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FEDERAL RESERVE BANKS—Clearing-house Functions-Cont'd.

Paragraph
Actual expenses incurred in collecting and remitting funds, or for

exchange sold are not prohibited. “The Federal Reserve Board
shall, by rule, fix the charges to be collected by the member
banks from its patrons whose checks are cleared through the
federal reserve banks and the charge which may be imposed for
the service of clearing or collection rendered by the Federal Re-
serve Bank”

107
May receive eligible paper as one-half of each installment of re-
serves deposited by member banks...

124
Reserves of member banks on deposit with reserve banks may be
checked against

126
Earnings:
Stockholders to receive 6% cumulative annual dividend after all
expenses are paid

49
After dividend payments, one-half of the net earnings shall go into

a surplus fund until it shall aggregate 40% of paid in capital stock 49
Remainder to be paid to the United States as a franchise tax, the

Secretary of the Treasury to have discretion to use it to supple-
ment the gold reserve or to reduce the government's bonded in-

debtedness; surplus after liquidation to go to the United States. . 49, 50
Except on real estate reserve banks are exempt from taxation.... 51
Examinations:
Reserve banks to be examined at least once a year....

134
Upon joint application of ten member banks, reserve board shall
order a special examination of a reserve bank...

134
Reserve banks may obtain the examination of a member bank... 132
Branch Banks:
Branches reserve banks shall be established in the bank's own
district

15
May be established in a district in which a reserve bank has been
suspended

15
Management of branches to be by a board of seven directors, four
selected by reserve bank and three by reserve board..

15
Reserve bank to designate one director as manager; all to have
same qualifications as directors of reserve banks.

15
Foreign agencies may be established by reserve banks; bank ac-

counts maintained in foreign countries and correspondents ap-
pointed

92
MEMBER BANKS.

All national banks are required and State banks and trust com-

panies are authorized to signify their acceptance of the Act, and
become member banks by subscribing to the capital stock of the
reserve bank of their district. ......

4, 53
Failure of national banks to become members forfeits their rights,
privileges and franchise if they do not join within one year....

7
Upon failure of national banks to accept the provisions of Act
within 60 days, they shall cease to act as reserve agent...

6
Directors personally liable for damages for failure to comply with
Act, except for failure to join within one year.

7
Application for stock

16
No discrimination in favor of or against a member bank is per-
mitted on the part of reserve banks.

30
Discounts, advancements and accommodations are to be made by

reserve banks with due regard for the claims and demands of
other member banks

30
The board of directors of each member bank shall elect a district

reserve elector, and shall nominate candidates for A and B
directors of reserve banks, to be voted for and elected by the dis-
trict reserve electors

39, 40
Upon increasing or decreasing its capital stock, a member bank

must correspondingly increase or decrease the amount of capital
stock it owns in the reserve bank......

47

an

MEMBER BANKS—Continued.

Paragraph
Acceptance: Any member bank may accept drafts or bills of
exchange drawn upon it growing out of transactions involving the
importation or exportation of goods, having not more than six
months' sight to run, to an amount in the aggregate not to ex-
ceed one-half its capital and surplus......

84
Exchange charges may be made by member banks.

107
Depositaries: Member banks may be used as government de-
positaries

94
No government funds shall be placed in banks not members.

94
Circulation: Member banks may retire their circulation, and after
December 23, 1915, may sell their bonds to reserve banks up to

amount aggregating $25,000,000 a year, if reserve board
approves

110-111
Deposit of bonds with Treasury not required.

109
Reserves: Member banks are required to keep reserves as fol-

lows:
In central reserve cities 18% of demand and 5% of time deposits.

Of this, 6/18 to be in its own vaults; 7/18 in the reserve bank,
and the balance in its own vaults or with the reserve bank.

123
Member banks in reserve cities, 15% of demand and 5% of time

deposits. Of this 6/15 in its own vaults for 3 years, thereafter
5/15. In reserve bank for three years 3/15; then increasing
1/15 for each of three succeeding half years; thereafter 6/15.
The balance for first three years in own vaults or reserve bank,
or in national banks in reserve or central reserve cities. After
three years in own vaults or reserve bank or both...

122, 123
Member banks not in reserve or central reserve cities, 12% of

demand and 5% of time deposits. Of this, 5/12 in its own vaults
for 3 years, thereafter 4/12. In reserve bank for one year 2/12;
then increasing 1/12 for each of three succeeding half years;
thereafter 5/12. Balance for first three years in own vaults or in
reserve bank or in national banks in reserve or central reserve

cities. After 3 years in own vaults or reserve bank or both.. 121
Demand deposits are those payable within 30 days...

119
Time deposits are those payable after 30 days, and all savings ac-

counts and certificates of deposit subject to not less than 30 days'
notice before payment.

119
Interest may be paid on time deposits.

139
Member banks may check against reserves held by reserve banks. 126
One-half of each installment of reserve deposits with reserve bank
may be eligible paper..

124
State banks as member banks may for first 3 years keep their
reserves as required by law of State.....

125
The 5% redemption fund in the Treasury may not be counted as a
part of the reserve

129
Method of estimating reserves

127
May make no new loans or pay dividends when reserves are below
requirements

126
Deposits of member banks with non-member banks prohibited in
excess of 10% of capital and surplus of depositing bank...

125
Discount privilege shall not be extended by member banks to non-
member banks, except with consent of reserve board...

125
Limitation as to fees and benefits to directors, officers and em-
ployes of member banks

136
Examinations: Member banks to be examined at least twice a
year by the Comptroller of the Currency; examiners given power
to administer oaths, shall report to Comptroller..

130
State banks as members to submit to examinations and regulations
prescribed by organization committee or resérve board...

54
State examination of State banks as members may be accepted.. 130
Reserve banks may order special examinations of member banks.. 132
Shall make reports to reserve board when required....

66
No bank shall be subject to visitorial powers other than authorized
by law or exercised by the courts or Congress.

133
Jurisdiction of examiners..

130

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MEMBER BANKS—Continued.

Paragraph
Cost of examination to be borne by member banks; examiners to
receive salaries

131
Loans and gratuities to examiners prohibited.

135
Foreign Branches of National Banks are permitted to banks having

a capital and surplus of $1,000,000 or over, also branches in United
States dependencies with approval of reserve board..

141
Accounts of foreign branches must be kept independently; examina-
tions provided

142
Farm Land Loans:
National banks as members not located in a central reserve city
may loan for periods of five years 25% of their capital and surplus

or 1/3 of their time deposits on unincumbered farm lands......139, 140
Limitations of indebtedness of national banks...

85
Prohibitions in Revised Statutes made applicable respecting lia-

bility, loans on own bank stock, impairment of capital, pay-
ment of unearned dividends

55
May reduce capital stock

145
National banks in Alaska or outside the United States may remain

non-meniber banks, or, except those in the Philippine Islands
may become member banks of any one of the districts.

128
Dissolution of national bank shall not abolish liability of stock-
holders

8
Double liability of stockholders provided

138
Extension of double liability for 60 days after transfer of stock in
case of subsequent failure of bank

138
State banks and trust companies may convert into national bank.. 52
Application for membership of State banks...

53
Membership requirements

53-57
Trust Functions Granted:
The rights to act as trustee, executor, administrator, or registrar
of stocks, may be granted national banks as members.

76

78
78
78

FEDERAL ADVISORY COUNCIL.

Created
Majority constitutes quorum.
Compensation and allowances
Powers:

To confer with Federal Reserve Board...
Make oral or written representations
Call for information and make recommendations.

79
79
79

THE PRESIDENT OF THE UNITED STATES.

Appoints members reserve board
Fills vacancies on reserve board.
May place employes in classified service..

58
62
77

THE SECRETARY OF THE TREASURY.
Member organization committee

2
Ex-officio chairman reserve board.

58, 61
Powers as secretary not diminished.

63
Ineligible for two years for position with member bank.

59
Holds United States stock in regional banks.

11
Dispose of United States stock in reserve banks.

11
Dispose of earnings derived by the United States from reserve banks 50
Deposit general fund of Treasury in reserve banks.

93
Constitute reserve banks fiscal agents of government.

93
Designate member banks as depositaries...

94
Fix amount of note redemption fund in Treasury.

.97, 98, 100
Direct Comptroller to have prepared plates and dies for printing
notes

102
Prescribe form and tenor of notes.:

102
May make available for preparation of notes any appropriations

already made for engraving and printing and for distinctive paper 106

Y

THE SECRETARY OF THE TREASURY_Continued.

Paragraph
Prescribe form and tenor of notes issued by reserve banks on gov-
ernment bonds

115
Approval required to exchange 2% bonds for one year 3% notes
and 30-year 3% bonds..

116
May request reserve banks to redeem one-year 3% gold notes. 116
May exchange notes for bonds..

118
Prescribe issue and tenor of 3% notes and bonds.

117
Announce establishment of federal bank for enforcement of reserve
provision

120
May borrow gold pledging bonds or buy gold selling bonds.

143

58

COMPTROLLER OF THE CURRENCY.
Member organization committee

2
Member reserve board

58
Compensation increased
Court proceedings to enforce Act in Comptroller's name.

7
Forward to banks stock subscription resolution.

16
Receive and preserve organization certificate.

18
Authorize reserve banks to commence business.

28
Receive from reserve board directors' certificate of increase and
decrease in capital stock

47, 48
Issue certificate upon conversion of "other" banks into national
bank

52
Ineligible for position with member bank.

59
Bureau of the Comptroller created.

65
Issue and retire federal reserve notes.

69
Prepare plates and dies for printing of notes.

102
Destroy unfit federal reserve notes

97
Deposit finished notes in Treasury, sub-treasuries and mints.

103
Have control and custody of plates and dies.

104
Issue circulating notes to reserve banks on deposit of United States
bonds

115
Examine member banks at least twice a year.,

130
Recommend to reserve board salaries of examiners.

131
Approval necessary for reduction of capital of national banks.... 145

TREASURER OF THE UNITED STATES.

Shall receive application from member banks to sell their bonds
securing circulating notes.

110
Shall report such applications quarterly to reserve board.

111
Shall notify member banks of amount of bonds sold for them. 113
Receive bonds on deposit from reserve banks....

115
ASSISTANT SECRETARIES OF THE TREASURY.
Ineligible for position with member bank....

59
Reserve Agent:
Shall hold gold and lawful money for redemption of outstanding
notes

100
Shall transmit as much gold to the Treasury for the redemption of
notes as the Secretary may request....

100
Shall exchange collateral deposited to secure notes, upon request of
reserve bank

101
Inconsistent provisions of law repealed.

143
Gold standard act reaffirmed...

143
Emergency Currency Act extended to June 30, 1915.

144
Tax changed on emergency currency note...

144
Court decisions to affect only that sentence or paragraph of the
Act in controversy

146
Right to amend, alter or repeal reserved.

147
Approved Dec. 23, 1913

148
Regulations under Federal Reserve Act.

58-59

ALPHABETICAL INDEX TO FEDERAL RESERVE ACT.

A

Paragraph
Acceptances

82, 86
Bankers

87
Accept drafts or bills of exchange.

84
Accounts

.80, 92, 142
Advisory council

78
Agencies in foreign countries.

92
Agricultural products

81
Alter, amend or repeal act...

147
Approved

148
Assets-doubtful to be written off.

72
Assistant Secretaries of the Treasury not eligible for position with
member bank

59

B
Bank-meaning of
Banks, adopt resolution.
Bills

Accepted for rediscount as security for notes.

Bills of exchange
Board, meaning of
Bonds-State and political sub-divisions.

1
16
81

96
.81, 83, 84, 85, 86, 87, 92

1
89

С
Cable transfers

87
Capital stock

4, 47
May be reduced by national banks.

145
State banks must possess sufficient capital to become national.

54
Certificate of organization

17
Charter bonds

109
Checks

80
Circulation:
By Federal Reserve Banks.....

.27, 114, 115
Cancel and retire

113
Federal Reserve Bank—permitted to take out.

114
Federal Reserve Bank-not limited.

115
Limit of liability

85
May retire after two years.

110
National bank notes

80
Cities-Federal Reserve

2
Cities—In which banks may make farm loans.

140
Cities–Reserve and central reserve.

122, 123
Cities—Increase or decrease number of reserve or central reserve.... 70
Classified service

77
Clearing checks

107
Collateral

.88, 101
To secure notes

96
Commercial transactions

81, 92
Comptroller of the Currency:
Approve reduction capital national banks..

145
Approve State bank conversion into National Association.

52
Authorize Federal Reserve Bank to begin business.

28
Certificate showing change Federal Reserve Bank stock.

47, 48
Compensation increased

58
Control and custody of plates and dies.

104
Deposit finished notes in available places.

103
Examine member banks..

130
i Forward application blanks

16
Ineligible to hold office in any member bank.

59
15

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