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137. Except as provided in existing laws, this provision shall not take effect until sixty days after the passage of this Act.


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


139. Sec. 24. Any national banking association not situated in a central reserve city may make loans secured by improved and unencumbered farm land, situated within its Federal reserve district, but no such loan shall be made for a longer time than five years, nor for an amount exceeding fifty per centum of the actual value of the property offered as security. Any such bank may make such loans in an aggregate sum equal to twenty-five per centum of its capital and surplus or to one-third of its time deposits and such banks may continue hereafter as heretofore to receive time deposits and to pay interest on the same.

140. The Federal Reserve Board shall have power from time to time to add to the list of cities in which national banks shall not be permitted to make loans secured upon real estate in the manner described in this section.


141. Sec. 25. Any national banking association possessing a capital and surplus of $1,000,000 or more may file application with the Federal Reserve Board, upon such conditions and under such regulations as may be prescribed by the said board for the purpose of securing authority to establish branches in foreign countries or dependencies of the United States for the furtherance of the foreign commerce of the United States, and to act, if required to do so, as fiscal agents of the United States. Such application shall specify, in addition to the name and capital of the banking association filing it, the place or places where the banking operations proposed are to be carried on, and the amount of capital set aside for the conduct of its foreign business. The Federal Reserve Board shall have power to approve or to reject such application if, in its judgment, the amount of capital proposed to be set aside for the conduct of foreign business is inadequate, or if for other reasons the granting of such application is deemed inexpedient.

142. Every national banking association which shall receive author

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

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STANDARD REAFFIRMED. 143. Sec. 26. All provisions of law inconsistent with or superseded by any of the provisions of this Act are to that extent and to that extent only hereby repealed: Provided, Nothing in this Act contained shall be construed to repeal the parity provision or provisions contained in an Act approved March fourteenth, nineteen hundred entitled “An Act to define and fix the standard of value, to maintain the parity of all forms of money issued or coined by the United States, to refund the public debt, and for other purposes,” and the Secretary of the Treasury may for the purpose of maintaining such parity and to strengthen the gold reserve, borrow gold on the security of United States bonds authorized by section two of the Act last referred to or for one-year gold notes bearing interest at a rate of not to exceed three per centum per annum, or sell the same if necessary to obtain gold. When the funds of the Treasury on hand justify, he may purchase and retire such outstanding bonds and notes.

NOTE.-See paragraph 240 National Bank Act.


144. Sec. 27. The provisions of the Act of May thirtieth, nineteen hundred and eight, authorizing national currency associations, the issue of additional national-bank circulation, and creating a National Monetary Commission, which expires by limitation under the terms of such Act on the thirtieth day of June, nineteen hundred and fourteen, are hereby extended to June thirtieth, nineteen hundred and fifteen, and sections fifty-one hundred and fifty-three, fifty-one hundred and seventy-two, fifty-one hundred and ninety-one, and fifty-two hundred and fourteen of the Revised Statutes of the United States, which were amended by the Act of May thirtieth, nineteen hundred and eight, are hereby reenacted to read as such sections read prior to May thirtieth, nineteen hundred and eight, subject to such amendments or modifications as are prescribed in this Act: Provided, however, That section nine of the Act first referred to in this section is hereby amended so as to change the tax rates fixed in said Act by making the portion applicable thereto read as follows:

National banking associations having circulating notes secured otherwise than by bonds of the United States, shall pay for the first three months a tax at the rate of three per centum per annum upon the average amount of such of their notes in circulation as are based upon the deposit of such securities, and afterwards an additional tax rate of one-half of one per centum per annum for each month until a


tax of six per centum per annum is reached, and thereafter such tax of six per centum per annum upon the average amount of such notes.

NOTE.—On June 30, 1915, when the provisions of the Act of May 30, 1908, will expire, sections 5153, 5172, 5191 and 5214 of the Revised Statutes will be revived by the above as they were prior to May 30, 1908. Section 5153 deals with public depositaries. It

not expressly amended by the Act of May 30, 1908, but was supplemented by Section 15 of that Act, requiring interest to be paid on public deposits. This section as it read prior to May 30, 1908, will be found as paragraph 50, National Bank Act. See also paragraph 93 Federal Reserve Act.

Section 5172 of the Revised Statutes deals with the printing, denominations and form of circulating notes of National banks. As amended by the Act of May 30, 1908, it will be found as paragraph 75 of the National Bank Act. As reenacted it will read as follows:

Section 5172. (Printing, denominations, and form of the circulating notes.) In order to furnish suitable notes for circulation, the Comptroller of the Currency shall, under the direction of the Secretary of the Treasury, cause plates and dies to be engraved, in the best manner to guard against counterfeiting, and fraudulent alterations, and shall have printed therefrom,

and numbered, such quantity of circulating notes, in blank, of the denomin[ations of one dollar, two dollars, three dollars, five dollars, ten dollars,

twenty dollars, fifty dollars, one hundred dollars, five hundred dollars, and one thousand dollars, as may be required to supply the associations entitled to receive the same. Such notes shall express upon their face that they are secured by United States bonds, deposited with the Treasurer of the United States, by the written or engraved signatures of the Treasurer and Register, and by the imprint of the seal of the Treasury; and shall also express upon their face the promise of the association receiving the same

to pay on demand, attested by the signatures of the president or viceè president and cashier; and shall bear such devices and such other state

ments, and shall be in such form, as the Secretary of the Treasury shall, by regulation, direct.

(Section 5175, paragraph 80, of the National Bank Act, should be read in connection with the above section.)

Section 5191, dealing with reserves, provides that reserve requirements shall not apply to public moneys. This section is now. largely superseded by the reserve provisions in the Federal Reserve Act (paragraphs 119-127), but since the character of reserve money is not specified in the Federal Reserve Act, it would seem that the requirement contained in Section 5191

R. S. (paragraph 120 National Bank Act), that reserves shall consist of E lawful money of the United States, is made applicable.

Section 5214 was never directly amended until the Act of May 30, 1908, but it had virtually been superseded by two previous statutes, one of which, Act March 3, 1883, repealed the tax on the capital and deposits of national banking associations, and the other, March 14, 1900, levied a tax of one

fourth of one per cent. on the circulation of National banks secured by the i deposit of United States two per cent. bonds, in lieu of existing taxes on

their circulation imposed by section 5214; and this latter tax was the one in force on May 29, 1908.


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

or by the organization committee pending the organization of the Federal Reserve Board.


THE ACT. 146. Sec. 29. If any clause, sentence, paragraph, or part of this Act shall for any reason be adjudged by any court of coinpetent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder of this Act, but shall be confined in its operation to the clause, sentence, paragraph, or part thereof directly involved in the controversy in which such judgment shall have been rendered.

147. Sec. 30. The right to amend, alter, or repeal this Act is here by expressly reserved.

148. Approved, December 23, 1913.



The first official circular of the Federal Reserve Bank Organization Committee was issued February 14, 1914, and is devoted to a definition of certain sections of the Federal Reserve Act, regarding which inquiries have been made by National and State banks. It also defines the duties and powers of the Committee. It is given below in full:

In view of the large number of inquiries received from both National and State Banks as to the proper interpretation of various sections of the Federal Reserve Act, it is deemed advisable to explain, as briefly as the circumstances will permit, the operation of this Act in so far as it relates to the duties and powers of the Organization Committee and the method of procedure adopted by the Committee. For convenience, these duties are considered in their chronological order.

First. Section 2 of the Federal Reserve Act provides as follows:

“Under regulations to be prescribed by the Organization Committee, every National banking association in the United States is hereby required, and every eligible bank in the United States and every trust company within the District of Columbia, is hereby authorized to signify in writing, within sixty days after the passage of this Act, its acceptance of the terms and provisions hereof."

It will be observed that under the provisions of this section all National Banks are required, and all other eligible banks are permitted, to signify their acceptance of the provisions of this Act within sixty days from its passage. Banks should not confuse this notice to the Committee with the formal application for stock to be filed later.

To facilitate compliance with this provision of the Act, the Committee has forwarded to all National Banks a prescribed form of resolution to be adopted by the Boards of Directors of such banks, and upon request from State Banks is forwarding a prescribed form of resolution for use by such banks. When certified copies of such resolutions have been received and filed, no other action by applying banks is necessary until the locations of the several Federal Reserve Banks have been established by the Committee, and the districts to be served by such banks have been defined.

The Committee is now engaged in holding hearings in various parts of the United States in order to have before it as much information as possible to enable it to properly determine the locations of such banks and the districts to be served.

Section 2 further provides as follows:

"When the Organization Committee shall have designated the cities in which Federal Reserve Banks are to be organized and fixed, the geographical limits of the Federal Reserve districts, every National banking association within that district shall be required within thirty days after notice from the Organization Committee to subscribe to the capital stock of such Federal Reserve Bank in a sum equal to six per centum of the paid-up capital stock and surplus of such bank, one-sixth of the subscription to be payable on call of the Organization Committee or of the Federal Reserve Board, one-sixth within three months, and one-sixth within six months thereafter, and the remainder of the subscription, or any part thereof, shall be subject to call when deemed necessary by the Federal Reserve Board, said payments to be in gold or gold certificates."

This section should be read in connection with Section 4 of the Federal Reserve Act, which reads as follows: "When the Organization Committee shall have established Federal Re


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