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3 June 1864.
13 Stat. 100.
Articles of association.
To be acknow.
belonging to his department; and the comptroller shall, from time to time, furnish the necessary furniture, stationery, fuel, lights and other proper conveniences for the
transaction of the said business. Ibid. & 4.
4. The term “United States bonds," as used in this act, shall be construed to mean all registered bonds now issued, or that may hereafter be issued, on the faith of the United States, by the secretary of the treasury, in pursuance of law.
II. ORGANIZATION OF BANKING COMPANIES. 3 June 1864 & 5. 5. Associations for carrying on the business of banking may be formed by any num
ber of persons, (a) not less in any case than five, who shall enter into articles of associa
tion, which shall specify in general terms the object for which the association is banking associa
formed, and may contain any other provisions not inconsistent with the provisions of this act, which the association may see fit to adopt for the regulation of the business of the association and the conduct of its affairs; which said articles shall be signed by the persons uniting to form the association, and a copy of them forwarded to the
comptroller of the currency, to be filed and preserved in his office. Ibid. & 6. 6. The persons uniting to form such an association shall, under their hands, make
an organization certificate, which shall specify
I. The name assumed by such association; which name shall be subject to the approval of the comptroller.
II. The place where its operations of discount and deposit are to be carried on, designating the state, territory or district, and also the particular county and city, town or village.
III. The amount of its capital stock, and the number of shares into which the same shall be divided.
IV. The names and places of residence of the shareholders, and the number of shares held by each of them.
V. A declaration that said certificate is made to enable such persons to avail themselves of the advantages of this act.
The said certificate shall be acknowledged before a judge of some court of record or ledged and filed
a notary public, and such certificate, with the acknowledgment thereof authenticated of record.
by the seal of such court or notary, shall be transmitted to the comptroller of the curCertified copies rency, who shall record and carefully preserve the same in his office. Copies of such
certificate, duly certified by the comptroller, and authenticated by his seal of office, shall be legal and sufficient evidence in all courts and places within the United States, or the jurisdiction of the government thereof, of the existence of such association, and of every other matter or thing which could be proved by the production of the original
certificate. Ibid. 27.
7. No association shall be organized under this act, with a less capital than one hundred thousand dollars, nor, in a city whose population exceeds fifty thousand persons, with a less capital than two hundred thousand dollars : Provided, That banks with a capital of not less than fifty thousand dollars may, with the approval of the secretary of the treasury, be organized in any place the population of which does not
exceed six thousand inhabitants. Ibid. & 8.
8. Every association formed pursuant to the provisions of this act shall, from the Corporate pow.
date of the execution of its organization certificate, be a body corporate, but shall transact no business except such as may be incidental to its organization, and necessarily preliminary, until authorized by the comptroller of the currency to commence the business of banking. Such association shall have power to adopt a corporate seal, and shall have succession by the name designated in its organization certificate, for the period of twenty years from its organization, unless sooner dissolved, according to the provisions of its articles of association, or by the act of its shareholders owning two-thirds of its stock, or unless the franchise shall be forfeited by a violation of this act; by such name it may make contracts, sue and be sued, complain and defend, in any court of law and equity, as fully as natural persons ;(b) it may elect or appoint directors, and by its board of directors appoint a president, vice-president, cashier and other officers, define their duties, require bonds of them, and fix the penalty thereof, dismiss said officers, or any of them, at pleasure, and appoint others to fill their places, and exercise under this act all such incidental powers as shall be necessary to carry on the business of banking, by discounting and negotiating promissory notes, drafts, bills of exchange and other evidences of debt; by receiving deposits ; by buying and selling exchange, coin and bullion ; by loaning money on personal security ; by obtain
to be evidence.
Amount of cap ital.
ing, issuing and circulating notes according to the provisions of this act; and its board (a) This act authorizes the creation of banking associations, the aggregato amount of the capital of banks, which may bo without the right to issue circulating notes; whilst limiting the organized thereunder. 11 Opin. 334. amount of bank note circulation, it places no restriction upon (6) See infra 60.
3 June 1864.
Term of office.
of directors shall also have power to define and regulate by by-laws, not inconsistent
Ibid. & 9. one of whom shall be the president. Every director shall, during his whole term of service, be a citizen of the United States; and at least three-fourths of the directors qualification of shall have resided in the state, territory or district in which such association is located one year next preceding their election as directors, and be residents of the same during President. their continuance in office. Each director shall own, in his own right, at least ten shares of the capital stock of the association of which he is a director. Each director, Oath of ofice. when appointed or elected, 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 number of shares of stock required by this act, subscribed by him, or standing in his name on the books of the association, and that the same is not hypothecated or in any way pledged as security for any loan or debt; 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. 10. The directors of any association first elected or appointed shall hold their places
Ibid. & 10. until their successors shall be elected and qualified. All subsequent elections shall be held annually on such day in the month of January as may be specified in the articles of association ; and the directors so elected shall hold their places for one year, and until their successors are elected and qualified. But any director ceasing to be the owner of the requisite amount of stock, or having in any other manner become disqualified, shall thereby vacate his place. Any vacancy in the board shall be filled by How vacancies appointment by the remaining directors, and any director so appointed shall hold his to be filled. place until the next election. 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 in all cases having been given, in a newspaper published 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 published nearest thereto. If the articles of association do not fix the day on which the election shall be held, or if the election should not be held on the day fixed, the day for the election shall be designated by the board of directors in their by-laws, or otherwise: Provided, That if the directors fail to fix the day as aforesaid, shareholders representing two-thirds of the shares may. 11. In all elections of directors, and in deciding all questions at meetings of share
Ibid. & 11. holders, each shareholder shall be entitled to one vote on each share of stock held by Corporate elechim. Shareholders may vote by proxies duly authorized in writing; but no officer, clerk, teller or bookkeeper of such association shall act as proxy; and no shareholder whose liability is past due and unpaid shall be allowed to vote.
III. CAPITAL STOCK. 12. The capital stock of any association formed under this act shall be divided into 3 June 1864 ( 12. shares of one hundred dollars each, and be deemed personal property and transferable on the books of the association in such manner as may be prescribed in the by-laws or Division of capiarticles of association; and every person becoming a shareholder by such transfer shall, in proportion to his shares, succeed to all the rights and liabilities of the prior holder Transfers. of such shares, and no change shall be made in the articles of association by which the rights, remedies or security of the existing creditors of the association shall be impaired. The shareholders of each association formed under the provisions of this act, and of Individual liaeach existing bank or banking association that may accept the provisions of this act, holdere. shall be held individually responsible, equally and rateably, and not one for another, for all contracts, debts and engagements of such association, to the extent of the amount of their stock therein at the par value thereof, in addition to the amount invested in such shares; except that shareholders of any banking association now existing under state laws, having not less than five millions of dollars of capital actually paid in, and a surplus of twenty per centum on hand, both to be determined by the comptroller of the currency, shall be liable only to the amount invested in their shares; and such surplus of twenty per centum shall be kept undiminished, and be in addition to the surplus
13 Stat. 102
bility of stock
troller to withhvid certificate.
Power to in
3 June 1864. provided for in this act; and if at any time there shall be a deficiency in said surplus
of twenty per centum, the said banking association shall not pay any dividends to its shareholders until such deficiency shall be made good; and in case of such deficiency,
the comptroller of the currency may compel said banking association to close its busiPower of comp- ness and wind up its affairs under the provisions of this act. And the comptroller shall
have authority to withhold from an association his certificate authorizing the commencement of business, whenever he shall have reason to suppose that the shareholders thereof have formed the same for any other than the legitimate objects contemplated
by this act. Ibid. 2 13. 13. It shall be lawful for any association formed under this act, by its articles of
association, to provide for an increase of its capital, from time to time, as may be deemed crease capital
espedient, subject to the limitations of this act: Provided, That the maximum of such increase in the articles of association shall be determined by the comptroller of the currency; and no increase of capital shall be valid until the whole amount of such increase shall be paid in, and notice thereof shall have been transmitted to the comptroller of the currency, and his certificate obtained specifying the amount of such increase of capital stock, with his approval thereof, and that it has been duly paid in as part of the capital of such association. And every association shall have power, by the vote of shareholders owning two-thirds of its capital stock, to reduce the capital of such association to any sum not below the amount required by this act, in the formation of associations: Provided, That by no such reduction shall its capital be brought below the amount required by this act for its outstanding circulation, nor shall any such reduction be made until the amount of the proposed reduction has been reported
to the comptroller of the currency, and his approval thereof obtained. Ibid. 2 14. 14. At least fifty per centum of the capital stock of every association shall be paid in Payment of before it shall be authorized to commence business; and the remainder of the capital capital. stock of such association shall be paid in instalments of at least ten per centum each
on the whole amount of the capital, as frequently as one instalment at the end of each succeeding month from the time it shall be authorized by the comptroller to commence business; and the payment of each instalment shall be certified to the comptroller,
under oath, by the president or cashier of the association. Ibid. ? 15. 15. If any shareholder, or his assignee, shall fail to pay any instalment on the stock,
when the same is required by the foregoing section to be paid, the directors of such gments to be for- association may sell the stock of such delinquent shareholder, at public auction, having
given three weeks' previous notice thereof in a newspaper published and of general circulation in the city or county where the association is located, and if no newspaper is published in said city or county, then in a newspaper published nearest thereto, to any person who will pay the highest price therefor, and not less than the amount then due thereon, with the expenses of advertisement and sale; and the excess, if any, shall be paid to the delinquent shareholder. If no bidder can be found who will pay for such stock the amount due thereon to the association, and the cost of advertisement and sale, the amount previously paid shall be forfeited to the association, and such stock shall be sold as the directors may order, within six months from the time of such forfeiture, and if not sold it shall be cancelled and deducted from the capital stock of the association; and if such cancellation and reduction shall reduce the capital of the association below the minimum of capital required by this act, the capital stock shall. within thirty days from the date of such cancellation, be increased to the requirements of the act; in default of which a receiver may be appointed to close up the business of
the association, according to the provisions of the fiftieth section of this act. Ibid. & 16. 16. Every association, after having complied with the provisions of this act, preDeposit of United liminary to the commencement of banking business under its provisions, and before it States bonds. shall be authorized to commence business, shall transfer and deliver to the treasurer
of the United States, any United States registered bonds bearing interest to an amount not less than thirty thousand dollars, nor less than one-third of the capital stock paid in, which bonds shall be deposited with the treasurer of the United States, and by him safely kept in his office, until the same shall be otherwise disposed of, in pursuance of the provisions of this act; and the secretary of the treasury is hereby authorized to receive and cancel any United States coupon bonds, and to issue in lieu thereof registered bonds of like amount, bearing a like rate of interest, and having the same time to and the deposit of bonds shall be, by every association, increased, as its capital may be paid up or increased, so that every association shall at all times have on deposit with the treasurer, registered United States bonds, to the amount of at least one-third of its capital stock actually paid in: Provided, That nothing in this section shall prevent an association that may desire to reduce its capital, or to close up its business and
Stock of delin
3 June 1804.
ties of the comptroller.
dissolve its organization, from taking up its bonds, upon returning to the comptroller its circulating notes, in the proportion hereinafter named in this act, nor from taking up any excess of bonds beyond one-third of its capital stock, and upon which no circulating notes have been delivered.
17. Whenever a certificate shall have been transmitted to the comptroller of the Ibid. 17. currency, as provided in this act, and the association transmitting the same shall notify Powers and duthe comptroller, that at least fifty per centum of its capital stock has been paid in as aforesaid, and that such association has complied with all the provisions of this act, as required to be complied with before such association shall be authorized to commence the business of banking, the comptroller shall examine into the condition of such association, ascertain especially the amount of money paid in on account of its capital, the name and place of residence of each of the directors of such association, and the amount of the capital stock of which each is the bonâ fide owner, and generally whether such association has complied with all the requirements of this act to entitle it to engage in the business of banking; and shall cause to be made and attested by the oaths of a majority of the directors and by the president or cashier of such association, a statement of all the facts necessary to enable the comptroller to determine whether such association is lawfully entitled to commence the business of banking under this act. 18. If, upon a careful examination of the facts so reported, and of any other facts
Ibid. & 18. which may come to the knowledge of the comptroller, whether by means of a special Certificate to he commission appointed by him for the purpose of inquiring into the condition of such issued and pubassociation, or otherwise, it shall appear that such association is lawfully entitled to commence the business of banking, the comptroller shall give to such association a certificate, under his hand and official seal, that such association has complied with all the provisions of this act, required to be complied with before being entitled to commence the business of banking under it, and that such association is authorized to commence said business accordingly; and it shall be the duty of the association to cause said certificate to be published in some newspaper published in the city or county where the association is located, for at least sixty days next after the issuing thereof: Provided, That, if no newspaper is published in such city or county, the certificate shall be published in a newspaper published nearest thereto. 19. All transfers of United States bonds, which shall be made by any association
Ibid. 2 19. under the provisions of this act, shall be made to the treasurer of the United States in Bonds to be astrust for the association, with a memorandum written or printed on each bond, and signed to the signed by the cashier or some other officer of the association making the deposit, a trust. receipt therefor to be given to said association, or by the comptroller of the currency, or by a clerk appointed by him for that purpose, stating that it is held in trust for the association on whose behalf such transfer is made, and as security for the redemption and payment of any circulating notes that have been or may be delivered to such association. No assignment or transfer of any such bonds by the treasurer shall be deemed valid, or of binding force and effect, unless countersigned by the comptroller of the currency. It shall be the duty of the comptroller of the currency to keep in his office a Transfer book. book, in which shall be entered the name of every association from whose accounts such transfer of bonds is made by the treasurer, and the name of the party to whom such transfer is made; and the par value of the bonds so transferred shall be entered therein; and it shall be the duty of the comptroller, immediately upon countersigning and entering the same, to advise by mail the association from whose account such transfer was made of the kind and numerical designation of the bonds and the amount thereof so transferred.
20. It shall be the duty of the comptroller of the currency to countersign and enter Ibid. 2 20. in the book, in the manner aforesaid, every transfer or assignment of any bonds held by the treasurer presented for his signature; and the comptroller shall have at all times, countersigned during office hours, access to the books of the treasurer, for the purpose of ascertaining the correctness of the transfer or assignment presented to him to countersign; and the treasurer shall have the like access to the book above mentioned, kept by the comptroller, during office hours, to ascertain the correctness of the entries in the same; and the comptroller shall also at all times have access to the bonds on deposit with the treasurer, to ascertain their amount and condition.
IV. BANK NOTES. 21. Upon the transfer and delivery of bonds to the treasurer, as provided in the fore- 3 June 1864 & 21. going section, the association making the same shall be entitled to receive from the comptroller of the currency, circulating notes of different denominations, in blank, regis- Circulating notes tered and countersigned as hereinafter provided, equal in amount to ninety per centum such associations. of the current market value of the United States bonds so transferred and delivered,
Transfers to be
13 Stat. 105.
3 June 1864.
Form and de vices.
but not exceeding ninety per centum of the amount of said bonds at the par value thereof, if bearing interest at a rate not less than five per centum per annum; and the amount of said circulating notes to be furnished to each association shall be in proportion to its paid-up capital as follows, and no more: To each association whose capital shall not exceed five hundred thousand dollars, ninety per centum of such capital ; to each association whose capital exceeds five hundred thousand dollars, but does not exceed one million dollars, eighty per centum of such capital; to each association whose capital exceeds one million dollars, but does not exceed three millions of dollars, seventy-five per centum of such capital; to each association whose capital exceeds three millions of dollars, sixty per centum of such capital. And one hundred and fifty millions of dollars of the entire amount of circulating notes authorized to be issued shall be apportioned to associations in the states, in the District of Columbia and in the territories, according to representative population, and the remainder shall be apportioned by the secretary of the treasury among associations formed in the several states, in the District of Columbia and in the territories, having due regard to the existing banking capital, resources and business of such states, dis
trict and territories.(a) Ibid. 2 22. 22. The entire amount of notes for circulation to be issued under this act shall not
exceed three hundred millions of dollars. In order to furnish suitable notes for circulation, the comptroller of the currency is hereby authorized and required, under the
direction of the secretary of the treasury, to cause plates and dies to be engraved, in pronter, y comp- the best manner to guard against counterfeiting and fraudulent alterations, and to have Denominations. printed therefrom and numbered such quantity of circulating notes, in blank, of the
denominations of one dollar, two dollars, three dollars, five dollars, ten dollars, twenty dollars, fifty dollars, one hundred dollars, five hundred dollars and one thousand dollars, as may be required to supply, under this act, the associations entitled to receive the same; which notes shall express upon their face that they are secured by United States bonds, deposited with the treasurer of the United States by the written or engraved signatures of the treasurer and register, and by the imprint of the seal of the treasury; and shall also express upon their face the promise of the association receiving the saine to pay on demand, attested by the signatures of the president or vice president and cashier. And the said notes shall bear such devices and such other statements, and shall be in such form as the secretary of the treasury shall by regulation direct: Pro vided, That not more than one-sixth part of the notes furnished to an association shall be of a less denomination than five dollars, and that after specie payments shall be resumed, no association shall be furnished with notes of a less denomination than five
dollars. Ibid. & 23. 23. After any such association shall have caused its promise to pay such notes on Now such notes demand to be signed by the president or vice-president and cashier thereof, in such may be issued a manner as to make them obligatory promissory notes, payable on demand, at its place
of business, such association is hereby authorized to issue and circulate the same as To be receivable money; and the same shall be received at par, in all parts of the United States, in payfor taxes, &c.
ment of taxes, excises, public lands and all other dues to the United States, except for duties on imports ; and also for all salaries and other debts and demands owing by the United States to individuals, corporations and associations within the United States, except interest on the public debt, and in redemption of the national currency. And no such association shall issue post notes, or any other notes to circulate as money than
such as are authorized by the foregoing provisions of this act. Ibid. & 24. 24. 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 also, on due montilated notes proof of the destruction of any such circulating notes, to deliver in place thereof to
such association other blank circulating notes to an equal amount. And such worn-out Destruction of or mutilated notes, after a memorandum shall have been entered in the proper books, cancelled notes.
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 four persons, one to be appointed by the secretary of the treasury, one by the comptroller of the currency, one by the treasurer of the United States, and one by the association, under such regulations as the secretary of the treasury may prescribe. 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
forwarded to the association whose notes are thus cancelled. Ibid. & 25. 25. It shall be the duty of every banking association having bonds deposited in the Annual examina- office of the treasurer of the United States, once or oftener in each fiscal year, and at such time or times, during the ordinary business hours, as said officer or officers may
Post notes prohibited.
for new ones.
(a) So amended by act 3 March 1865. 13 Stat. 498.
tion of bonds in treasurer's oflice.