors, or for denying to the bank such benefits as they believe may accrue in the form of increased confidence resulting from such a contract. Opinions of former Attorneys General, dated, respectively, July 28, 1908 (27 Op., 37), and April 6 , 1909 (27 Op., 272), are referred to in the inclosures as having been construed by the Comptroller of the Currency as holding that national banks are without authority to pay, as part of their legitimate expenses, premiums on policies insuring their deposi tors against loss. As I view these opinions, the conclusion in neither of them is inconristent with the conclusion reached herein. The opinion of July 28, 1908, construing the Oklahoma State banking act, determined that a national bank could not lawfully participate in the plan contemplated by the act for the guarantee of deposits, because it involved essentially a guarantee to the depositors of other banks that they should be paid in full—a contract which was deemed beyond the powers of the bank to make. The opinion of April 6 , 1909, held that national banks in the State of Kansas could not avail themselves of the bank depositor’s guaranty law of that State. The inquiry, upon the answer to which the decision rests, was whether an acceptance of the provisions of the Kansas law “ would so control the conduct of the affairs of national banks as to expressly conflict with the laws of the United States.” As pointed out in the opinion of the Solicitor of the Treasury, the more recent opinion of May 7, 1909 (27 Op., 324), in which the form of a policy of insurance guaranteeing the assets of a national bank against loss was approved provided certain suggested modifications should be made, is more nearly in point on the question now under consideration, and is in harmony with the views herein expressed. The language employed in the opinions of July 28, 1908, and April 6,1909, to the effect that national banks are without power to contract for insuring that depositors shall be paid in full, was used in the course of argument merely, applied to a question which it was not necessary to determine, and may be disregarded so far as inconsistent with this opinion. INDEX. INDEX TO NATIONAL-BANK ACT, ETC. (Index to Federal reserve act, p. 251.1 A. Paragraph. Abstract of report of condition to be included in annual report............................ 110 Abstraction, penalty for................................................................................................. 436 Acceptance of drafts or bills of exchange by member banks of Federal Reserve System....................................................................................................................... 206,207 Acknowledgment. (See Oath.) Acknowledgment of organization certificate.............................................................. 203 Acting Comptroller of the Currency............................................................................ 103 Act, the national-bank................................................................................................... 200 Acts: Of a general nature, not included in national-bank act, affecting national banks.................................................................................................................. 700-770 803 Special, authorizing change of name or location of national bank................ Additional Deputy Comptroller................................................................................... 104 Administrator, power of national banks to act as..................................................... 208 Administrators, not personally liable.......................................................................... 242 Advertisements (see also Publication, Printing): Imitation of circulation in, penalty for............................................................... 345 Notice to creditors of insolvent banks................................................................. 516 Agency, National Bank Redemption, provisions for........................................... 414, 415 Agent: Association as fiscal, of Government.................................................................... 243 Bonds, examination by.......................................................................................... 310 Central reserve city................................................................................................. 401 Central reserve city, additional............................................................................ 401 Circulation, to witness destruction...................................................................... 339 Foreign branches of national banks as fiscal, of United States....................... 210 Insurance, when national bank may act as......................................................... 209 Liquidating bank..................................................................................................... 522 Reserve.................................................................................................................. 401-407 Reserve, city, additional central, provisions for............................................... 401 Shareholders, appointment and qualifications of.............................................. 522 Shareholders, duties of............................................................................................ 522 Special, to examine bank failing to redeem notes............................................ 508 Witnessing destruction of circulation bv............................................................ 339 Aggregate amount of circulation not limited............................................................. 332 Aiding misdemeanors of officers................................................................................... 430 Alaska, reserve requirements, etc., for national banks in....................................... 411 Allotment. (See Shares.) 316 Allotment of United States bonds to be purchased by Federal reserve bank___ Amendments: Proposed, to national-bank act to be made in Comptroller’s report.............. 110 Restriction of, to articles of association............................................................... 225 Suggested, to improve system, to appear in annual report............................. 110 Amount: Of bond of Comptroller of Currency..................................................................... 102 Of bond of Deputy Comptroller of Currency...................................................... 103 Of bonds required to be on deposit.................................................................. 302, 313 Of capital required.................................................................................................. 224 Of circulation obtainable....................................................................................... 323 Of circulation that may be redeemed at one time, minimum........................ 414 Of dividends that may be declared..................................................................... 429 Of redemption fund required................................................................................ 414 Of reserve required to be held by— Banks elsewhere than in reserve city.......................................................... 405 Central reserve city banks............................................................................. 407 Country banks.................................................................................................. 405 Reserve city banks.......................................................................................... 406 221 222 INDEX TO NATIONAL-BANK ACT, ETC. Amount—Continued. Paragraph. Of tax on circulation............................................................................................... 444 Of United States bonds that may be refunded in one year............................. 316 423 Recoverable for usurious interest charges........................................................... That national banks may borrow.......................................................................... 427 Annual examination of bonds by association............................................................. 310 Annual meeting of shareholders.................................................................................. 232 Annual report of Comptroller of the Currency........................................................... 110 Appointment: Agent, shareholders.................................................................................................. 522 Agent to examine bonds......................................................................................... 310 Agent to witness destruction of circulation........................................................ 339 Clerks of Comptroller’s office................................................................................. 105 Committee to examine plates, etc......................................................................... 328 Committee to witness destruction of circulation................................................ 339 Comptroller................................................................................................................ 101 Deputy Comptroller................................................................................................. 103 Directors of associations........................................................................................... 204 Dissenting shareholders, committee of apprisal................................................. 219 Examiners of associations........................................................................................ 527 Officers of associations............................................................................................. 204 Receivers of associations..................................................................................... 515,520 Shareholders’ agent.................................................................................................. 522 Special commission for preliminary examinations of associations................ 320 Vacancies in board of directors.............................................................................. 237 Appraisal. (See Shares.) Appraisal of value of stock to be purchased from shareholders dissenting to ex tension of charter.......................................................................................................... 219 Approval of Comptroller of Currency required for extension of charter.............. 217 Approval of request for receiver to buy property...................................................... . 524 Articles of association: Amendment of, for extension of corporate existence.................................... 215,216 Amendment of, restricted....................................................................................... 225 Converted State bank, execution of, by.............................................................. 245 Increase of capital stock by amendment of................................................... 229 Proceedings in regard to, and form of.................................................................. 201 Provisions for elections when not provided for in............................................. 238 Reduction of capital stock...................................................................................... 230 Assessments: For examination....................................................................................................... 527 Impairment of capital............................................................................................. 430 Plates, engraving o f........................................................................................... 220,414 Redemption of circulation..................................................................................... 313 Repayment of tax..................................................................................................... 449 Reports of circulation, failure to make............................................................ 447,448 443 Reports of condition and earnings and dividends, failure to make............... Semiannual duty...................................................................................................... 446 Shareholder’s personal liability............................................................................. 240 Tax on unauthorized circulation....................................................................... 708-710 Transportation of notes............ .............................................................................. 414 Assessors, shareholders* lists accessible to................................................................... 439 Assets: Comptroller’s annual report to contain statement of national banks............. 110 Expense of receiver paid from.............................................................................. 519 Failed bank, may be turned over to agent......................................................... 522 Insolvent banks, distribution of............................................................................ 517 Of consolidated banks............................................................................................. 503 Receiver to collect, etc........................................................................................... 515 Receiver to sell on order of court.......................................................................... 515 Report of condition to contain statement of....................................................... 440 Shareholders’ agent to distribute.......................................................................... 522 United States has paramount lien on................................................................... 511 Assignee, failure to pay installments......................................................................... 227 Assignment (see also Treasurer United States; Bonds, United States): Of assets after insolvency void.............................................................................. 529 Register of bonds...................................................................................................... 307 United States bonds as security for circulation................................................. 306 INDEX TO NATIONAL-BANK ACT, ETC. 228 Paragraph. Assistant Deputy Comptroller..................................................................................... 104 Assistant Treasurer of United States: Circulation of liquidated and insolvent banks, duty of................................... 505 414 Circulation, unfit, to be sent to Treasurer for redemption.............................. Fraudulent notes to be marked by...................................................................... 746 Public moneys to be deposited with................................................................ 730, 731 Unauthorized withdrawal of public money from.............................................. 737 Associations: Defined...................................................................................................................... 300 National banking, provisions for formation of.................................................... 201 Organized under act of 1863 not affected............................................................ 247 To be notified of transfer of bonds....................................................................... 308 To issue gold notes................. ......... ...................................................................... 341 Assorting charges for redeemed circulation................................................................ 414 Attachment, not to issue prior to final judgment of court...................................... 529 Attorney General, opinions of................................................................................... 900-903 Auction: Bonds of expiring associations........................................................................... 221,504 Bonds of liquidating associations.......... ............................ .............................. 221, 504 Bonds, sale of, when association has failed to pay its circulating notes___ 511 Enforcement of assessment, impaired capital.................................................... 430 Purchase of property by receiver......................................................................... 523 Sale of delinquent national-bank stock............................................................... 430 Sale of dissenting shareholders’ stock.................................................................. 219 Authority: To commence business........................................................................................... 320 To coin silver dollars............................................................................................... 722 224 INDEX TO NATIONAL-BANK ACT, ETC. B. Paragraph. Bad debts defined............................................................................................................ 429 Ballot. (See Elections; Shareholders.) Bank balances, net to or from to be used in reserve calculations.......................... 410 Bank circulation. (See Circulation.) Bank examiners................................................................................................................ 527 Bank examinations.......................................................................................................... 527 Banking house: Association may own............................................................................................... 223 Location....................................................... . ................. ........................................... 400 Banking powers (see also Real estate and national banking associations): Corporate.................................................................................................................... 204 Incidental.................................................................................................................. 204 Banks not in reserve cities. (See Country banks.) Banks other than national, statement to be given in annual report........................ 110 Bills of exchange: Discount of.............. . ............................................................................................... 422 Illegal transfer of, void............................................................................................ 529 Interest on................................................................................................................. 422 Member bank of Federal Reserve System may acrept..................................... 206 Not considered borrowed money........................................................................... 425 Penalty for official malfeasance, relative to........................................................ 436 Restrictions on loans, not applicable to............................................................... 425 Restriction on associations, liability, not applicable to..................................... 427 Transfer of, to create a preference, void............................................................. 529 Bimetalism........................... ............................................................................................. 762 Board of directors. (See Directors.) Bonds, official: Comptroller............................................................................................................... 102 Deputy Comptroller................................................................................................. 103 Officers of associations............................................................................................. 204 Public depositaries.................................................................................................. 243 Receiver.................................................................................................................... 515 Shareholders’ agent................................................................................................. 522 Shareholders’, on election of agent....................................................................... 522 Bonds, others, to secure deposits.................................................................................. 243 Bonds, United States: Annual examination of, provided for................................................................. 310 Assignment or transfer of, to be countersigned by Comptroller........................ 306 Association to be notified of transfer or assignment........................................... 308 Cancellation of, forfeited, for circulation redeemed........................................... 510 Circulation issuable on................................................................................ 304, 317, 323 Circulation obtainable on............................................................................ 304, 317, 323 Comptroller, access to records of, and deposit with Treasurer....................... 309 Coupon, to be exchanged for registered................................................................ 305 Deficiency in proceeds from sale of, what first lien........................................... 511 Defined...................................................................................................................... 301 Deposit of, not required to begin business.......................................................... 302 Depositaries required to deposit............................................................................ 243 Depreciation in value of, how made good............................................................ 311 Exchange of, for Treasury gold notes.................................................................. 318 Exchange of, permitted.......................................................................................... 311 Forfeiture of, for failure to redeem circulation................................................... 508 General provisions respecting................................................................................ 311 Gold, banks to deposit............................................................................................ 341 Government depositaries, deposit of, required................................................... 243 Increase of deposit of.............................................................................................. 304 Interest on, liable for penalty for fsdlure to make reports to Comptroller.. . 443 Interest on, liable for penalty for failure to make returns and pay taxes___ 425 Interest on, withheld on impaired capital.......................................................... 430 Lawful money, deposit of, to retire circulation and withdraw......................... 312 INDEX TO NATIONAL-BANK ACT, ETC. 225 Bonds, United States—Continued. Paragraph. Liquidating bank, reassignment of...................................................................... 504 Minimum amount to be deposited................................................................... 302, 313 Maximum circulation issuable on....................................................................... 323 Obligations of the United States, including, defined......................................... 739 Panama Canal, available as security for circulation......................................... 303 Panama Canal, additional issue of, authorized................................................. 767 Panama Canal, authorized by act of August 5, 1909, not receivable as se curity for circulation........................................................................................... 768 Penalty for illegal dealing in counterfeit. . . ............... . . ................................ 746 Penalty for illegal possession or use of material for printing.......................... 741 Penalty for passing counterfeit............................................................................. 743 Penalty for taking or possessing unauthorized impressions of tools, etc., used in printing............................................................................................... 745, 746 307 Record of transfer or assignment of, to be kept by Comptroller....................... Reduction of deposit of.......................................................................................... 304 Refunding under provisions of Federal reserve act.......................................... 304 Refunding of.........................................................................................................316, 757 Registered, to be deposited with Treasurer United States.......................... 301, 302 Relation of, on deposit to capital......................................................................... 304 Return of, to association........................................................................................ 311 Sale of, at auction for failure to redeem circulation......................................... 511 Sale of, privataly, at not less than par, for failure to redeem circulation.. 512 Secretary of Treasury authorized to sell, to make good gold reserve.......... 750 Taxation, exempt from.......................................................................................... 716 Tax on circulation secured b y .............................................................................. 444 Tax on circulation secured by Panama Canal bonds.................................... 303,444 To secure deposits................................................................................................... 243 306 Transfer of, how effected....................................................................................... Treasurer of United States to have access to records of Comptroller relative to 309 Treasurer United States to hold, in trust for association................................. 306 Withdrawal of, and of circulation.................................................................. * 312,414 Withdrawal of.......................................................................................................... 304 Bookkeeper. (See Officers.) Books. (See Comptroller; Treasurer United States.) Borrowed money (see Liability of association; Loans): Limit of amount...................................................................................................... 427 To make good gold reserve, by Secretary of Treasury, authorized................ 750 Branch banks: Chicago World’s Fair.............................................................................................. 803 Louisiana Exposition.............................................................................................. 803 State banks entering system by conversion may retain................................... 246 Branches, foreign, authorized....................................................................................... 210 Broker, when national bank may act as broker in procuring loans on real estate. 209 Bureau of Comptroller of Currency............................................................................. 100 Bureau of Currency, expense of................................................................................... 327 Bureau of Engraving and Printing, Director of, designated as custodian of plates, dies, etc., of Federal reserve and national bank notes........................... 327 Business: Authorization of association to begin, when................................................... 226, 319 Place of . .................................................................................................................... 400 Suspension of, after default to pay circulation.................................................. 509 Business paper: Discount of............................................................................................................ 422,427 Excepted from limit on loans............................................................................... 425 By-laws prescribed by directors of national banks................................................... 204 164312°— 20------ 15 226 INDEX TO NATIONAL-BANK ACT, ETO. c. Paragraph. Call for report of condition............................................................................................. 440 Cancellation. (See Bonds, United States, circulation.) Cancellation of bonds forfeited...................................................................................... 510 Cancellation of circulation redeemed.......................................................................... 514 Capital stock: Agent of shareholders to distribute assets ratably............................................. 522 Amount required...................................................................................................... 224 Amount to be paid before association begins business................................. 226,319 Appointment and qualification of shareholders’ agent..................................... 522 Assessment for impairment of................................................................................ 430 Association to begin business, amount to be paid............................................. 226 Borrowed money must not exceed........................................................................ 427 Branches of converted State banks...................................................................... 246 Certificate of officers and directors required relative to payment of.......... 226,319 Circulation not to be used to create increase of................................................. 428 Circulation outstanding not exceeding 5 per cent of, free from taxation___ 706 Circulation, proportion to....................................................................................... 304 Conversion of State banks authorized.................................................................. 245 Creditors’ bill against shareholders....................................................................... 521 Deposit of United States bonds based on............................................................ 302 Directors, individual liability of........................................................................... 526 Directors, qualification of....................................................................................... 233 Disposition of, delinquent shareholders.............................................................. 227 Dividends declared on, and net earnings in excess of dividends to be reported.................................................................................................................. 442 Dividends on, and creation of surplus................................................................. 424 Dividends on, when prohibited............................................................................ 429 Division of, into shares, and number and value of each.................................. 225 Enforcement of assessment, to make good impairment of............................... 430 Enforcing individual liabilities of shareholders of, by receiver.................... 520 Enforcing payment of.............................................................................................. 227 Holders of shares of, in expiring associations to be extended or reorganized, to have preference in allotment of shares........................................................ 219 Holding of shares of, required by directors..................................................... 233,236 Impairment of, assessment for............................................................................... 430 520 Impairment of, receiver may be appointed for failure to make good........... Increase of, provisions for........................................................................... 228, 229, 304 Individual liability of shareholders..................................................................... 240 Liability of association not to exceed, except on account of certain demands. 427 Liquidation, shareholders owning two-thirds of, may vote to go into.......... 500 List of shareholders of, to be transmitted to the Comptroller......................... 439 426 Loans on security of shares, or purchase of, prohibited................................... Loans restricted to 10 per cent of, including surplus, etc................................ 425 Minimum amount, required of national banks................................................... 224 Minimum of bonds to.............................................................................................. 302 Number of shares and amount of, stated in organization certificate.............. 202 Of national banks held by converted State banks............................................ 245 Payment of, provisions for.................................................................................... 226 Penalty for failure to make good impairment of................................................ 430 Personal liability of shareholders.......................................................................... 240 Population to govern minimum amount............................................................. 224 Purchase of, prohibited........................................................................................... 426 Receiver may be appointed when, impaired..................................................... 430 Receiver may be appointed when, not fully paid in....................................... 227 Reduction of, provisions for............................................................................... 230, 304 Relation of bond deposit to.................................................................................... 304 Restoration of, when below the minimum required......................................... 227 Shareholders of, list to be kept and subject to inspection............................... 439 Shareholders owning two-thirds of, may place an association in liquidation.. 500 INDEX TO NATIONAL-BANK ACT, ETC. 227 Capital stock— Continued. Paragraph. Shareholders owning two-thirds of, may change title and location................ 211 Shareholders owning two-thirds of, may increase......................................... 228,229 Shareholders owning two-thirds of, may reduce............................................... 230 Shareholders owning two-thirds of, may extend corporate existence........... 216 Shareholders entitled to one vote on each share of, held by.......................... 231 Shareholders of, converted State banks not liable, when................................ 240 Shareholders of, not consenting to an extension may withdraw.................... 219 Shares of, acquired for debt to be disposed of, when....................................... 426 State taxation of shares of...................................................................................... 451 226 Subscriptions to, when payable........................................................................... Surplus fund to be created to the amount of 20 per cent of........................... 424 Transfer of shares.............................................. ..................................................... 241 United States registered bonds to be deposited as security for circulation to be based on...................................................................................................... 302 When increase of, becomes valid......................................................................... 228 Withdrawal of bonds on reduction of, or closing of business........................... 304 Withdrawal of bonds, limited............................................................................... 311 Withdrawal of, prohibited..................................................................................... 429 Cashier (see also President; Officers): Appointment of....................................................................................................... 204 Bank examiner may examine, on oath............................................................... 527 Bond assignment by ............................................................................................... 306 Certificate of officers and directors....................................................................... 319 Certificate of stock payment................................................................................. 226 Circulating notes, to sign................................................................................... 324, 337 204 Election or appointment of................................................................................... Embezzlement by................................................................................................... 436 Examiner of own bank, can not b e .................................................................... 527 Expiration of corporate existence, certification by...................................... 221 Extension of corporate existence, certification by............................................ 216 False certification of checks.................................................................................. 436 Incomplete circulation, provisions relative to................................................... 417 Increase of stock, certification of.......................................................................... 228 Liquidating bank, duty in.................................................................................... 501 Penalty for— Countersigning or delivering circulation improperly................................ 344 False certification of checks....................................................................... 434,439 Issuing circulation of expired associations.................................................. 747 Official malfeasance......................................................................................... 436 Pledging, etc., circulation.............................................................................. 432 738 Unauthorized receipt of public money....................................................... Protest of circulation, waiving notice of............................................................. 507 Proxy, not to act as................................................................................................. 231 Reports of condition, verified by...................................................................... 440,441 Reports of earnings and dividends, verified by................................................ 442 Shareholders, lists of, by........................................................................................ 439 Signature of, forged or wanting, not to invalidate circulation........................ 417 Taxable circulation, returns by............................................................................ 446 Unauthorized circulation, returns by.................................................................. 710 Voluntary liquidation, certified by...................................................................... 501 Cash reserve-required: Banks elsewhere than in reserve city.................................................................. 405 Central reserve city................................................................................................. 407 Reserve city banks.................................................................................................. 406 Central reserve agents. (See Agents; Reserve; Reserve agents.) Central reserve cities: Cash reserve required.............................................................................................. 407 Number and classification of................................................................................. 401 Certificate: Certified copy of organization, evidence............................................................. 704 Comptrollers, of authority..................................................................................... 320 Converted State banks............................................................................................ 245 Destruction of circulation on retirement account.............................................. 416 Destruction of notes................................................................................................. 339 Execution of organization...................................................................................... 203 Extension of corporate existence.......................................................................... 217 228 INDEX TO NATIONAL-BANK ACT, ETO. Certificate— Continued. Paragraph. Increase of stock valid, when................................................................................ .....228 %May be withheld, when.......................................................................................... ..... 320 Officers and directors to attest............................................................................... .....319 Of deposit as time deposits.......................................................................................... 403 Of payment of stock...................................................................................................... 226 Organization, to specify............................................................................................... 202 Payment of installments of stock to be certified............................................... .....226 Publication of Comptroller’s, of authority.......................................................... .....321 Purchase of property by receiver, required........................................................ .....523 Reduction of stock valid, when..................................................................................230 Sealed, of Comptroller, evidence.......................................................................... .....703 To be made by*association, showing bonds deposited with Treasurer.......... .....310 Voluntary liquidation...................................................................................................501 Certificates: Gold, issue of..................................................................................................................433 Gold............................................................................................................................ .....754 Silver.......................................................................................................................... .....755 United States, subject to State tax............................................................................717 Certification of checks, when forbidden, penalty for........................................... 434,435 Certified checks, receivable under certain conditions for duties on imports, internal taxes, etc.................................................................................................... 769,770 Certified copies of reports, etc................................................................................... 703, 704 Change of location, special acts authorizing....................................................................803 Change of title and location........................................................................................... .....211 Change of title and location, debts not affected by.................................................. .....212 Charges for transportation and assorting of circulation for redemption..................... 414 Charter (see also Corporate existence): Certificate of Comptroller authorizing the bank to begin business known as. 320 Extension of.............................................................................................................. .....215 Forfeiture of................................................................................................................... 526 Issue of, to national banks.......................................................................................... 320 Reextension of.......................................................................................................... .... 222 Term for which issued.............. .................................................................................. 204 Charter number of Fifth-Third National Bank of Cincinnati, Ohio, changed.. . 802 Charter number to be printed on circulation............................................................. .... 325 Checks: Certified, receivable for duties on imports and internal taxes.................... 769, 770 False certification of, unlawful.................................................................................. 434 Falsely certified, an obligation of association......................................................... 434 Penalty for false certification of............................................................................ .... 435 Chicago, 111., designated as central reserve city............................................................ 401 Cincinnati, Ohio, change of charter number of Fifth-Third National Bank....... .... 802 Circulation: Aggregate amount not limited............................................................................... .... 332 Amount of, obtainable................................................................................................. 323 Amount of, obtainable by gold banks...................................................................... 341 Association may issue.................................................................................................. 204 Association to receive interest on bonds as long as, honored.......................... .... 311 Associations consolidating, deposit of lawful money to retire, unnecessary. 503 Associations to redeem, in lawful money on demand....................................... .... 401 Banks other than national, tax on.................................................................... 708-710 Bonds in excess of amount required may be withdrawn................................. .... 304 Bonds forfeited when, dishonored.............................................................................508 Bonds having been forfeited.................................................................................. ....508 Bonds, United States, to secure............................................................................ .... 302 Capital not to be reduced below amount of outstanding................................. ....230 Cancellation of redeemed............................................................................................514 Certificates of destruction, by whom executed.................................................. ....339 Charter number on................................................................................................... ....325 Collection of tax on......................................................................................................448 Consolidating banks................................................................................................. ....503 Cost of plates to be paid by association............................................................... ....414 Counterfeiting, etc........................................................................ 344, 346, 740, 741, 747 Countersigning unlawfully..................................................................................... ....344 Denominations, minimum...................................................................................... ....329 Deposit of lawful money to withdraw......................................................................314 INDEX TO NATIONAL-BANK ACT, ETC. 229 Circulation— Continued. Paragraph. Deposit of United States bonds to secure........................................................... 302 Deposit of bonds to be increased when capital is increased........................... 304 Destroyed, to be replaced by an equal amount of new notes........................ 414 Disposition of redemption account balances...................................................... 416 Enforcing payment of tax on................................................................................ 448 Examination of bank upon request of, by agent of Comptroller.................... 508 Expense of plates for new notes of extended banks......................................... 220 Expenses of redemption, how paid...................................................................... 414 Expired associations, penalty for issuing............................................................ 747 Extended bank, shall differ from prior issue..................................................... 220 Failed banks, redemption of................................................................................. 505 Failure to redeem.................................................................................................... 507 Federal reserve banks............................................................................................. 317 For what, is receivable........................................................................................... 337 Fraudulent notes to be so stamped...................................................................... 748 Gain from lost and destroyed................................................................................ 220 Gold banks, amount not limited.......................................................................... 342 Gold bank, to be redeemed in gold coin............................................................ 341 Government depositaries to receive, at par....................................................... 243 Imitation of, prohibited........................................................................................ 345 Increasing capital stock, use of, prohibited....................................................... 428 Inscription on....................................................................................................... 324, 341 Lawful money deposit to retire circulation limited.......................................... 314 Limit on aggregate amount of................................................ .............................. 323 Liquidating banks, redemption of....................................................................... 505 Liquidating bank to deposit lawful money to redeem..................................... 504 Maceration of........................................................................................................ 339, 340 Minimum amount that may be withdrawn........................................................ 312 Minimum denominations....................................................................................... 329 Minimum deposit of bonds required.................................................................... 302 Mutilation of, prohibited........................................................................................ 346 Not considered borrowed money.......................................................................... 427 Notice of redemption of, to be forwarded to bank............................................ 414 Notice to present, for redemption when bonds have been forfeited............. 510 Of converted State bank, where redeemable.................................................... 246 Other, prohibited for national bank.................................................................... 338 Panama Canal bonds to secure.............................................................................. 303 Paper for printing.................................................................................................... 326 Penalty for engraving, etc., without authority................................................. 742 Penalty for failure to make return of, taxable................................................... 447 Place for redemption of.......................................................................................... 414 Plates and dies for printing of............................................................................... 327 Plates and dies to be engraved for....................................................................... 324 Pledging, as security prohibited.......................................................................... 428 Profit on unredeemed, inures to the United States.......................................... 220 Proceedings when return is not made................................................................. 712 Prohibition against circulating uncurrent notes................................................ 431 Proportion to bonds deposited.............................................................................. 323 Proportion to capital............................................................................................... 302 Protest of................................................................................................................... 507 Receivable at par by all national banks............................................................ 425 Receivable for what................................................................................................ 337 Redeemed, to be canceled..................................................................................... 514 Redemption fund..................................................................................................... 414 Redemption of, closed banks............................................................................ 505, 506 Redemption of, extended banks.......................................................................... 220 Redemption of, incomplete................................................................................... 417 Redemption of, in United States notes............................................................... 414 Redemption of, liquidating banks................................................................... 505, 506 Redemption records................................................................................................ 513 Reduction or retirement of.................................................................................... 313 Refunding excess tax.............................................................................................. 449 Register of Treasury’s signature to be on............................................................ 324 Reserve not determined by................................................................................... 402 Reserve not to be kept on...................................................................................... 402 Reserve requirement repealed.............................................................................. 402 230 INDEX TO NATIONAL-BANK ACT, ETC. Circulation—Continued. Paragraph. Restriction of tax provisions.................................................................................. 714 Restriction on notes less than $ 1 ............................................. ............................ 718 329 Restriction on notes less than $5............................................. ............................ Restriction on notes of $5....................................................................................... 323 Retirement account.................................................................................................. 416 Retirement of........................................................................................................ 314, 315 Retiring, under provisions of Federal reserve act.............................................. 304 Semiannual return of, subject to tax................................................................ 446, 711 Signing........................................................................................................... 324,337,417 Statement concerning, of closed banks to appear in annual report of Comp troller....................................................................................................................... 110 Tax on......................................................................................................................... 444 Tax on converted bank......... .................................................................................. 713 Tax on, insolvent banks remitted . *................................................................ 451, 715 Tax on, secured by Panama Canal bonds............................................................ 303 Tax on, State bank issue..................................................................................... 705, 712 Tax on, subject to State law................................................................................... 717 Treasurers and public depositaries to return all, of closed banks.................. 505 When exempt from tax............................................................................................ 706 When issuable........................................................................................................... 337 Withdrawal of, by depositing lawful money, limitation of.................. 312, 314, 414 Worn or mutilated, to be redeemed...................................................................... 414 Worn out or mutilated, destroyed.................................................................... 339, 340 Citizens’ national banking associations; where.......................................................... 214 516 Claims (see Insolvency; Receiver), notice to present, against insolvent banks.. Classification of central reserve cities............................................. •............................ 401 Clearing house, receipt in settlement of balances of gold and silver certificates by..................................................................................................................................... 433 Clerks: Appointment and qualification of, by the Secretary........................................ 105 Clerical force for the redemption of circulating notes...................................... 415 Duties of, fixed by the Comptroller...................................................................... 105 105 Employment of, for the bureau, by the Comptroller....................................... Names and compensation of, in annual report and Official Register........ 110, 111 231 Of banks can not act as proxy............................................................................... Closed associations (see Insolvency), statement to appear in annual report........ 110 Coin (see Gold; Silver), right to redeem circulation in ............................................ 414 Coins, Philippine Islands, legal tender...................................................................... 719 Collection of penalty for failure to make semiannual return of circulation......... 446 Collection of tax on circulation, enforcement o f....................................................... 448 Commencement of business, provisions to be complied with, prior to................. 319 Commercial paper: Discount of............................................................................................................ 422, 427 Excepted from limit on loans................................................................................. 425 Commission, not to be paid officer, director or employee of member bank___ 438c Commissioner of Internal Revenue, tax on circulation of insolvent banks to be remitted by.................................................................................................................... 715 Commissioner of Internal Revenue, returns of circulation other than national, to be made to............................................................................................................ 711,712 Committee: Of appraisal............................................................................................................... 219 Of destruction, provisions for................................................................................. 339 Compounding debts of insolvent national banks....................................................... 515 Comptroller of Currency: Action as to agent of shareholders......................................................................... 522 Agent, special, to be appointed for association failing to redeem circulation. 508 Annual report to be made to Congress by........................................................... 110 Appointment, term, and salary* or........................................................................ 101 Approval required for extension of charter......................................................... 217 Approve receiver’s purchase of property......................................................... 524, 525 Approve reserve agent............................................................................................. 401 Articles of association and organization certificate of national banks to be filed with............................................................................................................ 201,202 Assessment of tax on circulation when bank fails to make return................. 447 Bond of....................................................................................................................... 102 Bonds and records of, with Treasurer, access to................................................ 309 INDEX TO NATIONAL-BANK ACT, ETC. 231 Comptroller of Currency—Continued. Paragraph. Bonds, sale of, privately or at public auction, by........................................ 511,512 Bond transfers to be recorded by......................................................................... 307 Capital stock, increase or reduction of, to be approved by................. 228,229,230 Certificate to begin business.................................................................................. 320 Certificates of destruction of circulation on retirement account.................... 416 Certified copy of organization certificate, evidence......................................... 704 Charter number of bank, to be put on circulating notes by ........................... 325 Circulation— Of extended banks to be destroyed by....................................................... 220 324 Plates and dies to be engraved by order of................................................ To be issued by................................................................................................ 323 Worn, mutilated, destruction of............................................................... 339, 340 Cited in injunction of receiver............................................................................. 518 Clerks......................................................................................................................... 105 Creditors of failed banks, dividends to be paid to, by..................................... 517 Distribution of annual report of........................................................................ 112,113 Duties of................................................................................................................... 100 Enforce stockholders’ liability............................................................................. 240 Engraving of plates for printing of circulation to be ordered by................... 324 Enjoined by bank, how......................................................................................... 518 Evidence, sealed certificates................................................................................. 703 Examiners, appointed by...................................................................................... 527 Examiners’ salary, recommended by.................................................................. 527 Examiners’ reports to............................................................................................. 527 Exchange of bonds to secure circulation............................................................ 311 Expense of examinations assessed by ................................................................. 527 Expense of bureau.................................................................................................. 327 Extension of corporate existence, approval of, by............................................ 215 Federal Reserve Board, ex officio member of.................................................... 101 Fine for failure to make reports to....................................................................... 443 Forfeit, cancel, or sell bonds for default in payment of notes........................ 512 Forfeiture of charter, suit to be brought by....................................................... 526 Impairment of capital, action to be taken by................................................... 430 Interest in banks, prohibited................................................................................ 106 Jurisdiction of district court to enjoin................................................................ 701 Liquidation of associations, to be notified of..................................................... 501 List of shareholders, copy to be sent to.............................................................. 439 National bank examiners appointed by.............................................................. 527 Notice to banks short in reserve........................................................................... 402 Notice to creditors of insolvent banks................................................................. 516 Notice to present circulation for redemption when bonds have been for feited...................................................................................................................... 510 Oath of directors to be filed with......................................................................... 236 Oath to be taken and bond to be given by........................................................ 102 Organization certificate to be filed with............................................................. 203 Payment of capital to be certified to................................................................... 226 Plates and dies, exanfination of............................................................................ 328 Printing annual report of................................................................................... 112,113 Proceedings to enjoin.......................................................................................... 701,702 Qualification of........................................................................................................ 102 Reappraisal of value of stock of shareholders by.............................................. 219 Receivers appointed by.............................................................................. 402, 515,520 Reports of banks, other than national, to be obtained and published, b y .. 110 Reports to be made to........................................................................................ 440,441 Report to be made annually to Congress............................................................ 110 Rooms, etc................................................................................................................ 108 Salary of.................................................................................................................... 101 Seal of........................................................................................................................ 107 Shareholders’ agent, action as to.......................................................................... 522 State banks converted, approved by................................................................... 245 Term of.................................................................................................................... 101 Title and location, change of, to be approved by............................................. 211 Title of national banks subject to approval of................................................... 202 Transfer and assignment of bonds to be countersigned by.............................. 306 To determine if association can commence business........................................ 319 Withdrawal of circulation to have consent of.................................................... 314 232 INDEX TO NATIONAL-BANK ACT, ETC. Paragraph. Comptroller of Treasury, refunding of excess payment of tax on circulation to be approved b y ........................................................................................................... 449 Condition, report o f ........................................................................................................ 440 Congress: Comptroller’s annual report to be made t o ................................................... 110, 111 Visitatorial powers o f..................................... ........................................................ 527 216 Consent of two-thirds necessary for extension of charter..................................... Consolidation of national banks, provisions fo r ................................................. 503, 503a Contract insuring or guaranteeing deposits by national banks............................. 903 Contracts, power for association to make.................................................................. 204 Contributions, political, prohibited............................................................................ 437 Conversion of national gold banks into currency banks....................................... 343 Conversion, State banks............................................................................................... 245 Corporate existence: Expiration o f ........................................................................................................... 221 Extension o f......................................................................................................... 215-217 Reextension of......................................................................................................... 222 Term of....................................................................................................................... 204 Corporate powers. (See Powers.) Corporate seal, power to adopt and use...................................................................... 204 Corporation (see also Liability of associations), association becomes, when___ 204 Coporations, interlocking directorates forbidden................................................. 234, 235 Cost. (See Expense.) Cost of plates............................................................................................................... 220,414 Counterfeits (see Fraudulent notes, e tc .)................................................................... 748 Counterfeiting, making or using notes, plates, tools, etc..................................... 740, 748 Counterfeiting, plates and dies, to be guarded against............................................ 324 Country banks: Cash reserve required.............................................................................................. 405 Distribution of reserve............................................................................................ 405 Reserve required to be held with Federal reserve bank.................................. 405 Reserve requirements for........................................................................................ 405 Reserve that may be held with bank in reserve or central reserve cities... 405 Coupon bonds, to be exchanged for registered........................................................... 305 Courts. (See Crimes, jurisdiction, etc.) Creditors: Bill in equity by, against shareholders................................................................ 521 436 Checks falsely certified a valid obligation of association............................... Directors’ liability.................................................................................................... 526 Expiration of existence, notice to........................................................................ 221 Insolvency, notice of, to......................................................................................... 516 Nonpayment of circulation, notice of, to............................................................ 510 Payment of assets of failed banks......................................................................... 517 Preference of, illegal................................................................................................ 529 Rights not to be impaired......... ............ ............................................................... 529 Shareholders, list of, subject to inspection by................................................... 439 Shareholders, personal liability of, to............................. .................................... 240 Voluntary liquidation, notice of, to..................................................................... 501 Creditor’s bills; against shareholders.......................................................................... 521 Crimes, jurisdiction, etc.: Abstraction of money, funds, etc.......................................................................... 436 Aiders and abettors.................................................................................................. 436 Counterfeiting circulation, etc........................................................................... 740, 744 Dealing in counterfeit circulation........................................................................ 746 Embezzlement...................................................................................... 436,732,737,738 Enjoining of Comptroller and receiver.......... ..................................................... 518 Evidence, certified copy of organization certificate......................................... 704 Evidence, sealed certificate of Comptroller competent.................................... 703 False certification of checks............................................................................... 434, 435 False entries.............................................................................................................. 436 Forging or counterfeiting United States securities.......................................... 740 Having or taking unauthorized impressions of tools, etc....... ..................... 744, 745 Illegal possession or use of material for circulation........................................... 742 Imitating circulation for advertising purposes.. ................................................ 345 Improper countersigning or delivering circulation........................................... 344 Interlocking directorates forbidden...................................................................... 235 INDEX TO NATIONAL-BANK ACT, ETC. 233 Crimes, jurisdiction, etc.— Continued. Paragraph. Issuing circulation without authority.................................................................. 436 Issuing circulation of expired associations.......................................................... 747 Jurisdiction, general, of national-bank cases.................................................. 214, 218 Jurisdiction to enjoin Comptroller or receiver................................................... 701 Misapplication, willful............................................................................................ 436 Mutilating circulation............................................................................................. 346 Obligations of the United States defined............................................................ 739 Official malfeasance................................................................................................. 436 Passing counterfeit circulation.............................................................................. 743 Pledging United States notes or bank circulation............................................. 432 Political contributions............................................................................................ 437 Suits in which United States or its officers are parties..................................... 700 Taking unauthorized impression of tools, etc.................................................... 744 Violation of national-bank act............................................................................... 526 Currency. (See Circulation; Gold; Gold certificates; Silver; Silver certifi cates; Lawful money; United States note certificates; Federal reserve notes.) Currency Bureau: Designation of Office of Comptroller of Currency.............................................. 100 Expense of................................................................................................................. 327 Expense of, in liquidating failed banks.............................................................. I ll Offices, vaults, etc., for........................................................................................... 108 Submission of list of employees........................................................................ 110, 111 Custodian of plates and dies, etc., for Federal reserve and national-bank notes.. 327 234 INDEX TO NATIONAL-BANK ACT, ETC. D. Paragraph, Date of election of directors........................................................................................... .....£38 Date upon which an association becomes a body corporate......................................... 204 Date when application for extension of charter may oe made............................... ..... 215 Dates for payment of tax on circulation...................................................................... ..... 303 Dealing in counterfeit circulation, penalty for.......................................................... .....746 Debts, compounding of: Not affected by change of title or location............................................................... 212 Real estate held for....................................................................................................... 223 Declaration of dividends................................................................................................ ..... 428 Default in payment of circulation............................................................................ 507, 509 Deficiency. (See Bonds; Capital; Circulation; Receiver; Reserve.) Definitions: Bad debts........................................................................................................................429 Central reserve cities............................................................................................... .....401 Demand and time deposits.......................................................................................... 403 Of national banking associations and associations............................................. ..... 300 Of United States bonds........................................................................................... ..... 301 Reserve cities................................................................................................................. 402 Delinquent shareholders, sale of stock of.................................................................... ..... 430 Delivery of circulating notes......................................................................................... ..... 323 Demand deposits defined............................................................................................... ..... 403 Demands for which national-bank notes are receivable........................................... .....337 Denominations: Circulation of gold banks........................................................................................ .....341 Circulation of national banks................................................................................. .....324 Converted State-bank shares................................................................................ ..... 245 Gold certificates................................................................................................... 433,754 Panama Canal bonds...................................................................................................767 Shares of national-bank stock............................................................................ 225,245 Silver certificates.........................................................................................................755 Treasury notes......................................................................................................... .....764 Depositaries of public moneys................................................................................ 243, 244 Depositaries of the United States, circulation of liquidating and insolvent banks, duty of, to return........................................................................................ — 505 Deposit guaranty law: Kansas........................................................................................................................ .....901 Oklahoma........................................................................................................................900 Deposit not required in consolidation............................................................................... 503 Deposit of United States bonds not required............................................................. ..... 302 Deposit of lawful money: For circulation of extending banks............................................................................ 220 To redeem circulation of liquidating banks............................................................. 502 To withdraw circulation............................................................................................... 311 Deposits: Insolvent banks, deposit of funds of....................................... ............................ .....515 Insurance or .guaranty of, by national banks...........................'............................... 903 Not considered borrowed money........................................................................... ..... 427 Public money................................................................................................ 243,244, 730 Postmasters’ .................................................................................................................... 731 Reserve to be kept on.......................................................................... 405, 407,414, 744 Reserve determined by....................................................................................... 402, 410 To redeem circulation, disposition of........................................................................ 416 United States, no reserve required to be held against......................................... 413 Various kinds defined................................................................................................... 403 With nonmember banks limited........................................................................... ..... 408 Depreciation (see Bonds; Circulation) in value of bonds to secure circulation.. 311 Deputy Comptroller of Currency: Additional, bond of....................................................................................................... 104 Appointed by Secretary of the Treasury.......................................................... 103,104 Appointment.................................................................................................................. 103 INDEX TO NATIONAL-BANK ACT, ETC. 235 Deputy Comptroller of Currency—Continued. Paragraph. Bond........................................................................................................................... 103 Duties......................................................................................................................... 103 Interest in bank prohibited................................................................................... 106 Oath to be taken...................................................................................................... 103 Salary of..................................................................................................................... 103 Deputy comptroller, additional: Bond of...................................................................................................................... 104 Powers of.................................................................................................................... 104 Salary of.................................................................................................................... 104 Description of national-bank notes.............................................................................. 324 Designation of central reserve cities............................................................................ 401 339 Destruction committee provided for........................................................................... Destruction of circulation of extended banks............................................................ 220 Destruction of worn out and mutilated notes........................................................ 339,340 Dies. (See Plates.) Director of Bureau of Engraving and Printing designated as custodian of dies, plates, etc., of Federal reserve and national-bank notes..................................... 327 Directors: Appointment or election of................................................................................... 204 Assessment for impairment of capital, provisions for enforcement of............ 430 Attestation of reports to Comptroller by............................................................. 440 Capital impaired, duties in.................................................................................... 227 Certificate of officers and........................................................................................ 319 Certification of, to extension................................................................................. 216 Conversion of State banks, action by.................................................................. 245 Dividends, declaration of, by............................................................................... 428 Duties of.................................................................................................................... 204 Election of................................................................................................................ 204 Election postponed.................................................................................................. 238 Embezzlement, penalty......................................................................................... 436 Enforcing payment of capital............................................................................... 227 Failure to hold annual election............................................................................ 238 Forfeiture of charter for violation, etc., by........................................................ 526 Interlocking, prohibited......................................................................................... 234 Liquidated bank, duties in................................................................................... 501 Liability of................................................................................................................ 526 Names and residences of, to be ascertained by Comptroller........................... 319 Not to be appointed by the Comptroller to examine own bank.................... 527 Number and election of.......................................................................................... 232 Number, constituting board of............................................................................. 232 Oath of....................................................................................................................... 236 Penalty for issuing circulation of expired association..................................... 747 Penalty for official malfeasance............................................................................ 436 Penalty for political contributions....................................................................... 437 Penalty for unauthorized receipt of public money........................................... 738 President................................................................................................................... 239 President of board to be a...................................................................................... 239 Powers of.................................................................................................................... 204 Provisions for............................................................................................................ 232 Proxy can not act as............................................................................................... 231 Purchase of securities from or sale to director................................................... 438d 233 Qualifications of........................................... ........................................................... Rate of interest paid directors............................................................................. 438e Restrictions as to interlocking.............................................................................. 234 Sale of stock acquired from delinquent shareholders..................................... 227 Shareholders dissenting to extension to give notice, etc............................... 219 Term of...................................................................................................................... 232 Three-fourths to be resident of State................................................................... 233 Vacancies in board of............................................................................................. 237 Disbursing funds of United States officers, depositing with national-bank depositaries.................................................................................................................. 730 Disbursing officers, penalty for unauthorized deposit of public money, by___ 737 Discount. (See Loans; Liability of association; Interest.) Dismissal of officers......................................................................................................... 204 Disposal of redeemed circulating notes...................................................................... 513 Disposition of assets of insolvent banks...................................................................... 517 236 INDEX TO NATIONAL-BANK ACT, ETC. Paragraph. Disposition of earnings, by United States, from Federal reserve banks................... 750 Disposition of redemption account.............................................................................. ..... 416 Dissenting shareholders, withdrawal of, on extension.............................................. ..... 219 Dissolution (see Expiration of corporate existence; Forfeiture; Insolvency; Liquidation) of banks not extending period of succession.................................. ..... 221 Distinctive paper: National-bank circulation, etc., to be printed on................................................... 326 Unauthorized possession or use of......................................................................... ..... 742 Distribution of assets by shareholders’ agent................................................................... 522 Distribution of reserve: Banks elsewhere than in reserve cities................................................................ ..... 405 Central reserve cities, banks in..................... - ........................................................... 407 Reserve cities, banks in.......................................................................................... ..... 406 District attorney, suits in which United States or its officers are parties,,to be conducted by ................................................................................................................ ..... 700 District court, jurisdiction of, to enjoin Comptroller..................................................... 701 Dividends: Comptroller to make ratable, of assets of insolvent banks............................... ..... 517 Directors may declare, when................................................................................. ..... 424 Earnings and, to be reported................................................................................. ..... 442 Not to be paid by certain converted State banks when surplus is impaired. . 240 Penalty for failure to report earnings and........................................................... ..... 443 Prohibited when reserve is short................................................................................ 409 Restriction on association’s liability.................................................................... ..... 427 Unearned, prohibited.............................................................................................. ..... 429 Unpaid, not considered borrowed money........................................................... ..... 427 Divisions of Issue and Redemption established in office of United States Treas urer................................................................................................................................. ..... 752 Drafts: Against deposits not considered borrowed money............................................. ..... 427 Liability of association, relative to....................................................................... ..... 427 Member banks of Federal Reserve System may accept................................... ..... 206 . Obligations of United States, including.................................................................... 739 Official malfeasance....................................................................................................... 436 Penalty for mutilating............................................................................................. ..... 346 Dues. (See Tax; Duties.) Duties: Associations organized under the act of February 25, 1863............................. ..... 247 Circulation— Converted State banks.......................................................................................... 713 Enforcing payment of, on............................................................................... ..... 448 Exempt from..................................................................................................... ..... 706 Not receivable for customs......................................................................1 ... 337 Refunding excess on........................................................................................ .....449 Restrictions on.................................................................................................. ..... 714 Semiannual on............................................................................................... 444, 447 Unauthorized................................................................................................. 705, 710 Comptroller’s............................................................................................................. ..... 100 Deputy Comptroller’s.............................................................................................. . 103 Directors’ ........................................................................................................ 204,232, 236 Disbursing officers’ ................................................................................................... ..... 730 Examiners’ ........................................f . .........................................................................527 Gold certificates receivable for.............................................................................. ..... 754 Imports and internal taxes may be paid by certified check....................... 769, 770 Officers’...................................................................................................................... .....204 On imports, certified checks receivable for, under certain conditions.......... 770 Public depositaries, designation and.................................................................... 243 Receiver, appointment and.................................................................................... 515 Shareholders’ agent....................................................................................................... 522 Duty of Treasurer in regard to circulation of liquidating and insolvent banks. 505 INDEX TO NATIONAL-BANK ACT, ETC. E. 237 Paragraph. Earnings and dividends to be reported...................................................................... 442 Earnings by United States from Federal reserve banks, disposition of................ 750 Election of president of the board............................................................................... 239 Election or appointment of directors, appointment officers................................ 204,232 Elections: Change of title or location........................................................................ . ........... 211 Corporate powers........................................................................................ ............. 204 Extension of corporate existence.......................................................................... 215 Failure to hold annual............................................................................................ 238 Failure to hold at appointed time........................................................................ 238 Increase of stock...................................................................................................... 229 Number of directors................................................................................................ 232 Oath of directors...................................................................................................... 236 Qualifications of directors...................................................................................... 233 Qualifications of shareholders................................................................................ 231 Reduction of stock.................................................................................................. 230 Shareholders’ agent................................................................................................. 522 Voluntary liquidation............................................................................................. 500 Embezzlement, misapplication of funds, etc.: Money-order funds.................................................................................................. 732 Penalty for................................................................................................................ 436 Unauthorized deposit of public money by disbursing officer..................... 737, 738 Employees and expenses........................................................................................... 110,327 Employees, rate of interest paid.................................................................................. 438e Enforcing payment of capital stock, provisions for.................................................. 227 Enforcing payment of tax on circulation................................................................... 448 235 Enforcement of act in reference to interlocking directorates................................. Engraving. (See Circulation; Plates and dies.) Enjoining Comptroller or receiver from further proceedings.................................. 518 Equity, bills in, against shareholders......................................................................... 521 Estates, liability of, as shareholders............................................................................ 242 Estimate of reserve requirements................................................................................ 410 Evidence....................................................................................................................... 703, 704 Examination of organization proceedings preliminary to granting authority to begin business.............................................................................................................. 319 Examinations: Annual, of bonds..................................................................................................... 310 Ascertainment of value of stock of dissenting shareholders............................ 219 Assessment for.......................................................................................................... 527 Bonds and records, provisions for......................................................................... 309 Compensation of examiners................................................................................... 527 Examiners to make................................................................................................. 527 Expense of................................................................................................................ 527 Federal reserve banks............................................................................................. 527 Foreign branches of national banks..................................................................... 210 Limitation of visitatorial powers.......................................................................... 528 439 List of shareholders subject to.............................................................................. Member banks......................................................................................................... 527 National banks......................................................................................................... 527 Number to be made................................................................................................ 527 Plates and dies, annually....................................................................................... 328 319 Preliminary, to begin business............................................................................. Preliminary, expense of......................................................................................... 519 Qualification of examiners..................................................................................... 527 Special, of extended associations......................................................................... 217 State banks and trust companies.......................................................................... 527 238 INDEX TO NATIONAL-BANK ACT, ETC. Examiners: Paragraph. Appointment o f....................................................................................................... 527 Member bank not to make loan or grant any gratuity to................................ 438a Not to perform any service for compensation for any bank or officer 438b Not to disclose name of borrowers or collateral without first obtaining 438b written consent of the Comptroller.................................................................. Powers of.................................................................................................................... 527 Qualifications of........................................................................................................ 527 Reports of.................................................................................................................. 527 Salaries of.......... ........................................................................................................ 527 Special commission.................................................................................................. 320 Exceptions: Associations organized under the act of 1863..................................................... 319 Converted State bank may continue to hold stock of other national banks.. 245 Converted State banks may retain branches...................................................... 246 Converted State banks, par value of stock.......................................................... 245 Indebtedness of national banks, restriction on................................................... 427 Insolvent national banks not required to pay tax............................................. 450 Tax on obligations of United States..................................................................... 716 Tax on circulation secured by Panama Canal bonds........................................ 303 To limit on amount of loans................................................................................... 425 To restriction on amount of borrowed money..................................................... 427 Excessive loans................................................................................................................. 425 Excess payment of tax on circulation, refunding of................................................. 449 Exchange, bills of, member banks of the Federal Reserve System may accept.. . 206 Exchange of bonds.......................................................................................................... 323 Exchange of bonds to secure circulation..................................................................... 311 Exchange of certain United States bonds for Treasury gold notes by Federal reserve banks................................................................................................................. 318 Exchange of coupon for registered bonds................................................................... 305 Execution. (See Suit.) Executor, power of national bank to act as................................................................ 208 Executors, not personally liable................................................................................... 242 Existence: Expiration of............................................................................................................. 221 Extension of.............................................................................................................. 215 Reextension of.......................................................................................................... 222 Term of corporate, of national banks.................................................................... 204 Expenditures on account of Panama Canal................................................................ 767 Expenses: Bureau of the Currency.......................................................................................... 327 Bureau, to be stated in Comptroller’s annual report..................................... 110, 111 Circulation, redemption of..................................................................................... 414 Circulation, transportation and redemption of retired...................................... 313 522 Duties of shareholders’ agent relative to............................................................. Examinations............................................................................................................ 527 Examinations, dissenting shareholders................................................................ 219 Examinations, special....... ..................................................................................... 217 Examiners.................................................................................................................. 527 Liquidation of failed national banks.................................................................... I ll Of examinations....................................................................................................... 527 Plates, cost of........................................................................................................ 220, 414 Plates and dies, examination of............................................................................ 328 Reappraisal for dissenting shareholders............................................................... 219 Receivership, how paid.......................................................................................... 519 Receivership, paid prior to election of shareholders’ agent............................ 522 Sale of bonds.............................................................................................................. 511 Sale of delinquent stock.......................................................................................... 227 Expiration of charter....................................................................................................... 221 Expired associations, penalty for issuing circulation of........................................... 747 Extension of charter......................................................................................................... 215 Extension of charter, provisions for redemption of circulation.............................. 220 INDEX TO NATIONAL-BANK ACT, ETC. 239 P. Failed national banks: Paragraph. Redemption of circulation..................................................................................... 505 Report of expenses................................................................................................... ■ 111 Failure (see Insolvency): Of shareholder to pay installments....................................................................... 227 To hold election at appointed time...................................................................... 238 To make reports to Comptroller............................................................................ 443 To make return on circulation other than national........................................... 712 To pay up capital, assessment for......................................................................... 430 To redeem circulation............................................................................................. 507 To redeem circulation of extended bank?........................................................... 220 False entry, penalty for, official malfeasance............................................................ 436 Falsely certifying checks............................................................................................... 434 Penalty for...........................................•.................................................................... 435 Farm lands, loans on....................................................................................................... 205 Federal reserve agent: Information concerning member banks to be furnished Federal Reserve Board by................................................................................................................ 527 527 Special examination of member banks to be approved by............................. Federal reserve banks: Circulation may be issued to................................................................................. 317 Examination of......................................................................................................... 527 440 Examinations of, by Federal Reserve Board..................................................... Fiscal agents of United States.............................. ............................................... 615 Government depositaries........................................................................................ 615 Government deposits in......................................................................................... 244 Reserve required to be held with, by banks elsewhere than in reserve cities....................................................................................................................... 405 Reserve required to be held by reserve city banks.......................................... 406 Reserve required to be held by central reserve city banks............................ 407 Reserve, withdrawal of, by member banks........................................................ 409 Special examination of member banks may be ordered by ............................ 527 Statements and reports by..................................................................................... 440 Treasury gold notes may be obtained in exchange for certain United States bonds...................................................................................................................... 318 United States bonds, purchase of, by.................................................................. 316 Federal Reserve Board: Approval required for exchange of United States bonds for Treasury gold notes....................................................................................................................... 318 401 Central reserve cities may be changed or added to, by................................... Comptroller of the Currency ex officio member of............................................ 101 Examination of Federal reserve banks ordered by........................................... 527 Examiners’ salaries fixed by................................................................................. 527 Federal reserve banks may be required to purchase United States bond? by. 316 Federal reserve notes to be issued by Comptroller of Currency under the supervision of........................................................................................................ 100 Information concerning member banks to be furnished by Federal reserve agents..................................................................................................................... 527 Interlocking directorate act as to banks and trust companies to be enforced by............................................................................................................................ 235 Issue of Federal reserve notes under supervision of......................................... 100 May change or add to central reserve cities....................................................... 401 Permission for member bank to secure discounts for nonmember banks may be granted b y ....................................................................................................... 408 Reduction of capital to be approved by............................................................. 230 Reserve cities may be changed or added to by................................................. 40 L Reserve withdrawals under regulations b y ........................................................ 409 Special examination of member banks to be approved by............................. 527 Statements and reports from Federal reserve banks and member banks may be required by...................................................................................................... 440 240 INDEX TO NATIONAL-BANK ACT, ETC. Federal reserve notes: Paragraph. Comptroller of Cunency to issue, under supervision of Federal Reserve Board....................................................................................................................... 100 Execution of laws relating to.................................................................................. 100 Issue of........................................................................................................................ 317 Federal Trade Commission, enforcement of part of interlocking directorate act by .................................................................................................................................... 235 519 Fees (see Examiners; Receivers), protesting circulation......................................... Fees not to be paid officers, directors, or employees of member bank.............. 438 Fifth-Third National Bank, Cincinnati, Ohio, charter number changed............. 802 Filling vacancies.............................................................................................................. 237 Fine. (See Penalty.) Firm. (See Liability of association.) First lien, United States has, on all assets.................................................................. 511 Fiscal agents (see Agent; Government depositaries), Federal reserve banks as.. 615 Five per cent redemption fund..................................................................................... 414 Not counted as reserve............................................................................................ 412 Foreign branches, national banks may establish....................................................... 210 Foreign coins not legal tender....................................................................................... 719 Issue of certificates on gold.................................................................................... 754 Forfeiture of bonds when association refuses to redeem circulation...................... 508 Forfeiture of charter, suit to be brought for, by Comptroller of the Currency___ 526 Forged signatures on bank notes not to prevent redemption of............................. 417 Forgery of United States securities............................................................................... 740 Formation of national banking associations................................................................ 201 Form of report of condition............................................................................................ 440 Franchise, forfeiture of.................................................................................................... 526 Fraudulent notes, United States and national-bank officers to mark.................... 748 Furniture for Currency Bureau...................................................................................... 108 INDEX TO NATIONAL-BANK ACT, ETC# G. 241 Paragraph. Gain from failure to redeem circulation of extended banks................................... 220 General fund of United States may be deposited in Federal reserve banks.. . . 615 Gifts, not to be made to officer, director, or employee of member bank.......... 438 Gold: Banks not required to take circulation of other banks at par......................... 421 Certificates not to be issued when reserve of gold coin and bullion is depleted. 754 Certificates, when part of national-bank reserve............................................... 433 Circulation of gold banks redeemable in............................................................. 341 Deposit of, for certificates................................................................................... 433,754 Dollar, standard unit of value............................................................................... 749 Issue of certificates of deposit of....................................................................... 433, 754 Organization of gold banks..................................................................................... 341 Reserve of one hundred and fifty millions......................................................... 750 Reserve of gold banks to be silver and................................................................ 342 Taxation of, gold certificates, etc., by State...................................................... 717 Gold banks: Circulation of, issuable........................................................................................... 341 Conversion of............................................................................................................ 343 Deposit of bonds by................................................................................................ 341 Exempted from provisions relative to other bank circulation........................ 421 Organization of......................................................................................................... 341 Reserve required for............................................................................................ 342,401 Tax on circulation.................................................................................................. 444 Gold bank notes.............................................................................................................. 341 Gold certificates: Deposit of gold for.............................................................................................. 729, 754 Deposit of foreign gold coin for............................................................................. 754 Issue of, prohibited, when..................................................................................... 729 Minimum denominations................................................................................... 729, 754 Payable to order...................................................................................................... 754 Receivable for.............................................................................................. 433, 719, 754 Gold coins: Foreign, not legal tender........................................................................................ 719 United States, legal tender.................................................................................... 720 United States, legal tender in Philippine Islands............................................ 719 318 Gold notes, issue of, in exchange for certain United States bonds....................... Gold reserve in Treasury, gold certificates not to be issued wlien depleted.......... 754 Government deposits..................................................................................................... 615 Government depositaries: Deposit ana withdrawal of public moneys.......................................................... 730 Deposits by certain postmasters........................................................................... 731 Designation and duties of...................................................................................... 243 Federal reserve bank as......................................................................................... 244 National banks as.................................................................................................... 243 National-bank circulation to be received by..................................................... 243 National banks as financial agents of the Government.................................... 243 Penalty for misapplication of money-order funds............................................. 732 Penalty for unauthorized deposit of public moneys......................................... 737 Penalty for unauthorized receipt or use of public moneys............................. 738 Reserves on. (See Federal Reserve act, par. 619.) Secretary of the Treasury to designate................................................................ 243 Securities to be deposited by................................................................................ 243 Government’s funds to be deposited, where..................................... ....................... 615 Gratuity—Bank not to grant gratuity to any national-bank examiner................ 438a Guaranty law: Kansas........................................................................................................................ 901 Oklahoma................................................................................................................. 900 Guaranty of deposits by national banks.................................................................... 903 Guaranty of solvency of bank..................................................................................... 902 Guardian, power of national bank to act as.............................................................. 208 Guardians, not personally liable................................................................................. 242 164312°—20------16 242 INDEX TO NATIONAL-BANK ACT, ETC. H. Hawaii: Paragraph. National banking laws applicable to................................................................... 801 Reserve requirements, etc., for national banks i n ......................................... 411 House of Representatives, Comptroller’s report to be sent t o .............................. 112 Hypothecation: Of capital stock by directors restricted............................................................. 233 Of circulation prohibited...................................................................................... 428 Of stock by directors, prohibited......................................................................... 236 INDEX TO NATIONAL-BANK ACT, ETC. I. 243 P aragraph . Illegal preference of creditors....................................................................................... 529 Illegal use of title “ National” ...................................................................................... 530 Impairment of capital, assessment for......................................................................... 430 Imports and internal taxes, duties on, may be paid by certified check............... 769,770 Incomplete circulation (see also Circulation); Redemption of............................... 417 Increase of capital................................................................................................ 228,229,304 Individual liability, enforcement of........................................................................... 515 Individual liability of shareholders.......................... .................................................. 240 Information concerning member banks to be furnished Federal Reserve Board 527 by Federal reserve agent........................................................................................... Injunction. (See Comptroller; Suits.) Insolvency: Assets, distribution of, by receiver...................................................................... 517 Expenses incident to, report of............................................................................ I ll Funds of, where deposited..................................................................................... 515 Impairment of capital............................................................................................. 430 Jurisdiction of courts to enjoin Comptroller....................................................... 701 Jurisdiction of national-bank cases...................................................................214,218 Notice to creditors of associations in................................................................... 516 Penalty for issuing circulation of associations in............................................... 747 Preference of creditors............................................................................................ 529 Receiver, appointment of...................................................................................... 515 Receiver, duties of.................................................................................................. 515 Receiver, when may be appointed.................................................................. 515,520 Redemption of circulation of associations in.................................................... 505 Shareholders’ agent................................................................................................. 522 Taxes on banks in, remitted.............................................................................. 450, 715 Inspection of list of shareholders................................................................................. 439 Installments, capital stock may be paid in............................................................... 226 Installments, failure to pay........................................................................................... 227 Insurance agent, when national bank may act as agent for insurance company.. 209 Insurance company, insurance of solvency of bank by........................................... 902 Insurance of deposits by national banks.................................................................... 903 Interest-bearing Treasury notes are legal tender....................................................... 727 Interest in national banks prohibited: By Comptroller........................................................................................................ 106 By Deputy Comptroller......................................................................................... 106 Interest. (See also Usury): On bonds deposited with Treasurer..................................................................... 311 Rate of, chargeable by national banks................................................................ 422 Interlocking directorates, when forbidden............................................................. 234,235 Internal Revenue, Commissioner of: Penalty for failure to make returns to, of taxable circulation....................... 712 Remission of tax against insolvent State banks............................................. 450, 715 Semiannual return to, of taxable circulation other than national.................. 711 Internal taxes, certified checks receivable for, under certain conditions............ 770 International bimetalism, act March 14, 1900, relative to...................................... 762 Interstate Commerce Commission, enforcement of act in reference to interlock ing directorates, as to common carriers, by............................................................ 235 Issue and Redemption Divisions established, Treasurer’s Office.......................... 752 Issue of: Circulation by Comptroller of Currency............................................................. 323 Circulation to Federal reserve banks................................ 1................................ 317 Gold certificates....................................................................................................... 433 Gold certificates and gold certificates payable to order................................... 754 Gold notes, provision for........................................................................................ 341 Notes under $5 limited........................................................................................... 329 Post notes, etc., prohibited................................................................................... 338 Silver certificates..................................................................................................... 755 Treasury gold notes in exchange for certain United States bonds................ 318 Issuing circulation of expired associations, penalty for........................................... 747 Isthmian Canal Commission, estimate of cost of Panama Canal............................ 767 244 INDEX TO NATIONAL-BANK ACT, ETC. J. Judgment (see also Suits): Paragraph. Appointment of receiver when judgment obtained against bank............ 520 Illegal preference of creditors...................................................................... 529 Jurisdiction (seeCrimes, jurisdiction, etc.) of suits by or against national banks. 218,423 K. Kansas, deposits guaranty law..................... 901 INDEX TO NATIONAL-BANK ACT, ETC. 245 . 11 Larceny. (See Crimes, jurisdiction, etc.) Lawful money: Paragraph. Defined................................................................................................................... 342,414 Defined for gold banks............................................................................................ 342 Deposit of, to retire United States bond-secured circulation.............. 312, 313,314 706 Exemption of circulation from taxation, when, deposited.............................. Expiring associations to deposit........................................................................... 221 Extended banks to deposit.................................................................................... 220 Five per cent fund...............................................................................................414,416 Forfeiture of bonds for failure to redeem circulation in................................... 508 Limit of amount, to be deposited monthly........................................................ 314 Liquidating associations to deposit...................................................................... 502 Liquidating associations, consolidating not to deposit..................................... 503 Payment of protested circulation in .................................................................... 510 Protest of circulation for failure to redeem in.................................................... 507 Receiver to be appointed for failure to maintain reserve of........................... 402 Redemption account, disposition of..................................................................... 416 Reserve to be............................................................................................................ 402 Withdrawing circulation, deposit of................................................. 312, 313, 314,414 Lawful-money reserve, determined by deposits.................................................... 342,410 Legal-tender coins, Philippine Islands...................................................................... 719 Legal tender: Foreign coins not accepted as............................................................................... 719 Gold coins................................................................................................................. 720 724 Minor coins............................................................................................................... Silver dollars......................................................................................................... 722, 751 Subsidiary silver coins............................................................................................ 723 United States notes..................................................................................... 725, 726, 727 Liability: Association’s, for pledging, etc., United States notes, etc.............................. 432 Converted State bank, for old notes..................................................................... 713 Creditor’s bill against shareholders....................................................................... 521 Enforcement of individual, by receiver.............................................................. 515 Estates owning stock subject to............................................................................ 242 False certification of checks.................................................................................. 434 Individual, of directors.......................................................................................... 526 Individual, of shareholders................................................................................... 240 Limited to amount of capital, except.................................................................. 427 Of stockholders who have transferred their shares............................................ 241 Shareholder’s, debars from voting........................................................................ 231 Shareholders of certain banks exempt from....................................................... 240 Trustees, exempt from, when................................................................................ 242 Liabilities: Associations organized under the act of February 25, 1863............................ 247 Change of title or location not to affect........................................................... 212, 213 Comptroller’s annual report to contain statement of national banks............ 110 Converted State banks............................................................................................ 713 Deficiency in reserve not to increase................................................................... 402 Deposit of lawful money relieves from, on circulation..................................... 504 Duties of receiver.................................................................................................... 515 Exceptions to limitation........................................................................................ 427 Extended associations............................................................................................ 218 Incurred under provisions of Federal reserve act, not considered borrowed money.................................................................................................................... 427 Limit of, for national banks................................................................................... 427 Liquidating associations, on consolidation......................................................... 503 Loans, restrictions on.............................................................................................. 425 Reports of condition to show................................................................................. 440 Restrictions on......................................................................................................... 427 Statements of condition to show........................................................................... 440 To stockholders for unpaid dividends not considered borrowed money....... 427 Lien, United States has paramount, on assets of association................................511,769 246 INDEX TO NATIONAL-BANK ACT, ETC. Limitations: Paragraph. Associations, corporate existence.......................................................................... 204 Bonds, withdrawal of...........................................................................................311, 312 Borrowed money not to exceed capital................................................................ 427 245 Capital, converted State banks............................................................................. Capital stock— Increase of...................................................................................................... 228, 229 Payment of........................................................................................................ 226 Reduction of...................................................................................................... 230 Requisite amount of......................................................................................... 224 Circulation— Denominations.................................................................................................. 324 Deposit of lawful money on withdrawing................................................... 312 Exempt from tax, when. ✓.............................................................................. 706 Obtainable.......................................................................................................... 323 Obtainable by gold banks............................................................................... 341 Tax on............................................................................................................. 444, 714 To be taken at par............................................................................................ 421 Unauthorized, tax on................................................................................... 708-710 Corporate existence of converted gold banks...................................................... 343 Creditors of insolvent banks, notice to.......................................................... 516 Creditors of insolvent banks, illegal preference.................................................. 529 Directors, number of................................................................................................ 232 Dividends.............................................................................................................. 424, 429 Expiration of corporate existence....................................................................... 221 Extension of corporate existence..................................................................... 215, 222 Gold certificates, denominations o f..................................................................... 433 Impairment of capital............................................................................................ 430 Interest rate.............................................................................................................. 422 Isssue of notes under $5........................................................................................... 329 Jurisdiction, general, of national-bank cases........................................ 214,218, 701 Lawful money deposited to retire circulation.................................................. 313 Liability of national banks..................................................................................... 427 Location of associations, change of....................................................................... 211 Loans to one individual, e t c ................................................................................. 425 “ National,” in title of bank................................................................................. 530 Place of business...................................................................................................... 400 Public depositaries.................................................................................................. 243 Real estate holdings................................................................................................. 223 Reserve, gold banks................................................................................................. 342 Receiver, appointment of....................................................................................... 520 Receiver, purchase of property to protect trust................................................. 523 Reports of condition, transmitted......................................................................... 440 Reports of earnings and dividends, transmitted................................................ 442 Reserve requirements.............................................................................................. 402 Reserve with central reserve agents......................................................... 401,405,406 Reserve with Federal reserve banks..................................................................... 405 Reserve with reserve agents............................................................................... 402,405 Shareholders, personal liability of........................................................................ 240 Shareholders, personal liability of shareholders of certain converted banks.. 240 Shares of stock, par value....................................................................................... 225 Shares of stock, directors to own........................................................................... 233 State taxation of money.......................................................................................... 717 State taxation of national banks........................................................................... 451 Stock purchased or acquired.................................................................................. 426 Suits, conduct of....................................................................................................... 700 Time for which own stock taken for debt may be held.................................... 426 Time in which recovery may be made for usurious interest charges.......... 423 United States bonds deposited.............................................................................. 302 Visitorial powers..................................................................................................... 528 Voluntary liquidation, vote................................................................................... 500 Voluntary liquidation, deposit of lawful money................................................ 502 Voters at elections................................................................................................... 231 INDEX TO NATIONAL-BANK ACT, ETC. 247 Liquidation: Paragraph. Bonds withdrawn.................................................................................................... 504 Creditor’s bill against shareholders...................................................................... 521 Consolidation.................................................... ....................................................... 503 221 Expiring associations to comply with provisions for........................................ Lawful money to be deposited.............................................................................. 502 Notice of, to be published..................................................................................... 501 Penalty for issuing circulation of associations in............................................... 747 Redemption of circulation of associations in.................................................. 505,506 Sale of bonds, when................................................................................................ 504 Vote required........................................................................................................... 500 Liquidation and receivership (see also Liquidation: Receiver): Bonds, deficiency in, first lien on assets for redemption of circulation........ 511 Bonds, forfeiture of................................................................................................. 508 Bonds, sale of, at auction....................................................................................... 511 Bonds, sale of, privately........................................................................................ 512 Bonds, withdrawal of.............................................................................................. 504 Charter, forfeiture of............................................................................................... 526 Circulation, protest of............................................................................................. 507 Consolidation, provisions for................................................................................. 503 Creditor’s bill against shareholders.................................................................... 521 Deposit of collections by receiver...................................................................... 515 Deposit of lawful money on liquidation............................................................ 502 Distribution of assets of insolvent associations................................................. 517 Enjoining proceedings........................................................................................... 518 Enjoining proceedings, where brought.............................................................. 702 Expiring associations............................................................................................. 221 Illegal preference of creditors.............................................................................. 529 Jurisdiction, general, of national-bank cases..................................................... 214 Jurisdiction of district courts................................................................................ 701 Notice of vote to liquidate..................................................................................... 501 Notice to creditors of insolvent associations....................................................... 516 Notice to present circulation for redemption..................................................... 510 Penalty for issuing circulation of expired associations..................................... 747 Receiver, appointment of...................................................................................... 515 Receiver, purchase of property to protect trust................................................ 523 Receiver, when may be appointed...................................................................... 520 Receivership, expenses of...................................................................................... 519 Shareholders’ agent, appointment of................................................................... 522 Shareholders’ agent, duties of............................................................................... 522 Suits, conduct of...................................................................................................... 700 Suspension of business for nonpayment of circulation..................................... 509 Taxes on insolvent associations remitted........................................................ 150, 715 Vote required for liquidation................................................................................ 500 List of shareholders......................................................................................................... 439 Loans: Associations’ liability restricted............................................................................ 427 Bank not to grant loan to any national bank examiner................................. 438a Circulation as collateral for, restricted.............................................................. 428 Limitation of, to one individual, etc.................................................................. 425 No officer, director, or employee to receive any commission for any loan.. 438c On farm lands...................................................................................................... 205, 223 Prohibited on security of own stock.................................................................... 426 Prohibited when reserve is short.......................................................................... 409 Real estate, prohibited......................................................................................... 223 Location (see also Title and location): Change of.............................................................................................................. 211,803 Of banking house..................................................................................................... 400 Organization certificate, to state.......................................................................... 202 Losses, bad debts and, to be deducted from profits before declaring dividend.. 429 Lost or stolen national-bank notes, redemption of................................................... 417 248 INDEX TO NATIONAL-BANK ACT, ETC. M. Maceration: Paragraph. Redeemed circulation to be disposed of by........................................................ 340 Redeemed circulation of failed and liquidated banks to be disposed of by. 506 Management by directors............................................................................................... 232 Maximum. (See Bonds; Capital; Circulation; Limitations.) May change name and location, how........................................................................... 211 232 Meetings, annual.............................................................................................................. Member bank examiners................................................................................................ 527 Member banks: Depositaries of United States................................................................................. 615 Examinations by Federal Reserve Board........................................................... 527 Limit to deposit that may be kept with nonmember bank............................. 408 Officer, director, or employee not to receive any fee, commission, etc___ 438 Prohibited from securing discounts from Federal reserve banks for non member banks....................................................................................................... 408 Provisions for national banks outside of continental United States to become 411 Reserve requirements.................................................................................. 403-412-413 Reserve, withdrawal of, from Federal reserve banks....................................... 409 Statement and reports by....................................................................................... 441 Method of refunding United States bonds as permitted by Federal reserve act. 316 Minimum (see Bonds; Capital; Circulation; Limitation) amount of capital.......... 224 Minor coins: Philippine Islands, legal tender............................................................................ 719 724 United States, when legal tender.............. ........................................................... Misapplication: Money-order funds................................................................................................... 732 Penalty for................................................................................................................ 436 Misdemeanor. (See Crimes: Penalty; Official malfeasance.) Money-order funds, misapplication of......................................................................... 732 Moneys. (See Lawful money; Legal tender; Circulation; Public moneys.) Monthly installments, capital may be paid in .......................................................... 226 Mortgages: Assignment of, when illegal................................................................................... 529 Assignment, when official malfeasance................................................................ 436 Real estate, possession, etc., of, by association.................................................. 223 Mutilated, circulation of failed and liquidated to be............................................... 506 Mutilated or worn circulation, redemption of........................................................ 339,414 INDEX TO NATIONAL-BANK ACT, ETO. N. 249 Paragraph. Name, change of, by national bank...........................................................................211,803 202 Name of association to be approved of by Comptroller of Currency..................... N ational, use of the word, in titles of associations other than national, prohibited. 530 National-bank act: Authority for title.................................................................................................... 200 Provides for a national currency, etc.................................................................. 200 Status of national banks organized under the act of February 25, 1863 ___ 247 N ational-bank examiners............................................................................................... 527 National Banking Association defined........................................................................ 300 National Banking Associations: 206 Acceptance of drafts and bills of exchange........................................................ Amendment of articles of association restricted................................................ 225 Articles of association entered into by................................................................. 201 Borrowed money restricted.................................................................................... 427 Branches may be retained by converted State banks...................................... 246 Capital required....................................................................................................... 224 Cancellation of redeemed circulation.................................................................. 514 Certificate of officers and directors....................................................................... 319 Change of name and location................................................................................ 803 Change of title and location............................................................................... 211-213 Charter forfeiture..................................................................................................... 526 Charter number to be printed on circulation of................................................ 325 Circulation obtainable by...................................................................................... 323 Circulation of, tax on................................................................................... 444-450, 717 Circulation of, to be redeemed in United States notes.................................... 414 Circulation to be taken at par................................................ : ............................. 421 Circulation of, for what receivable....................................................................... 337 Circulation unsigned or with forged signatures to be redeemed..................... 417 Closed bank circulation...................................................................................... 505, 506 Comptroller and Deputy Comptroller not to be interested in, issuing circu lation...................................................................................................................... 106 Consolidation, no deposit required for circulation of liquidated banks___ 503 Conversion of State banks into.............................................................................. 245 Corporate and incidental powers of...................................................................... 204 Defined...................................................................................................................... 300 Depositaries of public money................................................................................ 243 Deposit of bonds by, requirement repealed....................................................... 302 Directors of, individually liable, when............................................................... 526 Directors, number and election of........................................................................ 232 Directors, oath of..................................................................................................... 236 Directors, qualifications of..................................................................................... 233 Election, holding annual.................................................................................... 232,238 Enjoining proceedings............................................................................................ 518 Examination of, prior to being authorized to begin business..................... 319, 320 Examiners of............................................................................................................. 527 Excepted from certain taxes on circulation....................................................... 714 221 Expiration of corporate existence, provisions on.............................................. Extended bank circulation.................................................................................... 220 Exchange of bonds.................................................................................................. 305 Extension of corporate existence of.................................................................. 215,217 Foreign branches..................................................................................................... 210 General provisions respecting bonds.................................................................... 311 Gold bank circulation, provisions for issuing..................................................... 341 Gold banks may be organized............................................................................... 341 Gold banks, conversion of...................................................................................... 343 Increase of capital stock by............................................................................... 228,229 Insurance or guaranty of deposits by................................................................... 903 Lending on own stock prohibited......................................................................... 426 250 INDEX TO NATIONAL-BANK ACT, ETC. National Banking Associations— Continued. Paragraph. Liquidating bank circulation............................................................................. 502-506 Liquidation, provisions for................................................................................. 500-504 Loans on farm lands................................................................................................ 205 Lost or stolen notes of, to be redeemed................................................................ 417 Not required to deposit United States bonds..................................................... 302 Organization certificate to specifically state...................... ................................ 202 Payment of stock prior to beginning business.................................................... 226 Place of business....................................................................................................... 400 Political contributions prohibited......................................................................... 437 Post notes, issue of, prohibited.............................................................................. 338 Power to act as trustee, administrator, executor, or registrar of stocks and bonds....................................................................................................................... 208 Power to insure solvency of bank......................................................................... 902 Preparation of bank circulation............................................................................. 324 President of, to be chosen by board..................................................................... 239 Publication of certificate of authority.................................................................. 321 Purchasing own stock prohibited.......................................................................... 426 Receiver may be appointed for failure to restore capital................................. 227 Reduction of capital stock...................................................................................... 230 Receiver for, when may be appointed................................................................. 520 Redemption and destruction of circulation of........................................ 339, 340, 414 Redemption account, disposition of..................................................................... 416 Regulation of business of........................................................................................ 400 Relation of bond deposit to capital of.................................................................. 304 Reserve requirements.......................................................................................... 403- 412 411 Reserve requirements outside of continental United States........................... Security for circulation........................................................................................ 302, 303 Shares of stock........................................................................................................... 225 Shareholders of, qualifications of, at election..................................................... 231 Shareholders’ agent.................................................................................................. 522 Shareholders of, personally liable......................................................................... 240 Shareholders of, when not personally liable....................................................... 240 Status of, organized under the act of February 25, 1863.................................. 247 Subscribed stock not paid for, forfeited to.......................................................... 227 Suspension of business after default to pay circulation.................................... 509 Taxation of circulation of, by States, etc........................................................ 716, 717 Tax provisions restricted......................................................................................... 714 Taxes on insolvent, remitted.............................................................................. 450, 715 Transfer of shares of stock........................................ ............................................. 241 Where proceedings to enjoin must be brought................................................... 702 Withdrawing circulation.............................................................................. 312, 313, 314 National banks deemed citizens of States in which located................................... 214 National banking laws applicable to Hawaii.............................................................. 801 National banking laws applicable to Porto Rico....................................................... 800 739 National-bank notes obligations of the United States.............................................. National-bank notes, penalty for counterfeiting........................................................ 714 Newspaper: Certificate of authority to commence business to be published in ................ 321 Election notice to be given in............................................................................... 238 Impairment of capital, notice to be published in............................................. 430 Liquidation notice to be published in................................................................. 501 Notice of meeting to elect shareholders’ agent to be published in................ 522 Notice to creditors of insolvent banks to be advertised in.............................. 516 Reports of condition to be published in............................................................... 440 Sale of stock of delinquent shareholders to be published in........................... 227 New York City: Associations in, reserve agents........................................................................... 402. 420 Bonds of liquidated banks that failed to make deposit, to be sold in.......... 504 Bonds, sale of forfeited, in...................................................................................... 511 Designated as central reserve city........................................................................ 401 Notice of expiration of corporate existence to be published in paper in___ 221 Notice of voluntary liquidation to be published in paper in.......................... 501 Net profits. (See Dividends.) INDEX TO NATIONAL-BANK ACT, ETC. 251 Nonmember banks: Paragraph. Amount of deposit that may be kept with, by member banks, restricted. . 408 Discounts from Federal reserve banks not allowed through member banks.. 408 Reserve requirements for national banks that are............................................ 411 Nonresidents: Directors.................................................................................................................... 233 State, etc., taxation of stock of............................................................................. 451 No release from liabilities by change of title or location......................................... 213 Notary public: Acknowledgment of organization certificate before.......................................... 203 Acknowledgment of reports............................................................................... 440-442 Protest of circulation by ....................................................................................... 507 Notes (see Circulation) of the United States are legal tender............................. 725-727 Notice (see Publication; Printing): Creditors of insolvent banks to present claim.................................................... 516 Of election................................................................................................................ 238 Of sale of bonds....................................................................................................... 511 Of transfer of bonds to be given association...................................................... 308 To present circulation for redemption when bonds have been forfeited___ 510 414 Notification of redemption of circulation by United States Treasurer................. Number of: Central reserve cities.............................................................................................. 401 Copies of annual report....................................................................................... 112,113 Examinations to be made...................................................................................... 527 Reports of condition that may be called for...................................................... 440 Null and void, illegal preference................................................................................. 529 252 INDEX TO NATIONAL-BANK ACT, ETC. O. Oath: Paragraph. Certificate of officers and directors.................................................................... 226,319 Directors..................................................................................................................... 236 Examiners may take statement under................................................................. 527 Execution of organization certificate................................................................ 203, 245 Official, by Comptroller.......................................................................................... 102 103 Official, by Deputy Comptroller........................................................................... Payment of installments......................................................................................... 226 Reports of condition, and earnings and dividends........................................ 440-442 Semiannual return of circulation.......................................................................... 446 Shareholders, list of................................................................................................. 439 Obligations of the United States: Defined....................................................................................................................... 739 Exempt from taxation............................................................................................. 716 Penalty for— Dealing in counterfeit...................................................................................... 746 Illegal possession or use of material for........................................................ 742 Passing counterfeit........................................................................................... 743 Pledging............................................................................................................. 432 Taking or having unauthorized impression of tools, etc................... 745, 746 Office force for redemption of circulation................................................................... 415 Officers (see also President; Cashier): Bonds assigned to be signed by cashier or other................................................ 306 Certificate of directors and..................................................................................... 319 Certificate of payment of increase of stock......................................................... 228 Certification of payment of stock by president or cashier............................... 226 337 Circulation properly signed by, issuable................................... ........................ Disqualified to examine national banking associations in which interested as.............................................................................................................................. 527 Election or appointment of, by directors............................................................ 204 Examination of, under oath................................................................................... 527 False certification of checks, forbidden............................................................... 434 Forfeiture of charter, provisions for...................................................................... 526 Forged signatures of, to circulation, not to invalidate...................................... 417 Fraudulent notes to be marked by....................................................................... 748 Interest rate of paid officers.................................................................................. 438e Oath, administration of, to reports....................................................................... 441 Official malfeasance, penalty for........................................................................... 436 Penalty for false certification of checks............................................................... 435 Penalty for improperly countersigned, etc., circulation.................................. 344 Penalty for issuing circulation of'expired associations.................................... 747 Penalty for official malfeasance............................................................................ 436 Penalty for pledging, etc., circulation................................................................ 432 Penalty for political contributions...................................................................... 437 Penalty for receiving commission for a loan....................................................... 438c Penalty for unauthorized receipt of public money........................................... 738 Preference of creditors............................................................................................. 529 President of board a director.................................................................................. 239 President or cashier— Certification of extension............^.................................................................. 216 Certification of expiration of existence....................................................... 221 Certification of liquidation............................................................................ 501 Waiving notice of protest................................................................................ 507 President or vice president and cashier to sign circulation............................. 324 Proxy, not to act as.................................................................................................. 231 520 Receiver, appointment of, for violation of national-bank act by................... Redemption of unsigned circulation.................................... ............................... 415 Reports of condition, verification of, by president or cashier............... . 440, 441 Reports of earnings and dividends, attestation of, by president or cashier . . 442 Shareholders’ lists verified by president or cashier........................................... 439 Taxation, circulation subject to, returns by president or cashier................. 446 Taxation, unauthorized circulation, returns by president or cashier........... 711 Officers, United States: Deposit and withdrawal of public money........................................................... 730 Penalty for improper countersigning or delivering circulation...................... 344 Penalty for unauthorized deposit of public money........................................... 737 Receiving or disbursing public money to mark fraudulent............................ 748 Offices, vaults, ete., assignment of, to the Comptroller by the Secretary...................108 INDEX TO NATIONAL-BANK ACT, ETC, 253 Official: Paragraph. Malfeasance, penalty for......................................................................................... 436 Register, information for........................................................................................ I ll Seal of Comptroller of the Currency..................................................................... 107 Oklahoma, deposit guaranty law ................................................................................. 900 Organization and powers of national banks: Amendment of articles of association................................................................... 225 Articles of association............................................................................................. 201 246 Branches of converted State banks..................................................................... Capital stock............................................................................................................. 202 Capital stock requirements.................................................................................... 224 Certificate of authority to begin business............................................................ 320 Certificate of officers and directors....................................................................... 319 Change in title and location.................................................................................. 211 Conversion of gold banks....................................................................................... 343 Conversion of State banks...................................................................................... 245 Corporate powers...................................................................................................... 204 Deposit of bonds...................................................................................................... 302 Directors, election of............................................................................................... 238 Directors, number and election of........................................................................ 232 Directors, oath of..................................................................................................... 236 Directors, qualification of...................................................................................... 233 Directors, to choose president............................................................................... 239 Directors, vacancy, how filled.............................................................................. 237 Enforcing payment of stock.................................................................................. 227 Examination preliminary to beginning business............................................... 319 Execution of organization certificate................................................................... 203 Extension of corporate existence.......................................................................... 215 Failure to hold election.......................................................................................... 238 Gold banks, conversion of...................................................................................... 343 Gold banks, organization of................................................................................... 341 Incidental powers........................ ........................................................................... 204 Increase of capital stock, provisions for.......................................................... 228, 229 Increase of capital stock, when valid.................................................................. 228 Liquidation............................................................................................................... 500 Location and title, change of................................................................................. 211 Location..................................................................................................................... 202 Organization certificate.......................................................................................... 202 Payment of stock..................................................................................................... 226 President, election of, by board........................................................................... 239 President, qualification of..................................................................................... 239 Publication of certificate of authority to begin business................................. 321 Reduction of capital stock, provisions for.......................................................... 230 Restoration of capital stock................................................................................... 227 Shareholders............................................................................................................. 202 Shareholders, personal liability of........................................................................ 240 Shareholders, qualification of, at election.......................................................... 231 Shareholders, when personally liable.................................................................. 240 Shares of stock.......................................................................................................... 225 State banks, conversion of..................................................................................... 245 State banks, converted, may retain branches.................................................... 246 247 Status of associations organized under act of Feb. 25, 1863........................... Title........................................................................................................................... 202 Title and location, change of................................................................................. 211 Vacancies in board, how filled.............................................................................. 237 Organ ization certificate: Acknowledgment of................................................................................................ 203 Certified copy of, evidence.................................................................................... 704 Comptroller to grant or withhold.......................................................................... 320 Conversion of gold banks....................................................................................... 343 Conversion of State banks...................................................................................... 245 Execution of........................................................ .................................................... 203 Sealed certificate of Comptroller, evidence...................................................... 703 Specifications in....................................................................................................... 202 Other bonds to secure deposits..................................................................................... 243 Other real estate owned............................................... ................................................. 223 Other cities may be designated as central reserve cities......................................... 401 Other reserve cities. (See Reserve cities.) Overdue paper................................................................................................................. 429 254 INDEX TO NATIONAL-BANK ACT, ETC. Panama Canal bonds: Paragraph. Additional issue........................................................................................................ 767 Available and nonavailable as security for circulation.............................. 303, 768 Issued under act Aug. 5, 1909, not receivable as security for circulation.. 768 Tax on circulation secured by........................................................................... 303,444 Panama, reserve requirements, etc., for national banks in..................................... ’ 411 Paper for printing circulating notes............................................................................. 326 Paper used for United States securities, penalty for use of without authority.. 742 Par, bonds not to be sold at less than........................................................................... 512 Par, national banks to take notes of other national banks at.................................. 425 Par value of capital stock of converted State banks................................................ 245 Par value of stock............................................................................................................ 225 Passing counterfeit circulation, penalty for................................................................ 743 Past due paper.................................................................................................................. 429 Payment of: Assessment for impaired capital............................................................................ 430 Capital stock, provisions relative to..................................................................... 226 517 Claims against insolvent banks............................................................................. Tax on circulation.................................................................................................... 444 Tax on circulation other than national................................................................ 710 Payments for: Purchase of property by receiver provided for.................................................. 525 Which, national bank notes are receivable.......................................................... 337 Penalty: Appointment of receiver for violations of act................................................. 515, 520 Bond of Comptroller................................................................................................ 102 Bond of Deputy Controller................................................................................. 103,104 Circulating notes less than $1, issue of................................................................. 718 Commission, penalty for receiving commission for a loan................................ 438c Counterfeiting circulation, e tc......................................................................... 740, 747 Dealing in counterfeit circulation....................................................................... 746 Embezzlement? abstraction, willful misapplication, false entries, etc......... 436 False certification of checks................................................................................... 435 Failure to make reports.......................................................................................... 443 227 Failure to pay installment on stock..................................................................... Failure to redeem circulation................................................................................. 508 Forfeiture of charter for violations of bank act.................................................. 526 Forging or counterfeiting United States securities............................................ 740 Illegal possession or use of material for circulation............................................ 742 345 Imitating bank circulation for advertising purposes................................... ... Improper countersigning or delivering circulation............................................ 344 Interest, unlawful.................................................................................................... 423 Interlocking directorates...................................................................................... 235 Issuing circulation of expired associations......................................................... 747 Jurisdiction of the United States courts........................................................ 214,218 Mutilating circulation............................................................................................ 346 Misapplication of money-order funds................................................................... 732 •* National, ’ ’ unlawful use of the word................................................................ 530 Official malfeasanc e.................................................................................................. 436 Passing counterfei t circulation.............................................................................. 743 Pledging United States notes or bank circulation............................................. 432 Reports to Comptroller, failure to make............................................................. 443 Reserve, maintenance of........................................................................................ 402 Reserve, shortage...................................................................................................... 409 Semiannual return of circulation, failure to make....................................... 446-449 Taking or having unauthorized impression of tools, etc.............................. 744, 745 Unauthorized deposits of public money............................................................. 737 Unauthorized receipt or use of public money................................................... 738 Usury..................................................................................................................... 422,423 Violations of any of the provisions of the bank act......................................... 526 Violations of section 22, Federal reserve act..................................................... 438f Period for which real estate may be held................................................................... 223 Personal liability. (See Shareholders; Trustees; Liability.) Personal property, shares of stock of national banks taxed as............................... 451 Philippine Islands, legal-tender coins.................................................................... — 719 INDEX TO NATIONAL-BANK ACT, ETC. 255 Philippine Islands: raragraph. Public funds in the United States to be deposited in member banks.......... 615 Reserve requirements, etc., for national banks i n . ......................................... 411 Photographing United States securities without authority, penalty for......... 742 Place of business, organization certificate to state................................................ 202, 400 Place for redemption of circulation............................................................................ 414 Place where proceedings to enjoin Comptroller must be brought......................... 702 Place where tax on shares in national banks is to be paid..................................... 451 414 Places where circulation may be redeemed.............................................................. Plates: Control of................................................................................................................... 327 Cost of engraving.......................................................................................... 220, 327, 414 Custody oi................................................................................................................. 108 Engraving of............................................................................................................. 324 Examination annually.......................................................................................... 328 Expense of examination and destruction of....................................................... 328 Extended banks...................................................................................................... 220 Liquidating bank, to be destroyed.............. . ..................................................... 328 Penalty for counterfeiting or having possession of counterfeit................... 742, 744 Penalty for taking unauthorized impression of tools, etc................................ 744 Penalty for having false impressions of tools, etc.............................................. 745 Pledging or hypothecating circulation prohibited................................................... 428 Political contributions prohibited............................................................................... 437 Population, relation of capital stock to...................................................................... 224 Porto Rico: National banking laws applicable to................................................................... 800 Reserve requirements, etc., for national banks in............................................ 411 Postal savings funds to be deposited in member banks.......................................... 615 Postmasters: Deposit of public funds by ................................................................................... 731 Misapplication of money-order funds b y . ......................................................... 732 Postmaster General, deposit of funds by authority of.............................................. 732 Post notes, national banking associations prohibited from using.......................... 338 Power: 443 Comptroller to assess fine for failure to make reports....................................... Of attorney to receive interest on bonds............................................................ 311 Of national banks to act as trustee, executor, etc............................................. 208 Of national banks to insure deposits................................................................... 903 To hold real property............................................................................................. 223 Powers (see also Comptroller) : Granted to national banks..................................................................................... 204 Incidental, of national banks............................................................................... 204 Of examiners............................................................................................................ 527 Of national banks to insure solvency of bank................................................... 902 Receiver................................................................................................................ 515 523 Shareholders’ agent................................................................................................. 522 Trust company, powers of national banks.......................................................... 208 Visitatorial, limitations of..................................................................................... 528 Preference: Tn allotment of shares in succeeding association............................................... 219 Of creditors illegal................................................................................................... 529 Preliminary examinations, expense of........................................................................ 519 Preparation of circulation, provisions for................................................................... 324 President (see also Officers): Certificate of officers and directors..................................................................... 319 Certificate of stock payment................................................................................. 319 Countersigning or delivering circulation improperly....................................... 344 Director to be.............................................................. *.......................................... 239 Election or appointment of, by directors........... ......................................... 204,239 False certification of checks by, and penalty for.......................................... 134,435 Liquidating bank, duty in.................................................................................... 501 Of the board, election of........................................................................................ 239 Official malfeasance, penalty for.......................................................................... 436 Proxy, not to act as................................................................................................ 231 Public money, unauthorized receipt of, by....................................................... 738 Reports of condition, verified b y ....................................................................... 440 Reports of earnings and dividends to be verified by....................................... 442 Signature of, forged, not to invalidate circulation............................................ 417 256 INDEX TO NATIONAL-BANK ACT, ETC. President (see also Officers)— Continued. Paragraph. Signature of, on circulation................................................................................ 324,337 Violations of act, by, penalty for...................................................................... 436,526 President of the United States, appointment of Comptroller by........................... 101 Printing: Annual report of the Comptroller, number printed and distribution o f .. 110-112 Certificate of authority to begin business............................................................ 321 325 Charter number on circulation............................................................................... Circulating notes on distinctive paper.................................................................. 326 Circulation of associations....................................................................................... 324 Circulation of extend ed banks................................................................................ 220 Creditors of insolvent associations, notice to...................................................... 516 Notice of special annual election......................................................................... 238 Notice of sale of delinquent stock.................................................................... 227,430 Notice of sale of bonds at public auction............................................................ 511 Notice of liquidation............................................................................................... 501 Notice of expiration............................................................................................... 221 Penalty for counterfeiting circulation........................ ........................................ 741 Penalty for illegal possession or use of material tor circulation...................... 742 Penalty for imitating circulation....... .................................................................. 345 Penalty for taking or having unauthorized impression of tools, etc., for. . . 744, 745 Reports of condition.............................................................................................. 440 Shareholders agent, notice of election o f ........................................................... 522 Voluntary liquidation, notice o f ......................................................................... 501 Private sale of bonds to secure circulation................................................................. 512 Proceedings: If shareholder fails to pay installments............................................................... 227 To enjoin Comptroller......................................................................................... 701, 702 Where no election is held on the proper day..................................................... 238 Profits, undivided, not considered borrowed money................................................ 427 Prohibitions: Borrowed money in excess of capital....... .......................................................... 427 Business not to be transacted until authorized by Comptroller...................... 204 Circulation, pledging of.......................................................................................... 428 Comptroller or Deputy Comptroller from being interested in any association issuing national currency................................................................................... 106 Counterfeiting, etc............................................................................................... 740, 746 Deposit of Government money in banks not belonging to Federal Reserve System................................................................................................................... 244 Imitation of circulation.......................................................................................... 345 Interlocking directorates....................................................................................... 234 Issuing circulation to unauthorized associations............................................... 344 Loaning on own stock___........................................................................................ 426 Loans in excess of a certain limit............... ....... .................................................. 425 Member bank limited in amount of deposit with, and forbidden to secure discounts from, Federal reserve banks for nonmember banks.................... 408 Mutilation of circulation........................................................................................ 346 432 National-bank notes not to be used as security for loans................................. Notes less than $1................... ................................................................................. 718 Officers of bank not to administer oath for reports of condition..................... 441 Political contributions................................... ....................................................... 437 Postmasters not to receive interest on deposits.................................................. 731 Posts notes, issue of. . . . . . . .................................................................................... 338 Public funds of Philippine Islands, postal savings or any Government funds not to be deposited in banks other than member............................... 615 Purchase of own stock............................................................................................. 426 Reserve shortage...................................................................................................... 409 Restriction as to visitatorial powers....... ............ ................................................ 528 Sale of bonds for default of payment of circulation at less than par............. 512 Unauthorized deposit of public money............................................................... 737 Unauthorized receipt of public money.............................................................. 738 Uncurrent notes not to be put in circulation..................................................... 431 United States notes not to be used as security for loans.................................. 436 Use of title ‘ ‘ National ” ....... .................................................................................. 530 Using plates to print notes without authority.................................................... 742 Usunous rate of interest.......................................................................................... 422 Voters at elections.................................................................................................... 231 Withdrawal of capital.............................................................................................. 421 INDEX TO NATIONAL-BANK ACT, ETO. 257 Pa ra gra p h . Proof of publication, report of condition.................................................................... ..... 440 Protest of circulation: Bonds forfeited, when.......................................................................................... ...... 508 Bonds, sale of, when........ . ................................................................................. 511, 512 Failure to redeem circulation..................................................................................... 507 Provisions: Appointment of receiver.. ................................................. .................................. .....515 Assessment when bank fails to make return on circulation............................ .....447 Dividends............................................. - ................................................................. .....424 Enforcing payment of tax on circulation................................................................. 448 Examination of bonds and records.................. ................................................ 309-311 Excess payment of tax on circulation, refunding: of.............................................. 449 Federal Reserve Board to sell United States bonds to Federal reserve banks....... ............. . .............................................................................................. .....316 For changes in deposit of bonds........................................................................... .....304 For deposits by disbursing officers....................................................................... .....730 For deposits by postmasters......... .......... . ........................................................... .....731 For destruction and replacing of circulation.................................................. 339, 340 For liquidation of banks at expiration of charter...................................................221 For national banks outside the continental United States to become mem ber banks................ : .................................................................................................411 For obtaining circulation....................................................................................... .....323 For organization of gold banks...................................................................................341 For redeeming circulation. ............................. ..................................................... .....414 For redemption of circulation when charter is extended................................ .....220 For reimbursement of expenses for redemption of circulation....................... .....415 For withdrawal of circulating notes..........................................................................312 Gold certificates, issue of....................................................................................... .....433 Impairment of capital............................................................................................ .....430 Inspection of list of shareholders...............................................................................439 Liquidation.......................................................................................................... 500. 501 Of articles of association............................................................................................. 20 L Of by-laws............................ .................................................................................... .... 204 Payment of tax on circulation.............................................................................. .... 444 Reports of condition............................................................................................... .... 440 Respecting bonds, general..................... .............................................................. .... 311 Retirement of circulation by sale of United States bonds.............................. .... 315 Shareholders’ agent, election of........................................................................... .... 522 Surplus....... ........ . .................................. ............. ................................................... .... 424 To be complied with before commencing business....................................... 302. 319 Proxies authorized.......................................................................................................... .... 231 Proxies can vote for shareholders’ agent.................................................................... .... 522 Publication (see also Printing): Annual election, notice of holding special......................................................... .... 238 Certificate of authority to begin business........................................................... .... 321 Creditors of insolvent associations, notice to.......................................................... 516 Nonpayment of circulation, notice to present................................................... ....510 Reports of condition of national banks............................................................... .... 440 Sale of bonds, notice of.......................................................................................... .... 511 Sale of delinquent stock, notice of................................................................... 227,430 Shareholders’ agent, notice of election of........................................................... ....522 Voluntary liquidation, notfce o f............................... ..............................................501 Public debt, national-bank circulation receivable for, with certain exceptions. 337 Public deposits (see also Deposits): Banks to give security for..........................................................................................243 Duty of disbursing officers.........................................................................................730 Duty of postmasters................................................................................................ ....731 Postmasters............................................................................................................... ....731 Purchase of real estate.................................................................................................. ....223 Public dues, certified checks receivable for, under certain conditions....................770 Public sale of stock purchased from dissenting shareholders................................. ....219 Pulp from macerated circulation................................................................................. ....340 Purchasing own stock prohibited.....................................................................................426 Purchase of property by receiver............................................................................. 523,525 Purchase of United States bonds by Federal reserve banks...................................... 316 Purpose of organization certificate to be stated therein......................................... ... 202 li . i l ° - 2 0 ----- 17 258 INDEX TO NATIONAL-BANK ACT, ETC. Q ualification: Paragraph. Comptroller of the Currency.................................................................................. Deputy Comptroller................................................................................................. Directors of national banks..................................................................................... Examiners of associations....................................................................................... Shareholders’ agent.................................................................................................. Quarters for Currency Bureau....................................................................................... 102 103 233 527 522 108 INDEX TO NATIONAL-BANK ACT, ETC. 259 R. Rate. (See Interest; Tax; Usury.) Paragraph. Rate of interest which may be charged..................................................................... 422 Ratio. (See Bonds; Capital and circulation.) Real estate: Investments and holdings restricted..................................................................... 223 Loans on, permitted with certain restrictions.................................................... 205 223 Mortgages, limited.............. . .................................................................................. Subject to State, etc., taxation............................................ ................................ 451 Real estate broker, when national bank may act as broker in procuring loans on real estate................ ............................................................................................... 209 Reassignment of bonds, liquidating bank.................................................................. 504 Receipt for bonds transferred......................................................................................... 306 Receiver: Appointment and duties of................................................................................... 515 Appointment of— For failure to dispose of own stock.............................................................. 515 For failure to restore diminished capital..................................................... 515 For false certification of checks.................................................................... 515 For nonpayment of circulation..................................................................... 515 For impairment of capital.............................................................................. 515 For insolvency.................................................................................................. 520 For nonmaintenance of reserve..................................................................... 515 When capital reduced by failure to pay installments............................. 227 Courts may enjoin................................................................................................... 518 Deposit of collections by....................................................................................... 515 Expenses of, how paid........................................................................................... 519 214 General jurisdiction of national-bank cases...................................................... Jurisdiction of district courts to enjoin Comptroller or................................... 701 National bank as receiver under trust company powers................................. 208 Purchase of property by, to protect trust.......................................................... 523 Receiverships. (See Liquidation and receivership; Receiver.) Recoinage of uncurrent subsidiary silver.................................................................. 757 Records, regulations for redemptions......................................................................... 513 Red Cross, subscriptions to........................................................................................... 771 Redeeming circulation................................................................................................... 414 Redemption: Cancellation of circulation sent for...................................................................... 514 Deposit of lawful money for, of associations in liquidation............................. 502 Division, Treasurer’s Office, established............................................................. 752 Disposition of, account........................................................................................... 416 Enjoining Comptroller............................................................................................ 518 Extended bank circulation.................................................................................... 220 First lien on assets................................................................................................... 511 Five per cent fund for— To be maintained............................................................................................. 414 Not part of lawful reserve...........................................................................412, 414 Forfeiture of bonds.................................................................................................. 508 Forged signatures not to prevent.......................................................................... 417 General provisions respecting................................................................................ 414 Incomplete circulation........................................................................................... 417 Issue and Redemption divisions established..................................................... 752 Lawful money, of circulation................................................................................ 414 Liquidating bank circulation............................................................................ 504, 505 Lost national-bank notes........................................................................................ 417 Notice to present circulation for.......................................................................... 510 Of circulating notes issued prior to extension.................................................... 220 Of circulation, place for.......................................................................................... 414 Proceeds from sale of bonds for. of circulation.................................................. 504 Profit on circulation not presented for................................................................ 220 Protest of circulation, for failure to redeem........................................................ 507 Records of.................................................................................................................. 513 Retirement account................................................................................................. 416 260 INDEX TO NATIONAL-BANK ACT, ETC. Redemption— Continued. Paragraph. Sale of bonds.......................................................................................................... 511, 512 State bank circulation............................................................................................. 706 Stolen national-bank notes..................................................................................... 417 United States notes, of circulation, in................................................................. 414 United States and Treasury notes, to be in gold............................................... 750 Unsigned circulation to be redeemed.................................................................. 417 Withdrawn circulation......................................................................................... 312, 313 Worn or mutilated circulation........................................................................... 339, 340 Redemption account, disposition of............................................................................. 414 Redemption of United States notes, gold coin and bullion to be set apart as reserve for...................................................................................................................... 750 Reduction of— Bonds to secure circulation........................... ........................................................ 311 Capital.................................................................................................................. 230, 304 Circulating notes..................................................................................................... 313 Reextension of charter................................................................................................... 222 Refunding— Bonds under provision of Federal reserve act................................................. 315 Excess payment tax on circulation..................................................................... 449 Of United States bonds.......................................................................................... 759 Of United States bonds under Federal reserve act......................................... 315 Register of the Treasury, signature on circulation................................................. 324 Registered bonds, intended by term “ United States bonds” ........................... 301 Registered bonds, exchange of coupon bonds for..................................................... 305 Registrar of stock and bonds, power of national banks to act as.......................... 208 Registry of transfer of bonds.......................................................................................... 307 Regulations for exchange of bonds............................................................................... 323 Regulations for redemption records.............................................................................. 513 Regulation of banking business: Assessment, enforcement of.................................................................................... 430 Circulation, improper use of................................................: ................................. 428 Dividends................................................................................................................... 424 Dividends prohibited, when.................................................................................. 429 Examiners, appointment of.................................................................................... 527 Examiners, compensation of.................................................................................. 527 Impairment of capital.............................................................................................. 430 Interest, limited....................................................................................................... 422 Interest, unlawful, penalty for.............................................................................. 423 Laws governing certain associations..................................................................... 300 Liability of association restricted.......................................................................... 427 Loans, restrictions on............................................................................................... 425 Net profits.................................................................................................................. 424 Place of business....................................................................................................... 400 Real estate, purchasing, etc................................................................................... 223 Reports of condition................................................................................................. 440 Reports, failure to make......................................................................................... 443 Reports, verification of........................................................................................ 441, 442 Reports of dividends and earnings........................................................................ 442 Reserve cities...................... ..................................................................................... 402 Reserve cities, balances with agents.................................................................... 406 Reserve cities, central......................................................................................... 401, 402 Reserve cities, requirements.................................................................................. 402 Reserve requirements, gold banks........................................................................ 342 Shareholders, list of.................................................................................................. 439 State taxation of associations................................................................................. 451 Stock, holding, etc................................................................................................... 426 Surplus and dividends............................................................................................ 424 Uncurrent notes, use of, prohibited...................................................................... 431 Unearned dividends prohibited............................................................................ 429 Visitatorial powers, limitation of........................................................................... 528 Reimbursement (see Circulation; Expense; Plates and dies) of expenses for redemption of circulation........................................................................................... 415 Removal of Comptroller of the Currency.................................................................... 101 Replacing worn-out and mutilated circulation.......................................................... 339 INDEX TO NATIONAL-BANK ACT, ETC. 261 Reports: Paragraph. Amendments proposed in Comptroller’s annual................................................ 110 Animal, number to be printed.......................................................................... 112.113 Annual, to be made to Congress........................................................................... 110 Banks’ , other than national................................................................................... 110 Circulation, semiannual return of......................................................................... 446 Closed banks......................................................................................................... 110.111 Condition of national banks in annual................................................................ 110 Distribution of annual........................................................................................ L12. IL3 Dividends and earnings...................................................................................... 442. 443 Failure to make, to Comptroller........................................................................... 443 List of shareholders................................................................................................. 439 Of examiners............................................................................................................ 527 Payment of capital stock................................................................................... 226, 227 Printed, number of copies of annual................................................................ 112, 113 Receiver, to Comptroller........................................................................................ 515 Statement of condition of national banks. Federal reserve banks, and member banks.................................................................................................. 440, 441 Requirements prior to commencing business............................................................ 319 Requisite: Amount of capital.................................................................................................... 224 Qualifications of directors...................................................................................... 233 Requisites of organization certificate.......................................................................... 202 Reservation of rights of associations organized under act of 1803.......................... 247 Reserve: Clearing-house certificates..................................................................................... 402 Deposits to govern amount of................................................................................ 410 Determined by deposits, not circulation............................................................ 402 Federal reserve banks, that may be held with.............................................. 405-407 Five per cent fund not counted as................................................................... 412. 414 Gold and silver, held by gold banks.................................................................... 312 Gold certificates....................................................................................................... 433 Lawful money...................................................................................................... 402,414 Maintenance of......................................................................................................... 402 None required to be held against United States deposits............................... 413 On circulation not required................................................................................... 402 Penalty for failure to maintain............................................................................. 402 Proportion of, with agents.......................................................................... 401, 405, 406 Proportion of, with Federal reserve bank........................................................... 405 Requirements....................................................................................................... 402-412 Required to be held with Federal reserve bank.............................................. 407 Requirements for gold banks................................................................................ 342 Silver certificates..................................................................................................... 729 Withdrawal of, from Federal reserve bank......................................................... 409 Reserve agents (see also Agent), balance with................................................. 401, 405. 406 Reserve cities: * Additional, provisions for.................................................................................. 401,402 (’ash reserve required............................................................................................. 406 Central, deposits in.............................................................................. 401, 402, 405, 406 Central, provisions for............................................................................................ 401 Classification of........................................................................................................ 402 Designation of.......................................................................................................... 402 Distribution of reserve to be held by banks in................................................. 40;» Names of................................................................................................................... 402 Requirements, not applicable to gold banks in San Francisco......................... 40 L Requirements of associations in........................................................................ 402, 406 Reserve requirements............................................................................................. 406 Reserve that may be held with, by banks elsewhere than in reserve cities . .. 405 Reserve requirements: Banks not in reserve or central reserve cities.................................................... 405 Central reserve cities.......................................................................................... 401.407 Country banks.......................................................................................................... 405 Estimate of............................................................................................................... 410 Five per cent redemption fund not counted as reserve................................... 412 How estimated......................................................................................................... 410 Reserve cities other than central..................................................................... 402, 406 When effective......................................................................................................... 404 262 INDEX TO NATIONAL-BANK ACT, ETC. Residences: Paragraph. List of shareholders and, reported annually......................................................... 439 List of shareholders and, in organization certificate............................................ 202 National bancs.......................................................................................................... 214 Qualifications of directors of associations............................................................ 233 Resources. (See Assets.) Restoration of capital stock, provisions for............................................................. 227, 430 Restrictions: Amount of lawful money that may be deposited to withdraw circulation.. 314 Gold certificates, issue of........................................................................................ 729 Notes less than $1..................................................................................................... 718 On banks’ indebtedness.......................................................................................... 427 On loans..................................................................................................................... 425 State tax on national-bank shares......................................................................... 451 Tax on circulation.................................................................................................... 714 Upon use of circulating notes................................................................................ 428 Visitatorial powers limited..................................................................................... 528 Resumption of specie payments................................................................................... 329 Retirement account, circulation for which deposits made to redeem...................... 416 Retirement of: Circulating notes....................................................................................................... 313 Circulation by deposit of lawful money............................................................... 314 Circulation by sale of United States bonds......................................................... 315 Retiring circulation under provisions of Federal reserve act..................................... 315 Returns. (See Circulation; Reports; Taxation.) Right of shareholders to vote........................................................................................ 231 Rooms, vaults, and furniture for Currency Bureau................................................... 103 INDEX TO NATIONAL-BANK ACT, ETC. 263 S. Para gra p h . St. Louis designated as a central reserve city........................................................... 401 Salaries of examiners...................................................................................................... 527 Sale: Assets of insolvent association, by receiver........................................................ 515 Assets of insolvent associations, by shareholders’ agent..................................... 522 Bonds, for failure to redeem circulation.......................................... 504, 508, 511, 512 Of stock purchased from dissenting shareholders........................................... 219 Stock, for delinquent payment of installment................................................. 227 Stock, for impairment of capital.......................................................................... 430 Stock taken for debt............................................................................................... 426 Savings accounts as time deposits.............................................................................. 403 Savings banks, statements to be given in annual report....................................... 110 Seal, power of association to adopt and use............................................................... 204 Seal of Office of Comptroller: Certified copy of organization certificate under, evidence................................ 704 Certificates under, competent evidence.............................................................. 703 Description, impression of, and certificate of approval by Secretary of the Treasury, to be filed with the Secretary of State............................................. 107 Devised by Comptroller and approved by Secretary....................................... 107 Secretary of Interior, report to, of bureau employees................................................. I ll Secretary of State, description, impression, and certificate of seal of Comp troller to be filed with................................................................................................ 107 Secretary of the Treasury: Agent, special, to be appointed for associations failing to redeem circula tion......................................................................................................................... 508 Appointment of clerical force, for redemption of circulation, by...................... 415 ^ ppointment of Comptroller on recommendation of.......................................... 101 Appointment and classification of clerks by...................................................... 105 Appointment of Deputy Comptroller by........................................................ 103,104 Assignment of rooms, etc., for the Comptroller by............................................ 108 Authorized to exchange registered for coupon bonds......................................... 305 Authorized to issue 3 per cent gold bonds and Treasury gold notes.............. 3L8 Certified checks may be received for duties, internal taxes, and all public dues upon regulations prescribed by................................................................ 770 Circulating notes printed under direction of...................................................... 326 Circulation, worn or mutilated, destruction of, by......................................... 339, 340 i 05 Clerks for Comptroller of the Currency appointed by......................................... Deposit of Government moneys upon direction of............................................ (>L5 Depositaries of public moneys designated by.................................................... 243 Duties of Comptroller under general direction of.............................................. 100 Earnings from Federal reserve banks, disposition of, by................................. 750 Examiners, appointments to be approved by.................................................... 527 Exchange of bonds, terms of, prescribed by.................................................. 3J1, 323 Gold certificates, authority to issue................................................................. 433, 729 Gold certificates to be issued by........................................................................... 754 Gold dollar to be maintained as standard unit of value by................................. 749 Gold notes may be issued by, in exchange for certain United States bonds... 318 Gold reserve for redemption of United States and Treasury notes to be maintained by ..................................................................................................... 750 May prescribe rules for printing charter numbers on circulation................ 325 National bank examiners, appointments to be approved by........................ 527 Notice to present circulation for redemption when bonds have been for feited ...................................................................................................................... 510 Organization of national banks with capital less than $100,000 to be approved by........................................................................................................................... 224 Panama Canal bonds, additional issue by.......................................................... 767 Plates and dies, regulations for, examination of, to be approved by.......... 328 Post-office money-order funds placed in national banks designated b y .. . 732 264 INDEX TO NATIONAL-BANK ACT, ETC. Secretary of the Treasury—Continued. Paragraph. Public-money deposits............................................................................................ 730 Pulp from maceration to be disposed of by........................................................ 340 Purchase of property by receiver to be approved by................................ 524, 525 101 Recommendation of appointment of Comptroller by___! ............................... Receivers, appointment of, by Comptroller, concurrence in by, in certain cases........................................................................................................................ 402 Refunding United States bonds............................................................................ 759 Regulations for redemption records...................................................................... 513 Regulations for reimbursement of circulation retirement account.............. 416 Seal of office of Comptroller to be approved by................................................ 107 State-bank circulation, regulations for redemption of, to be prescribed by. 706 Sureties on bond of Comptroller of Currency to be approved by................ 102 Sureties on bond of Deputy Comptroller to be approve b y ........................ 103,104 When silver dollars are coined, Treasury notes to be canceled, and silver certificates to be issued by................................................................................ 753 Withdrawal of circulation to be approved by.................................................... 314 Sections of Revised Statutes, not included in the national-bank act, affecting national banks.......................................................................................................... 700-770 Security for circulation {see Bonds, United States), United States bonds a s.. 302, 303 Security for Government deposits................................................................................ 243 Security for loans: Personal...................................................................................................................... 204 United States notes and national bank notes not to be used as..................... 432 Semiannual return of circulation.................................................................................. 446 Senate: Comptroller appointed by the President, by and with the advice of.......... 101 Comptroller’s report to be sent to......................................................................... 112 Shareholders: Agent of, to return to, assets of insolvent associations...................................... 522 Annual meeting....................................................................................................... 232 Appointment and qualification of agent of......................................................... 522 Assessment for impairment of capital.................................................................. 430 Assets of insolvent association to be returned to, ratably after debts are paid. 517 Consent of, necessary to extension....................................................................... 216 Conversion of State banks, requirements............................................................ 245 Creditor’s bill against.............................................................................................. 521 Directors, election or appointment of, by....................................................... 204, 232 Dissenting to extension, may withdraw.............................................................. 219 Duties of agent of..................................................................................................... 522 Enforcement of assessment for impairment of capital stock...................... 430 Enforcing payment by, of installments............................................................... 227 Estates and funds with trustee liable for assessment........................................ 242 Extension of corporate existence...................................................................... 215, 216 Failure to pay installments.................................................................................... 227 Impairment of capital, assessment....................................................................... 430 Increase of capital stock by............................................................................... 228, 229 Individual liability of............................................................................................. 240 Liability, enforcement of, by receiver............................................................. 515,520 Liability of, who have transferred their shares.................................................. 241 List of, to be kept and sent to Comptroller........................................................ 439 List of, subject to inspection................................................................................. 439 Location, change of, b y .......................................................................................... 211 Names, residences, and number of shares held by each in organization certificate............................................................................................................... 202 Personal liability of, in certain converted State banks.................................... 240 Provision for election by, when............................................................................ 238 Proxies, votir g by................................................................................................... 231 Qualifications of directors....................................................................................... 233 Red uction of capital stock by ............................................................................... 230 Rights, and liabilities of, on transfer of shares................................................... 225 Title and location of association, change of, by................................................. 211 Vote of, necesary to place association in liquidation........................................ 500 Voters, qualification of............................................................................................ 231 INDEX TO NATIONAL-BANK ACT, ETC. 265 Shares: Paragraph. Association not to own or hold its own, except...................... ^.............. ........... ......426 Capital stock number, and name of holders to be stated in organization certificate.............................................................................................................. ......202 Consent of owners of two-thirds, necessary to extension................................. ..... 216 Converted State bank to be the same as prior to conversion............................... 245 Disposition of, taken for debt............................................................................... ......426 Fifty per cent of aggregate value of, to be paid in prior to beginning busi ness .................................................................................... ................................... ..... 226 Holding of, in other banks by converted banks authorized........................... ..... 245 Installments, payment, and certification of............................................................ 226 List of owners of, to be kept and copy sent to Comptroller................................. 439 Loan on security of, prohibited............................................................................ ..... 426 Oath of director relative to......................................................................................... 236 Owners of two-thirds may place association in liquidation.................................. 500 Organization certificate to state capital and number of........................................ 202 Personal property................................................................................................. 225,451 Preference in allotment of, in succeeding associations..........................................219 Purchased or acquired..................................................................................................426 Qualifications of directors...................................................................................... ..... 233 Receiver may be appointed for failure to dispose of, taken........................ 426, 515 Sale or forfeiture of, for failure to pay installments due....................................... 227 Sale of, when necessary.............................................................................. 219, 426, 430 State taxation of............................................................................................................451 Transfer of................................................................................................................ .....225 Value of, of shareholders dissenting to extension, how ascertained.............. ..... 219 Value, par, of each.............................................................................................. 225, 245 Voting.................................................: ..................................................................... .....231 Signature on circulation: Not required for redemption of.................................................................................. 417 President or vice president and cashier................................................................... 324 Treasurer and Register, United States................................................................ ..... 324 Silver: Construed to be lawful money, when....................................................................... 342 Reserve of gold banks to gold and....................................................................... ..... 342 Silver certificates: Clearing-house balances payable in..................................................................... ..... 729 Denominations of.......................................................................................................... 755 Issue of, in place of Treasury notes, when......................................................... ..... 753 Issue of, when...................................................................................................... 753, 755 Reserve of national banks may be....................................................................... ..... 729 Silver coinage: Dollars................................................................................................................... 751,753 Subsidiary............................................................................................................. 756, 757 Silver coins: Foreign, not legal tender.............................................................................................719 Philippine Islands, legal tender........................................................................... .....719 United States, are legal tender......................................................................... 722, 723 Silver dollars to remain legal tender. ................... ........ ....................................... 722, 751 Solicitor of the Treasury, conduct of suits under direction and supervision of. . . 700 Special acts relating to national banks....................................................................... ..... 803 Special agent. (See Agent.) Special customs deposits, certified checks receivable for, under certain condi tions............................................................................................................................... .....770 Special examination for extension of charter.......................................................... .....217 Special reports, authority for.......................................................... ........................... .....440 Specie payments, no notes under $5 to be issued after resumption of................. .....329 Standard unit of value, gold dollar declared to be........................................................749 State banks: Branches of, converted........................... .............................................................. .....246 Circulation of, when exempt from taxation....................................................... .....706 Conversion of.................................................................................................................245 Examination (member banks).......................... ........... ........................................ .....527 Penalty for failure to make return of tax on circulation................................. .....712 Penalty for unauthorized receipt of public money................................................738 Reports of, provided for......................................................................................... .....110 266 INDEX TO NATIONAL-BANK ACT, ETC. State banks— Continued. Paragraph. Return of taxable circulation................................................................................ 711 Shareholders’ personal liability, exceptions....................................................... 240 Shares of, converted................................................................................................. 245 Statement of condition............................................................................................ 110 Tax on circulation.................................................................................................... 705 Tax on circulation of converted............................................................................ 713 Tax on unauthorized circulation....................................................................... 708-710 State courts. (See Comptroller; Suits.) State, Territory, or District: Change of title or location of associations............................................................ 211 245 Conversion of bank organized under authority of laws of................................ Interest, national banks not to take, etc., in excess of legal rate in.............. 422 “ National, ” use of the word in titles................................................................... 530 Qualification of directors........................................................................................ 233 Proceedings to enjoin Comptroller or receiver to be brought in district in which association is located............................................................................... 702 Taxation of circulation of State, etc., associations........................................ 705,715 Taxation of money by......................................................................................... 710,717 Taxation of national banks by............................................................................... 451 Stationery, etc................................................................................................................. 108 Status not changed by extension of charter............................................................... 218 Status of associations organized under the act of 1863............................................. 247 Statutory bad debts defined.......................................................................................... 429 Stock: Amount of capital, to be stated in organization certificate............................. 202 Increase of capital.................................................................................................... 228 245 Of national banks may be held by converted State banks............................. Par value of................. ............................................................................................ 225 Payment and certification of.................................................................................. 226 Purchased or acquired............................................................................................. 430 Reduction of capital................................................................................................ 230 Transfer of shares...................................................................................................... 225 Stocks, United States, exempt from taxation............................................................ 716 Stolen national-bank notes, redemption of................................................................. 417 Subsidiary silver coinage............................................................................................ 756, 757 Succession: Expired associations................................................................................................ 219 Period of, national banks........................................................................................ 204 Suits: Against United States officers or agents............................................................... 700 Certified copy of organization certificate evidence in...................................... 704 Circuit and district courts, jurisdiction of...............................................214, 218, 701 Corporate powers of associations............................................................................ 204 Creditors’ bill against shareholders....................................................................... 521 Crimes, jurisdiction, etc. (See Crimes.) 701 District courts, jurisdiction of , to enjoin Comptroller...................................... Enjoining Comptroller or receiver........................................................................ 518 Forfeiture of charter................................................................................................. 526 Proceedings to enjoin Comptroller to be brought, where................................. 702 Sealed certificate of Comptroller competent evidence..................................... 703 Shareholders’ agent.................................................................................................. 522 Shareholders’ liability, to enforce........................................................................ 515 Solicitor of the Treasury to direct and supervise certain................................. 700 Surplus: Converted State banks with capital of $5,000,000............................................. 240 Creation of................................................................................................................. 424 425 Loans, limit of, measured by capital and................................ .......................... Surplus and dividends, provisions for surplus and payment of dividends.......... 424 Surrender of bonds. (See Bonds, United States.) Suspension of business after refusal to pay circulation............................................. 509 INDEX TO NATIONAL-BANK ACT, ETC. T. 267 Paragraph. Taking unauthorized impressions of tools, penalty for............................................ 744 Tax: Circulation — Enforcing payment of..................................................................................... 448 Exempt from.................................................................................................... 706 Failure to make returns.................................................................................. 447 Of converted State banks............................................................................... 713 ■Rate and time of payment............................................................................. 444 Refunding excess............................................................................................. 449 Secured by Panama Canal bonds................................................................. 303 Semiannual return of...................................................................................... 446 Money of all kinds subject to, by States, etc..................................................... 717 Notes" State banks, corporation, company, or persons......................... 705-708, 710 Notes, State banks, corporation, company, or persons, failure to make 712 returns..................................................................................... ............................ Notes, State banks, corporation, company, or persons, semiannual return.. 711 Provisions restricted on circulation..................................................................... 714 Remission of, on insolvent national banks..................................................... 450, 715 State taxation of national banks........................................................................... 451 Taxation. (See Tax.) Taxes: Internal-revenue, on imports may be paid by certified checks..................... 769 Teller. (See Officers.) Term: Of office for directors.............................................................................................. 232 For which charter is issued................................................................................... 204 For which real estate may be held...................................................................... 224 Territorial court. (See Comptroller: Redemption; State, etc.) The national-bank act, authority for title.................................................................. 200 Time: Allowed for transmission of reports of condition............................................... 440 Deposits defined...................................................................................................... 403 430 For payment of assessment for impairment of capital..................................... For payment of tax on circulation....................................................................... 444 In which liquidating banks must deposit lawful money............................. 502. 504 In which United States bonds may be refunded.............................................. 315 Title and location, change of, by national banks.......................................... 211, 213, 803 Title of association to be approved by Comptroller of Currency........................... 202 Transfer of bonds............................................................................................................. 306 Association to be notified....................................................................................... 308 Record of................................................................................................................... 307 Transfer of shares of capital stock, effect of............................................................... 241 Transfer of shares of stock............................................................................................. 225 Transfers (see Treasurer, United States; Bonds, United States), when void....... 529 Transportation charges for redeemed circulation...................................................... 414 Treasurer, United States: Application to sell bonds to be filed with.......................................................... 315 Circulation of liquidating and insolvent banks, duty of............................. 505, 506 Circulation, tax on, to be paid to......................................................................... 444 Circulation, withdrawal of, provisions for..................................... ‘.................... 314 Deposits of bonds with........................................................................................... 302 Deposit of bonds with, to secure circulation...................................................... 323 Deposit of lawful money with, by liquidating bank........................................ 502 Disposition of redemption account...................................................................... 416 Enforcing tax on circulation................................................................................. 448 Examination of bonds and records, provisions for................................ 309, 310,311 Federal Reserve Board to be furnished with list of applications to sell bonds. 316 Fine for failure to make reports to Comptroller to be retained by................ 443 Interest on bonds to be retained by, when.................................................... 430,448 268 INDEX TO NATIONAL-BANK ACT, ETO. Treasurer, United States— Continued. Paragraph. Lawful money to redeem circulation of extended banks to be deposited with......................................................................................................................... 220 Proceedings on default in making return on circulation subject to d u ty .. . 448 Public moneys to be deposited with Assistant Treasurer, Government de positaries, or...................................................................................................... 730, 731 524 Purchase of property by receiver, approval to be filed with.......................... Receiver to pay all money received to................................................................ 515 Redemption— Fund to be kept with...................................................................................... 414 Of circulation by.............................................................................................. 414 Of circulation in United States notes by..................................................... 414 Semiannual return to, of circulation subject to duty....................................... 446 Signature of, on circulation.................................................................................... 324 Tax, excess, refunding............................................................................................ 449 Tax on circulation, to be paid to.......................................................................... 444 Transfer of bonds in trust for associations to be made to................................. 306 Treasury, extended banks to reimburse, cost of new plates................................... 220 Treasury notes: Cancellation of...................................................................................................... 753, 756 Demand, legal tender.............................................................................................. 726 Interest-bearing........................................................................................................ 727 Issue of................................................................................................................... 318, 764 Redeemable in gold................................................................................................. 750 Tax, exempt from.................................................................................................... 716 Treasury, United States (see also Treasurer, United States): Association to reimburse, for cost of redemption of circulation and plates.. 414 Currency Bureau in................................................................................................. 100 Divisions of Issue and Redemption established................................................ 752 Notice to present circulation at............................................................................. 510 Penalty for failure of associations to report, to be paid into....................... 443, 446 Redemption account, disposition of..................................................................... 416 Redemption fund, 5 per cent, in.......................................................................... 414 Redemption of circulation at..................................................... 312, 414, 505, 513, 514 235 Trial for violation of interlocking directorate act................................................... Trust companies: Examinations (member)........................................................................................ 527 Trust, purchase of property by receiver to protect................................................. 523 Trustees: Not personally liable............................................................................................. 242 Power of national banks to act as........................................................................ 208 INDEX TO NATIONAL-BANK ACT, ETC. tr. 269 T ara graph. Unauthorized deposit of public money, by disbursing officer............................... 737 Unauthorized receipt or use of public money by banks, etc................................. 738 Uncurrent notes, issue of, prohibited.......................................................................... 431 Uncurrent subsidiary silver, recoinage of.................................................................. 757 Undivided profits not considered borrowed money.................................................. 429 Unearned dividends prohibited................................................................................... 429 Unfit circulation, redemption of.................................................................................. 414 United States (see also Officers of the United States; Crimes, jurisdiction, etc.): Bonds. (See Bonds.) Coins are legal tender......................................................................................... 720 724 Courts of, may enjoin proceedings....................................................................... 518 Courts, jurisdiction of, not affected..................................................................... 214 416 Debt, deposits to redeem circulation to be reported monthly as................... Deposits in Federal reserve banks....................................................................... 615 Deposits. (See Government depositaries.) Gam by failure to redeem notes by extended banks....................................... 220 Obligations, exempt from taxation...................................................................... 716 Obligation of, defined............................................................................................. 739 Securities, penalty for counterfeiting or forging................................................ 740 Suits in which, is a party...................................................................................... 700 United States disbursing officers: Fraudulent notes to be marked by...................................................................... 748 Penalty for unauthorized deposit of public money...................................... 737, 738 Withdrawal of public money................................................................................ 730 United States notes: Are legal tender....................................................................................................... 725 Circulation of banks redeemable in..................................................................... 414 Fraudulent, to be marked..................................................................................... 748 Issue of...................................................................................................................... 764 Obligations of United States defined................................................................... 739 Penalty for: Dealing in counterfeit..................................................................................... 746 Illegal use or possession of material for printing....................................... 745 Passing counterfeit.......................................................................................... 743 Pledging, etc.................................................................................................... 432 Taking or having unauthorized impressions of tools, etc..................... 744, 745 Redeemable in gold................................................................................................ 750 Subject to taxation by States, etc........................................................................ 717 Unit of value, gold dollar to be standard................................................................... 749 Unpaid dividends not considered borrowed money................................................. 427 Unsigned national bank currency, redemption of.................................................... 417 Using plates to print notes without authority........................................................... 742 Use of circulation, restricted......................................................................................... 428 Use of title “ National” prohibited.............................................................................. 530 Usury: Interest, when not................................................................................................... 422 Penalty for................................................................................................................ 423 270 INDEX TO NATIONAL-BANK ACT, ETO. V. Paragraph. Vacancies, board of directors, filling........................................................................... 237 Value of capital stock of converted State banks, par............................................... 245 Value of capital stock, par............................................................................................. 225 Vaults for Currency Bureau........................................................................................... 108 Verification of report of condition................................................................................ 441 Vice president (see also Officers): Bonds, United States, may sign transfer of......................................................... 306 Circulation, may sign........................................................................................... 324, 337 Election or appointment of.................................................................................... 204 Proxy, not to act as.................................................................................................. 231 Violations of provisions of national-bank act, forfeiture of charter for.................. 526 Visitatorial powers restricted........................................................................................ 528 Visitatorial powers, limitation o f.................................................................................. 528 Void, illegal preference................................................................................................... 529 Voluntary liquidation. (See Liquidation.) Vote required: For change of title or location................................................................................ 211 For conversion of State bank................................................................................. 245 For increase............................................................................................................... 229 For liquidation..................................................................................................... 204,500 For reduction............................................................................................................ 230 For shareholders’ agent........................................................................................... 522 For voluntary liquidation....................................................................................... 500 To fix date of election............................................................................................. 238 Voters, qualifications of shareholders at elections..................................................... 231 INDEX TO NATIONAL-BANK ACT, ETC. w. 271 Paragraph. When receiver may be appointed................................................................................ 520 Where proceedings to enjoin Comptroller must be brought.................................... 702 Withdrawal: Bonds, general provisions respecting............................................................... 311, 414 Circulation, provisions for................................................................... 312, 313, 314, 414 Deposit and, of public moneys......................................................................... 730, 737 Dissenting shareholders.......................................................................................... 219 Expired associations, bonds of.............................................................................. 221 Illegal preference of creditors................................................................................ 529 Liquidating associations, bonds of....................................................................... 504 Of reserve from Federal reserve bank................................................................. 409 Reduction of capital................................................................................................ 230 Unearned dividends................................................................................................ 429 Worn-out circulation, destroying and replacing........................................................ 339 INDEX TO THE FEDERAL RESERVE ACT. A. Acceptance: Paragraph. Failure of national banks to signify................................ .......................... 602e, 602f Of terms of act.......................................................................................................... 602b Acceptances, bankers’ ......................................................................................... 613b, 614 Acceptances rediscounted by Federal reserve banks..................................... 613b, 613c Accommodation extended to member banks............................................................. 604c Accounts: Foreign...................................................................................................................... 614 With other Federal reserve banks for exchange purposes............................... 614 Acknowledgment of organization certificate of Federal reserve banks................. 004a Act of March 14, 1900, parity provisions reaffirmed................................................. 626 Act of May 30, 1908, certain provisions extended, etc............................................ 627 Additional national-bank circulation.......................................................................... 627 Tax rate changed..................................................................................................... 627a Additional reserve and central reserve cities............................................................ 611e Administrators, national banks as............................................................................... 611k Advancements extended to member banks............................................................... 604c Advisory council..................................................................................................... 612,612a Agencies, foreign............................................................................................................. 614 Agent, when bank may act as insurance agent or as broker in procuring loans on real estate................................................................................................................ 613c Agent, Federal reserve................................................................................................... 604f Alaska........................................................................................................................ 602, 619g Reserve requirements for national banks in...................................................... 6!9g Aldrich-Vreeland Act, effect on................................................................................... 627 Amending section 5154, United States Revised Statutes....................................... 608 Amendment to section 5202, United States Revised Statutes, liability of national banks............................................................................................................. 613c Amount of capital required for Federal reserve banks............................................ 6021 Amount of capital stock required to be subscribed to............................................. 602c Amount: Of Federal reserve bank circulating notes not limited.................................... 618b Of Federal reserve notes that may be issued..................................................... 616a Of gold notes that may be issued to Federal reserve banks............................ 618c Of redemption fund required for Federal reserve notes................................... 616(1 Of reserve required for Federal reserve notes.................................................... 616b Of reserve required to be held by— Banks elsewhere than in reserve cities........................................................ 619a Central reserve city banks............................................................................. 619c Country banks.................................................................................................. 619a Reserve city banks.......................................................................................... 619b Of United States bonds that may be purchased by Federal reserve banks from member banks........................... ................................................................. 618a That may be loaned on farm lands.............................. * ..................................... 624 Annual report of Federal Reserve Board to House of Representatives................ 610g Application for Federal reserve notes......................................................................... 616a Application for Federal reserve notes subject to action of Federal Reserve Board............................................................................................................................. 616e Application for membership after organization of Federal reserve banks............ 605 Appointment of: Employees of Federal Reserve Board.................................................................. 6111 Examiners................................................................................................................. 621 Members of Federal Reserve Board..................................................................... 610 164312°—20------18 273 274 INDEX TO FEDERAL RESERVE ACT. Appropriation: Paragraph. For expenses of organization committee...................................................... 602n For expenses of printing Federal reserve notes........................................... 616i Assessments for examiners.................................................................................. 621a Assessment on Federal reserve banks: To pay cost of Federal reserve notes............................................................ 616h To pay salaries and expenses of board...............................................610b, 6111 Assistants to organization committee.............. .................................................. 602n Attorneys not to receive fee or other consideration other than usual fee or salary. 622b Authority of Reserve Bank Organization Committee......................................... 602a INDEX TO FEDERAL RESERVE ACT. 275, B. Bank: Paragraph, Balances, net, to or from to be used in reserve calculations...........................^I9f Defined...................................................................................................................... 601 Examinations............................................................................................ 621-622, Bank examiners: Appointment of........................................................................................................ 621 Gratuities to, prohibited........................................................................................ 622a Loans to, prohibited................................................................................................ 622a, Powers of................................................................................................................... 621 Salaries of.................................................................................................................. 621.1 Secrecy enjoined of............ ................................................................................... 622aService to banks and their directors, officers, etc., restricted to official duties...................................................................................................................... 622 Bankers’ acceptances............................................................................................ 613b- 614 Banks1 Eligible............................................................................................ 602b, 608, 609 609d May become national, how.................................................................................... 608 Not in reserve cities. (See Country banks ) Outside continental United States....................................................................... 6I9g Bed pieces for Federal reserve notes........................................................................... $16U Bills of exchange: Acceptable by member banks............................................................................... 613b Bought by Federal reserve banks from member banks................................... 614 Foreign............................^......................................................................................... 614 Limit to liability of national banks not to include........................................... 613c Open-market operations......................................................................................... 614 Rediscounted by Federal reserve banks................................................. 613a-613c Bills of State and subdivisions thereof dealt in by Federal reserve banks............614 Bills receivable, subject to rediscount.............................................................. 613a-613c Board, held to mean Federal Reserve Board............................................................ 601 Board of directors of Federal reserve bank (see also Federal reserve bank, directors of)............................................. ........................................................... 604c-604i Certificate to be made by, when capital is increased or reduced.......... 605d, 606 Bond, Federal reserve agent......................................................................................... 611i Bonds, United States: Dealt in by Federal reserve banks....................................................................... 614 Hypothecation of, by Federal reserve banks..................................................... 614 National banks not required to deposit prior to commencement of business.. 617 Purchase of, by Federal reserve banks................................................................ 618a Refunding.......................................................................................................... 6l8-618c To secure Federal reserve bank notes.................................................................. 004b “ Two’s” exchange for 1-year gold notes and 30-year gold bonds.................. 018c Thirty-year 3 per cent gold, without circulating privileges............................ 618c In exchange for 1-year 3 per cent Treasury notes............................................. 618d Branch: Federal reserve banks............................................................................................. 603 National banks— Foreign............................................................................................................... 625 In dependencies............................................................................................... 625 By-laws of Federal reserve banks................................................................................. 604b 276 INDEX TO FEDERAL RESERVE ACT. c. Paragraph. Cable transfers, purchase and sale of, in open market............................................. 614 Cancellation of Federal reserve notes.......................................................................... 616c Capital, amount required to enable State bank to become member bank........ 609f Capital stock of Federal reserve banks: Allotment of.................................................................................................... 602c, 604a Cancellation and redemption of.................................................................. 605e, 606 Dividends.................................................................................................................. 607 Hypothecation of, prohibited when owned by member bank........................ 605a Increase and decrease of.................................................................................. 605-606 Liability of holders........ ^.............................................................................. 602d. 606 Maximum amount permitted to be held by any one individual or corpo ration.................................................... .................................................................. 602h Minimum amount of, before organization......................................................... 6021 Net earning, apportionment of.............................................................................. 607 Payment for........................................................................................... 602c, 602g, 609 Shares of $100 each.................................................................................................. 605 Subscriptions to— After organization of Federal reserve banks............................................... 605b By banks........................................................................................... 602c, 604, 619g By public................................................................................................. 602g, 602h By State banks.................................................................................. 604, 609, 609a By trust companies........................................................................... 604, 609, 609a By trust companies in District of Columbia............................. 604, 602b, 602c By United States.............................................................................................. 602i Transfer of............................................................................................. 602h, 602k, 605a Voting power of, limited......................................................................................... 602j Cash reserve required: Banks elsewhere than in reserve cities................................................................ 619a Central reserve city banks...................................................................................... 619c Reserve city banks................................................................................................... 619b Central reserve cities....................................................................................................... 602 m Cash reserve required.............................................................................................. 619c Number may be increased or decreased.............................................................. 611e Reserve board to control......................................................................................... 611e Status of..................................................................................................................... 602 m Certificate of: Increase of capital of Federal reserve banks....................................................... 605d Organization of Federal reserve banks................................................................. 604a Reduction of capital of Federal reserve banks................................................... 606 Certificates of deposit as time deposits........................................................................ 619 Chairman of board of directors of Federal reserve banks............................... 604d, 604f Changing collateral for Federal reserve notes............................................................. 616g Charter forfeited by national banks not accepting terms of this act..................... 602f Charter of Federal reserve banks to be for 20 years.................................................. 604b Checks receivable at par by Federal reserve banks, when..................................... 616j Circulating notes of: Federal reserve banks, issue of.............................................................................. 618b Member banks, retirement of......................................................................... 618, 618a Circulation (see Federal reserve bank notes and Federal reserve notes): Federal reserve notes........................................................................................ 616, 616a Limit to liability of national banks not to include........................................... 613c Civil service, President may place employees of Federal Reserve Board under.. 6111 Class A directors..................................................................................................... 604d, 604e Class B directors..................................................................................................... 604d, 604e Class C directors..................................................................................................... 604d, 604i Clearing house for Federal reserve banks and member banks................................ 6161 Collateral for Federal reserve notes.............................................................................. 616a Substitution of.......................................................................................................... 616g INDEX TO FEDERAL RESERVE ACT. 277 P ara gra p h . Collection charges............................................................................................................ ..616k Collateral, limit to liability of national banks not to include................................ ..613c Commercial paper: Eligible for rediscount............................................................................................ ..613a Foreign....................................................................................................................... .614 Purchase and sale of..................................................................................................614 Security for Federal reserve notes....................................................................... ..616a Comptroller of the Currency: Duties performed under direction of the Secretary of the Treasury............. ..610h Duties when Federal reserve districts have been established........................ ..004 Examination of member banks............................................................................. ..021 Examiners’ salaries, recommended by..................................................................621a Examiners’ reports to............................................................ ................................ ..621 Expense of examination, assessed by....................................................................621a Federal reserve notes, issued by.............................................................................61 Id Federal reserve notes, unfit for circulation, to be returned to....................... ..616o May permit examiners to disclose information in regard to member banks.. 622b Member of Federal Reserve Board.........................................................................610 Member of Reserve Bank Organization Committee............................................602 National-bank examiners appointed by................................................................62 L Organization certificate of Federal reserve banks to be filed with...................604a Plates, dies, etc., for Federal reserve notes under supervision and control of. 616h Powers of................................................................................................................... ..61Oh Salary of.................................................................................................................... ..610 Suits against national banks not complying with terms of this act...................602f Congressman not allowed to be member of Federal Reserve Board or officer or director.......................................................................................................................... ..604d Congress, visitatorial powers of......................................................................................621b Contracts, powers of Federal reserve banks to make..................................................604b Conversion of State banks............................................................................................. .608 Corporate seal, Federal reserve banks..........................................................................604b Correspondents, foreign...................................................................................................614 Council, Federal advisory...................................................................................... 612, 612a Country banks: Cash reserve required............................................................................................. .619a Distribution of reserve.............................................................................................619a Reserve requirements for.........................................................................................619a Reserve required to be held with Federal reserve bank................................. ..619a Reserve that may be held with bank in reserve or central reserve city............619a County bonds, etc., dealt in by Federal reserve banks............................................614 Currency act of Mar. 14, 1900, parity provisions reaffirmed....................................626 Currency associations........................................................................................................627 Customs, Federal reserve notes receivable for........................................................... ..616 J 278 INDEX TO FEDERAL RESERVE ACT. D. Paragraph. Daily report by Federal reserve agent of Federal reserve notes............................. 616a Definitions......................................................................................................................... 601 Demand and time deposits..................................................................................... 619 Demand deposits defined............................................................................................... 619 Dependencies: Branches of national banks in............................................................................... 625 National banks in..................................................................................................... 619g Depositories....................................................................................................................... 615 Deposits: In Federal reserve banks........................................................................ 613, 614, 615 Reserves against................................................................................................ 616b In member banks, reserves against.............................................................. 619, 619f Limit to liability of national banks not to include........................................... 613c Of Government funds.................................................................................. ... 613, 615 Secretary of Treasury to receive deposits of gold coin or gold certificates tendered by Federal reserve bank or agent................................................... 616m Various kinds defined.............................................................................................. 619 With Federal reserve agent of Federal reserve notes, gold, etc., by Federal reserve banks............................................................................................... 6L6f, 616g With nonmember banks, limited.......................................................................... 619a Denomination of gold notes issuable to Federal reserve banks .s............................ 618c Deputy Federal reserve agent....................................................................................... 604f Description of Federal reserve notes.................................................................. G16c, 616h Destruction of Federal reserve notes............................................................................ 616c Dies, etc., for Federal reserve notes............................................................................. 616h Directors (see Federal reserve banks, directors of): Branch Federal reserve banks............................................................................... 603 • Liability for violation of this act by national banks......................................... 602f Not to receive fee or other considerations for loan........................................... 622c Of Federal reserve banks, suspension or removal of......................................... 611f iDiscount rates: Established................................................................................................................ 614 Increased by tax on deficiency in reserve requirements................................. 611c Recommendations by council................................................................................ 612a [Discounts: By Federal reserve banks....................................................................................... 613a Extended to member banks................................................................................... 604c 'solution of: federal reserve bank..................................................................................... 604b, 607 £ T&tional member banks.......................................................................................... 602f DistriL ^ !fcion of reserve: BaL ^ elsewhere ^an in reserve city.................................................................. 619a t \ai reserve city, banks in............................................................................... 619c Reser city, banks in..................................... ...................................................... 619b District. ^ ^dealt in by Federal reserve banks................................................. .614 fWHfiod* showing geographical lines of Federal reserve.............................. .604 Held to m ' an Federal reserve district................................................................. .601 District of Colui trust comPanies in> eligible.................................................... .602b Dividends: __ , , n/v_ Of Federal res ^ v e banks.........................................................................................607 Prohibited wht * reserve is short............................................................................619e TTrmairl Urnif L liability of national banks not to include............................. .613c Doubt?ulasseteof Pec W al reserve banks, written off.............................................. .611g Drafts * Limit to liability to national banks, not to include...........................................613c Receivable at par by Fe? eral re8T e ^ ’ whe“ ..................................... ^ Rediscounted by Fedi ^ reserve banks......... .................................... 613a Drainage, bonds, etc , dealt 111 by Pederal reserve banks.................................. 614 Duties: Of Federal advisory cornu Committee.'.'.'.'.'.'.! ! ! ! ! ! ! . ' ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 602 Of Reserve Bank Orgamzai Interest rate of paid directo. ...............................................ftoof Securities, purchase of and t ^ directors...............................................622e INDEX TO FEDERAL BESEBVE ACT. E. 279 Paragraph. Earnings, division of....................................................................................................... 607 Election of directors of Class A and Class B .............................................................. 604e Eligible banks........................................................................................ 602b, 608,60&-609d Employees not to receive fee or other consideration other than usual salary----- 622c Employees not to receive a greater rate of interest than other depositors.......... 622e Employees of Federal reserve banks.......................................................................... 604b Employees of Federal Reserve Board........................................................................ 6111 Estimate of reserve requirements............................................................................... 619f Examiners: Appointment of......................................................................................................621 Examiner, member bank not to make loan or grant any gratuity to.......... 622a Examiner not to perform any service for compensation for any bank or officer..................................................................................................................... 622b Examiner not to disclose names of borrowers or collateral without first ob taining written consent of Comptroller.......................................................... 622b Powers of................................................................................................................... 621 Qualifications of....................................................................................................... 621 Reports of.................................................................................................................. 621 Salaries of.................................................................................................................. 621a Examinations: Assessments for......................................................................................................... 621a Bank........................................................................................................... 621-622,625 Examiners to make................................................................................................. 621 Expense of................................................................................................................. 621a Federal reserve banks.............................................................................................621c Member banks.................................................................................................. 621,621b National banks......................................................................................................... 621 Number to be made.................................................................................................621 Of foreign branches of national banks................................................................. 625 Of plates, dies, bed pieces, etc.. of Federal reserve notes............................... 616h Qualifications of examiners....................................................................................621 State bank and trust companies............................................................................ 621 Exceptions to limit to liability of national banks.................................................... 613c Exchange, account with other Federal reserve banks for purposes of.................. 614 Exchange charges.................................................................................................. 616k, 6161 Exchange of certain United States bonds for gold notes......................................... 618d Executive officers of Federal Reserve Board............................................................. 610 Executors, national banks as......................................................................................... 611k Exempt from taxes except real estate......................................................................... 607a Exempt from taxes, gold notes issued in exchange for gold bonds....................... 618c Expenses: For Federal reserve notes.............................................................................616h, 616i Of examiners............................................................................................................. 621a Of Federal advisory council.................................................................................. 612 Of Federal Reserve Board...................................................................................... 610b Exports, acceptances on, eligible as discounts by Federal reserve and member banks..............................................................................................................................613b Extension of additional currency act to June 30, 1915............................................ 627 280 INDEX TO FEDERAL EESERVE ACT. F. Paragraph. Failure to accept terms of this act...................................................................... 602e, 602f Failure to make report, penalty ...................................................................... 609c-609d Farm lands, loans on....................................................................................................... 624 Federal advisory council........................................................................................ 612,612a Federal reserve agent...................................................................................................... 604f Bond required of...................................................................................................... 611i Daily report on issue and withdrawal of Federal reserve notes......................616a Deposits with, of Federal reserve notes, gold, etc., by Federal reserve banks.............................................................................................................. 616f, 616g Deputy....................................................................................................................... 604f Federal reserve notes issued to Federal reserve banks through...................... 616 Federal reserve notes, applications for, made to............................................... 616a Gold coin or gold certificates to be received as deposits by Secretary of Treasury when tendered by Federal reserve bank or agent...................... 616m Information concerning member banks to be furnished Federal Reserve Board by................................................................................................................. 621b Powers of, second to those of Secretary of Treasury......................................... 610f Salary of..................................................................................................................... 604f Special examination of member banks to be approved by............................. 621b Federal reserve banks.................................................................... ”................................ 602a Acceptances, purchase and sale of, in open market..........................................614 Rediscount of.......................................................................................... 613b, 613c Account with other Federal reserve banks......................................... 613, 614, 6161 Advances to, by means of Federal reserve notes............................................... 616 Amount of capital stock to be subscribed to....................................................... 602c Application for Federal reserve notes subject to action of Federal Reserve Board....................................................................................................................... 616e Bankers’ acceptances, purchase and sale of, in open market......................... 614 Bills of exchange— Purchase and sale of........................................................................................ 614 Purchase from member banks........................................................................ 614 Bills of State and political subdivision thereof dealt in................................... 614 Branches..................................................................................................................... 603 Foreign connections......................................................................................... 614 By-law's....................................................................................................................... 604b Cable transfers, purchase and sale of.................................................................... 614 Capital stock of......................................................................................................... 6021 Certificate of organization....................................................................................... 604 Charter, term of........................................................................................................ 604b Checks received at par. when................................................•...............................616j Circulating notes, issue of....................................................................................... 618b Circulating notes, redemption of........................................................................... 618b Clearing-house provisions........................................................................................ 6161 Collateral deposited with Federal reserve agent for Federal reserve notes.. 616a Increasing, to reduce liability for notes....................................................... 616f Substitution of................................................................................................... 616g Withdrawal of.................................................................................................... 616g Collection charges........................................................................................... 6161", 6161 Commercial paper— Purchase and sale of......................................................................................... 614 Rediscount of........................................................................................... 613a-613c Security for Federal reserve notes.............................................. 616a, 616f, 616g Contracts, power to make........................................................................................ 604b Corporate body.......................................................................................................... 604b Powers of............................................................................................................. 604b Council, recommendations by................................................................................ 612a Depository, Government............................................................... ................. 613,615 INDEX TO FEDERAL RESERVE ACT. 281 Federal reserve banks— Continued. Deposits— Paragraph. Defined and classified..................................................................................... 619 From member banks................................................................................ 613, 616j From or in other Federal reserve banks..................................... 613,614,616j From the United States.......................................................................... 613, 615 Reserves against............................................................................................... 616b With Federal reserve agent of Federal reserve notes, gold, etc. . . 616f, 616g Directors.......................................................................................................... 604c-604i Chairman of (Federal reserve agent).................................................. 604d, 604f Bond required of...................................................................................... 611i Chosen, how................................................................................... 604d, 604e, 604f Classification of................................................................................................. 604d Compensation of............................................................................................... 604g Duties of............................................................................................................ 604c Extension of discount, advancement and accommodations by.............. 604c Number and classification of......................................................................... 604d Qualifications of............................................................................................... 604d Removal of........................................................................................................ 61If Suspension of.................................................................................................... 611f Term of.................................................................................................... 604d, 604i Vacancies........................................................................................................... 604i Discount rates to be established................................................................ 611c, 614 Discount by Federal reserve bank of paper secured by United States bonds issued since April 24,1917................................................................................. 611m Dissolution of.................................................................................................. 604b, 607 Dividends of............................................................................................................. 607 Doubtful assets of, to be written off...................................................................... 611g Drafts, received at par, when................................................................................ 616] Earnings, divisions of............................................................................................. 607 Employees................................................................................................................ 604b Establishment of, to be officially announced by Secretary of Treasury-----619 Examination of........................................................................................................ 621c Examination of member banks by....................................................................... 621b Exchange charges.................................................................................................... 616k Exempt from taxes.................................................................................................. 607a Expense of Federal Reserve Board to be paid by............................................. 610b Federal reserve notes. (See Federal reserve notes.) Fiscal agent of the United States......................................................................... 615 Foreign connections................................................................................................ 614 Franchise tax............................................................................................................ 607 Gold bond, 30-year 3 per cent without circulating privilege................. 618c, 618d Under same general terms as United States threes without circulating privilege now issued.................................................................................... 618c Gold coin or gold certificates to be received as deposits by Secretary of Treasury when rendered by Federal reserve bank or agent......................616m Gold loans, made of, and contracted for............................................................. 614 Gold, purchase and sale of........................................................................... 612a, 614 Gold notes, 1-year 3 per cent without circulating privilege.................. 618c, 618d Exempt from taxes......................................................... ! .............................. 618c Government deposits.......................................................................................613, 615 Hypothecation of United States bonds for gold loans...................................... 614 Individual liability of shareholders..................................................................... 602d Liquidation of................................................................................................... 607, 611h Loans made of, and contracted for....................................................................... 614 Municipal securities dealt in................................................................................. 614 National banks must become shareholders of................................. 602b. 602e, 602f Net earnings of, apportionment of........................................................................ 607 Notes of (see Federal reserve notes)............................................................ 604b, 611d Notes of State and political subdivisions thereof dealt in............................... 614 Officers and employees........................................................................................... 604b Officers of, may be removed or suspended......................................................... 611f Open-market operations......................................................................................... 614 Organization of..................................................................................... 602a, 604a, 604h Official announcement of, by Secretary of Treasury................................ 619 Powers of.................................................................................................. .604b, 613-614 282 INDEX TO FEDERAL RESERVE ACT. Federal reserve banks— Continued. Paragraph. Purchase of United States bonds from member banks..................................... 618a Redemption fund................................................................................ 616c-616d, 616f Rediscount— Of acceptances.................................................................................................. 613b Of bills receivable............................................................................................ 613a Of notes, drafts, and bills of exchange......................................................... 613a Of paper of other Federal reserve banks...................................................... 611b Recommendations by council........................................................................ 612a Regulations by board............................................................................ 611b, 613c Refunding United States bonds held by member banks.......................... 618-618b Reorganization of...................................................................................................... 611h Reserve required to be held with— By banks elsewhere than in reserve cities................................................. 619a By central reserve cities.................................................................................. 619c By reserve city banks..................................................................................... 619b Reserve requirements for Federal reserve notes...................................... 616b, 616d May be suspended by board.......................................................................... 611c Tax on deficiency in........................................................................................ 611c Reserve, withdrawal of, by member banks........................................................ 619e Reserves— Against deposits................................................................................................ 616b Against Federal reserve notes.............................................................. 616b. 616d Of member banks...................................................................................... 619-619g Revenue bonds of State and political subdivisions, dealt in.......................... 614 Safeguarding bonds, notes, collateral, funds, etc............................................... 611i Salaries and expenses of board paid by..................................................... 610b, 611e Seal, corporate.......................................................................................................... 604b Senators, Representatives, prohibited from being directors of....................... 604d Special examinations of member banks may be ordered by........................... 621b State banks may become members............ .................................................. 609-609(1 State bills, notes, bonds, and warrants dealt in................................................. 614 Statement of condition to be published weekly by board............................... 611a Stockholders of, responsibility and liability of........................................ 602d, 606 Stock of. (See Capital stock.) Succession of............................................................................................................. 604b Suits, by or against.................................................................................................. 604b Supervision of, by board.............................................................................. 611a-611j Surplus funds............................................................................................................ 607 Suspension of............................................................................................................ 611 h Taxes, free from, except on real estate................................................................ 607a Transfer of funds among, and charges therefor................................................... 616k United States bonds— . Dealt in.............................................................................................................. 614 Hypothecated for gold loans.......................................................................... 614 United States bonds of member banks purchased by............................. 618a, 618b United States deposits.......................................................................................613, 615 Warrants of State and political subdivisions thereof dealt in......................... 614 Worthless assets to be written off.......................................................................... 611g Federal Reserve Board: Admission of banks other than national...................................................... 609-609d Annual report of....................................................................................................... 610g Application for Federal reserve notes may be granted or rejected b y ............ 616e Approval of, required for issue of bonds in exchange for 1-year gold notes... 618c Authorized to review decisions of Reserve Bank Organization Committee. 602 Chairman of............................................................................................................... 610c Class C directors designated by................................................................... 604d, 604f Clearing house— For reserve banks, designation by................................................................. 6161 For member banks, designation by.............................................................. 6161 Creation of..................................................................................................................610 Directors of Federal reserve banks may be suspended or removed b y ......... 611f Discounts by Federal reserve banks, character to be determined b y ...........613a Discount rates subject to approval of...................................................................614 Doubtful or worthless assets of Federal reserve banks to be ordered written off books of Federal reserve banks.................................................................... 611g INDEX TO FEDERAL RESERVE ACT. 283 Federal Reserve Board— Continued. Paragraph. Employees of, not in classified service................................................................ 6111 Examinations of Federal reserve banks and member banks........................... 611a Examinations ordered by............................................................................... 621-621c Examiners ’ salary fixed by................................................................................... 621a Expenses of, how paid................................................................................. 610b, 01 le Extension of discounts etc., by directors, subject to orders of....................... 604c Federal advisory council, expenses to be approved by................................... 012 Federal reserve banks may be required to purchase United States bonds by.................................................................................................................. 618a, 618b Federal reserve notes issued under the supervision of..................................... 610h Federal reserve notes issued and retirement regulated by.............................. 61 Id Foreign branches of national banks..................................................................... 625 Foreign business to be approved by.................................................................... 614 Governor of............................................................................................................... 610a Information concerning Federal reserve banks to be furnished to, by Fed eral reserve agent..........................................................................'..................... 621b Issue of Federal reserve notes regulated by.................................................. 616, 616a Interest on rediscounts to be fixed by................................................................. 611b Making farm loans................................................................................................... 624 Meetings of............................................................................................................... 610c Members of................................................................................................................ 610 Conditions precedent on......................................................................... 610, 610d Oath of office............................................................................................. 610, 610d Qualifications of............................................................................................... 610a Removal of, by President.............................................................................. 610 Restriction on, during and after term of office................................... 6 J0, 610d Salaries of.......................................................................................................... 610 Term of.............................................................................................................. 610 National banks to act as trustee, etc., by permission of.................................. 611k Offices........................................................................................................................ 610a Open-market operation operated by.................................................................... 614 Permission for member banks to secure discounts for nonmember banks may be granted by.............................................................................................. 619d Powers of........................................................................................................... 611-61 le Powers secondary to those of Secretary of Treasury, when............................. 610f Power to add to list of cities prohibited from making farm loans..................624 Purchase of United States bonds by Federal reserve banks on order of........... 618a Redemption fund for Federal reserve notes to be required by...................... 616d Rediscounting of paper of Federal reserve banks by other Federal reserve banks..................................................................................................................... 611b Report of, to House of Representatives................................................................ 610g Safeguarding assets of Federal reserve banks by................................................ 611 i Special examination of member banks to be approved by................................. 621b Substitution of collateral for Federal reserve notes to be regulated by............ 616g Suits against national banks not complying with terms of this act................... 602f Suspension of reserve requirements by................................................................. 61 lc Transfer of public stock in Federal reserve banks to be regulated by............. 602k Vacancies.................................................................................................................. 610e Vice governor...................................... .................................................................... 610a Violations of act, of Federal reserve banks, duty of............................................. 61 Ih Federal reserve cities.............................................................................................. 602, 604 Federal reserve banks therein.............................................................................. 602a Federal reserve districts......................................................................................... 602, 004 Designation by number.......................................................................................... 602 Farm land loans confined to.................................................................................. 624 How apportioned..................................................................................................... 602 Increase in number of............................................................................................ 602 Readjustment of...................................................................................................... 602 Federal reserve notes (obligations of United States): Acceptable for.......................................................................................................... 616 Application for..................................................................................... 611b, 616a, 616e Authorization of....................................................................................................... 616 Cancellation and destruction of............................................................................ 616c Character of..................................................................................................... 616c, 616h Collateral for.......................................................................... .................................. 616a Cost of making, etc......................................................................................... 616h, 616i 284 INDEX TO FEDERAL RESERVE ACT. Federal reserve notes (obligations of United States)— Continued. Paragraph. Daily report of issue and withdrawal of................................................................ 616a Denominations of..................................................................................................... 616h Deposit by bank of issue with Federal reserve agent.......................................616f Description of................................................................................................. 616c, 616h Destruction of........................................................................................................... 616c Examination of plates, dies, etc............................................................................ 616h Expense for making, issue, and redemption paid by Federal reserve banks............................................................................................................ 616h, 616i Form of...................................................................................................................... 616h Held for distribution, where.................................................................................. 616h Identification marks on................................................................................. 616c, 616h Interest paid to United States on account of..................................................... 616e Issue and retirement of, regulated by board............................................ 611d, 616 Liability for, may be reduced............................................................................... 616f Lien on assets........................................................................................................... 616e Paper for..........: ........................................................................................................ 616i Penalty for paying out, by Federal reserve bank, other than bank of issue.. 616c Plates, dies, paper, etc..................................................................................616h, 616i Printing of....................................................................................................... 616h, 616i Purpose of.................................................................................................................. 616 Receivable for.......................................................................................................... 616 Received by Federal reserve bank other than bank of issue.............................. 616c Recommendations concerning, by council.......................................................... 612a Redeemed in gold on demand................................................................................ 616 Redemption fund................................................................................. 616c, 616d, 616f Redemption of......................................................................................... 616, 616c, 616f Reduction of, liability for...................................................................................... 616f Reissue of notes deposited with Federal reserve agent.................................... 616f Reserves against............................................................................................ 616b, 616d Return to bank of issue........................................................................................... 616c Securities for................................................................................................... 616a, 616b Substitution of collateral for.................................................................................. 616g Supervision of........................................................................................................... 611d Federal reserve notes (circulating, obligations of Federal reserve banks)............... 604b For United States bonds purchased of member banks by Federal reserve banks............................................................................................................ 604b, 618b For United States bonds with circulation privilege against which no cir culation is outstanding.............................................................................. 604b, 618b Issued and redeemed as national-bank notes........................................... 604b, 618b Fiscal agent of United States: Federal reserve banks a s........................................................................................ 615 In foreign countries, dependencies....................................................................... 625 Five per cent redemption fund not counted as reserve........................................... 620 Foreign acceptances........................................................................................................ 614 Foreign agencies of Federal reserve banks................................................................... 614 Foreign branches of national banks.............................................................................. 625 Foreign correspondents................................................................................................... 614 Forfeiture of charter by national banks for not accepting terms of this act......... 602f Franchise tax on Federal reserve banks..................................................................... 607 INDEX TO FEDERAL EESERVE ACT. G. 285 Paragraph General fund of United States may be deposited in Federal reserve banks----- 615 General fund of United States Treasury may be deposited in Federal reserve banks.............................................................................................................................. 615 General repealing clause................................................................................................ 626 General supervision of Federal reserve banks by board.......................................... 611j Gold bonds, 30-year 3 per cent, without circulation privilege............................. 618c Under same conditions as United States 3 per cent without circulation privilege now issued............................................................................................ 618c Gold deposits for reduction of Federal reserve notes............................................... 616f Gold loans by Federal reserve banks.......................................................................... 614 Gold notes, 3 per cent, 1 year, without circulation privilege............................... 618c Exempt from taxes.................................................................................................. 618c May be exchanged for 30-year 3 per cent gold bonds............................ 018c, 618d Gold, purchase and sale of, by Federal reserve banks..................................... 612a, 614 Gold, redemption fund for Federal reserve notes to be in...................................... 616d Gold reserve required for Federal reserve notes....................................................... 616b Government deposits.............................................................................................. 613, 615 Government funds to be deposited, where................................................................. 615 Governor of Federal Reserve Board............................................................................ 610a Granting of application for Federal reserve notes..................................................... 616e Gratuities to bank examiners prohibited............................................................... 622a H. Paragraph. Hawaii, reserve requirements, etc., for national banks in...................................... 619g House of Representatives, annual report of Federal Reserve Board to.................61Og Hypothecation: Of Federal reserve bank stock by member banks prohibited....................... 605a Of United States bonds by Federal reserve banks for gold loans...................614 286 INDEX TO FEDERAL RESERVE ACT. I. Paragraph. Imports, acceptances on, eligible as discounts by Federal reserve and member banks.............................................................................................................................. 613b Incidental powers necessary to comply with this act............................................... 604b Income from Federal reserve bank exempt from taxation...................................... 607a Increase of capital of Federal reserve banks...................................................... 605-605d Individual liability of shareholders............................................................................. 602d Individual liability of stockholders of national banks............................................. 623 Information concerning member banks to be furnished Federal Reserve Board by Federal reserve agent............................................................................................ 621b Information, examiners not to disclose....................................................................... 622b Insolvent member banks................................................................................................ 606 Interest rate for rediscount fixed by board.........................................................611b, 613c Interest rate increased by tax on deficiency in reserve requirements.................. 611c Interest rates on Federal reserve notes........................................................................ 616e Invalidating clause.......................................................................................................... 629 Investment securities not eligible for discount by Federal reserve banks.......... 613a Irrigation bonds, etc., dealt in by Federal reserve banks....................................... 614 Issue of circulating notes by Federal reserve banks................................................. 618b Issue of Federal reserve notes............................................................................... 616, 616a Issue of gold notes of United States in exchange for certain United States bond®. 618d INDEX TO FEDERAL RESERVE ACT. 287 L. Paragraph. Lawful money deposits for reduction of liability for Federal reserve notes........ 616b Liabilities, rights and powers of State banks when member banks..................... 609g Liabilities incurred under the provisions of this act................................................ 613c Liabilities of national banks......................................................................................... 613c Liability for Federal reserve notes, reduction of...................................................... 616f Liability of director of national banks violating this act......................................... 602f Liability of stockholders: Of Federal reserve banks................................................................................ 602d, 606 Of national banks.................................................................................................... 623 Lien on assets amount of Federal reserve notes first................................................ 616e Limitations, none on amount of Federal reserve bank notes................................. 604b Limit not placed on amount of Federal reserve bank circulating notes.............. 618b Limit to amount of acceptance on imports and exports.......................................... 613b By Federal reserve banks...................................................................................... 613b By member banks................................................................................................... 613b Limit to amount of gold notes issuable to Federal reserve banks.......................... 618c Limit to amount of public stock in Federal reserve bank held by one individual, etc.................................................................................................................................. 602h Limit to amount of United States bonds that Federal reserve banks may pur chase from member banks......................................................................................... 618a Limit to maturity of discounts by Federal reserve banks...............................613a, 613b Liquidating of member banks...................................................................................... 605e Liquidating of Federal reserve banks................................................................. 607, 611h Loans of gold by Federal reserve banks..................................................................... 614 Loans on farm lands....................................................................................................... 624 Loans prohibited when reserve is short...................................................................... (ilQe Loans to bank examiners prohibited........................................................................... 022a Loan, no officer, director, or employee to receive a commission for any loan... 622c 288 INDEX TO FEDERAL RESERVE ACT. M. Paragraph. Manager branch Federal reserve banks....................................................................... 603 Market operations open.................................................................................................. 614 Maturity of discounts of Federal reserve banks limited.................................. 613a, 613b Maximum amount of public stock in Federal reserve bank held by one indi vidual, etc..................................................................................................................... 602h Meetings of Federal reserve council............................................................................. 612 Member banks (see also National banks)........................................... 601, 602b, 608, 609 Acceptance rediscounted by Federal reserve bank........................................... 613b Acting as agent for nonmember banks, restrictions.......................................... 619d Alaska.................................................................................................................. 602, 619g Application for membership as, after organization of Federal reserve bank 605c Balances in Federal reserve banks, considered as reserve............................... 619f Bills of exchange— Acceptable......................................................................................................... 613b Rediscounted by Federal reserve banks........................................... 613a, 613b Sold to Federal reserve banks........................................................................ 614 Capital, amount required of State bank to become member bank.............. 609f Collection charges.................................................................................................... 618a Depositories of United State.................................................................................. 615 Deposits in Federal reserve bank......................................................................... 613 Deposits, reserves against............................................................................... 619-619b Deposits with nonmember bank........................................................................... 619d Directors not to accept fees for loans.................................................................. 622c Dividends are not to De paid when reserves are below requirements.......... 619e Drafts— Acceptable....................................................................................................... 613b Rediscounted by Federal reserve banks............................................. 613a, 613b Examiners................................................................................................................. 621 Examinations of....................................................................................................... 621b Examinations of Federal reserve banks on request of 10 member banks___ 621c Exchange charges.................................................................................................... 616k Hypothecation of stock of Federal reserve banks prohibited......................... 605a Individual liability of............................................................................................. 602d Insolvency of............................................................................................................ 606 Insurance agent, when may act as....................................................................... 613c Limit to deposits that may be kept with nonrnember banks..........................619d Liquidation of.................................................... ..................................................... 605e Loans and gratuities to bank examiners prohibited ......................................... 622a Loans may not be made when reserves are below requirements.................... 619e Loans on real estate..... .......................................................................................... 624 National banks (see National banks).......................................................... 602c-602f 608 Notes rediscounted by Federal reserve banks......................................... 613a, 613b Officers and employees not to accept fees, etc................................................... 622c Outside continental United States....................................................................... 619g Prohibited from securing discounts from Federal reserve banks for nonmember banks.................................................................................................... 619d Provisions for national banks outside continental United States to become.. 6I9g Real estate, when bank may act as broker in procuring loans on....................613c Refunding United States bonds securing circulation................................618,618a INDEX TO FEDERAL RESERVE ACT. 289 Paragraph. Report of condition by................................................................................................... 609c Report of earnings and dividends b y .................................................................. 609c Reserve requirements.............................................................................. 611m, 619-620 Reserve, withdrawal of, from Federal reserve banks....................................... 619e Reserves............................................................................................................ 619-619f Against deposits........................................................................................ 619-619f Balances in Federal reserve banks considered as..................................... 619f Banks in central reserve cities......................................................................619c Banks in reserve cities.................................................................................... 619b Banks not in central reserve or reserve citi es............................................... 619a Checking against, in Federal reserve banks............................................... 619e Net balance due to and from other banks considered in estimating........ 619f State banks as........................................................................................................... 609 Withdrawal from Federal reserve bank...................................................... 609e Deposits with nonmember banks.................................................................. 619d Examinations of...............................................................................................621 Member banks, rights, powers, and liabilities o f..................................... 609g Stock in Federal reserve banks................................................................... 602c, 604 605 Transfer of stock in Federal reserve banks............................................... 602k, 605a Trust companies as.................................................................................................. 609 Deposits with nonmember banks.................................................................. 619d Examinations of...............................................................................................621 Withdrawal from Federal reserve bank...................................................... 609e Trust companies in District of Columbia............................................................ 602b Members, Federal advisory council............................................................................. 612 Minimum amount of capital of Federal reserve banks............................................ 6021 Mints, Federal reserve notes may be deposited in ...................................................616h Mortgages on farm lands................................................................................................ 624 Municipal securities dealt in by Federal reserve banks......................................... 614 164312°— 20------ 1'9 290 INDEX TO FEDERAL RESERVE ACT. N. National banking associations: Paragraph. Defined....................................................................................................................... 601 Examiners of.............................................................................................................. 621 Reserve requirements....... . ..................................................................................... 619 Reserve requirements outside continental United States................................ 619g National-bank examiners (see also Examiners'): Prohibited from performing other services for banks, etc................................ 622b Prohibited from receiving loans or gratuities from member banks.................. 622a National banks (see also Member banks)..................................................................... 601 Administrators........................................................................................................... 611k Alaska................................. .............................................................................. 602, 619g Branches in foreign countries and dependencies............................................... 625 Capital stock— Decrease of............................................................................................... 605d, 606 628 Increase of................................................................................................ 605a, 605d Charter bonds no longer required.......................................................................... 617 Circulation— Act of May 30, 1908, extended....................................................................... 627 Retirement of.................................................................................................... 618 Tax rate for certain circulating notes changed........................................... 627a Commencing business, provisions for deposit of United States bonds with Treasury repealed................................................................................................. 617 Dependencies............................................................................................................ 619g Deposits, time, and interest thereon.................................................................... 624 Directors’ liability.................................................................................................... 602f Dissolution for failure to enter system................................................................. 602f Executors................................................................................................................... 611k Foreign branches...................................................................................................... 625 Hypothecation of stock in Federal reserve banks............................................. 605a Liability of.................................................................................................................613c Loans on farm lands................................................................................................. 624 Mortgages on farm lands....................................... .................................................. 624 Must become member banks............................... ........................................ 602b, 602e Notes of— Liability for cost of, unaffected..................................................................... 616i May be retired........................................................................................... 618,618a Other banks may become....................................................................................... 608 Outside continental United States....................................................................... 619g Penalty for failure to enter system............................................................. 602e, 602? Philippine Islands.................................................................................................... 619g Redemption fund for notes not counted as reserve........................................... 620 Refunding bonds.............................................................................................. 618, 618a Registrar of stocks and bonds................................................................................ 611k Required to become member banks........................................................... 602b, 602e 602f Retirement of circulating notes..................................................................... 618, 618a State banks may convert to.................................................................................... 608 Stock in Federal reserve bank..................................................................... 602c, 604 605 Stockholders, responsibility and liability.................................................. 602f, 623 Surplus, increase or decrease of.............................................................................605 Time deposits and interest thereon....................................................................... 624 Transfer of stock in Federal reserve banks............................................... 602k, 605a Trustees...................................................................................................................... 611k National currency association........................................................................................ 627 INDEX TO FEDERAL RESERVE ACT. 291 Nonmember banks: Paragraph. Alaska........................................................................................................................ 619g Amount of deposits that may be kept with nonmember banks restricted___ 619d Deposits with............................................................................................................ 619d Discounts from Federal reserve banks not allowed through member banks.. 619d Member banks may not act as agents for, in applying for or receiving dis counts from Federal reserve banks............................ ...................................... 619d Outside continental United States....................................................................... 619g Nonmember national banks, reserve requirements................................................... 619g Notes: Federal reserve. (See Federal reserve notes.) Of State or political subdivisions thereof dealt in by Federal reserve banks. 614 Rediscounted by Federal reserve banks.................................................... 613a, 613b Treasury, 1-year 3 per cent, coupon or registered............................................. 618c Exempt from taxes........................................................................................... 618c May be changed for 30-year 3 per cent gold bonds......................... 618c, 618d Number of examinations to be made.......................................................................... 621 Number of Federal reserve cities.................................................................................. 602 292 INDEX TO FEDERAL RESERVE ACT. o. Paragraph. Obligation of Federal reserve banks to purchase gold notes................................... Obligations of Federal reserve banks, circulating notes are.................................... Obligations of United States, Federal reserve notes................................................. Officers and employees of Federal reserve banks...................................................... Officers not to receive fee or other consideration for loan....................- ............... Officers, rate of interest paid on deposits................................................. - ............... Officers of Federal reserve banks, suspension or removal of.................................... Open-market operations.............. ................................................................................... Recommendations by council................................................................................ Organization certificate of Federal reserve banks..................................................... Organization committee. (See Reserve Bank Organization Committee.) Other reserve cities. (See Reserve cities.) 618c 618b 616 604b 622c 622e 611f 614 612a 604a INDEX TO FEDERAL EESERVE ACT. 293 P. Paragraph. Panama, reserve requirements, etc., for national banks in................................. 619g Paper for Federal reserve notes................................................................................... 6 I 61 Parity maintained.......................................................................................................... 626 Par, when checks and drafts receivable by Federal reserve banks at................ 616j Payment of expenses of organization committee.................................................... 602n Payments of capital stock subscriptions.................................................................... 602c Penalties: Acceptance of fees, etc., by directors, officers, and employees of member banks...................................................................................................................... 622c Divulging information by bank examiners........................................................ 622b Failure to make report................................................................................. 609c, 609d Gratuities to bank examiners................................. .............................................. 622a Loans to bank examiners....................................................................................... 622a Member banks not national banks for failure to comply with conditions, etc................................................................................................................ 609c, 609d National banks failing to comply with provisions of this act.............. 602e, 602f Paying out Federal reserve notes by Federal reserve banks other than bank of issue.................................................................................................................. 616c Reserve shortage..................................................................................................... 619e Violation of section 22 , Federal reserve act...................................................... 622f Violations of act by Federal reserve banks...................................................... 61 lh Period for which Federal reserve bank charter is issued....................................... 604b Philippine Islands: Bank in, may not become member bank.......................................................... 619g Public funds in United States to be deposited in member banks................615 Reserve requirements for national banks in.................................................... 619g Plates, dies, etc., for Federal reserve notes.............................................................. 616h Political subdivisions, bonds, etc., dealt in by Federal reserve banks..............614 Porto Rico, reserve requirements, etc., for national banks in............................. 619g Postal savings funds to be deposited in member banks ....................................... 615 Powers of: Examiners................................................................................................................ 621 Federal advisory council....................................................................................... 612a Federal reserve banks.......................................................................... 604b, 613-614 Federal Reserve Board................................................................................. 611-6111 Not to conflict with those of Secretary of Treasury................................. 61Of Reserve Bank Organization Committee............................................................ 602 State bank as member bank................................................................................. 609g President may place Federal Reserve Board employees under civil service... 6111 President of United States, members of Federal Reserve Board appointed b y .......................................................................................................................... 610, 610e Printing Federal reserve notes................................................................................... 616h Prohibitions: Central reserve city banks from making farm loans....................................... 624 Gratuities and loans to bank examiners............................................................ 622a Member banks limited in amount of deposits with and forbidden to secure discounts from Federal reserve banks for nonmember banks.................... 619d Members of Federal Reserve Board, Assistant Secretary of Treasury, and Comptroller of Currency not to hold office in any member bank... 610, 610d National-bank examiners not to perform other services for banks, etc___ 622b Officers and employees, from receiving fee for loan....................................... 622c Public funds of Philippine Islands, postal savings, or any Government funds not to be deposited in any bank other than member bank............ 615 Reserve shortage.................................................................................................... 619e Restrictions as to visitatorial powers.................................................................. 621b Senators and Representatives not allowed to be members of Federal Re serve Board or director of Federal reserve bank.......................................... 604d Transacting business by Federal reserve bank until authorized by Comp troller......................................................................................... .......................... 604b 294 INDEX TO FEDERAL RESERVE ACT. Paragraph. Profits^ undivided, limit to liability of national bank not to include.................. 613c Provisions for national banks outside continental United States to become member banks.............................................................................................................. 619g Public dues, Federal reserve notes receivable for..................................................... 616 Public Federal reserve bank stock............................................................................... 602e Amount of, limited to any one individual or corporation............................... 602h Liability of holders of................................................................................... 602d, 602g Par value of..................................................................................................... 602g, 605 Payment for..................................................................................................... 602c, 602g Tax free...................................................................................................................... 607a Transfer of................................................................................................................. 602h Voting power, none.................................................................................................. 602j Purchase of: Bills of exchange from member banks................................................................. 614 Gold notes by Federal reserve banks................................................................... 618c United States bonds by Federal reserve banks............................................. 618a Q. Paragraph. Qualification of examiners............................................................................................. 621 INDEX TO FEDERAL RESERVE ACT. 295 R. Paragraph. Rate of taxation on “ additional currency” ............................................................... 627a Rates of discount......................................................................................... 611b, 611c, 614 Rates of interest on Federal reserve notes.................................................................. 616e Real estate loans.............................................................................................................. 624 Reclamation bonds, etc., dealt in by Federal reserve bank................................... 614 Redemption fund: In United States Treasury for Federal reserve note 3.................... 616c, 616d, 616f Not counted as reserve (5 per cent, of national banks).................................... 620 Of Federal reserve notes......................................................................................... 618b Redemption of Federal reserve bank circulating notes........................................... 618 b Rediscount by Federal reserve banks: Acceptances.............................................................................................................. 613b Bills of exchange..................................................................................................... 613a Bills receivable........................................................................................................ 613a Drafts......................................................................................................................... 613a Notes.......................................................................................................................... 613a Paper discounted by other Federal reserve banks.......................................... 611b Paper, rediscounted, as collateral for Federal reserve notes........................... 616a Recommendations by council............................................................................... 612a Regulations by board................................................................................... 611b, 613c Reduction: Of capital of Federal reserve bank..................................................... 605, 605d, 606 Of liability for Federal reserve notes................................................................. 616f Refunding bonds..................................................................................................... 618-618c Registrar of stock and bonds, national bank as......................................................... 611k Regulations: For Federal reserve notes...................................................................................... 611d For transfer of funds and charges therefor among Federal reserve banks___ 616k For transfer of public stock in Federal reserve banks...................................... 602k To be prescribed by organization committee..................................................... 602b Reissue of Federal reserve notes deposited with Federal reserve agent..............616f Rejection of application for Federal reserve notes................................................... 616e Removal or suspension of officer or director of Federal reserve bank................. 61 If Reorganization of Federal reserve banks................................................................... 611 h Repealing clause, general.............................................................................................. 626 Report of board to House of Representatives............................................................ 610g Report of condition by Federal reserve banks, weekly............................... *......... 611a Report of condition by member banks....................................................................... 609c Report of earnings and dividends by member banks.............................................. 609^ Reports: Of examination........................................................................................................ 621 Of foreign branches of national banks................................................................. 625 Representatives not allowed to become members of Federal Reserve Board or directors of Federal reserve banks........................................................................... 604d Requiring national banks to become member banks............................................... 602b Reserve banks held to mean Federal reserve banks................................................ 601 Reserve bank organization committee........................................................................ 602 Admission of banks other than national banks.......................................... 609,609a Allots stock of Federal reserve banks to United States................................... 602i Appropriation for expenses of.............................................................................. 602n Certificates showing districts to be filed with Comptroller..............................604 Designates Federal reserve cities and districts.......................................... 602, 602a Exercises powers of chairman of Federal Reserve Board until such is appointed........................................................................................ 604d, 604e, 604h General powers of.......................................................................................... 602a, 602n How constituted...................................................................................................... 602 Majority a quorum................................................................................................... 602 Offers stock of Federal reserve bank to public.................................................. 602g Organizes each Federal reserve bank.................................................................. 602a 296 INDEX TO FEDERAL RESERVE ACT. Paragraph. Reserve cities.................................................................................................................... 602m Cash reserve required.............................................................................................. 619b Distribution of reserve............................................................................................ 619b Federal Reserve Board to control......................................................................... 61 le Number may be increased or decreased.............................................................. 611e Reserve requirements..............................................................................................619b Reserve that may be held with, by banks elsewhere than in reserve cities. 619a Reserve districts. (See Federal reserve districts.) Reserve requirements of Federal reserve banks * Against deposits........................................................................................................ 616b Against Federal reserve notes...................................................................... 616b, 616d Suspension of, by board.......................................................................................... 611c Tax on deficiency in................................................................................................ 611c Reserve requirements of member banks............................................................... 619-619f Banks in central reserve cities.............................................................................. 619c Banks in reserve cities............................................................................................ 619b Banks not in central reserve or reserve cities.................................................... 619a Country banks.......................................................................................................... 619a Central reserve cities.................................................. ............................................ 619c Estimate of................................................................................................................ 619f Redemption fund not counted as reserve........................................................... 620 Recommendations by council................................................................................612a Reserve cities other than central........................... .............................................. 619b To be held with Federal reserve banks............................................................... 619d When effective.......................................................................................................... 619 Reserve: That may be held with member banks..................................................... 619a, 619b Withdrawal of, from Federal reserve banks......... .............................................. 619e Reserves, tax on deficiency in......................................................................................611c Increase rates of interest and discount................................................................ 611c Restriction, visitatorial powers limited....................................................................... 621b Retirement of: Federal reserve notes............................................................................................... 611d National-bank notes......................................................................................... 618, 618a Revenue bonds of State or political subdivisions thereof dealt in by Federal reserve banks................................................................................................................ 614 Rights of State bank when member bank.................................................................. 609f INDEX TO FEDERAL RESERVE ACT. 8 297 . Paragraph. Safeguarding assets of Federal reserve banks.............................................................611i Salaries: Of examiners............................................................................................................. 621a Of Federal Reserve Board employees.................................................................. 6111 Of members of Federal Reserve Board................................................................610 Salary: Director Federal reserve bank.............................................................................. 604g Federal reserve agent.............................................................................................. 604f Savings accounts as time deposits............................................................................... 619 Seal of Federal reserve bank......................................................................................... 604b Secretary of Agriculture, member of Reserve Bank Organization Committee... 602 Secretary of Treasury: Amount of redemption fund for Federal reserve notes determined by ........ 616d Assistant, restrictions on, subject to term.......................................................... 610 Circulating notes of Federal reserve banks, form to be prescribed by..........618b Chairman of Federal Reserve Board....................................................................610c Deposit of Government funds upon direction of............................................. 615 Deposit of gold coin or certificates to be received when tendered by Fed eral reserve bank or agent..................................................................................616m Earnings from Federal reserve banks to be used under regulations pre scribed by.............................................................................................................. 607 Examiners’ appointment to be approved by.................................................... 621 Gold notes and bonds issued in exchange for certain United States bonds b y ..................................................................................................................618c, 618d Maintaining of parity.............................................................................................. 626 Member of Federal Reserve Board....................................................................... 610 Member of Reserve Bank Organization Committee.......................................... 602 Payment of expenses of Organization Committee to be approved by........... 602n Plates, dies, etc., for Federal reserve notes engraved by direction of.......... 616h Powers heretofore vested in, unchanged.............................. ■............................. 610f Redemption fund for Federal reserve notes controlled b y ..............................616c Redemption fund required by.............................................................................. 615 Strengthening gold reserves...................................................................................626 Section 5154, United States Revised Statutes, amended........................................ 608 Section 5202, United States Revised Statutes, amended........................................ 613c Securities: Dealt in by Federal reserve banks....................................................................... 614 Purchase and sale of, recommended by council............................................... 612a Security: For Federal reserve notes............................................................................. 616a, 616b For gold transactions............................................................................................... 614 Senate, members of Federal Reserve Board to be confirmed by........................... 610 Senators and Representatives not allowed to be members of Federal Reserve Board or officers or directors of Federal reserve banks....................................... 604d Shareholders of Federal reserve banks, liability of........................................ 602d, 606 Short title, 4‘ Federal Reserve Act” ............................................................................ 600 Special examination of foreign branches of national banks................................... 625 State banks as member banks....................................................................... 601, 609, 609d Amount capital required to become member bank......................................... 609f Deposits with nonmember banks......................................................................... 619d Examinations of....................................................................................................... 621 Requirements precedent........................................................................................ 609a Requirements subsequent........................................................................... 609b, 609c Withdrawal from membership in Federal reserve bank................................. 609e Subscription to stock...................................................................................................... 609 Surrender of privileges........................................................................................... 609d 298 INDEX TO FEDERAL RESERVE ACT. Paragraph. State banks may become national banks.................................................................... 608 State revenue bonds, warrants, etc., dealt in by Federal reserve banks............. 614 Statement of condition of Federal reserve banks, weekly....................................... 611a Strengthening gold reserves of the United States...................................................... 626 Stock of Federal reserve banks. (See Capital stock.) Stockholders of Federal reserve banks, liability of........................................ 602d, 606 Stockholders of national banks, responsibility and liability of..................... 602f, 623 Subscription to capital stock of Federal reserve banks: After organization of Federal reserve banks....................................................... 605b By banks.......................................................................................................... 602c, 604 By public................................................................................................................... 602g By State banks.......................................................................................... 604, 609, 609a By trust companies.................................................................................. 604, 609, 609a By trust companies in the District of Columbia...................................... 602c, 604 By United States...................................................................................................... 602i Substitution of collateral for Federal reserve notes.................................................. 616g Sub treasury, Federal reserve notes may be deposited in....................................... 616h Succession of Federal reserve banks............................................................................ 604b Suits against national banks not complying with terms of this act....................... 602f Suits by or against Federal reserve banks.................................................................. 604b Supervision of: - Federal reserve banks by board............................................................................ 611j Federal reserve notes............................................................................................... 611d Surplus funds of Federal reserve banks....................................................................... 607 Free from taxation................................................................................................... 607a On dissolution or liquidation................................................................................. 607 Suspension: Of Federal reserve banks........................................................................................ 611h Of reserve requirements by Federal Reserve Board......................................... 611c Or removal of officers or directors of Federal reserve banks............................611f INDEX TO FEDERAL RESERVE ACT. 299 T. Taxes: Paragraph. Federal reserve banks free from, except on real estate.................................... 607a Federal reserve notes receivable for..................................................................... 616 For paying out Federal reserve notes by bank other than bank of issue___ 616c Franchise, on Federal reserve banks................................................................... 607 Gold notes, 1 year, 3 per cent, without circulation privilege, free from___ 618c Income on capital stock and surplus of Federal reserve banks free from.. . 607a On deficiency in reserve requirements................................................................ 611c Rates of, for certain circulating notes of national banks, changed................ 627a Term of office for directors of Federal reserve banks....................................... 604d, 604i Time deposits defined.................................................................................................... 619 Time deposits in national banks.................................................................................. 624 Title “ Federal reserve act” .......................................................................................... COO Transfer of Federal reserve stock............................................................. 602h, 602k, 605a Transfer of national bank stock, effect of, on liability of stockholder.................. 623 Treasurer of United States: Application to, for retirement of circulating notes by member banks.. 618, 618a Expenses of organization committee payable by.............................................. 602n Federal reserve notes received by........................................................................ 616c Quarterly report to Federal Reserve Board of applications to sell bonds.. . 618a Treasury Department: Federal reserve notes redeemable at.................................................................... 616 Federal reserve notes may be deposited in........................................................ 616h Treasury gold notes issuable to Federal reserve banks in exchange for certain United States bonds........................................................................................ 618c, 618d Trust companies: As member banks. (See State banks as member banks)....... 601, 602b, 608, 609d In District of Columbia.......................................................................................... 602b (Member) examinations.......................................................................................... 621 Withdrawal from membership in Federal reserve bank................................. 609e Trustees, national banks as........................................................................................... 611k 300 INDEX TO FEDERAL RESERVE ACT. u. United States: Paragraph. Applications to sell bonds...................................................................................... 618 Deposits in banks..................................................................................................... 615 Earnings of Federal reserve banks accruing to.................................................. 607 Federal reserve notes, obligations of.................................................................... 616 Treasurer, quarterly report to Federal reserve bank of.................................... 618a United States bonds (see also Bonds, United States): Charter requirements for national banks repealed............................................ 617 Dealings in, by Federal reserve banks.................................................. ............. 614 Discount by Federal reserve bank of paper secured by United States bonds issued since April 24,1917.................................................................................. 611m Hypothecation of, for gold by Federal reserve banks..................................... 614 Refunding.......................................................................................................... 618-618c Purchase of, by Federal reserve banks................................................................ 618a Thirty-year 3 per cent gold, exchanged for 1-year 3 per cent Treasury notes............................................................................................................. 618c, 618d Twos exchanged for 1-year 3 per cent gold notes.............................................. 618c Twos exchanged for 30-year 3 per cent gold bonds........................................... 618c United States deposits of Government funds..................................................... 613, 615 United States Federal reserve bank stock.................................................................. 602i Unpaid dividends, limit to liability of national banks not to include............... 613c Undivided profits, limit to liability of national banks not to include..................613c INDEX TO FEDERAL RESERVE ACT. 301 V. Paragraph. Vacancies in membership of Federal Reserve Board............................................... 610e Vice governor of Federal Reserve Board.................................................................... 610a Violation of provisions of act................................................................................ 602f, 609d Visitatorial powers over banks restricted.................................................................... 621b Vote required to convert State bank to a national bank......................................... 608 Voting power of Federal reserve bank stock..................................................... 602j, 604e W. Warrants of State or political subdivisions thereof dealt in by Federal reserve banks..............................................................................................................................614 Weekly statement of condition by Federal reserve banks................................. 611a Withdrawal from membership in Federal reserve bank by State bank or trust company...................................................................................................................... 609e Withdrawal of: Collateral for Federal reserve notes......................................................................616g Of reserve from Federal reserve banks................................................................619e Worthless assets of Federal reserve banks to be written off.................................... 611g SECTIONS OF REVISED STATUTES. Section. 3847. 4046. 5133. 5134. 5135. 5136. 5137. 5138. 5139. 5140. 5141. 5142. 5143. 5144. 5145. 5146. 5147. 5148. 5149. 5150. 5151. 5152. 5153. 5154. 5155. 5156. 5157. 5158. 5159. 5160. 5161. 5162. 5163. 5164. 5165. 5166. 5167. 5168. 5169. 5170. 5171. 5172. Section. Page. 188 188 20 20 20 21 32 32 32 33 33 34 34,177 34 35 35 40 40 40 40 40 41 42 43,131 44 44 50 50 51,156 51 52 52 53 53 53 53 54 58 59 59 59 61 o 5173 5174 5175 5176 5177, 5178, 5179, 5180 5181. 5182. 5183. 5184. 5185. 5186. 5187. 5188. 5189. 5190. 5191. 5192. 5193. 5194. 5195. 5196. 5197. 5198. 5199. 5200. 5201. 5202. 5203. 5204. 5205. 5206. 5207. 5208. 5209. 5210. 5211. 5212 5213, 5214, Section. 61 62 62 62 62 63 63 63 63 63,187 63 64 64 65 65 66 66 70 72 73 80 80 80 80 80 81 81 81 83 83,146 84 84 84 85 85 86 87 90 90 91 92 92 5215. 5216. 5217. 5218. 5219. 5220. 5221. 5222. 5223. 5224. 5225. 5226. 5227. 5228. 5229. 5230. 5231. 5232. 5233. 5234. 5235. 5236. 5237. 5238. 5239. 5240. 5241. 5242. 5243. 5413. 5414. 5415. 5430. 5431. 5432. 5433. 5434. 5437. 5488. 5497. 93 94 94 94 95 99 99 100 100 101 102 102 103 103 104 104 104 105 105 105 106 106 106 107 111 161 113 113 113 191 192 192 192 193 194 194 194 194 191 391