by such associations of additional circulating notes on deposit of securities, including commercial paper, and prescribed the liability of the banks belonging to such associations and their assets for the redemption of such additional circulating notes.

Section 2 of said act prescribed the procedure to be followed on the failure of any bank belonging to such associations to preserve or make good its fund for the redemption of the circulating notes issued under the provisions of section 1. Section 3 of said act provided for the issue by national banks, under certain conditions, of additional circulating notes on deposit of bonds other than United States bonds.

Section 4 of said act provided for the disposition, etc., of the bonds deposited under section 3.

Section 5 of said act prescribed the status of the additional circulating notes issued under the act, and limited the amount of such notes which might be issued.

Section 6 of said act provided for an additional redemption fund for additional circulating notes outstanding.

Section 7 of said act provided for the distribution of the additional circulating notes proportionate to the capital and surplus of national banks in each state, and provided for emergency assignments of such circulating notes not applied for from the amounts authorized.

Section 8 of said act required the Secretary of the Treasury to obtain information as to the securities acceptable under the act and to furnish such information to national banks.

Section 9 of said act amended R. S. § 5214, post, § 9779, but said section was re-enacted to read as it stood prior to said amendment, with an amendment of a portion thereof, by a provision of the Federal Reserve Act of Dec. 23, 1913, c. 6, § 27, 38 Stat. 274, as amended by Act Aug. 4, 1914, c. 225, 38 Stat. 682.

Section 10 of said act amended the Currency Act of July 12, 1882, c. 290, § 9, as previously amended by Act March 4, 1907, c. 2913, § 4, and is incorporated in said section as set forth ante, § 9709.

Section 11 of said act amended R. S. § 5172, and is incorporated in said section as set forth post, § 9714.

Section 12 of said act provided for the redemption by the Treasury of circulating notes of national banking associations in lawful money of the United States. It is set forth post, § 9752.

Section 13 of said act required all acts and orders of the Comptroller of the Currency and the Treasurer of the United States authorized by the act to be approved by the Secretary of the Treasury, and gave the Secretary power to make rules and regulations concerning, and exercise such control over, the organization and management of national currency associations as might be necessary to carry out the purposes of the act.

Section 14 of said act provided that the provisions of R. S. § 5191 (post, § 9746) should not apply to deposits of public moneys by the United States in designated depositaries. It is set forth ante, § 9692.

Section 15 of said act prescribed the rate of interest on special and additional deposits in national banks designated as depositaries. It is set forth ante, § 9693.

Section 16 of said act appropriated a sum sufficient to carry out the provisions of the preceding sections of the act, out of any money in the Treasury not otherwise appropriated, and was merely temporary in its legal effect. Section 17 of said act created a National Monetary Commission. Section 18 of said act prescribed the duties and powers of said Commission. Section 19 of said act made an appropriaton for the expenses of the Commission.

Section 20 of said act provided that the act should expire by limitation on June 30, 1914.

Act Dec. 23, 1913, c. 6, § 27, 38 Stat. 274, extended the limitation fixed by said section 20 for another year. Said section read as follows:

"The provisions of the Act of May thirtieth, nineteen hundred and eight, authorizing national currency associations, the issue of additional national-bank circulation, and creating a National Monetary Commission, which expires by limitation under the terms of such Act on the thirtieth day of June, nineteen hundred and fourteen, are hereby extended to June thirtieth, nineteen hundred and fifteen, and sections fifty-one hundred and fifty-three, fifty-one hundred and seventy-two, fifty-one hundred and ninety-one, and fifty-two hundred and fourteen of the Revised Statutes of the United States, which were amended by the Act of May thirtieth, nineteen hundred and eight, are hereby reenacted to read as such sections read prior to May thirtieth, nineteen hundred and eight, subject to such amendments or modifications as are prescribed in this Act: Provided, however, That section nine of the Act first referred to in this section is hereby amended so as to change the tax rates fixed in said Act by making the

portion applicable thereto read as follows: National banking associations having circulating notes secured otherwise than by bonds of the United States, shall pay for the first three months a tax at the rate of three per centum per annum upon the average amount of such of their notes in circulation as are based upon the deposit of such securities, and afterwards an additional tax rate of one-half of one per centum per annum for each month until a tax of six per centum per annum is reached, and thereafter such tax of six per centum per annum upon the average amount of such notes."

Said Act Dec. 23, 1913, c. 6, § 27, was amended by Act Aug. 4, 1914, c. 225, 88 Stat. 682, to read as follows:

"The provisions of the Act of May thirtieth, nineteen hundred and eight, authorizing national currency associations, the issue of additional national-bank circulation, and creating a National Monetary Commission, which expires by limitation under the terms of such Act on the thirtieth day of June, nineteen hundred and fourteen, are hereby extended to June thirtieth, nineteen hundred and fifteen, and sections fifty-one hundred and fifty-three, fifty-one hundred and seventy-two, fifty-one hundred and ninety-one, and fifty-two hundred and fourteen of the Revised Statutes of the United States, which were amended by the Act of May thirtieth, nineteen hundred and eight, are hereby reenacted to read as such sections read prior to May thirtieth, nineteen hundred and eight, subject to such amendments or modifications as are prescribed in this Act: Provided, however, That section nine of the Act first referred to in this section is hereby amended so as to change the tax rates fixed in said Act by making the portion applicable thereto read as follows:

"National banking associations having circulating notes secured otherwise than by bonds of the United States, shall pay for the first three months a tax at the rate of three per centum per annum upon the average amount of such of their notes in circulation as are based upon the deposit of such securities, and afterwards an additional tax rate of one-half of one per centum per annum for each month until a tax of six per centum per annum is reached, and thereafter such tax of six per centum per annum upon the average amount of such notes: Provided further, That whenever in his judgment he may deem it desirable, the Secretary of the Treasury shall have power to suspend the limitations imposed by section one and section three of the Act referred to in this section, which prescribe that such additional circulation secured otherwise than by bonds of the United States shall be issued only to National banks having circulating notes outstanding secured by the deposit of bonds of the United States to an amount not less than forty per centum of the capital stock of such banks, and to suspend also the conditions and limitations of section five of said Act except that no bank shall be permitted to issue circulating notes in excess of one hundred and twenty-five per centum of its unimpaired capital and surplus. He shall require each bank and currency association to maintain on deposit in the Treasury of the United States a sum in gold sufficient in his judgment for the redemption of such notes, but in no event less than five per centum. He may permit National banks, during the period for which such provisions are suspended, to issue additional circulation under the terms and conditions of the Act referred to as herein amended: Provided further, That the Secretary of the Treasury, in his discretion, is further authorized to extend the benefits of this Act to all qualified State banks and trust companies, which have joined the Federal reserve system, or which may contract to join within fifteen days after the passage of this Act."

The date last mentioned having passed without any further extension having been made, said Act May 30, 1908, c. 229, became inoperative, and is therefore omitted from this compilation, except sections 12, 14, and 15, which are set forth post, § 9752, and ante, §§ 9692, 9693, respectively.

Act Aug. 22, 1911, c. 36, § 4, 37 Stat. 30, provided that:

"No one receiving a salary or emoluments from the Government of the United States, in any capacity, shall receive any salary or emolument as a member or employé of said commission from the date of the passage of this Act: Provided, That voluntary assistance, without compensation, may be accepted by the commission from present employés or from others whose assistance may be desired by the commission."

Said section is also omitted from this compilation for the reasons stated above.

Said Act Dec. 23, 1913, c. 6, § 27, 38 Stat. 274, as amended by said Act Aug. 4, 1914, c. 225, 38 Stat. 682, is also omitted from this compilation for the reasons stated above.

The Federal Reserve Act of 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.

(11886)

§§ 9729-9743. (Omitted as obsolete.)

These sections, which were Act May 30, 1908, c. 229, §§ 1-8, 13, 17-20, 35 Stat. 546, Act Aug. 22, 1911, c. 36, § 4, 37 Stat. 30, and Act Dec. 23, 1913, c. 6, § 27, 38 Stat. 274, as amended by Act Aug. 4, 1914, c. 225, 38 Stat. 682, are omitted from this compilation as having expired by limitation. See notes at the beginning of this Chapter.

§ 9744. (R. S. § 5190.) Place of business.

The usual business of each national banking association shall be transacted at an office or banking-house located in the place specified in its organization certificate.

Act June 3, 1864, c. 106, § 8, 13 Stat. 101.

Provisions relating to change of place of business were made by Act May 1, 1886, c. 73, § 2, ante, § 9662.

Notes of Decisions

Place of transacting business.-A bank may purchase coin of another bank at the banking house of the latter. Merchants' Nat. Bank v. State Nat. Bank (1870) 10 Wall. 604, 651, 19 L. Ed. 1008.

The provision of this section as to the place at which the usual business of each national banking association shall be transacted refers to its usual business after obtaining the certificate from the comptroller, and to the place -that is, the city or town-in which, after it has been authorized by such certificate to commence business, its office or banking house is located. McCormick v. Market Nat. Bank (1897) 17 Sup. Ct. 433, 436, 165 U. S. 538, 41 L. Ed. 817.

There is no right to organize and. carry on the business of a national bank except on the conditions and in the manner prescribed by the acts of Congress regulating national banks, of which all must take notice. First Nat. Bank v. Murray (1914) 212 Fed. 140, 128 C. C. A. 652.

Under this section a national bank cannot make a valid contract for the cashing of checks upon it, at a different place from that of its residence, through the agency of another bank. Armstrong v. Second Nat. Bank (D. C. 1889) 38 Fed. 883.

This section, properly construed, restricts the carrying on of the general banking business by a national bank to one office or banking house in the place designated in the association's certifi

cate of organization. (1911) 29 Op. Atty. Gen. 81.

Banks created under the national banking act of the United States are not within St. § 571, providing that "all corporations, except foreign insurance companies, formed under the laws of this or any other state," shall at all times have a place of business in the state, and that no corporation shall carry on any business in the state, till it shall have filed a statement giving the location of its office and the name of its agent. First Nat. Bank v. Commonwealth (Ky. 1896) 33 S. W. 1105.

A national bank bookkeeper induced defendants to deposit funds in the bank, and from time to time received money outside the bank to be deposited for them, but so manipulated accounts as to enable him to appropriate the money to his own use; checks against the deposits being charged against other depositors. On discovery of the bookkeeper's defalcations, his surety paid the bank the shortage and took an assignment of the bank's claim against defendants, arising through the overdraft resulting from charging their checks against their account. Held that, in view of this section, as affecting defendants' liability to the surety, the bookkeeper must be deemed to have been defendants' agent, and not the bank's. Fidelity & Deposit Co. of Maryland v. Colby (Sup. 1911) 132 N. Y. Supp. 20.

Cited without definite application, Earling v. Emigh (1909) 30 Sup. Ct. 672, 674, 218 U. S. 27, 54 L. Ed. 915.

§ 9745. (Act Dec. 23, 1913, c. 6, § 25, as amended, Act Sept. 7, 1916, c. 461.) Foreign branches.

Any national banking association possessing a capital and surplus of $1,000,000 or more may file application with the Federal Reserve Board for permission to exercise, upon such conditions and under such regulations as may be prescribed by the said board, either or both of the following powers:

First. To establish branches in foreign countries or dependencies or insular possessions of the United States for the furtherance of the foreign commerce of the United States, and to act if required to do so as fiscal agents of the United States.

Second. To invest an amount not exceeding in the aggregate ten per centum of its paid-in capital stock and surplus in the stock of one or more banks or corporations chartered or incorporated under the laws of the United States or of any State thereof, and principally engaged in international or foreign banking, or banking in a dependency or insular possession of the United States either directly or through the agency, ownership, or control of local in

stitutions in foreign countries, or in such dependencies or insular possessions.

Such application shall specify the name and capital of the banking association filing it, the powers applied for, and the place or places where the banking operations proposed are to be carried on. The Federal Reserve Board shall have power to approve or to reject such application in whole or in part if for any reason the granting of such application is deemed inexpedient, and shall also have power from time to time to increase or decrease the number of places where such banking operations may be carried on.

Every national banking association operating foreign branches shall be required to furnish information concerning the condition of such branches to the Comptroller of the Currency upon demand, and every member bank investing in the capital stock of banks or corporations described under subparagraph two of the first paragraph of this section shall be required to furnish information concerning the condition of such banks or corporations to the Federal Reserve Board upon demand, and the Federal Reserve Board may order special examinations of the said branches, banks, or corporations at such time or times as it may deem best.

Before any national bank shall be permitted to purchase stock in any such corporation the said corporation shall enter into an agreement or undertaking with the Federal Reserve Board to restrict its operations or conduct its business in such manner or under such limitations and restrictions as the said board may prescribe for the place or places wherein such business is to be conducted. If at any time the Federal Reserve Board shall ascertain that the regulations prescribed by it are not being complied with, said board is hereby authorized and empowered to institute an investigation of the matter and to send for persons and papers, subpœna witnesses, and administer oaths in order to satisfy itself as to the actual nature of the transactions referred to. Should such investigation result in establishing the failure of the corporation. in question, or of the national bank or banks which may be stockholders therein, to comply with the regulations laid down by the said Federal Reserve Board, such national banks may be required to dispose of stock holdings in the said corporation upon reason

able notice.

Every such national banking association shall conduct the accounts of each foreign branch independently of the accounts of other foreign branches established by it and of its home office, and shall at the end of each fiscal period transfer to its general ledger the profit or loss accrued at each branch as a separate item.

Any director or other officer, agent, or employee of any member bank may, with the approval of the Federal Reserve Board, be a director or other officer, agent, or employee of any such bank or corporation above mentioned in the capital stock of which such member bank shall have invested as hereinbefore provided, without being subject to the provisions of section eight of the Act approved October fifteenth, nineteen hundred and fourteen, entitled "An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes." (38 Stat. 273. 39 Stat. 755.)

This section, as originally enacted, read as follows:

"Any national banking association possessing a capital and surplus of $1,000,000 or more may file application with the Federal Reserve Board, upon such conditions and under such regulations as may be prescribed by the said board, for the purpose of securing authority to establish branches in foreign countries or dependencies of the United States for the furtherance of the foreign commerce of the United States, and to act, if required to do so, as fiscal