THE NATIONAL-BANK ACT

(Compiled Under the Direction of the Comptroller of the Currency)

CHAPTER I

THE CURRENCY BUREAU

1. The National-Bank Act. -Section 1 of the act of June 20, 1874, provides that the act entitled "An act to provide a national currency secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof," approved June 3, 1864, shall hereafter be known as the "National-Bank Act."

2. Comptroller of the Currency (Sec. 324). - There shall be in the Department of the Treasury a Bureau charged with the execution of all laws passed by Congress relating to the issue and regulation of a national currency secured by United States bonds, the chief officer of which Bureau shall be called the Comptroller of the Currency, and shall perform his duties under the general direction of the Secretary of the Treasury.

3. His Appointment, Term, and Salary (Sec. 325). - The Comptroller of the Currency shall be appointed by the President, on the recommendation of the Secretary of the Treasury, by and with the advice and consent of the Senate, and shall hold his office for the term of five years, unless sooner removed by the President, upon reasons to be communicated by him to the Senate; and he shall be entitled to a salary of $5,000 a year.

4. His Qualification (Sec. 326). - The Comptroller of the Currency shall, within fifteen days from the time of notice of his appointment, take and subscribe the oath of office; and he shall give to the United States a bond in the penalty of $100,000, with not less than two responsible sureties, to be approved by the Secretary of the Treasury, conditioned for the faithful discharge of the duties of his office.

5. Deputy Comptroller (Sec. 327).-There shall be in the Bureau of the Comptroller of the Currency a Deputy Comptroller of the Currency, to be appointed by the Secretary, who shall be entitled to a salary of $2,800 a year, and who shall possess the power and perform the duties attached by law to the office of Comptroller during a vacancy in the office or during the absence or inability of the Comptroller. The Deputy Comptroller shall also take the oath of office prescribed by the constitution and laws of the United States, and shall give a like bond in the penalty of $50,000.

6. Interest in National Banks Frohibited (Sec. 329).-It shall not be lawful for the Comptroller or the Deputy Comptroller of the Currency, either directly or indirectly, to be interested in any association issuing national currency under the laws of the United States.

7. Office Clerks (Sec. 328).-The Comptroller of the Currency shall employ, from time to time, the necessary clerks, to be appointed and classified by the Secretary of the Treasury, to discharge such duties as the Comptroller shall direct.

8. Seal of Office (Sec. 330).-The seal devised by the Comptroller of the Currency for his office, and approved by the Secretary of the Treasury, shall continue to be the seal of office of the Comptroller, and may be renewed when necessary. A description of the seal, with an impression thereof, and a certificate of approval of the Secretary of the Treasury, shall be filed in the office of the Secretary of State.

9. Offices, Vaults, Etc. (Sec. 331).-There shall be assigned, from time to time, to the Comptroller of the Currency, by the Secretary of the Treasury, suitable rooms in the Treasury building for conducting the business of the Currency Bureau, containing safe and secure fireproof vaults, in which the Comptroller shall deposit and safely keep all the plates not necessarily in the possession of engravers or printers, and other valuable things 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 business of his office.

10. Annual Report (Sec. 333). - The Comptroller of the Currency shall make an annual report to Congress, at the commencement of its session, exhibiting:

FIRST. Condition of National Banks. - A summary of the state and condition of every association from which reports have been received the preceding year, at the several' dates to which such reports refer, with an abstract of the whole amount of banking capital returned by them, of the whole amount of their debts and Habilities, the amount of circulating notes outstanding, and the total amount of means and resources, specifying the amount of lawful money held by them at the times of their several returns, and such other information in relation to such associations as in his judgment may be useful.

SECOND. Closed Banks. -A statement of the associations whose business has been closed during the year, with the amount of their circulation redeemed and the amount outstanding.

THIRD. Amendments Proposed. - Any amendment to the laws relative to banking by which the system may be improved and the security of the holders of its notes and other creditors may be increased.

FOURTH. Condition of Other Banks. - A statement exhibiting under appropriate heads the resources and liabilities and condition of the banks, banking companies, and savings banks organized under the laws of the several states and territories, such information to be

obtained by the Comptroller from the reports made by such banks, banking companies, and savings banks to the legislatures or officers of the different states and territories, and, where such reports cannot be obtained, the deficiency to be supplied from such other authentic sources as may be available.

FIFTH. Employes and Expenses. - The names and compensation of the clerks employed by him, and the whole amount of the expenses of the banking department during the year.

11. When Annual Report Is Printed (Sec. 3811).- When the annual report of the Comptroller of the Currency upon the national banks and banks under state and territorial laws is completed, or while it is in process of completion, if thereby the business may be sooner despatched, the work of printing shall be commenced, under the superintendence of the Secretary, and the whole shall be printed and ready for delivery on or before the first day of December next after the close of the year to which the report relates.

12. Number of Copies to Be Printed. - The act of January 12, 1895, provides that there shall be printed of the annual report of the Comptroller of the Currency 10,000 copies; 1,000 for the Senate, 2,000 for the House, and 7,000 for distribution by the Comptroller of the Currency.

CHAPTER II

ORGANIZATION AND POWERS OF NATIONAL BANKS

13. Articles of Association (Sec. 5133). - Associations for carrying on the business of banking under this title may be formed by any number of natural persons, not less in any case than five. They shall enter into articles of association, which shall specify in general terms the object for which the association is formed, and may contain any other provisions, not inconsistent with law, which the association may see fit to adopt for the regulation of its business and the conduct of its affairs. These articles shall be signed by the persons uniting to form the association, and a copy of them shall be forwarded to the Comptroller of the Currency, to be filed and preserved in his office.

14. Organization Certificate (Sec. 5134). - The persons uniting to form such an association shall, under their hands, make an organization certificate, which shall specifically state:

FIRST. Title. - The name assumed by such association, which name shall be subject to the approval of the Comptroller of the Currency. SECOND. Location. - The place where its operations of discount and deposit are to be carried on, designating the state, territory, or district, and the particular county and city, town, or village.

THIRD. Capital Stock. -The amount of capital stock and the number of shares into which the same is to be divided.

FOURTH. Shareholders. - The names and places of residence of the shareholders and the number of shares held by each of them.

FIFTH. Object of Certificate. - The fact that the certificate is made to enable such persons to avail themselves of the advantages of this title.

15. Execution of Organization Certificate (Sec. 5135). - The organization certificate shall be acknowledged before a judge of some court of record, or notary public, and shall be, together with the acknowledgment thereof, authenticated by the seal of such court or notary, transmitted to the Comptroller of the Currency, who shall record and carefully preserve the same in his office.

16. Corporate Powers (Sec. 5136).-Upon duly making and filing articles of association and an organization certificate, the association shall become, as from the date of the execution of its organization certificate, a body corporate, and as such, and in the name designated in the organization certificate, it shall have power:

FIRST.

Seal. -To adopt and use a corporate seal.

SECOND. Term of Existence. – To have succession for the period of twenty years from its organization, unless it is 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 its franchise becomes forfeited by some violation of law.

THIRD. Contracts. - To make contracts.

FOURTH. Suits. - To sue and be sued, complain and defend, in any court of law and [or] equity, as fully as natural persons.

FIFTH. Officers. - To elect or appoint directors, and by its board of directors to appoint a president, vice-president, cashier, and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss such officers or any of them at pleasure, and appoint others to fill their places.

SIXTH. By-Laws. - To prescribe, by its board of directors, by-laws not inconsistent with law, regulating the manner in which its stock shall be transferred, its directors elected or appointed, its officers appointed, its property transferred, its general business conducted, and the privileges granted to it by law exercised and enjoyed.

SEVENTH. Incidental Powers. - To exercise by its board of directors, or duly authorized officers or agents, subject to law, 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; and by obtaining, issuing, and circulating notes according to the provisions of this title; but no association shall transact any business except such as is incidental and necessarily preliminary to its organization until it has been authorized by the Comptroller of the Currency to commence the business of banking.

17. Amount of Capital Stock Required (Sec. 5138, as amended by act of March 14, 1900). -No association shall be organized with a

less capital than $100,000, except that banks with a capital of not less than $50,000 may, with the approval of the Secretary of the Treasury, be organized in any place the population of which does not exceed 6,000 inhabitants, and except that banks with a capital of not less than $25,000 may, with the sanction of the Secretary of the Treasury, be organized in any place the population of which does not exceed 3,000 inhabitants. No association shall be organized in a city the population of which exceeds 50,000 persons with a capital of less than $200,000.

18. Shares of Stock (Sec. 5139). - The capital stock of each association shall be divided into shares of $100 each, and be deemed personal property, and transferable on the bocks of the association in such manner as may be prescribed in the by laws or articles of association. 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 of such shares.

19. Payment of Capital Stock (Sec. 5140). - At least fifty per centum of the capital stock of every association shall be paid in before it shall be authorized to commence business; and the remainder of the 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 of the Currency 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.

20. Enforcing Payment of Capital (Sec. 5141). - Whenever any shareholder, or his assignee, fails to pay any instalment on the stock when the same is required by the preceding section to be paid, the directors of such 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, or, 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, to be 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 canceled and deducted from the capital stock of the association.

21. Restoration of Capital (Sec. 5141).-If any such cancelation and reduction shall reduce the capital of the association below the minimum capital required by law, the capital stock shall, within