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serve districts as provided in Section 2 of this Act a certificate shall be filed with the Comptroller of the Currency showing the geographical limits of such districts and the Federal Reserve city designated in each of such districts. The Comptroller of 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 blank shall contain a resolution to be adopted by the Board of Directors of each bank executing such application, authorizing a subscription to the capital stock of the Federal Reserve Bank organizing in that district in accordance with the provisions of this Act.”

It will be observed from the foregoing that the Comptroller of the Currency will cause to be forwarded to those banks which have signified their intention to become members of Federal Reserve Banks, a form of application to be executed by such banks after the districts have been laid out and the location of the Federal Reserve Banks definitely established by the Organization Committee. These forms will be forwarded in due course and in accordance with the further provisions of the Act, when the minimum amount of stock for any Federal Reserve Bank has been subscribed the Committee will designate five banks to execute the necessary, organization certificate. Subscriptions to stock will therefore not be called by the Committee until after these preliminary steps have been taken.

Attention is called to the fact that all National Banks are required to signify, within sixty days from the passage of the Federal Reserve Act, whether or not they accept the provisions of the Act and intend to subscribe to the stock of the Federal Reserve Banks when organized.

That within thirty days after the Organization Committee has announced the designation of cities in which Federal Reserve Banks are to be organized, fixed the geographical limits to be served, and notified such Nationa Banks, all such_National Banks are required to subscribe to the capita stock of such Federal Reserve Banks. These provisions are clearly se forth in the Federal Reserve Act, and the Committee will expect and requir a strict compliance therewith.

A number of banks appear to be under the misapprehension that they are allowed twelve months' time in which to accept the provisions of the Federal Reserve Act. This limitation, which is manifestly intended to cause automatically a forfeiture of the charters of those banks failing to comply with the provisions of the Act, must not be construed as extending the time specifically set out in the Act within which such banks must take i the action above outlined.

The provisions relating to membership by State Banks are, under the terms of the Act, entirely optional. State Banks are not required to signify within any given time their intention to become members, but are permitted to do so if they desire to become members as soon as Federal Reserve Banks are originally organized.

Two methods are prescribed by the Federal Reserve Act by which such banks may become members of the Federal Reserve System. First, under i Section 8, by conversion of State Banks into National Banks, in which case the laws applicable to National Banks become immediately operative as soon as such conversion is completed. Second, under Section 9, State Banks may become members, as State Banks, retaining their State charters, in which case such banks are subject, specifically, to the provisions of the Federal Reserve Act contained in Section 9, and to such other provisions of the Act as are clearly applicable. Banks becoming members as State Banks, therefore, may exercise those powers conferred by their State charters which are not in conflict with the specific provisions of the Federal Reserve Act.

State Banks and Trust Companies signifying their intention to become members of the Federal Reserve System before the organization of the Federal Reserve Banks will be permitted to participate in the selection of directors of said Reserve Banks, as prescribed by the Federal Reserve Act.

The Committee has prescribed the regulations under which State Banks and Trust Companies may become members, and a copy of such regulations, with the forms approved for use by such banks, will be furnished upon request of any, State Bank desiring to apply for membership in a Federal Reserve Bank.

M. C. ELLIOTT, Secretary, Reserve Bank Organization Committee.

On February 20, 1914, the Organization Committee issued the following: REGULATIONS AND BY-LAWS, RESERVE BANK ORGANIZATION

COMMITTEE, PRESCRIBING CONDITIONS UNDER WHICH
STATE BANKS AND TRUST COMPANIES MAY SUBSCRIBE
TO THE STOCK AND BECOME MEMBERS OF FEDERAL

RESERVE BANKS.
Section 9 of the Federal Reserve Act reads in part, as follows:

“Any bank incorporated by special law of any State, or organized under the general laws of any State of the United States, may make application to the Reserve Bank Organization Committee, pending organization, and thereafter to the Federal Reserve Board for the right to subscribe to the stock of the Federal Reserve Bank organized or to be organized within the Federal Reserve district where the applicant is located. The Organization Committee or the Federal Reserve Board, under such rules and regulations as it may prescribe, subject to the provisions of this section, may permit the applying bank to become a stockholder in the Federal Reserve Bank of the district in which the applying bank is located. Whenever the Organization Committee or the Federal Reserve Board shall permit the applying bank to become a stockholder in the Federal Reserve Bank of the district, stock shall be issued and paid for under the rules and regulations in this Act provided for National Banks which become stockholders in Federal Reserve Banks."

Pursuant to the provisions of this section, the Reserve Bank Organization Committee has prescribed the following regulations and by-laws specifying the conditions under which State Banks and Trust Companies may become members of Federal Reserve Banks.

First.-Any State Bank or Trust Company eligible to membership in a Federal Reserve Bank under the Federal Reserve Act and desiring to subscribe to the capital stock of the Federal Reserve Bank to be organized in the district which will include the place of business of such State Bank or Trust Company shall submit to its board of directors for consideration a resolution in the following forn

to wit: Whereas, Under Section 2 of the Act of Congress known as the Federal Reserve Act, approved on the 23d day of December, 1913, it is provided that: “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 thereof;" and

Whereas, This bank is believed by the Board of Directors to be eligible to membership and to have the right to subscribe to the capital stock of the Federal Reserve Bank to be organized; and

Whereas, It is the intention of this Board to apply under the provisions of the Federal Reserve Act for its proper proportion of stock of the Federal Reserve Bank to be organized within the district in which this bank will be located when the geographical limits to be served by such Federal Reserve Bank have been fixed and announced by the Organization Committee.

Now, therefore, be it resolved, That the president of this bank be, and he hereby is authorized, empowered and directed to notify the Reserve Bank Organization Committee that this bank will apply for an allotment of stock of the Federal Reserve Bank aforesaid, and, if granted, will become a member of such Federal Reserve Bank' subject to the provisions of the Federal Reserve Act.

When such resolution has been passed by the board of directors, the president or executive officer of such State Bank or Trust Company shall transmit a duly certified copy of such resolution to the Reserve Bank Organization Committee at Washington.

Second.—When the location of the several Federal Reserve Banks provided for in the Federal Reserve Act have been established and the districts to be served by such Federal Reserve Banks have been defined, the Committee will cause to be forwarded to such State Banks or Trust Companies, at the same time that applications are forwarded to National Banks under

the provisions of the Federal Reserve Act, a form of application for an amount of capital stock in such Federal Reserve Bank equal to 6 per cent of the unimpaired capital stock and surplus of such State Bank or Trust Company. This application must be accompanied by a statement showing the assets and liabilities of such State Bank or Trust Company listed on forms approved by the Committee. These forms will be furnished by the Committee upon request. The Board of Directors or a committee composed of not less than five members of such Board shall certify that in their opinion the assets listed in the manner prescribed by the Committee represent actual existing values, and that in the opinion of said Board none of such assets are carried at an excessive valuation on the books of said bank.

State Banks and Trust Companies shall also file with their applications for membership copies of their charters, with amendments, and a digest thereof showing the powers (granted by such charters and amendments) classified to indicate:

a. Those powers which such banks and trust companies have exercised and desire to continue to exercise.

b. Those powers which, while granted, have not been exercised and which such banks and trust companies will not desire nor attempt to exercise as members of the Federal Reserve System.

Third.-In lieu of a special examination of the conditions of such bank by a National Bank examiner or examiner appointed by the Committee or the Federal Reserve Board, the Committee may accept a certificate from a duly accredited State examiner or bank commissioner to the effect that the statement filed by the Board of Directors as aforesaid represents the true condition of such State Bank or Trust Company, and that the capital stock of such bank is in the opinion of such examiner or commissioner unimpaired, the surplus represents actual existing values and the liabilities are as shown by such statement. The Committee, however, will reserve the right in any case to require a special examination by a National Ban examiner or an examiner selected by the Committee or by the Federa Reserve Board as a condition precedent to membership in any Federa Reserve Bank.

Fourth.—Only those banks which have an unimpaired capital sufficient to entitle them to become National banking associations under the provisions of the National Bank Act shall be considered as eligible to membership in a Federal Reserve Bank.

In accordance with Section 5138, U. S. Revised Statutes, as amended by the Act of March 14, 1900, State Banks or Trust Companies in order to be eligible to membership must have unimpaired capital stock, as follows:

In cities or towns of less than 3,000 inhabitants, $25,000.

In cities or towns of more than 3,000 inhabitants, but less than 6,000 inhabitants, $50,000.

In cities of more than 6,000 inhabitants but less than 50,000 inhabitants, $100,000.

In cities of more than 50,000 inhabitants, $200,000. Fifth.-State Banks becoming members as such under the provisions of Section 9 of the Federal Reserve Act and retaining their State charters shall be subject to the provisions of Section 9 and to such other provisions of the Federal Reserve Act as are applicable thereto.

Sixth.-State Banks desiring to become inembers under Section 8 of the Federal Reserve Act by being first converted into National Banks in accordance with the provisions of this section, shall become members as National Banks. Where such conversion into National Banks is completed before the expiration of 60 days from the passage of the Federal Reserve Act; such banks should file with the Organization Committee the form of resolution prescribed by the Committee to signify their acceptance of the terms and provisions of the Federal Reserve Act before February 23, 1914. Where such conversion is not completed before the expiration of the 60 days aforesaid, the board of directors of such banks shall, in executing the articles of association and organization certificate as required by Section 8, at the same time adopt the resolution prescribed by the Organization Committee as aforesaid, and such resolution shall accompany the organization certificate filed with the Comptroller of the Currency.

Seventh.—Where such conversion is completed after the organization of the Federal Reserve Banks, such organization certificate shall be accompanied by an application to the Federal Reserve Board or to the Organiza

tion Committee for an amount of stock equal to 6 per cent. of the unimpaired capital and surplus of such bank.

Eighth.—Whenever a trust company shall become converted into a National Bank under the provisions of Section 8 of the Federal Reserve Act and shall desire to continue to act as trustee, executor, administrator or registrar of stocks and bonds, such organization certificate shall, when filed with the Comptroller of the Currency, be accompanied by an application to the Federal Reserve Board for permission to engage in such business, and no certificate for the conversion of such trust company into a National Bank shall be approved by the Comptroller of the Currency until the Federal Reserve Board has granted this permission under rules and regulations prescribed by it.

Ninth.-Whenever a State Bank or Trust Company with established branches shall make application for conversion into a National Bank and shall desire to retain such branches, such State Bank or Trust Company shall comply with Section 5155, U.S. Revised Statutes, which reads as follows:

“It shall be lawful for any bank or banking association organized under State laws, and having branches, the capital being joint and assigned to and used by the mother-bank and branches in definite proportions, to become a National banking association in conformity with existing laws, and to retain and keep in operation its branches, or such one or more of them as

it may elect to retain; the amount of the circulation redeemable at the ľ mother-bank, and each branch to be regulated by the amount of capital assigned to and used by each.”

Tenth.–State Banks or Trust Companies applying for membership in the Federal Reserve System under Section 8 of the Federal Reserve Act by

conversion into National banking associations, or applying for membership en under Section 9 as State Banks will, if otherwise found to be eligible, be

given a reasonable time within which to adjust the loans and investments of such banks to conform to the requirements of the Federal Reserve Act and other laws of the United States applicable thereto. Any bank applying

for membership and having loans to any one person, firm, or corporation i in excess of the limit allowed by the Federal Reserve Act or other loans

and investments prohibited by such act shall, before being admitted to membership, give satisfactory assurance to the Committee or to the Federal Reserve Board that such loans and investments will be eliminated or made to conform to the provisions of the Federal Reserve Act and other applicable laws not later than January 1, 1915.

The condition of the applying bank or trust comnany and the general nature of its business will be considered by the Committee in each case in determining whether such banks shall be admitted to membership.

Eleventh. The Committee or the Federal Reserve Board will from time to time adopt and publish such additional regulations and by-laws as may be deemed necessary and advisable.

W. G. MCADOO, Chairman,
D. F. HOUSTON,

J. S. WILLIAMS,
Reserve Bank Organization Committee.

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