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such powers by National Banks shall not be deemed to be in contravention of any State or local law.

All assets held by a National Bank in any such fiduciary capacity shall be segregated from the general assets and a separate set of books kept which shall be open to inspection by the State authorities to the same extent as those of corporations exercising similar powers under State laws.

National Banks shall not receive in their trust departments deposits of current funds subject to check or deposits of checks, drafts, bills of exchange, or other items for collection or exchange purposes. Separate accounts shall be kept for funds held in trust, carried in a separate account, and unless United States bonds or other securities, approved by the Federal Reserve Board, are first set aside in the trust department, such funds shall not be used in the conduct of the business of the bank.

In case of the failure of a bank, owners of funds held in trust for investment, have a lien on the securities so set apart, in addition to their claim against the estate of the bank.

Deposit of securities required by State laws for the protection of trusts, shall be similarly made by National Banks.

National Banks are authorized to execute bonds when so required by State laws, but shall not be required to furnish bonds if State corporations are exempt from such requirement in similar cases.

Affidavits required by State laws may be executed by proper officers of National Banks.

National banking associations are prohibited from lending trust funds to any officer, director or employee, the officer, director or employee making or receiving the loan being subject to a fine of $5,000 or imprisonment for five years, or both.

Federal Reserve Board, in granting permission to act as fiduciary, may consider the capital and surplus of the applying bank, the needs of the community and other pertinent facts, but no permit shall be granted if the capital and surplus is less than that required of State institutions exercising similar powers.

Provisions of Aldrich-Vreeland Act extended to June 30th, 1915, with changes in tax rates on circulation, and R. S. Sections 5153, 5172, 5191, and 5214 reenacted to read as prior to May 30th, 1908.

National Banks in places the population of which does not exceed 5,000, may, under supervision of the Comptroller of the Currency, act as insurance agents and mort. gage loan brokers.

Subject to regulation of Federal Reserve Board, a Member Bank may accept drafts or bills of exchange having not more than three months' sight to run, exclusive of days of grace, drawn upon it by foreign banks or bankers for purpose of furnishing dollar exchange up to an amount not exceeding 12 its unimpaired capital and surplus.

The Secretary of Treasury may permit National Banks to issue circulating notes not to exceed 125% of capital and surplus against which redemption fund in gold of not less than 5% must be maintained in the United States Treasury.

Reserves In estimating reserves, net balance of amounts due to and from other banks shall be used as the basis for ascertaining the bank deposits against which reserves shall be determined.

Demand deposits are those payable within 30 days; time deposits those payable after 30 days, those subject to not less than 30 days' notice, and all Postal Savings deposits.

Every Member Bank must maintain reserves as follows: A Banks not in a Reserve or Central Reserve City

7% of demand deposits in Federal Reserve Bank of

district. 3% of time deposits in Federal Reserve Bank of dis

trict. B Banks in a Reserve City.

10% of demand deposits in Federal Reserve Bank of

district. 3% of time deposits in Federal Reserve Bank of dis

trict. A bank located in the outlying district of a Reserve City or in territory added by the extension of its corporate charter, may hold, upon the approval of five members of the Federal Reserve Board, the reserves required of banks, specified in "A,” above.

C Banks in a Central Reserve City.

13% of demand deposits in Federal Reserve Bank of

district. 3% of time deposits in Federal Reserve Bank of dis

trict. A bank, located in the outlying district of a Central Reserve City or in territory added by the extension of its corporate charter, may hold, upon the approval of five members of the Federal Reserve Board, reserves required of banks specified in “A” and “B,” above.

Reserve funds in Federal Reserve Banks may be checked against to meet existing liabilities, but reserve must be restored before new loans or dividends can be made or declared.

Section in former law providing that 5% redemption fund be considered part of reserve is repealed.

No Member Bank shall keep on deposit with a nonmember bank more than 10% of its own capital and surplus.

Refunding of U. S. 2% Bonds At any time within twenty years after December 23rd, 1915, at the request of any Member Bank, the Federal Reserve Board may direct Federal Reserve Banks to purchase at par not to exceed $25,000,000 in any one year, Government 2% bonds used to secure circulation, and circulation thereby secured shall be retired, but Federal Reserve Banks so purchasing may issue circulation as under present National Bank Act.

Any Federal Reserve Bank may exchange U. S. 2% bonds for one-year 3% U. S. gold notes in amount equal to one-half of amount of bonds exchanged, and thirty-year U. S. 3% bonds without circulation privilege equal to remainder, provided such bank agrees to purchase for gold if so requested at the end of each year for thirty years, an amount of notes equal to the notes so received. Such notes on approval of Federal Reserve Board may be exchanged for U. S. 3% thirtyyear bonds.

Corporations Authorized to do Foreign

Banking Business Banking corporations authorized to do foreign banking business may be organized under regulations of the Federal Reserve Board. (For details see booklet issued by the Guaranty Trust Company of New York entitled “Foreign Financing Under the Edge Act.”)

Reserve Bank Organization Committee
(This Committee automatically ceased its functions

August 10, 1914.)
W. G. McAdoo, Secretary of the Treasury, Chairman.
D. F. HOUSTON, Secretary of Agriculture.
J. S. WILLIAMS, Comptroller of the Currency.
M. C. ELLIOT, Counsel, and Secretary to the Committee.

Federal Reserve Board David F. HOUSTON, Secretary of the Treasury, ex-officio

Chairman. J. S. WILLIAMS, Comptroller of the Currency, ex-officio. W. P. G. HARDING, Governor,

Of Birmingham, Ala.

Term expires August 10, 1922. EDMUND PLATT,

Of Poughkeepsie, N. Y.

Term expires October 26, 1928. CHARLES S. HAMLIN,

Of Boston, Mass.

Term expires August 10, 1926. ADOLPH C. MILLER,

Of San Francisco, Cal.

Term expires August 10, 1924.
D. C. Wills,

Of Cleveland, Ohio.
Interim appointment.

W. W. Hoxton, Secretary.
WALTER L. Eddy, Assistant Secretary.
W. M. IMLAY, Fiscal Agent.
M. JACOBSON, Statistician.
WALTER S. Logan, General Counsel.
H. PARKER WILLIS,

Director, Division of Analysis and Research. J. E. CRANE, Acting Director, Division of Foreign Exchange.

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