The preliminary proceeding in connection with the organization of a national bank is to write to the Comptroller of the Currency requesting the reservation of the desired title and stating the location. and the proposed capital.

It is the practice to reserve a title for 15 days, during which time it is expected a formal application will be filed.

If the nationalization of a State bank is contemplated, the request should indicate whether the bank is to be converted into a national bank or placed in liquidation and a national bank organized as its successor. If the State bank is to continue in existence and a separate national bank is to be organized, that fact should be stated.

The application must be signed by at least five persons who are prospective shareholders of the association, and preferably by individuals who are also to be officers or directors. It should be indorsed by three prominent public officials, preferably the mayor and the postmaster of the place where the bank is to be located, and a judge of court.

The exclusion of any professional promoters from the organization will be required, as an application to receive favorable consideration must represent a local demand for banking accommodations.

The following formal application for reservation of title and authority to organize a national bank will be furnished upon request:

APPLICATION TO ORGANIZE A NATIONAL BANK.

19-.

To the COMPTROLLER OF THE CURRENCY,

Washington.

SIR: We, the undersigned, prospective shareholders, being natural persons and of lawful age, intend, with others, to organize a national banking association, under the title of "The

-," to be located at

5

county of

State of

bank of

with a capital of $Population,

to succeed the

We request that the title be reserved for a period of sixty days and organization blanks and instructions be sent to who is an actual resident

of the place where the proposed bank is to be located.

Signatures of applicants.

Residences.

Business.

Financial strength, in figures.

Shares subscribed.

The signers of this application are known by me to be reputable citizens; the information in reference to their business and financial standing is in my opinion correct, the statement as to population authentic, and I am of the belief that the conditions locally are such as to insure success if the bank is organized and properly managed.

The name of the place should form a part of the title, thus, "The First National Bank of A- -" but the name of the State should not be included. Consideration will not be given to an application for a title including the word "First," if a national bank exists at the given locality; nor to an application for a title identical with that of a national bank heretofore in existence, nor to one materially similar to that of a national, State, or other bank existing in the place.

The application must be signed by at least five prospective shareholders, and should be indorsed by three prominent persons, judge of court, postmaster, and mayor, or other public officials.

The correspondent should be a resident of the place where the bank is to be located, a prospective shareholder, and, if possible, an officer or director of the proposed bank.

The following shows the national, State, or private bank with which the applicants are, or have been, connected.

*N. B.-The correspondent is requested to furnish, as early as possible, a list of the prospective officers and directors of the proposed organization and a statement showing their previous connection, if any, with other banking institutions.

Care must be exercised in giving information called for on the back of the application. The capacity in which the applicants were connected with other banks should be stated. The list of officers and directors should be promptly furnished as soon as the organization has progressed sufficiently to permit of their determination.

Organization expenses should not include any commissions paid for the sale of stock, or promotion fees, but only such legitimate other expenses as are incident to the actual organization of banks. The capital and surplus must be paid in money and in money only. If any agreement, whether verbal or written, exists to use subsequently any part of the capital stock, surplus, or undivided profits to pay promoters' expenses, or commissions contracted prior to organization, this fact must be reported with the application for charter, as favorable consideration will not be given to any application if there is an agreement to pay expenses not properly allowable.

Information is also desired whether any of the applicants or other persons interested in any manner in the proposed organization have at any time been connected with, or interested in, the organization or attempted organization of any bank, either State or national; if so, the name of the bank or banks and the conditions under which they were organized should be stated.

If the organization is effected, the president and a majority of the directors should be residents of the place where the bank is located. To avoid delay and unnecessary letter writing all correspondence relating to official matters should be conducted by the local correspondent directly with the Comptroller's office.

Printed headings on the stationery of the organizing bank should indicate clearly that the bank is "organizing" or bear the heading "Organizing Committee."

As the charter number should appear on the bank's permanent letterhead, stationery should not be ordered until the bank is chartered and the charter number obtained. Special numbers can not be reserved and the number can not be determined until the charter is issued.

2. CAPITAL REQUIRED.

National banks with a minimum capital of $25,000 may be organized in places the population of which does not exceed 3,000; with minimum capital of $50,000 in places the population of which does not exceed 6,000; with minimum capital of $100,000 in places the population of which does not exceed 50,000; and with minimum capital of $200,000 in cities with population of over 50,000.

National banks organized in suburban districts included within the political boundaries of a city must have the amount of capital re

quired by law by a bank organized in the city in question. (Opinion of Attorney General, June 6, 1913.)

3. INVESTIGATION BY NATIONAL-BANK EXAMINER.

When an application is transmitted it should be accompanied by a draft for $100, payable to the order of the Comptroller of the Currency, to cover the expense of investigation. Upon receipt of this draft the chief national-bank examiner for the district will be directed to detail an examiner to make the investigation, the examiner being requested to arrange with the local correspondent in the case as to the date when the investigation is to be made.

In making this investigation the examiner is instructed to give full consideration to all factors entering into the proposition. Among other matters to be considered are: First, the general character and experience of the organizers and of the proposed officers of the new bank; second, the adequacy of existing banking facilities and the need of further banking capital; third, the outlook for the growth and development of the town or city in which the bank is to be located; fourth, the methods and banking practices of the existing bank or banks, the interest rates which they charge to customers, and the character of the service which as quasi-public institutions they are rendering to their community; fifth, the reasonable prospects for success of the new bank if efficiently managed.

In every case where there is a protest, the examiner is directed to see and personally interview those for and against the proposition. In addition to securing a report from the examiner, made after a personal investigation, the Comptroller obtains a report from the Federal reserve bank of the district; from the State banking department, and from such other sources as he may deem advisable.

4. APPROVAL OF APPLICATION-INSTRUCTIONS.

If the application receives the approval of the Comptroller he will furnish all necessary blanks for use in connection with effecting the organization, with instructions for their proper execution, and the title applied for will be reserved for 60 days, during which it is expected the organization of the bank will be completed. When the papers are transmitted the directors should submit over their signatures a statement showing the amounts collected on subscriptions and the expenditures which have been made from the funds collected. The balance remaining, after the purchase of the necessary bonds to secure circulation, if circulation is to be issued, must be deposited with some disinterested bank and the president or cashier of the depositary bank requested to certify to this office the amount on