The Commoner
'JANUARY, 19M
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Of the two per centum bonds so tend
ered: Provided, That" at the time of
such exchange the Federal reserve
hank obtaining such one-year gold
notes shall enter into an obligation
with the Secretary of the Treasury
binding itse'lf to purchase from the
Uuited States for gold at the matur
ity of such one-year notes, an amount
equal to those delivered in exchange
for such bonds, if so requested by the
Secretary, ' and at each maturity of
one-year notes so purchased by such
Federal reserve bank, to purchase
from the United States such an
amount of one-year notes as the Sec
retary may tender to such bank, not
to exceed the amount issued to such
bank in the first instance, in exchange
for the two. per centum United States
gold bonds; said obligation to pur
chase at maturity such notes shall
continue in force for a period not to
exceed thirty years.
For the purpose of making the ex
change .herein provided for the Sec
retary of the Treasury is authorized
to issue at par Treasury notes in
coupon or registered form as he may
prescribe in denominations of one
hundred dollars or any multiple
thereof, bearing interest at the rate
of three per centum per annum, pay
able quarterly, such Treasury notes
to be payable not more 'than one-year
from the date of their issue in gold
coin of the present standard value,
and to be exempt as to principal and
interest from the payment of all taxes
and duties of the United States ex
cept as provided by this Act, as well
as from taxes in any form by or
under State, municipal, or local au
thorities. And for the same purpose,
the Secretary is authorized and em
powered to issue United States gold
bonds at par, bearing three per
centum interest payable thirty years
from date of issue, such, bonds to "be
of the same general tenor and effect
and to be issued under the same gen
eral terms and conditions as the
United States three per centum
bonds without the circulation privi
lege now issued and outstanding.
Upon application of any Federal
reserve bank, approved by the Fed
eral Reserve Board, the Secretary
may issue at par such thjree per
cen,tum bonds in exchange for the
one-year gold notes herein provided
for.
BANK RESERVES
Sec. 19.. Demand deposits within
- the -meaning of this ct shall .com
prise all deposits payable within
thirty days and time deposits shall
comprise all deposits payable after
thirty days, and all savings accounts
and certificates of deposit which are
subject to not less than thirty days'
notice before payment.
When the Secretary of the Treas
ury shall have officially announced,
in such manner as he may elect, the
establishment of a Federal reserve
bank in any district, every subscrib
ing member shall establish and main
tain reserves as follows:
(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 per centum
of the aggregate amount of its de
mand deposits and five per centum of
its time deposits, as follows:
In its vaults for a period of thirty
six months after said date five
twelfths thereof and permanently
thereafter four-twelfths.
In the Federal reserve bank of its
district, for a period of twelve
months after said date, two-twelfths
and for each succeeding six months
an additional one-twelfth, until five
twelfths have been so deposited,
which shall be the amount perma
nently required.
For a period of thirty-six months
after said date the balance of the re
serves may be held in its own vaults,
or in the Federal reserve bank, or in
national banks in reserve or central
reserve cities as now definod by law.
After said thirty-six months'
period said reserve's, other than those
hereinbefore required to bo held in
the vaults of the member bank and in
the Federal reserve bank, shall bo
held in the vaults of the member
bank or in the Federal reserve bank,
or in both, at the option of the mem
ber bank.
(b) A bank in a reserve city, as
now or hereafter defined, shall hola
and maintain reserves equal to fifteen
per centum of the aggregate amount
of its demand deposits ana five per
centum of its time deposits, as fol
lows: In its vaults for a period of thirty
six months after said date six
fifteenths thereof, and permanently
thereafter five-fifteenths.
In the Federal reserve bank of its
district for a period of twelve months
after the date aforesaid at least
three-fifteenths, and for each suc
ceeding six months an additional one
fifteenth, until six-fifteenthd have
been so deposited, which shall bo the
amount permanently required.
For a period of thirty-six months
after said date the, balance of the re
serves may bo held in its own vaults,
or in the Federal reserve bank, or in
national banks in reserve or central
reserve cities' as now defined by law.
After said thirty-six months' period
all of said reserves, except those
hereinbefore required to be held per
manently in the vaults of the member
bank and in the Federal reserve
bank, shall be held in its vaults or
in the Federal reserve bank, or in
both, at the option of tho member
bank.
(c) A bank in a central reserve
city, as now or hereafter defined,
shall hold -and maintain a reserve
equal to eighteen per centum of the
aggregate amount of its demand de
posits and fivo per centum of its time
deposits, as follows:
In its vaults six-eighteenths there
of. In tho Federal reserve bank seven
eighteenths. The balanco of said reserves shall
be held in its own vaults or in the
Federal reservo bank, at its option.
Any Federal reserve bank may re
ceive from the member banks as re
serves, not exceeding one-half of each
installment, eligible paper as de
scribed in section fourteen properly
indorsed and acceptable to the said
reserve bank. .
If a State bank or trust company
is required by the law of its State to
keep its reserves either in its own
vaults or with another State bank or
trust company, such reservo deposits
so kept In such Stato bank or trust
company shall bo construed, within
tho meaning of this section, as if they
wero reserve deposits in a national
bank in a reserve or central reserve
city for a period of three years after
tho Secretary of the Treasury shall
havo officially announced the estab
lishment of a Federal reserve bank
in tho district in which such Stato
bank or trust company Is situated
Except as thus provided, no member
bank shall keep on deposit wilh any
nonmember bank a sum In excess of
ten per centum of its own paid-up
capital and surplus. No member
bank shall act as the medium or
agent of a nonmember bank in apply
ing for or receiving discounts from a
Federal reserve bank under the pro
visions of this Act except by permis
sion of the Federal Reserve Board,
The reserve carried, by a member
bank with a Federal reserve bank
may, under the regulations and sub
ject to such penalties as may be pre
scribed by the Federal Reserve Board
be checked against and withdrawn by
such member bank for the purpose
of meeting existing liabilities Pro
vided, however, That no bank shall
at any time make new loans or shall
pay any dividends unless and until
tho total reservo required by law is
fully restored.
In estimating tho roservos required
by this Act, the net balance of
amounts duo to and from other banks
shall bo taken as tho basis for ascer
taining the deposits against which re
serves shall bo determined. Balances
In reserve banks duo to member
banks shall, to the extent heroin pro
vided, bo counted as reserves.
National banks located in Alaska
or outside the continental United
States may remain nonmember banks,
and shall in that event maintain re
serves and comply with all the condi
tions now provided by law regulating
them; or said banks, oxcepz in the
Phillpplno Islands, may, with tho
consent of tho Reserve Board, be
come member banks of any ono of tho
resetvo districts, and shall, in that
event, take stock, maintain reserves,
and bo subjected to all the othor pro
visions of this Act.
Sec. 20. So much of sections two
and three of tho Act of Juno twen
tieth, eighteen hundred and seventy
four, entitled "An Act fixing tho
amount of United States notes, pro
viding for a redistribution of tho an-tional-bank
currency, and for other
purposes," as provides that tho fund
deposited by any national banking
association with the Treasurer of the
United States for tho redemption of
its notes shall bo counted as a part of
its lawful reservo as provided in tho
Act aforesaid, is hereby repealed.
And from and after the passage of
this Act such fund of fivo per centum
shall in no case bo counted by any
national banking association as a
part of its lawful reserve.
BANK EXAMINATIONS
Sec, 21. Section fifty-two hun
dred and forty, United States Re
vised Statutes, is amended to read
as follows:
The Comptroller of tho Currency,
with the approval of the Secretary of
tho Treasury, shall appoint examin
ers who shall examine every member
bank at least twice In each calendar
year and oftener if considered neces
sary: Provided, however, That the
Federal Reserve Board may author
ize examination by the State authori
ties to be accepted in the case of
State banks and trust companies. and.
may at any time direct tho holding
of a special examination of State
banks or trust companies that are
stockholders In any Federal reserve
bank. The examiner making the ex
amination of any national bank, or
of any other member bank, shall have
power to make a thorough examina
tion of all the affairs of the bank and
in doing so he shall have power to
administer oaths and to examine any
of the officers and . agents thereof
under oath and shall make a full and
detailed report of the condition of
said bank to the Comptroller of the
Currency.
The Federal Reserve Board, upon
the recommendation of the Comp
troller of the Currency, shall fix the
salaries of all bank examiners and
make report thereof to Congress.
The expense of the examinations
herein provided for shall bo assessed
by tho Comptroller of tho Currency
upon tho banks examined In propor
tion to assets or resources held by
the banks upon the dates of examina
tion of tho various banks.
In addition to tho examinations
mado and conducted by tho Comp
troller of the Currency, every Federal
reserve bank may, with the approval
of the Federal reserve agent or the
Federal Reserve Board, provide foi
special examination of member banks
within its district. The expense of
such examinations shall bo borne by
the bank examined. Such examina
tions shall be so conducted as to in
form tho Federal reserve bank of the
condition of its member banks and
of the lines of credit which are being
extended by them. Every Federal
reservo bank shall at all times fur
nish to tho Fedoral Reservo Board
such information as may bo demand
ed concerning tho condition cf any
membor bank within tho district of
tho said Federal resorvo bank.
No bank shall bo subjoct to any
visitatorial powers othor than such as
are authorized by law or vested in
the courts of justico or such as shull
bo or shall havo been exorcised or di
rected by Congress, or by either
House thereof or by any committee
of Congress or of either JIouso duly
authorized.
Tho Federal Resorvo Board shall,
at least once each year, order an ex
amination 'of each Fedoral reserve
bank, and upon Joint application of
ten member banks tho Fedoral Re
serve 'Board shall order a special ex
amination and report of tho condi
tion of any Federal resorvo bank.
Sec. 22. No member bank or any
officer, diroctor, or employeo thereof
shall hereafter make any loan or
grant any gratuity to any bank ex
aminer. Any bank officer, director,
or employee violating this provision
shall be deemed guilty of a misde
meanor and shall bo imprisoned not
exceeding ono year or fined not more
than $5,000, or both; and may be
fined a further sum equal . to- the
money so loaned or gratuity given.
Any examiner accepting a loan or
gratuity from any bank examined by
him or from an officer, director, or
employee thereof shall bo deemed
guilty of a misdemeanor and shall
be imprisoned not exceeding onp year
or fined not more than $5,000, or
both; and may be fined a further sum
equal to tho money so loaned or
gratuity given; and shall forever
thereafter bo disqualified from hold
ing office as a national-bank exam-,
iner. No national-bank examiner,
shall perform any other service for
compensation while holding such
office for any bank or officer, dire 'tor,
or employee thereof.
Other than tho usual salary or di
rector's fee paid to any officer, di
rector, or employeo of a member
bank and other than a reasonable fee
paid by said bank to such officer, di
rector, or employeo for services rend
ered to such bank, no officer, director,
or employee, or attorney or a member,
bank shall be a beneficiary of or re
ceive, directly or indirectly, any fee,
commission, gift, or other considera
tion for or in connection with any
transaction or business of the bank.
No examiner, public or private, shall
disclose the names of borrowers or
the collateral for loans of a member
bank to other than the proper officers
of such bank without first having ob
tained the express permission in writ
ing from the Comptroller of the Cur
rency, or from the board of directors
of such bank, except when ordered to
do so by a court of competent juris
diction, or by direction of the Con
gress of the United States, or of
either House thereof, or any commit
tee of Congress or of either House
duly authorized. Any person violat
ing any provision of this section shall
be punished by a fine of not exceed
ing $5,000 or by Imprisonment not
exceeding ono year, or both.
Except as provided in existing
laws, this provision shall not take
effect until sixty days after the pass
age of this Act
Sec. 23. The stockholders of every
national banking association shall be
held individually responsible for all
contracts, debts, and engagements of
such association, each to the amount
of his stock therein, at the par value
thereof in addition to the amount in
vested in such stock. The stockhold
ers In any national banking associa
tion who shall have transferred their
shares or registered the transfer
theeof within sixty days next before
the date of the failure of such asso
ciation to meet its obligations, or
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