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CHAPTER IV.

REGULATION OF THE BANKING BUSINESS.

119. 5190. Place of business.

139. 5201. Associations must not loan 120. 5191. Reserve cities and reserve

on or purchase their own requirements.

stock. 121. 5192. What may be counted as re- 140. 5202. Restriction on bank's inserve.

debtedness. 122. Act June 30, 1874. Lawful money 141. 5203. Restriction upon use of cirreserve to be determined by

culating notes. deposits.

142. 5204. Prohibition upon with123. Act May 30, 1908. No reserve

drawal of capital. Unearned need be held against deposits

dividends prohibited. of public money.

143. 5205. Assessment for failure to 124. Act June 30, 1874. Provisions for

pay up capital stock or for redeeming circulation. Five

impairment of capital. per cent redemption fund. 144. 5206. Prohibition against uncur125. Act March 3, 1875. Clerical force

rent notes. for redemption of circulating 145. 5207. United States notes not to notes.

be held as collateral. 126. Act March 3, 1887, as amended 146. Act July 12, 1882. Issue of gold March 3, 1903. Addtional

certificates. reserve cities.

147. 5208. Penalty for falsely certify127. Act July 14, 1890. Disposition

ing checks. of redemption account. 148. Act July 12, 1882. Punishment 128. Act July 28, 1892. Redemption of

for falsely certifying checks. lost or stolen notes and of 149. 5209. Penalty for embezzlement, notes not properly signed.

abstraction, willful misappli129. 5193. Repealed by act March 14,

cation, false entries, etc. 1900.

150. Act January 26, 1907. National 130. 5194. Superseded by repeal of

banks not permitted to make section 5193.

contributions in connection 131. 5195. Place for redemption of cir

with election to political ofculating notes to be desig

fice. nated.

151. 5210. List of shareholders. 132. Act June 20, 1874. National banks 152. 5211. Reports to Comptroller of not required or permitted to

the Currency. redeem their circulating notes 153. Act February 26, 1881. Verifielsewhere than at their own

cation of reports. counters or at the Treasury 154. 5212. Report of dividends. of the United States.

155. 5213. Penalty for failure to make 133. Act March 3, 1887. Additional

reports. central reserve cities.

156. 5214. Taxes payable to the United 134. 5196. National banks to take notes

States. of other national banks at 157. 5215. Half-yearly return of circupar.

lation [deposits and capital 135. 5197. Limitation upon rate of in

stock]. terest which may be taken. 158. 5216. Penalty for failure to make 136. 5198. Penalty for taking unlawful

return. interest. Jurisdiction of suits 159. 5217. Enforcing tax on circulaby or against national banks.

tion. 137. 5199. Dividends.

160. 5218. Refunding excess tax. 138. 5200. Limitation of liabilities 161. Act March 1, 1879. No tax to be which may be incurred by

paid by insolvent banks. any one person, company, etc. 162. 5219. State taxation.

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106.

PLACE OF BUSINESS. Act June 3,

119. Sec. 5190.-The usual business of each national 1864, 106,

8; 13 banking association shall be transacted at an office or Stat. L., 101.

banking house located in the place specified in its organization certificate.

NOTE.-See act May 1, 1886, following Revised Statutes, 5136, in reference to change in place of business.

RESERVE CITIES AND RESERVE REQUIREMENTS. Act June 3,

120. Sec. 5191.-Every national banking association in 1864, sec 3i : 13 either of the following cities: Albany, Baltimore, Bos

act Maps 1, ton, Cincinnati, Chicago, Cleveland, Detroit, Louisville, 1872, c. 22; 17 Milwaukee, New Orleans, New York, Philadelphia, PittsStat. L., 32.

burg, St. Louis, San Francisco, and Washington, 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 deposits; 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 circulation 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 association shall not increase its liabilities by making any new loans or discounts otherwise than by discounting or purchasing bills of exchange payable at sight, nor make any dividends of its profits until the required proportion, 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 association, as provided in section fifty-two hundred and thirty-four.

NOTE.—This section is amended by the act of June 20, 1874, section 2, which provides that no reserve need be held against circulation. Said act follows section 5192. Act of March 3, 1903, amending act of March 3, 1887, providing for additional reserve cities, follows section 5192. Provisions relating to redemption of circulating notes, acts June 20, 1874, March 3, 1875, and July 14, 1890, follow Revised Statutes, 5192. Provisions relating to redemption of old notes of banks extending their corporate existence, act July 12, 1882, follows Revised Statutes, 5136. Leavenworth, Kansas, was included as a reserve city in the original act, but was struck out March 1, 1872. Words “lawful money construed by Attorney-General as including all that is legal tender. Opin. Atty. Gen'l 17 : 123.

c. 106,

WHAT MAY BE COUNTED AS RESERVE.
121. Sec. 5192.—Three-fifths of the reserve of fifteen

Act June 3,

, per centum required by the preceding section to be kept, sed si; 13 may consist of balances due to an association, available Stact mar. for the redemption of its circulating notes, from associa- 1872, c. 22; 17

. L., . tions approved by the Comptroller of the Currency, organized under the act of June three, eighteen hundred and sixty-four, or under this Title, and doing business in the cities of Albany, Baltimore, Boston, Charleston, Chicago, Cincinnati, Cleveland, Detroit, Louisville, Milwaukee, New Orleans, New York, Philadelphia, Pittsburg, Richmond, Saint Louis, San Francisco, and Washington. Clearing-house certificates, representing specie or lawful money specially deposited for the purpose, of any clearing-house association, shall also be deemed to be lawful money in the possession of any association belonging to such clearing-house, holding and owning such certificate, within the preceding section.

NOTE.—Leavenworth, Kansas, was included as a reserve city in the original act, but was struck out March 1, 1872. Charleston and Richmond not being included in the list of reserve cities enumerated in section 5191, the banks of which are required to hold a reserve of twenty-five per centum of their net deposits, the Comptroller of the Currency has never approved any banks in said cities as reserve agents. LAWFUL MONEY RESERVE TO BE DETERMINED BY DE

POSITS. ACT JUNE 20, 1874. 122. Sec. 2.-That section thirty-one of "the national

1874, c. 343, bank act” be so amended that the several associations therein provided for shall not hereafter be required to Stat. L., 123. 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.

NOTE.—Section 31 of “the national-bank act” is incorporated in sections 5191, 5192, Revised Statutes. Section 1 of act June 20, 1874, precedes section 5133, Revised Statutes. NO RESERVE NEED BE HELD AGAINST DEPOSITS OF

PUBLIC MONEY. ACT MAY 30, 1908. 123. Sec. 14.—That the provisions of section fifty-one Act May 30, hundred and ninety-one of the Revised Statutes, with 1908, sec. 14, reference to the reserves of national banking associations, shall not apply to deposits of public moneys by the United States in designated depositaries. PROVISIONS FOR REDEEMING CIRCULATION. FIVE PER

CENT REDEMPTION FUND. ACT JUNE 20, 1874. 124. Sec. 3.—That every association organized, or to be

1874, organized, under the provisions of the said act, and of the sec: 3; 18

Stat. L., 123. several acts amendatory thereof, shall at all times keep and have on deposit in the Treasury of the United States, in lawful money of the United States, a sum equal to five per centum of its circulation, to be held and used for the

Act June 20,

Ssec.

2;

18

Act June 20,

c. 343.

redemption of such circulation; which sum shall be counted as a part of its lawful reserve, as provided in section two of this act; and when the circulating notes of any such associations, assorted or unassorted, shall be presented for redemption, in sums of one thousand dollars, or any multiple thereof, to the Treasurer of the United States, the same shall be redeemed in [United States notes]. All notes so redeemed shall be charged by the Treasurer of the United States to the respective associations issuing the same, and he shall notify them severally, on the first day of each month, or oftener, at his discretion, of the amount of such redemptions; and whenever such redemptions for any association shall amount to the sum of five hundred dollars, such association so notified shall forthwith deposit with the Treasurer of the United States a sum in United States notes equal to the amount of its circulating notes so redeemed. And all notes of national banks, worn, defaced, mutilated, or otherwise unfit for circulation, shall, when received by any assistant treasurer, or at any designated depository of the United States, be forwarded to the Treasurer of the United States for redemption as provided herein. And 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 of such notes are worn, mutilated, defaced, or rendered otherwise unfit for use, they shall be forwarded to the Comptroller of the Currency and destroyed and replaced as now provided by law: Provided, That each of said associations shall reimburse to the Treasury the charges for transportation and the costs for assorting such notes; and the associations hereafter organized shall also severally reimburse to the Treasury the cost of engraving such plates as shall be ordered by each association respectively; and the amount assessed upon each association shall be in proportion to the circulation redeemed, and be charged to the fund on deposit with the Treasurer: And provided further, That so much of section thirty-two 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.

NOTE.—Section 12 of act of May 30, 1908, provides that notes of national banking associations shall be redeemed in lawful money of the United States. (See said section 12, page 49, ante.)

Section 32 of national-bank act is section 5195, Revised Statutes.

Other sections of act of June 20, 1874.
Section 1 precedes Revised Statutes, 5133.
Section 2. See paragraph 122, page 53, 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. 125. That to carry into effect the provisions of section Act Mar. 3, three of the act entitled “An act fixing the amount of L., 399; part United States notes, providing for a redistribution of of the sundry

civil appropriathe national-bank currency, and for other purposes," tion act. approved June twentieth, eighteen hundred and seventyfour, the Secretary of the Treasury is authorized to appoint the following force, to be employed under his direction, namely: In the Office of the Treasurer: In the Office of the Comptroller of the Currency * And at the end of each month, the Secretary of the Treasury shall reimburse the Treasury to the full amount paid out under the provisions of this section by transfer of said amount from the deposit of the national banking association with the Treasury of the United States; and at the end of each fiscal year he shall transfer from said deposit to the Treasury of the United States such sum as may have been actually expended under his direction for stationery, rent, fuel, light, and other necessary incidental expenses which have been incurred in carrying into effect the provisions of the said section of the abovenamed act. ADDITIONAL RESERVE CITIES. ACT OF MARCH 3, 1903,

AMENDING ACT OF MARCH 3, 1887. 126. Sec. 1.—That whenever three-fourths in number Act Mar. 3, of the national banks located in any city of the United States having a population of twenty-five thousand peo- 55 Act Mar. 3. ple shall make application to the Comptroller of the Cur- 1903, sec. 1 rency, in writing, asking that the name of the city in 1223. 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 request, and every bank located in such city shall at all times thereafter 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 fiftyone hundred and ninety-one and fifty-one hundred and ninety-five of the Revised Statutes. DISPOSITION OF REDEMPTION ACCOUNT. ACT JULY 14,

1890. 127. Sec. 6.—That upon the passage of this act the Act July 14, balances standing with the Treasurer of the United sec States to the respective credits of national banks for de- Stat. L., 289. posits made to redeem the circulating notes of such banks, and all deposits thereafter received for like purpose, shall be covered into the Treasury as a miscellaneous receipt, and the Treasurer of the United States shall redeem from the general cash in the Treasury the circulating notes of said banks which may come into his possession subject to redemption; and upon the certificate

1887, sec. 24 Stat.

1; L.,

Stat.

L.,

1890, c. 708,

6; 26

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