SIXTY-THIRD CONGRESS . SEss. II. CHs. 4-6. 1913 .

251

Be it enacted the Senate and House o{Representatives of the Unitedy Pnbliebnilaings.States of America in Congress assembled, That section twenty-six of suresuer Mine lab.the Act approved March fourth, nineteen hundred and thirteen, -stories, Pittsburgh,

which authorizes the Secretary of the Treasury to enter into a con-tract or contracts for the erection of fireproof laboratories for the t;0AL?futa of addiBureau of Mines in the city of Pittsburgh, Pennsylvapia, and so Vol . 37, p. 886.forth, is hereby amended so as to authorize the Secretary of theTreasury, in his discretion, to accept and expend, in addition .to thelimit of cost therein fixed, such funds as may be received by con-tribution from the State of Pennsylvania, or from other sources, forthe purpose of enlarging, by purchssae, condemnation, or otherwise,and improving the site authorized to be acquired for said Bureau of

Proviso.Mines, or for other work contemplated by said legislation : Provided, Limit oicost .That the acceptance of such contributions and the improvementsmade therewith shall involve the United States in no expenditurein excess of the limit of cost heretofore fixed .Approved, December 22, 1913 .

CHAP. 6.-An Act To provide for the establishment of Federal reserve banks,to furnish an elastic currency, to afford means of rediscounting commercial paper,to establish a more effective supervision of banking in the United States, and forother purposes.

Be it enacted by the Senate and House of Representatives of the UnitedStates ofAmerica in Congress assembled, That the short title of thisAct shall be the "Federal Reserve Act ."

Wherever the word "bank" is used in this Act, the word shall beheld to include State bank bankin association and trust company,except where national bangs or Feeral reserve banks are specificallyreferred to .

The terms "national bank" and "national banking association"used in this Act shall be held to be synonymous and interchangeable .The term "member bank" shall be held to mean any national bank,State bank, or bank or trust company which has become a memberof one of the reserve banks created by this Act . The term "board"shall be held to mean Federal Reserve Board ; the term "district"shall be held to mean Federal reserve district ; the term "reservebank" shall be held to mean Federal reserve bank .

FEDERAL RESERVE DISTRICTS .

December 23,1913,111. it. 7837.]

[Public, No. 43 .]

Federal ReserveAct.

Terms construed.

Federal reserve dis-tricts.

SEC. 2. As soon as practicable, the Secretary of the Treasury, the oraDlreserecties.Fed-

Secretary of Agriculture and the Comptroller .of the Currency, act-ing as "The Reserve Bank Organization Committee," shall designatenot less than eight nor more than twelve cities to be known as Federalreserve cities, and shall divide the continental United States, ex-cluding Alaska, into districts, each district to contain only one of suchFederal reserve cities . The determination of said organization

Districts.

or other uses, or any vested right acquired thereunder, and the Secre-tary of the Interior, in carrying out the provisions of this Act, shallproceed in conformity with the laws of said State .Approved, December 19, 1913 .

CHAP. 5.-An Act Amending an Act entitled "An Act to increase the limit of Decemter22, 1913.

cost of certain public buildings to authorize the enlargement, extension, remodeling,

]s. 2sas.]

or improvement of certain public buildings, to authorize the erection and completionof public buildings, to authorize thu purchase of sites for public buildings, and forother purposes," approved March fourth, nineteen hundred and thirteen .

[Public, No. 42.1

252

SIXTY-THIRD CONGRESS . Sass. II. Ca. 6 . 1913 .

committee shall not be subject to review except by the FederalProviso

Reserve Board whelk organized : Provided That the districts shall beAp portionment ofterniory apportioned with due regard to the convenience and customary course

of business and shall not necessarily be coterminous with any Stateor States . The districts thus created may be readjusted and newdistricts may from time to time be created by the Federal Reserve

Designation, etc. Board, not to exceed twelve in all . , Such districts shall be known asFederal reserve districts and may be designated by number . A ma-jority of the organization committee shall constitute a quorum withauthority to act .

Reserve Ban], Or- Said organization committee shall be authorizedd to employ counselDutieeanndauthority. and expert aid to take testimony, to send for persons and papers, to

administer oats, and to make such investigation as may be deemednecessary by the said committee in determuung the reserve districtsand in designateng_the cities within such districts where such Federalreserve banks shall be severally located . The said committee shallsupervise the organization in each of the cities designated of aFederal reserve bank, which shall include in its title the name of thecity in which it is situated, as "Federal Reserve Bank of Chicago ."

Written acceptance Under regulations to be prescribed by the organization committee,of Act by banks° every national banking association in the United States is herebyrequired, and every eligible bank in the United States and everytrust company within the District of Columbia, is hereby authorizedto signify in writing, within sixty days after the passage of this Act,

Federal reserve its acceptance of the terms and provisions hereof. When the organi-b Suub

bscriptionsbyna- zation committee shall have designated the cities in which Federalbanks to, re-

quired. reserve banks are to be organized, and fixed the geographical limitsof the Federal reserve districts, every national banking associationwithin that district shall be required within thirty days after noticefrom the orga.nization committee, to subscribe to the capital stockof such Federal reserve bank in a sum equal to six per centum

Payment for stock° of the paid-up capital stock and surplus of such bank, one-sixth ofthe subscription to be payable on call of the org anization committeeor of the Federal Reserve Board, one-sixth within three months andone-sixth within six months thereafter, and the remainder of the sub-scription, or any part thereof, shall be subject to call when deemednecessary by the Federal Reserve Board, said payments to be ingold or gold certificates .

flesponsibility of The shareholders of every Federal reserve bank shall be held indi-ahareholders

e

vidually responsible, equally and ratably, and not one for another,for all contracts, debts, and engagements of such bank to the extentof the amount of their subscriptions to such stock at the par valuethereof in addition to the amount subscribed, whether such subscrip-tions have been paid up in whole or in part, under the provisions ofthis Act.

Nonaccepting banks Any national bank failing to signify its acceptance of the terms ofnot to be reserveagents . this Act within. the sixt~p days aforesaid, shall cease to act as a reserve

agent, upon thirty days notice, to be given within the discretion of thesaid organization committee or of the Federal Reserve Board .

Dissolution of non- Should any national banking association in the United States nowbags fng national organized fail within one year after the passage of this Act to becomea member bank or fail to comply with any of the provisions of thisAct applicable thereto, all of the rights, privileges, and franchises ofsuch association granted to it under the national-bank Act, or under

tions thisDs of this Act

.viola- the provisions of this Act, shall be thereby forfeited . Any noncom-

pliancepliance with or violation of this Act sha, however, be determinedand adjudged by any court of the United States of competent juris-diction in a suit brought for that purpose in the district or territoryin which such bank is located, under direction of the Federal ReserveBoard, by the Comptroller of the Currency in his own name before

SIXTY-THIRD CONGRESS. SEss. II. CH. 6. 1913 .

253

the association shall be declared dissolved . In. cases of such noncom-t ors'

of diree.

dance or violation, other than the failure to become a memberbank under the provisions of this Act, every, director who partici-pated in or assented to the same shall be held liable in his personalor individual capacity for all damages which said bank, its share-holders, or any other person shall have sustained in consequence ofsuch violation .

Such dissolution shall not take away or impair any remedy against Further remadies .

such corporation, its stockholders or officers, for any liability orpenalty which shall have been previously incurred .

Public subscriptionsShould the subscriptions by banks to the stock of said Federal to stock of Federal re.reserve banks or any one or more of them be in the judgment of the serve banks .

organization committee, insitflrcient to provide the amount of capitalrequired therefor, then and in that event the said organization com-mittee may, under conditions and regulations to be prescribed by it,offer to public subscription at par such an amount of stock in saidFederal reserve banks, or any one or more of them, as said committeeshall determine, subject to the same conditions as to payment andstock liability as provided for member banks .

Limit of public sub.No individual, copartnership, or corporation other than a member scriptions.

bank of its district shall be permitted to subscribe for or to hold atany time more than $25,000 par value of stock in any Federal reservebank. Such stock shall be known as public stock and may be trans-ferred on the books of the Federal reserve bank by the chairman ofthe board of directors of such bank.

Conditional al.lot-Should the total subscriptions by banks and the public to the stock meat to United States.

of said Federal reserve bank%, or anyone or more of them, be, in thejudgment of the organization committee, insufficient to provide theamount of capital required therefor, then and in that event the saidorganization committee shall allot to the United States such anamount of said stock as said committee shall determine . Said United Payment, etc.

States stock shall be paid for at par out of any money in . the Treas-ury not otherwise appropriated and shall be held by the Secretaryof the Treasury and posed o? for the benefit of the United Statesin such manner, at such times, and at such price, not less than par,as the Secretary of the Treasury shall determine .Stock not held by member banks shall not be entitled to voting No voting power.

power .The Federal Reserve Board is hereby empowered to adopt and Transfers of stock .

promulgate rules and regulations governing the transfers of saidstock .

No Federal reserve bank shall commence business with a sub- Capital required.

scribed capital less than $4,000,000 . The organization of reservedistricts and Federal reserve cities shall not be construed as chang-ing the present status of reserve cities and central reserve cities,except in so far as this Act changes the amount of reserves that

Appropriation . formay be carried with approved reserve agents located therein . The expenses of crgamza'organization committee shall have power to appoint such assistants tioncommitteen

and incur such expenses in carrying out the provisions of this Act asit shall deem necessary, and such expenses shall be payable by theTreasurer of the United States upon voucher approved by the Secre-tary of the Treasury, and the sum of $100,000, or so much thereof asmay be necessary, is hereby appropriated, out of any moneys in theTreasury not otherwise appropriated, for the payment of suchexpenses .

Branch offices .BRANCH OFFICES .

SEC. 3 . Each Federal reserve bank shall establisl, branch bankswithin the Federal reserve district in which it is located and may doso in the district of any Federal reserve bank which may have beensuspended. Such branches shall be operated by a board of directors

Establishment ofbranch banks.

Management, etc.

254

SIXTY-THIRD CONGRESS. SEss. II. Ca. 6. 1913 .

under rules and regulations approved by the Federal Reserve Board .,Directors of branch banks shall possess the same qualifications asdirectors of the Federal reserve banks . Four of said directors shallbe selected by the reserve bank and three by the Federal ReserveBoard, and tey shall hold office during the pleasure, respectively,of the parent bank and the Federal Reserve Board. The reservebank shall designate one of the directors as manager .

FEDERAL RESERVE BANKS.Federal reservebanks.

Establishment of SEo. 4. When the organization committee shall have establishedcities .

es and reserve Federal reserve districts as provided in section two of this Act, aacertificate shall be filed with the Comptroller of the Currency showingthe geographical limits of such districts and the Federal reserve city

Notice for organize° designated in each of such districts . The Comptroller of the Cur-rency shall thereupon cause to be forwarded to each national bankklocated in each district, and to such other banks declared to be eli-gible by the organization committee which may apply therefor, an .application blank in form to be approved by the organization com-mittee, which blank shall contain a resolution to be adopted by theboard of directors of each bank executing such application, author-izing a subscription to the capital stock of the Federal reserve bankorganizing in that district in accordance with the provisions of thisAct .

0 aanizatfon pro- When the minimum amount of capital stock prescribed by thisAct for the organization of any Federal reserve bank shall have beensubscribed and allotted, the organization committee shall designateany five banks of those whose applications have been received, toexecute a certificate of organization, and thereupon the banks sodesignated shall, under their seals, make an organization certificatewhich shall specifically state the name of such Federal reserve bank,the territorial extent of the district over which the operations of suchFederal reserve bank are to be carried on the city and State in whichsaid bank is to be located, the amount ott capital stock and the num-ber of shares into which the same is divided, the name and place ofdoing business of each bank executing such certificate, and of allbanks which have subscribed to the capital stock of such Federalreserve bank and the number of shares subscribed by each, and thefact that the certificate is made to enable those banks executingsame, and all banks which have subscribed or may thereafter sub-scribe to the capital stock of such Federal reserve bank, to avail them-selves of the advantages of this Act .

Depositoreertifieate. The said organization certificate shall be acknowledged before aajudge of some court of record or notary public ; and shall be, togetherwith the acknowledgment thereof, authenticated by the seal of suchcourt, or notary, transmitted to the Comptroller of the Currency,who shall file, record and carefully preserve the same in his office.

Corporate powers . Upon the filing of such certificate with the Comptroller of theCurrency as aforesaid, the said Federal reserve bank shall become abody corporate and as such, and in the name designated in suchorganization certificate, shall have power-

General .

First. To adopt and use a corporate seal .Second. To have succession for a period of twenty years from its

organization unless it is sooner dissolved by an Act of Congress, orunless its franchise becomes forfeited by some violation of law .Third. To make contracts.Fourth. To sue and be sued, complain and defend, in any court of

law or equ~ity.Fifth. To appoint by its board of directors, such officers and em-

ployees as are not otherwise provided for in this Act, to define their

SIXTY-THIRD CONGRESS . SEss . II . Cu._ 6 . 1913 .

255-duties, require bonds of them and fix the penalty thereof, and to dis-miss at pleasure such officers or employees.

Sixth. To prescribe by its board of directors, by-laws not inconsist-ent with law, regulating the manner in which its general businessmay be conducted, a d the -privileges granted to it by law may beexercised and enjoyed .

Seventh. To exercise by its board of directors, or duly authorizedofficers or agents, all powers specifically granted by the provisions ofthis Act and such incidental powers as shall be necessary to carry onthe business of banking within the limitations prescribed by this Act.

E~' ghth. Upon deposit with the Treasurer of the United States of ao~a of ofranlating

any bonds of the United States in the manner provided by existinglaw relating to national banks, to receive from the Comptroller of theCurrency circulating notes in blank, registered and countersigned asprovided by law, equal in amount to t e par value of the bonds sodeposited, such notes to be issued under the same conditions and pro-visions of law as relate to the issue of circulating notes of nationalbanks secured by bonds of the United States bearing the circulatingprivilege, except that the issue of such notes shall noe limited to thecapital stock Much Federal reserve bank .

or busi.But no Federal reserve bank shall transact any business except such neRss.

estrictionas is incidental and necessarily preliminary to its organization until ithas been authorized by the Comptroller of the Currency to commencebusiness under the provisions of this Act. '

Every Federal reserve bank shall be conducted under the super- Board of direeters .

vision and control of a board of directors .The board of directors shall perform the duties usually appertaining aenerai duties .

to the office of directors of banking associations and all such duties asare prescribed by law .

Said board shall administer the affairs of said bank fairly and impar- Administration.

tially and without discrimination in favor of or against any memberbank or banks and shall subject to the provisions of law and the ordersof the Federal Reserve board, extend to each member bank such dis-counts, advancements' and accommodations as may be safely andreasonably made with due regard for the claims and demands ofother member banks.

Such board of directors shall be selected as hereinafter specified and ors~ar and term

shall consist of nine members, holding office for three years, and Classification .

divided into three classes, designated as classes A, B, and C .Class A shall consist of three members, who shall be chosen by and 1P: 733.

be representative of the stock-holding banks .Class B shall consist of three members, who at the time of their Class B.

election shall be actively engaged in their district in commerce, agri-culture or some other industrial pursuit .

Class C shall consist of three members who shall be designated by Class C.the Federal Reserve Board . When the necessary subscriptions to the Chairman or board .

capital stock have been obtained for the organization of any Federalreserve bank, the Federal Reserve Board shall appoint the class Cdirectors and shall designate one of such directors as chairman of theboard to be gelected . Pending the designation of such chairman, theorganization committee shall exercise the powers and duties ap er-taimng to the office of chairman in the organization of such Federalreserve bank .

No Senator or Representative in Congress shall be a member of the service or Senatorsfor Representatives for-

Federal Reserve Board or an officer or a director of a Federal reserve bidden .

bank .No director of class B shall be an officer, director, or employee of Other

dons.di .goaliSee

any bank .No director of class C shall be an officer, director, employee, or

stockholder of any bank .

I

256

SIXTY-THIRD CONGRESS. Sass . II . C$. 6 . 1913 .

Directors of class A Directors of class A and class B shall be chosen in the followingmanner: .

Procedure for choos-ing. The chairman of the board of directors of the Federal reserve bankof the district in which the bank is situated or, pending the ap oint-ment of such chairman the organization committee shall classy themember banks of the district into three general groups or divisions .Each group shall contain as nearly as may be one-third of the aggre-gate number of the member banks of the district and shall consist, asnearly as may be, of banks of similar capitalization . The groups shallbe designated by number by the chairman .

Electors for memberbanks,

At a regularly called meetin of the board of directors of each.member bank in the district it s all elect by ballot a district reserveelector and shall cert' his name to the chairman of the board ofdirectors of the Feder reserve bank of the district. The chairmanshall make lists of the district reserve electors thus named by banksin each of the aforesaid three groups and shall transmit one list to eachelector in each group .

Nomination of can-didates. Each member bank shall be permitted to nominate to the chair-

man one candidate for director of class A and one candidate fordirector of class B . The candidates so nominated shall be listed bythe chairman, indicating by whom nominated, and a copy of said listshall, within fifteen days after its completion, be furnished by thechairman to each elector .

Balloting for direr

Every elector shall, within fifteen days after the receipt of the saidtors .list, certify to the chairman his first, second, and other choices of adirector of class A and class B, respectively, upon a referential bal-lot, on a form furnished by the chairman of the boar of directors ofthe Federal reserve bank of the district. Each elector shall make across opposite the name of the first, second, and other choices for adirector of class A and for a director of class B, but shall not votemore than one choice for any one candidate .

Declaration ofresult. Any candidate having a majority of all votes cast in the columnof first choice shall be declared elected . If no candidate have amajority of all the votes in the first column, then there shall be addedtogether the votes cast by the electors for such candidates in thesecond column and the votes cast for the several candidates in the firstcolumn. If any candidate then have a majority of the electors vot-ing, by adding together the first and second choices, he shall be de-clared elected. If no candidate have a majority of electors votingwhen the first and second choices shall have been added, then thevotes cast in the third column for other choices shall be added to-gether in like manner, and the candidate then having the highestnumber of votes shall be declared elected . An immediate report ofelection shall be declared .

class c directors.

Class C directors shall be appointed by the Federal Reserve Board .Appointment.

They shall have been for at least two ears residents of the districtfor which they are appointed, one of whom shall be designated by

chairman of board said board as chairman of the board of directors of the Federaland Federal reserveagent .

reserve bank and as "Federal reserve agent." He shall be a person ofDaises, etc . tested banking experience ; and in addition to his duties, as chairmanof the board of directors of the Federal reserve bank he shall berequired to maintain under regulations to be established by theFederal Reserve Board a local office of said board on thepremises of the Federal reserve bank . He shall make regularreports to the Federal Reserve Board, and shall act as its officialrepresentative for the performance of the functions conferred

Pap,

upon it by this Act . He shall receive an annual compensationto be fixed by the Federal Reserve Board and paid monthly by

Deputy, the Federal reserve bank to which he is designated . One ofthe directors of class C, who shall be a person of tested bankingexperience, shall be appointed by the Federal Reserve Board as

SIXTY-TIIIRD CONGRESS. SEES. II. Ca. 6. 1913.

257

deputy chairman and deputy Federal reserve agent to exercise thepowers of the chairman of the board and Federal reserve agent incase of absence or disability of his principal .

Directors of Federal reserve banks shall receive, in addition to anycompensation otherwise provided, a reasonable allowance for neces-sary expenses in attending meetings of their respective boards, whichamount shall be paid by the respective Federal reserve banks. Anycompensation that may be provided by boards of directors of Federalreserve banks for directors, officers or employees shall be subject tothe approval of the Federal Reserve Board .The Reserve Bank Organization Committee may, in organizing

Federal reserve banks, call such meetings of bank directors in the sev-eral districts as may be necessary to carry out the purposes of thisAct, and may exercise the functions herein conferred upon the chair-man of the board of directors of each Federal reserve bank pendingthe complete organization of such bank .

At the first meet' of the full board of directors of each Federalreserve bank, it shall be the duty of the directors of classes A, BandC, respectively, to designate one of the members of each class whoseterm of office shall expire in one year from the first of Januarynearest to date of such meeting, one whose term of office shall exp ireat the end of two years from said date, and one whose term of office.shall expire at the end of three years from said date. Thereafterevery director of a Federal reserve bank chosen as hereinbefore pro-vided shall hold office for a term of three years. Vacancies thatmay occur in the several classes of directors of Federal reserve banksmay be filled in the manner provided for the original selection ofsuch directors, such appointees to hold office for the unexpired termsof their predecessors .

Compensation ofdirectors.

Preliminary meet-ings.

Designation of firstterms of members .

Subsequent tenure.

Vacancies .

STOCK ISSUES; INCREASE AND DECREASE OF CAPITAL .

Capital stock .

SEC. 5. The capital stock of each Federal reserve bank shall be creaseProvision for in-divided into shares of $100 each. The outstanding capital stockshall be increased from time to time as member banks increase theircapital stock and surplus or as additional banks become members,and may be decreased as member banks; reduce their capital stock orsurplus or cease to be members. Shares .of the capital stock of banks notttrrans

memberfebierFeral reserve banks owned by member banks shall not be trans-ferred or hypothecated . When a member bank increases its capi- ti nddib' sae

rtal stock or surplus, it shall thereupon subscribe for an additional banks increasing their

amount of capital stock of the Federal reserve bank of its district capital'

equal to six per centum of the said increase, one-half of said sub-scription to be paid in the manner hereinbefore provided for originalsubscription, and one-half subject to call of the Federal ReserveBoard. A bank applying for stock in a Federal reserve bank at any nwnmm~e'ns fremtime after the organization thereof must subscribe for an amount ofthe capital stock of the Federal reserve bank equal to six per centumof the paid-up capital stock and surplus of said applicant bank, pay-ing therefor its par value plus one-half of one per centum a month

Certificate of in-from the period of the last dividend. When the capital stock of any creases.Federal reserve bank shall have been increased either on account ofthe increase of capital stock of member banks or on account of theincrease in the number of member banks, the board of directors shallcause to be executed a certificate to the Comptroller of the Currencyshowing the increase in capital stock, the amount paid in, and by

Surrenderfrommemwhom paid. When a member bank reduces its capital stock it shall bars reducing capital;surrender a proportionate amount of its holdings in the capital of etc-

said Federal reserve bank, and when a member bank voluntarilyliquidates it shall surrender all of its holdings of the capitalstock of said Federal reserve bank and be released from its stock

91006'-VOL 38-PT 1-17

258

SIXTY-THIRD CONGRESS . SESS. II . Ca. 6. 1913 .canceilationand subscription not previously called. In either case the shares sur-ayment ofsure"' rendered shall be canceled and the member bank shall receive in

payment therefor, under regulations to be prescribed by the FederalReserve Board, a sum equal to its cash-paid subscriptions on theshares surrendered and one-half of one per centum a month from theperiod of the last dividend, not to exceed the book value thereof, lessany liability of such member bank to the Federal reserve bank .

CCaanocellationofmsock, SEC. 6 . If any member bank shall be declared insolvent and aetc. receiver appointed therefor, the stock held by it in said Federal

reserve bank, shall be canceled, without impairment of its liability,and all cash-paid subscriptions on said stock, with one-half of one percentum per month from the period of last dividend, not to exceedthe book value thereof, shall be first applied to all debts of the insol-

Certificate •f reduc- vent member bank to the Federal reserve bank, and the balance, ifti•ns. any, shall be paid to the receiver of the insolvent bank . Whenever

the capital stock of a Federal reserve bank is reduced, either onaccount of a reduction in capital stock of any member bank or of theliquidation or insolvency of such bank, the board of directors shallcause to be executed a certificate to the Comptroller of the Currencyshowing such reduction of capital stock and the amount repaid tosuch bank .

Division of earnings.

DIVISION OF EARNINGS .

Annual dividends .

SEC . 7. After all necessary expenses of a Federal reserve bankhave been paid or provided for, the stockholders shall be entitled to

Franchise tax.

receive an annual dividend of six per centum on the paid-in capitalstock, which dividend shall be cumulative . After the aforesaid

Surplus fund. dividend claims have been fully met t all the net earnin shall bepaid to the United States as a franchise tax, except that %e-half ofsuch net earnings shall be paid into a surplus fund until it shallamount to forty per centum of the paid-in capital stock of suchbank.

Disposition •f earn- The net earnings derived by the United States from Federal reserveSgsdarivedbyUnited banks shall, in hdiscretion f the Secretary, be used to supplementthe gold reserve held against outstanding United States notes, or shallbe applied to the reduction of the outstanding bonded indebtedness ofthe United States under regulations to be prescribed by the Secre-

atBanks dissolving, tart' of the Treasury . Should a Federal reserve bank be dissolvedor go into liquidation, any surplus remaining, after the ayment of alldebts, dividend requirements as hereinbefore provide and the parvalue of the stock, shall be paid to and become the property of theUnited States and shall be similarly applied .

Tax exemption .

Federal reserve banks, including the capital stock and surplustherein, and the income derived therefrom shall be exempt from

National banks .

Federal, State, and local taxation, except taxes upon real estate .SEC. 8 . Section fifty-one hundred and fifty-four, United States

Conversion of State,Revised Statutes, is hereby amended to read as follows :

etc .,banks into .

Any bank incorporated by special law of any State or of the996, amended, 5154, p

. United States or organized under the general laws of any State or ofthe United States and having an ununpaired capital sufficient, toentitle it to become a national banking association under the pro-visions of the existing laws may, by the vote of the shareholdersowning not less than fifty-one per centum of the capital stock ofsuch bank or banking association, with the approval of the Comp-troller of the Currency be converted into a national banking associ-

Pro•iso .

ation, with any name approved by the Comptroller of the Currency :Not to contravene Provided, however, That said conversion shall not be in contraventionState law. of the State law . In such case the articles of association and orgath-

oro .

the bank or banking institution, and the certificate shall declare thatDeclaratlonbydirec- nation certificate may be executed by a majority of the directors oft•ra .

the bank or banking institution, and the certificate shall declare that

SIXTY-THIRD CONGRESS. SEss . II . Ca. 6 . 1913 .

259

the owners of fifty-one per centum of the capital stock have author-ized the directors to make such certificate and to change or convertthe bank or banking institution into a national association. A ma-jority of the directors, after executing the articles of association andthe organization certificate, shall have power . t o execute all otherpapers and to do whatever may be required to make its organizationperfect and complete as a national association . The shares of anysuch, bank may continue to be for the same amount each as theywere before the conversion, and the directors may continue to bedirectors of the association until others are elected or appointed inaccordance with the provisions of the statutes of the United States .When the Comptroller has given to such bank or bankin . associationa certificate that the provisions of this Act have been complied with,such bank or banking association, and all its stockholders, officersand employees, shall Yiave the same powers and privileges, and shallbe subject to the same duties, liabilities, and regulations, in all re-spects, as shall have been prescribed by the Federal Reserve Act andby the national banking Act for associations originally organized asnational banking associations.

Capital stock .

Certificate, etc..

STATE BANKS AS MEMBERS.

State banks, etc.

Sac. 9. Any bank incorporated by special law of any State, or comepmemtthe to be.

organized under the general laws of any State or of the UnitedStates, may make application to the reserve bank org anizationcommittee, pending organization and thereafter to the FederalReserve Board for the right to subscribe to the stock of the Federalreserve bank organized or to be organized within the Federal reservedistrict where the applicant is located . The organization committeeor the Federal Reserve Board, under such rules and regulations asit may prescribe, subject to the provisions of this section, maypermit the applying bank to become a stockholder in the Federalreserve bank of the district in which the applying bank is located . issueofstock.Whenever the organization committee or the Federal Reserve Boardshall permit the applying bank to become a stockholder in the Federalreserve bank of the district, stock shall be issued and paid for underthe rules and regulations in this Act provided for national bankswhich become stockholders in Federal reserve banks.The organization committee or the Federal Reserve Board shall organization.

establish by-laws for the general government of its conduct in actingupon applications made by the State banks and banking associationsand trust companies for stock ownership in Federal reserve banks .Such by-laws shall require applying banks not or

f

under By-laws .

Federal law to comply with the reserve and capita requirements

b

and to submit to the examin ation and regulations prescribed by the Capital required .organization committee or by the Federal Reserve Board . No ap-plying bank shall be admitted to membership in a Federal reserveank unless it possesses a paid-up, unimpaired capital sufficient to

entitle it to become a national bag association in the place whereit is situated, under the provisions of the national banking Act .

Additional restrloAny bank becoming a member of a Federal reserve bank under the ,loos.provisions of this section shall in addition to the regulations andrestrictions hereinbefore provided, be required to conform to theprovisions of law imposed on the national banks respecting thelimitation of liability which may be incurred by any person, firm, orcorporation to such banks, the prohibition against making purchaseof or loans on stock of such banks, and the withdrawal or impairmentof capital, or the payment of unearned dividends, and to such rulesand regulations as the Federal Reserve Board may, in pursuancethereof, prescribe .

260

SIXTY-THIRD CONGRESS. SEES. II. On. 6. 1913 .

regubttinso specified Such banks, and the officers, agents, and employees thereof, shallalso be subject to the provisions of and to the penalties prescribed

5208,5209,pp 1005_1007' b sections fifty-one hundred and ninety-eight, fifty-two hundred,ty-two hundred and one, and fifty-two hundred and eight, and

fifty-two hundred and nine of the Revised, Statutes . The memberbank, ; shall also be required to make reports of the conditions and

R.B.,secs.5211-5213, of the payments of dividends to the comptroller, as provided inpp. loo7, loos . sections fifty-two hundred and eleven and- fifty-two hundred and

twelve of the Revised Statutes, and shall be subject to the penaltiesprescribed by section fifty-two hundred and thirteen for the failureto make such report.

compmg banks not If at any time it shall appear to the Federal Reserve Board that a

iatnidnsl etc ., to be sus- member bank has failed to comply with the provisions of this sectionor the

roflations of the Federal Reserve Board, it shall be within the

uncellattonofstock,e power the said board, after hearing, to require such bank to sur-render its stock in the Federal reserve bank; upon such surrender theFederal reserve bank shall pay the cash- aid subscriptions to the saidstock with interest at the rate of one-half of one per centum permonth, computed from the last dividend, if earned, not to exceedthe book value thereof, less any liability to said Federal reserve bank,except the subscription liability not previously called, which shall becanceled, and said- Federal reserve bank shall, upon notice from theFederal Reserve Board, be required to suspend said bank from furtherprivileges of membership, and shall within thirty days of such noticecancel and retire its stock and make payment therefor in the manner

Restoration . herein provided. The Federal Reserve Board may restore member-ship upon due proof of compliance with the conditions imposed bythis section .

Federal ReserveBoard .

FEDERAL RESERVE BOARD.

~Cpreated ; member- SEc. 10. A Federal Reserve Board is hereby created which shallconsist of seven members, including the Secretary of the Treasuryand the Comptroller of the Currency, who shall be members exofficio, and five members appointed bV the President of the United

Appointivemembers. States, by and with the advice and consent of the Senate . Inselecting the five appointive members of the Federal Reserve .Board, not more than one of whom shall be selected from anyone Federal reserve district, the President shall have due regard toa fair representation of the different commercial, industrial and

Duties, salaries, etc ° geographical divisions of the country . The five members of theFederal Reserve Board appointed by the President and confirmedas aforesaid shall devote their entire time to the business of theFederal Reserve Board and shall each receive an annual salary of$12,000, payable monthly together with actual necessary traveling

Co ddttionalpar to expenses, and the Comptroller of the Currency, as ex officio member

currency . of the Federal Reserve Board, shall, in addition to the salary nowpaid him as Comptroller of the Currency, receive the sum of $7,000annually for hiq services as a member of said board .

memberban sConnections with The members of said board, the Secretary of the Treasury, the

den. banks forbid-

Assistant Secretaries of the Trasury, and theyComptroller of thCur-rency shall be ineligible during the time they are in office and for twoyears thereafter to hold any office, position, or employment in any

Tenureorappofntive member bank . Of the five members thuss appointed by the Presidentmembers . at least two shall be persons experienced in banking or finance . Oneshall be designated by the President to serve for two, one for four, onefor six, one for eight, and one for ten years, and thereafter eachmember so appointed shall serve for a term of ten years unless

Governor and vice sooner removed for cause by the President . Of the five persons thusgovernor.

appointed, one shall be designated by the President as governor andone as vice governor of the Federal Reserve Board . The governor of

SIXTY-THIRD CONGRESS. SESs ., II . CH. 6. 1913 .

261the Federal Reserve Board subject to its supervision, shall be theactive executive officer . Tie Secretary of the Treasury may assign ofrices,etc"

offices in the Department of the Treasury for the use of the FederalReserve Board . Each member of the Federal Reserve Board shallwithin fifteen days after notice of appointment make and subscribeto the oath of office .

The Federal Reserve Board shall have power to levy semiannually~ Assessment for ea

upon the Federal reserve banks, in proportion to their capital stock penses.

and surplus, an assessment sufficient to pay its estimated expenses andthe salaries of its members and employees for the half year succeed-ing the levying of such assessment, together with any deficit carriedforward from the preceding half year.

The first meeting of the Federal Reserve Board shall be held in meetings, ste.

W

ton, District of Columbia, as soon as may be after the passageof this ct, at a date to be fixed by the Reserve Bank OrganizationCommittee . The Secretary of the Treasury shall be ex officio chair-

Disqualflieatinna"man of the Federal Reserve Board . No member of the FederalReserve Board shall be an officer or director of any bank, bankinginstitution, trust company, or Federal reserve bank nor hold stockin any bank, banking institution, or trust compan ; and beforeentering upon his duties as a member of the Federal

company;

Boardlie shall certify under oath to the Secretary of the Treasury that lie

Vacancies.has complied- with this requirement. Whenever a vacancy shalloccur, other than by expiration of term among the five members ofthe Federal Reserve Board appointed by the President, as aboveprovided, a'successor shall be appointed by the President, with theadvice and consent of the Senate to fill such vacancy, and whenappointed he shall hold office for tfte unexpired term of the memberwhose lace he is selected to fill .

commissions duringThe President shall have power to fill all vacancies that may hap- re-,R of the Senate.

pen on the Federal Reserve Board during the recess of the Senate, bygranting commissions which shall expire thirty days after the nextsession of the Senate convenes .

Nothing in this Act contained shall be construed as taking awayof~oTr oef Secretarycretany powers heretofore vested by law in the Secretary of the Treasury paired .

which relate to the supervision, management, and control of theTreasury Department and bureaus under such department, and wher-ever any power vested by this Act in the Federal Reserve Board orthe Federal reserve agent appears to conflict with the powers of theSecretary of the Treasury, such powers shall be exercised subjectto the supervision and control of the Secretary .

The Federal Reserve Board shall annually make a full report of Annuaireports

its operations to the Speaker of the House of Representatives, whoshall cause the same to be printed for the information of the Congress .

offieeof cemptronerSection three hundred and twenty-four of the Revised Statutes of of the Currency .

the United States shall be amended so as to read as follows : Thereshall be in the Department of the Treasury a bureau charged with Duties.Rusesec.324,p .54,

the execution of all laws passed by Congress relating to the issue and amended,

regulation of national currency secured by United States bonds and,under the general supervision of the Federal Reserve Board, of allFederal reserve notes, the chief officer of which bureau shall be calledthe Comptroller of the Currency and shall perform his duties underthe general directions of the Secretary of the Treasury-

Authority and pow.SEC. 11 . The Federal Reserve Board shall be authorized and em_ ors of hoard .powered :(a) To examine at its discretion the accounts, books and affairs 1 ;xamination,etc .,of

reserve and memberof each Federal reserve bank and of each member bank and to require banks.

such statements and reports as it may deem necessary . The saidboard shall publish once each week a statement showing the condi-tion of each Federal reserve bank and a consolidated statement for all

Published state-Federal reserve banks . Such statements shall show in detail the ments .

262

SIXTY-THIRD CONGRESS. SESS. II. Cg. 6. 1913.

assets and liabilities of the Federal reserve banks, single and com-bined, and shall furnish full information regarding the character of themoney held as reserve and the amount, nature and maturities of thepaper and other investments owned or held by Federal reservebanks .

Rediscounted paper. (b) To permit, or, on the affirmative vote of at least five membersof the Reserve Board to require Federal reserve banks to rediscountthe discounted paper of other Federal reserve banks at rates of in-

onofreserveterest to be fixed by the Federal Reserve Board.

Surequirements.

(c) To suspend for a period not exceeding thirty days, and fromtime to time to renew such suspension for periods not exceedin

TaxZimposed .

fifteen days any reserve requirement specifiedperiodsin this Act : Provide

That it shall establish a graduated tax upon the amounts by whichGraduatedrates. the reserve requirements of this Act may be permitted to fall below

the level hereinafter specified : And provided further, That when thegold reserve held against Federal reserve notes falls below forty percentum, the Federal Reserve Board shall establish a graduated tax ofnot more than one per centum per annum upon such deficiency ntilthe reserves fall to thirty-two and one-half per centum, and whensaid reserve falls below thirty-two and one-half per centum, a tax atthe rate increasingly of not less than one and one-half per centumper annum upon each two and one-half per centum or fraction thereofthat such reserve falls below thirty-two and one-half per centum .

Increase of interestrates.

The tax shall be paid by the reserve bank, but the reserve bank shall.add an amount equal to said tax to the rates of interest and discountfixed by the Federal Reserve Board.

Control of Federalreserve notes .

(d) To supervise and regulate through the bureau under the charge.of the Comptroller of the Currency the issue and retirement of Federalreserve notes, and to prescribe rules and regulations under which suchnotes may be delivered by the Comptroller to the Federal reserveagents applying therefor.

Reserve cities .

(e) To add to the number of cities classified as reserve and centralreserve cities under existing law in which national banking associa-

Posy p . 271 . tions are subject to the reserve requirements set forth in sectiontwenty of this Act ; or to reclassify existing reserve and centralreserve cities or to terminate their designation as such .

Reserve bank • 'oats. (f) To suspend or remove any officer or director of any Federal

reserve bank, the cause of such removal to be forthwith communi-cated in writing by the Federal Reserve Board to the removed officeror director and to said bank.

Doubtful assets.

(g)- To require the writing off of doubtful or worthless assets uponthe books and balance sheets of Federal reserve banks .

snspe r. 8. of re-

(h) To suspend, for the violation of any of the provisions of thisserve banksAct, the operations of any Federal reserve bank, to take possessionthereof, minister the same during the period of suspension, and,when deemed advisable, to liquidate or reorganize such bank .

General authority,

(1) To require bonds of Federal reserve agents, to make regulationsover reserve agents,etc_ for the -safeguarding of all collateral, bonds, Fderal reserve notes,

money or property of any kind deposited in the hands of suchagents, and said board shal~perform the duties, functions, or servicesspecified in this Act, and make all rules and regulations necessary toenable said board effectively to perform the same .

sere banksSupervision of re-

( °) To exercise general supervision over said Federal reserve banks ..Fiduciary permits . () To grant by special permit to national banks applying therefor,

when not in contravention of State or, local law, the right to act astrustee, execu‡or, administrator, or registrar of stocks and bondsunder such rules and regulations as the said board may prescribe .

Employees. (1) To employ such attorneys, experts, assistants, clerks, or otheremployees as may be deemed necessary to conduct the business ofthe board . All salaries and fees shall be fixed in' advance by saidboard and shall be paid in the same manner as the salaries of the

SIXTY-THIRD CONGRESS. SEss. IL Ca. 6 . 1913 .

263

members of said board . All such attorneys, experts, assistants,=1 t

ppeBatua with-

clerks, and other employees shall be appointed without regard to the

ce laws, etc .

eighteen hundred and Vol. 22, p . 403.provons of the Act of January sixteenth,eighty-three (volume twenty-two, United States Statutes at Large,page four hundred and three), and amendments thereto, or any rule

proviso.or regulation made in pursuance thereof : Provided, That nothing Authorityherein shall prevent the President from placing said employees in the President .

classified service .

FEDERAL ADVISORY COUNCIL .

SEC. 12 . There is hereby created a Federal Advisory Council, Created.

which shall consist of as many members as there are Federal reservedistricts. Each Federal . reserve bank by its board of directors shall bers, pay etc

r mem-

annually select from its own Federal reserve district one member ofsaid council, who shall receive such compensation and allowances asmay be fixed l, y his board of directors subject to the approval of the MeetingsFederal Reserve Board . The meetings of said advisory council shall etc.

be held at Washington, District of Columbia, at least four times eachyear, and oftener if called by the Federal Reserve Board. Thecouncil may in addition to the meetings above provided for hold suchother meetings in Washington, District of Columbia, or elsewhere, asit may deem necessary, may select its own officers and adopt its ownmethods of procedure, and a majority of its members shall constitutea quorum for the transaction of business. Vacancies in the councilshlla be filled by the respective reserve banks and members selectedto fill vacancies, shall serve for the unexpired term .

Authority and du-The Federal Advisory Council shall have power, by itself or through ties.

its officers, (1) to confer directly with the Federal eserve Board ongeneral business conditions ; (2) to make oral or written representa-tions concerning matters within the jurisdiction of said board ; (3) tocall for information and to make recommendations in regard todiscount rates, rediscount business, note issues, reserve conditions inthe various districts, the purchase and sale of gold or securities byreserve banks, open-market operations by said banks, and the generalaffairs of the reserve banking system .

POWERS OF FEDERAL RESERVE BANKS .

SEC. 13. Any Federal reserve bank may receive from any of itsmember banks, and from the United States, deposits of current fundsin lawful money, national-bank notes, Federal reserve notes, orchecks and drafts u on solvent member banks, payable upon presen-tation; or, solely for exchange purposes, may receive from otherFederal reserve banks deposits of current funds in lawful money,national-bank notes, or checks and drafts upon solvent member orother Federal reserve banks, payable upon presentation .

Upon the indorsement of any of its member banks, with a waiver ofdemand, notice and protest by such bank, any Federal reserve bankmay discount notes, drafts, and bills of exchange arising out of actualcommercial transactions ; that is, notes, drafts, and bills of exchangeissued or drawn for agricultural, industrial, or commercial purposes,or the proceeds of which have been used, or are to be used, for suchpurp oses, the Federal Reserve Board to have the right to determineor define the character of the paper thus eligible for discount, withinthe meaning of this Act. Nothing in this Act contained shall beconstrued to prohibit such notes, drafts, and bills of exchange, securedby staple agricultural products, or other goods, wares, or merchandisefrom being eligible for such discount ; but such definition shall notinclude notes, drafts, or bills covering merely investments or issued

of the

Federal AdvisoryCouncil.

officers,

Federal reservebanks .

Deposits allowed.

Discounting com-mercial paper .

Description.

Agricultural, etc.,paper .

Stock trading paperexcluded .

264

SIXTY-THIRD CONGRESS. SEES. 11. Cs. 6 . 1913.

or drawn for the purpose of carrying or trading in stocks, bonds, orother investment securities, except bonds and notes of the Govern-

Time limit.

ment of the United States . Notes, drafts, and bills admitted to dis-count under the terms of this paragraph must have a maturity at

Additional for agrf- the time of discount of not more than ninety days : Provided, Thatcultural notes, etc. notes, drafts, and bills drawn or issued for agricultural purposes or

based on live stock and having a maturity not exceeding six monthsmay be discounted in an amount to be limited to a percentage of thecapital of the Federal reserve bank, to be ascertained and fixed by the

Rediscounting for.Federal Reserve Board .

eigntradoseceptances . Any Federal reserve bank may discount acceptances which arePost, p. 958, based on the importation or exportation of goods and which have

a maturity at time of discount of not more than three months, andindorsed by at least one member bank. The amount of acceptancesso discounted shall at no time exceed one-half the paid-up capital stock

Restriction on reds_ and surplus of the bank for which the rediscounts are made .counts. The aggregate of such notes and bills bearing the signature or en-

dorsement of any one person, company, firm, or corporation redis-counted for any one bank shall at no time exceed ten per centum of theunimpaired capital and surplus of said bank ; but this restriction shallnot apply to the discount of bills of exchange drawn in good faith

Dealing in foreign against actually existing values .trade paper by mem. Any member bank may accept drafts or bills of exchange drawnber banks allowed~ upon it and growing out of transactions involving the importation

or exportation of goods having not more than six months sight torun ; but no bank shall accept such bills to an amount equal at anytime in the aggregate to more than one-half its paid-up capital stock

National banks.

and surplus.Debts limited .

Section fifty-two hundred and two of the Revised Statutes of theR . S., see .5202, p. United States is hereby amended so as to read as follows : No national

IOOO, amended .

banking association shall at any time be indebted, or in any waliable, to an amount exceeding the amount of its capital stock at such

Exceptions,

time actually paid in and remaining undiminished by losses or other-wise, except on account of demands . of the nature following :

Circulating notes .

First. Notes of circulation.Deposits .

Second. Moneys deposited with or collected by the association .Drafts, etc°

Third. Bills of exchange or drafts drawn against money actuallyDividends, etc.

on deposit to the credit of the association, or due thereto .Fourth. Liabilities to the stockholders of the association for

Federal reserve pro. dividends and reserve profits.visions added .

Fifth . Liabilities incurred under the provisions of the FederalRegulation of redis. Reserve Act.

counts° etc ° The rediscount by any Federal reserve bank of any bills receivableand of domestic and foreign bills of exchange and of acceptancesauthorized by this Act, shall be subject to suchI restrictions, limita-tions, and regulations as may be imposed by the Federal ReserveBoard.

Open-market opera-tions.

OPEN-MARKET OPERATIONS.

Federal reserve SEc. 14. Any Federal reserve bank may, under rules and regula-eommeremiaepaper,etc. tions prescribed by the Federal Reserve Bard, purchase and sell in

the open market, at home or abroad, either from or to domestic orforeign banks, firms, corporations, or individuals, cable transfers andbankers' acceptances and bills of exchange of the kinds and maturitiesby this Act made eligible for rediscount, with or without the indorse-ment of a member bank.

Additional powers.

Everr,v~ Federal reserve bank shall have power :Gold transactions . ~a) 1o deal in gold coin and bullion at home or abroad, to make

loans thereon, exchange Federal reserve notes for gold, gold coin, orgold certificates, and to contract for loans of gold coin or bullion,giving therefor, when necessary, acceptable security, including the

SIXTY-THIRD CONGRESS. SESs. IL Ca. 6 . 1913.

265

hypothecation of United States bonds or other securities which Federalreserve banks are authorized to hold ;

(b) To .buy and sell, at home or abroad, bonds and notes of the Bonds, aotes, etc.

United States, and bills, notes, revenue bonds, and warrants with amaturity from date of purchase of not exceeding six months, issuedin anticipation of the collection of taxes or in. anticipation of thereceipt of assured revenues by any State, county, district, politicalsubdivision, or municipality in the continental United States, includ-ing irrigation, drainage and reclamation districts, such purchases tobe made in accordance with rules and regulations prescribed by theFederal Reserve Board ;

(c) To purchase from member banks and to sell, with or without its Commercial ex-

indorsement, bills of exchange arising out of commercial transactions,as hereinbefore defined ;

(d) To establish from time to time, subject to review and determi-nationof the Federal Reserve Board, rates of discount to be chargedby the Federal reserve bank for each class of paper, which shall befixed with a view of accommodating commerce and business ;

(e) To establish accounts with other Federal reserve banks for F•rei g n aeeonntsexchange purposes and, with the consent of the Federal Reserve

and agencies.

Board, to open and maintain banking accounts in foreign countries,appoint correspondents, and establish agencies in such countrieswheresoever it may deem best for the purpose of~purchasing, selling,and collecting bills of exchange, and to buy and sellwith or without itsindorsement, through such correspondents or agencies, bills of exchangearising out of actual commercial transactions which have not morethan ninety days to run and which bear the signature of two or moreresponsible parties .

GOVERNMENT DEPOSITS .

Government deposits .

SEC . 15 . The moneys held in the general fund of the Treas

Use of reserve bankUry, asSacal agents, etc.except the five per centum fund for the redemption of outstandingnational-bank notes and the funds provided in this Act for the redemp-tion of Federal reserve notes may, upon the direction of the Secretaryof the Treasury, be deposited in Federal reserve banks which b . ..xs,when required by. the Secretary of the Treasur, shall act as fiscalagents of the United States ; and the revenues of the Government orany part thereof may be deposited in such banks, and disbursementsmay be made by checks drawn against such deposits .

No public funds of the Philippme Islands, or of the postal savings, funds restricted.public

or any Government funds, shall be deposited in the continental UnitedStates in any bank not belonging to the system established by this Act :

Proviso .Provided, however, That not

m this Act shall be construed to deny Useofmemberbanksthe right of the Secretary of t e Treasury to use member banks as asdeposltortes.

depositories.

Federal reservenotes.NOTE ISSUES.

SEC. 16 . Federal reserve notes, to be issued at the discretion of theFederal Reserve Board for the purpose of making advances to Federalreserve banks through the Federal reserve agents as hereinafter setforth and for no other purpose, are hereby authorized . The said notesshall be

obadations of the United States and shall be receivable by all

national amember banks and Federal reserve banks and for alltaxes, customs, and other public dues . They shall be redeemed ingold on demand at the Treasury Department of the United States, inthe city of Washington, District of Columbia, or in gold or lawfulmoney at any Federal reserve bank .Any Federal reserve bank may make application to the local

Federal reserve agent for such amount of the Federal reserve noteshereinbefore provided for as it may require . Such application shall

Issue authorized .

Reeeivabtlity.

Redemption.

Applications for, byreserve banks .

Collateral required .

266

SIXTY-THIRD CONGRESS. Srss. II. Cs. 6 . 1913 .

be accompanied with a tender to the local Federal reserve agent ofcollateral in amount equal to the sum of the Federal reserve notes thusapplied for and issupursuant to such application . The collateralseca p 283

urity thus offered shall be notes and bills ; accepted for rediscountunder the provisions of section thirteen of t iia A, and the Federalreserveagent shall each day notify the Federal Reserve Board of all

Additional security,issues and withdrawals of Federal reserve notes to and by

the '

ederalreserve bank to which he is accredited . The said Federal ReserveBoard may at any time call upon a Federal reserve bank for addi-tional security to protect the Federal reserve notes issued to it .

Reserves required Every Federal reserve bank shall maintain reserves in gold orfor deposits a clreu-iation° lawful money of not less than thirty-five per centum against its

deposits and reserves in gold of not less than forty per centumagainst its Federal reserve notes in actual circulation, and not

Designation of notes . offset by gold or lawful money deposited with the Federal re-serve agent. Notes so paid out shall bear upon their faces a

Reserve banks to re- distinctive letter and serial number, which shall be assignedturn notes to issuing by the Federal Reserve Board to each Federal reserve bank. Whenbanks .

ever Federal reserve notes issued through one Federal reserve bankshall be received by another Federal reserve bank they shall be

Penalty for using promptly returned for credit or redemption to the Federal - reserveotherwise .

bank through which they were originally issued . No Federal reserveRedemption at the bank shall pay out notes issued through another under penalty_of a

Treasury.

tax often per centum upon the face value of notes so paid out . Notespresented for redemption at the Treasury of the United States shall

Reimbursement bybe paid out of the redemption fund and returned to the Federal

reserve bank . reserve banks through which they were originally issued, and there-upon such Federal reserve bank shall, upon demand of the Secretaryof the Treasury, reimburse such redemption fund in lawful moneyor, if such Federal reserve notes have been redeemed by the Treasurerin gold or gold certificates, then such funds shall be reimbursed tothe extent deemed necessary by the Secretary of the Treasury in goldkeptla reserve to be or gold certificates, and such Federal reserve' bank shall, so long asany of its Federal reserve notes remain outstanding, maintain withthe Treasurer in gold an amount sufficient in the judgment of theSecretary to provide for all redemptions to be made by the Treasurer .Federal reserve notes received by the Treasury, otherwise than forredemption, may be exchanged for gold out of the redemption fundhereinafter provided and returned to the reserve bank through which

Destruction •r nnatthey were originally issued or they may be returned to such bank

notes .

for the credit of the United States . Federal reserve _notes unfit for .circulation shall be returned by the Federal reserve agents to the

Gold-redemp.tfe'n Comptroller of the Currency for cancellation and destruction.fund

surybe kept in The Federal Reserve Board shall require each Federal reserve bank

to maintain on deposit in the Treasury of the United States a sumin gold sufficient in the judgment of the Secretary of the Treasuryfor the redemption of the Federal reserve notes issued to suchbank, but in no event less than five per centum ; but such de-

Reserve soara toposit of gold shall be counted and included as part of the forty per

co ese veteIssue. centum reserve bereinbefore required . The board shall have theright, acting through the Federal reserve agent, to grant in wholeor in part or to reject entirely the application of any Federalreserve bank for Federal reserve notes ; but to the extent that suchapplication may be granted the Federal Reserve Board shall, throughits local Federal reserve went, supply Federal reserve notes to the

Interest to be paid . bank so applying, and suc bank shall be charged with the amountof such notes and shall pay such rate of interest on said amount as

Lien created .

may be established by the Federal Reserve Board, and the amount ofsuch Federal reserve notes so issued to any such bank shall, upon

Post p _

delivery, together with such notes of such Federal reserve bank asmay be issued under section eighteen of this Act upon security of

SIXTY-THIRD CONGRESS. Snss. II. Cu. 6 . 1913.

United States two per centum Government bonds, become a first andparamount lien on all the assets of such bank .

Any Federal reserve bank may at any time reduce its liability foroutstanding Federal reserve notes by depositing, with the Federalreserve agent, its Federal reserve notes, gold, gold certificates, orlawful money of the United States . Federal reserve notes so depos-ited shall not be reissued, except upon compliance with the conditionsof an original issue.

The Federal reserve agent shall hold such gold, gold certificates orlawful money available exclusively for exchange for the outstandingFederal reserve notes when offered by the reserve bank of which he isa director. Upon the request of the Secretary of the Treasury theFederal Reserve Board shall require the Fral reserve agent totransmit so much of said gold to the Treasury of the United States asmay be required for the exclusive purpose of the redemption of suchnotes.

Any Federal reserve bank may at its discretion withdraw collateraldeposited with the local Federal reserve agent for the protection ofits Federal reserve notes deposited with it and shall at the same timesubstitute therefor other like collateral of equal amount with theapproval of the Federal reserve agent under regulations to be pre-scribed by the Federal Reserve Board .

In order to furnish suitable notes for circulation as Federal reservenotes, the Comptroller of the Currency shall, under the direction ofthe Secretary of the Treasury, cause plates and dies to be engravedin the best manner to guard against counterfeits and fraudulentalterations, and shall have printed therefrom and numbered suchquantities of such notes of the denominations of $5, $10, $20,$50, $100, as may be required to supply the Federal reserve banks .Such notes shall be in form and tenor as directed by the Secretary ofthe Treasury under the provisions of this Act and shall bear thedistinctive numbers of the several Federal reserve banks throughwhich they are issued .

When such notes have been prepared, they shall be deposited inthe Treasury or in the subtreasury or mint of the United Statesnearest the place of business of each Federal reserve bank and shallbe held for the use of such bank subject to the order of the Comp-troller of the Currency for their delivery, as provided by this Act .

The plates and dies to be procured by the Comptroller of the Cur-rency for the printing of such circulating notes shall remain underhis control and direction, and the expenses necessarily incurred inexecuting the laws relating to the procuring of such notes, and alllother expenses incidental to their issue and retirement, shall be paidby the Federal reserve banks, and the Federal Reserve Board shallinclude in its estimate of expenses levied against the Federal reservebanks a sufficient amount to cover the expenses herein provided for .

The examination of plates, dies, bed pfeces, and so forth, andregulations relating to such examination of plates, dies, and so forth,of national-bank notes provided for in section fifty-one hundred andseventy-four Revised Statutes, is hereby extended to include notesherein provided for.

Any appropriation heretofore made out of the general funds ofthe Treasury for engraving plates and dies, the purchase of distinc-tive paper, or to cover any other expense in connection with theprinting of national-bank notes or notes provided for by the Act ofMay thirtieth, nineteen hundred and eight, and any distinctive paperthat may be on hand at the time of the passage of this Act may beused in the discretion of the Secretary for the purposes of this Act,and should the appropriations heretofore made be insufficient tomeet the requirements of this Act in addition to circulating notesprovided for by existing law, the Secretary is hereby authorized to

267

Reduction of re-serve liability.

Reserve agent's du-ties.

Transfer of gold tothe Treasury .

Exchange of collat-eral.

Provisions for print-ing, ate., notes.

Custody of notes be.fore iasue.

Custody of platesand dies.

Annual examina-tion of plates, etc.R . S.,eer . 517A,p.1o00.

Payment forengrac-ing, printing, paper,ete .VoL 35, p . 5a;.

Additional appropri-ation .

268

SIXTY-THIRD CONGRESS. SEES. II. CH. 6. 1913.

use so much of any funds in the Treasury not otherwise appropriatedReimbursement . for the purpose of furnishing the notes aforesaid : Provided, however,

That nothing in this section contained shall be construed as exempt-ing national banks or Federal reserve banks from their liability toreimburse the United States for any expenses incurred in printingand issuing circulating notes.

Reserve banks .

Every Federal reserve bank shall receive on deposit at par fromDeposits,etc . , authorized,

colleetions,member banks or from Federal reserve banks checks and drafts drawnupon any of its depositors, and when remitted by a Federal reservebank, checks and drafts drawn by any depositor in any other Federalreserve bank or member bank upon finds to the credit of said deposi-tor in said reserve bank or member bank. Nothing herein containedshall be construed as prohibiting a member bank from charging itsactual expense incurred in collecting and remitting funds, or for

ChargesfeoT ba eetionsby member nks . exchange sold to its patrons . The Federal Reserve Board shall, by

rule, fix the charges to be collected by the member banks from itspatrons whose checks are cleared through the Federal reserve bankand the charge which may be imposed for the service of clearing orcollection rendered by the Federal reserve bank .

Clearing house pro- The Federal Reserve Board shall make and promulgate from timevisions. to time regulations governing the transfer of funds and chargestherefor among Federal reserve be.nks and their branches, and mayat its discretion exercise the functions of a clearing house for suchFederal reserve banks, or may designate a- Federal reserve bank toexercise such functions, and may also require each such bank to

National banks.

exercise the functions of a clearing house for its member banks .Deposit of registered SEC. 17 . So much of the provisions of section fifty-one, hundred

b ndbsrepealed . and fifty-nine of the Revised Statutes of the United States, andp. 997,amended.

section four of the Act of June twentieth, eighteen hundred andVol . 18, p. 124 ; Vol .

22,p.164, seventy-four, and section eight of the Act of July twelfth, eighteenhundred and eighty-two, and of any other provisions of existingstatutes as require that before any national banking associationsshall be authorized to commence banking business it shall transferand deliver to the Treasurer of the United States a stated amount ofUnited States registered bonds is hereby repealed .

Refunding bonds.

Member banks maysell bonds to retire SEC. 18 . After two years from the passage of this Act, and at anynotes, time during a period of twenty years thereafter, any member bank

desiring to retire the whole or any part of its circulating notes, mayfile with the Treasurer of the United States an application to sell forits account, at par and accrued interest, United States bonds secur-.in circulation to be retired .

bank.basebyreserve e Treasurer shall, at the end of each quarterly period, furnish

the Federal Reserve Board with a list of such applications, and theFederal Reserve Board may, in its discretion, require the Federalreserve banks to purchase such bonds from the banks whose ap li-cations have been filed with the Treasurer at least ten days beforethe end of any quarterly period at which the Federal Reserve Board

Aanuaiiimit. may direct the purchase to be made : Provided, That Federal reservebanks shall not be permitted to purchase an amount to exceed$25,000,000 of such bonds in any one year, and which amount shall

Aate,p .254A

include bonds acquired under section four of this Act by the Federalreserve bank .

Allotment. ' Provided further, That the Federal Reserve Board shall allot toeach Federal reserve bank such proportion of such bonds as thecapital and surplus of such bank shall bear to the aggregate capitaland surplus of all the Federal reserve banks .

Assignment, etc.

Upon notice from the Treasurer of the amount of bonds so sold forits account, each member bank shall duly assign and transfer, in

REFUNDING BONDS.

I

SIXTY-THIRD CONGRESS. Sass. II. Ca. 6 . 1913 .

269

writing; such bonds to the Federal reserve bank purchasing thesame, and such Federal reserve bank shall, thereupon, deposit lawfulmoney with the Treasurer of the United States for the purchase priceof such bonds, and the Treasurer shall pay to the member banks elling S,., note;,Steout-of

bonds any balance due after deducting a sufficient sum toredeem its outstanding notes secured b such 'bonds, which notesshall be canceled and permanently retire when redeemed .

The Federal reserve banks purchasing such bonds shall be per- Servetoff Federal re-

mitted to take out an amount of circulating notes equal to the parvalue of such bonds .

Upon the deposit with the Treasurer of the United States of bonds d Delt o~vbf notes tes on

so purchased, or any bonds with the circulating privilege acquired A7* p 2s4&under section four of this Act, any Federal reserve bank makingsuch deposit in the manner provided by existing law, shall be entitledto receive from the Comptroller of the Currency circulating notesin blank, registered and countersigned as provided by law, equal inamount to the par value of the bonds so deposited . Such notes of nottes and character

shall be the obligations of the Federal reserve bank procuring thesame, and shall be in form prescribed by the Secretary of the Treas-ury, and to the same tenor and effect as national-bank notes nowprovided by law . They shall be issued and redeemed under thesame terms and conditions as national-bank notes except that theyshall not be limited to the amount of the capital stock of the Federalreserve bank issuing them .

Exr,,nNa of two perUpon application of any Federal reserve bank, approved by the cent bonds, for geldFederal Reserve Board, the Secretary of the Treasury may issue, in notes and bonds.

exchange for United States two per centum gold bonds bearing the cir-culation privilege, but against which no circulation is outstanding,one-7ear gold notes of the United States without the circulationprivilege, to an amount not to exceed one-half of the two per centumbonds so tendered for exchange, and thirty-year three per centumgold bonds without the circulation privilege for the remainder of thetwo per centum bonds so tendered . Provided, That at the time of such Geld p;nebases, etc,exchange the Federal reserve bank obtaining such one-year goldnotes shall enter into an obligation with the Secretary of the Treas-ury binding itself to purchase from the United States for gold at thematurity of such one-year notes, an amount equal to those deliveredin exchange for such bonds, if so requested by the Secretary, and ateach maturity of one-year notes so purchased by such Federal reservebank, to purchase from the United States such an amount of one- earnotes as the Secretary may tender to such bank, not to exceed theamount issued to such bans in the first instance, in exchange for thetwo per centum United States gold bonds ; said obligation to pur-chase at maturity such notes shall continue in force for a period notto exceed thirty years.

Authority for inter-For the purpose of making the exchange herein provided for, the est bearing Treasury

Secretary of the Treasury is authorized to issue at par Treasury notes notes.

in coupon or registered form as he may prescribe in denominationsof one hundred dollars, or any- multiple thereof, bearing interest atthe rate of three per centum per annum, payable quarterly, suchTreasury notes to be payable not more than one year from the date oftheir issue in gold coin of the resent standard value, and to be exemptas to principal and interest from the payment of all taxes and dutiesof the United States except as provided by this Act, as well as fromtaxes in any form by or under State, municipal, or local authorities .

Issue of three perAnd for the same purpose, the Secretary is authorized and empowered cent b onds .to issue United States gold bonds at par, bearing three per centuminterest payable thirty years from date of issue, such bonds to be ofthe same general tenor and effect and to be issued under the samegeneral terms and conditions as the United States three per centumbonds without the circulation privilege now issued and outstanding .

270

SIXTY-THIRD CONGRESS. Sass . II. Cs. 6 . 1913 .

Exchanges of goldnotes for bonds .

Bankreservee .

Upon application of any Federal reserve bank, approved by theFederal Reserve Board, the Secretary may issue at par such threeper centum bonds in exchange for the one-year gold notes herein .provided for .

BANS RESERVES .

d Demand nndetime SEC. 19 . Demand deposits within the meaning of this Act shallcomprise all deposits payable within thirty days, and time depositsshall comprise all deposits payable after thirty days, and all savingsaccounts and certificates of deposit which are subject to not less thanthirty days' notice before payment.

ragaen~srequired When the Secretary of the Treasury shall have officially announced,in such manner as lie may elect, the establishment of a Federal reservebank in any district, every subscribing member bank shall establishand maintain reserves as follows :

Banks not in reserveoreentraireserveaities . (a) A bank not in a reserve or central reserve city as now or here-

after defined shall hold and maintain reserves equal to twelve percentum of the aggregate amount of its demand deposits and five percentum of its time deposits, as follows :

In its vaults for a period of thirty-six months after said datefive-twelfths thereof and permanently thereafter four-twelfths .

In the Federal reserve bank of its district, for a period of twelvemonths after said date, two-twelfths, and for each succeeding sixmonths an additional one-twelfth, until five-twelfths have been sodeposited, which shall be the amount permanently required .

For a period of thirty-six months after said date the balance ofthe reserves may be held in its own vaults, or in the Federal reservebank, or in national banks in reserve or central reserve cities as nowdefined by law .

Af ter said thirty-six months' period said reserves, other thanthose hereinbefore required to be held in the vaults of the memberbank and in the Federal reserve bank, shall be held in the vaults ofthe member bank or in the Federal reserve bank, or in both, at theoption of the member bank .

In reserve cities. (b) A bank in a reserve city, as now or hereafter defined, shall holdand maintain reserves equal to fifteen per centum of the aggregateamount of its demand deposits and five per centum of its timedeposits, as follows :

In its vaults for a period of thirty-six months after said datesix-fifteenths thereof, and permanently thereafter five-fifteenths .

In the Federal reserve bank of its district for a period of twelvemonths after the date aforesaid at least three-fifteenths, and for eachsucceeding six months an additional one-fifteenth, until six-fifteenthshave been so deposited, which shall be the amount permanentlyrequired .

For a period of thirty-six months after said date the balance ofrest, p. 691. the reserves may be held in its own vaults, or in the Federal reserve

bank, or in national barks in reserve or central reserve cities as nowdefined by law.

After said thirty-six months' period all of said reserves, exceptthose hereinbefore required to beheld permanently in the vaults ofthe member bank and in the Federal reserve bank, shall be held inits vaults or in the Federal reserve bank, or in both, at the optionof the member bank .

In central reserve

(c) A bank in a central reserve city, as now or hereafter . defined,cities, shall hold and maintain a reserve equal to eighteen per centum of

the aggregate amount of its demand deposits and five per centum ofits time deposits, as follows :

In its vaults six-eighteenths thereof .In the Federal reserve bank seven-eighteenths .

SIXTY-THIRD CONGRESS. SEES. II. Cit. 6. 1913 .

271The balance of said reserves shall be held in its own vaults or in

the Federal reserve bank, at its option .Any Federal reserve bank may receive from the member banks as

reserves, not exceeding one-half of each installment, eligible paper asdescribed in section fourteen properly indorsed and acceptable tothe said reserve bank .

If a State bank or trust company is required by the law of its Stateto keep its reserves either in its own vaults or with another State bankor trust company, such reserve deposits so kept in such State bankor trust company shell be construed, within the meaning of this sec-tion, as if they were reserve deposits in a national bank in a reserveor central reserve city for a period of three years after the Secretaryof the Treasury shall have officially announced the establishment of aFederal reserve bank in the district in which such State bank ortrust company is situate . Except as thus provided, no memberbank shall keep on deposit with any nonmember bank a sum inexcess of ten per centum of its own paid-up capital and surplus .No member bank shall act as the medium or agent of a nonmemberbank in applying for or receiving discounts from a Federal reservebank under the provisionsrovisions of this Act except by permission of theFederal Reserve Board .

The reserve carried by a member bank with a Federal reserve bankmay, under the regulations and subject to such penalties as may beprescribed by the Federal Reserve Board, be checked against andwithdrawn by such member bank for the purpose of meeting existingliabilities : Provided, however, That no bank shall at.Qany time makenew loans or shall pay any dividends unless and until the total reserverequired by law is fully restored .

In estimating the reserves required by this Act the net balance ofamounts due to and from other banks shall be taken as the basis forascertaining the deposits against which reserves shall be determined .Balances in reserve banks due to member banks slm]l, to the extentherein provided, be counted as reserves .

National banks located in Alaska or outside the continental UnitedStates may remain nonmember banks and shall in that eventmaintain reserves and comply with all the conditions now providedby law regulating them ; or said banks, except in the PhilippineIslands, may, with the consent of the Reserve Board, become memberbanks of any one of the reserve districts, and shrill, in that event, takestock, maintain reserves, and be subject to all the other provisionsof this Act.SEC. 20. So much of sections two and three of the Act of June

twentieth, eighteen hundred and seventy-four, . entitled "An Actfixing the amount of United States notes, providing for a redistribu-tion of the national bank currency, and for other purposes," as pro-vides that the fund deposited by any national banking associationwith theTreasurer of the United States for the redemption of its notesshall be counted as a part of its lawful reserve as provided in the Actaforesaid, is hereby repealed . And from and after the passage ofthis Act such fund of five per centum shall in no case be counted byany national banking association as a part of its lawful reserve .

SEc. 21 . Section fifty-two hundred and forty, United States Re-vised Statutes, is amended to repd as follows :

The Comptroller of the Currency, with the approval of the Secre-tary of the Treasury, shall appoint examiners who shall examineevery member bank at least twice in each calendar year and oftenerif considered necessary : Provided, however, That the Federal ReserveBoard may authorize examination by the State authorities to be

Acceptance of eligi.ble paper as part ofreserve.

Past, p .691.

Reserves by statebanks or trust oompa.Dies .Post, p.691 .

Restriction on de.posits, etc ., by mem°bar banks.

Use of reserves.

Proviso.Restriction .

Basis of reserves .Post, p.692 .

Alaskan and Insularbanks .

Banks to PhilippineIslands

National bank re°demption funds not tobe part of reserve .Vol . 18, p . 123.

BANK EXAMINATIONS .

Bank examinations.

Examiners .R. S ., sec. 5240, p.

1013, amended .Appointment, etc.

Proviso .Acceptance of State

examinations .

272

SIXTY-THIRD CONGRESS. SEES. II. Ca. 6 . 1913 .

accepted in the case of State banks and trust companies and may atany time direct the holding of a Special examination of State banksor trust companies that are stockholders in any Federal reserve

Authority, etc., of bank. The examiner makin the examination of any national bank,examiners, or of any other member bank, shall have power to make a thorough

examination of all the affairs of the bank and in doing so he shallhave power to administer oaths and to examine any of the officersand agents thereof under oath and shall make a full and detailedreport of the condition of said bank to the Comptroller of the Cur-rency.

Salariesandeapenses . The Federal Reserve Board, upon the recommendation of theComptroller of the Currency, shall fix the salaries of all bank exam-iners and make report thereof to Congress . The expense of theexaminations herein.provided for shall be assessed by the Comptrollerof the Currency upon the banks examined in proportion to assets orresources held by the bssnks upon the dates of examination of thevarious banks.

special examina- In addition to the examinations made and conducted by theeons.

Comptro

for

ller

s

of the Currency, every Federal reserve bank may!withthe approvalof the Federal reserve agent or the Federal ReserveBoard,

ovide

pecial examination of member banks within its district .he expense of such examinations shall be borne by the bankbank exam-ed . Such examinations shall be so conducted as to inform the

Federal reserve bank of the condition of its member banks and of thelines of credit which are being extended by them. Every Federalreserve bank shall at all times furnish to the Federal Reserve Boardsuch information as may be demanded concerning the condition ofany member bank within the district of the said Federal reserve bank .

Limit of otherexam- 1Vo bank shall be subject to any visitatorial powers other than suchinatiOIIs.

as are authorized by law, or vested in the courts of justice or such asshall be or shall have been exercised or directed by Congress, or byeither House thereof or by any committee of Congress or of eitherHouse duly authorized .

serve banks. of `e- The Fral Reserve Board shall, at least once each year, order anexamination of each Federal reserve bank, and upon joint applica-tion of ten member banks the Federal Reserve Board shall order aspecial examination and report of the condition of any Federalreserve bank .

menLoans6iaat exam- SEC . 22 . No member bank or any officer, director, or employee

thereof shall hereafter make any loan or grant any gratuity to anyPunishment for vio- bank examiner. . An bank officer, director, or employee violat-lating by bank official . gmg this provision shall be deemed guilty of a misdemeanor and shall

be imprisoned not exceeding one year or fined not more than $5,000,or both; and may be fined a further sum equal to the money so loaned

Ceptance byPunishmentexaminer .rr . - or gratuity given . Any examiner accept in

91

a loan or gratuity from anYbank examined by him or from an officer, ector, or employee thereofshall be deemed guilty of a misdemeanor and shall be .imprisoned notexceeding one year or fined not more than $5 000, or both ; and may befined a further sum equal to the money so loaned or gratuity given ;

Restriction on rerv- and shall forever thereafter be disqualified from holding office as alee by examiners. national-bank examiner. No national-bank examiner shall perform

any other service for compensation while holding such office for anybank or officer, director, or employee thereof .

by banka feesetc

Other than the usual salary or director's fee paid to any officer,atrfotedi director, or employee of a member bank and other than a reasonable

fee paid by said bank to such officer, director, or employee for servicesrendered to such bank, no officer, director, employee, or attorney of amember bank shall be a beneficiary of or receive, directly or indirectly,any fee, commission, gift, or other consideration for or in connection

closures byUnauthorized airexaminerss with any transaction or business of the bank . No examiner, public

forbidden,

or private, shall disclose the names of borrowers or the collateral for

SIXTY-THIRD CONGRESS. Suss. II. CH. 6. 1913 .

273loans of a member bank to other than the proper officers of suchbank without first having obtained the express permission in writingfrom the Comptroller of the Currency, or from the board of directorsof such bank, except when ordered to do so by a court of competentjurisdiction or by direction of the Congress of the United States, orof either House thereof, or any committee of Congress or of eitherHouse duly authorized. Any person violating any provision of thissection shall be punished by a fine of not exceeding $5,000 or byim risonment not exceeding one year, or both .

xcept as provided in existing laws, this provision shall not takeeffect until sixty days after the assage of this Act.SEC. 23 . The stockholders ofpevery national banking association

shall be held individually responsible for all contracts, debts, andengagements of such association, each to the amount of his stocktherein, at the par value thereof in addition to the amount investedin such stock. The stockholders in any national banking associationwho shall have transferred their shares or registered the transferthereof within sixty days next before the date of the failure of suchassociation to meet its obligations, or with knowledge of such im-pending failure, shall be liable to the same extent as if they had madeno such transfer, to the extent that the subsequent transferee fails tomeet such liability ; but this provision shall not be construed toaffect in any way any recourse which such shareholders might other-wise have against those in whose names such shares are registered atthe tune of such failure.

Punishment for vio.lations.

In effect in OO days.

Individual liabilityof national bank stockholder&R. S., see . 5151, p.

995, amended.Transferred stock.

LOANS ON FARM LANDS .

Los== Dim land,

SEc. 24 . Any national banking association not situated in a central In 0ont~ral hreesservereserve city may make loans secured by improved and unencum- cities may makedbered farm land, situated within its Federal reserve district, butno such loan shall be made for a longer time than five years, nor Unfit'for an amount exceeding fifty per centum of the actual value of theproperty offered as security. Any such bank may make such loans Penmisefbleam•m~tain an aggregate sum equal to twenty-five per centum of its capitaland surplus or to one-third of its time deposits and such banks maycontinue hereafter as heretofore to receive time deposits and to payinterest on the same.

Extension of restric °The Federal Reserve Board shall have power from time to time to tfons.add to the list of cities in which national banks shall not be permittedto make loans secured upon real estate in the manner described inthis section.

FOREIGN BRANCHES .

Foreign branches.

SEC. 25 . Any national banking association possessing a capital and 'National banks maysurplus of $1,000,000 or more may file application with the FederalReserve Board, upon such conditions and under such regulations asmay be prescribed by the said board, for the purpose of securingauthority to establish branches in foreign countries or dependenciesof the United States for the furtherance of the foreign commerce ofthe United States, and to act, if required to do so, as fiscal agents ofthe United States . Such application shall specify, in addition to the Applications .name and capital of the banking association ailing it, the place orplaces where the banking operations proposed are to be carried on,and the amount of Capital set aside for the conduct of its foreignbusiness. The FederalpReserve, Board shall have power to approve Approval of Reserveor to reject such application if, in its judgment, the amount of cal- Board.ital proposed to be set aside for the conduct of foreign business isinadequate, or if for other reasons the granting of such applicationis deemed inexpedient .

91006'-VOL 38-PT 1-18

274

SIXTY-THIRD CONGRESS. SEss. II. Cs. 6 . 1.91 3 .Information to be Ever national banking association which shall receive authorityfurnished, et•' to establish foreign branches shall be required at all times to furnish

information concerning the condition of such branches to the Comp-troller of the Currency upon demand, and the Federal Reserve Boardmay order special examinations of the said foreign branches at such

counts tp n dent as- time or times as it may deem best. Every such national bankingassociation shall conduct the accounts of each foreign branchindependently of the accounts of other foreign branches establishedby it and of its home office, and shall at the end of each fiscal periodtransfer to its general ledger the profit or loss accruing at each branchas a separate item.

r IInccoenasistent laws SEc. 26. All provisions of law inconsistent with or superseded by anyof the provisions of this Act are to that extent and to that extent only

Proviso.

hereb repealed : Provided, Nothing in this Act contained shall be con-Statees'tmod y Umain strued to repeal the parity provision or provisions contained in ant&Iee8

"31, p . 45 . Act approved March fourteenth, nineteen hundred, entitled "AnAct to define and fix the standard of value, to maintain the parityof all forms of money issued or coined by the United States, to

Securing gold by refund the public debt, and for other purposes," and the Secretary ofUnited states . the Treasury may for the purpose of msmtaimng such parity and tostrengthen the gold reserve, borrow gold on the security of UnitedStates bonds authorized by section two of the Act last referred toor for one-year gold notes bearing interest at a rate of not to exceed

Retiring bonds and three per centum per annum, or sell the same if necessary to obtainnotes .

gold . When the funds of the Treasury on hand justify, he maypurchase and retire such outstanding bonds and notes.

rational currency SEc.27. The rovisions of the Act of May thirtieth nineteenassociations .

rProvisions for, ex- hundred and eig t, authorizing national currency associations, thetended. toJune30,1915. ..Vol. 35,p 546.

issue of additional national-ba circulation, and creating a NationalPost, p.682.

Monetary Commission, which expires by limitation under the termsof such Act on the thirtieth day of June, nineteen hundred and four-teen, are hereby extended to June thirtieth, nineteen hundred and

5191,5214,-5153,5172, fifteen and sections fifty-one hundred and fifty-three, fifty-onepp.9961000,

~100410o3,amended . hundred and seventy-two, fifty-one hundred and ninety-one, andreenactteed

. provisions fifty-two hundred and fourteen of the Revised Statutes of the UnitedStates, which were amended by the Act of May thirtieth, nineteenhundred and eight, are hereby reenacted to read as such sectionsread prior to May thirtieth, nineteen hundred and ei ht, subject tosuch amendments or modifications as are prescribe in this Act :

Pr•vin °

Provided however That section nine of the Act first referred to inVo1n 5ouuP .

6o o, this section is hereby amended so as to chapge the tax rates fixedamended.

in said Act by making the portion applicable thereto read as follows :Tax on notessecureaother than by United National banking associations haveng circulating notes securedStates bonds, reduced . otherwise than by bonds of the United States, shall pay for the firstR. S ., sec . 5214, p.1008, amended . 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 basedupon the deposit of such securities, and afterwards an additional taxrate of one-half of one per centum per annum for each month until atax of six per centum per annum is reached, and thereafter such taxof six per centum per annum upon the average amount of suchnotes .

Reduction of capital SEe.28. Section fifty-one hundred and forty-three of the Revised0 9R tsnaeec8 II5 43, p . Statutes is hereby amended and reenacted to read as follows : Any

994, amended, association formed under this title may, by the vote of shareholdersowning two-thirds of its capital stock, reduce its capital to any sumnot below the amount required by this title to authorize the forma-tion of associations ; but no such reduction shall be allowable whichwill reduce the capital of the association below the amount required

Approval by Federal for its outstanding circulation, hor shall any reduction be made untiladda

e 73•era ' et• the amount of the proposed reduction has been reported to the Comp -troller of the Currency and such reduction has been approved by the

SIXTY-THIRD CONGRESS. SEss. II. Cas. 6-9. 1913, 1914.

275said Comptroller of the Currency and by the Federal Reserve Board,or by the organization committee pending the organization of theFederal Reserve Board .SEC. 29 . If any clause, sentence, paragraph, or part of this Act clamuseahec not

nip

shall for any reason be adjudged by any court of competent juris- rest remainder or Act.diction to be invalid, such judgment shall not affect, im air, orinvalidate the remainder of this Act, but shall be confine in itsoperation to the clause, sentence, paragraph, or part thereof directlyinvolved in the controversy in which such judgment shall have beenrendered .

SEC. 30 . The right to amend, altL .r, or repeal this Act is hereby Amendment, etc.expressly reserved .Approved, December 23, 1913 .

CRAP . 7.-An Act To provide for expenses of representatives of the United States December23,1913.at the International Maritime Conference for Safety of Life at Sea . [ a .11~ . 1

Be it enacted by the Senate and House ofRepresentatives of the United(Public, No. 44.1

States of America in Congress assembled, That for the expenses of the ~erere e" ~-representatives of the United States at the International Maritime Additional appro.Conference for Safety of Life at Sea, now in session at London, there odelegates eapanseeis appropriated, out of any money in the Treasury not otherwiseappropriated, the sum of $5,000 in addition to the appropriation of

Vol. 37, p. 638.$10,000 made in the joint resolution approved June twenty-eighth,nineteen hundred and twelve, entitled ` Joint resolution proposing aninternational maritime conference."Approved, December 23, 1913 .

CHAP. 8 .-An Act To authorize the construction, maintenance, and operation ofa bridge across the Bayou Bartholomew, at or near Wilmot, Arkansas .

ranua[y 15, 1914.1H. R. 8142.1

[Public,Be it enacted by the Senate and House of Representatives of the United

, No. 45.1

States of America in Congress assembled, That the county of Ashley, mBayou, Bartholo-Statescorporation organized and existing under the laws of the State of A

AshleyyCoune .bridg tArkansas, its successors and assigns, be, and they are hereby, author- wamot .

ized to construct, maintain, and operate a bridge and approachesthereto across the Bayou Bartholomew, at or near Wilmot, Arkansas,at a point suitable to the interests of navigation, in accordance with Vo1.34, s4.the provisions of the Act entitled "An Act to regulate the construe-

ption of bridges over navigable waters," approved March twenty-third,nineteen hundred and six .

SEC. 2 . That the right to alter, amend, or repeal this Act is hereby Amendment .

expressly reserved.Approved, January 15, 1914 .

CHAP. 9.-An Act To amend an Act entitled "An Act to prohibit the importa- January 17,1914 .lion and use of opium for other than medicinal purposes," approved February ninth,[13°R '1966.1nineteen hundred and nine .

[Public, No . 46.1

Be it enacted by the Senate and House o Representatives of the UnitedStates of America in Congress assembl , That an Act entitled "An voPoll m as, p, 614,Act to prohibit the importation and use of opium for other than medic- aendd .191~.inal purposes," approved February ninth, nineteen hundred and nine,is hereby amended so as to read as follows :

"That after the first day of April, nineteen hundred and nine, it hibmpdOrtation pro-

shall be unlawful to import into the United States opium in any formor any preparation or derivative thereof : Provided, That opium and Proviso.