liabilities, and restrictions imposed by this Title, notwithstanding all the steps prescribed by this Title for the organization of associations were not pursued, if such associations were duly organized under that act. Act June 3, 1864, c. 106, § 62, 13 Stat. 118. Sec. CHAPTER TWO Obtaining and Issuing Circulating Notes bonds. 9705. Annual examination of bonds by associations. 9706. Custody of bonds, collection of interest, etc. 9707. Withdrawal of circulating notes 9708. Amount of bonds required to be 9710. Comptroller to determine if asso- Sec. 9712. Publication of certificate. 9716. Distinctive paper for printing 9717. Plates and dies to be under control of Comptroller. 9718. Annual examination of plates, dies, etc. 9719. Limit to issue of notes under five 9720. Aggregate amount of circulating 9726. Their lawful money reserve, and 9727. Conversion of national gold banks into currency banks. 9728. Penalty for issuing circulating notes to unauthorized associations. § 9697. (R. S. § 5157.) What associations are governed by chapters 2, 3, and 4. The provisions of chapters two, three, and four of this Title, which are expressed without restrictive words, as applying to "national banking associations," or to "associations," apply to all associations organized to carry on the business of banking under any act of Congress. The Federal Reserve Act Dec. 23, 1913, c. 6, post, §§ 9785-9805, created a new system for the government and regulation of all national banks, and such of the state banks and trust companies as, possessing the necessary qualifications, should signify their acceptance of the act. Notes of Decisions Circulating notes.-The provisions of the national currency act of June 3, 1864 (chapter 106), and the amendatory act of March 3, 1865 (chapter 78) authorize the creation of banking associations without the right to obtain, issue, and circulate notes. (1865) 11 Op. Atty. Gen. 334. The German-American Savings Bank of Washington, D. C., incorporated under a law of Congress relating to the District of Columbia, and having a capital of $126,000, is entitled to receive circulating notes. (1877) 15 Op. Atty. Gen. 606. § 9698. (R. S. § 5158.) Registered bonds intended by the term "United States bonds." The term "United States bonds," as used throughout this chapter, shall be construed to mean registered bonds of the United States. Act June 3, 1864, c. 106, § 4, 13 Stat. 100. (R. S. § 5159. Repealed.) This section was as follows: "Every association, after having complied with the provisions of this Title, preliminary to the commencement of the banking business, and before it shall be authorized to commence banking business under this Title, 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 and not less than one-third of the capital stock paid in. Such bonds shall be received by the Treasurer upon deposit, and shall be by him safely kept in his office, until they shall be otherwise disposed of, in pursuance of the provisions of this Title." It was repealed by the Federal Reserve Act of Dec. 23, 1913, c. 6, § 17, 38 Stat. 268, which provided that "so much of the provisions of section fiftyone hundred and fifty-nine of the Revised Statutes of the United States * * * as require that before any national banking associations shall be authorized to commence banking business it shall transfer and deliver to the Treasurer of the United States a stated amount of United States registered bonds is hereby repealed." The further provisions of the section not included in said description of the provisions repealed, as they related only to the custody and disposition of the bonds required to be deposited by the repealed provisions, became temporary merely upon such repeal. Banks having a capital of $150,000, or less, were not to be required to keep on deposit bonds in excess of one-fourth of the capital stock as security for their circulating notes, by the Currency Act of July 12, 1882, c. 290, § 8, post, § 9708. So much of said Act July 12, 1882, c. 290, § 8, as required that before any national banking association should be authorized to commence banking business it should transfer and deliver to the Treasurer of the United States a stated amount of United States registered bonds was repealed by the Federal Reserve Act of Dec. 23, 1913, c. 6, § 17, 38 Stat. 268. Other provisions for the issue of circulating notes to members of national currency associations to be used in emergencies were made by the Aldrich-V reeland Act of May 30, 1908, c. 229, 35 Stat. 546. Such notes were authorized to be issued on any securities, including commercial paper, on approv al thereof by the Secretary of the Treasury. Said act also provided for the issue of additional circulating notes to national banking associations on the security of bonds, other than United States bonds, by sections 3 and 4 thereof, 35 Stat. 548. See notes to Chapter Two A of this Title. In bonds to defray and reimburse expenditures on account of the Panama Canal, issued under the Payne-Aldrich Tariff Act of Aug. 5, 1909, c. 6, § 39, ante, § 6828, the Secretary of the Treasury was authorized to insert a provision that such bonds should not be receivable as security for the issue of circulat ing notes to national banks, and bonds containing such provision were not to be receivable for that purpose, by Act March 2, 1911, c. 195, ante, § 6829. § 9699. (R. S. § 5160.) Increase or reduction of deposit to cor respond with capital. The deposit of bonds made by each association shall be 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. And any association that may desire to reduce its capital or to close up its business and dissolve its organization, may take up its bonds upon returning to the Comptroller its circulating notes in the proportion hereinafter required, or may take up any excess of bonds beyond one-third of its capital stock, and upon no circulating notes have been delivered. which Act June 3, 1864, c. 106, § 16, 13 Stat. 104. All provisions of existing statutes, requiring that before any national banking association should be authorized to commence banking business it should trans fer and deliver to the Treasurer of the United States a stated amount of Unit ed States registered bonds, were repealed by the Federal Reserve Act of Dec. 23, 1913, c. 6, § 17, 38 Stat. 268. Notes of Decisions Retention of bonds.-The Treasurer of the United States cannot retain, as security for a claim due the United States, the bonds deposited with him signee as trustee in bankruptcy, the assignment being the act of bankruptcy relied on by the petitioning creditors, and the assignee having an unsettled account and a claim for compensation for his services. In re Kellar (C. C. A. 1912) 192 Fed. 830. A common-law assignee may be appointed as temporary receiver of the estate in bankruptcy, and if he turns over to himself, as such receiver, the funds in his hands as assignee, without retaining any sum therefrom as compensation for his past services, he submits both the fund and himself to the jurisdiction of the court of bankruptcy with respect to his right to an allowance for such services. In re Klein (D. C. 1902) 116 Fed. 523, 8 Am. Bankr. Rep. 559. 95. Credits and allowances to assignee. When an assignee for the benefit of creditors is required to surrender the estate committed to him by the assignment, at the instance of a trustee in bankruptcy subsequently appointed, and in order that the property may be administered in bankruptcy, he is entitled to an allowance for the actual and necessary expenses incurred by him in collecting, caring for, and preserving the property from the time he took charge of it as assignee up to the date of the adjudication in bankruptcy. In re Mays (D. C. 1902) 114 Fed. 600, 7 Am. Bankr. Rep. 764; In re Tatum (D. C. 1901) 112 Fed. 50, 7 Am. Bankr. Rep. 52; Burkholder v. Stump (D. C. 1871) 4 N. B. R. 597, Fed. Cas. No. 2,165; Wehl v. Wald (C. C. 1881) 6 Fed. 163; In re Pauly, 1 Nat. Bankr. News, 405. Compare In re Stubbs (D. C. 1870) 4 N. B. R. 376, Fed. Cas. No. 13,557. Thus, where the assignee, during the time the property remained in his care, and before the adjudication in bankruptcy, collected bills due to the bankrupt, continued insurance on the property, arranged for guarding the same, collected outstanding goods, conducted correspondence, made an inventory, and incurred a liability for rent, it was held that he had a lien on the assets for these necessary disbursements. In re Chase (1903) 124 Fed. 753, 59 C. C. A. 629, 10 Am. Bankr. Rep. 677. So he should be reimbursed for money paid for rent of the premises and for wages paid to clerks, workmen, and servants. Eichholz v. Polack (1910) 140 App. Div. 551, 125 N. Y. Supp. 1108. And for taxes paid on the property, the same being a valid lien which the trustee would have had to discharge if the assignee had not done So. In re Cohn (D. C. 1873) 6 N. B. R. 379, Fed. Cas. No. 2,966. And he may be allowed the costs and expenses of a sale of the property or a portion of it, if it appears that the sale was an advantageous one and beneficial to the estate. In re Scholtz (D. C. 1901) 106 Fed. 834, 5 Am. Bankr. Rep. 782; In re Cohn (D. C. 1873) 6 N. B. R. 379, Fed. Cas. No. 2,966; Clark v. Marx (D. C. 1872) Fed. Cas. No. 2,830; Jackson v. McCulloch (C. C. 1871) 13 N. B. R. 283, Fed. Cas. No. 7,140. Neither the assignee nor his attorney will be entitled to claim any compensation for services or expenses rendered or incurred in unsuccessfully attempting to resist the adjudication in bankruptcy or in the endeavor to maintain his own title and possession. Randolph v. Scruggs (1903) 190 U. S. 533, 23 Sup. Ct. 710, 47 L. Ed. 1165, 10 Am. Bankr. Rep. 1; In re Stewart (1910) 179 Fed. 222, 102 C. C. A. 348; Platt v. Archer (D. C. 1876) Fed. Cas. No. 11,214; Clark v. Marx (D. C. 1872) Fed. Cas. No. 2,830. The assignee cannot claim an allowance for any items which will result in subjecting the estate to double charges for the same thing. In re Kurth (D. C. 1878) 17 N. B. R. 573, Fed. Cas. No. 7,948. The assignee under a common-law assignment which is avoided by the adjudication of the debtor as a bankrupt, who was permitted by the creditors to continue in possession of the property and to operate the business, is not necessarily to be charged with a resulting loss, either before or after the filing of the petition in bankruptcy; but he is liable for a loss in carrying on the business, in the absence of a finding that it was good judgment to continue the business, or of a showing as to how much of the loss was incurred before the filing of the petition. In re Karp (D. C. 1915) 228 Fed. 798. 96. Compensation for services.The allowance to be made to an assignee for creditors, on surrendering the estate to the trustee in bankruptcy, must be restricted to money actually disbursed, and cannot include any commissions or compensation for his own services. In re Congdon (D. C. 1904) 129 Fed. 478, 11 Am. Bankr. Rep. 219; In re Mays (D. C. 1902) 114 Fed. 600, 7 Am. Bankr. Rep. 764; In re Tatum (D. C. 1901) 112 Fed. 50, 7 Am. Bankr. Rep. 52; Wilbur v. Watson (D. C. 1901) 111 Fed. 493, 7 Am. Bankr. Rep. 54; In re Peter Paul Book Co. (D. C. 1900) 104 Fed. 786, 5 Am. Bankr. Rep. 105: Stearns v. Flick (D. C. 1900) 103 Fed. 919, 4 Am. Bankr. Rep. 723; Hunker v. Bing (D. C. 1881) 9 Fed. 277; In re Cohn (D. C. 1873) 6 N. B. R. 379, Fed. Cas. No. 2,966; In re Stubbs (D. C. 1870) 4 N. B. R. 376, Fed. Cas. No. 13,557; In re Pauly, 1 Nat. Bankr. News, 405. If there was nothing inherently fraudulent or illegal in the assignment and the assignee was not a party to any actual fraud, he should not be deprived of compensation for his services rendered under the assignment, in so far as the same were beneficial to the estate, merely because of the fact that the assignment was an act of bankruptcy on which creditors could, if they chose, institute proceed § 9703. (R. S. § 5164.) Notice of transfer to be given to association interested. The Comptroller of the Currency shall, immediately upon countersigning and entering any transfer or assignment by the Treasurer, of any bonds belonging to a national banking association, advise by mail the association from whose accounts the transfer is made, of the kind and numerical designation of the bonds, and the amount thereof so transferred. Act June 3, 1864, c. 106, § 19, 13 Stat. 105. The provisions of this section were made applicable to bonds, other than United States bonds, deposited by national banks for the issue of the additional circulating notes authorized by the Aldrich-Vreeland (National Currency Associations) Act of May 30, 1908, c. 229, § 3, 35 Stat. 548, by section 4 of that act, 35 Stat. 549. See notes to Chapter Two A of this title. See notes to R. S. § 5160, ante, § 9699. § 9704. (R. S. § 5165.) Examination of registry and bonds. The Comptroller of the Currency shall have at all times, during office-hours, access to the books of the Treasurer of the United States for the purpose of ascertaining the correctness of any transfer or assignment of the bonds deposited by an association, presented to the Comptroller to countersign; and the Treasurer shall have the like. access to the book mentioned in section fifty-one hundred and sixtythree, 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. Act June 3, 1864, c. 106, § 20, 13 Stat. 105. The provisions of this section were made applicable to bonds, other than United States bonds, deposited by National banks for the issue of the additional circulating notes authorized by the Aldrich-Vreeland (National Currency Associations) Act of May 30, 1908, c. 229, § 3, 35 Stat. 548, by section 4 of that act, 35 Stat. 549. See notes to Chapter Two A of this Title. See notes to R. S. § 5160, ante, § 9699. § 9705. (R. S. § 5166.) Annual examination of bonds by associa tions. Every association having bonds deposited in the office of the Treas urer of the United States shall, once or oftener in each fiscal year, examine and compare the bonds pledged by the association with the books of the Comptroller of the Currency and with the accounts of the association, and, if they are found correct, to execute to the Treasurer a certificate setting forth the different kinds and the amounts thereof, and that the same are in the possession and custody of the Treasurer at the date of the certificate. Such examination shall be made at such time or times, during the ordinary business hours, as the Treasurer and the Comptroller, respectively, may select, and may be made by an officer or agent of such association, duly appointed in writing for that purpose; and his certificate before mentioned shall be of like force and validity as if executed by the president or cashier. A duplicate of such certificate, signed by the Treasurer, shall be retained by the association. Act June 3, 1864, c. 106, § 25, 13 Stat. 106. The provisions of this section were made applicable to bonds, other than Unit ed States bonds, deposited by national banks for the issue of the additional cir culating notes authorized by the Aldrich-Vreeland (National Currency Associa tions) Act of May 30, 1908, c. 229, § 3, 35 Stat. 548, by section 4 of that act, 35 Stat. 549. See notes to Chapter Two A of this Title. See notes to R. S. § 5160, ante, § 9699. § 9706. (R. S. § 5167.) Custody of bonds, collection of interest, etc. The bonds transferred to and deposited with the Treasurer of the United States, by any association, for the security of its circulating notes, shall be held exclusively for that purpose, until such notes are redeemed, except as provided in this Title. The Comptroller of the Currency shall give to any such association powers of attorney to receive and appropriate to its own use the interest on the bonds which it has so transferred to the Treasurer; but such powers shall become inoperative whenever such association fails to redeem its circulating notes. Whenever the market or cash value of any bonds thus deposited with the Treasurer is reduced below the amount of the circulation issued for the same, the Comptroller may demand and receive the amount of such depreciation in other United States bonds at cash value, or in money, from the association, to be deposited with the Treasurer as long as such depreciation continues. And the Comptroller, upon the terms prescribed by the Secretary of the Treasury, may permit an exchange to be made of any of the bonds deposited with the Treasurer by any association, for other bonds of the United States authorized to be received as security for circulating notes, if he is of opinion that such an exchange can be made without prejudice to the United States; and he may direct the return of any bonds to the association which transferred the same, in sums of not less than one thousand dollars, upon the surrender to him and the cancellation of a proportionate amount of such circulating notes: Provided, That the remaining bonds which shall have been transferred by the association offering to surrender circulating notes are equal to the amount required for the circulating notes not surrendered by such association, and that the amount of bonds in the hands of the Treasurer is not diminished below the amount required to be kept on deposit with him, and that there has been no failure by the association. to redeem its circulating notes, nor any other violation by it of the provisions of this Title, and that the market or cash value of the remaining bonds is not below the amount required for the circulation issued for the same. Act June 3, 1864, c. 106, § 26, 13 Stat. 107. This section was not modified or repealed by the Parity Act of March 14, 1900, c. 41, § 12, post, § 9713, by a proviso to that effect annexed to said section. Provisions authorizing the deposit of lawful money, the return of bonds deposited, and the withdrawal, in whole or in part, of the circulating notes were made by the Currency Act of June 20, 1874, c. 343, § 4, post, § 9707, and the Currency Act of July 12, 1882, c. 290, § 9, post, § 9709. The provisions of this section were made applicable to bonds, other than United States bonds, deposited by national banks for the issue of the additional circulating notes authorized by the Aldrich-Vreeland (National Currency Associations) Act of May 30, 1908, c. 229, § 3, 35 Stat. 548, by section 4 of that act, 35 Stat. 549. See notes to Chapter Two A of this Title. See notes to R. S. § 5160, ante, § 9699. Notes of Decisions Set-off against proceeds of bonds.See Cook County Nat. Bank v. U. S. (1883) 2 Sup. Ct. 561, 567, 107 U. S. 445, 27 L. Ed. 537. See, also, note under § 9701, ante. Postal and money order funds.Where postal and money order funds have been deposited by a deputy postmaster, without security, in a bank which subsequently becomes insolvent, a bill by the United States claiming a priority over other creditors, will be dismissed. Cook County Nat. Bank v. U. S. (1882) 2 Sup. Ct. 561, 107 U. S. 445, 27 L. Ed. 537. § 9707. (Act June 20, 1874, c. 343, § 4.) Withdrawal of circulating notes on deposit of lawful money and withdrawal of bonds. Any association organized under this act, or any of the acts of which this is an amendment, desiring to withdraw its circulating notes, in whole or in part, may, upon the deposit of lawful money with the Treasurer of the United States in sums of not less than nine thousand dollars, take up the bonds which said association has on deposit with the Treasurer for the security of such circulating notes; which bonds shall be assigned to the bank in the manner specified in the nineteenth section of the national-bank act; and the outstanding |