frsbog_mim_v24_0316.pdf

X-45$M)6 (Memorrnnjum J r ^ & r e d by O f f i c e of Comptroller of t h e C u r ^ n ^ f ) - .

A p r i l 31, 1926.

Memorandum f o r the Comptrol ler ;

I have given a h u r r i e d examination of the proposed c o d i f i -c a t i o n of the laws wi th r e f e r e n c e to s e c t i o n s r e l a t i n g to Na t iona l Banks and f i n d the fo l lowing omissions and e r r o r s :

OMISSIONS.

1 . The p r o v i s i o n in the Act of June 3, 1864, i n c o r p o r a t e d i n Sect ion D80 of the Revised S t a t u t e s p rov id ing t h a t s u i t s and p roceed ings a r i s i n g out of laws governing Nat iona l Basking A s s o c i a t i o n s should, J a, conducted by d i s t r i c t a t t o r n e y s under the supe rv i s ion of t h e S o l i c i t o r of the Treasury ,

2i The p r o v i s i o n in the Act of June 5, 1664, i nco rpo ra t ed i n Sec t ion 736 of t h e Revised S t a t u t e s p rov id ing when proceedings to en jo in the Comptrol ler , must be b rough t ,

3 . The p r o v i s i o n i n the Act of June 3, 1864. i nco rpo ra t ed i n Sect ion 884 of the Revised S t a t u t e s nai.ti.ng sea l ed c e r t i f i c a t e s of the Comptrol ler competent evidence .

4 . The p r o v i s i o n i n the Act of June 3, 1864, i nco rpo ra t ed i n Sect ion 885 of the Revised Statutes? making a c e r t i f i e d copy of the Organiza t ion C e r t i f i c a t e evidence of the ex i s t ence of a Na t iona l Banking Assoc i a t i on ,

5 . The p r o v i s i o n in the J e d o r a l Reserve Act i nco rpo ra t ed i:i Sec t ion 24 as amended Se~:te".bcr 7 , 1316, a u t h o r i s i n g Na t iona l Banks to make loans on r o a l e s t a t e . While t h i s was passed as an amendment to the F e d e r a l Reserve ^.ct, i t r e l a t e s e n t i r e l y to Na t iona l Banks and should be i n c o r p o r a t e d i n the chap te r s re lc , t in c : to n a t i o n a l Bank Act and not i n chap te r s r e l a t i n g to the Federa l Reserve Act .

6 . That p o r t i o n of Sec t ion 11-K of the Federa l Reserve Act a u t h o r i z -ing t h e Federa l Reserve Board to i s s u e p e r m i t s to Na t iona l Banks to e x e r c i s e f i d u c i a r y powers. As thi;3 r s l a t e s to Na t iona l Banks i t should appear in the chap te r s r e l a t i n g to Na t iona l Bank Act and not to those r e l a t i n g to the Fede ra l Reserve Act .

7 . Sec t ion 25 of the Fede ra l R3se:cva Act a u t h o r i z e s Na t iona l Bank-ing A s s o c i a t i o n s p o s s e s s i n g c a p i t a l of a m i l l i o n d o l l a r s o r more wi th the pe rmiss ion oi' the Federa l Reserve Board to e s t a b l i s h branches i n f o r e i g n c o u n t r i e s . This r e l a t e n e n t i r e l y to Na t iona l Banks and should appear in chap te r s r e l a t i n g to the Na t iona l Bank Act and no t i n the Federa l Reserve Act .

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8 . The 16th paragraph of f lect ion 24 of the Act of March 3, 1911, p r o v i d i n g t h a t Na t iona l Banks should "be deemed c i t i z e n s of the s t a t e s i n which l o c a t e d should a l so appear i n the Na t iona l Bank Act .

9 . Sec t i on 18 Act of December 23, 1913, a u t h o r i z i n g Na t iona l Banks to r e t i r e the whole or any p a r t of t h e i r c i r c u l a t i n g n o t e s "by s a l e to Federa l Reserve Banks.

10. Sec t i on 175 Act of March 4 , 1909, p r o v i d i n g p e n a l t y f o r i m i t a t e ing banks c i r c u l a t i o n .

11* Sec t ion 176 Act of March 4 , 1909, p rov id ing a p e n a l t y f o r mu-t i l a t i n g Na t iona l Banking c i r c u l a t i o n .

12. While p r o v i s i o n i s made i n the Act f o r r e s e r v e s and where they s h a l l be h e l d f o r banks l o c a t e d in Alaska and Hawaii, a l l p r o v i s i o n s r e l a t i n g to r e s e r v e s f o r Na t iona l Banks in the c o n t i n e n t a l United S t a t e s t h a t a r e member banks of the Federa l Reserve System, have been omi t t ed f rom t h e Na t iona l Bank Act . As t h i s p r o v i s i o n a l though

* con ta ined i n t h e Federa l Reserve Act r e l a t e s to Na t iona l Banks as we l l a s to S t a t e Banks, a s e c t i o n should be i n s e r t e d i n the Na t iona l Bank Act cover ing t h e ques t ion of r e s e r v e s .

13 . Act of January 26, 1907, f o r b i d d i n g Nat iona l Banks to make con-v t r i b u t i o n s i n connect ion wi th e l e c t i o n to p o l i t i c a l o f f i c e should be i n s e r t e d in the chap te r r e l a t i n g to Na t iona l Banks.

14. The p r o v i s i o n i n Sec t ion 5240 a u t h o r i z i n g the Comptroller of t h e Currency, w i th the approval of the Sec re t a ry of t h e Treasury , to appo in t examiners who s h a l l examine every member bank a t l e a s t twice each ca lendar year has been omi t t ed . The words "member banks" in t h i s s e c t i o n r e f e r to Na t iona l Banks only as the Comptrol ler does no t appoin t examiners to examine S t a t e Banks t h a t a r e members of the

** Fede ra l Reserve system.

15. The Act of A p r i l 12, 1900, extending Na t iona l Banking laws to Por to Rica has been omi t t ed , ,

*

^ 16, The Act of Apr i l 20,1509,extending Nat iona l Banking laws to Hawaii has been o m i t t e d .

NOTE: I t i s assumed t h a t a l l of t he se s e c t i o n s a r e given i n some o t h e r p a r t of the proposed Revised Code o t h e r than t h a t r e l a t i n g to Na t iona l Banks bu t i t i s b e l i e v e d

^ t he se s e c t i o n s should be i nco rpo ra t ed i n the Chapter r e f e r r i n g to Na t iona l Banks.

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31 ERRORS IN THE PROPOSED REVISION

The Numbers given a r e the numbers of the new s e c t i o n s .

25 . This s e c t i o n i s no t necessa ry a s i t merely r e p e a l s the qrld Extens ion Act and p rov ide s t h a t the p reced ing s e c t i o n s h a l l govern. The o l d Extens ion Act w i l l be r epea led by the genera l r e p e a l i n g c l ause t h a t comes wi th the enactment of the Revised S t a t u t e s and a s p e c i f i c r e p e a l i s no t neces sa ry .

38. I t i s no t unders tood why t h i s s e c t i o n i s i n s e r t e d . The Act as i t a t p r e s e n t s t ands i s i nco rpo ra t ed under the t i t l e "Banks and Bankers" and i s i n many ways d i f f e r e n t from the Act of June 3, 1864.

55. Line 25 n e a r e s t i s m i s s p e l l e d .

57 and 58 Revised S t a t u t e s , Sec t ion 5142, p rov ided f o r an i n -c r e a s e i n the c a p i t a l s t ock of a Na t iona l Bank. When p r o v i s i o n was made t he re fo r , i n t h e A r t i c l e s of Assoc ia t ion i n Act of May 1, 1886, a new method f o r i n c r e a s i n g the c a p i t a l of a Na t iona l Bank was p r o -vided f o r . A p o r t i o n of Sec t ion 5142 i s t h e r e f o r e o b s o l e t e and a new s e c t i o n should be provided cover ing those p o r t i o n s of Sec t ions 57 and 58 t h a t a r e v a l i d a t t h i s t ime. We had one i n s t a n c e r e c e n t l y of a bank d e s i r i n g to i n c r e a s e i t s c a p i t a l s tock under t h e o l d p r o -v i s i o n s of Sec t ion 5142 wi thout the vo te of i t s sha reho lde r s as i s r e q u i r e d i n the Act of May 1, 1886.

S e c t i o n s 63 and 64. Sec t ion 12 of the Act of June 3, 1864, i n -co rpo ra t ed i n Revised S t a t u t e s as Sec t ion 5151 p r o v i d i n g f o r the i n d i v i d u a l l i a b i l i t y of sha reho lde r s , s t a t e d t h a t the sha reho lde r s should be h e l d i n d i v i d u a l l y r e s p o n s i b l e equa l ly and r a t a b l y and not one f o r ano the r , f o r a l l c o n t r a c t s , deb t s and engagements of such a s s o c i a t i o n , e t c . This i s i nco rpo ra t ed as Sec t ion 63 of t h i p com-p i l i n g . Sec t ion 34 of the Act of December 23, 193,3, p rov ided t h a t t h e s t ockho lde r s of every Nat iona l Banking Assoc ia t ion s h a l l be h e l d i n d i v i d u a l l y r e s p o n s i b l e f o r a l l c o n t r a c t deb ts and engagements each to t h e amount of h i s s t o c k t h e r e i n a t the p a r va lue thereof in a d d i t i o n to the amount i n v e s t e d i n such s t o c k . The remainder of th&s s e c t i o n r e l a t e s to the t r a n s f e r of s t o c k in a Na t iona l Banking Assoc i a t i on w i t h i n 60 days b e f p r o the da te of i t s f a i l u r e . These two s e c t i o n s r e f e r r i n g to the game mat t e r should be combined in one and not r e enac t ed as they s tand becaa.su they d i f f e r as to the l i a -b i l i t y of sha reho lde ra . As the l a s t p r o v i s i o n of law enacted governs i t i s now h e l d t h a t tho l i a b i l i t y i s f i x e d by p r o v i s i o n i n Sec t ion 23 of t h e Act of December 23, 1913, and not by Sec t ion 12 of the Act of June 3, 1864. I f , however, both s e c t i o n s should be r eenac t ed as proposed, t h e r e would be a ques t ion as to e x a c t l y what the l i a b i l i t y of a sha reho lde r of a bank would b o .

82. In t h e f i f t h paragraph of t h i s s e c t i o n a r e the words "of the Federal Reserve Act i n s t e a d of Chapter 3 " . In the s i x t h paragraph a re

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the words "of the War Finance i n s t e a d of Chapter 10 of t i t l e 15 Commerce and Trade" . The e igh th paragraph i s e n t i r e l y a d d i t i o n a l and cannot be v e r i f i e d from anything submit ted ,

84. On the f i f t e e n t h l i n e under t h i s number a f t e r 346 t h e r e should a l s o be i n s e r t e d "372 and 373". There o r i g i n a l l y appeared the number and words " 1 3 of the Fede ra l Reserve Act" . As i t s tands today " S e c t i o n " ' 3 4 6 a lone appears ,

92. Last l i n e f i l i n g omi t ted between in h i s ,

94, F i r s t l i n e f i r s t word S u i t s omi t ted ,

107, Line one e igh th word procured not produced.

143, The words " r e s e r v e of" omi t ted b e f o r e the words " l a w f u l money" i n $he 18th l i n e of t h i s s e c t i o n .

145. The Treasury n o t e s r e f e r r e d to i n t h i s s e c t i o n a r e those i s s u e d under t h e Sherman Act which has been r e p e a l e d ,

162, In l i n e 7 v e r i f i c a t i o n i s m i s s p e l l e d ,

178, The second paragraph of t h i s s e c t i o n r e l a t e s e n t i r e l y to c i r -c u l a t i o n i s sued under a u t h o r i t y of the s o - c a l l e d A ld r i ch Act passed

H a y 30, 1908, This Act expi red by l i m i t a t i o n and t h e r e i s no longer any a u t h o r i t y f o r the i s suance of c i r c u l a t i n g no te s td Na t iona l Banks on any s e c u r i t i e s o the r than bonds of the United S t a t e s , •

191, This s e c t i o n r e l a t e s to Rece ive r sh ip r e f e r r e d to as Sect ion 94. This should be 93,

548 (d) Second l i n e a f t e r 6 th word i n s e r t a t , 570 The l a s t c l ause does no t r e f e r to Na t iona l Banks a t a l l , 591. This i s Revised S t a t u t e s Sec t ion 208 which has been e n t i r e l y

r e w r i t t e n and the g r e a t e r p a r t of the s e c t i o n has been omi t t ed . The e a r l y p a r t of Sec t ion 5208 de f ined the crime f o r f a l s i f y i n g c e r t i f i e d checks . The l a t t e r p a r t p rovided a p e n a l t y t h e r e f o r . The former p a r t of t h i s s e c t i o n has been e n t i r e l y emitted i n 591 t h e p e n a l t y a lone remaining i t be ing exp re s s ly s ta ted t h a t i t i s a p e n a l t y f o r the v i o l a t i o n s of the p r o v i s i o n s of this^ s e c t i o n . This r e f e r s to the omi t t ed p a r t of the s e c t i o n .

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