In its vaults for a period of thirty-six months after said date five-twelfths thereof and permanently thereafter four-twelfths. In the Federal reserve bank of its district, for a period of twelve months after said date, two-twelfths, and for each succeeding six months an additional one-twelfth, until five-twelfths have been so deposited, which shall be the amount permanently required. For a period of thirty-six months after said date the balance of the reserves may be held in its own vaults, or in the Federal reserve bank, or in national banks in reserve or central reserve cities as now defined by law. After said thirty-six months' period said reserves, other than those hereinbefore required to be held in the vaults of the member bank and in the Federal reserve bank, shall be held in the vaults of the member bank or in the Federal reserve bank, or in both, at the option of the member bank. (b) A bank in a reserve city, as now or hereafter defined, shall hold and maintain reserves equal to fifteen per centum of the aggregate amount of its demand deposits and five per centum of its time deposits, as follows: In its vaults for a period of thirty-six months after said date, six-fifteenths thereof, and permanently thereafter five-fifteenths. In the Federal reserve bank of its district for a period of twelve months after the date aforesaid, at least three-fifteenths, and for each succeeding six months an additional one-fifteenth, until sixfifteenths have been so deposited, which shall be the amount permanently required. For a period of thirty-six months after said date the balance of the reserves may be held in its own vaults, or in the Federal reserve bank, or in national banks in central reserve cities, as now defined by law. After said thirty-six months' period all of said reserves, except those hereinbefore required to be held permanently in the vaults of the member bank and in the Federal reserve bank, shall be held in its vaults or in the Federal reserve bank or in both, at the option of the member bank. (c) A bank in a central reserve city, as now or hereafter defined, shall hold and maintain a reserve equal to eighteen per centum of the aggregate amount of its demand deposits and five per centum of its time deposits, as follows: In its vaults, six-eighteenths thereof. In the Federal reserve bank, seven-eighteenths. The balance of said reserves shall be held in its own vaults or in the Federal reserve bank, at its option. Any Federal reserve bank may receive from the member banks as reserves not exceeding one-half of each installment, eligible paper as described in section thirteen properly indorsed and acceptable to the said reserve bank. If a State bank or trust company is required or permitted by the law of its State to keep its reserves either in its own vaults or with another State bank or trust company or with a national bank, such reserve deposits so kept in such State bank, trust company, or national bank shall be construed within the meaning of this section as if they were reserve deposits in a national bank in a reserve or central reserve city for a period of three years after the Secretary of the Treasury shall have officially announced the establishment of a Federal reserve bank in the district in which such State bank or trust company is situate. Except as thus provided, no member bank shall keep on deposit with any nonmember bank a sum in excess of ten per centum of its own paid-up capital and surplus. No member bank shall act as the medium or agent of a nonmember bank in applying for or receiving discounts from a Federal reserve bank under the provisions of this Act except by permission of the Federal Reserve Board. The reserve carried by a member bank with a Federal reserve bank may, under the regulations and subject to such penalties as may be prescribed by the Federal Reserve Board, be checked against and withdrawn by such member bank for the purpose of meeting existing liabilities: Provided, however, That no bank shall at any time make new loans or shall pay any dividends unless and until the total reserve required by law is fully restored. In estimating the reserves required by this Act, the net balance of amounts due to and from other banks shall be taken as the basis for ascertaining the bank deposits against which reserves shall be determined. Balances in reserve banks due to member banks shall, to the extent herein provided, be counted as reserves. National banks located in Alaska or outside the continental United States may remain nonmember banks, and shall in that event maintain reserves and comply with all the conditions now provided by law regulating them; or said banks, except in the Philippine Islands, may, with the consent of the Reserve Board, become member banks of any one of the reserve districts, and shall, in that event, take stock, maintain reserves, and be subject to all the other provisions of this Act. (38 Stat. 270. 38 Stat. 691.) Subsections (b) and (c) of this section were, as originally enacted, as follows: "(b) A bank in a reserve city, as now or hereafter defined, shall hold and maintain reserves equal to fifteen per centum of the aggregate amount of its demand deposits and five per centum of its time deposits, as follows: "In its vaults for a period of thirty-six months after said date six-fifteenths thereof, and permanently thereafter five-fifteenths. "In the Federal reserve bank of its district for a period of twelve months after the date aforesaid at least three-fifteenths, and for each succeeding six months an additional one-fifteenth, until six-fifteenths have been so deposited, which shall be the amount permanently required. "For a period of thirty-six months after said date the balance of the reserves may be held in its own vaults, or in the Federal reserve bank, or in national banks in reserve or central reserve cities as now defined by law. "After said thirty-six months' period all of said reserves, except those hereinbefore required to be held permanently in the vaults of the member bank and in the Federal reserve bank, shall be held in its vaults or in the Federal reserve bank, or in both, at the option of the member bank. "(c) A bank in a central reserve city, as now or hereafter defined, shall hold and maintain a reserve equal to eighteen per centum of the aggregate amount of its demand deposits and five per centum of its time deposits, as follows: "In its vaults six-eighteenths thereof. "In the Federal reserve bank seven-eighteenths. "The balance of said reserves shall be held in its own vaults or in the Federal reserve bank, at its option. "Any Federal reserve bank may receive from the member banks as reserves, not exceeding one-half of each installment, eligible paper as described in section fourteen properly indorsed and acceptable to the said reserve bank. "If a State bank or trust company is required by the law of its State to keep its reserves either in its own vaults or with another State bank or trust company, such reserve deposits so kept in such State bank or trust company shall be construed, within the meaning of this section, as if they were reserve deposits in a national bank in a reserve or central reserve city for a period of three years after the Secretary of the Treasury shall have officially announced the establishment of a Federal reserve bank in the district in which such State bank or trust company is situate. Except as thus provided, no member bank shall keep on deposit with any nonmember bank a sum in excess of ten per centum of its own paid-up capital and surplus. No member bank shall act as the medium or agent of a nonmember bank in applying for or receiving discounts from a Federal reserve bank under the provisions of this Act except by permission of the Federal Reserve Board. "The reserve carried by a member bank with a Federal reserve bank may, under the regulations and subject to such penalties as may be prescribed by the Federal Reserve Board, be checked against and withdrawn by such member bank for the purpose of meeting existing liabilities: Provided, however, That no bank shall at any time make new loans or shall pay any dividends unless and until the total reserve required by law is fully restored. "In estimating the reserves required by this Act, the net balance of amounts due to and from other banks shall be taken as the basis for ascertaining the deposits against which reserves shall be determined. Balances in reserve banks due to member banks shall, to the extent herein provided, be counted as re serves. "National banks located in Alaska or outside the continental United States may remain nonmember banks, and shall in that event maintain reserves and comply with all the conditions now provided by law regulating them; or said banks, except in the Philippine Islands, may, with the consent of the Reserve Board, become member banks of any one of the reserve districts, and shall, in that event, take stock, maintain reserves, and be subject to all the other provisions of this Act." These subsections were amended by Act Aug. 15, 1914, c. 252, last cited above, so as to make the section read as set forth here. § 9802. (Act Dec. 23, 1913, c. 6, § 20.) Repeal of law making funds deposited for redemption of national bank notes part of reserve fund. So much of sections two and three of the Act of June twentieth, eighteen hundred and seventy-four, entitled "An Act fixing the amount of United States notes, providing for a redistribution of the nationalbank currency, and for other purposes," as provides that the fund deposited by any national banking association with the Treasurer of the United States for the redemption of its notes shall be counted as a part of its lawful reserve as provided in the Act aforesaid, is hereby repealed. And from and after the passage of this Act such fund of five per centum shall in no case be counted by any national banking association as a part of its lawful reserve. (38 Stat. 271.) The Currency Act of June 20, 1874, c. 343, §§ 2, 3, mentioned in this section, are set forth ante, §§ 9748, 9751. The Parity Act of March 14, 1900, c. 41, mentioned in this section, prescribing the standard unit of value of money, and providing for the redemption of United States notes and Treasury notes, etc., is set forth ante, §§ 64806487. § 9803. (Act Dec. 23, 1913, c. 6, § 26.) Repeal; borrowing gold on security of United States bonds or one year gold notes; sale of such bonds or notes. All provisions of law inconsistent with or superseded by any of the provisions of this Act are to that extent and to that extent only hereby repealed: Provided, Nothing in this Act contained shall be construed to repeal the parity provision or provisions contained in an Act approved March fourteenth, nineteen hundred entitled "An Act to define and fix the standard of value, to maintain the parity of all forms of money issued or coined by the United States, to refund the public debt, and for other purposes," and the Secretary of the Treasury may for the purpose of maintaining such parity and to strengthen the gold reserve, borrow gold on the security of United States bonds authorized by section two of the Act last referred to or for one-year gold notes bearing interest at a rate of not to exceed three per centum per annum, or sell the same if necessary to obtain gold. When the funds of the Treasury on hand justify, he may purchase and retire such outstanding bonds and notes. (38 Stat. 274.) § 9804. (Act Dec. 23, 1913, c. 6, § 29.) Effect of partial invalidity of act. If any clause, sentence, paragraph, or part of this Act shall for any reason be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder of this Act, but shall be confined in its operation to the clause, sentence, paragraph, or part thereof directly involved in the controversy in which such judgment shall have been rendered. (38 Stat. 275.) 9805. (Act Dec. 23, 1913, c. 6, § 30.) Reservation of power to amend, alter, or repeal act. The right to amend, alter, or repeal this Act is hereby expressly reserved. (38 Stat. 275.) Sec. CHAPTER FOUR Dissolution and Receivership 9806. Voluntary dissolution of associations. 9807. Enforcement of shareholders' individual liability by creditors on voluntary dissolution. 9808. Notice of intent to dissolve. 9809. Deposit of lawful money to redeem outstanding circulation. 9810. Exemption as to an association consolidating with another. 9811. Reassignment of bonds and redemption of notes, etc. 9812. Destruction of redeemed notes. 9813. Mode of protesting notes. 9814. Examination by special agent. 9815. Continuing business after default. 9816. Notice to holders; redemption at Treasury; cancellation of bonds. 9817. Sale of bonds at auction. 9818. Sale of bonds at private sale. 9819. Disposal of protested notes. 9820. Cancellation of national bank notes. 9821. Appointment of receivers; deposits in Government depositary. 9822. Notice to present claims. 9823. Dividends. § 9806. (R. S. § 5220.) Voluntary dissolution of associations. Any association may go into liquidation and be closed by the vote of its shareholders owning two-thirds of its stock. Act June 3, 1864, c. 106, § 42, 13 Stat. 112. Notes of Decisions Construction of statute.-This section contemplates only a voluntary liquidation. McDonald v. Thompson (1902) 22 Sup. Ct. 297, 299, 184 U. S. 71, 46 L. Ed. 437. See note under § 9807, post. Right to liquidate. The right to put a national bank in voluntary liquidation does not affect the right of the comptroller to appoint a receiver under the act of June 30, 1876. Washington Nat. Bank v. Eckels (C. C. 1893) 57 Fed. 870. The right given by this section may be exercised, though it be contrary to to the wishes, and against the interests, of the owners of the minority of the stock. Watkins v. National Bank of Lawrence (1893) 51 Kan. 254, 32 Pac. 914. The owners of two-thirds of the stock of a national bank may vote to liquidate the bank, though they are the directors and the executive officers thereof, since they, as directors and officers, owe no duty to dissenting minority stockholders to continue the bank, where they do not desire so to do. Green v. Bennett (Tex. Civ. App. 1908) 110 S. W. 108. This section confers on a national bank the right to liquidate when the owners of two-thirds of the shares thereof agree so to do, and is not limited to insolvent banks, nor to cases where the interest of all of the shareholders, including the minority, may be best subserved thereby. Id. Pendency and completion of liquidation. The dissolution of a national banking association is not complete until the necessary action has been had for the redemption of its circulating notes, either by actually redeeming them and surrendering them to the Comptroller of the Currency, or by depositing an amount of treasury notes with him adequate to their redemption. (1869) 13 Op. Atty. Gen. 56. A resolution of the directors of a bank, that said bank go into liquidation, be closed, and its business cease, and that its franchises be surrendered, does not operate to dissolve the corporation. Nothing but a repeal of the charter, or a judicial decree, can effect such a dissolution so as to preclude suits and actions against it to enforce its debts and liabilities. Lake Ontario Nat. Bank v. Onondaga County Bank (N. Y. 1876) 7 Hun, 549. Effect on powers, duties, and liabilities. A judgment against the bank on its guaranty, recovered after the making of such agreement, is not binding upon the stockholders who had no knowledge of the agreement, so as to prevent their raising the question whether the guaranty was not discharged by the release of the principal debtor. Schrader v. Manufacturers' Nat. Bank (1890) 10 Sup. Ct. 238, 133 U. S. 67, 33 L. Ed. 564, affirming decree Irons v. Manufacturers' Nat. Bank (C. C. 1888) 36 Fed. 843. The officers of a national bank, which has gone into liquidation, having no authority to bind the stockholders by the transaction of any business except that necessarily involved in the winding up of its affairs, an agreement by the president of such bank that its guaranty, made before liquidation, of certain notes, shall not be discharged by a change in the security of such notes and the release of the principal debtor, creates no liability on the part of the stockholders. Id. The owner of real property leased to a national bank for building purposes is not liable to account to the bank's receiver for the bank building erected thereon, which the bank, while insolvent and in course of voluntary liquidation, turned over to him in consideration of a release from all further liability under the lease; the bank being at the time in arrears for rent and taxes, and the income from the property not exceeding the charges against it. Brown v. Schleier (1904) 24 Sup. Ct. 558, 194 U. S. 18, 48 L. Ed. 857, affirming decree (1902) 118 Fed. 981, 55 C. C. A. 475. The tangible assets and the liability of stockholders of an insolvent national bank in process of voluntary liquidation in the hands of the liquidating agent is a trust fund for the primary benefit of creditors. George v. Wallace (1904) 135 Fed. 286, 68 C. C. A. 40, decree affirmed Wyman v. Same (1906) 26 Sup. Ct. 495, 201 U. S. 230, 50 L. Ed. 738, and Frenzer v. Same (1906) 26 Sup. Ct. 498, 201 U. S. 244, 50 L. Ed. 742, and Poppleton v. Same (1906) 26 Sup. Ct. 498, 201 U. S. 245, 50 L. Ed. 743. Where the insolvency of a national bank was accompanied by a conveyance of its assets to a trustee, and a pledge thereof for the benefit of creditors, and this was followed by affirma tive proceedings in liquidation, authorized by law, and the selection by the shareholders of the same trustee as their liquidating agent, such agent held the assets under an express trust for the benefit of creditors. Id. After a national bank has, by its shareholders, decided to go into liquidation, its president, upon giving paper held by the bank to creditors of the bank as collateral security for their claims, has authority to indorse or guaranty such paper in the name of the bank, so as to bind the bank and its shareholders. Irons v. Manufacturers' Nat. Bank (C. C. 1886) 27 Fed. 591, 596, reversed (1887) 7 Sup. Ct. 788, 121 U. S. 27, 30 L. Ed. 864. The obligations, duties, and liabilities of such association, before the completion of the acts necessary to its dissolution, stated. (1869) 13 Op. Atty. Gen. 56. A national bank, though it has ceased to do a banking business, has such a corporate existence as enables it in its own name to collect, for distribution among its stockholders, debts contracted with it. McCann v. Rogers (1893) 15 Ky. Law Rep. 127. A resolution by vote of two-thirds of the shareholders of a national bank to go into liquidation and close, certified to the comptroller of the currency, does not dissolve the corporation, nor affect its capacity to collect its assets and close its affairs. Merchants' Nat. Bank v. Gaslin (1889) 41 Minn. 552, 43 N. W. 483. was Where shareholders of a national bank appointed a committee to liquidate its affairs, the control of the bank by the directors, and their power to determine what actions should be brought by it, not thereby terminated. Planten v. National Nassau Bank of New York (Sup. 1916) 157 N. Y. S. 31. The owners of two-thirds of the stock of a national bank, who are its directors and executive officers, must, on voting to liquidate the bank, make such disposition of the assets as will be to the best interests of all the stockholders, including minority dissenting stockholders, and this may be done by the directors or by means of a liquidating committee. Green v. Bennett (Tex. Civ. App. 1908) 110 S. W. 108. A sale of the assets of a national bank, in process of liquidation by the liquidating committee, composed of the directors of the bank owning two-thirds of its stock, to a bank organized by themselves is not void, but only subject to the closest scrutiny on the part of a court of equity, and subject to be set aside on it being shown that it was not conducted with the utmost fairness, to the end that full value, and the best price obtainable, was realized. Id. A liquidating agent of a national bank, though authorized to pay the bank's debts by delivery of assets, may not create a new liability against the |