a member bank of fees, commissions, gifts, etc., for or in connection with any transaction or business of the bank, except as prescribed, prohibiting examiners from disclosing the names of borrowers or the collateral for loans of a member bank, except in certain cases, and prescribing the punishment for violations of its provisions, is set forth post, § 9833.

Section 23 of the act, relating to the individual liability of stockholders of national banks, is set forth ante, § 9689.

Section 24 of the act, relating to loans on farm lands by national banks, is set forth ante, § 9763.

Section 25 of the act, relating to the establishment of foreign branches by national banks, is set forth ante, § 9745.

Section 27 of said act extended the provisions of the Aldrich-Vreeland Act of May 30, 1908, c. 229, 35 Stat. 546, to June 30, 1915, and re-enacted R. S. §§ 5153, 5172, 5191, and 5214, ante, §§ 9691, 9714, 9746, 9779, to read as they read prior to their amendment by said Aldrich-Vreeland Act of May 30, 1908, c. 229, subject to such amendments or modifications as were prescribed by this act. It was amended by Act Aug. 4, 1914, c. 225, 38 Stat. 682. A proviso annexed to the section, amending a part of said Aldrich-Vreeland Act of May 30, 1908, c. 229, § 9, which section amended R. S. § 5214, is incorporated in said R. S. § 5214, as set forth ante, § 9779. See, also, notes to Chapter Two A of this Title.

Section 28 of the act amended R. S. § 5143, and is incorporated in that section as set forth ante, § 9681.

FEDERAL RESERVE DISTRICTS

§ 9786. (Act Dec. 23, 1913, c. 6, § 2.) (1) Federal reserve cities and Federal reserve districts; designation by Reserve Bank Organization Committee; readjustment.

As soon as practicable, the Secretary of the Treasury, the Secretary of Agriculture and the Comptroller of the Currency, acting as "The Reserve Bank Organization Committee," shall designate not less than eight nor more than twelve cities to be known as Federal reserve cities, and shall divide the continental United States, excluding Alaska, into districts, each district to contain only one of such Federal reserve cities. The determination of said organization committee shall not be subject to review except by the Federal Reserve Board when organized: Provided, That the districts shall be apportioned with due regard to the convenience and customary course of business and shall not necessarily be coterminous with any State or States. The districts thus created may be readjusted and new districts may from time to time be created by the Federal Reserve Board, not to exceed twelve in all. Such districts shall be known as Federal reserve districts and may be designated by number. A majority of the organization committee shall constitute a quorum with authority to act.

(2) Powers of Reserve Bank Organization Committee; Federal reserve banks; supervision of organization; titles of Federal reserve banks.

Said organization committee shall be authorized to employ counsel and expert aid, to take testimony, to send for persons and papers, to administer oaths, and to make such investigation as may be deemed necessary by the said committee in determining the reserve districts and in designating the cities within such districts where such Federal reserve banks shall be severally located. The said committee shall supervise the organization in each of the cities. designated of a Federal reserve bank, which shall include in its title the name of the city in which it is situated, as "Federal Reserve Bank of Chicago."

(3) Acceptance of act by banks; subscriptions to capital stock of Federal reserve banks; when and how payable.

Under regulations to be prescribed by the organization committee, every national banking association in the United States is hereby required, and every eligible bank in the United States and

every trust company within the District of Columbia, is hereby authorized to signify in writing, within sixty days after the passage of this Act, its acceptance of the terms and provisions hereof. When the organization committee shall have designated the cities. in which Federal reserve banks are to be organized, and fixed the geographical limits of the Federal reserve districts, every national banking association within that district shall be required within thirty days after notice from the organization committee, to subscribe to the capital stock of such Federal reserve bank in a sum equal to six per centum of the paid-up capital stock and surplus of such bank, one-sixth of the subscription to be payable on call of the organization committee or of the Federal Reserve Board, onesixth within three months and one-sixth within six months thereafter, and the remainder of the subscription, or any part thereof, shall be subject to call when deemed necessary by the Federal Reserve Board, said payments to be in gold or gold certificates. (4) Liability of shareholders of Federal reserve banks.

The shareholders of every Federal reserve bank shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts, and engagements of such bank to the extent of the amount of their subscriptions to such stock at the par value thereof in addition to the amount subscribed, whether such subscriptions have been paid up in whole or in part, under the provisions of this Act.

The liability of shareholders of national banking associations generally was prescribed by section 23 of this act, ante, § 9689, which section superseded R. S. § 5151.

(5) Banks failing to accept act to cease acting as reserve agents. Any national bank failing to signify its acceptance of the terms of this Act within the sixty days aforesaid, shall cease to act as a reserve agent, upon thirty days' notice, to be given within the discretion of the said organization committee or of the Federal Reserve Board.

(6) Banks failing to become member banks or to comply with provisions of act to forfeit rights, etc., under national bank act; determination of noncompliance with or violations of act; liability of directors of banks for noncompliance with or violations of act.

Should any national banking association in the United States now organized fail within one year after the passage of this Act to become a member bank or fail to comply with any of the provisions of this Act applicable thereto, all of the rights, privileges, and franchises of such association granted to it under the national-bank Act, or under the provisions of this Act, shall be thereby forfeited. Any noncompliance with or violation of this Act shall, however, be determined and adjudged by any court of the United States of competent jurisdiction in a suit brought for that purpose in the district or territory in which such bank is located, under direction of the Federal Reserve Board, by the Comptroller of the Currency in his own name before the association shall be declared dissolved. In cases of such noncompliance or violation, other than the failure to become a member bank under the provisions of this Act, every director who participated in or assented to the same shall be held liable in his personal or individual capacity for all damages which said bank, its shareholders, or any other person shall have sustained in consequence of such violation.

(7) Effect of dissolution of banks.

Such dissolution shall not take away or impair any remedy against such corporation, its stockholders or officers, for any liability or penalty which shall have been previously incurred.

(8) Public subscriptions to capital stock of Federal reserve banks. Should the subscriptions by banks to the stock of said Federal reserve banks or any one or more of them be, in the judgment of the organization committee, insufficient to provide the amount of capital required therefor, then and in that event the said organization committee may, under conditions and regulations to be prescribed by it, offer to public subscription at par such an amount of stock in said Federal reserve banks, or any one or more of them, as said committee shall determine, subject to the same conditions as to payment and stock liability as provided for member banks. (9) Limitation on amount of public subscriptions to capital stock of Federal reserve banks; designation and transfer of stock. No individual, copartnership, or corporation other than a member bank of its district shall be permitted to subscribe for or to hold at any time more than $25,000 par value of stock in any Federal reserve bank. Such stock shall be known as public stock and may be transferred on the books of the Federal reserve bank by the chairman of the board of directors of such bank.

(10) Allotment to United States of stock in Federal reserve banks. Should the total subscriptions by banks and the public to the stock of said Federal reserve banks, or any one or more of them, be, in the judgment of the organization committee, insufficient to provide the amount of capital required therefor, then and in that event the said organization committee shall allot to the United States such an amount of said stock as said committee shall determine. Said United States stock shall be paid for at par out of any money in the Treasury not otherwise appropriated, and shall be held by the Secretary of the Treasury and disposed of for the benefit of the United States in such manner, at such times, and at such price, not less than par, as the Secretary of the Treasury shall determine.

(11) Nonvoting stock.

Stock not held by member banks shall not be entitled to voting

power.

(12) Rules and regulations governing transfers of capital stock of Federal reserve banks.

The Federal Reserve Board is hereby empowered to adopt and promulgate rules and regulations governing the transfers of said stock.

(13) Required capital of Federal reserve banks; effect of act on present reserve cities and central reserve cities; powers and expenses of organization committee in carrying out the provisions of act; appropriation.

No Federal reserve bank shall commence business with a subscribed capital less than $4,000,000. The organization of reserve districts and Federal reserve cities shall not be construed as changing the present status of reserve cities and central reserve cities, except in so far as this Act changes the amount of reserves that may be carried with approved reserve agents located therein. The organization committee shall have power to appoint such assistants and incur such expenses in carrying out the provisions of this Act as it shall deem necessary, and such expenses shall be payable by the Treasurer of the United States upon voucher approved by the

Secretary of the Treasury, and the sum of $100,000, or so much. thereof as may be necessary, is hereby appropriated, out of any moneys in the Treasury not otherwise appropriated, for the payment of such expenses. (38 Stat. 251.)

The previous provisions relating to reserve cities and central reserve cities were contained in R. S. §§ 5191, 5192, Act June 20, 1874, c. 343, § 2, and Act March 3, 1887, c. 378, §§ 1, 2, ante, §§ 9746-9750.

BRANCH OFFICES

§ 9787. (Act Dec. 23, 1913, c. 6, § 3.) Federal reserve bank branch offices; directors and managers of branch banks.

Each Federal reserve bank shall establish branch banks within the Federal reserve district in which it is located and may do so in the district of any Federal reserve bank which may have been suspended. Such branches shall be operated by a board of directors under rules and regulations approved by the Federal Reserve Board. Directors of branch banks shall possess the same qualifications as directors of the Federal reserve banks. Four of said directors shall be selected by the reserve bank and three by the Federal Reserve Board, and they shall hold office during the pleasure, respectively, of the parent bank and the Federal Reserve Board. The reserve bank shall designate one of the directors as manager. (38 Stat. 253.)

FEDERAL RESERVE BANKS

§ 9788. (Act Dec. 23, 1913, c. 6, § 4.) (1) Certificate of establishment of Federal reserve districts; contents; application blanks for subscriptions to capital stock of Federal reserve banks.

When the organization committee shall have established Federal reserve districts as provided in section two of this Act, a certificate shall be filed with the Comptroller of the Currency showing the geographical limits of such districts and the Federal reserve city designated in each of such districts. The Comptroller of the Currency shall thereupon cause to be forwarded to each national bank located in each district, and to such other banks declared to be eligible by the organization committee which may apply therefor, an application blank in form to be approved by the organization committee, which blank shall contain a resolution to be adopted by the board of directors of each bank executing such application, authorizing a subscription to the capital stock of the Federal reserve bank organizing in that district in accordance with the provisions of this Act.

(2) Certificate of organization of Federal reserve bank; contents. When the minimum amount of capital stock prescribed by this Act for the organization of any Federal reserve bank shall have been subscribed and allotted, the organization committee shall designate any five banks of those whose applications have been received, to execute a certificate of organization, and thereupon the banks so designated shall, under their seals, make an organization certificate which shall specifically state the name of such Federal reserve bank, the territorial extent of the district over which the operations of such Federal reserve bank are to be carried on, the city and State in which said bank is to be located, the amount of capital stock and the number of shares into which the same is divided, the name and place of doing business of each bank executing such certificate, and of all banks which have subscribed to the capital stock of such Federal reserve bank and the number of shares subscribed by each, and the fact that the certificate is made to enable those banks executing same, and all banks which have subscribed or may thereafter subscribe to the capital stock of such

Federal reserve bank, to avail themselves of the advantages of this Act.

(3) Acknowledgment and transmission of certificate of organization to Comptroller of Currency; filing.

The said 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 file, record and carefully preserve the same in his office.

(4) Corporate capacity and powers of Federal reserve banks.

Upon the filing of such certificate with the Comptroller of the Currency as aforesaid, the said Federal reserve bank shall become a body corporate and as such, and in the name designated in such organization certificate, shall have power

First. To adopt and use a corporate seal.

Second. To have succession for a period of twenty years from its organization unless it is sooner dissolved by an Act of Congress, or unless its franchise becomes forfeited by some violation of law. Third. To make contracts.

Fourth. To sue and be sued, complain and defend, in any court of law or equity.

Fifth. To appoint by its board of directors, such officers and employees as are not otherwise provided for in this Act, to define their duties, require bonds of them and fix the penalty thereof, and to dismiss at pleasure such officers or employees.

Sixth. To prescribe by its board of directors by-laws not inconsistent with law, regulating the manner in which its general business may be conducted, and the privileges granted to it by law may be exercised and enjoyed.

Seventh. To exercise by its board of directors, or duly authorized officers or agents, all powers specifically granted by the provisions of this Act and such incidental powers as shall be necessary to carry on the business of banking within the limitations prescribed by this Act.

Eighth. Upon deposit with the Treasurer of the United States of any bonds of the United States in the manner provided by existing law relating to national banks, to receive from the Comptroller of the Currency circulating notes in blank, registered and countersigned as provided by law, equal in amount to the par value of the bonds so deposited, such notes to be issued under the same conditions and provisions of law as relate to the issue of circulating notes of national banks secured by bonds of the United States bearing the circulating privilege, except that the issue of such notes. shall not be limited to the capital stock of such Federal reserve bank.

But no Federal reserve bank 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 business under the provisions of this Act.

(5) Board of directors of Federal reserve banks; classification, qualifications and election; compensation and expenses; chairman of Federal reserve bank and "Federal reserve agent"; appointment, qualifications, compensation, and powers and duties; deputy chairman of Federal reserve bank and deputy Federal reserve agent; meetings of directors; term of office of directors; vacancies in office of directors.

Every Federal reserve bank shall be conducted under the supervision and control of a board of directors.