The watchman and southron. (Sumter, S.C.) 1881-1930, December 31, 1913, Image 2
CUOf BILL
VITAL TO
c amtes glass.
Chief features of
New federal Re*
serve Act Here
Presented-fed.
eral Reserve
Board of Seven
Members to Su?
pervise Banking
System of the
Country.
Till: federal reserve act Is now a
fart of the law of the land.
With President Wilsons algna
ttire to tbe new Ulass-Owen
currency reform bill the country looks
forward to the practical working out
of the act The law la in part as fol?
lows:
Au act to provide for the establish
ment of federal reserve banks to fur
alab an elastic currency, to afford
ids of redis?
count l o|; codM
rial paper, to es?
tablish a more ef
t e c 11 v a super
vision of bau king
la the United
States and for
other purposes.
That the short
title cf this act
shall be tbe "fed?
eral reserve act"
Sec. 2. As soon
as practicable tbe Jy A?r,c?
? - Prtss Association,
secret nr.- of the
isury, tbe sec- TH* *mbidbiit.
ratsry ad agriculture and the comp?
troller of tbe currency, acting aa "the
reserve bunk organisation committee.'
shall designate not leas than eight nor
mors than twelve cities to be known as
federal reserve cities, aud shall divide
tbe continental United States, exclud?
ing Alaska, into districts, each district
to eoutatn otdy one of iu< n *? derul rc
cltl^t fc
NAMING RESERVE BANKS.
Te Take Title of Prinoipsl City In Re*
serve District.
The said committee shall sujwrvlse
the organization In each of the Htles
designs ted of a federal reserve bank,
wblcb shall Include In Its title the
name of the city In which it is situat?
ed, aa "Federal Reserve Dank of Chi
ca go
Under rcgulatl n .to he prescribed by
tbe organization committee every na
tlonsl bat King association In the Unit?
ed State* Is hereby required and every
eligible bank In tbe United States and
every trust company within tbe Dis?
trict of Columbls Is hereby authorized
to signify In writing within sixty days
after tbe passage of this act Its ac?
ceptance of tbe terms and provisions
bereor
When tbe organization committee
shilt have designated the cities in
which federal reserve banks are to be
organized and fixed the geographical
limits of the federal reserve districts
every nstlon.il bsnklug sssovlattou
wttblo t.nt district ahsll be required
wltblo thirty days ufter uotlce from
the org? ni/jition committee to sub?
scribe to tbe capital stock of such fed
eral reserve hank In a turn equal to 0
per cent of tbe paid up capital stock
sod surplus of such bank.
Any national bnuk fulling to signify
its acceptance of tbe terms of this act
within the sixty daw aforesaid rtbal)
cease to act as s reserve ugent upon
thirty dar?' uotlce to be given within
illscr.'tlon of the said orguul/utlon
0) It tee or of tbe fjder.il reserve
hoard.
"Should any national banking associa?
tion In the ('tilted States now organ
is*d fall sltbln one year after tbe pas?
sage of this act to become a member
bank under the provisions bei-clubefore
atuted or fall to comply with any of
tbe provisions of this act applicable
thereto all of tbe rights, privileges and
fraucnhMM of such aemndatiou granted
to It uadvr tbe natloual bauk act or un?
der tbe provisions of thla act ahull be
thereby forfeited.
No Individual, copartnership or cor
?oration other tbnn a member bank
of Its district shall be permitted to
auhscrlhe for or to bold tit any time
more than IHUMX) par value of stock
In rny federal reserve Imnk Such
atock ahall be known as public stock
and may be transferred on the books
of tbe federal reserve bank by the
chairman of tbe board of directors of
au. h bank.
Should the subscription of atock by
bauk* and the public be Inadequate
tie government Itself may aubscribe
for atock. Stock not held by member
banks ahall be voted by Claas c direc?
tors ouly.
RESERVE BANK BRANCHES.
Rsgljnsl lostitutiona Eivowerad to
Eatabhth Sub Banke.
Hi federal reserve hank shall com
meme hu*lne*s with h subscribed cap
Ital less In amount than tTtrfnt.OOO.
Sec. 3. Kacli federal reserve bauk
I
B. L. OWEf.
Eight to Twelve
Reserve Banks
to Be Establish?
ed In Various
Parts of the
Land ? Enacts
Money Reforms,
Particularly
With Regard to
farmers.
n1u.11 extabllsh branch banks within
tbe federal reserre district In which
It Is located and may do so in the dis?
trict of any federal reserre bank
which may have been suspended.
Such branches sball be operated by a
board of directors under the rules and
regulations approved by the federal
reserve board. Directors of branch
banks shall possess the same qualtfl
cations as directors of the federal re?
serre bauks. Four of said directors
?hall be selected by the reserve bank
&n? three by the federal reserve board,
and they shall hold office during the
pleasure, respectively, of the parent
bank and tbe federal reserve board
Tbe reserve bank shall designate one
of the directors as manager. #
Bee. 4. ? ? ? Upon the filing of ? ? ?
certifieste with the comptroller of the
currency ? ? ? the said federal re?
serre bank shall become a body cor
poiate and aa such and in the name
designated In such organization csr
till ate shall have power
First?To adopt and use a corporate
seal.
Svond ?To have succession for s pe?
riod of twenty years from Its organisa?
tion unless ft la sooner dissolved by sn
set of congress or noises Its franchise
becomes forfeited by some violation of
law.
Third.?To make contracts
Fourth ?To aue and be sued, com
: \ 1 n and flVfend, in any court of lew
ur equity.
Klfth.? To trpolut br its' boa*! of
directors, elected as hereinafter pro
v d *l, such officer*, as are i I tier
wise provided for In tlih* set I i defli <
their duties, require bonds of them and
fix the penalty thereof, to dismiss such
officers or any of them as may be ap?
pointed by them at pleasure and to sp
point others to fill their places.
S, xtb.?To prescribe by its board of
directors bylaws not inconsistent wltb
luw regulating the manner In which its
general business may he conducted
and the privilege* granted to it by law
U'uy be exercised and enjoyed.
Seventh.- To exercise by Its board of
directors or duly authorized officers or
agents ull powers specifically granted
by the provisions of this net and such
Incidental powers as shall be necessary
to ;\rry ou tbe business of banking
wlt.iln tbe limitations prescribed by
this act.
E-.ghth.?I'pon deposit with the tress
urer of the United States of any bonds
of tbe United States In tbe manner
provided by existing law relating to
uatonul bunks to receive from the
comptroller of tbe currency circulating
notes lu blank, registered and counter
signed as provided ty law. equal In
amount to the par value of tbe bonds
so de|Misited. such notes to be Issued
under the same conditions and provl
aloris of law which relate to the Issue
of circulating notes of notional banks
secured by bonds of the halted States
bearing the circulating privilege, ei
cept that the Issue of such notes shall
not be limited to the amount of the
capital Htock of such federal reserve
ba nk.
Hut no federal reserve bank shall
transact any business except such as
Is Incidental and netessti rily prellml
nary to Its organization until It bas
been authorized by tbe comptroller of
the currency to commence business un?
der Uie provisions of this act
CLASSES OF DIRECTORS.
Board of Nine to Control lisch Reserve
Bank.
livery federal reserve bmk shall be
conducted under the supervision snd
control of a l>oard of directors.
Such board of directors shall be se
leeted M hereinafter specified and shall
consist of nine tn'tubers. holding office
for three years and divided Into three
classes, designated as Classes A, B
and C.
Class A shall consist of three mem?
bers, who shall be chosen by nnd be
representative of the stock holding
banks
Class R shall consist of three mem?
bers, who ut the time of their election
shall be actively eugaged in their dis?
trict in commerce. In agriculture or In
some other industrial pursuit
Class C skull consist of three mem
hers, who abull be designated by the
federal reserve board. Wbeu the nec?
essary subscriptions to the capital
stock have been obtslued for tho or?
ganization for auy federal reserve
bank tie federal reserve board shall
appoint the Class C directors nnd shall
designate one of stich directors ns
ein?Irman of the nonrd to be selected.
Pending the designation of such cluilr
Uiuu 11,0 organisation committee shall
exorcise the powers and (intics epper
t tuning to tbe office of chairman m tbe
organization of auch federal reserve
bank.
No senator or representative It. con?
gress shall be a member of federal re?
serve board or an officer or a director
of a federal reserve bank.
No director of Class B shall bo an 1
officer, director or employee oi any
bauk. I
No director of Class 0 shall be ao 1
officer, director, employee or stock?
holder of any bank.
Class C directors shall be appointed
by the federal reserve bou. * Tb
ahall have been fur at least two years
residents of the district for wbicb
they are appointed, one of whom
shall be designated by said board as
chairman of the board of directors of
the federal reserve bank and as "fed?
eral reserve agent" He shall be ft
person of tested banking exper' nee,
and in addition to his duties aaii
man of the board of dlrectv ;
federal reserve bank he sba
quired to maintain under reg. Mors
to be established by the federal i ?
board a local office of said boai
the premises of the federal reev^ed
bank.
Sec. & The capital stock of each fet
eral reserve bank shall be divided Into
shares of $100 each.
Diviaion of Earnings.
Sec. 7. After all necessary expenses
of a federal reserve bank have been
paid or provided for, the stockhold?
ers ahall be entitled to receive an
annual dividend of 0 per centum on
tbe paid In capital atock. which divi?
dend ahull be cumulative. After the
aforesaid divtdeud claims have V^n
fully met all net earnings ahall be paid
to the United States aa a franchise
tax. except that one-half of such net
earnings shall be paid into a surplus
fund until It ahall amount to 40 per
centum of the paid in capital etcsk of
auch bank.
The net earnings derived by the Unit?
ed States from federal reserve banka
shall, in the discretion of the secretary,
be used to supplement tbe gold reserve
held against outstanding United States
notes, or shall be applied to tbe re?
duction of the outstanding bonded in
debtednesa of tbe United States. Re i
serve banka shall not be taxed except
upon real estate.
Section 8 amends the existing bank
Ing laws, ao that stockholders owning
51 per cent of tbe stock of banks other
than national banks can convert their
organisations Into national banka.
Section 9 describes how state banks
may become members of reserve banka
FPOERAL RESERVE BOARD. I
i.- I !
5Uv?o toam?er? Fiv? Whc.n Ar? u? <
G"t $12 000 ? Year Each.
I" 10 - fedora,! reserve based *p!
hereby crct * . which shall cou*ist of
seven members. Including the secre- |
tury of tbe treasury and tlie eomptrol- j
let of the currency? who shall be mem
ben ex officio, und live members ap
pointed by the president of the Unit
cd States, by and with the advice and
consent of tbe setiate In selecting the
live appointive members of the federal
reserve board not more than one of
whom shall be selected from any one
federal reserve district the. president
shall have due regard to a fair repre?
sentation of the dltYereut geographical
divisions of the country The five mem?
bers of the federal reserve board ap
poluted by tbe president and confirmed
as aforesaid shall devote their entire j
time to tbe business of tbe federal re- 1
serve board and sbull each receive an
annual salary of $12.000. together with
actual necessary traveling expenses,
and the comptroller of tbe currency,
us ex officio mein her of the federal re?
serve board, shall in addition to the
salary now paid him as comptroller of
the currency receive the sum of $7.000
annually for his services us a member
of said board The members of said
board, the secretary of tbe treasury,
the assistant secretary of the treasury
and the comptroller of the currency
shatl be ineligible during the time they
are in office and for two years thereaft
er to hold any office, position or em?
ployment lu any member bank. Of
the five members thus appointed by
the president at least two shall be
persons experienced in banking or
finance. One ahall be designated by
tbe president to nerve for two. one for
four, one for six. one for eight one
for ten. and thereafter each member
ao appointed sbull serve for a term of
ten years unless sooner to moved for
cause by the president Of the five
persons thus uppoluted one shall be
designated by the president aa gov
ernor and one as vice governor of the
federal reserve board. Tbe governor
of the federal reserve board, subject to
its supervision, shall be tbe acting ex?
ecutive officer
The federal reserve board ahall have
power to levy semiannual y upon the
federal reserve banks In proportion to
their capital stock and surplus an as?
sessment sufficient to pay its estimated
expenses and salaries of its members
and employees for tbe half year suc?
ceeding tbe levying of such assessment
together with any deficit carried for
wurd from the preceding half year.
The first meeting of the federal re?
serve board shall be held iu Washing?
ton, District of Columbia, as soou as
may be after the passage oif this act at
a date to be fixed by the reserve bank
organization committee T'.iosecretary
of the treasury shall be ex officio chair?
man of tbe federal reserve board. No
member of the federal reiierve board
ahall be an officer or dirts tor of any
bank, hanking Institution, truat com
pany or federal reserve bank nor hold
dock hi ins bunk, banking Institution
.?I trust compnny, and before entering
i a h dm lea na a member of the
federal ic> rve board be shall certify
nhder oath tu the secretJtry of the
Ueeeurj that be baa complied with
this requirement. Whenever a vacan?
cy shall occur other than by expiration
of term among the six members of tbe
federal reserve board appointed by the
president, as above provided, a succes?
sor shall be appointed by the president,
with the advice and consent of the
senate, to fill such vacancy.
The president shall have power to
fill all vacancies that may happen on
the federal reserve board during tbe
recess of tbe senate by granting com?
missions which shall expire thirty days
after the next session of tbe senate
onvenes.
RESERVE BOARD POWERS.
Has Controlling Hand on Banking of
tha Nation.
Sec. 11. The federal reserve board
shall be authorized and empowered:
(a) To examine at its discretion the
accounts, books and affairs of each
?ederal reserve bank and of each mem
>r bank and to require such state*
u ? nts and reports as it r^j ^eem
ssar.7. The said board shall pub
uce each week a statement show
M+, % condition of each federal re
ink nnd a consolidated state
i? all federal reserve banks,
??ments sball show in detail
n*e asfets : nd liabilities of the federal
mkm, single and combined,
iish full Information re
g. praeter of the money
he.^ and the amount, na
tu re 'es of the paper and
other owned or held by
federu. oanks.
(h) Tc . v-rmit or on the affirmative
vote of at least five members of the
reserve board to require federal re?
serve banks to rediscount tbe discount?
ed paper of other federal reserve
banks at rates of Interest to be fixed
by the federal reserve board.
(c) To suspend for a period not ex?
ceeding thirty day8, and from time to
time to renew auch suspension for pe
rlods not exceeding fifteen days, any
reserve requirement sptcifled In this
act: Provided, that It shall establish a
graduated tax upon the amounts by
which the reserve requirements of this
act may be permitted to fall below
the level hereinafter specified; and
provided, further, that when the gold
reserve held against federal reserve
notes falls below 40 per centum, the
federal reserve board shall establish a
graduated tax of not more than 1 per
centum upon such deficiency until the
reserves fall to 32V? per centum, and
when aaid reserve falls below 32^
per centum, a tax at the rate increas?
ingly of not less than lx,i per centum
upon each 2% per centum or fraction
thereof that such reserve falls below
82% per centum. The tax sball be paid
by the reserve bank, but the reserve
ben-: shall nfld an amount equal \o
sa^l t?* b> the rats* of interest and i
Uscotuit fixed by the federal reserve I
btmrJ.
(4j To snperi He and regulate tarou go
tine bureau ander the* charge of the
comptroller of the currency the Issue
and retirement of federal reserve
notes, and to prescribe rules and regu?
lations under which such notes may
be delivered by the comptroller to the
federal reserve agents applying there
for.
' (e) To add to the number of cities
classified as reserve and central re?
serve cities under existing law tn
which national banking associations
are subject to tbe reserve require?
ments set forth In section 20 of this
act, or to reclassify existing reserve
and central reserve cities or to terml
uate their designation as such.
(f) To suspend or remove any officer
or director of any federal reserve |
bank, the cause of such removal to be
forthwith communicated in writing by
the federal reserve board to the re
moved officer or director and to said
bank.
(g) To require tbe writing off of j
doubtful or worthless assets upon the
books and balance sheets of federal
reserve banks.
(h) To suspend, for the violation of
any of the provisions of this act, the
operations of any federal reserve
bank, to take possession thereof, ad
minister the same during the period of
suspension and when deemed advisa?
ble to liquidate or reorganize such
bank.
(i) To require bonds of federal re?
serve agents, to make regulations for
the safeguarding of all collateral,
bonds, federal reserve notes, money or
property of any kind deposited in the
hands of such agents, and said board
shall perform the duties, functions or
services specified in this act and to
make all rules and regulations neces?
sary to enable said board effectively
to perform the same
(J) To exercise general supervision
over said federal reserve banks.
(k) To grunt by special permit to na?
tional banks applying therefor, when
not in contravention of state or local
law, the right to act as trustee, ex
ecutor, administrator or registrar of
stocks and bonds under such rules and
regulations as the said board may pre?
scribe.
(1) To employ such attorneys, ex?
perts, assistants, clerks or other em?
ployees us may be deemed necessary
I to properly conduct the business of
the board. All salaries and fees shall
be fixed in advance by said board and
shall be paid in the same manner as
the salaries of tbe members of said
board. All such attorneys, experts,
assistants, clerks und other employees
shall be appointed without regard to
the provisions of the act of Jan. 1<>,
1883 (volume 22. United States stat?
utes at large, page 403), and amend?
ments thereto or any rule or regulation
made In pursuance thereof.
Section 12 creates a federal advisory
council, consisting of one member
from each federal reserve district,
which Is empowered to confer with
the federal reserve board and make
representations regarding the business
of the board.
RESERVE BANK POWERS
Principal Functions of the Now Re?
gional Institutions.
Sec. 13. Any federal reserve bank
may receive from any of Its member
banka and from the United States de?
posits of current funds in lawful mon?
ey, national bank notes, federal reserve
notes or checks and drafts upon mem?
ber banks, payable upon presentation
or solely for exchange purposes may
receive from other federal reserve
banks deposits of current funds in
lawful money, national bank notes or
checks and drafts upon solvent mem
ber or other federal reserve banka
payable upon presentation.
Upon the indorsement of any of its
member banks, with a waiver of de?
mand notice and protest by such bank,
any federal reserve bank may dis?
count notes, drafts and bills of ex?
change arising out of actual commer?
cial transactions?that Is. notes, drafts
and bills of exchange issued or drawn
for agricultural, industrial or commer?
cial purposes or the proceeds of which
have been used or are to be used for
such purposes, the fedaral reserve
board to have the right to determine
or define the character of the paper
thus eligible for discount within tbe
meaning of this act Nothing in this
act contained shall be construed to
prohibit such notes, drafts and bills of
exchange secured by staple agricul?
tural products or other goods, warea
or merchandise from being eligible for
such discount but such definition shall
not include notes, drafts or bills cov
| erlng merely investments or Issued or
drawn for the purpose of carrying or
trading in stocks, bonds or other in?
vestment securities except bonds and
notea of the government of the United
States. Notes, drafts and bills admit
ted to discount under the terms of this
paragraph tnuat have a maturity at
the time of discount of not more than
ninety days, provided that notes,
drafts and billa drawn or Issued for
agricultural purposes or based on live
stock and having a maturity not ex?
ceeding six months may be discounted
In an amount to be limited to a per?
centage of the capital of the federal
reserve bank, to be ascertained and
fixed by the federal reserve board. j
Discounting Acoeptancea.
Any federal reserve bank may dis?
count acceptances which are based on
tbe importation or exportation or do
meatic shipment of goods and which
have a maturity at time of discount of
not more than three mouths and In
dorsed by at least one member bank.
The amount of acceptances so dis?
counted shall at no time exceed one
half the paid up capital atock and sur?
plus of die bank for "which tbe re?
discount* ftre made.
T ;r. ;re?e of sucn aouw .
bill* bearing the signature or ttidorR* !
? e.ut of any one person, company or;
i arm ei corporation *eun*coumeo tor
any one bank shall at no time exceed
10 per centum of the unimpaired capi?
tal and surplus of said bank, but this
restriction shall not apply to the dis?
count of billa of exchange drawn in
! good faith against actually existing
values.
Any member bank may accept drafts
or bills of exchange drawn upon It
and growing out of transactions in
I volvlng the Importation or exportation
I of goods having not more than six
' months sight to run, but no bank shall
accept such bills to an amount equal
at any time in tbe aggregate to more
than one-half of ita paid up capital
stock and surplus.
Open Market Operations.
Sec. 14. Any federal reserve bank
may, under aies and regulations pre?
scribed by tbe federal reserve board,
purchase and sell in the open market
at home or abroad, either from or to
! domestic or foreign banks. Arms, cor?
porations or individuals, cable trans
| fers and bankers' acceptances and
bills of exchange of the kinds snd ma?
turities by this act made eligible for
rediscount with or without the indorse?
ment of a member bank.
Every federal reserve bank ahall
have power:
(a) To deal In gold coin and bullion
at home or abroad, to make loans
thereon, exchange federal reserve
notes for gold, gold coin or gold cer?
tificates and to contract for loans of
gold coin or bullion, giving therefor,
when necessary, acceptable security,
including the hypothecation of United
States bonds or other securities which
federal reserve banka are authorized
to bold;
tb) To buy and sell at homo or abroad
bonds and notes of tbe United States
and bills, notes, revenue bouds and
warrants with a maturity from date
of purchasing of not exceeding six
months, issued In anticipation of the
collection of taxes or in anticipation of
the receipt of assured revenues by any
state, county, district political subdi?
vision or municipality In the conti?
nental United States, including irriga?
tion, drainage and reclamation dis?
tricts, such purchases to be made in
accordance with rules and regulations
prescribed by the federal reserve
board;
(O To purchase from member banks
and to sell, with or without Its In?
dorsement, bills of exchange arising
out of commercial transactions aa
hereinbefore defined;
(dl To establish from time to time.
?Object to review and determination
of the federal reserve board, rates of
discount to be charged by the federal
reserve bank for each c]n%* of paper,
which shall be fixed with a view of ac?
commodating commerce and business:
tel To establish accounts with other
federal reserve banks for exchange
purposes and, with the consent of the
federal reserve board, to open and
maintain banking accounts In foreign
countries, appoint correspondents and
establish agencies lu sudi countries
i wheresoever It my deem best for the
j purpose of purchasing, selling end col?
lecting bills of exchange, and to buy
and sell with or without Its Indorse*
j nieut through such correspondents or
I agencies, bills of exchange arising ont
of actual commercial transactions
which bare not more than ninety days
to run and which bear tbe signature
of two or more responsible parties.
Section 15 provides that inoneys held
in the general fund of the United
States treasury, except tbe 5 per cen?
tum fund for the redemption of out?
standing national bank notes and the
funds provided in the set for the re?
demption of federal reserve notes,
may be deposited in federal reserve
banks which shall act as fiscal agents
and that tbe funds of the Philippine
Islands, the postal savings and any
other government funds most be de?
posited in federal reserve, banks.
Section 16 provides for the Issuance
of federal reserve notes to federal re?
serve banks, redeemable in gold on de?
mand at the treasury department or
In gold or lawful money at r?ny fed?
eral reserve bank. The collateral se?
curity shall he notes and bills accept?
ed for rediscount under section 18.
Federal reserve banks shall have a
gold reserve of 40 per cent of their
federal reserve notes and shall malm*
tain In tbe United States treasury In
gold a reserve of not less than 5 per
cent of the federal reserve notes for
their redemption.
Section 17 repeals laws requiring na?
tional banks to deposit government
bonds with the United States treasurer.
Section 18 provides a plan for retir?
ing the 2 per cent bonds on which the
present currency is based. Under tbe
plan $25,000,000 worth of these bonds
will be purchased each year, beginning
two years after the system Is placed la
operation, by the new regional banks
from member banks On one naif of
its holdings each regional bank may Ve?
nue currency. Tbe remainder will be
refunded hi 3 per cent thirty year
bonds or 3 per cent one year treasury
notes, which the banks must agree te
renew each year for thirty years.
Section 10 describes bow member
banks shall establish and maintain re?
serves.
Section 21 provides for the examina?
tion of each member bank by the
comptroller of the currency at least
twice s year, for a special examination
of member banks when desired by
federal reserve banks and for a spe?
cial examination of soy federal re?
serve bank upon the application ef
ten member banks.
PENALTY F0R_DISH0NESTY.
T?*??ro mo With Bans Exam an are Made
Criminal O*?ons?.
Sec. 2 No msaioer oana or a**y
officer, director or employes thereof
shall 11 arseftor make ac^y lean or
grant any gratuity to any bank ex?
aminer. Any bank officer, dlrectee
or employee violating this provision
shall be deemed guilty of a misde?
meanor and shall be Imprisoned net
exceeding one year or fined not more
than $5,000. or both, may be fined a for*
ther sum equal to tbe money so loan?
ed or gratuity given. Any examiner
accepting a loan or gratuity from any
bank examined by blm or from an
officer, director or employee thereof
shall be deemed guilty of a misde?
meanor and shall be tmprbtoaed net
exceeding oue year or fined not more
than $5.ooo. or both.
Section 23 provide* that national
bank stockholders shall be reaponslble
for all contracts, debts and engage?
ments of their banks to the amount of
their stock at par value In addition to
tbe amount invested In auch stock.
If they transfer their stock within
sixty days before tbe failure of their
banks they shall be liable to the same
extent in ease the transferee falls to
meet such liability.
Loan* on Farm Lands,
Sec. 24. Any national banking as?
sociation not situated in s central
reserve city may make loana secur?
ed by Improved and unencumbered
farm land situated within its fed?
eral reserve district, but no auch loan
shall be made for a longer time than
five years nor for an amount exceeding
50 per centum of the actual value of
the property offered sa se<^-lty Any
such betttk may make such loans lo an
aggregate sum equal to 25 per centum
of IbR capital and surplus or to one*
third of its time deposits, snd such
hanks may continue hereafter, as here?
tofore, to receive time deposits snd
pay Interest on the sama ,.
The federal reserve board shall bare
power from time to time to add to the
list of cities In which national banks
shall uot be permitted to make loans
secured upon real estate in the man?
ner described In this section.
Section 25 authorises nations 1 bank?
ing associations possessing a capital
aud surplus of ItjuUMJOO or more to es?
tablish foreign branches under the di?
rection of the federal reserve board.
Section 28 ?ether!ess tbe secretary
of the treasury to strengthen the gold
reserve by borrowing gold on United
States bonds or by selling them.
Section 27 extends from June 80,
1014. uutll .lune 30. 1915, tbe life of en
act authorizing national currency as?
sociations, the Issuance of additional
national bank circulation and the cre?
ation of a national monetary commie
slot) It re-enacts certain United
states banking statutes amended by
an act of May 30. 1908. aubject to such
amendments or modifications as SPS
contained In the new currency lsw. It
amends the May 30. 19ts\, set In re?
gard to the taxation of clrcuistlng
notes held by national banking asso?
ciations and secured otherwise than
by United States bonds.
Section 28 provides that If sny part
of the act is declared luv slid by a
court the hi dement shall not affect the
remainder of the act