PUBLIC LAWS

· OF THE

UNITED STATES OF AMERICA

PASSED BY THE

SEVENTY-THIRP CONGRESS

1933-1934 .

iii
 LIST
OF THE

PUBLIC ACTS AND RESOLUTIONS OF CONGRESS

CoNTAINED IN THis VoLUME

THE SEVENTY-THIRD CONGRESS OF THE UNITED STATES

FIRST SESSION, 1933
Page.
Emergency banking relief; Bank Conservation Act. AN ACT To provide relief in the existing
national emergency in banking, and for other purposes ___________ _March 9, 1933 __ 1
Legislative expenses. JOINT RESOLUTION To provide for certain expenses incident to the
first session of the Seventy-third Congress ___________ ____ _______ March 17, 1933_- 8
United States Government, maintain credit of. AN ACT To maintain the credit of the United
States Government ______ ___________________________________ _March 20, 1933 __ 8
Revenue taxes on certain nonintoxicating li quor. AN ACT To provide revenue by the taxation
of certain nonintoxicating liquor, and for other purposes __________ March 22, 1933 __ 16
Earthquake, etc., relief. JOINT RESOLUTION To authorize the Reconstruction Finance
Corporation to make loans for financing the repair or reconstruction of buildings
damaged by earthquake in 1933 ________________ _______________ March 23, 1933., _ 20
Direct loans to State banks, etc. AN ACT To provide for direct loans by Federal reserve
banks to __
________ State banks and trust companies in certain cases, and for
_________________________________________________ other24,purposes
March 1933 __ 20
Swimming exercise tank. JOINT RESOLUTION To provide for the acceptance of sums
donated for the construction of a swimming exercise tank for the use of the President
---- -----------~ ------ ------------------- -- ----------------~arch30, 1933 __ 22
Unemployment relief. AN ACT For the relief of unemployment through the performan ce of
useful public work, and for other purposes _______ _______________ March 31, 1933 __ 22
Medicinal liquor prescriptions. AN ACT Relating to the prescribing of medicinal liquors
_________ __ _______ _________.____________ ___ ________________ March 31, 1933 __
~
23
District of Columbia, beer, etc., tax. AN ACT To provide revenue for the District of Columbia
by the taxation of beverages, and for other purposes _______________ April 5, 1933 __ 25
Pages, Senate and House of Representatives. JOINT RESOLUTION To provide for th.~
payment of pages for the Senate and House of Representatives for the first session of
the Seventy-third Congress __________ ____ ___________________ __ _April 14, 1933 __ 29
Bridge, Allegheny J1iver. AN ACT Granting the consent of Congress to the Commonwealth
of Pennsylvania to construct~,...maintain, and operate a free highway bridge across the
Allegheny River at or near .t'arkers Landing in the county of Armstrong, Common-
wealth of Pennsylvania _____________________________ __ _________ April29, 1933 __ 29
Bridge, Allegheny River. AN ACT Granting the consent of Congress to the Commonwealth
· of Pennsylvania to construct, maintain, and operate a free highway bridge across the
Allegheny River, at a point near the Forest-Venango County line, in Tionesta Town-
ship, and in the county of Forest, and in the Commonwealth of Pennsylvania
______ c __ _ ____________ _ _ __ ______ ----- - - ____________________ _ April 29, 1933_- 30
Crop production loans. JOINT RESOLUTION To amend section 2 of the Act approved
· February 4, 1933, to provide for loans to farmers for crop production and harvesting
during the year 1933, and for other purposes _________ ___ __________ May 1, 1933 __ 30
Pan American Petroleum Company, etc. JOINT RESOLUTION Authorizing the Attorney
General, with the concurrence of the Secretary of the Navy, to release claims of the
United States upon certain assets of the Pan American Petroleum Company and the
Richfield Oil Company of California and others in connection with collections upon a
certain judgment in favor of the United States against the Pan American Petroleum
Company heretofore duly entered ___________ __ _________________ __ May 3, 1933 __ 30
Agricultural Adjustment Act. AN ACT To r elieve the existing national economic emergency
by increasing agricultural purchasing power, to raise revenue for extraordinary ex-
p enses incurred by r eason of such emergency, to provide emergency relief with respect
to agricultural indebtedness, to provide for the orderly liquidation of joint-stock land
banks, and for other purposes ____________________________ ______ May 12, 1933 __ 31
Bridge, Missouri River. AN ACT To extend the time for completing the construction of a
bridge across the Missouri River at or near Kansas City, Kansas ____ May 12, 1933 __ 54
Bridges, Pee Dee and Waccamaw Rivers. AN ACT To extend the times for commencing and
completing the construction of a bridge across the Pee Dee River and a bridge across
the Waccamaw River, both at or near Georgetown, South Carolina __ May 12, 1933 __ 54
Bridge, Waccamaw River. AN ACT To extend the time for commencing and completing the
construction of a bridge across the Waccamaw River near Conway, South Carolina
-------------------------------------------------------------May 12, 1933 __ 55
v
162 73cl CONGRESS. SESS. I. CHS. 87-89. JUNE 15, 16, 1933.

made in t ime of war, shall continue until six months after its
termination, and an officer appointed in time of war shall be entitled
to be relieved from active Federal service within six months after
its termination if he makes application therefor."
Approved, June 15, 1933.

[CHA-PTER 88. ]
AN ACT
June 15, 1933.
--;~[H~.R
::0:.'-""'5~
79-=-;
3.];;-.,-- To revi ve and reenact t he Act entitled "An Act authorizing Jed P. Ladd, his heirs,
[Public, No. 65.] legal r epresentatives, and assigns, to construct, maintain, and operate a bridge
across Lake Champlain from East Alburg, Vermont, to West Swanton, Ver-
mont", approved March 2, 1929.

Be it enacted by the Senate and House of R epresentative8 of the

~S::Et~~~~~~':; or Uwited States of America in Oong1·ess ass~n.bled, That the Act ~f
bridge across, at East Congress approved March 2, 1929, authonzmg Jed P. Ladd, lus
A~~{g4 5;';·. 150!1. heirs, legal representatives, and assigns, to construct a bridge across
L ake Champlain, between a point at or near East Alburg, Vermont,
and a point at or near Swanton, Vermont, be, and the same is hereby,
~:::~ncement of revived and reenacted: Provided, That this Act shall be null and void
construction. unless the actual construction of the bridge herein referred to be
commenced within one year and completed within three years from
the date of approval hereof.
Amendment. SEc. 2. The right to alter, amend, or repeal this Act is. hereby
expressly reserved.
Approved, June 15, 1933.

[CHAPTER 89. ]
June 16, 1933. AN ACT
[H.R. 5661.] To provide for the safer and more effective use of the assets of banks, to regulate
[Public, No. 66.] interbank control, to prevent the undue diversion of funds into speculative
operations, and for other purposes.
Be it enacted by the S enate and House of Representatives of the
BankingActotl933. United States of Ammica in Congress assembled, That the. short
Post, p. 888. title of this Act shall be the " Banking Act of 1933."
SEc. 2. As used in this Act and in any provision of law amended
by this Act-
Terms construed. ( a) The terms " banks ", " national bank ", " national banking
association", "member bank", "board", "district", and "reserve
Vol. 38, p . 251. bank" shall have the meanings assigned to them in section 1 of the
u .s.a., p . 274.
F ederal Reserve Act, as amended.
".Affi~iates," or!(ani- (b) Except
zatwns mcluded w1thm . . where otherwise specifically
. . provided ' the term
. ." affili-
term. ate " shall mclude any corporatiOn, busmess trust, assoCiatiOn, or
other similar organization-
. Member .ba'?k hav- (1) Of which a member bank directly or indirectly owns or ·
m g controlhngmterest.
contro ls e1t
• h er a maJonty
• . of the' votmg · ' sh ares or more' t h an owQ
per centum of the number of shares voted for the election of its
directors, trustees, or other persons exercising similar functions at
the preceding election, or controls in any manner the election of a
majority of its directors, trustees, or other persons exercising similar
functions ; or
berShareholdersotmem·
bank control. (2) Of which control is held, directly or indirectly, through
stock ownership or in any other manner, by the shareholders of a
member bank who own or control either a majority of the shares
of such bank or more than 50 per centum of the number of shares
voted for the election of directors of such bank at the preceding
election, or by trustees for the benefit of the shareholders of any
such bank; or
 73d CONGHESS. SESS. I. CH. 89. JUNE 16, 1933. 163
(3) 0£ which a majority of its directors, trustees, or other persons M~Joritydirectorsor,
· ·
exerc1smg · ·1ar f unctwns
s1m1 · are d'1rectors o £ any one mem b er b an{. ] aredrrectorsofmember
bank.
(c) The term " holding company affiliate " shall include any cor· "Hoh\(ng c~mp~ny
· b · · · h · . .
poratwn, us1ness trust, assoCiatiOn, or ot er s1m11ar organizatiOn- included within term.
. affiltate, orgamzatwns
(.1) . -Which owns or controls . ' directly . or indirectly ' either a shares Whenof capital
majoritystock
ot
maJonty of the shares of capital stock of a member bank or more ofmemberbankowned,
than 50 per centum of the number of shares voted for the election etc.
of directors of any one bank at the preceding election, or controls
in any manner the election of a majority of the directors of any one
bank; or · _
( 2) For . the benefit of. whose shareholders or members . all or of W hen capital
member bank stock
held
substantially all the cap1tal stock of a member bank IS held by in trust.
trustees.
SEc. 3. (a) The fourth paragraph after paragraph "Eighth" . l of VoL 38, p. 255 ·
U.S.C.,p.278.
section 4 of the F ederal R eserve A ct, as amen d e d (uSC . . ., t1t e 12,
sec. 301) ,. is amended to read as follows :
" Said board of directors shall administer the affairs of said bank B,oard ?f directors ..
·
:fairlv an d 1mparha · 11 y an d w1t · h out d'ISCl'lminatwn
· . . . f avor of or counts,
Ill Extenswn of dJS-
advancements,
agamst·" any mem b er b. an k or b anI\:S an d may, su b'Ject to t h e prov1- · etc.' to- member banks.
sions of law and the orders of the Federal Reserve Board, extend
to each member bank such discounts, advancements, and accommoda-
tions as may be safely and reasonably made with due regard for
the claims and demands of other member banks, the maintenance of
sound credit conditions, and the accommodation of commerce, indus-
try, and agriculture. The Federal Reserve Board may prescribe Federal Reserve
.
regu l a t IOns f ur th er d efi nmg
· WI'th'm th e 1'1m1ta· t•Ions o f t h'IS A ct t h e ditions.
Board to prescnbe con··
conditions under which discounts, advancements, and the accommo-
dations may be extended to member banks. Each Federal reserve . Reserve bank to keep
· 1£ m
b an I{ sh a 11 k. eep 1tse · f orme d o f t h e genera1 ch aracter and amount etc., mformed of amount.
of loans.
of the loans and investments of its member banks with a view to
ascertaining whether undue use is being made of bank credit for Purpose.
the speculative carrying of or trading in securities, real estate, or
commodities, or for any other purpose inconsistent with the mainte-
nance of sound credit conditions; and, in determining whether to
grant or refuse advances, rediscounts or other credit accommodations,
the Federal reserve bank shall give consideration to such informa-
tion. The chairman of the Federal reserve bank shall report to b R~port by reserve
the Federal Reserve Board any such undue use of bank credit by an ·
~nyhme.mdber bank,£ to getFherd withRhis recoBmmedndation. Whenever, be~u~~~'f~iy~~~ ~~"~i
In t e JU gment o t 11e e era1 eserve oar , any member bank credit facilities.
is making such undue use of bank credit, the Board may, in its
discretion, after reasonable notice and an opportunity for a hearing, Hearing and notice.
suspend such bank from the use o:f the credit :facilities of the Federal
Reserve System and may terminate such suspension or may renew
it from time to time."
(b) The paragraph of section 4 of the Federal Reserve Act, as Vol. 40, p. 9ti8.
amended (U.S.C., title 12, sec. 304), which commences with the words u.s.a., p. 278.
" The Federal Reserve Board shall classify " is amended by inserting dir~~t~srs~o\ and class B
before the period at the end thereof a colon and the following:
" Provided, That whenever any two or more member banks within Participation . by
th e same F e d era1 reserve d IS . t nc
. t are affil'Iate d w1t
. h t l1e same }10ld'1ng member banks
tions wit.hin m elec-
district.
company affiliate, participation by such member banks in any such
nomination or election shall be confined to one o:f such banks, which
may be desio-nated for the purpose by such holding company affiliate." .
SEc. 4. The first paragraph of section 7 of the Federal Reserve 40;'~\lf-i. p. 253 ; Vol.
Act, as amended (U.S. C ., title 12, sec. 289), is amended, effective ~JY· P· 2~s.te 0 f
July 1, 1932, to read as follows: amen~"r;:;~t. a
"After all necessary expenses of a Federal reserve bank shall have Dividend on stock of
b een pa1'd or prov1'de d £or, t h e stockJ10 ld ers sh a 11 b e entitled . to recmve. reserve bank.

------,
 164 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933.
Net earnings paid an annual dividend of 6 per centum on the paid-in capital stock,
into surplus fund.
Franchise tax pay- which dividend shall be cumulative. After the aforesaid dividend
m ents, eliminated.
claims have been fully met, the net earnings shall be paid into the
surplus fund of the F ederal reserve bank."
40
Vol. 232
38,_ P· 259; Vol.
44
SEc. 5. (a) The first paragraph of section 9 of the Federal Reserve
' p.
122?. ' Vol. ' p . A ct, as amen d ed (USC · l e 12, sec. 321; S upp. VI , tit
. . ., tit . l e 12, sec.
v? ::fis.P· 279 ; supp. 321), is amended by inserting immediately after the words " United
.Application of Mor- States " a comma
n s Plan banks to be· . and the following·· " including Morris Plan .banks .
rome member banks. and other mcorporated banking institutions engaged in Similar
business." ·
233
44 VoiAg9. P · ; Vol. . (b) The second paragraph of section 9 of the Federal Reserve Act,
vf.s.03.. p. 279; Supp. as amended, is amended by adding at the end thereof the following:
st~~~emberban!<s. "Provided, however, That nothing herein contained shall prevent
b~;h~. to establish any State member bank from establishing and operating branches in
the United States or any dependency or insular possession thereof or
in any foreign country, on the same terms and conditions and subject
to the same limitations and restrictions as are applicable to the
establishment of branches by national banks."
Vol. 40, p. 233. 9 (c) Section 9 of the Federal Reserve Act, as amended (U.S.C., I
I.
su~:.-~r. ~~il"l. ' ZSO; t.itle 12, sees. 321-331; Supp. VI, title 12, sees. 321-332), is :f}.Irther
Mutual savi ngs amended by adding at the end thereof the following new paragraphs:
banks. "Any mutual savings bank having no capital stock (including any
other banking institution the capital of which consists of weekly or
other time deposits which are segregated from all other deposits and
·are regarded as capital stock for the purposes of taxation and the
declaration of dividends), but having surplus and undivided profits
Application of, to not less than the amount of capital required for the organization of a
becomememberbanks. nat10na - l b an k m
. t h e same p l ace, may app l y f or an d be a d m1tte . d to
membership in the Federal Reserve System in the same manner and
. Subscription
Ita! stock of toreserve
cap- sub]'.ect to the same provisions of law as State banks and . trust com- .
bankrequired. pames, except that any such savings bank shall subscnbe for capital
stock of the Federal reserve bank in an amount equal to six-tenths of
.Amount ot. 1 per centum of its total deposit liabilities as shown by the most recent
report of examination of such savings bank precedi:qg its admission
nuallyAdjustment semian0 ( t o mem be rs h"1p. Th ereaft er sueh subscnp
under rules · t"lOll s h a·11 b e a d'JUS t ed
Re.,erve Board.· semiannually on the same percentage basis in accordance with rules
su~s':Pr?~Uo~e<tr~f:~r.J~ and regulations prescribed by the Federal Reserve Board. If any such
mutual savings bank applying for membership is not permitted by
the laws under which it was organized to purchase stock in a Federal
reserve bank, it shall, upon admission to the system, deposit with
the Federal reserve bank an amount equal to the amount which it
. would have been required to pay in on account of a subscription to
posit.AdJustment. of de- capital stock. Thereafter such deposit shall be ad]'usted semi- ..
conditionssubJectto. annually in the same manner as subscriptions for stock. Such
Post, p. 971. deposits shall be subject to the same conditions with respect to repay-
ment as amounts paid upon subscriptions to capital stock by other
Interest payments. member banks and the Federal reserve bank shall pay mterest
thereon at the same rate as dividends are actually paid on outstand-
r.o~i¥pliga;~~scr7~u~:: ing shares of stock of such Federal reserve bank. If the laws under
1faftersubscription
lega!I7ed; here- which .any such savings _ bank was organized . be amended so as to
· authonze mutual savmgs banks to subscnbe for Federal reserve bank
stock, such savings bank shall thereupon subscribe for the appropriate
amount of stock in the Federal r eserve bank, and the deposit here-
Termination of sav- inbefore provided for in lieu of payment upon capital stock shall be
!;i~~~~~M~ rights of applied upon such subscription. If the laws under which any such
savings bank was organized be not amended at the next session of
the legislature following the admission of such savings bank to
scr"%~eg0 {~~~t~~ - sub- membership so as to authorize mutual savings banks to purchase

'

:I
II.
 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933. 165
Federal reserve bank stock, or if such laws be so amended and such fai~:n t~ran~~c:~~
bank fail within six months thereafter to purchase such stock, all stock.
of its rights a:nd_privileges as a member bank shall be forfeite_d and
its membership rn the Federal Reserve System shall be termmated
in the manner prescribed elsewhere in this section with respect to
State member banks and trust companies. Each such mutual savings b;~~tt~"c~n:~;\~~~~
bank shall comply with all the provisions of law applicable to State Statelawsan~ Reserve
member banks and trust companies, with the regulations of the Fed- Boardregulatwns.
eral R eserve Board and with the conditions of membership prescribed
for such savings bank at the time of admission to membership, except
as otherwise hereinbefore provided with respect to capital stock.
" Each bank admitted to membership under this section shall ba~~~~~ 1~M~~~ted
obtain from each of its affiliates other than member banks and
furnish to the Federal reserve bank of its district and to the Federal
Reserve Board not less than three r eports during each year. Such Form of reports.
reports shall be in such form as the Federal Reserve Board may . .
prescribe, shall be verified by the oath or affirmation of the president Venficatwn.
or such other officer as may be designated by the board of directors r f t" t b dl
of such affiliate to verify such reports, and shall disclose the infor- clo~g~ma wn ° e s,
mation hereinafter provided for as of dates identical with those
fixed by the Federal Reserve Board for reports of the condition . of
the affiliated memb er b an lr. E ach sueh report of an affil mte sh a ll Report of affiliates.
be transmitted as herein provided at the same time as the corre-
sponding report of the affiliated member bank, except that the
Federal Reserve Board may, in its discretion, extend such time for .
good cause shown. Each such report shall contain such information q~e~~r mat 10n re-
as in the judgment of the Federal Reserve Board shall be necessary
to disclose fully the relations between such affiliate and such bank
and to enable the Board to inform itself as to the effect of such
relations upon the affairs of such bank. The reports of such affiliates Publication of.
shall be published by the bank under the same conditions as govern
its own condition reports. .. ,
"Any such affiliated member bank may be required to obtain from .~1a~~tlo~fa/e~~rt ;:_
any such affiliate such additional reports as in the opinion of its quired.
Federal reserve bank or the Federal Reserve Board may be necessary
in order to obtain a full and complete knowledge of the condition .
of the affiliated member bank. Such additional reports shall be er:1rii:~~:e:o~ted·
transmitted to the Federal reserve bank and the Federal Reserve
Board and shall be in such form as the F ederal Reserve Board may Form.
prescribe. '
"Any such affiliated member bank which fails to obtain from any Pe!'alty provis!on.
0f 1'ts affil"1ates an d f urms
. h any report prov1"d ed f or b y t h e two ports.
Failure to furniSh r&-
preceding paragraphs of this section shall be subject to a penalty of
$100 for each day during which such failure continues, which, by
direction of the Federal Reserve Board, may be collected, by suit or
otherwise, by the Federal reserve bank of the district in which such
member bank is located. For the purposes of this paragraph and 5 ~~~llate ", con·
the two preceding paragraphs of this section, the term 'affiliate'
shall include holding company affiliates as well as other affiliates.
"State member banks shall be subject to the same limitations and m~~~~~·~'~g~8°~~~~
conditions with respect to the purchasing, selling, underwritinbO'' and ing pturcha:;ti_ng invest-
·
h old1ng o f 1nves
. t ment secuntles
. . an d stoclr as are app 11ca
. ble 1n. t h e men
R.S.,secun 1es. p. 993.
sec. 5136,
case of national banks under paragraph 'Seventh ' of section 5136 44;'~\ii6. p. 767; Vol.
of the Revised Statutes, as amended. u.s.a., p. 260; supp.
"After one year from the date of the enactment of the Banking v~t~t;~ember bank
Act of 1933, no certificate representing the stock of any State member st~~tceri~ca;:present
bank shall represent the stock of any other corporation except a s~ock of other corpora·
member bank or a corporation existing on the date this paragraph t'~xception.
takes effect engaged solely in holding the bank premises of such State
 166 '73cl CONGRESS. SESS. I. CR. 89. J UNE 16, 1933.
Tr~I)Sferotcertificate member bank. nor shall the ownership, sale, or transfer of any
condttwned
etc., prohibited.upon sale, cert1'fi cate representmg
' · t h e stoc k of· any sue11 b a nk b e con d't'
1 wne d 111·
any manner whatsoever upon the ownership, sale, or transfer of a
certificate representing the stock of any other corporation, except a
member bank.
State ~ember banks "Each State member bank affiliated with a holding company
and holdrng company
affiliates. . a ffil'1ate sh a ll obtam . f rom sue h l10 ld'mg company affil'1at e, WI'th'111
Agrcementsrequued. such time as the Federal Reserve Board shall prescribe, an agree-
R.S., seo.ol44, p.994_ rnendt.tt?at suchd h ?l~itngt. company affiliat~ shballl bedsubjectt _to th e samef.
u.s.c., p. 262. 1 1
con 1 Ions an 1m1 a wns as are app 1ca e un er sec wn 5144 o
.the Revised Statutes, as amended, in the case of holding company
9opy or agreement; affiliates of national banks. A copy of each such a~reement shall be
~!~altv 011 failure to filed with t he Federal Reserve Board. Upon the failure of a State
comply.· member bank affiliated with a holding company affiliate to obtain
. such an agreement within the time so prescribed, the Federal R eserve
Board shall require such bank to surrender its stock in the Federal
reserve bank and to forfeit all rights and privileges of membership
Resen·e
req'!ire Board
state may Ill
member . t h e F e d eral R eserve S ystem as prov1'd ed Ill · th' ·
. l S sectiOn. 'lXTh
n en-
affihates t9
stock and n ghts. surrender ever the F ederal Reserve
.
Board·
shall.
h ave r evoked the voting p ermit
· of any such holdmg company affiliate, the Federal Reserve Board
may, in its discretion, requil'e any or all State member banks
affiliated with such holding company affiliate to surrender their
stock in the Federal reserve bank and to forfeit all rights and
privileges of membership in the Federal R eserve System as provided
in this section.
st~t!':n~~'l,~~h~g~s.0 1 "In connection with examinations of State member banks, exam-
iners selected or approved by the Federal Reserve Board shall make
ota!llliates. such examinations of the affairs of all affiliates of such banks as
~f~~!~~nsbips to be shall be n ecessary to disclose fully the relations between such banks
and their affiliates and the effect of such relations upon the affairs
Assessments tor ex- of such banks. The expense of examination of affiliates of any State
penses. member bank may, in the discretion of the F ederal Reserve Board,
be assessed against such bank and, when so assessed, shall be paid
Penalty upo~ iai~ure by such bank. In the event of the r efusal to give any information
to pernut exammatwn, requeste
etc. · d 111
· th e course of th e exannna · t'1011 of any sue11 a ffil'1ate, or ·ill
·
the event of the refusal to permit such examination, or in the event
of the refusal to pay any expense so assessed, the Federal R eserve
Board may 1 in its discretion, require any or all State member banks
affiliated with such affiliate to surrender their stock in the F ederal
reserve bank and to :forfeit all rights and privileges o:f membership
in the Federal R eserve System, as provided in this section."
40,Vol.
38
p. 1315;• p.Vol. Vol.
260; 42, p. SEc. 6. (a) The ~econd paraO'raph 1;2; o:f section 10 of the Federal
620. Reserve A ct, as amended (U.S.l.i., title 12, sec. 242), is amended to
u.s.c., p. 275 . read as follows:
Ine~igibllit:v to hold "The S ecretary o:f the Treasury and the Comptroller o:f the Cur-
officemmemberbanks. rency shall be ineligible during the time they are in office and for two
years thereafter to hold any office, position, or employment in any
member bank. The appointive members o:f the Federal Reserve
Board shall be ineligible during the time they are in office and for
two years thereafter to hold any office, position, or employment in
any member bank, except that this restriction shall not apply to a
member who has served the :full term for which he was appointed.
Terms or office or Upon the expiration of the term o:f any appointive member of the
w:s~~?~Bo~~d.Federal Federal R eserve Board in office when this paragraph as amended
takes effect, the President shall fix the term of the successor to such
member at not to exceed twelve years, as designated by the President
at the time of nomination, but in such manner as to provide for the
expiration of the term of not more than one appointive member in
any two-year period, and thereafter each appointive member shall
 73d CONGRESS . SESS. I. CH . 89. JUNE 16, 1933. 167
hold office for a term of twelve years from the expiration of the term
of his predecessor. Of the six persons thus appointed, one shall be Designation of gover-
designated by the President as governor and one as vice governor of nor.
the F ederal Reserve Board. The governor of the Federal Reserve
Board, subject to its supervision, shall be its active executive officer. Oathototnce.
Each member of the Federal Reserve Board shall within fifteen days
after notice of appointment make and subscribe to the oath of office."
(b) The fourth paragraph of section 10 of the Federal Reserve Vol. as, p. 261; Vol.
Act, as amended (U.S.C., title 12, sec. 244), is am~nded to read as 4Vs~8.; p. 21s.
follows: .
"The principal offices of the Board shall be in the District of B.;,.~t.cipal offices ot
Columbia. At meetings of the Board the Secretary of the Treasury Chairman.
shall preside as chairman, and, in his absence, the governor shall
preside. In the absence of both the Secretary of the Treasury and
the governor the vice governor shall preside. In the absence of the
Secretary of the Treasury, the governor, and the vice governor the Chairman pro tern-
Board shall elect a member to act as chairman pro tempore. The poHetermination of
Board disbursem~nts
. shall determine
. and prescribe
. . the manner in which its obli- to manner
be made and obhga-
gatwns shall be mcurred and Its disbursements and expenses allowed tions incurred.
and paid, and may leave on deposit in the Federal Reserve banks the
proceeds of assessments levied upon them to defray its estimated
expenses and the salaries of its members and employees, whose Salaries, leave, etc.
employment, compensation, leave, and expenses shall be governed
solely by the provisions of this Act, specific amendments thereof, and
rules and regulations of the Board not inconsistent therewith; and
funds derived from such assessments shall not be construed to be
Government funds or appropriated moneys. No member of the Fed- m~b~~fications of
eral Reserve Board shall be an officer or director of any bank, bank- ·
ing institution, trust company, or Federal Reserve bank or hold stock
in any bank, banking institution, or trust company; and before
entering upon his duties as a member of the Federal Reserve Board
he shall certify under oath that he has complied with this require-
ment, and such certification shall be filed with the secretary of the
Board. Whenever a vacancy shall occur, other than by expiration vacancies ..
of term, among the six members of the Federal Reserve Board
appointed by the President as above provided, a successor shall be
appointed by the President, by and with the advice and consent of
the Senate, to fill such vacancy, and when appointed he shall hold
office for the unexpired term of his predecessor~ "
SEc. 7. Paragraph (m) of section 11 of the Federal Reserve Act, as 41 v;\~~6 P· ;sz; V oL
amended (U.S.C., title 12, sec. 248), is amended to read as follows: ' · ·
"(m) Upon the affirmative vote of not less than six of its mem- ~i'xwer~e~~~~~· of
hers the Federal Reserve Board shall have power to fix from time bank capital and sur-
.
to time f or each F ed era1 reserve d'Istnct
· th e percentage of In
. d'I· loans.
plus represented by
vidual bank capital and surplus which may be represented by loans
secured by stock or bond collateral made by member banks within
such distric~, but no such ~oan sha1l bfe made by any sufchhbank_ to arJ'o~~::/o~~Jain~n on
any person m an amount m excess o 10 per centum o t e umm-
paired capital and surplus of such bank. Any percentage so fixed Percentage subject to
by the Federal Reserve Board shall be subject to change from time change.
to time upon ten days' notice, and it shall be the duty of the Board
to establish such percentages with a view to preventing the undue
use of bank loans for the speculative carrying of securities. The
F ed eral R eserve B oar d sh all h ave power to d 1rec Power
. t any memb er b ank from to directloans.
increasing bank
to refrain from further increase of its loans secured by stock or
bond collateral for any period up to one year under penalty of
suspension of ail rediscount privileges at Federal reserve banks."

; ....._
 168 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933.

Vol. 38, p. 263.

277 28
SEc. 8. The Federal Reserve .Act, as amended, is amended by insert-
u.s.a., p p. ' 1. ing between sections 12 and 13 (U.S.C., title" 12, sees. 261, 262, and
342) , thereof the following new sections :
k!'tederabo~"'~d'f:i,; "SEc. 12.A. (a) There is hereby created a Federal Open Market
created. Committee (hereinafter referred to as the ' committee'), which ~1
Members. shall consist of as many members as there are Federal reserve dis-
Selection of. i'
tricts. Each Federal reserve bank by its board of directors shall
Meetings . annually select one member of said committee. The meetings of
said committee shall be held at Washington, District of Columbia,
at least four times each year, upon the call of the governor of the
.Federal Reserve Board or at the request of any three members of
the committee, and, in the discretion of the Board, may be attended
by the members of the Board.
ingRegulations
open-marketgovern·
opera- ,: (b) N o F ed era1 reserve b ank sh a11 engage 1n· open-mark et opera-
t!~~~:~.egT:vobanks. tions under section 14 of this .Act except in acdcordTanceBwithd rehgul;
Adoption of regula- lations adopted by the Fed~ral Reserve B<;>ar . . he oar s a i
tions. consider, adopt, and transmit to the committee and to the several ji
Federal reserve banks regulations relating to the open-market trans- I
actions of such banks and the relations of the Federal Reserve System
with foreign central or other foreign banks.
Post, p. 183. " (c) The time, character, and volume of all purchases and sales
Vol. 38, p. 284.
u. s. c., p. 283. of paper described in section 14 of this .Act as eligible for open-
market operations shall be governed with a view to accommodating
commerce and business and with regard to their bearing upon .the
general credit situation of the country.
Filing decision not to " (d) If any Federal reserve bank shall decide not to participate
partiCipate m open- . • .
marketoperations. In open-market operatiOns recommended and approved as provided
in paragraph (b) hereof, it shall file with the chairman of the
committee within thirty days a notice of its decision, and transmit
a copy thereof to the Federal Reserve Board.
Federal D eposit .In· " SEc. 12B. (a) There is hereby created a Federal Deposit Insur-
surance Corporatwn;
created. ance C orporat10n· · f ter re f erre d to as t h e 'Corporation
(h ereina · ') ,
etf.>ut~Io~d li~~i?~J~i whose duty it shall be to purchase, hold, and liquidate, as hereinafter
~ndks state member provided, the assets of national banks which have been closed by
a;osi, pp. 279,969. action of the Comptroller of the Currency, or by vote of their direc-
tors, and the assets of State member banks which have been closed
by action of the appropriate State authorities, .or by vote of their
Insurance of deposits. directors; and to insure, as hereinafter provided, the deposits of all
banks which are entitled to the benefits of insurance under this
section.
po~~ft~~ement of Cor- "(b) The management of the Corporation shall be vested in a
board of directors consisting of three members, one of whom shall
be the Comptroller of the Currency, and two of whom shall be
m~i.ectors, appoint- citizens of the United States to be appointed by the President, by
and with the advice and consent of the Senate. One of the appoin-
tive members shall be the chairman of the board of directors of the
Corporation and not more than two of the members of such board
Terms ot office; com· of directors shall be members of the same political party. Each
pensatiOD.
such appointive member shall hold office for a term of six years and
shall receive compensation at the rate of $10,000 per annum, payable
monthly out of the funds of the Corporation, but the Comptroller
of the Currency shall not receive additional compensation for his
services as such member.
AJ?propriation au- " (c) There is hereby authorized to be appropriated out of any
thonzed, payment for • '
Corporation capital money m the Treasury not otherwise appropriated, the sum of
st~~;1 , p. 279. $150,000,000, which shall be available for payment by the Secretary
of the Treasury for capital stock of the Corporation in an equal
amount, which shall be subscribed for by him on behalf of the United

~
I
I

I
 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933. 169
States. Payments upon such subscription shall be subject to call in cJayments subject to
whole or in part by the board of directors of the Corporation. Such T.o be additional.
stock shall be in addition to the amount of capital stock required to
be subscribed for by Federal reserve banks and member and nonmem-
ber • banks as hereinafter
·
provided
. . '
and the United States shall be toDividend payments
Uruted States.
entitled to the payment of dividends on such stock to the same extent
as member and nonmember banks are entitled to such payment on the
class A. stock of the Corporation held by them. Receipts for pay- m Re:ipts tor pay-
ments by the United States for or on account of such stock shall be en ·
issued by the Corporation to the Secretary of the Treasury and shall
be evidence of the stock ownership of the United States. "
"(d) The capital stock -of the Corporation shall be divided•
into v1ded
_Caplt_al stock, di-
mto shares of
shares of $100 each. Certificates of stock of the CorporatiOn shal1 $100each.
be of two classes-class A. and class B. Class A. stock shall be held c1!!~~k certificates,
by member and nonmember banks as hereinafter provided and they hack,ote ~eTd which
shall be entitled to payment of dividends out of net earnings at the n s ·
rate of 6 per centum per annum on the capital stock paid in by them,
which dividends _shall_be cumulative, or t~ the extent of 30 per centum a~:;~~-end payments,
of such net earmngs many one year, whichever amount shall be the
greater, but such stock shall have no vote at meetings of stockholders.
Class B stock shall be held by Federal reserve banks only and shall R~~~;e b~;k_held by
not be entitled to the payment of dividends. Every Federal r eserve
bank shall subscribe to shares of class B stock in the Corporation to Subscription tor.
an amount equal to one half of the surplus of such bank on January
1, 1933, and its subscriptions shall be accompanied by a certified check Payments.
payable to the Corporation in an amount equal to one half of such
subscription. The remainder of such subscription shall be subject to
call from time to time by the board of directors upon ninety days'
notice.
" (e) Every bank which is or which becomes a member of the Fed- cl~bs.fi~~~o~: bet~~!
eral Reserve System on or before July 1, 1934, shall take all steps July 1, 1934.
necessary to enable it to become a class A. stockholder of the Corpora• Po•t, P- 969·
tion on or before July 1 1934· and thereafter no State bank or Admission to mem-
trust company or mutual ' savmgs · ' ban k sh all be admitted
· bersh1p th~realter; sub-
to mem• scription required.
bership in the Federal Reserve System until it becomes a class A.
stockholder of the Corporation, no national bank in the continental ~atf?J'a\ba~ks.
United States shall be granted a certificate by the Comptroller of mene~ orc~C:um~ b'i:'n~:
1

the Currency authorizing it to commence the business of banking ~~le~:f"~~be~e~~~

until it becomes a member of the Federal Reserve System and a class A stockholder.
class A. stockholder of the Corporation, and no national bank in
the continental United States for which a receiver or conservator
has been appoi_nted shall be permitted to resume the transaction
of its banking business until it becomes a class A. stockholder of the
Corporation. Every member bank shall apply to the Corporation Application tor ciSSi
for class A. stock of the Corporation in an amount equal to one half AAmount.
of 1 per centum of its total deposit liabilities as computed in accord-
ance with regulations prescribed by the Federal Reserve Board;
except .
that in the case of a member bank organized after the. date this bank
E xception; member
hereafter organ-
sectiOn takes effect, the amount of such class A. stock apphed for by ized.
such member bank during the first twelve months after its organiza-
tion shall equal 5 per centum of its paid-up capital and surplus, and Amount.
beginning after the expiration of such twelve months' period the
amount of such class A. stock of such member bank shall be adjusted
annually in the same manner as in the case of other member banks.
Upon. receipt of such application the Corporation shall request the lngCertification
snffimency ofrespect-
apply-
Federal Reserve Board, in the case of a State member bank, or the lng bank's assets.
Comptroller of the Currency, in the case of a national bank, to cer-
tify upon the basis of a thorough examination of such bank whether
or not the assets of the applying bank are adequate to enable it to
 170 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933.

meet all of its liabilities to depositors and other creditDrs as shown

by the books of the bank; and the Federal Reserve Board or the
Comptroller of the Currency shall make such certification as soon as
Payment affirmative;
ficatwn if certi· practicable.
. If such certification
. . bed in the affirmative
. ' the Corpora-
amount. twn shall grant such apphcatwn an the applymg bank shall pay one
half of its subscription in full and shall thereupon become a class A
~;t";~~quired before stockholder ~f the Corporation : Provided, That no member bank
July 1, 1934. shall be reqmred to make such payment or become a class A stock-
de;~iiliJ:~ tO: ~{fain· holder of t~1e _Corphoration bebf.ore July 1, f1934. . The reJ?ainbder hof
such subscnptwn s all be su Ject to call rom time to time y t e
ti.?n~~~rug~trJJ'~~: board of directors of the Corporation. If such certification be in the
atlve. negative, the Corporation shall deny such application. If any
vJo~<;e!~~oi~[m~~~r· national bank shall not have become a class A stockholder o:f the
' · Corporation on or before July 1, 1934, the Comptroller of the Cur-
rency shall appoint a receiver or conservator therefor in accordance
Terminationo!mem·
bership, state member w1t . h t h e provisiOns
· · of eXIS· t"1ng 1a w. E xcep t as prov1"d ed Ill · sub sec-
bank not subscribing
class A on or before tion (g) of this section ' if any State member. bank shall not have
July 1,1934. become a class A stockholder of the CorporatiOn on or be:for.e July 1,
Post, p. 180.
1934, the Federal Reserve Board shall terminate its membership in
the Federal Reserve System in accordance with the provisions of
section 9 of this Act.
Applic.ations
membership on or tor
be-
" (f) Any .~;!tate bank or trust company or mutual savings bank
• <-' . . .
tore July 1, 1936. which applies :for membership 111 the Federal Reserve System or for
Benefits to accrue conversion into a national banking association on or after July. 1,
during pendency ot. 1936, may, with the consent of the Corporation, obtain the benefits
of this section, pending action on such application, by subscribing
and paying for the same amount of stock of the Corporation as it
.. would be required to subscribe and pay :for upon becoming a member
Pr?viswns thereafter bank• Thereupon
applicable. . the provisions of this section applicable to member
banks shall be applicable to such State bank or trust company or
. mutual savings bank to the same extent as if it were already a
~~~~;'{nent it mem· member bank: P1·ovided, That if the application of such State bank
bersbipapplicatio~not or trust company or mutual savings bank for membership in the
proved, etc. or disap- F ed eral R eserve S ys t em or f or con verswn
completed · In· t o ·a nat"1onal b ank"Ing
association be approved and it shall not complete its membership in
the Federal Reserve System or its conversion into a national banking
association within a reasonable time, or if such application shall be
disapproved, then the amount paid by such State bank or trust
company or mutual savings bank on account of its subscription to the
capital stock of the Corporation shall be repaid to it and it shall no
longer be subject to the provisions or entitled to the privileges o:f this
section.
Deposit
bank by State " ( g ) If any St at e b an k or t rus t c01npany, or· mu t ual savings
with membership · b an,;:
l
application, when
purchase unlawful un· stock (referred to in this subsection as ' State bank ') .which is or. which
der state laws. becomes a member o:f the Federal Reserve System IS not permitted by
the laws under which it was organized to purchase stock in the
Corporation, it shall apply to the Corporation for admission to the
benefits o:f this section and, if such application be granted after
appropriate certification in accordance with this section, it shall
deposit with the Corporation an amount equal to the amount which
it would have been required to pay in on account o:f a subscription
po~1Ju•tment or de- to capital stock of the Corporation. Thereafter such deposit shall
be adjusted in the same manner as subscriptions :for stock by
class A stockholders. Such deposit shall be subject to the same
to:onctit.ions subject conditions with respect to repayment as amounts paid on subscrip-
tions to class A stock by other member banks and the Corporation
Interest. payments. shall pay int~rest thereon at the same rate as dividends are actually
ct~n;e~ 0e~;,; 0_{ s~;~k~ paid on outstanding shares of class A stock. As long as such
bolder. deposit is maintained with the Corporation, such State bank shnll,
 73cl CONGRESS. SESS. I. CH. 89. JUNE 16, 1933. 171
for the purposes of this section, be deemed to be a class A stockholder
of the. Corporation. If the laws uricler. which such State bank was .
ApplicuLion. or de·
posit to subscnpt.ton, If
orgamzed be amended so as to authonze State banks to subscnbe subscription hereafter
for class A stock of the Corporation, such State bank shall within legalized.
six months thereafter subscribe for an appropriate amount of such
class A stock and the deposit hereinafter provided for in lieu of
payment upon class A stock shall be applied upon such subscription. . .
If th e 1a w un d er wh lC . l1 sueh St ate b ank was organize · d be not bank Termmatwn of State
to rights of mem-
amencled at the next session of the State legislature following the bership .
· · 0 f SUCl1 Stat 1;1 ban k t 0 tlle benefits 0 f th'lS SeCt'lOll 80 as t 0 scribe
a d1111SS10ll Wben notrioht to sub-
granted.
authorize State banks to purchase such class A stock, or, if the law
be so amended and such State bank shall fail within six months farii:~:n 1~ran~~~c1~~~
thereafter to purchase such class A stock, the deposit previously made stock.
with the Corporation shall be returned to such State bank and it
shall no longer be entitled to the benefits of this section, unless it
shall have been closed in the meantime on accoun_t of inability to
meet the demands of its depositors. .
" (h) The amount of the outstanding class A stock of the Corpo- .~~~~~·~f gl~~s~ent,
ration held by member banks shall be annually adjusted as here-
inafter provided as of the last preceding call date as member banks
increase their time and demand deposits or as additional banks
become members or subscribe to the stock of the Corporation, and Decrease authorized.
such stock may be decreased in amount as member banks reduc~\ · Transfer, etc. , or
their time and demand deposits or cease to be members. Shares of shares b¥ membor
the capital. stoc k of t 11e Corporatwn
. owned b y mem b er. b a1~ lrs sha11 banks, demed.
Additional subscrip-
not be transferred or hypothecated. When a member bank mcreases tion, upon increase of
its time and demand deposits it shall, at the beo-inning of each deposits.
calendar year, subscribe for an additional amount of capital stock of
the Corporation equal to one half of 1 per centum of such increase Payment~.
in deposits. One hal£ of the amount of such additional stock shall
be paid for at the time of the subscription therefor, and the bal-
a!lce shall be subject t<;> call by the board of directors ?f the .Corpora- Amonnt oi subscriJ>-
twn. A bank orgamzed on or before the elate this sectiOn t akes tion for c!Pss A; mem-
· d to memb ersh 1p
e ff ect an d a d m1tte · m · t h e F ed era1 R eserve S ystem ber banks.!·
at any time after the organization of the Corporation shall be
required to subscribe for an amount of class A capital stock equal
to one half of 1 per centum of the time and demand deposits of the Payment.
applicant bank as of the date of such admission, paymg therefor
its par value plus one half of 1 per centum a month from the period
of the last dividend on the class A stock of the Corporation. 'When Proportionate s ur-
a member bank .
reduces its time and demand deposits it shall sur- shares, render or amount .or
when deposits
render, not later than the 1st day of January thereafter, a propor- decrease.
tionate amount of its holdings in the capital stock of the Corpora- T otal surrendenipon
tion, and when a member bank voluntarily liquidates it shall liquidation.
surrender all its holdings of the capital stock of the Corporation
and be released from its stock subscription not previously called. Cance ll atio n or
The shares so surrendered shall be canceled and the member bank shares.
shall receive in payment therefor, under regulations to be pre- Repavrueuts-amonnt
scribed by the Corporation, a sum equal to its cash-paid subscriptions oc. · '
on the shares surrendered and its proportionate share of dividends
not to exceed one half of 1 per centum a month, from the period o:f
the last dividend on such stock, less any liability of such member
ban~ to the Corporation. . . . k:
"(1) If any member or nonmember bank snail be declared msolvent, ~f~~~~tt,~~~~s,~"'h'.~
or shall cease to be a member bank (or in the case of a nonmember insolvent . or censes
bank, shall cease to be entitled to the benefits of insurance under this m : : :: : e r bank:
section), the stock held by it in the Corporation shall be canceled, ~· bility not i~l­
without impairment of the liability of such bank, and all cash-paid pair~d.
subscriptions on such stock, with its proportionate shar e of dividends
172 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933.

D istribution orassets. not to exceed one half of 1 per centum per month from the period of
last dividend on. such stock shall be first applied to all debts of the
insolvent bank or the receiver thereof to the Corporation, and the
balance, if any, shall be paid to the receiver of the insolvent bank.
s.J:g~!~o;:,'tr~~~~nrn- "(j) Upon the date of enactment of the Banking Act of 1933, the
Corporate powers. Corporation shall become a body corporate and as such shall have
power-
" First. To adopt and use a corporate seal.
"Second. To have succession until dissolved by an Act of
Congress.
"-Third. To make contracts.
" Fourth. To sue and be sued, complain and defend, in any court
of law or equity, State or Federal.
"Fifth. To appoint by its board of directors such officers and
employees as are not otherwise provided :for in this section, to define
their duties, fix their compensation, require bonds of them and fix
the penalty thereof, and to dismiss at pleasure such officers or em-
ployees. Nothing in this or any other Act shall be construed to
prevent the appointment and compensation as an officer or employee
of the Corporation of any officer or employee of the United States
in any board, commission, independent establishment, or executive
department thereof.
"Sixth. To prescribe by its board of directors, bylaws not in-
consistent 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 section and such incidental powers as shall be necessary to
carry out the powers so granted.
Board of directors; "(k) The board of directors shall administer the affairs of the
=t~~':~n of cor- Corporation fairly and impartially and without discrimination. The
Determi.nation of board of directors of the Corporation shall determine and prescribe
manner in- th
disbursements
made; obligations . e manner Ill· wh'IC h I'ts obl'1gatwns
· sh a 11 be Incurre
· d an d Its
· ex-
cu¥:adclctng privilege. penses allowed and paid. The Corporation shall be entitled to the
free use of the United States mails in the same manner as the
Coopedration of ex- executive departments of the Government. The Corporation with
ecut1ve apartments. t h e consent o f any F e d era1 reserve b an k or of any b oar d , commis- ·
sion, independent establishment, or executive department of the Gov-
ernment, including any field service thereof, may avail itself o:f the
use of information, services, and :facilities thereof in carrying out
the provisions of this section.
Insurance or deposits "(1) Effective on and after July 1, 1934 (thus affording ample
r-emrr ~aft~; effec: t ime for examination and preparation), unless the President shall by
'~os~ ~p.' 969, 97o. proclamation fix an earlier date, the Corporation shall insure as
ila;J:;'S:fet. may fix hereinafter provided the deposits o:f all member banks, and on and
Nonmember banks. after such date and until July 1, 1936, of all nonmember banks,
which are class A stockholders o:f the Corporation. N otwith-
corporation as re- standing any other provision o:f law, whenever any national bank
IT~~:f b~;k.closed na- which is a class A stockholder of the Corporation shall have been
closed by action o:f its board o:f directors or by the Comptroller of
the Currency, as the case may be, on account of inability to meet the
demands of its depositors, the Comptroller of the Currency shall
Organization or new appoint the Corporation receiver for such bank. As soon as possi-
national bank.
ble thereafter the Corporation shall organize a new national bank
to assume the insured deposit liabilities of such closed bank, to
receive new deposits and otherwise to perform temporarily the :func-

I
 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933. 173
tions provided for it in this paragraph. For the purposes of this ','Ins~ed deposit li-
.
su bsect wn, th e t erm ' msure
· d d eposit
· 1·Iab"l " , sh all mean with
I Ity . ability , construed.
respect to the owner of any claim arising out of a deposit liability
of such closed bank the following percentages of the net amount
due to such owner by such closed bank on account of deposit lia- Percentages.
bilities : 100 per centum of such net amount not exceeding $10,000;
and 75 per centum of the amount, if any, by which such net amount
exceeds $10,000 but does not exceed $50,000; and 50 per centum of
the amount, if any, by which such net amount exceeds $50,000:
Provided, That, in. determining the amount clue to such owner for PrDeotviso. . t·
e rm1na 100 o
,
the purpose 0 f fixmg such percentage, there shall be added together amounts for fixing per-
all net amounts due to such owner in the same capacity or the same centages.
right, on account of deposits, regardless of whether such deposits
be maintained in his name or in the names of others for his benefit. '.'I~su~~d deposit !i-
F or th e purposes of th IS . subsectwn, . t h e term , msure
. . abilities, construed.
d d epos1•t 1la-
bilities ' shall mean the aggregate amount of all such insured deposit . .
liabilities of such closed bank• The Corporation shall determine as amounts DetermmatiOn <?f
due deposi-
expeditiously as possible the net amounts due to depositors of the tors.
closed bank and shall make available to the new bank an amount Amountsmadeavail-
equal to the insured deposit liabilities of such closed bank, where- able.
upon such new bank shall assume the insured deposit liability of such c t· b
close db an k to each of Its . d epositors,
. an d t h e Corporatwn
. s hl a I b e gatedorporaion sura-
to rights against
subrogated to all rights against the closed bank of the owners of _cl~~~i~l~:ii'ent to divi-
such deposits and shall be entitled to receive the same dividends from dends.
the proceeds of the assets of such closed bank as would have been
payable to each such depositor until such dividends shall equal the
insured deposit liability to such depositor assumed by the new bank,
whereupon all further dividends shall be payable to such depositor. in~entstobemad<>
Of the amount thus made available by the Corporation to the new
bank, such portion shall be paid to it in cash as may be necessary to
enable it to meet immediate cash demands and the remainder shall Credits.
be credited to it on the books of the Corporation subject to with-
drawal on demand and shall bear interest at the rate of 3 per centum Interest rate.
per annum until withdrawn. The new bank may, with the de~~~~:ance 01 new
approval of the Corporation, accept new deposits, which, together
with all amounts made available to the new bank by the Corporation, . Investments author-
shall be kept on hand in cash, invested in direct obligations of the !zed.
United Sbtatles, osr dhepositedb Wik"thhthlel Corpor~tion odr witl?-ta J!'tehdetrhal M aintenance of re-
reserve an r. uc new an s a maintain on eposi WI e serve with re se r v e
Federal reserve bank of its district the reserves required by law of bank.
member banks but shall not be required to subscribe for stock of the sub s cript.ion tor
F ed eraI reserve b an k un t I"l 1"ts own capi"ta1 st ock h as b een subsen"b ed stock not reqmred.
an d pal"d f or In· t. h e n1anner• l1ereina
· ft er pro vi"ded . The ar t"cl
I es of tion Articles of associa-
and organization.
association and organization certificate of such new bank may be
executed by such representatives of the Corporation as it may desig-
nate; the new b an1r sh all not b e reqmre · d to h ave any d"1recto rs at bank. M anagement of new

the time of its organization, but shall be managed by an executive

officer to be designated by the Corporation; and no capital stock need m~a~i~~ ;~~~~aR~~~
be paid in by the Corporation; but in other respects such bank shall
be organized in a?co~dance wit~ the existing provisioz:ts of law r~l~t- . .
ing to the orgamzation of natiOnal banks; and, until the reqms1te n~~ansactiOn of busi-
amount of capital stock for such bank has been subscribed and paid
for in the manner hereinafter provided, such bank shall transact
no business except that authorized by this subsection and such busi- otr f .tal t &:
ness as may be incidental to its organization. When in the judg- ofne:~~~P soc
1

ment of the Corporation it is desirable to do so, the Corporation shall

offer capital stock of the new bank for sale on such terms and condi- Amount.
tions as the Corporation shall deem advisable, in an amount suffi -
_cient in the opinion of the Corporation to make possible the conduct

c;::·
 174 73d CONGRESS. SESS. I. CH. 89. JUNE 16: 1933.

R . s., sec. 5138, p. 993. of the business of the new bank on a sound basis, but in no event less
26
u.s. c ., p. 1. than that required by section 5138 of the Revised Statutes, as amended
(U.S.C., title 12, sec. 51), for the organization of a national bank in
l'recmption right ot the I)lace where such new bank is located rriving the stockholders of
stockholders. . l b
the closed bank the first opportumty to purchase such stock. Upon
Oertificat:e to com- proof that an adequate amount of capital stock of the new bank has
mence
to issue.buomes,·
~ 1
•• when oeen subsen'b ed an d pal'd f or m • cas11 by subsen'b ers sat1s· f actory to th e
Comptroller of the Currency, he shall issue to such bank a certificate
Management there- of authority to commence business and thereafter it shall be managed
after. . • ·
by directors elected by its own shareholders and may exercise all of the
•rrans!er of business,
when stock snbscrip- powers gran e , t d b y ~w o na 10na an mg assoCia IOn~. If an a d~-
1 t t' 1 b k' · t' ·
tiou inadequate. quate amount of capital for such new bank IS not subscnbed and paid
in, the Corporation may offer to transfer its business to any other
banking institution in the same place which will take over its assets,
assume its liabilities, and pay to the Corporation for such business
tio~0~T~~~~~ban1k~hd:~ such amount as the Corporation may deem adequate. Unless the
not transferred. capital stock of the new bank is sold or its assets acquired and its
liabilities assumed by another banking institution, in the manner
herein prescribed, within two years from the date of its organization,
the Corporation shall place the new bank in voluntary liquidation
Depositinsurance ac- and wind up its affairs. The Corporation shall open on its books a
count. deposit insurance account and, as soon aspossible after taking pes-
Duty ot corporation session of any closed national bank, the Corporation shall make an
to open. estimate of the amount which will be available from all sources for
application in satisfaction of the portion of the claims of depositors
Debits to. to which it has been subrogated and shall debit to such deposit insur-
ance account the excess, if any, of the amount made available by the
Corporation to the new bank for depositors over and above the
Additi_onaJ duiie~ of amount of such ·estimate. It shall be the duty of the Corporation
corporatwn; ltqmda- l' h
tion ot closed bank. to rea IZe upon t e assets o sue
f h closed b ank, havmg · due regar d
to the condition of credit in the district in which such closed bank
is located; to enforce the individual liability of the stockholders
and directors thereof; and to wind up the affairs of such closed
bank in conformity with the provisions of law relating to the
liquidation of closed national banks, except 'as herein otherwise
provided, retaining for its own account such portion of the amount
realized from such liquidation as it shall be entitled to receive on
account of its subrogation to the claims of depositors and paying
to depositors and other creditors the amount available for distribu-
tion to them, after deducting therefrom their share of the costs of the
liquidation of the closed bank. If the total amount realized by the
Corporation on account of its subrogation to the claims of depositors
be less than the amount of the estimate hereinabove provided for, the
deposit insurance account shall be charged with the deficiency and,
if the total amount so realized shall exceed the amount of such esti-
Power~ and righ~ of mate, such account shall be credited with such excess. With respect
corporatwn as receiver. to such closed national banks, the Corporation shall have all the
rights, powers, and privileges now possessed by or hereafter given
receivers of insolvent national banks and shall be subject to the
obligations and penalties not inconsistent with the provisiOns of this
paragraph to which such receivers are now or may hereafter become
subject.
Closed State member "Whenever any State member bank which is a class A stockholder
banks. of the Corporation shall have been closed by action of its board of
directors or by the appropriate State authority, as the case may be,
on account of inability to meet the demands of its depositors, the
Corporation as re- Corporation shall accept appointment as receiver thereof, if such
ceiver of.
appointment be tendered by the appropriate State authority and be

·'
,f

.,,,
)

j\tJ l ":, ·~-·

 73d CONGRESS . SESS. I. CH . 89. JUNE 16, 1933. 175
authorized or permitted by State law. Thereupon the Corporation Organization or new
shall organize a n,ew national bank, in accordance with the provisions bank.
of this subsection, to assume the insured deposit liabilities of such Purpose.
closed State member bank, to receive new deposits and otherwise to
perform temporarily the functions provided for in this subsection.
Upon satisfactory recognition of the right of the Corporation to Funds to cover in-
. d'lVl'den ds on th e same bas1s
recmve · as 1n
· th e case of a c1ose d nat'wnalsureddepositliabilities
made available by cor-
bank under this subsection, such r ecognition being accorded by State ~f~fJ~<;,~;h;~~i';,~!e~o
law, by allowance of claims by the appropriate State authority, by ·
assignment of claims by-depositors, or by any other effectiv(} method,
·the Corporation shall make available to such new national bank, in
the manner prescribed by this subsection, an amount equal to the
insured deposit liabilities of such. closed State member bank·' and the bank. Management or new
Corporation and such new natwnal bank shall perform all of the
functions and duties and shall have all the rights and privileges with
respect to such State member bank and the depositors thereof which
are prescribed by this subsection with respect to closed national banks
holding class A stock in the Corporation : P1·ovided, That the rights i%~'::i:ination 0 r
of denositors and other creditors of such State member bank shall be rightsofdepositors,etc.
deterillined in accordance with the applicable provisions of State
law: .And provided ju1·ther, That, with respect to such State member Powers,etc.,orcorpo-
bank, the corporatwn · sh a11 possess t h e powers an d pnv1
· 'leges pro- ratwn under State law.
vided by State law with respect to a receiver of such State member
bank, except in so far as the same are in conflict with the provisions
of this subsection.
" \iVhenever any State member bank which is a class A stockholder Organization or new
of the Corporation shall have been closed by action of its board of :e~~·otcho"r~o~ftf~~n;;
directors or by the appropriate State authority, as the case may be, receiver unlawful.
on account of inability to meet the demands of its depositors, and
the applicable State law does not permit the appointment of the
Corporation as receiver of such bank, the Corporation shall organize
a new national bank, in accordance with the provisions of this sub- Functions.
section, to assume the insured deposit liabilities of such closed State
member bank, to receive new deposits, and otherwise to perform tem-
porarily the functions provided for in this subsection. Upon satis- F!ll'ds to be _made
facto r Jv recognition of the right
·
of the Corporation to receive clivi- availabie_whenrlgb~or
CorporatiOn to rece1ve
dends on the same basis as in the case of a closed national bank under dividends r~gnized.
this subsection, such recognition being accorded by State law, by "
allowance of claims by the appropriate State authority, by assign-
ment of claims by depositors, or by any other effective method, the
Corporation shall make available to such new bank, in accordance
with the provisions of this subsection, the amount of insured deposit
liabilities as to which such recognition has been accorded; and such Assumption or in·
new bank shall assume such insured deposit liabilities and shall in sureddepositliabilities.
other respects comply with the provisions of this subsection respect-
ing new banks organized to assume insured deposit liabilities of
closed national banks. In so far as possible in view of the applicable
provisions of State law, the Corporation shall proceed with respect
to the receiver of such closed bank and with respect to the new bank
organized to assume its insured deposit liabilities in the manner
prescribed by this subsection with respect to closed national banks
and new banks organized to assume their insured deposit liabilities;
except that the Corporation shall have none of the powers, duties,
or responsibilities of a receiver with respect to the winding up of
the affairs of such closed State member bank. The Corporation, in
its discretion, however, may purchase and liquidate any or all of the
asset-s of such bank.
 176 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933.

Levy on class A " Whenever the net debit balance of the deposit insurance account t
stockholders.
of the Corporation shall equal or exceed one fourth of 1 per centum
of the total deposit liabilities of all class A stockholders as of the
date of the last preceding call report, the Corporation shall levy
upon such stockholders an assessment equal to one fourth of 1 per
Credit to insurance centum of their total deposit liabilities and shall credit the amount
account. collected from such assessment to such deposit insurance account.
Dividend payment No bank which is a holder of class A stock shall pay any dividends
~~~~;nf~~~~~ until until all assessments levied upon it by the Corporation shall have
. been paid in full; and any director or officer of any such bank who
Penalty provision. participates in the declaration or payment of any such dividend may,
upon conviction, be fined not more than $1,000, or imprisoned for not
more than one year, or both.
"Receiver", con- "The term' receiver' as used in this section shall mean a receiver, ,,,,
strued. liquidating agent, or conservator of a national bank, and a receiver,
liquidating agent, conservator, commission, person, or other agency
charged by State law with the responsibility and the duty of winding
up the affairs of an insolvent State member bank.
"National bank." , "For the purposes of this section only, the term 'national bank' .J
shall incl.u de all national banking associations and all banks, banking
associations, trust companies, savings banks, and other banking insti-
tutions located in the District of Columbia which are members of
b;~~5!>te member the Federal Reserve System; and the term 'State member bank'
shall include all State banks, banking associations, trust companies,
savings banks, and other banking institutions organized under the
laws of any State, which are members of the Federal Reserve System.
Amount.• of deposits, " In any determination of the insured deposit liabilities of any
payable excluded
country in foreignin cl ose d b a nk or of th e t ot al d epos1't l'1ab'l't'
1 1 1es of any b an k pJ/AuiC
' h IS
.
det~rll?-i.ni?.g.
posit liabilities.
total de- a holder of class A stock of the Corporation or a member of the
• • • '
Fund provided for m subsectiOn (y), for the purposes of this
section, there shall be excluded the amounts of all deposits of such
bank which are payable only at an office thereof located in a foreign
country.
Rules, etc., by cor- " The Corporation may make such rules, regulations, and contracts
poration. •
as It may d eem necessary m · or d er tD carry out t h e provisiOns
· · of this
section.
Depositorinvestment "Money of the Corporation not otherwise empl¥Jned shall be
of money by Corpora-
tion. invested m • • •
secuntres of t 11e Government of t h e mte · d S tates,
except that for temporary periods, in the discretion of the board
of directors, funds of the Corporation may be deposited in any
Federal reserve bank or with the Treasurer of the United States.
D~ignation of Co~- When designated for that purpose by the Secretary of the Treasurv
poratwn as publiC C . h . . v '
moneys depositary. the orporatwn s all be a depositary of pubhc moneys, except
receipts from customs, under such regulations as may be prescribed
by the said Secretary, and may also be employed as a financial agent
of the Government. It shall perform all such reasonable duties as
depositary of public moneys and financial agent of the Government
as may be required of it.
Authority of Corpo- " ( m) Nothing herein contained shall be construed to prevent the
~~fi'o~!f b,~~.~~~~~ to Corporation from making loans to national banks closed by action
of the Comptroller of the Currency, or by vote of their directors,
or to State member banks closed by action of the appropriate State
authorities, or by vote of their directors, or from entering into nego-
tiations to secure the reopening of such banks.
Sale of assets of in- "(n) Receivers or liquidators of member banks which are now
poration.banks to Cor- or may h erea fte r b ecome Inso
solvent · 1vent or suspen d ed sh a 11 b e enht · 1ed
Permission required. to offer the assets of such banks for sale to the Corporation or as
security for loans from the Corporation, upon receiving permission
from the a-ppropriate State authority in accordance with .express pro-

-~- .. ~- W:- •
 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933. 177
visions of State law in the case of State member banks, or from the
Comptroller of the Currency in the case of national banks. The
proceeds of e':"ery such sale or loan shall be utilized _for the same ~~~zation or pro-
p1_urJ?doses
t. andfmththe samt e mfannehr basnkotherTfuhndcs realtizedll from£ tthhe Payment of diivi-
IqUl a 10n o e asse s o sue a s. e omp ro er o e dends on proved
Currency may, in his d_iscr~tion, pay jil.iv~dends on pro_ved claims at cl'ji~8.: sec. 5235 , p.
any time after the expiratiOn of the ) enod of advertisement made 1012.
pursuant to section 5235 of the Revised Statutes (U.S.C., title 12, u.s. 0 ·· p. 272.
sec. 193), and no liability shall attach to the Comptroller of the
Currency or to the receiver of any national bank by reason of any
such payment for failure to pay dividends to a claimant whose claim
is not proved at the time of any such payment.
"(o) The Corporation
. is authorized
. . and empowered to issue . and JDg . Amount of out~ta!Jd
corporate obliga-·
to have outstan d mg at any one time m an amount aggregatmg not tions.
.
more t h an th ree t Imes th e amoun t of 1"ts cap1"tal , I"ts no t es, d eben t ures, maturitv
Redeemable
optional.before
bonds, or other such obligations, to be redeemable at the option of the ·
Corporation before maturity in such manner as may be stipulated in
such obligations, and to bear such rate or rates of interest, and to
mature at such time or times as may be determined by the Cor-
poration: Provided, That the Corporation _ma:y sell on a discount f:1o:is~f short-term
basis short-term obligations payable at matunty without interest. obligati?ns at discount.
The notes, debentures, bonds, and other such obligations of the Cor- secur>ty.
poration may be secured by assets of the Corporation in such manner
as shall be prescribed by its board of directors. Such obligations
may be offered for sale at such price or prices as the Corporation
may determine.
" ( p ) All no t es, d eb en t ures, b on d s, or oth er sueh obl"Igat•lOllS ISsue. d tions,
Corporate obliga-
tax exemption.
by the Corpor~tion shall be exempt, b?th a~ to principal and interest, in::,.~~~~:::,nta~~te and
from all taxatiOn (except estate and mhentance taxes) now or here-
after imposed by the United States, by any Territory, dependency,
or possession thereof, or by any State, county, municipality, or local . .
taxing. auth on•ty. Th e c orporat•wn, Inc . l u a·1ng 1•ts f ranc h"Ise, 1•ts cap1-
. ingCorporatlOn JDclud-
franchise,' exempt.
tal, reserves, and surplus, and its income, shall be exempt from all · ,
taxation now or hereafter imposed by the United States, by any
Territory, dependency, or possession thereof, or by any State, county,
municipality, or local taxing authority, except that any real prop-
erty of the Corporation shall be subject to State, Territorial, county,
municipal or local taxation to the same extent according to its value
as other real property is taxed.
" ( q) In order that the Corporation may be supplied with such dei~~~~~~i~~c.~ffo~::
forms of notes, debentures, bonds, or other such obligations as it may
need for issuance under this Act, the Secretary of the Treasury is
authorized to prepare such forms as shall be suitable and approved by
the Corporation, to be held in the Treasury subject to deliveTy, upon di~u~~~dy ot plates,
order of the Corporation. The engraved plates, dies, bed pieces, and ' ·
other material executed in connection therewith shall remain in the ex~~.ursement tor
custody of the Secretary of the Treasury. The Corporation shall
reimburse the Secretary of the Treasury for any expenses incurred
in the preparation, custody, and delivery of such notes, debentures,
bonds, or other such obligations.
" (r) The Corporation shall annually make a report of its opera- 0 .;~g~;;.~1on.report ot
tions to the Congress as soon as practicable after the 1st day of
January in each year. .
" (s) Whoever, for the purpose of obtaining any loan from the ~:;r:~rs;~~~t~ns.
Corporation, or any extension or renewal thereof, or the acceptance,
release, or substitution of security therefor, or for the purpose of
jnducing the Corporation to purchase any assets, or for the purpose of
influencing in any way the action of the Corporation under this sec-
86637•-34--12
 178 73d CONGR E SS. SE SS. I. CH. 89 . J UNE 16: 1933 .

. Willful! overvalue-
tiOn of anv secun ty
tion ' 1nakes any statement' knowing it to be false' Or willfully •
OVer-
- · values any security, shall be punished by a fine of not more than
$5,000, 9r by imprisonment for not more than two years, or both.
Coun terfeit of cor- ' " (t ) Whoever (1) ~ely makes, forges, or counterfeits any obli-
porate obl!gatwn, etc. gation or coupon, in im1tation of or purporting to be an obligation
or coupon issued by the Corporation, or (2) passes, utters, or pub-
lishes, or attempts to pass, utter, or publish, any false, forged, or
counterfeited obligation or coupon purporting to have been issued
by the Corporation, knowing the same to be false, forged, or conn-
. terfeited, or (3) falsely alters any obligation or coupon issued or
purporting to ha ve been issued by the Corporation, or (4) passes,
utters, or publishes, or attempts to pass, utter, or publish, as true,
any falsely altered or spurious obligation or coupon, issued or pur-
porting to have been issued by the Corporation, knowing the same
to be falsely altered or spurious, shall be punished by a fine of not
more than $10,000, or by imprisonment for not more than five years,
or both. '
Embezzlement, etc.
" (u) Whoever, being connected in any capacity with the Corpo-
ration, (1) embezzles, abstracts, purloins, or willfully misapplies
any moneys, funds, securities, or other things of value, whether
belonging to it or pledged, or otherwise intrusted to it, or (2) with
intent to defraud the Corporation or any other body, politic or
corporate, or any individual, or to deceive any officer, auditor., or
examiner of the Corporation, makes any false entry in any book,
report, or statement of or to the Corporation, or without being duly
authorized draws any order or issues, puts forth, or assigns any
note, debenture, bond, or other such obligation, or draft, bill of
exchange, mortgage, judgment, or decree thereof, shall be punished
by a fine of not more than $10,000, or by imprisonment for not
more than five years, or both.
po;;1'rns~~~~:r~or~: " (v) No individual, association, partnership, or corporation shall
ration." use the words 'Federal Deposit Insurance Corporation', or a com-
Exclusive use.
False advertising. bination or any t h ree of these f our worel s, as t h e name or a part
Post, p. 970. thereof under which he or it shall do business. No :individual, asso-
ciation, partnership, or corporation shall advertise or otherwise
represent falsely by any device whatsoever that his or its deposit
liabilities are insured or in anywise guaranteed by the Federal
Deposit Insurance Corporation, or by the Government of the United
States, or by any instrumentality thereof; and no class A stock·
holder of the Federal Deposit Insurance Corporation shall
advertise or otherwise represent falsely by any device whatsoever
the extent to which or the manner in which its deposit liabilities are
Penalty tor violation. insured by the Federal Deposit Insurance Corporation. Every
individual, partnership, association, or corporation violating this
subsection shall be punished by a fine of not exceeding $1,000, or
by imprisonment not exceeding one year, or both.
u~i~~~f~tes?ode ot " ( w) The provisions of sections 112, 113, 114, 115, 116, and 117
in.b~;~:~~~· of the Criminal 9ode ?f th~ United States (U.S.C., title 18, ch. 5,
Applicable to corpo- sees. 202 to 207, mclus1ve), m so far as applicable, are extended to
:;a~:em~~'t:~acts and apply to contracts or agreements with the Corporation under this
section, which for the purposes hereof shall be held to include loans,
advances, extensions, and renewals thereof, and acceptances, releases,
and substitutions of security therefor, purchases or sales of assets,
and all contracts and agreements pertaining to the same.
Secret
sion, Service
Treasury Divi-
Depart- "( x ) Tl1e S ecre t· S erv1ce
· D'I VISIOn
· · of th e T reasu1y
· D epart men t IS
·
m~!iection, etc., ot aut!wrized to detect, arres~, ai~d ~el!v~r into the custody o! ~he
persons violating. Umted States marshal havmg ]UI'lsdiCtwn any person comnuttmg
any of the offenses punishable under this section.
 73d CONGRESS . SESS. I . CH. 89. J UNE 16, 1933. 179
_
"(y). The Corporat ion shall open on its books a Temporary Federal .Depos1t Temporary F ederal
Insurance
Deposit Insurance Fund (hereinafter referred to as the 'Fund '), Fund.
which shall become oper_ative on J..anua:ry 1, 1934, un_less the Presi- bo~gs .~f c0tr~~~tio~
dent shall by proclamatiOn fix lff earher date, and It shall be the operative 19
January 1•
duty of the Corporation to insure deposits as hereinafter provided j,4,;st, p. 969.
until July 1, 1934.
-"Each member bank licensed before January 1; 1934, by the Secre- F~J.rub e rshtp 01
tary of the Treasury pursuant to the authority vested in him by the
Executive order of the President issued March 10,1933, shall, on or nu~~~~~- Order
before January 1, 1934, become a member of the Fund; each member
bank so licensed after such date, and each State bank trust company or
mutual savings bank (referred to in this subsection as 'State bank', Post, P· 971.
which term shall also include all banking institutions located in
the District of Columbia) which becomes a member of the Federal
Reserved Sytsttedmton or abfterh_such date, shall, ubpon fbeih11g Fso hd·ce11sedd State banks not
or so a mi e o 111e111 ers Ip, become a mem er o t e un ; an members or reserve
any State bank which is not a member of the Federal Reserve system.
System, with the approval of the authority having supervision of
such State bank and certification to the Corporation by such author-
ity that such State bank is in solvent condition, shall, after exam-
ination by, and with the approval of, the Corporation, be entitled
to become a member of the Fund and to the privileges of this sub-
section upon agreeing to comply with the requirements thereof and
upon paying to the Corporation an amount equal to the amount that
would be required of it under this subsection if it were a member
bank. The Corporation is authorized to prescribe rules and regu- et~~~'r;'ig:t~:!.scr?"~"J~
lations for the further examination of such State bank, and to fix
the compensation of examiners employed to make examinations of
.State banks.
" Each member of the Fund shall file with the Corporation on or Certified statement
before the date of its admission a certified statement under oath by Fund members.
showing, as of the fifteenth day of the month preceding the month
in which it was so admitted, the number of its depositors and the Contents.
total amount of its deposits which are eligible for insurance under Payments to Corpo-
this subsection, and shall pay to the Corporation an amount equal ration.
to one-half of 1 per centum of the total amount of the deposits so
-certified. One-half of such payment shall be paid in full at the Manner or making.
time of the admission of such member to the Fund, and the remainder
of such payment shall be subject to call from time to time by the
board
- of directors of the Corporation • Within a reasonable time of Similar statement,
June 15, as
1934, re-
fixed by the Corporation each such member shall file a similar quired.
statement showing, as of June 15, 1934, the number of its depositors Post, P- 9" 9·
and the total amount of its deposits which are eligible for such
insurance and shall pay to the Corporation in the same manner an
amount equal to one-half of 1 per centum of the increase, if any,
in the total amount of such deposits since the date covered by the
.statement filed upon its admission to membership in the fund.
"If at any time prior to July 1, 1934, the Corporation requires Additional. assess-
:additional • funds with which to meet its obligations • under this ments Post,authonzed.
p. 969.
subsectwn, each member of the Fund shall be subJect to one addi-
tional assessm~nt only in an amo~nt not exceedin~ tha..-total amount Amount.
theretofore paid to the CorporatiOn by such member.
" If any member of the Fund shall be closed on or before June 30; Payment of insured
1934, on account of inability to meet its deposit liabilities, the Corpo~ ~'ifr:>Jit m~~~!~ti~ios~
ration shall proceed in accordance with the provisions of subsection before June 30, 1934.
(I) of this section to pay the insured deposit liabilities of such mem· ~;:f,'ff:J;i,
her; except that the Corporation shall pay not more than $2,500 A,mount to any de
on account of the net approved claim of the owner of any deposit. posltor.
 180 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933.
~
see''ld~li(1jt 1 on
.P~st, p ...969.
or The provisions o:f such subsection (l) relating to State member banks
sub-
shall be extended :for the purposes o:f this subsection to members of
~·I
I
the Fund which are not members of the Feder al Reserve System;
and th.li:.._provisions o:f this subsection shall apply only to deposits .!
o:f members of the Fund which have been made available since
March 10, 1933, for withdrawal in the usual course of the banking
business.
Ju~;ltnf:34 _of Fund, "Before July 1, 1934, the Corporation shall make an estimate of
Post, p . 970. the balance, if any, which will remain in the Fund after providing
:for all liabilities of the Fund, including expenses of operation
thereof under this subsection and allowing for anticipated recoveries.
Refunds to mem· The Corporation shall refund such estimated balance, on such basis
bers. as the Corporation shall find to be equitable, to the members of the
Fund other than those which have been closed prior to July 1, 1934.
Subscription for class
A stock, State bank
"Each State bank which is a member of the Fund ' in order to
member ot Fund. obtain the benefits of this section after July 1, 1934, shall, on or
before such date, subscribe and pay :for the same amount o:f class A
stock of the Corporation as it would be required to subscribe and
pay for upon becoming a member bank, or if such State bank is
Deposit, it subscrip· not permitted by the laws under which it was organized to -pur-
bon unlawful. chase such stock, it sha.ll deposit with the Corporation an amount.
equal to the amount it would have been required to pay in on account
of a subscription to such stock; and thereafter such State bank shall
be entitled to such benefits until July 1, 1936.
P urpose of section. " It is not the purpose o:f this section to discriminate, in any
manner, against State nonmember, and in :favor of, national or
member banks; but the purpose is to provide all banks with the
same opportunity to obtain and enjoy the benefits of this section. No·
bank shall be discriminated against because its capitR.l stock is less
than the amount required :for eligibility for admission into the
Federal Reserve System."
Vol.39,p.753,Vo1. 47, SEc. 9. The eighth paragraph o:f section 13 of the Federal Reserve
P·J~g·.c., p . 2s2, s upp. Act, as amended (U.S. C., title 12, sec. 347; Supp. VI, title 12, sec.
VI, p. 136
Past, pp.· 348, 646. 347) , IS. amen d ed t o rea d as :fo11ows.' : ·
Advances to member "Any F ederal reserve bank may make advances for periods not.
banks on t heir notes. exceeding fifteen days to its member banks on their promissory
notes secured by the deposit or pledge of bonds, notes, certificates of
indebtedness, or Treasury bills of the United States, or by the
er3ei~~~~;:;:;1ia1~ {r~~: deposit or pledge of debentures or other such obligations of Federal
it banks . intermediate credit banks which are eli_gible for purchase by Fed-
';oJ. 42, P· 1479· eral r eserve banks under section 13 (a) o:f this Act; and any
'U.S.C., p. 282.
Federal reserve b ank may rnak e advances :for penods . not excee d'm g
ninety days to its member banks on their promissory notes secured
by such notes, drafts, bills o:f exchange, or bankers' acceptances as are
eligible :for rediscount or :for purchase by Federal reserve banks under
Rates of advances. the provisions of this Act. All such advances shall be made at rates
sePv~tif:~~~ct by Re- to be established by such Federal reserve banks, such rates to be sub-
ject to the review and determination of the Federal Reserve Board.
Advances deemed I£ any member bank to whic!J. any such advance has been made
immediately paya):>Je, shall during the life or continuance of such advance and despite
when outs tandmg ' . . . . )
loans increased for an official warmng of the reserve bank of the distnct or of the
stock, etc., purchases. F e d eral R eserve B oar d t o th e con t rary, Increase
· I .s out st an d'Ing
't
loans secured by collateral in the :form of stocks, bonds, debentures,
or other such obligations, or loans made to members of any organized
stock exchange, investment house, or dealer in securities, upon any
obligation, note, or bill, secured or unsecured, for the purpose of
purchasing and/or carrying stocks, bonds, or other investment
securities (except obligations of the United States) such advance
shall be deemed immediately clue and payable, and such member
 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933. 181
bank shall be ineligible as a borrower. at the reserve bank of .
the er Ineligible as borrow-
at reserve bank
district under the provisions of this paragraph for such penod as therearter.
the Federal Reserve Board shall determine : Provided, That no .r.:;~~ary carryina
temporary carrying or clearance loans made solely for the purpose or clearance loans. D

<>f facilitating the purchase or delivery of securities offered for

public subscription shall be included in the loans referred to in
this paragraph."
SEc. 10. Section 14 of the Federal Reserve Act, as amended (U.S. C., Vol. 38, p . 265.
title 12, sees. 353-358), is amended by adding at the end thereof the u.s.c., p. 282 '
following new paragraph:
"(g) The Federal Reserve Board shall exercise special supervision Supervision by
· h'Ips an d transactiOns
over a 11 re Iatwns · of any k'Ind entere d Into
. by actions
Board, !oretgn trans·
or reserve bank.
any Federal reserve bank with any foreign bank or banker, or with
any group of foreign banks or bankers, and all such relationships
and transactions shall be subject to such regulations, conditions, and Regulations.
limitations as the Board may prescribe. No officer or other represen- Permission to con·
tative of any Federal reserve bank shall conduct negotiations of g~~- foreign negotia·
any kind with the officers or representatives of any foreign bank
<>r banker without first obtaining the permission of the Federal
Reserve Board. The Federal Reserve Board shall have the right, in re~~~t~/io:o~~i~~
its discretion, to be represented in any conference or negotiations by conferences.
such representative or representatives as the Board may designate.
A full report of all conferences or negotiations, and all understand- Report to be filed.
ings or agreements arrived at or transactions agreed upon, and all
other ~aterial facts appertaining to such conferences or negotiations,
shall be filed with the F ederal Reserve Board in writing by a duly
authorized officer of each Federal reserve bank which shall have
participated in such conferences or negotiations."
SEc. 11.. (a) Section 19 of the Federal Reserve Act, as amended in.~·. ~·P~86 8 , 284 ,
(U.S.C., title 12, sees. 142, 374, 461-466; Supp. VI, title 12, sec. 462a), 287; Supp. vr, p. 138.
is amended by inserting after the sixth paragraph thereof the follow-
ing new paragraph:
" N o mem ber b an k sh a11 ac t as th e me d'lUll or agen t of any non- agent Member
in makingbankloans
as
banking corporation, partnership, association, business trust, or indi- to ~tock brokers pro-
VI'd ua1 In. rnak mg
' l oans on t h e secunty. of stoclrs, b on ds, an d oth er htbtted.
investment securities to brokers or dealers in stocks, bonds, and other
investment securities. Every violation of this provision by any Penalty provision.
member bank shall be punishable by a fine of not more than $100
per day during the continuance of such violation; and such fine
may be collected, by suit or otherwise, by the Federal reserve bank
of the district in which such member bank is located."
(b) Such section 19 of the Federal R eserve Act, as amended, is Vol. 38• p. 270 ·
further amended by adding at the end thereof the following new
paragraphs: ·
"No member bank .
shall ' directly or. indirectly
. .
by any device what- demand
Interestpaymentson
depostts pro-
soever, pay any mterest on any deposit wh1ch 1s payable on demand: llibited.
P ?b'O,v~ded,hThat nothting _hetreintc.ontainedd shall ~ehcohnstrued asfpro- :rrg:s~D.tracts.
1u 1tmg t e paymen of m eres m accor ance wit t e terms o any
certificate of deposit or other contract heretofore entered intc in
good faith which · is in force on the date of the enactment of this
paragraph; but no such certificate of deposit or other contract shall
be r enewed or extended unless it shall be modified to conform to this
paragraph, and every member bank shall take such action as may be
necessary to ~onform to this paragraph as soon as possible consist-
ently with its contractual obligations: Provided . '
however ' That. this Application. to de-
. postt payable m foretgn
paragraph shall not apply to any deposit of such bank which 1s country.
payable only at an office thereof located in a foreign country, and
shall not apply to any deposit made by a mutual savings bank, nor
to any deposit of public funds made by or on behalf of any State, Public funds .
 182 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933.
county, school district, or other subdivision or municipality, with
respect to which payment of interest is required under State law.
Regulation ol inter· " The Federal Reserve Board shall from time to time limit by
t h e rate 01..e mterest
• wh'1ch may b e pa1'd by mem b er b an ks

I
est ra te, tlme deposits. .
regulatwn
on time deposits, and may prescribe different rates for such pay-
ment on time and savings deposits having different maturities or
subject to different conditions respecting withdrawal or repay- n
ment or subject to different conditions by reason of different loca-
~ayment. before rna· tions • No member bank shall pay any time deposit before its ma-
turitY probibit<Jd. .
· · turity, or waive any requirement of notice before payment of any
savings deposit except as to all savings deposits having the same
re~uirement."
Postal sayings de· c) Section 8 of the Act entitled "An Act to establish postal
positories. savings depositories for depositing savings at interest with the-
security of the Government for repayment thereof, and for other
Vol. 36, p . 816.
u.s.c., p. 1281. purposes", approved June 25, 1910, as amended (U.S.C., title 39,.
sec. 758), is amended by striking out the first sentence thereof and
Wit.hdrawals on 60 inserting in lieu thereof the following: "Any depositor may with-
days' notice.
draw the whole or any part of the funds deposited to his or her
credit with the accrued interest only on notice given sixty days in
advance and under such regulations as the Postmaster General
may prescribe; but withdrawal of any part of such funds may be
On dem3nd.
made upon demand, but no interest shall be paid on any funds so-
withdrawn except interest accrued to the date of enactment ' of the
. Banking Act of 1933: P1·ovided, That Postal Savings depositories
Deposits with mem- may depos1t
ProOiso. . 1.Un
.e d s 111. n1emb•er b an k s on time. nne1er regu l a t'Ions t o be
ber hanks. prescribed by the Postmaster General." !I
Vol.15936• p . 816; Vol. (d) The second sentence of section 9 of the Act entitled "An Act to·
39
' p.
u.s.c,, '
p.I28L . es t a bl'1sh posta l savmgs
. d epos1tones
. . 1.0r J! d epos1tmg
. . savmgs. a t mteres
. t
Deposit ol funds m · h h · .e 1 G .e } .e d .e
banks. wit t e secunty 01. t 1e overnment 1.0r repayment t 1ereo1., an 1.0r
other purposes'\ approved June 25, 1910, as amended (U.S.C., title
39, sec. 759), is amended by striking out the period at the end thereof
po~~u~~~red':hen de- and inserting in lieu thereof a colon and the following: "Pro-v ided,
Ante, P· 168· That no such security shall be required in case :-Of such part of the
deposits as are insured under section 12B of the Federal Reserve Act,.
as amended."
~~§·.~~: tP~;~4 , 288, SEc. 12. Section 22 of the Federal Reserve Act, as amended (U.S. C.,
~~-292; Supp. vr, p. title 12, sees. 375, 376, 503, 593-595; Supp. VI, title 12, sec. 593), is

l
· further amended by adding at the end thereof the following new
paragraph:
Loans to executive " (g) No executive officer of any member bank shall borrow from
officer prohibited.
or otherwise become indebted to any member bank of which he is
an executive officer, and no member bank shall make any loan or I
\
extend credit in any other manner to any of its own executive officers:
re~~~;, 1 ot loans P1•ovided, That loans heretofore made to any such officer may ~e
made prior hereto. renewed or extended not more than two years from the date this
paragraph takes effect, if in accord with sound banking practice.
w:eif~jeb~ld tg~t};~; H any executive. officer of any member bank borrow from or i:f
member bank. he be or become mdebted to any bank other than a member bank
of which he is an executive officer, he shall make a written report to
the chairman of the board of directors of the member bank of which
he is an executive officer, stating the date and amount of such loan
or indebtedness, the security therefor, and the purpose :for which
P61lalty provision. the proceeds have been or are to be used. Any executive officer o£
any member bank violating the provisions of this paragraph shall
be deemed guilty of a misdemeanor and shall be imprisoned not
exceeding one year, or fined not more than '$5,000, or both; and any
member bank violating the provisions of this paragraph shall be
 73d CONGHESS. SESS. I. CH. 89. JUNE 16, 1933. 183
fined not more than $10,000, and may be fined a :further sum equal
to the amount so loaned or credit so extended."
SEC. 13. The Federal Reserve Act, as amended, is amended by ~0~· t:f• p. 27~63 283 .
inserting between sections 23 and 24 thereof (U.S. C., title 12, sees. supj:,.'vi, ~P·l37.' '
64 and 311; Supp. VI, title 12, sec. 311) the :following new section:
"SEc. 23A. No member bank shall (1) make any loan or any Loans, ~v~tments,
extension of credit to, or purchase securities under repurchase agree- ~~;;,be¥rb':~~~t~~ am~f.
ment n·om, any of its affiliates, or (2) invest any of its :funds in the ates.
capital stock, bonds, debentures, or other such obligations of any
such affiliate, or (3) accept the capital stock, bonds, debentures, or
other such obligations of any such affiliate as collateral security :for
advances made to any person, partnership, association, or corpora-
tion, if, in the case of any such affiliate, the aggregate amount of Percentage permit-
. such loans, extensions of credit, repurchase agreements, investments, ted.
and advances against such collateral security will exceed · 10 per
centum of the capital stock and surplus of such member bank, or
if, in the case of all such affiliates, the aggregate amount of such
loans, extensions of credits, repurchase agreements, investments, and
advances against such collateral security will exceed 20 per centum
of the capital stock and surplus of such member bank.
"Within the foregoing limitations, each loan or extension of credit security.
of any kind or character to an affiliate shall be secured by collateral
in the form of stocks, bonds, debentures, or other such obligations
having a market value at the time of making the loan or extension
of credit of at least 20 per centum more than the amount of the
loan or extension of credit, or of at least 10 per centum more than
the amount of the loan or extension of credit if it is secured by
qbligations of any State, or of any political subdivision or agencv
thereof: P1'0Vided, That the provisions of this paragraph shall not Proviso.
apply to loans or extensions of credit secured by obligations of the tio~~~~~-states obliga-
United States Government, the Federal intermediate credit banks,
the Federal land banks, the Federal Home Loan Banks, or the Home
Owners' Loan Corporation, or by such notes, drafts, bills of exchange,
or bankers' acceptances as are eligible :for rediscount or for purchase
by Federal reserve banks. A loan or extension of credit to a acil?:~~ to officers ot
director officer, clerk, or other employee or any representative of
any such affiliate shall be deemed a loan to the affiliate to the extent
that the proceeds of such loan are used for the benefit of, or trans-
ferred to, the affiliate.
"For the purposes of this section the term' affiliate' shall include "Affiliate", con-
holding company affiliates as well as other affiliates, and the pro- strued.
visions of this section shall not apply to any affiliate (1) engaged Affiliates not in·
solely in holding the bank premises of the member bank with which eluded.
it is affiliated, (2) engaged solely in conducting a safe-deposit busi-
ness or the business of an agricultural credit corporation or livestock
loan company, (3) in the capital stock of which a national banking
association is authorized to invest pursuant to section 25 of the Vol. 38, p. 273.
Federal Reserve Act, as amended, (4) organized under section u.s.c., p. 292·
25 (a) of the Federal Reserve Act, as amended, or (5) enga.ged
solely in holding ·obligations of the United States Government, the
Federal intermediate credit banks, the Federal land banks, the Fed-
eral Home Loan Banks, or the Home Owners' Loan Corporation;
but as to any such affiliate, member banks shall continue to be subject
to other provisions of law applicable to loans by such banks and
investments by such banks in stocks, bonds, debentures, or other such
obligations."
SEc. 14. The Federal Reserve Act, as amended, is amended by Vol. 38, P· 273.
.
msertmg . bet ween sectiOn . 25 t hereo f (U .S .C., title 12, supp.
. 24 an d sectiOn u.s.c.,
vr. pp. 283, 292;
p. 137.
 184 73d CONGRESS. SESS. I. CH. 89. JUNE 16, i933.

sees. 3'71 and 601-605; Supp. VI, title 12, sec. 371) the following
new section :
. Investments prohib· " SEc. 24A. Hereafter no national bank without the approval
1ted to natiOnal and '
State member banks. of the Comptroller of the Currency, and no State member bank,
without the approval of the Federal Reserve Board, shall (1) invest
in bank premises, or in the stock, bonds, debentures, or other such
obligations of any corporation holding the premises of such bank
or (2) make loans to or upon the security of the stock of any such
corporation, if the aggregate of all such investments and loans will
exceed the amount of the crupital stock of such bank."
Vol. 41, p. 1145. SEc. 15. The Federal Reserve Act, as .amended, is further amended
u.s.c., p. 293- 200 · by inserting after 'Section 25 (a) thereof (U.S.C., title 12, sec.
611-631) the following new section :
Foreign branches. "SEC. 25. (b) Notwithstanding any other provision of law all suits
Suits at law, equity. f · · nature at common law or in equity towh 1c ' h any corporatiOn
'
o a Civil
organized under the laws of the United States shall be a party, aris-
ing out of transactions involving international or foreign banking, or
banking in a dependency or insular possession of the United States,
or out of other international or foreign financial operations, either
directly or through the agency, ownership, or control of branches or
local institutions in dependencies or insular possessions of the United
J.urisdiction _of States or in foreign countries, shall be deemed to arise under the laws
'2,~~~~~ St.ates dJstnct o:f the United States, and the district courts of the United States
shall have original jurisdiction of all such suits; and any defendant
Removal. in any such suit may, at any time before the trial thereof, remove
such suits :from a State court into the district court of the United
States for the proper district by following the procedure for the
r emoval of causes otherwise provided by law. Such removal shall
not cause undue delay in the trial of such case and a case so removed
shall have a place on the calendar of the United States court to
which it is removed relative to that which it held on the State court
from which it was removed.
When Federal Re- "Notwithstanding any other provision of law, all suits of a civil
serve bank a party. nature at common law or in equity to which any Federal Reserve
bank shall be a party shall be deemed to arise under the laws of the
United States and the district courts of the United States shall have
original jurisdiction of all such suits; and any Federal Reserve bank
which is a defendant in any such suit may, at any time before the
trial thereof, remove such suit from a State court into the district
court of the United States for the proper district by following the
Attachment before procedure for the removal of causes otherwise provided by law. No
final judgment demed.
attach ment or executiOn · sh a11 b e Issue
· d agamst
· any F ederal Reserve
bank or its property before final judgment in any suit, action, or
proceeding in any State county, municipal, or United States court."
R .s.,sec.5136,p.99a. SEc. 16. Paragraph (,Seventh" of section 5136 of the Revised
vf:::fil.p. 259; Supp. Statutes, as amended (U.S.C., title 12, sec. 24; Supp. VI, title 12, sec.
24), is amended to read as follows :
Corporate P?wcrs of "Seventh. To exercise by its board of directors or duly authorized
natiOnal banhcmg as.•o· offi cers or agent s, sub JeC
ciations. · t to 1aw, a 11 sueh 1nc1
· · d ent a1 powers ass h a11 b e
necessary to carry on the business of banking; by discounting and
negotiatmg promissory notes, drafts, bills of exchange, and other
evidences of debt; by receiving deposits; by buying and selling
exchange, coin, and bullion; by loaning money on personal security;
and by obtaining, issuing, and circulating notes according to the
provisions of this title. The business of dealing in investment securi-
ties by the association shall be limited to purchasing anu selling such
securities without recourse, solely upon the order, and for the account
of, customers, and in no case for its own account, and the association
 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933. 185
shall not underwrite any issue of securities: Provided, That the asso- f~·~h':llie of invest-
ciation may purchase :for its own account investment securities under ment securities.
such limitations and r estrictions as the Comptroller of the Currency
may by regulation prescribe, but in no event (1) shall the total mftt!dcentage per-
amount of any issue of investment securities of any one obligor or
maker purchased after this section as amended takes effect and held
by the association :for its own account exceed at any time 10 per centum
of the total amount of such issue outstanding, but this limitation shall
not apply to any such issue the total amount of which does not exceed
$100,000 and does not exceed 50 per centum of the capital of the asso-
ciation, nor (2) shall the total amount of the investment S'ecurities of
any one obligor or maker purchased after this section as amended
takes effect and held by the association for its own account exceed at
any time 15 per centum of the amount of the capital stock of the
association actually paid in and unimpaired and 25 per centum of its
unimpaired surplus fund. As used in this section the term 'invest- " Investment securl·
ment securities' shall mean marketable obligations evidencing indebt- ties," construed.
edness of any person, copartnership, association, or corporation in the
:form of bonds, notes andjor debentures commonly known as invest-
ment securities under such :further definition of the term 'investment
securities' as may by regulation be prescribed by the Comptroller of
the Currency. Except as hereinafter provided or otherwise per- sh~'::s~base of stock
mitted by law, nothing h erein contained shall authorize the purchase
by the association of any shares of stock of any corporation. The
limitations and restrictions
.
herein contained as to dealincr o
in ' under- States,
Obligations otUnit.ed
etc.
writing and purchasmg for its own account, investment securities
shall not apply to obligations of the United States, or general obliga-
tions of any State or of any political subdivision thereof, or obliga-
tions issued under authority of the F ederal Farm Loan Act, as
amended, or issued by the Federal Home Loan Banks or the Home
Owners' Loan Corporation: Provided, That . bin carrying
. on the busi- Safe-deposit
Prornso.
business.
ness common l y Imown as th e sa:£e-d eposrt usmess the association
shall not invest in the capital stock of a corporation organized under
the law of any State to conduct a safe-deposit business in an amount
in excess of 15 per centum of the capital stock of the association
actually paid in and unimpaired and 15 per centum of its unimpaired
surplus."
~ff~tlve date ot re-
• The restrictions of this section as to dealing in investment securi- str1ct1ons.
tres shall take effect one year after the date of the approval of
this Act.
SEc. 1'7. (a) Section 5138 of the Revised Statutes, as amended ~lc~~- ~;~~~;:
5

(U.S.C., title 12, sec. 51; Supp. VI, title 12, sec. 51), is amended to vr, p. Iao.
read as follow.s :
" SEc. 5138. After this section as amended takes effect, no national ba~:s~ it a 1 • national
banking association shall be .organized
. . hwith a. less
l :£ capital
l than onRequisite !'mount ot,
orgaruzat10n.
$100,000, except t h at sueh assocratwns wrt a caprta o not ess than
$50,000 may be organized in any place the population of which does
not exceed six thousand inhabitants. No such association shall be
organized in a city the population of which exceeds fifty thousand
persons with a capital of less than $200,000, except that in the out-
lying districts of such a city where the State laws permit the organi-
zation of State banks with a capital of $100,000 or less, national
banking associations now organized or hereafter organized may, with
the approval of the Comptroller of the Currency, have a capital o:f
not less than $100,000."
(b) The tenth paragraph of section 9 of the F ederal Reserve Act, ~~~-.c~'/28~ ·
4

as amended (U.S.C., title 12, sec. 329), is amended to read as follows: Admission to mem-
" No applying bank . shall be admitted
. d to member
. .shicl in a· Federal
l ffi bersl!
1d·p.
P at -up cap1
.tal
re-
reserve ban k un1ess rt possesses a par -up ummpaue caprta su - quired.
 186 73cl CONGR E SS. SE SS. I. CH. 89. J UNE 16, 1933.

cient to entitle it to become a national banking association in the

place where it is situated under the provisions of the National
f[;[~80 banks organ - Bank Act, as amended: Provided, That this paragraph shall not
ized prior hereto, etc. apply to State banks and trust companies organized prior to the
date this paragraph as amended takes effect and situated in a place
the population of which does not exceed three thousand inhabitants
and having a capital of not less than $25,000, nor to any State bank
Ante , p. 168. or trust company which is so situated and which, while it is entitled
to the benefits of insurance under section 12B of this Act, increases
_ its capital to not less than $25,000."
., p." 281 :, ~-
8 139
-P::-.S.C
u ·• sec. wa .
.• upp. SEc. 18. Section 5139 of the Revised Statutes ' as amended (U.S.C. '
VI, 1-'· 131. title 12, sec. 52; Supp. VI, title 12, sec. 52), is amended by adding at
the end thereof the following new paragraph:
ba~t~f~ ass~~g;.;:~~· "After one year from the date of the enactment of the Banking Act
u~e. toh represent of 1933, no certificate representing the stock of any such association
stocK m ot er corpora- l ll
tion prohibited. s 1a represent t h e stoc k of any oth er corporatwn,. except a member
bank or a corporation existing on the date this paragraph takes effect
engaged solely in holding the bank premises of such association, nor
shall the ownership, sale, or transfer of any certificate representing
the stock of any such association be conditioned in any manner
whatsoever upon the ownership, sale, or transfer of a certificate rep-
resenting the stock of any other corporation, except a member bank."
~Jc"ec. 5~,p. 994. SEc. 19. Section 5144 of the Revised Statutes, as amended (U.S.C., .
· · ., p. · title 12, sec. 61), is amended to read as follows:
v;~areholder's right to " SEc. 5144. In all elections of directors, each shareholder shall
have the right to vote the number of shares owned by him for as
many persons as there are directors to be elected, or to cumulate
such shares and give one candidate as many votes as the number of
directors multiplied by the number of his shares shall equal, or to
distribute them on the same principle among as many candidates as
he shall think fit; and in deciding all other questions at meetings of
Nonvoting shar~s . shareholders, each shareholder shall be entitled to one vote on each
share of stock held by him; except (1) that shares of its own stock
held by a national bank as sole trustee shall not be voted, and shares
of its own stock held by a national bank and one or more persons as
trustees may be voted by such other person or persons, as trustees,
in the same manner a.s if he or they were the sole trustee, and
(2) shares controlled by any holding compan-y affiliate of a national
bank shall not be voted unless such holding company affiliate shall
have first obtained a voting permit as hereinafter provided, which
permit is in force at the time such shares are voted. Shareholders
Proxies.
may vote by proxies duly authorized in writing; but no officer, clerk,
teller, or bookkeeper of such bank shall act as proxy; and no share-
holder whose liability is past due and unpaid shall be allowed to vote.
Shares deeJl'!ed con- " For the purposes of this section shares shall be deemed to be
trolled by holdmg com- . • •
pany. controlled by a holdlllg company affihate 1f they are owned or con-
trolled directly or indirectly by such holding company affiliate, or
held by any trustee for the benefit of the shareholders or members
thereof.
Voting permit, hold-
ing company affiliate.
"Any such holding company affiliate may make application to the
Federal Reserve Board for a voting permit entitling it to cast one
vote at all elections of directors and in deciding all questions at
meetings of shareholders of such bank on each share of stock con-
trolled by it or authorizing the trustee or trustees holding the stock
for its benefit or for the benefit of its shareholders so to vote the same.
The Federal Reserve Board may, in its discretion, grant or with-
hold such permit a.s the public interest may require. In acting upon
Application for . such application, the Board shall consider the financial condition of
the applicant, the general character of its management, and the prob-
 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933. 187
able effect of the granting of such permit upon the affairs of such Conditions.
bank, but no such permit shall be granted except upon the following
conditions:
" (a) Every such holding company affiliate shall, in making the Agreement required .
application for such permit, agree (1) to receive, on dates identical
with those fixed for the examination of banks with which it is
affiliated, examiners duly authorized to examine such banks, who
shall make such examinations of such holding company affiliate as
shall be necessary to disclose fully the relations between such banks
and such holding company affiliate and the effect of such xelations
upon the affairs of such banks, such examinations to be at the
expense of the holding company affiliate so examined; (2) that the
reports of such examiners shall contain such information as shall be
necessary to disclose fully the relations between such affiliate and
such banks and the effect of such relations upon the affairs of such
banks; ( 3) that such examiners may examine each bank owned or
controlled by the holding company affiliate, both individually and in
conjunction with other banks owned or controlled by such holding
company affiliate; and ( 4) that publication of individual or con-
solidated statements of condition of such banks may be required;
" (b) After five years after the enactment of the Banking Act tat,':J.ts to be main·
of 1933, every such holding company affiliate (1) shall possess, and Post, p. 195 ·
shall continue to possess during the life of such permit, free and
clear of any lien, pledge, or hypothecation of any nature, readily
marketable assets other than bank stock in an amount not less than
12 per centum of the aggregate par value of all bank stocks con-
trolled by such holding company affiliate, which amount shall be
increased by not less than 2 per centum per annum of such aggregate
par value until such assets shall amount to 25 per centum of the
aggregate par value of such bank stocks; and (2) shall rein vest in
readily marketable assets other than bank stock all net earnings
over and above 6 per centum per annum on the book value of its
own shares outstanding until such assets shall amount to such 25
per centum of the aggregate par value of all bank stocks controlled
by it;
" (c) Notwithstanding the :foregoing provisions of this section, 1. Shareholders' liabil·
after five years after the enactment of the Banking Act of 1933, (1) t.Ypost, p. 195.
any such holding company affiliate the shareholders or members of
which shall be individually and severally liable in proportion to the
number of shares of such holding com"pany affiliate held by them
respectively, in addition to amounts invested therein, for all statutory
liability imposed on such holding company affiliate by reason of its
control of shares of stock of banks, shall be required only to
establish and maintain out of net earnings over and above 6 per
centum per annum on the book value of its own shares outstanding
a reserve of readily marketable assets in an amount of not less than
12 per centum of the aggregate par value of bank stocks controlled
by it, and (2) the assets required by this section to be possessed by
such holding company affiliate may be used by it :for replacement of
capital in banks affiliated with it and for losses incurred in such
banks, but any deficiency in such assets resulting from such use shall
be made up within such period as the Federal Reserve Board may
by regulation prescribe; . .
" (d) Every officer ' director ' agent '. and employee of every. such employees,
Lmbllity ol officers,
etc.
1wlding company affiliate shall be subJect to the same penalties :for
false entries in any book, report, or statement of such holding com- 2
pany affiliate as are applicable to officers, directors, agents, and ~:~:<5~j,~ ~i~· ·
1007

employees of member banks under section 5209 of the Revised

Statutes, as amended (U.S.C., title 12, sec. 592); and
 188 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933.

. Votingpermits,hold-
mg company affiliates. " (e) Every. such holding
. companh affiliate
. shall ' in its application
~equirements of ap- for such votmg permit, (1) show t at It does not own, control, or
plicatiOn. have any inter est in, and is not participating in the management or
d_ir~ction of, !illY. corporation, business trust, association, or ot~er
similar orgamzatwn formed for the purpose of, or engaged pr111-
cipally in, the issue, flotation, underwriting, public sale, or
distribution, at wholesale or retail or through syndicat~ participa-
tion, of stocks, bonds, debentures, notes, or other securities of any
Agreements. sort (hereinafter referred to as 'securities company') ; (2) agree I
that during the period that the permit r emains in force it will not
acquire any ownership, control, or interest in any such securities :\
company or participate in the management or direction ther eof;
(3) agree that if, at the time of filing the application for such permit,
it owns, controls, or has an interest in, or is participating in the '\
management or direction of, any such securities company, it willt
within five years after the filing of such application, divest itself I
of its ownership, control, and interest in such securities company
and will cease participating in the management or direction thereof,
and will not thereafter, during the period that the permit r emains
in force, acquire any further ownershjp, control, or interest in any
such securities company or participate in the management .or direc-
tion thereof; and ( 4) agree that thenceforth it will declare dividends
only out of actual net earnings. .
Revocationofpermit,
upon violating Bank· "If at any time it shall appear to the Federal Reserve ;Board that
ing Act of 1933. ·a ny holding company affiliate ~ violated any of the provisions of
the Banking Act of 1933 or of any agreement made pursuant to this
Post, p. 195. section, the Federal Reserve Board may, in its discretion, revoke any
such voting· permit after giving sixty days' notice by registered mail
of its intention to the holding company affiliate and affording it an
st~~~~bi~f ~.:'~~~~ opportunity to be heard. Whenever the Federal Reserve Board shall
denied. have revoked any such voting permit, no national bank whose stock
is controlled by the holding company affili at~ whose permit is so
revoked shall receive deposits of public moneys of the United States,
nor shall any such national bank pay any further dividend to such
holding company affiliate upon any shares of such bank controlled
by such holding company affiliate.
Forfeitureetc.ot rights, "Whenever the Federal Reserve Board shall have revoked any
privileges,
voting permit as hereinbefore provided, the rights, privileges, and
franchises of any or all national banks the stock of which is con-
trolled by such holding company affiliate shall, in the discretion of
Vol. 38• P· 25 1. the Federal Reserve Board, be subject to forfeiture in accordance
with section 2 of the Federal Reserve Act, as amended."
atf;,l:~~i~ ~~. ~~i; SEc. 20. After one year fro~ the ~ate of the enactment _of th}s Act,
sales organi<ation, pro- no member bank shall be affiliated 111 any manner descnbed 111 sec-
hibited. tion 2 (b) hereof with any corporation, association, business trust, or
Ante, p.l62. other similar organization engaged principally in the issue, flotation,
underwriting, public sale, or distribution at wholesale or retail or
through syndicate participation of stocks, bonds, debentures, notes,
or other securities.
Penalty tor violation. For every violation of this section the member bank invqlved shall
be subject to a penalty not exceeding $1,000 per day for each day
-~ssessment ot. during which such violation continues. Such penalty may be assessed
by the Federal Reserve Board, in its discretion, and, when so
assessed, may be collected by the Federal reserve bank by suit or
otherwise.
National b~ks. If :tny such violation shall continue for six calendar months after
et!.~1Ti~%~ag~~igto~ the member bank shall have been warned by the F ederal Reserve
tinues. Board to discontinue the same, (a) in the case of a national bank, all
the rights, privileges, and franchises granted to it under the National
 73d CONGRE SS. SE SS. I. CH. 89. J UNE 16, 1933. 189
Bank Act may be forfeited in the manner prescribed in section 2 of Vol. as, p . 2s1.268 270•
the F ederal Reserve Act, as amended (U.S.C., title 12, sees. 141, 222- 27Y,·~f· pp . ' '
225, 281-286, and 502), or, (b) in the case of a State member bank, ~~r~~if~~b~{bt':,~::
all of its rights and privileges of membership in the Federal Reserve bership rights.
System may be forfeited in the manner prescribed in section 9 of the
Federal Reserve Act, as amended (U.S. C., title 12, sees. 321-332). ~0~· ;ss· p. ~g: s
SEa. 21. (a) After the expiration of one year after the date of vr, P: 1is.P· ' u pp.
enactment of this Act it shall be unlawful-
( 1) For any person, firm, corporation, assoc/ation, business trust, Unlawful acts.
or other similar organization, engaged in the business of issuing, Heceiving deposits
underwriting, selling, or distributing, at wholesale or retail. or ~~hJ:;Jc~ 0seffi:~~~.~
through syndicate participation, stocks, bonds, debentures, notes, or organization.
other securities, to engage at the same. time to any extent whatever
in the business of receiving deposits subject to check or to repayment
upon presentation of a passbook, certificate of deposit, or other
evidence of debt, or upon request of the depositor; or
(2) For any person, firm, corporation, association, business trust, .Receiving .de.posits
or other similar organization, other than a financial institution or w• th~,~~t~~.mlttrng to
private banker subject to examination and regulation under State
or Federal law, to engage to any extent whatever in the business of
receiving deposits subject to check or to repayment upon presentation
of a passbook, certificate of deposit, or other evidence of debt, or upon
request of the depositor, unless such person, firm, corporation, asso-
ciation, business trust, or other similar organization shall submit
to periodic examination by the Comptroller of the Currency or by
the Federal reserve bank of the district and shall make and publish Reports required.
periodic reports of its condition, exhibiting in ·detail its resources
and liabilities, such examination and reports to be made and pub-
lished at the same times and in the same manner and with like effect
and penalties as are now provided by law in respect of national
banking associations transacting business in the same locality.
(b) ·whoever shall willfully violate any of the provisions of this Penalty provisions.
section shall upon conviction be fined not more than $5,000 or impris-
oned not more than five years, or both, ·a nd any officer, director,
employee, or agent of any person, firm, corporation, association,
business trust, or other similar organization who knowingly par-
ticipates in.. any such violation shall be punished by a like fine or
imprisonment or both.
SEa. 22. The additional liability imposed upon shareholders in Additional liability,
natwna· 1 b an k'1ng assocw
· t'Ions by the prov1s10ns
· · of sect'IOn 5151 of th e not applicable
hereafter issuedto. shares
Revised Statutes, as amended, and section 23 of the Federal Reserve ~~t·a~~~~M~: P· 995·
Act, as amended (U.S.C., title 12, sees. 63 and 64), shall not apply u.s.c., p. 263.
with respect to shares in any such association issued after the date
of enactment of this Act.
SEa. 23. Paragraph (c) of section 5155 of the Revised Statutes, as R.S ., sec. s1ss, 20
p. 996.
amended (U.S.C., title 12, sec. 36), is amended to read as follows: u.s.a., p . 1.
"(c) A national banking associatioz: may, with the approval of the ~~~~b~~hment by
Comptroller of the Currency, establish and operate new branches: nssociation, upon ap
(1) Within the limits of the city, town or village in which said proval.
association is situated, if such establishment and operation are at the
time expressly authorized to State banks by the law of the State in
question; and (2) at any point within the State in which said associa-
tion is situated, if such establishment and operation are at the time
authorized to State banks by the statute law of the State in question
by language specifically granting such authority affirmatively and
not merely by implication or recognition, and subject to the restric-
tions as to location imposed by the law of the State on State banks .

•
190 73d CONGRESS. SESS. I. CH. 89. JUNE 16; 1933.
Branch outside of No such association shall establish a branch outside of the city, town,
~~
or village in which it is situated unless it has a paid-in an d unim-
Prtotvisohs. . 1)aired canital stock of not less than $500,000: Provided, That in
S aesavmgpopua- 1
ti~n. of Jess tllan one States with a popu atwn o
,L 1' fl ess t h an one mi'11'wn, an d wh'hl
lC 1ave no
nnlhon. cities located therein with a population exceeding one hundred
thousand, the capital shall be not less than $250,000: Provided, That
Less than one half in States with a population of less than one-half million, and which
million.
have no cities located therein with a population exceeding fifty
thousand, the capital shall not be less than $100,000."
R.S., sec. 5155, P- W6. Paragraph (d) of section 5155 of the Revised Statutes, as amended
u.s.c., P· :w1. (U.S. C., title 12, sec. 36), is amended to read as follows:
Aggregate m pital or " (d) The aggregate capital of every national banking association
association; amount. and its branches shall at no time be less than the aggregate minimum
capital required by law for the establishment of an equal number
of national banking associations situated in the various places where
such association and its branches are situated."
National banking as- SEO. 24. (a) Sections 1 and 3 of the Act entitled "An Act to pro-
sociations; consolida·
tions. vide for the consolidation of national banki ng associations " , ap-
44,";\~~- 1043; Vol. proved November 7, 1918, as_ a!l1ended (U.S.C., title 12, se~s. 33, 34,
vYs.g9P· 260; Supp. and 34a), are amended by stnkmg out the word_s " county, c1ty, town,
.:ftilte',., added. or village" wherever they occur in each such section, and inserting
in lieu thereof the words" State, county, city, town, or village."
~oUf·P~ 122 5- vr (b) Section 3 of such Act of November 7, 1918, as. amended, is-.
p. 1w.'. ·• t;upp. .' further amended by striking out the second sentence thereof ancl
da?e't~~:;oci~to~nsoli- inserting in lieu thereof the following: " The capital stock of such
consolidated association shall not be less than that required under
existing law for the organization of a national banking association
in the place in which such consolidated association is located.
~erger ot corporate Upon such a consolidation, or upon a consolidation of two or
enstenoo. more national banking associations under section 1 of this Act, the
corporate existence of each of the constituent banks and national
banking associations participating in such consolidation shall be
merged into and continued in the consolidated national banking
association and the consolidated association shall be deemed to be
pr~~~s~~retc~ 1 rights, the same corporation as each of the constituent institutions. All the
rights, franchises, and interests of each of such constituent banks
and national banking associations in and to every species of prop-
erty, real, personal, and mixed, and choses in action thereto belonging,
shall be deemed to be transferred to and vested in such consolidated
national banking association without any deed or other transfer; and
such consolidated national banking association, by virtue of such
consolidation and without any order or other action on the part of
any court or otherwise, shall hold and enjoy the same and all rights
of property, franchises, and interests, including appointments, desig-
nations, and nominations and all other rights and interests as trustee,
executor, administrator, registrar of stocks and bonds, guardian of
estates, assignee, receiver, committee of estates of lunatics and in
every other fiduciary capacity, in the same manner and to the same
extent as such rights, franchises, and interests were held or enjoyed
by any such constituent institution at the time of such consolidation:
fo~~o. 01 court to Provided, however, That where any such constituent institution at the
re<I?-o--:econsolidatedas- time of such consolidation was acting under appointment of any court
soCiatwn from trustee-
ship, etc. as t rust ee, executor, a d m1mstrator,
· · ·
registrar of stock s an d b on d s~
guardian of estates, assignee, receiver, committee of estates of lunatics
or in any other fiduciary capacity, the consolidated national banking
association shall be subject to removal by a court of competent juris-
diction in the same manner and to the same extent as was such
constituent corporation prior to the consolidation, and nothing herein
contained shall be construed to impair in any , manner the right of

•
 73d CONGRESS. SESS. I. CH. 89. JUNE Hi, 1933. 191
any court to remove such a consolidated national banking association
and to appoint in lieu ther eof a substitute trustee, executor, or other
fiduciary , except that such right shall not be exercised in such a
manner as to discriminate against national banking associations, nor aur~~~f!~~ation not
shall any such consolidated association be removed solely because
of the fact that it is a national banking association."
SEc. 25. The first two sentences of section 5197 of the Revised 1oJ;:s., sec. 5197, p .
Statutes (U.S. C., title 12, sec. 85) are amended to read as follows: u.s.c., p. 2M.
"Any association may t ake, receive, r eserve, and charge on any Right or. association
.
l oan or d 1scoun t 1nad e, ur upon any no t es, b"ll
1 so f excnange,
' 1 • loans,
or ot1er to take mterest on
etc.
evidences of debt, interest at the rate allowed by the laws of the State,
Territory, or District where the bank is located, or at a rate of 1
per centum in excess of the discount rate on ninety-day commercial Co=ercial paper.
paper in effect at the Federal reserve bank in the Federal reserve
district where the bank is located, whichever may be the greater, and
no more, except that where by the laws of any State a different rate
is limited for banks organized under State laws, the rate so limited
shall be allowed for associations organized or existing in any such
State under this title. ·when no rate is fixed by the laws of the When no fixed rate.
State, or Territory, or District, the bank may take, receive, reserve,
or charge a rate not exceeding 7 per centum, or 1 per centum in excess
of the discount rate on ninety-day commercial paper in effect at the
Federal reserve bank in the Federal reserve district where the bank
is located, whichever may be the ,greater, and SlJCh interest may be
taken in advance, reckoning the days for which the note, bill, or other
evidence of debt has to run."
SEc. 26. (a) The second sentence of the first paragraph of section 100R.s., sec. 5200, p.
5200 of the Revised Statutes, as amended (U.S.C., title 12, sec: 84; -J:s.c ., p. 264; supp.
Supp. VI, title 12, sec. 84), is amended by inserting before the period vh~;l3~iliability.
at the end thereof the following: " and shall include in the case of
obligations of a corporation all obligations of all subsidiaries thereof
in which such corporation owns or controls a :rpajority interest."
(b) The amendment made by this section shall not apply to such 81}biigations or sub-
obligations of subsidiaries held by such association on the date this tanes.
section takes effect.
R .S., sec. 5211, p.
SEc. 27. Section 5211 of the Revised Statutes, as amended (U.S.C., 1007.
u.s.a.,
title 12, sec. 161; Supp. VI, t~tle 12, sec. 161), is amended by adding VI, p . 133.p. 26\Y. supp.
at the end thereof the followmg new paragraph:
" Each national banking association shall obtain from each of its ba~~~~~t~ss~iafl~i~iate
affiliates other than member banks and furnish to the Comptroller of
the Currency not less than three reports during each year, in such
form as the Comptroller may prescribe, verified by the oath or affir- Form.
mation of the president or such other officer as may be designated by Verification.
the board of directors of such affiliate to verify such reports, dis-
closing the information hereinafter provided for as of dates identical
with those for which the Comptroller shall during such year require
the reports of the condition of the association. For the purpose of
this section the term 'affiliate' shall include holding company affil- st;~~:filiate", con-
iates as well
.
as other affiliates. Each such report .
of an affiliate shall toRComptroller.
eport transmitted
be transmitted to the Comptroller at the same t1me as the correspond-
ing report of the association, except that the Comptroller may, in his
discretion, extend such time for good cause shown. Each such report
shall contain such information as in the judgment of the Comptroller Contents.
of the Currency shall be necessary to disclose fully the relations
between such affiliate and such bank and to enable the Comptroller
to inform himself as to the effect of such relations upon the affairs of
such bank. The reports of such affiliates shall be published by the Publication.
association under the sam.e conditions as govern its own condition re-
ports. The Comptroller shall also have power to ca.Il for additional Additionalreports .
192 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933.

reports with respect to any such affiliate whenever in his judgment

the same are necessary in order to obtain a full and complete knowl-
edge of the conditions of the association with which it is affiliated.
Such additional reports shall be transmitted to the Comptroller of
Penaltyprovision. the Currency in such form as he may prescribe. Any such affiliated
bank which fails to obtain and furnish any r eport r equired under
this section shall be subject to a penalty of $100 for each day during
which such failure continues."
10~: ·• sec.
8 6240
' p. SEc. 28. (a) The first paragraph of section 5240 of the Revised
u.s,c., P· 288· Statutes, as amended (U.S. C., title 12, sec. 481), is amended by
inserting before the period at the end thereof a colon and the fol-
Bank examinations.
Aftiliates to be in- 1omng · · : "Prov id ec.l , Th at m
proviso · rnak mg
' th e exam1na · t'1011 of any
eluded. national bank the examiners shall include such an examination of
the affairs of all its affiliates other than member banks as shall be
necessary to disclose fully the r elations between such bank and such
Intormatlonrequired. affiliates and the effect of such relations upon the affairs of such
Forfeiture ot rights bank; and in the event of the refusal to give any information
on refusal. required in the course of the examination of any such affiliate, or in
the event of the refusal to permit such examination, all the rights,
privileges, and franchises of the bank shall be subject to forfeiture
in ~s, P· 25~ -n5 in accordance with section 2 of the Federal Reserve Act, as amended
-n1,'2Bs. ·• PP· ' ' (U.S. C., title 12, sees. 141, 222-225, 281- 286, and 502). The Comp-
troller of the Currency shall have power, and he is hereby author-
0f
Publi!l"t't·~n, report ized, to publish the report of his examination of any national banking
examma Ions. assoCla· t'wn or affil 1a
' t e wh'1ch sh a.ll not w1t
· h 1n
' one h un d red an d t went y
days after notificatio~ of the recommendations or suggestions of the
Comptroller, based on said examination, have complied with the same
Notice of. to his satisfaction. Ninety days' notice prior to such publicity shall
be given to the bank or affiliate."
R .S., sec. 5240, p.
1013.
(b) Section 5240 of the Revised Statutes, as amended (U.S. C., title
u.s.c., p. 288. 12, sec. 481), is further amended by adding after the first paragraph
thereof the following new paragraph:
Powers of examiner. " The examiner making the examination of any affiliate of a
national bank shall have power to make a thorough :examination of
all the affairs of the affiliate, and in doing so he shall h ave power
to administer oaths and to examine any of the officers, directors,
employees, and agents thereof under oath and to make a report of
. Expense of examtna- his findings to the Comptroller of the Currency. The expense of
twns. examinations of such affiliates may be assessed by the Comptroller
of the Currency upon the affiliates examined in proportion to assets
or resources held by the affiliates upon the dates of examination of
Assessment on re- the various affiliates. If any such affiliate shall refuse to pay such
!usa! to pay. expenses or shall fail to do so within sixty days after the date of
su ch assessment, then such expenses may be assessed against the
f'~~~ent when at- affit~iated bnatkionpal bapdkdar;d, when T
1
filiation of two or na 10na an : rov~ e , tW'toever,
sohass~sfstehd, shffial.l bt.e p~id ~yhsuch
at, 1 e a 11a 1011 IS w1t two
more national hanks. or more n ational banks, such expenses may be assessed against, and
collected from, any or all of such national banks in such proportions
~mplo~ent 01 ex- as the Comptroller of the Currency may prescribe. The examiners
ammers, e · and assistant examiners making the examinations of national bank-
ing associations and affiliates thereof herein · provided for and the
chief examiners, reviewing examiners and other persons whose serv-
ices may be required in connection with such examinations or the
reports thereof, shall be employed by the Comptroller of the Cur-
rency with the approval of the Secretary of the Treasury; the
Com!X'nsation. employment and compensation of examiners, chief examiners, review-
ing examiners, assistant examiners, and of the other employees of the
office of the Comptroller of the Currency whose compensation is paid
from assessments on banks or affiliates thereof shall be without regard
 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933. 193
to the provisions of other laws applicable to officers or employees of
the United States. The funds derived from such assessments may be
deposited by the Comptroller of the Currency in accordance with the Statusofassessment~.
provisions of section 5234 of the Revised Statutes (U.S.C., title 12, 5214
sec. 192) and shall not be construed to be Government funds or wTh$., sec. ' p.
27
appropriated monies; and the Comptroller of the Currency is u.s.c., P · 1.
authorized and empowered to prescribe regulations governing the
computation and assessment of the expenses of examinations herein
provided for and the collection of such assessments from the banks
and/or affiliates examined. If any affiliate of a national bank shall fn;;~~ru~~· ~~:!,"1 ~" ~~:
refuse to permit an examiner to make an examination of the affiliate a mination.
or shall refuse to give any information required in the course of any
such examination, the national bank with which it is affiliated shall
be subject to a penalty of not more than $100 for each day that any
such refusal shall continue. Such penalty may be assessed by the t/\ssessment or penal-
Comptroller of the Currency and collected in the same manner as
expenses of examinations."
SEc. 29. In any Resumption of bu~i-
. case in which ' in the opinion of the Comptroller
. ness, by closed assoma-
0 f t h e Currency, It would be to the advantage of the depositors and tion.
unsecured creditors of any national banking association whose busi-
ness has been closed, for such association to resume business upon the
retention by the association, for a reasonable period to be prescribed
by the Comptroller, of all or any part of its deposits, the Comp-
troller is authorized, in his discretion, to permit the association to consent or <leposi-
resume business if depositors and unsecured creditors of the associa- tors, etc.
tion representing at least 75 per centum of its total deposit and
unsecured credit liabilities consent in writing to such retention of Powers or Comptrol-
d eposi'ts. N otlung
. m . th'IS sec t'wn sh a11 b e construe d to a ffect In
• any Jer not affected.
manner any powers of the Comptroller under the ;provisions of law
in force on the date of enactment of this Act With respect to the
reorganization of national banking associations. ,
SEc. 30. Whenever, in the opinion of the Comptroller of the Cur- Violations or Ja..y by
. to r or offi cer of a na t'wna1 b a nk, or 0.1~ a b an k or officer,
rency, any d 1rec bank.
etc., of nattonal
:·
trust company doing business in the District of Columbia, or when-
ever, in the opinion of a Federal reserve agent, any director or officer
of a State member bank in hisb district shall have continued to vio- safe,
o
Wben contil;mcs un-
etc., bnnkmg prac-
late any law relatmg to such ank or trust company or shall have tices.
continued unsafe or unsound practices in conducting the business
of such bank or trust company, a.fter having been warned by the
Comptroller of the Currency or the Federal reserve agent, as the
case may be, to discontinue such violations of law or such unsafe
or unsound practices, the Comptroller of the_ Curren~y or the Federal t o ~~~~~~tion of facts
reserve agent, as the case may be, may certify the .1acts to the Fed-
eral Reserve Board. In any such case the Federal Reserve Board
may cause notice to be served upon such director or officer to appear
before such Board to show cause why he should not be removed ~opy to be trnns-
from office. A copy of such order shall be sent to each director of rultted.
the bank affected, by registered mail. If after granting the accused af~:'f:~a~!~:."tborlzed,
director or officer a reasonable oppo~·tunity to _be heard, the Fede_ral
Reserve Board finds that he has contmued to VIolate any law relatmg
to such bank or trust company or has continued unsafe or unsound
practices in conducting the business of such bank or trust company
after having been warned by the Comptroller of the Currency or
the Federal reserve agent to discontinue such violation of law or
such unsafe or unsound practices, the Federal Reserve Board, in its
discretion, may order that such director or officer be removed from or~eol.'y or removal
office. A copy of such order shall be served upon such director or
officer. A copy of such order shall also be served upon the bank of
which he is a director or officer, whereupon such director or officer
8()637°-34--13
 194 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933.

PraviJo. shall cease to be a director or officer of such bank : Provided, That

of ~~d'e~uentiai nature such order and the findings o:f :fact upon which it is based shall not
be made public or disclosed to anyone except the director or officer
involved and the directors of the bank involved, otherwise than in
Removedofficer,p~n- connection with proceedings for a violation of th~s secti<;m. Any
alt:l' for further pnrtwl- such director or officer removed from office as hermn provided who
pa twu m bank manage- •
meut. thereafter participates in any manner m the management of such
bank shall be fined not more than $5,000, or imprisoned for not more
than five years, or both, in the discretion of the court. .
Board of directors, . SEc. 31. After one year from the date of enactment of this Act,
etc. notwithstanding any other provision of law, the board of directors,
board of trustees, or other similar governing body of every natio~al
banking association and of every State bank or trust company which
N umberofmembcrs. is a member of the Federal Reserve System shall consist of not less
· than five nor more than twenty-five members; and every director,
Stock ownership re- trustee, or other member of such governing body shall be the bona
qulrement. fide owner in his own right of shares of stock of such banking asso-
Posl., p. 971. ciation, State bank or trust company having a I?ar value in the
aggregate of not less than $2,500, unless the capital of the bank
shall not exceed $50,000, in which case he must own in his own right
shares having a par value in the aggregate of not less than $1,500,
or unless the capital of the bank shall not exceed $25,000, in which
case he must own in his own right shares having a par value in the
Appointment of re- aggregate of not less than $1,000. If any national banking assooia-
ceiver, _when violation tion violates the provisions of this section and continues such viola-
by natwnal bank. •
t10n a :fter th'Irty d ays ' no t ICe
' :from t.h e Comptroller of t h e C urrency,
the said Comptroller may appoint a receiver or conservator therefor,
Forfeiture ot mem- in accordance with the provisions of existing law. If any State bank
bership, State member or trust company which is a member of the Federal Reserve System
bank. violates the provisions of this section and continues such violation
after thirty days' notice from the Federal R eserve Board, it shall be
subject to the forfeiture of its membership in the Federal Reserve
System in accordance with the provisions of section 9 of the Federal
R eserve Act, as amended.
Member bank offi- SEc. 32. From and after January 1, 1934, no officer or director
cers, dir~ctor~, etc. . of any member bank shall be an officer, director, or manager of anv
Engagmg m secun· • h· · d
ti!ls. transactions pro· corporatiOn, partners Ip, or umncorporate associatlOn engage pn-
· · d :'
h!hlted. marily in the business of purchasing, selling, or negotiating securi-
ties, and no member bank shall perform the functions of a corre-
Meruber bank not to spondent bank on behalf of any such individual partnership
act as correspondent
bank. corporat.1011, or umncorporate
. d assoClatlOn
· · an d no sue' h Individual,
· · · '
partnership, corporation, or unincorporated association shall perform
the functions of a correspondent for any member bank or hold on
Permit issued by deposit any funds on behalf of any member bank, unless in any
Board. such case there is a permit therefor issued by the Federal Reserve
Board; and the Board is authorized to issue such permit if in its
judgment it is not incompatible with the public interest, and to
Revocation. revoke any such permit whenever it finds after reasonable notice
and opportunity to be heard, that the public interest requires such
revocation.
VoL as, p. 73 2; Vol. SEc. 33. The Act entitle,d "An Act to supplement existin!! laws
39,p. 121;VoL4l,p.026. . l f l' f h ~
u.s.c., p. 353. agamst un aw ul restraints and monopo 1es, and or ot er purposes",
approved October 15, 1914, as amended (U.S.C., title 15, sec. 19), is
hereby amended by adding after section 8 thereof the following new
section:
m~~f~tonAct,nmend- " SEc. SA. That from and after the 1st day of January 1934, no
rn1~".!'~~~lli~r~~recto- director, officer, or employee of any bank, banking association, or
trust company, organized or operating under the laws of the United
States shall be at the same time a director, officer, or employee o£ a

; ..._· ;.
-:-:
 73d CONGRESS . SESS. I . CHS. 89, 90. JUNE 16, 1933. 195
corporation (other than a mutual savings bank) or a member of a
partnership organized for any purpose whatsoever which shall make
loans secured by stock or bond collateral to any individual, associa-
tion, partnership, or corporation other than its own subsidiaries."
SEc. 34. The right to alter, amend, or repeal this Act is hereby Amendment.
expressly reserved. If any provision of this Act, or the application .s.eparabillty or pro·
thereof to any person or circumstances, is held invalid, the remainder vlswns.
of the Act, and the application of such provision to other persons
or circumstances, shall not be affected thereby.
Approved, June 16; 1933, 11:45 a.m.

[CHAPTER 90.]
AN ACT June 16, 1033.
To encourage national industrial recovery, to foster fair competition, and to - m'O[Hi:i.T:RC:..:.5~7'?'56~.1.,...-­
provide for the construction of certain useful public works, and for other [Public, No. 67.)
purposes.
Be it ena,cted by the S ena,te and H OU8e of Re'Yn·esentatives
r · of the Recovery
NationalAct.Industri!ll
United States of America in Congress assembled,
TITLll: I-IND US·
TITLE I-INDUSTRIAL RECOVERY TRIAL RECOVERY.

DECLARATION OF POUCY Appropriation tor.

Post, p . 275.

SECTION 1. A national emergency productive of widespread unem- Declaration of pol!cy.

ployment and disorganization of industry, wHich burdens interstat~
and foreign commerce, affects the public welfare, and undermines
the standards of living of the American people, is hereby declared
to exist. It is hereby declared to be the policy of Congress to remove
obstructions to the free flow of interstate and foreign commerce
which tend to diminish the amount thereof; and to provide for the
general welfare by promoting the organization of industry for the
purpose of coopera,tive action among trade groups, to induce and
maintain united action of labor and management under adequate
governmental sanctions and supervision, to eliminate unfair coi!'lpeti-
tive practices, to promote the fullest possible utilization of the
present productive capacity of industries, to avoid undue restriction
of production (except as may be temporarily required), to increase
the consumption of industrial and agricultural products by increas-
ing purchasing power, to reduce and relieve unemployment, to
improve standards of labor, and otherwise to rehabilitate industry
and to conserve natural resources.
ADMINISTRATIVE AGENCIES
Administrative agen-
cies.

SEo. 2. (a) To effectuate the policy of this title, the President is to ~r:b~f~~- authorized
hereby authorized to' establish such agencies, to accept and utilize
such voluntary and uncompensated services, to appoint without Appointments.
regard to the provisions of the civil service laws, such officers and
employees, and to utilize such Federal officers and employees, and, Cooperation of Fed-
with the consent of the State. such State and local officers and em- era! and State officers,
ployees, as he may find necessary, to prescribe their authorities, etc.
duties, responsibilities, and tenure, and, without regard to the Classi-
fication Act of 1923, as amended, to fix the compensation of any
officers and employees so appointed.
(b) The President may delegate any of his functions and powers tifo~~egat!on or tunc-
under this title to such officers, agents, and employees as he may Inddustriahl planning
.
des1gna te or appom. t , an d may establ'1sh an m
. d ustr1a
. 1 p 1annmg
. an d researc agency.
anE~tablishment · au-
research agency to.aid in carrying out his functions under this title. thomed.