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3 Juno 1864.

tion.

terest.

.

on cancellation of notes.

select, to examine and compare the bonds so pledged with the books of the comptroller and the accounts of the association, and, if found correct, to execute to the said treasurer a certificate setting forth the different kinds and the amounts thereof, and that the same are in the possession and custody of the treasurer at the date of such certificate. Such examination may be made by an officer or agent of such association, duly appointed in writing for that purpose, whose certificate before mentioned shall be of like force and validity as if executed by such president or cashier; and a duplicate signed by the treasurer shall be retained by the association.

26. The bonds transferred to and deposited with the treasurer of the United States, Ibid. 2 26. as hereinbefore provided, by any banking association for the security of its circulating Bonds to be held notes, shall be held exclusively for that purpose, until such notes shall be redeemed, to secure circulaexcept as provided in this act; but the comptroller of the currency shall give to any such banking association powers of attorney to receive and appropriate to its own use the interest on the bonds which it shall have so transferred to the treasurer; but such Payment of inpowers shall become inoperative, whenever such banking association shall fail to redeem its circulating notes as aforesaid. Whenever the market or cash value of any bonds Proceedings in deposited with the treasurer of the United States, as aforesaid, shall be reduced below case of depreciathe amount of the circulation issued for the same, the comptroller of the currency is hereby authorized to demand and receive the amount of such depreciation in other United States bonds at cash value, or in money, from the association receiving said bills, to be deposited with the treasurer of the United States as long as such depreciation continues. And said comptroller, upon the terms prescribed by the secretary of Bonds may be the treasury, may permit an exchange to be made of any of the bonds deposited with exchanged. the treasurer by an association, for other bonds of the United States authorized by this act to be received as security for circulating notes, if he shall be of opinion that such an exchange can be made without prejudice to the United States, and he may To be returned direct the return of any of said bonds to the banking association which transferred the same, in sums of not less than one thousand dollars, upon the surrender to him and the cancellation of a proportionate amount of such circulating notes: Provided, That the remaining bonds which shall have been transferred by the banking association offering to surrender circulating notes, shall be equal to the amount required for the circulating notes not surrendered by such banking association, and that the amount of bonds in the hands of the treasurer shall not be diminished below the amount required to be kept on deposit with him by this act: And provided, That there shall have been no failure by such association to redeem its circulating notes, and no other riolation by such association of the provisions of this act, and that the market or cash value of the remaining bonds shall not be below the amount required for the circulation issued for the same.

27. It shall be unlawful for any officer acting under the provisions of this act to Ibid. 27. countersign or deliver to any association, or to any other company or person, any cir- Penalty for unculating notes contemplated by this act, except as herein before provided, and in accord- authorized de

livery of notes. ance with the true intent and meaning of this act. And any officer who shall violate the provisions of this section shall be deemed guilty of a high misdemeanor, and on conviction thereof shall be punished by fine not exceeding double the amount so countersigned and delivered, and imprisonment not less than one year, and not exceeding fifteen years, at the discretion of the court in which he shall be tried.

V. BANKING BUSINESS. 28. It shall be lawful for any such association to purchase, hold and convey real 3 June 1864 2 28. estate as follows:

I. Such as shall be necessary for its immediate accommodation in the transaction of Power to hold its business.

II. Such as shall be mortgaged to it, in good faith, by way of security for debts previously contracted.

III. Such as shall be conveyed to it in satisfaction of debts previously contracted in the course of its dealings.

IV. Such as it shall purchase at sales under judgments, decrees or mortgages held by such association, or shall purchase to secure debts due to said association.

Such associations shall not purchase or hold real estate in any other case, or for any other purpose,

than as specified in this section. Nor shall it hold the possession of any real estate under mortgage, or hold the title and possession of any real estate purchased to secure any debts due to it, for a longer period than five years.

29. The total liabilities to any association, of any person, or of any company, cor- Ibid. & 29. poration or firm, for money borrowed, including in the liabilities of a company or firin Limitation of the liabilities of the several members thereof, shall at no time exceed one-tenth part amount of in

13 Stat. 107.

real estate.

debtedness.

3 June 1864.

usury.

What amount of

of the amount of the capital stock of such association actually paid in: Provided, That the discount of bonâ fide bills of exchange drawn against actually existing values, and the discount of commercial or business paper actually owned by the person or persons,

corporation or firm negotiating the same, shall not be considered as money borrowed. Ibid. 230. 30. Every association may take, receive, reserve and charge on any loan or discount Rato of interest. made, or upon any note, bill of exchange or other evidences of debt, interest at the rate

allowed by the laws of the state or territory where the bank is located, and no more; except that where by the laws of any state a different rate is limited for banks of issue organized under state laws, the rate so limited shall be allowed for associations organized in any such state under this act. And when no rate is fixed by the laws of the state or territory, the bank may take, receive, reserve or charge a rate not exceeding

seven per centum, and such interest may be taken in advance, reckoning the days for Penalty for which the note, bill or other evidence of debt has to run. And the knowingly taking,

receiving, reserving or charging a rate of interest greater than aforesaid shall be held and adjudged a forfeiture of the entire interest which the note, bill or other evidence of debt carries with it, or which has been agreed to be paid thereon. And in case a greater rate of interest has been paid, the person or persons paying the same, or their legal representatives, may recover back, in any action of debt, twice the amount of the interest thus paid, from the association taking or receiving the same: Provided, That such action is commenced within two years from the time the usurious transaction occurred. But the purchase, discount or sale of a bonâ fide bill of exchange, payable at another place than the place of such purchase, discount or sale, at not more than the current rate of exchange for sight drafts, in addition to the interest, shall not be

considered as taking or receiving a greater rate of interest. Ibid. 2 31. 31. Every association in the cities hereinafter named shall, at all times, have on hand,

in lawful money of the United States, an amount equal to at least twenty-five per cencash funds to be tum of the aggregate amount of its notes in circulation and its deposits; and every kept on hand.

other association shall, at all times, have on hand, in lawful money of the United States, an amount equal to at least fifteen per centum of the aggregate amount of its notes in circulation, and of its deposits. And whenever the lawful money of any association in any of the cities hereinafter named shall be below the amount of twenty-five per centum of its circulation and deposits, and whenever the lawful money of any other association shall be below fifteen per centum of its circulation and deposits, such association shall not increase its liabilities, by making any new loans or discounts, otherwise than by discounting or purchasing bills of exchange payable at sight, nor make any dividend of its profits, until the required proportion between the aggregate amount of its outstanding notes of circulation and deposits and its lawful money of the United States shall be restored : Provided, That three-fifths of said fifteen per centum may consist of balances due to an association available for the redemption of its circulating notes from associations approved by the comptroller of the currency, organized under this act, in the cities of Saint Louis, Louisville, Chicago, Detroit, Milwaukie, New Orleans, Cincinnati, Cleveland, Pittsburgh, Baltimore, Philadelphia, Boston, New York, Albany, Leavenworth, San Francisco and Washington City: Provided also, That clearing-house certificates, representing specie or lawful money specially deposited for the purpose of any clearing-house association, shall be deemed to be lawful money in the possession of any association belonging to such clearing-house holding and owning such certificate, and shall be considered to be a part of the lawful money which such association is required to have under the foregoing provisions of this section: Provided, That the cities of Charleston and Richmond may be added to the list of cities in the national associations of which other associations may keep three-fifths of their lawful money,

whenever, in the opinion of the comptroller of the currency, the condition of the southern Proceedings on

states will warrant it. And it shall be competent for the comptroller of the currency neglect to keep

to notify any association, whose lawful money reserve as aforesaid shall be below the amount to be kept on hand as aforesaid, to make good such reserve; and if such association shall fail, for thirty days thereafter, so to make good its reserve of lawful money of the United States, the comptroller may, with the concurrence of the secretary of the treasury, appoint a receiver to wind up the business of such association, as provided

in this act. Ibid. 2 32. 32. Each association organized in any of the cities named in the foregoing section Redemption of

shall select, subject to the approval of the comptroller of the currency, an association circulation. in the city of New York, at which it will redeem its circulating notes at par. And

each of such associations may keep one-half of its lawful money reserve in cash deposits in the city of New York. And each association not organized within the cities named in the preceding section shall select, subject to the approval of the comptroller of the

such funds in reserve.

3 June ISO.

Dividends.

15 Stat. 270.

notes.

currency, an association in either of the cities named in the preceding section at which it will redeem its circulating notes at par, and the comptroller shall give public notice of the names of the associations so selected at which redemptions are to be made by the respective associations, and of any change that may be made of the association at which the notes of any association are redeemed. If any association shall fail either Proceedings in to ma the selection or to redeem its notes as af

case of neglect.

resaid, the comptroller of the currency may, upon receiving satisfactory evidence thereof, appoint a receiver, in the manner provided for in this act, to wind up its affairs: Provided, That nothing in this section shall relieve any association from its liability to redeem its circulating notes at its own counter, at par, in lawful money, on demand: And provided further, That Associations to every association formed or existing under the provisions of this act shall take and times to this receive at par, for any debt or liability to said association, any and all notes or bills issued by any association existing under and by virtue of this act.

33. The directors of any association may, semi-annually, each year, declare a divi- Ibid. 2 33. dend of so much of the net profits of the association as they shall judge expedient; but each association shall, before the declaration of a dividend, carry one-tenth part of its net profits of the preceding half year to its surplus fund, until the same shall amount to twenty per centum of its capital stock.

34. No national banking association shall hereafter offer or receive United States 19 Feh. 1869 ? 1. notes or national bank notes as security or as collateral security for any loan of money, or for a consideration shall agree to withhold the same from use, or shall offer or Not to make receive the custody or promise of custody of such notes as security, or as collateral States or nasecurity, or consideration for any loan of money; and any national banking association tional bank offending against the provisions of this act shall be deemed guilty of a misdemeanor, and upon conviction thereof in any United States court having jurisdiction, shall be punished by a fine not exceeding one thousand dollars, and by a further suin equal to one-third of the money so loaned ; and the oflicer or officers of said bank who shall Penalty for so make sach loan or loans shall be liable for a further sum equal to one-quarter of the dwing. money so loaned ; and the prosecution of such offenders shall be commenced and conducted as provided for the punishment of offences in an act to provide a national currency, approved June 3d 1864,(a) and the fine or penalty so recovered shall be for the benefit of the party bringing such suit.

35. It shall be unlawful for any officer, clerk or agent of any national bank to cer- 3 March 189 21. tify any check drawn upon said bank, unless the person or company drawing said check shall have on deposit in said bank, at the time such check is certified, an amount of Not to certify

checks, without money equal to the amount specified in such check; and any check so certified by duly funds. authorized officers shall be a good and valid obligation against such bank; and any Penalty. officer, clerk or agent of any national bank violating the provisions of this act shall subject such bank to the liabilities and proceedings on the part of the comptroller as provided for in section fifty of the national banking law, approved June 3d 1864.(0)

VI. GENERAL PROVISIONS. 36. No association shall make any loan or discount on the security of the shares of 3 June 1864 ? 25. its own capital stock, nor be the purchaser or holder of any such shares, unless such

13 Stat. 110. security or purchase shall be necessary to prevent loss upon a debt previously con- Stock not to be tracted in good faith ; (c) and stock so purchased or acquired shall, within six months from the time of its purchase, be sold or disposed of at public or private sale, in default of which a receiver may be appointed to close up the business of the association, according to the provisions of this act.

37. No association shall at any time be indebted, or in any way be liable, to an Ibid. & 36. amount exceeding the amount of its capital stock at such time actually paid in and Limitation of inremaining undiminished by losses or otherwise, except on the following accounts, that debtedness.

15 Stat. 335.

discounted on.

is to say:

I. On account of its notes of circulation.
II. On account of moneys deposited with, or collected by, such association.

III. On account of bills of exchange or drafts drawn against money actually on deposit to the credit of such association, or due thereto.

IV. On account of liabilities to its stockholders for dividends and reserved profits.

38. No association shall, either directly or indirectly, pledge or hypothecate any of Ibid. & 37. its notes of circulation, for the purpose of procuring money to be paid in on its cap- Circulating notes ital stock, or to be used in its banking operations, or otherwise ; nor shall any associa- not to be pledged. tion use its circulating notes, or any part thereof, in any manner or form, to create or increase its capital stock. (a) See in fra 59-60.

(b) See infra 52. individual as partnership indebtedness. Ex parte Bigelow, 1 (c) A national bank has, in order to prevent loss nipon a debt Bank. Reg. 202. But soe Rosenback v. Salt Springs N. Bank, 53 previously contracted, a lien upon the shares of an individual Barb. 495. stockholder, and may apply the same as well to the payment of

tal to be withdrawn.

certain notes.

List of stock holders.

and a copy

3 June 1864 & 38. 39. No association, or any member thereof, shall, during the time it shall continue No part of capi- its banking operations, withdraw, or permit to be withdrawn, either in form of divi

dends or otherwise, any portion of its capital. And if losses shall at any time have been sustained by any such association, equal to or exceeding its undivided profits then on hand, no dividend shall be made; and no dividend shall ever be made by any association, while it shall continue its banking operations, to an amount greater than its net profits then on hand, deducting therefrom its losses and bad debts. And all debts due to any association, on which interest is past due and unpaid for a period of six months, unless the same shall be well secured, and shall be in process of collection, shall be considered bad debts within the meaning of this act: Provided, That nothing in this section shall prevent the reduction of the capital stock of the association under the

thirteenth section of this act. Ibid. & 39. 40. No association shall at any time pay out on loans or discounts, or in purchasing Not to pay out drafts or bills of exchange, or in payment of deposits, or in any other mode pay or

put in circulation the notes of any bank or banking association which shall not, at any such time, be receivable, at par, on deposit and in payment of debts by the association so paying out or circulating such notes ; nor shall it knowingly pay out or put in circulation any notes issued by any bank or banking association which at the time of such paying out or putting in circulation is not redeeming its circulating notes in

lawful money of the United States. Ibid. & 40. 41. The president and cashier of every such association shall cause to be kept, at all

times, a full and correct list of the names and residences of all the shareholders in the association, and the number of shares held by each, in the oflice where its business is transacted ; and such list shall be subject to the inspection of all the shareholders and creditors of the association, and the officers authorized to assess taxes under state authority, during business hours of each day in which business may be legally transacted ;

of such list, on the first Monday of July in each year, verified by the oath of such president or cashier, shall be transmitted to the comptroller of the

currency. Ibid. & 41.

42. The plates and special dies to be procured by the comptroller of the currency, for Custody of plates

the printing of such circulating notes, shall remain under his control and direction, and the expenses necessarily incurred in executing the provisions of this act respecting the procuring of such notes, and all other expenses of the bureau, shall be paid out of the

proceeds of the taxes or duties now or hereafter to be assessed on the circulation, and Tax on circula- collected from associations organized under this act. And in lieu of all existing taxes, tion and deposits, every association shall pay to the treasurer of the United States, in the months of Jan

uary and July, a duty of one-half of one per centum, each half year from and after the first day of January 1864, upon the average amount of its notes in circulation, and a duty of one-quarter of one per centum, each half year, upon the average amount of its

deposits, and a duty of one-quarter of one per centum, each half year as aforesaid, on How collected. the average amount of its capital stock beyond the amount invested in United States

bonds; and in case of default in the payment thereof by any association, the duties aforesaid may be collected in the manner provided for the collection of United States duties of other corporations, or the treasurer may reserve the amount of said duties out of the interest, as it may become due, on the bonds deposited with him by such defaulting association. And it shall be the duty of each association, within ten days from the first days of January and July of each year, to make a return, under the oath of its president or cashier, to the treasurer of the United States, in such form as he may prescribe, of the average amount of its notes in circulation, and of the average amount of

its deposits, and of the average amount of its capital stock beyond the amount invested Penalty for de in United States bonds, for the six months next preceding said first days of January fault.

and July as aforesaid, and in default of such return, and for each default thereof, each defaulting association shall forfeit and pay to the United States the sum of two hundred dollars, to be collected either out of the interest as it may become due such association on the bonds deposited with the treasurer, or, at his option, in the manner in which penalties are to be collected of other corporations under the laws of the United States; and in case of such default the amount of the duties to be paid by such association shall be assessed upon the amount of notes delivered to such association by the comptroller

of the currency, and upon the highest amount of its deposits and capital stock, to be Limitation of ascertained in such other manner as the treasurer may deem best: Provided, That state taxation.

nothing in this act shall be construed to prevent all the shares in any of the said associations, held by any person or body corporate, from being included in the valuation of the personal property of such person or corporation, in the assessment of taxes

and dies.

15 Stat. 34.

shares to be tax.

13 Stat. 112

imposed by or under state authority, at the place where such bank is located, (a) and 3 June 1864. not elsewhere, but not at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such state:(6) Provided further, That the tax 80 imposed under the laws of any state upon the shares of any of the associations authorized by this act, shall not exceed the rate imposed upon the shares in any of the banks organized under authority of the state where such association is located : Provided also, That nothing in this act shall exempt the real estate of associations from either state, county or municipal taxes, to the same extent, according to its value, as other real estate is taxed.(c)

43. The words “place where the bank is located, and not elsewhere,” in section 4 Feb. 1868 & 1. forty-one of the “Act to provide a national currency," approved June 3d 1864, shall be construed and held to mean the state within which the bank is located ; and the Where bank legislature of each state may determine and direct the manner and place of taxing all able. the shares of national banks located within said state, subject to the restriction that the taxation shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such state : And provided always, That the shares of any national bank owned by non-residents of any state shall be taxed in the city or town where said bank is located, and not elsewhere.

44. Any association may go into liquidation, and be closed by the vote of its share- 3 June 1864 2 42. holders owning two-thirds of its stock. And whenever such vote shall be taken, it shall be the duty of the board of directors to cause notice of this fact to be certified, under Proceedings to the seal of the association, by its president or cashier, to the comptroller of the cur- tions.

wind up associarency, and publication thereof to be made for a period of two months in a newspaper published in the city of New York, and also in a newspaper published in a city or town in which the association is located, and if no newspaper be there published, then in the newspaper published nearest ereto, that said association is closing up its affairs, and notifying the holders of its notes and other creditors to present the notes and other claims against the association for payment. And at any time after the expiration of one year from the time of the publication of such notice as aforesaid, the said association may pay over to the treasurer of the United States the amount of its outstanding notes in the lawful money of the United States, and take up the bonds which said association has on deposit with the treasurer for the security of its circulating notes; which bonds shall be assigned to the bank in the manner specified in the nineteenth section of this act, and from that time the outstanding notes of said association shall be redeemed at the treasury of the United States, and the said association and the shareholders thereof shall be discharged from all liabilities therefor.(d)

45. The treasurer, on receiving from an association lawful money for the payment Ibid. & 43. and redemption of its outstanding notes, as provided for in the preceding section of Duties of the this act, shall execute duplicate receipts therefor, one to the association and the other treasurer. to the comptroller of the currency, stating the amount received by him, and the purpose for which it has been received, which amount shall be paid into the treasury of the United States, and placed to the credit of such association upon redemption account. And it shall be the duty of the treasurer, whenever he shall redeem any of the notes Mutilation of of said association, to cause the same to be mutilated, and charged to the redemption account of said association; and all notes so redeemed by the treasurer shall, every three months, be certified to and burned in the manner prescribed in the twenty-fourth section of this act.

46. Any bank incorporated by special law, or any banking institution organized Ibid. 244. under a general law of any state, may, by authority of this act, become a national How state banks association under its provisions by the name prescribed in its organization certificate ; may become and in such case the articles of association and the organization certificate required by tions. this act may be executed by a majority of the directors of the bank or banking institution; and said certificate shall declare that the owners of two-thirds of the capital stock have authorized the directors to make such certificate and to change and convert

redeemed notes.

(a) See County Treasurer v. Webb, 11 Minn. 500. State v. Society for Savings v. Coite, 6 Wall. 594. Provident Institution Haight, 30 N. J. 399. State v. Hart, Ibid. 434. Austin v. The v. Massachusetts, Ibid. 611. People v. Dolan, 36 N. Y. 59. MintAldermen, 7 Wall. 694.

zer v. Montgomery County, 54 Penn. St. 139. (6) This subjects them to state taxation without regard to the (c) None of the property of a national bank is taxable by state, fact that a part or the whole of the capital is invested in national county or municipal authority, except its real estate, and the securities which are themselves exempt from such taxation. Van shares of its stockholders; the duties provided by the acts of Allen v. Thy Assessors, 3 Wall. 573. 8. C. 33 N. Y. 161. People v. congress were designed to be in lieu of all existing taxes. NaThe Commissioners, 4 Wall. 244. Monroe Savings Bank v. Ro- tional State Bank v. Young, 3 West. Jur. 183. chester, 37 N. Y. 365. State v. Haight, 30 N. J. 399. But where (d) The dissolution of a national bank is not complete, until A state imposes on the state banks a tax on their capital (the the necessary action has been had for the redemption of its cir. shares being exempt), it cannot lay a tax on the shares of na- culating notes, either by actually redeeming them, and surren. tional banks. Bradley v. The People, 4 Wall. 459. 8. c. 39 III. dering them to the comptroller, or by depositing an amount of 130. Hubbard y. Board of Supervisors, 23 Iowa 130. Taxation treasury notes with him adequate to their redemption; urtil of national banks by the states, in any other way than that that time it is subject to the provisions of the act of congress. allowed by the act of congress, is unconstitutional. Pittsburkh Opinion of Attorney-General Hoar, 9 Int. R. Rec. 173. 2 Am. L. v. First National Bank of Pittsburgh, 55 Penn. St. 45. And see T. Dep. Rep. 81.

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