25 Feb. 1863. When further deposit of secu rities to be required. Ibid. 31. In case of depre ciation interest to be retained. cash value shall be reduced, 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. 24. Whenever the price of any of the bonds pledged as aforesaid for the redemption of the circulating notes of any such banking association shall be, at the stock exchange in the city of New York, for four consecutive weeks, at a rate less than that at which they shall have been estimated when so pledged, and such depreciation shall not have been made good by a deposit of other bonds or money, it shall be the duty of the comptroller of the currency to notify the treasurer of the United States of such fact, and the payment of interest upon such depreciated bonds shall be suspended, and such interest shall be retained by said treasurer, until the same, when added to the current market value of the bonds so pledged, to be ascertained as before provided, shall be equal to To be invested in the amount for which such bonds were pledged: Provided, That it shall be the duty of the comptroller of the currency, at the expiration of every period of three months, to cause the whole of the sums so retained, and then remaining in the treasury of the United States, to be invested in United States bonds, in the name of the comptroller of the currency, in trust for the respective associations by which the bonds on which such interest shall have accrued shall have been pledged; and whenever the price of such depreciated bonds at the stock exchange in New York shall rise to the price at which they were pledged, and so remain for four consecutive weeks, such investment shall be assigned to such association, and all accruing interest on such pledged bonds shall thereafter be paid to such association on demand thereof. other bonds. Ibid. 32. Worn-out and to be exchanged for new ones. 25. It shall be the duty of the comptroller of the currency to receive worn-out or mutilated circulating notes issued by any such banking association, and to deliver in mutilated notes place thereof to such association other blank circulating notes to an equal amount; and such worn-out or mutilated notes, after a memorandum shall have been entered in the proper books, in accordance with such regulations as may be established by the comptroller, as well as all circulating notes which shall have been paid or surrendered to be cancelled, shall be burned to ashes in presence of three persons, one to be appointed by the secretary of the treasury, one by the comptroller of the currency and one by the treasurer of the United States, under such regulations as the secretary of the treasury may prescribe; and in case such notes shall have been delivered to the comptroller by an officer or agent of such association, then in the presence also of such officer or agent; and a certificate of such burning, signed by the parties so appointed, shall be made in the books of the comptroller, and a duplicate thereof given to such officer or agent. Destruction of cancelled notes. Ibid. 33. Penalty for unery of notes. 26. It shall be unlawful for any officer acting under the provisions of this act to countersign or deliver to any such association, or to any other company or person, any authorized deliv- circulating notes contemplated by this act, except as hereinbefore provided, and in accordance 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 exceeding fifteen years, at the discretion of the court in which he shall be tried. Ibid. 34. 27. All fees for protesting the notes issued by any such banking association shall be Costs of protest. paid by the person procuring the protest to be made, and such banking association shall be liable therefor; but no part of the stock pledged by such banking association as aforesaid shall be applied to the payment of such fees; and all expenses of any preliminary or other examinations into the condition of any association shall be paid by such association; and all expenses of any receivership shall be paid out of the assets of such association before distribution of the proceeds thereof. Ibid. 256. Penalty for muti notes. 28. Every person who shall mutilate, cut, deface, disfigure or perforate with holes, or shall unite or cement together, or do any other thing to any bank bill, draft, note or lating or defacing other evidence of debt issued by any such association, or shall cause or procure the same to be done, with intent to render such bank bill, draft, note or other evidence of debt unfit to be reissued by said association, shall upon conviction forfeit fifty dollars to the association who shall be injured thereby, to be recovered by action in any court having jurisdiction. 29. If any person shall falsely make, forge or counterfeit, or cause or procure to be made, forged or counterfeited, or willingly aid or assist in falsely making, forging or counterfeiting any note in imitation of, or purporting to be an imitation of the circulating notes issued under the provisions of this act; or shall pass, utter or publish, or attempt to pass, utter or publish any false, forged or counterfeited note, purporting to be issued by any association doing a banking business under the provisions of this act, knowing the same to be falsely made, forged or counterfeited; or shall falsely alter, or 25 Feb. 1863. cause or procure to be falsely altered, or willingly aid or assist in falsely altering any Uttering. such circulating notes issued as aforesaid; or shall pass, utter or publish, or attempt to pass, utter or publish as true, any falsely altered or spurious circulating note, issued or purporting to have been issued as aforesaid, knowing the same to be falsely altered or spurious; every such person shall be deemed and adjudged guilty of felony, and being thereof convicted by due course of law, shall be sentenced to be imprisoned and kept at hard labor for a period not less than five years nor more than fifteen years, and to be fined in a sum not exceeding one thousand dollars. Ibid. 58. Engraving plates, 30. If any person shall make or engrave, or cause or procure to be made or engraved, or shall have in his custody or possession any engraved plate or block after the similitude of any plate from which any circulating notes issued as aforesaid shall have been &c. printed, with intent to use such plate or block, or cause or suffer the same to be used in forging or counterfeiting any of the notes issued as aforesaid; or shall have in his custody or possession any blank note or notes engraved and printed after the similitude of any notes issued as aforesaid, with intent to use such blanks, or cause or suffer the same to be used in forging or counterfeiting any of the notes issued as aforesaid; or shall have in his custody or possession any paper adapted to the making of such notes, Possession of paand similar to the paper upon which any such notes shall have been issued, with intent per, &c. to use such paper, or cause or suffer the same to be used in forging or counterfeiting any of the notes issued as aforesaid; every such person being thereof convicted by due course of law, shall be sentenced to be imprisoned and kept to hard labor for a term not less than five nor more than fifteen years, and fined in a sum not exceeding one thousand dollars. V. BANK STATEMENTS. 12 Stat. 671. 31. It shall be the duty of either the president or cashier of every banking associa- 25 Feb. 1863 & 23. tion having stocks deposited in the office of the treasurer of the United States, once or more in each fiscal year, and at such time or times during the ordinary business hours Examination of bonds pledged. as said officer or officers may select, to examine and compare the bonds so pledged with the books of said department, 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 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. Certificate. oath. ment. 32. Every association issuing circulating notes under the provisions of this act, shall Ibid. 24. make a quarterly report to the comptroller of the currency commencing on the first day Quarterly reporte of the quarter of the year next succeeding the organization of such association, and to be made on continuing on the first days of each succeeding quarter in every year thereafter, which report shall be verified by the oath or affirmation of the president and cashier; and all wilful false swearing in respect to such report shall be perjury, and subject to the punishment prescribed by law for such offence. The report hereby required shall be in the Form of stateform prescribed by the comptroller, and shall contain a true statement of the condition of the association making such report, before the transaction of any business on the morning of the day specified, next preceding the date of such report, in respect of the following items and particulars, to wit: loans and discounts, overdrafts due from banks, amount due from the directors of the association, real estate, specie, cash items, stocks, bonds and promissory notes, bills of solvent banks, bills of suspended banks, loss and expense account, capital, circulation, profits, amount due to banks, amount due to individuals and corporations other than banks, amount due the treasurer of the United States, amount due to depositors on demand, amount due not included under either of the above heads. And it shall be the duty of the comptroller to publish full abstracts To be published. of such reports together, in two newspapers to be designated by him for that purpose, one in the city of Washington and the other in the city of New York, exhibiting the items of capital, circulation and deposits, specie and cash items, public securities and private securities; and the separate report of each association shall be published in a newspaper published in the place where such association is established, or if there be no newspaper at such place, then in a newspaper published at the capital of the state, at the expense of the association making such report. In addition to the quarterly Monthly state reports required by this section, every association located and doing business in the ments to be pub cities of Boston, Providence, New York, Philadelphia, Baltimore, Cincinnati, Chicago, cities. St. Louis and New Orleans, shall publish or cause to be published on the morning of the first Tuesday in each month, in a newspaper printed in the city in which the association making such report is located, to be designated by the comptroller of the currency, a statement, under the oath of the president or cashier, showing the condition lished in certain 25 Feb. 1863. 25 Feb. 1863 25. 12 Stat. 672. of the association making such statement, on the morning of the day next preceding the date of such statement, in respect to the following items and particulars, to wit: average amount of loans and discounts, specie, deposits and circulation. VI. PROCEEDINGS ON FAILURE TO REDEEM. 33. If any such association shall at any time fail to redeem, in the lawful money of the United States, any of its circulating notes when payment thereof shall be lawfully Protest of notes. demanded, during the usual hours of business, at the office of such association, the holder may cause the same to be protested in one package by a notary public, unless the president or cashier of the association shall offer to waive demand and notice of the protest, and shall in pursuance of such offer make, sign and deliver to the party making such demand an admission in writing, stating the time of the demand, the amount demanded and the fact of the non-payment thereof; and such notary public, on making such protest or upon receiving such admission, shall forthwith forward such admission or notice of protest to the comptroller of the currency; and after such default it shall not be lawful for the association suffering the same to pay out any of its notes, discount any notes or bills, or otherwise prosecute the business of banking, except to receive and safely keep money belonging to it, and to deliver special deposits: Provided, however, That if satisfactory proof be produced to such notary public that the payment of any such notes is restrained by order of any court of competent jurisdiction, such notary public shall not protest the same; and when the holder of such notes shall cause more than one note or package to be protested on the same day, he shall not receive pay for more than one protest. Business to be thereupon discontinued. Ibid. 26. Comptroller to ascertain fact of suspension. forfeited. sented for pay ment at the treasury. 34. On receiving notice that any such association has failed to redeem any of its circulating notes, as specified in the next preceding section, the comptroller of the currency, with the concurrence of the secretary of the treasury, may appoint a special agent (of whose appointment immediate notice shall be given to such association,) who shall immediately proceed to ascertain whether such association has refused to pay its circulating notes in the lawful money of the United States, when demanded as aforeSecurities to be said, and report to the comptroller the facts so ascertained; and if from such protest or the reports so made, the comptroller shall be satisfied that such association has refused to pay its circulating notes as aforesaid and is in default, he shall, within thirty days after he shall have received notice of such failure, declare the United States bonds and securities pledged by such association forfeited to the United States, and the same shall Notes to be pre- thereupon be forfeited accordingly; and thereupon the comptroller shall immediately give notice, in such manner as the secretary of the treasury shall, by general rules or otherwise, direct, to the holders of the circulating notes of such association to present Bonds to be can- them for payment at the treasury of the United States; and the same shall be paid as presented, whereupon said comptroller may in his discretion cancel an equal amount of the bonds pledged by such association, equal at current market rates, not exceeding par, to the notes paid; and it shall be lawful for the secretary of the treasury from time to time to make such regulations respecting the disposition to be made of such circulating notes after presentation thereof for payment as aforesaid, and respecting the perpetuation of the evidence of the payment thereof, as may seem to him proper; but all such Preference of the notes on being paid shall be cancelled; and for any deficiency in the proceeds of the deficiency. bonds pledged by such association, when disposed of as hereinafter specified, to reimburse to the United States the amount so expended in paying the circulating notes of such association, the United States shall have a first and paramount lien upon all the assets of such association, and such deficiency shall be made good out of such assets in preference to any and all other claims whatsoever, except the necessary costs and expenses of administering the same. celled. United States for Ibid. & 27. Comptroller may, 35. Whenever the comptroller shall become satisfied, as in the last preceding section specified, that any such association has refused to pay its circulating notes as therein at his option, sell mentioned, he may, instead of cancelling the United States bonds pledged by such association, as provided in the next preceding section, cause so much of them as may be necessary to redeem the outstanding circulating notes of such association to be sold at public auction in the city of New York, after giving thirty days' notice of such sale to such association. securities by auction. Ibid. 2 28. Or by private sale. 36. The comptroller of the currency may, if he shall be of opinion that the interests of the United States will be best promoted thereby, sell at private sale any of the stock so transferred to him by such association, and receive therefor either money or the circulating notes of such failing association: Provided, That no such bonds shall be sold by private sale for less than the par, nor less than the market value thereof at the time of sale: And provided further, That no sales of any such stock, either public or private, shall be complete until the transfer thereof shall have been made with the formalities prescribed in this act. 25 Feb. 1863. Ibid. 29. duties. receiver. 37. On becoming satisfied, as specified in this act, that any such association has refused to pay its circulating notes as therein mentioned, and is in default, the comptroller Appointment of of the currency may forthwith appoint a receiver, and require of him such bond and receiver. security as he shall deem proper, who, under the direction of the comptroller, shall take possession of the books, records and assets of every description of such associa- His powers and tion, collect all debts, dues and claims belonging to such association, and upon the order of a court of record of competent jurisdiction, may sell or compound all bad or doubtful debts, and on a like order sell all the real and personal property of such association on such terms as the court shall direct; and such receiver shall pay over all moneys so made to the treasurer of the United States, and also make report to the comptroller of the currency of all his acts and proceedings. The comptroller shall thereupon Proceedings on cause notice to be given by advertisement in such newspapers as he may direct, for three appointment of consecutive months, calling on all persons who may have claims against such association to present the same, and to make legal proof thereof; and from time to time, the comptroller, after full provision shall have been first made for refunding to the United States any such deficiency in redeeming the notes of such association as is mentioned in this act, shall make a rateable dividend of the moneys so paid over to him by such receiver, on all such claims as may have been so proved or adjudicated in a court of competent jurisdiction, and from time to time, as the proceeds of the assets of such association shall be paid over to him, he shall make further dividends, as aforesaid, on all claims previously proved or adjudicated; and the remainder of such proceeds, if any, shall be paid over to the shareholders of such association, or their legal representatives, in proportion to the stock by them respectively held: Provided, however, That if any such association against which proceedings have been so instituted on account of any alleged have an issue as refusal to redeem its circulating notes as aforesaid, shall deny having failed to do so, pension. such association may, at any time within ten days after such association shall have been notified of the appointment of an agent as provided in this act, apply to the nearest circuit, or district, or territorial court of the United States, to enjoin further proceeding in the premises; and such court, after citing the comptroller of the currency to show cause why further proceedings should not be enjoined, and after the decision of the court or finding of a jury that such association has not refused to redeem its circulating notes, when legally presented, in the lawful money of the United States, shall make an order enjoining the comptroller, and any receiver acting under his direction, from all further proceedings on account of such alleged refusal. VII. CAPITAL STOCK. Association may to the fact of sus 12 Stat. 675. tal stock. Assignment of 38. The capital stock of any association formed under this act shall be divided into 25 Feb. 1863 ? 36. shares of one hundred dollars each, and shall be assignable on the books of the association in such manner as its by-laws shall prescribe; but no shareholder in any asso- Division of capi ciation under this act shall have power to sell or transfer any share held in his own right so long as he shall be liable, either as principal, debtor, surety or otherwise, to shares. the association for any debt which shall have become due and remain unpaid, nor in any case shall such shareholder be entitled to receive any dividend, interest or profit on such shares so long as such liabilities shall continue, but all such dividends, interests and profits shall be retained by the association, and applied to the discharge of such liabilities; and no stock shall be transferred without the consent of a majority of the directors while the holder thereof is thus indebted to the association. Ibid. 37. 39. No banking association shall take as security for any loan or discount, a lien upon any part of its capital stock; but the same security, both in kind and amount, shall be shares not to be required of shareholders as of other persons; and no such banking association shall be discounted on. the purchaser or holder of any portion of its capital stock, or of the capital stock of any other incorporated company, unless such purchase shall be necessary to prevent Nor to be owned loss upon a debt previously contracted in good faith, on security which at the time was by the company. deemed adequate to insure the payment of such debt, independent of any lien upon such stock, or in case of forfeiture of stock for the non-payment of instalments due thereon; and stock so purchased or acquired shall in no case be held by such association so purchasing for a longer period of time than six months, if the same can within that time be sold for what the stock cost. Exceptions. stockholders. 40. The stockholders collectively of any such association shall at no time be liable Ibid. 235. to such association, either as principal debtors or sureties or both, to an amount greater Limitation of disthan three-fifths of the capital stock actually paid in and remaining undiminished by counts &c., to losses or otherwise; nor shall the directors be so liable, except to such amount and in such manner as shall be prescribed by the by-laws of such association, adopted by its stockholders to regulate such liabilities. 41. In all elections of directors, and in deciding all questions at meetings of share Ibid. 38. 25 Feb. 1863. Stock votes. 25 Feb. 1863 39. 12 Stat. 676. Number and qualifications of directors. Oath. Ibid. 240. Term of office. holders, each shareholder shall be entitled to one vote on cach share of stock held by VIII. DIRECTORS. 42. The affairs of every such association shall be managed by not less than five nor more than nine directors, one of whom shall be president of the association; every director shall, during his whole term of service, be a citizen of the United States and a resident of the state in which such association is located. At least three-fourths of the directors shall have resided in the state in which such association is located one year next preceding their election as directors; and each director shall own in his own right at least one per centum of the capital stock of such association not exceeding two hundred thousand dollars, and the half of one per centum of its capital if over two hundred thousand dollars. Each director shall take an oath that he will, so far as the duty devolves on him, diligently and honestly administer the affairs of such association, and will not knowingly violate or willingly permit to be violated any of the provisions of this act, and that he is the bonâ fide owner in his own right of the shares of stock standing in his name on the books of the association, and that the same is not hypothe cated or in any way pledged as security for any loan obtained or debt owing to the association of which he is a director; which oath, subscribed by himself and certified by the officer before whom it is taken, shall be immediately transmitted to the comptroller of the currency, and by him filed and preserved in his office. 43. The directors of any such association first elected shall hold their places until their successors shall be elected and qualified. All subsequent elections shall be held annually on such day in the month of January as the stockholders of said association may prescribe; and the directors so elected shall hold their places for one year, and until their successors are elected and qualified. But any director removing from the state or ceasing to be the owner of the requisite amount of stock shall thereby vacate How vacancies to his place. Any vacancy in the board shall be filled by appointment by the remaining directors. The director so appointed shall hold his place until the next annual election; and if from any cause an election of directors shall not be made at the time appointed, the association shall not for that cause be dissolved, but an election may be held on any subsequent day, thirty days' notice thereof having been given in a newspaper printed or of general circulation in the city, town or county in which the association is located, and if no newspaper is published in such city, town or county, such notice shall be published in a newspaper in the county adjoining. be filled. 25 Feb. 1863 241. 12 Stat. 677. IX. BANKING BUSINESS. 44. Every such association shall at all times have on hand in lawful money of the United States, an amount equal to at least twenty-five per centum of the aggregate What amount of amount of its outstanding notes of circulation and its deposits; and whenever the cash funds to be kept on hand. What to be deemed cash funds. amount of its outstanding notes of circulation and its deposits shall exceed the abovenamed proportion for the space of twelve days, or whenever such lawful money of the United States shall at any time fall below the amount of twenty-five 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 its deposits and lawful money of the United States shall be restored: Provided, however, That clearinghouse 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 certificates, and considered to be a part of the lawful money which such association is required to have under the foregoing provisions of this section: Provided further, That any balance due to any association organized under this act in other places, from any association in the cities of Boston, Providence, New York, Philadelphia, Baltimore, Cincinnati, Chicago, St. Louis or New Orleans, in good credit, subject to be drawn for at sight, and available to redeem their circulating notes and deposits, may be deemed to be a part of the lawful money which such association in other places than the cities of Boston, Providence, New York, Philadelphia, Baltimore, Cincinnati, Chicago, St. Louis and New Orleans are required to have by the foregoing provisions of this section, to the extent of three-fifths of the said amount of twenty-five per centum Proceedings on required. And it shall be competent for the comptroller of the currency to notify any such association whose lawful money reserve as aforesaid shall fall below said proportion of twenty-five per centum, 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 neglect to keep such funds in reserve. |