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Member Banks

Duties and Powers Every National Bank must within 30 days after notification from Organization Committee, and eligible State Institutions may, at any time, join the Federal Reserve Bank in their District, by subscribing to stock a sum equal to 6% of their paid-up capital and surplus: By National Banks, one-sixth to be payable on call, one-sixth within three months, and one-sixth within six months thereafter, the remainder on call. By State Banks, payable subject to call by Federal Reserve Board.

Any National Bank failing to accept terms of this Act within sixty days after its passage shall cease to act as reserve agent, and failing to comply with the Act within one year after its passage shall forfeit its franchise under the National Bank Act.

National Banks having capital and surplus of $1,000,000 or more may, with permission of Federal Reserve Board:

(a) Establish foreign branches;
(b) Invest an amount not exceeding 10% of their paid

up capital and surplus in the stock of banks or cor-
porations incorporated under Federal or State laws
and principally engaged in foreign or international

banking. Until January 1, 1921, National Banks, without regard to amount of capital and surplus, may, with the permission of the Federal Reserve Board, invest an amount not exceeding in the aggregate 5% of their paid-in capital and surplus in stock of one or more domestic corporations principally engaged in international and foreign financial operations necessary to facilitate exports to foreign countries. The total investments by a National Bank authorized by Sec. 25, shall not exceed 10% of its capital and surplus.

A private banker, or an officer, director or employee of any Member Bank or Class A director of a Federal Reserve Bank may, with the consent of the Federal Reserve Board, be an officer, director or employee of not more than two other banks, banking associations or trust companies, whether organized under State or Federal laws, if they are not in substantial competition with such banker or Member Bank. (Sec. 8 of Federal Anti-Trust Act, as amended May 26, 1920.) May accept drafts or bills of exchange having not more than six months to run, exclusive of days of grace, drawn upon them for importation or exportation of goods, or domestic shipments accompanied by title documents or warehouse receipts as follows:

(a) For any one person, firm, or corporation up to an amount equal to not more than 10% of bank's capital and surplus, if unsecured by either attached documents or other collateral. (See Page 9, 13.)

(b) Aggregate acceptances at any one time shall not exceed 50% of bank's capital and surplus, except that by permission of Federal Reserve Board such acceptances may equal 100%.

(c) Aggregate of domestic acceptances shall in no event exceed 50% of capital and surplus of bank.

May lend to any one borrower in excess of 10% of its capital and surplus, but not in excess of 25%, provided the loans over 10% are represented by notes secured by shipping documents, warehouse receipts, or other such documents conveying or securing title covering readily marketable, non-perishable staples, including live stock. The actual market value of property securing the obligation may not at any time be less than 115% of the face amount of the loan and the property must be fully covered by insurance. The privilege of lending in excess of 10% of the bank's capital and surplus upon notes secured as above described, shall not apply to any one borrower for more than six months in any consecutive twelve. (Sec. 5200, R. S., as amended Oct. 22, 1919.)

Liabilities created by the endorsement of accepted bills of exchange payable abroad, actually owned by the endorsing bank and discounted at home or abroad, are excepted from the limitations upon the amount for which any National Bank may be liable at any one time. (Sec. 5202 R. S., as amended Oct. 22, 1919.)

National Banks, if not in a Central Reserve City, may make loans maturing(a) In not to exceed five years on farm land within its

District, or within radius of one hundred miles of place where bank is located irrespective of district

lines; (b) In not to exceed one year on improved and unin

cumbered real estate within one hundred miles of

place where bank is located, irrespective of dis
trict lines;
Such loans not to exceed 50% of value of property,
up to an aggregate of 25% of capital and surplus,

or to 1-3 of time deposits. National Banks permitted to receive time deposits and to pay interest thereon.

May receive deposits of net earnings of the War Finance Corporation. (War Finance Corporation Act, of April 5, 1918.)

No bank subject to visitorial powers except such as authorized by law.

No officer, director, employee or attorney of a Member Bank shall receive directly or indirectly any fee, commission, gift or other consideration for endeavoring to procure a loan or the purchase or discount of any paper, note, draft, check or bill of exchange by a Member Bank under penalty of imprisonment for one year or fine of $5,000 or both.

Officers, directors, attorneys, and employees may receive usual interest on deposits with their banks.

Any evidences of debt executed or endorsed by directors or attorneys of a Member Bank may be discounted with such bank on the usual terms upon affirmative vote of a majority of Board of Directors.

The purchase of securities or other property may be made by Member Banks from any of its directors or from any firm of which any of its directors is a member, but only on condition that the transaction is made in the regular course of business upon terms not less favorable than those offered to others, or upon the affirmative vote or written assent of a majority of the board of directors not interested in the sale. A full disclosure of any such transaction may be required by the Federal Reserve Board under regulations it may prescribe.

The sale of securities or other property may be made by Member Banks to any of its directors or to any firm of which any of its directors is a member, but only on condition that the transaction is made in the regular course of business upon terms not more favorable than those offered to others or upon the affirmative vote or written assent of a majority of the board of directors.

The authorization to purchase or sell securities or other property is specifically confined to those transactions authorized by law.

Directors and officers of any Member Bank are held liable in their personal capacity for all damages resulting to the Member Bank, its shareholders or any other person for violation of any of the provisions of Section 22, or regulations issued thereunder.

Comptroller of Currency, with approval of Secretary of Treasury, shall appoint examiners who shall examine each National Bank at least twice in each calendar year.

Requirement that National Banks shall maintain minimum deposit of U. S. bonds with Treasurer repealed.

State Banks may become National Banks.

May charge customers actual expense of collections and of exchange, rate of charge for collections to be fixed by Federal Reserve Board.

Except_by permission of Federal Reserve Board, no Member Bank shall act as agent for non-member banks in obtaining discounts.

May make reasonable charge, to be determined and regulated by Federal Reserve Board, in no case to exceed 10c per $100, for collection or payment of checks and drafts. No charge shall be made against Federal Reserve Banks.

State Banks whose financial condition, general management, and corporate powers exercised are approved by Federal Reserve Board may become Member Banks.

State Banks, upon becoming Member Banks, shall conform to the provisions of the National Bank Act which prohibit lending on or purchasing their own stock and which relate to withdrawal or impairment of capital stock and payment of unearned dividends; shall be subject to rules of Federal Reserve Board; and shall also be liable to certain penalties under this Act.

State Banks becoming Member Banks shall not be subject to examination under provisions first two paragraphs, R. S. Section 5240, as amended by Section 21 of the Federal Reserve Act.

State Banks shall be subject to examination by Federal Reserve Board, but whenever the directors of the Federal Reserve Bank shall approve examinations made by State authorities, these examinations and the reports thereof may be accepted in lieu of those instituted by the Board. State Banks admitted to membership shall make reports of condition and of payment of dividends to Federal Reserve Bank, not less than three reports to be made annually.

Subject to the provisions of the Federal Reserve Act and the regulations of the Board, State Banks joining Federal Reserve System may retain charter and State statutory rights, and may continue to exercise all corporate powers granted by the State.

State Banks may withdraw from membership in a Federal Reserve Bank after six months' notice to Federal Reserve Board, upon surrender of their holdings of capital stock in Federal Reserve Bank, but no Federal Reserve Bank, unless authorized by the Board, shall cancel within any one year more than 25% of its capital stock for effecting voluntary withdrawals. Upon surrender of holdings, a refund of cash paid subscription with 12% per month interest from date of last dividend, if earned, will be paid by Federal Reserve Bank to withdrawing bank; such refund not to exceed the book value of stock.

Capital and reserve of applying State Banks must meet requirements of National Banks under National Bank Act.

Under penalty of forfeiture of bank's membership, no officer, clerk, or agent of a State Bank admitted to membership shall certify any check drawn on such bank unless drawer has at least an equal amount on deposit. Any check certified by an officer in violation hereof, however, shall be a valid obligation of the bank. Any officer, director, agent or employee certifying check in violation of above is subject to penalty imposed by Revised Statutes. Sec. 5208.

National Banks in Alaska or insular possessions may remain non-member banks under National Bank Act, or may with consent of Federal Reserve Board become members.

NATIONAL Banks may, by special permission of Federal Reserve Board, act as trustee, executor, administrator, and registrar of stocks and bonds or in any fiduciary capacity in which State banks, trust companies or other corporations which come into competition with National Banks, are permitted to act under the laws of the State in which the National Bank is located.

If a State permits State banks, trust companies, or other corporations which compete with National Banks, to exercise any of the foregoing fiduciary powers, the exercise of

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