DIGEST OF RULINGS.

FEDERAL RESERVE ACT.

Construction of the Word "Bank."

SECTION 1.

I, 100. The following have been held not to constitute "banks" within the meaning of the act: A mutual savings association without capital stock (1919 Bulletin, p. 53; 1917 Bulletin, p. 950), a building and loan association (1915 Bulletin, p. 212), a private banker (1917 Bulletin, p. 693), an acceptance corporation (1918 Bulletin, p. 634). (See IX, 300-304. See also rulings on the word "bank" under Clayton Act, infra.)

I, 101. Foreign banks are not included in the phrase "the net difference of amounts due to and from other banks" in section 19. 1919 Bulletin, p. 963. (See XIX, 304.)

Federal Reserve Districts.

SECTION 2.

II, 100. Reduction of Federal reserve districts.-The Federal reserve act does not give to the Federal Reserve Board the power to reduce the number of Federal reserve districts determined by the reservebank organization committee. (An extensive discussion of the authorities.) 1916 Bulletin, p. 20. 1916 Bulletin, p. 20. (But see contra, an opinion rendered by Joseph P. Cotton, 1916 Bulletin, p. 25.)

II, 101. Description of Federal reserve districts, including counties included in parts of States. 1917 Bulletin, p. 668.

Federal Reserve Banks.

II, 200. Power of board to abolish, including abolishment of districts.— The Attorney General is of the opinion that as the Federal reserve act does not expressly and affirmatively give the board permission to abolish Federal reserve districts or banks, but merely to "readjust," the power to abolish can not be implied, and hence the board has no such power. 1915 Bulletin, p. 396.

II, 201. Change of location of Federal reserve banks- Minimum capitalization. The Attorney General is of the opinion that the Federal Reserve Board does not possess the power to change the present location of any Federal reserve bank, irrespective of whether there has been an alteration or readjustment of the district line.

1

Furthermore, the Attorney General ruled that the minimum capitalization of $4.000.000 of Federal reserve banks, while a condition precedent to commenting business, is not a requirement that must ecotine to be complied with after a Federal reserve bank has commented business. 1916 Bulletin, p. 207.

Member Banks

II. 300. Transfer of region in which located from one Federal reserve diatrics to croche-Pending transfer of the northern section of New Jersey from Philadelphia district to New York district on July 1, 1915. the Federal Reserve Bank of Philadelphia may extend discount privileges to member banks located therein, and, as to paper discounted prior thereto but maturing thereafter, may hold until matunity or on the date of transfer, rediscount with the Federal Reserve Bank of New York. 1915 Bulletin, p. 102. (See V, 101.)

II. 301. Lizbaity of stockholders of State bank when State bank has become member-Doble liability.-While stockholders of national banks are liable to double the amount of their stock under section 5151. R. S.. there is nothing in the Federal reserve act which subjects stockholders of State member banks to double liability. But stockholders of Federal reserve banks, including stockholding State member banks. are doubly liable under section 2 of the Federal reserve act. This. however, is a liability of the member bank, and does not impose any direct individual liability on the shareholders of such member bank. 1915 Bulletin, p. 273.

Federal Reserve Branch Banks.

SECTION 3.

III. 100. By-laws of branch banks.-Copy of standard by-laws for use by branches. approved by the board, set forth in detail. 1917 Bulletin. pp. 586, 935.

III. 101. Election of branch-bank directors.-The directors of branches of Federal reserve banks should be elected annually. 1918 Bulletin. p. 31.

Federal Reserve Bank Directors.

SECTION 4.

IV. 100. Qualification of—Effect of change of residence from one district to another by transfer of district.—Where part of Philadelphia district (in New Jersey) is transferred to New York district, a director of the Federal Reserve Bank of Philadelphia, living in the part of the district transferred and possessing the necessary qualifications at the time of election, is not made ineligible to serve out his term by this change in the limits of his district which made him a resident of another district; discussion of the term "resident." 1915 Bulletin, p. 103.

IV, 101. Election of class A directors-Residence.-While the Federal reserve act does not specifically require that a class A director shall be a resident of the district of the Federal reserve bank in question, nevertheless, since Congress intended that all class A directors should be representative of the member banks by which they are elected, class A directors should be residents of the district in which the Federal reserve bank is located. 1916 Bulletin, p. 607.

IV, 102. Holding over of Federal reserve bank director.-A director of a Federal reserve bank has no authority to continue to serve as such after the expiration of his term, even though his successor has not been elected. 1917 Bulletin, p. 290.

IV, 103. Election of class A and class B directors.-A member bank is entitled to have its vote counted if the certificate authorizing one of its directors to cast its vote is filed with the chairman of the Federal reserve bank at any time before the polls are closed. 1918 Bulletin, p. 1215.

IV, 104. Class C directors not eligible to serve mutual savings banks.— Although the word "bank" has been held not to include mutual savings associations without capital stock, class C directors should not be affiliated with such institutions. 1919 Bulletin, p. 53. (See I, 100, and IX, 303.)

IV, 105. Member banks required to vote for Federal reserve bank directors. While it is optional with member banks whether or not they shall nominate candidates for class A and class B directors, section 4 requires that each member bank authorize its board of directors by a resolution or by amendment to its by-laws to appoint some officer to cast a vote in behalf of the bank in the election of such directors. It further requires that such officer certify his first, second, and third choices for such directors. In all cases where there are three or more nominees, no ballot is valid unless first, second, and third choices are designated thereon. 1920 Bulletin, p.

1178.

Federal Reserve Bank Officers and Employees.

IV, 200. Tenure of office.-Officers and employees should be considered as holding office for the calendar year, subject to the pleasure of the board of directors. 1916 Bulletin, p. 13. (See also 1916 Bulletin, p. 64.)

Federal Reserve Bank Notes and Federal Reserve Notes.

IV, 300. Characteristics of such notes and differences between' them.-Federal reserve bank notes are obligations of the Federal reserve banks by which they were issued and are secured in the manner in which national-bank notes are secured, while Federal reserve notes

Furthermore, the Attorney General ruled that the minimum capitalization of $4,000,000 of Federal reserve banks, while a condition precedent to commencing business, is not a requirement that must continue to be complied with after a Federal reserve bank has commenced business. 1916 Bulletin, p. 207.

Member Banks.

II, 300. Transfer of region in which located from one Federal reserve district to another.-Pending transfer of the northern section of New Jersey from Philadelphia district to New York district on July 1, 1915, the Federal Reserve Bank of Philadelphia may extend discount privileges to member banks located therein, and, as to paper discounted prior thereto but maturing thereafter, may hold until maturity or, on the date of transfer, rediscount with the Federal Reserve Bank of New York. 1915 Bulletin, p. 102. (See V, 101.)

II, 301. Liability of stockholders of State bank when State bank has become member-Double liability.-While stockholders of national banks are liable to double the amount of their stock under section 5151, R. S., there is nothing in the Federal reserve act which subjects stockholders of State member banks to double liability. But stockholders of Federal reserve banks, including stockholding State member banks, are doubly liable under section 2 of the Federal reserve act. This, however, is a liability of the member bank, and does not impose any direct individual liability on the shareholders of such member bank. 1915 Bulletin, p. 273.

Federal Reserve Branch Banks.

SECTION 3.

III, 100. By-laws of branch banks.-Copy of standard by-laws for use by branches, approved by the board, set forth in detail. Bulletin, pp. 586, 935.

III, 101. Election of branch-bank directors.-The directors of branches of Federal reserve banks should be elected annually. 1918 Bulletin, p. 31.

Federal Reserve Bank Directors.

SECTION 4.

IV, 100. Qualification of-Effect of change of residence from one district to another by transfer of district.-Where part of Philadelphia district (in New Jersey) is transferred to New York district, a director of the Federal Reserve Bank of Philadelphia, living in the part of the district transferred and possessing the necessary qualifications at the time of election, is not made ineligible to serve out his term by this change in the limits of his district which made him a resident of another district; discussion of the term "resident." 1915 Bulletin, p. 103.

IV, 101. Election of class A directors-Residence.-While the Federal reserve act does not specifically require that a class A director shall be a resident of the district of the Federal reserve bank in question, nevertheless, since Congress intended that all class A directors should be representative of the member banks by which they are elected, class A directors should be residents of the district in which the Federal reserve bank is located. 1916 Bulletin, p. 607.

IV, 102. Holding over of Federal reserve bank director.-A director of a Federal reserve bank has no authority to continue to serve as such after the expiration of his term, even though his successor has not been elected. 1917 Bulletin, p. 290.

IV, 103. Election of class A and class B directors.-A member bank is entitled to have its vote counted if the certificate authorizing one of its directors to cast its vote is filed with the chairman of the Federal reserve bank at any time before the polls are closed. 1918 Bulletin, p. 1215.

IV, 104. Class C directors not eligible to serve mutual savings banks.Although the word "bank" has been held not to include mutual savings associations without capital stock, class C directors should not be affiliated with such institutions. 1919 Bulletin, p. 53. (See I, 100, and IX, 303.)

IV, 105. Member banks required to vote for Federal reserve bank directors. While it is optional with member banks whether or not they shall nominate candidates for class A and class B directors, section 4 requires that each member bank authorize its board of directors by a resolution or by amendment to its by-laws to appoint some officer to cast a vote in behalf of the bank in the election of such directors. It further requires that such officer certify his first, second, and third choices for such directors. In all cases where there are three or more nominees, no ballot is valid unless first, second, and third choices are designated thereon. 1920 Bulletin, p.

1178.

Federal Reserve Bank Officers and Employees.

IV, 200. Tenure of office.-Officers and employees should be considered as holding office for the calendar year, subject to the pleasure of the board of directors. 1916 Bulletin, p. 13. (See also 1916 Bulletin, p. 64.)

Federal Reserve Bank Notes and Federal Reserve Notes.

IV, 300. Characteristics of such notes and differences between them.-Federal reserve bank notes are obligations of the Federal reserve banks by which they were issued and are secured in the manner in which national-bank notes are secured, while Federal reserve notes