162 CONGRESS.

73d CONGRESS. I. CHS.

SESS. I. CRS. 87-89. JUNE 15,
87-89. JUNE 15, 16,
16, 1933.
1933.

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

[CHAPTER 88.]
[CHAPTER
lune
AN ACT
ACT
lune 15,
IS, 1933.
1933.
-.~[Hc;;.R;.:;.~5.;-:793=.~]
[H.R. 5793.] ..-- To revive
revive and reenact
reenact the Act
Act entitled
entitled""An
An Act
Act authorizing
authorizing Jed
Jed P.
P. Ladd,
Ladd, his
his heirs,
[Public,
[Public, No. No. 65.1
65.] representatives, and
legal representatives, and assigns, to
to construct, maintain,
maintain, and
and operate aa bridge
across Lake
across Lake Champlain from East Alburg, Vermont, to
Champlain from to West Swanton,
Swanton, Ver-
Ver-
mont",
mont", approved
approved March
March 2, 1929.
1929.
Be
Be it it enacted by the Senoe
Senate and House
H O'Use of Representatives' of
01 Representatives, 01 the
Con s trution of
LakeChpla.
~:~t~~~lt~ off
United
U'lIIited States
States of Aaneriea in
of America in Congress assembled, That
Oongress aJJse:n.bled, That the Act of
the Act <?£
bridge across,
bridge across, at East Congress
Congress approved March 2, 1929,
approved March 1929, authorizing
authorlzmg JedJed P.P. Ladd, his
hIS
Al~grg4t;;;·.
Alburg, Vt.
1506.
Vol. 45, p. 150K heirs, legal
heirs, legal representatives,
representatives, and assigns, to construct a bridge across
across
Lake between a point at or near East Alburg, Vermont,
Lake Champlain, between Vermont,
Swanton, Vermont, be, and
and a point at or near Swanton, and the same is hereby
hereby
Commne
PrOlliso.
of
of revived
revivedthe and reenacted:
andactual
reenacted: Provided,
Provided, That this
That this Act shall
Act shall be null and void
bereferred
null and void
unless the actual construction of the bridge herein referred to
unless construction of the bridge herein to be
Commencement
construction.
construction. be
commenced within one year and
commenced completed within three
and completed three years from
approval hereof.
the date of approval
Amendment.
Amendment. SEC. 2. The right to alter, amend, or repeal this Act Act is hereby
hereby
expressly
expressly reserved.
Approved,
Approved, June June 15,
15, 1933.
1933.

[CHAPTER 89.]
[CHAPTER 89.]
June
AN ACT
AN ACT
June 16,
16, 1933.
1933.
S[HR. 5~66=1-,;;;'];,-_
[H.R. 5661.] provide for the safer and more effective use of the assets of banks, to regulate
To provide
[Public, No.
[Public, 66.]
No. 66.] control, to prevent the undue diversion
interbank control, diversion of funds into speculative
speculative
operations, and for other purposes.
Be it enacted by the Senate
it enacted House of Representatives
and House
and Representatives of the
Act ofl933.
Banking Act
Banking of 1933. Arnerlca in
United States of America
United Congress aJJsembled,
Oongress assembled, That the short short
p. 8.
Post, p, 888. title
title ofof this
this Act shall be
Act shall be the
the"" Banking
Banking ActAct of 1933."
o£ 1933."
SEC. 2. As used in this Act and in any provision of law amended
SEC. amended
by this Act-
Act-
Terms construed. (a)
(a) The terms "banks", "national bank", "national
"banks", "national "national banking
banking
association ",
association "member bank",
", "member " board ",
bank ", "board " district ", and
", "district and"" reserve
reserve
38, P.
Vol. 38, 251.
p. 251. bank " shall
bank" shall have
have the
the meanings
meanings assigned to
assigned to them
them in section
in section 11 of the
of the
U.S.C., p. 2i4.
274. Federal Reserve Act, as amended.
Federal Reserve Act, as amended.
"Affiliates," or\la~i.
".Affi~iates." organi- (b)
(b) Except where otherwise
Except where specifically provided,
otherwise specifically provided, thethe term"
term " affili-
affili-
ations mcluded
zstlons included W within I t h m . . • • •
i rm.
term. ate"
ate" shall include corporation, busmess
mclude any corporatIOn, business trust, assoCIabon,
association, or or
other similar organization-
organization-
Member bank
Member bank hav·bay- which aa member
(1) Of which
(1) member bank, directly or
bank, directly indirectly, owns
or indirectly, owns or or
ing
controI s either
interest, controls
ig controlling interest. either aa majority
majority of t h e voting
of the h ares or
voting sshares or more h an 50
more tthan 50
in

per centum of the number of shares voted for the election of its its
persons exercising similar functions at
directors, trustees, or other persons at
the preceding election, or controls in any manner the election of a
preceding election,
majority of its directors, trustees, or other persons exercising exercising similar
similar
functions; or or
Shaeholdersofmem-
Shll1eholdersofmem- (2)
(2) OfOf which control is
which control is held,
held, directly
directly or indirectly, through
or indirectly, through
b bank
her bank control. stock ownership or in any other manner, by the shareholders
stock ownership or in any other manner, by the shareholders of a
member bank who own or control either aa majority of the shares
of such bank or or more than 50 per centum of the number of shares
voted for the election of directors of such bank at the preceding preceding
election, or by trustees for the benefit of the shareholders shareholders of any
such bank; or or

HeinOnline -- 48 Stat. 162 1928-1934

 73d
73d CONGRESS.
CONGRESS. SESS. I.
SESS. I. CH.
CH. 89.
89. JUNE
JUNE 16,
16, 1933.
1933. 163
163
(3) Of
(3) which aa majority
Of which majority of its directors,
of its trustees, or
directors, trustees, or other persons ar~re~~~~7~':':~!'
other persons areMajbritydirectrsof,
directors of member
exercising similarsimilar functions
functions are are directors of of anyone
any one member
member bank. bank. bank. r
(c) The
(c)
.
The term"
b
term "holding
'
holding companycompany affiliate"
. . •
affiliate"
th
~affiliate,"
shall include
shall
"1
include any
.
any cor. "~ol~!ng
.
c~mp!,ny
"Holdingorganizations
affilIate,
company
orgamzatlOns
poration, business
poratIOn, USlness trust,trust, assoC1atIOn,
association, or or 0other similar
er smll organization- included
ar orgamzatlOn- included withinwithin term.
term.
(1) Which owns
(1) owns or or controls, directly or indirectly, either
controls, directly either aa Sh:~e~rWhenof ~gl~jtYt~
shares maJoritystock
capital of
majority of of the shares
shares of capital stock stock of aa member member bank bank or more ofmemberb~ko:ned,
or more ofmemberbankowoed,
than 50 per per centum of the number number of of shares voted voted for
for the election
election etc.etc.
directors of
of directors of anyone
any one bank bank at the the preceding election, or or controls
in any mannermanner the election election of of aa majorit.y
majority of the the directors of anyone any one
bank; or or
(2) For the benefit of whose shareholders or members all
(2) all oror or'!,~:b:P~~ksh~
wmern k eld
substantially all the the capital
capital stock of a nwmber member bank is held by in intrust.
trustees.
SEC. 3. (a) (a) The fourth paragraph after paragraph" paragraph "Eighth" Eighth"
section 44 of the Federal R 'tl of 2 Vol.
of Vol. 38,
U.S.C., a, p.p. 255.
2M.
p. 278.
section Reserve
eserve Act, as amende amendedd (U .S.C. , tl
(U.S.C., titlee 112,, sC., p.27.
see. 301),
sec. 301), is amended to read as follows:
"Said board of directors shall administer the affairs of said bank Board~rdirectors
"Said Board
Extension of directors. ..
of dis-
fairly and ImpartIal.impartially. 1y and and WIthout.
without d · · · · ·In
discrimination
IscnmmatlOn in ffavor
avor 0off or counts, E~tenslon of dlS'
counts, advancements,
advancement,
.
against
agamst any mem member ank or
b er bbank or bbanks
an ks anand d may,
may, su b']ect to
subject h e prOVl-
to tthe provi- . etc. member banks.
' to member
etc., to
sions of of law and the orders of the Federal Reserve Reserve Board, extend
to each member bank such such discounts, advancements, and accommoda.-
tions as may be safely and reasonably made with due regard for
the claims
claims and demands of other member banks, the maintenance maintenance of of
sound credit conditions, and the accommod.ation accommodation of commerce, indus-
try, and agriculture. The Federal Reserve Board may prescribe Board Federal
Federalto preribe R~sen-e
Reserve con-
regulations ·
regu 1a t IOns ffurther
urth er ddefining
efi nmg
. 'th'm the
within
WI th e l'limitations
ImI'ta t'Ions 0off thO IS A
this ActCt the
th editions.
Board
ditions.to prescrIbe can·.
conditions under which discounts, advancements, and the accommo-
dations may be extended to member banks. Each Federal reserve. reserve informed
Reservebanktokeep
Reserve bank to keep
of amaount,
bank shall keep itself informed informed of the general character character and amount etc., ::t~~~e~a~.
of loans. amount.
of
of thethe loans
loans and investments
investments of its member banks with a view to to
ascertaining
ascertaining whether undue use is being made of bank bank credit for Purpose. Purpose.
the speculative
speculative carrying of or trading trading in securities, real estate, estate, or or
commodities, or for any other purpose inconsistent inconsistent with the mainte-
nance of sound credit conditions; and, in determining determining whether to to
grant
grant or or refuse advances, rediscounts
refuse advances. rediscounts or other credit credit accommodations,
accommodations,
the Federal
Federal reservereserve bankbank shall give consideration
consideration to such informa-
tion. The
tion. chairman of the Federal
The chairman Federal reservereserve bank bank shall reportreport to bank. Report by reserve
b Report reserve
Federal Reserve Board
the Federal Board any any such undue use
such undue use of of bank credit by
bank credit by ank.
any
any member
member bank, together with his recommendation. recommendation. Whenever, b supenion Susperuksiofn
berbank fromof of use
mem-
memo
of
. the
in
In . dgment 0off the
t he judgment
JU theFederal
Fe dera1 Reserve
R eserve Board,
B oar, d any mem member ber ban
bank 1{ credit
or ban
credit rom me of
facilities.
facilities.
is
is making
making such such undueundue use of bank bank credit, the Board may, in its
discretion, after after reasonable
reasonable notice and and an opportunity
opportunity for a hearing, Hearing Hearingand and notice.
notice.
suspend
suspend such bank bank from the use of of the credit facilities
facilities of the Federal
Federal
Reserve
Reserve System and and may may terminate
terminate such such suspension
suspension or may renew renew
it from time time to time."
(b)
(b) The The paragraph
paragraph of section 4 of the the Federal
Federal Reserve
Reserve Act, Act, as Vol. ~O, p.
Vol. 40, p. M.
968.
amended (U.S.C.,
amended (U.S.C., title 12, see.
title 12, 304), which
sec. 304), commences with
which commences with the words u.s.c.,
the words U.S.C.,p.278.p.27.
"The
" The Federal Reserve Board
Federal Reserve Board shall classify"" is
shall classify is amended
amended by inserting
inserting dics
and thebyfollowing: dir~~t,"~~ and class
A and i B B
before the period at the end thereof
before the period at the end thereof a colon and the following: a colon rectrs.

"Provided, That That whenever

whenever any two two or more more member
member banksbanks within
within member Participation.
Participation by
by
banks in elec-
the same
same Federal
Federal reserve
reserve district
district are are affiliated
affiliated with with the
the same holding
holding tionsfi'~:~ft~~~g'ic~l.ec­
within district.
company
company affiliate,
affiliate, participation
participation by such such member
member banks 'banks in any such such
nomination
nomination or or election
election shall
shall be be confined
confined to to oneone of of such banks,
banks. whichwhich
may
may be be designated
designated for for the
the purpose
purpose by by such
such holding
holding company
company affiliate."
affiliate."
SEC. 4.
SEC. The first
4. The paragraph of
first paragraph section 77 of
of section of the Federal Reserve
the Federal Reserve 40, Vol.
40~1;~·1~4.
38, p.
p. 1314. p. 25;
258; Vol.
Vol.
Act,
Act, as as amended
amended (U.S.C., (U.S.C., title 12, 12,~Effective
sec.
sec. 289),
289), is amended,
amended, effective
effective uEU;!l' C :, p.. 2s.c
27
date
8' o.f
of
~ llec t I'Ve da t e 0
July
J U 1Y 1,1, 1932,
1932, to to read
rea d asas -ollows:
mllows: amendment.
amendment.
"After
"After all all necessary
necessary expenses
expenses of of aa Federal
Federal reservereserve bank
bank shall
shall have
have Dividend
Dividend on on stock
stock ofof
been paid
been paid or provided for,
or provided for, the stockholders shall
the stockholders shall be entitled to
be entitled to receive
receive reserve
reserve bank.
bank.

HeinOnline -- 48 Stat. 163 1928-1934

 164 73d CONGRESS. SESS. I. CR.
CI. 89. JUNE
JUNE 16, 1933
1933..

. f'et et~ng~
Netsurplus
into earnings paid
fund. paid
an annual dividend of 6 per centum' centum'on on the paid-in capital capital stock,
mF'r~':c~:e
Franchise ~~x·
tax pay- which dividend
claims have
have been shall
been fully be
fully met,
cumulative.
cumulative.
met, the After the aforesaid
aforesaidpaid dividend
ments, eliminated,
ments, eliminated. claims the net
net earnings
earnings shallshall be be paid into the
into the
surplus
surplus fund of the Federal reserve bank."
reserve bank."
.1229. 38, p.
VoL 38,. p. 259;
259; Vol.
VoL Act, SEC.
SEC. 5. (a)
5. (a) The
The first
first paragraph
paragraph of of section
section 99 of of the
theVI,Federal
Federal Reserve
title Reserve
0Vol
as amended (U.S.C., title 12, sec. 321; Supp. 12, sec.
40, p. 232, Vol. 44, p. A d d (U S C
1229. ct, as amen e . . . , tIt. 1e 12, sec. 321; S upp. VI' , tItI e 12, sec.
vr:·ris.
VIp.279; P . 279; supp. 321), is amended by inserting
Supp. 321), inserting immediately
immediately after the words words"" United
Application of
. ApplIcation of Mor- States " aa comma
Mor- States" comma and and thethe following:
following: ""including
including MorrisMorris Plan Plan banks
banks
ns Plan banks to be-
an d ot h er 'Incorporate
incorporatedd banking b an k'Ing InstItutIOns
. . . engage d 'in -'1 ar
rig Plan banks to be-
come member banks,banks. and other institutions engaged In similar
snni
business.""
business.
vol.
Vol. 40, p. 233; Vol.
40, p. 233; Vol.
(b) The
(b) The second
second paragraph
paragraph of of section
section 99 of of the
the Federal
Federal Reserve
Reserve Act, Act,
44, p. 1229.
u.stc., p. 279;
U.S.C., supp. as amended, is amended by adding
279; Supp. adding at the end thereof the following: following:
VI, p. 135.
V~t~t';~emberban~s.
State member banks. "Provided,1 Provided, how'ever,
owWever, That nothing herein contained'shall contained'shall prevent prevent
Power to
br~~":s.
branches. establish any
to establish any State
State member
member bank from establishing establishing and operating branches in
the United
United States
States or any dependency
dependency or insular insular possession
possession thereof or or
in any foreign country, on the same terms and conditions and subject subject
to the same limitations and restrictions as are applicable to the
establishment of branchesbranches by national banks."
40, p.
~o§. ~,p.
u.s.C.,
Vol. pp.M.
233279 , 280;
280: (c) Section
(C) Section 99 of of the Federal
the Federal Reserve
Reserve Act, Act, as as amended
amended (U.S.C.,(U.S.C.,
219
supp.
Bupp:vi',w, ~~i35.
p. 135. ' 'title title 12,
12, sees. 321-331; Supp. VI, title 12, sees. 321-332),
12, secs. 321-332), is furtherfurther
Mutual
Mutual savlogs . amended
amended by adding at the end thereof the following
following new paragraphs:
paragraphs:
banks. sa YI n g s "Any mutual savings bank having no capital stock (including any
other banking institution the capital of which consists of weekly or or
other time deposits which are segregated segregated from all other deposits and
are regarded
regarded as capital stock for the purposes purposes of of taxation and the
declaration dividends), but having surplus and undivided profits
declaration of dividends),
Application of, to not less than the amount of capital required for the organization of a
be!J>J;~:~~%er~~n~~
becomememberbank national not,less than bankt~e amount of capital required for the organizati.on of a
national bank in the same place, may apply
III the same place, may apply for for andand be admItted
admitted to
membership in the Federal Reserve
membership Reserve System in the same manner and
cap- subject to the
the same
same provisions of law
law asas State
State banks
banks and trust com-
Subscription to
. Subscription to cap- subJ'.ect to provisions of and trust com-
ltal stock of
ital stock of reserve
reserve . . .
bank required.
bank panies, except that any such savings
pames, savmgs bank shall subscrIbe subscribe for capitalcapItal
stock of the Federal reserve bank in an amount amount equalequal to six-tenths of of
Amount of.
Amount of. 11 per
per centum
centum of its total
of its total deposit
deposit liabilities as shown by the most recent recent
report of examination
examination of such savings bank bank preceding
precedmg its admission
Adjustment
Adjustment
nually
nually under rules
under semian-
semian
rules of to
of t 0 membership.
mem b ersh'Ip. Th Thereafter
Teefeerea ft er suc suchh subscription
uhsalb SUb SCrIp. t'IOn sshall
h a II bbee aadjusted
d'JUS t ed
Reserve Board.
Reserve Board. semiannually on
semiannually on the same percentage
the same percentage basis basis in accordance with
in accordance rules
with rules
8u~serrf~no~e't,~r:~iui~
sueptot requlaw and regulations
regulations prescribed
prescribed by the Federal Reserve Board. If
Federal Reserve If any such
such
mutual savings bank bank applying for membership membership is not permitted permitted by by
the laws under which it it was organized
organized to purchase
purcnase stock in a Federal Federal
reserve bank, it shall, upon admission to the system, deposit with
the Federal reserve reserve bank an amount equal to the amount which it
would have have been required to pay in on account of a subscription subscription to
Adpustment of de-capital stock. Thereafter such
A.djustment of de- capital stock• Thereafter
posit.
POSIt. such deposit
deposit shallshall be adjusted semi-
be adJ'usted semi-
Conditions subject to, annually in the same manner as subscriptions for stock. Such
Conditionssubjectto, Such
Post,
Post, p.p. 971.
971. deposits shall be subject to the same conditions with respect to repay-
ment as amountsamounts paid upon subscriptions to capital stock by other other
Interest payments.
Interest payments. member banks
member banks and and the the Federal
Federal reservereserve bankbank shallshall pay interest
pay mterest
thereon at the same rate as dividends are actually paid on outstand-
Application of de- shares
p~~P¥:;~~scri~ti~~:
posit to subscription, ing shares of of stock
stock of such such Federal reserve bank. If
Federal reserve the laws under
If the under
if subscription here- which any such savings bank was organized be amended so as to
~te~~~:~n~J~on
after legalised. here- authorize
whihch _anymutualsuch lsavi~gs
savings bbankk
banks was 0brga!lbizefd
to subscribe forb-if, admended
Federal so as
reserve banktko
aut OrIze mutua savmgs an s to su SCrI e or.J.' e eral reserve ban
stock, such savings bank shall thereupon subscribe for the appropriate
amount
amount of stock in the Federal reserve bank, and the deposit here-
Termination
Termination of of sat- inbefore provided
sav- inbefore provided for for inin lieu
lieu of of payment
payment upon upon capital
capital stock shall be
stock shall be
lngs bank to rights o
~~~g:~i~~ rights of applied
membership. applied upon such subscription. If If the laws under under which any such such
savings bank bank was organized be not amended at the next session of of
the legislature following the admission of such savings savings bank to to
When netright to sub- membership so as to authorize mutual savings banks to purchase
scJb~e:or:r~;~~.sub-
scribe granted. membership so as to authorize mutual savings banks to t purchase

HeinOnline -- 48 Stat. 164 1928-1934

 73d CONGRESS.
CONGRESS. SESS. 1.
I. CR.
CI1. 89. JUNE
JUNE 16, 1933.
1933. 165
165
Federal reserve bank stock, or if such laws be
such laws be so amended and
so amended and such when t7:'an~~ch~
fari'~:n
such failure granted
to purchaseand
bank fail within
within six months thereafter thereafter to purchase such stock, all $tock. stock.
of its rights and privileges as a member member bank shall be forfeited forfeited and and
its membership in the Federal Reserve System shall be terminated terminated
in the manner
manner prescribed elsewhere in this section with respect to to
State member
member banks and trust companies. Each such mutual mutual savingssavings b~tt~ac~~;r;\~i1g
ba ly it
bank shall comply with all the provisions provisions of law applicable to State Statelawsan~
State State laws and Reserve
member bbanks an k s anandd trust companies,
trust compames, .. WIth the
with th regulations
I atIOns
e regu · of the Fed-
0 f th e F e- d Board regulatIons.
regulations.

eral Reserve Board and with the conditions of membership prescribed prescribed
for such savings bank at the time of admission admission to membership, except except
as otherwise hereinbefore provided with respect to capital stock.
"Each bank admitted to membership
"Each membership under under this this section
section shall ba!~~o:~~~=~ted
Reports by admitted
obtain from each each of of its
its affiliates than member
other than
affiliates other banks shall
member banks and
and banks and affiliates.
furnish to the Federal Federal reserve bank of its district and to the Federal Federal
Reserve Board not less than three reports during each
reports during each year. Such Such Form Form of reports.
of reports.
reports shall
shall be in such such form as the Federal Reserve Board may
prescribe, shall be verified
prescribe, affirmation of
verified by the oath or affirmation the president
of the president Verification.
Verification.
or such other officer as may be designated by the board of directors l Information
I t · to bbe dis- d.
of such affiliate ·
affil late ven·fy suc
to verify such h reports, and sh a II disclose
an d shall d·ISC1ose the t he ·ill f or- closed.
infor- normslOnto e!S-
losed.
mation hereinafter
hereinafter provided
provided for as of dates identical with those
fixed by the Federal Reserve Board for reports of the condition of of
Report 01 atIilistes.
the affiliated
affiliated mem memberber bank. Each such report of 0 f an affiliate
affiliate sal h I Report of afflates.
shall
be transmitted
transmitted as herein provided at the same time as the corre- corre-
sponding report of the affiliated member bank, except that the
Federal
Federal Reserve Board Board may, in its discretion, extend such time for
Each such report shall contain shall such information Information re
good cause shown. Each
Reserve Board
such necessary q~e~~rmation re-
information
be
as in the judgment of the Federal
of the Federal Reserve Board shall be necessary
to disclose frillyfully the relations
relations between
between such affiliate and such bank
and to enable
enable the Board to inform itself as to the effect of such
relations upon
relations upon the affairs of such bank. The The reports
reports of such affiliates
of such Publication of.
affiliates Publication of.
shall
shall be published
published by the bank under the same conditions conditions as govern govern
its own condition reports. ..
"Any
"Any such affiliated member bank may be required to obtain obtain from ~~cp"tlO!~yrerart:­
afiate may be re-
any such affiliate such additional reports reports as in the opinion of its quired. quired.
Federal reserve bank or the Federal Federal Reserve
Reserve Board
Board may be be necessary
in order to obtainobtain a full and complete complete knowledge
knowledge of the condition condition
of the affiliated member bank. Such Such additional reports shall be er] er~::~~:o~led­
Reerve Board.
transmitted to the Federal reserve bank and the Federal Reserve Reserve
Board and shall be in such form form as as the
the Federal Reserve Board
Federal Reserve Board may may Form. Form.
prescribe.
"Any such
"Any such affiliated
affiliated member
member bank which fails
bank which fails to obtain from
to obtain from any any Penalty provision.
Pe!'altyprovisi.on.
Failure to furnish re-
of ·ts affiliates
of Iits affil·Iate s an
and d furnish
f urnls. h any report providedprovl·ded ffor or byb y the t h e two ports. Failure to f = h l'&-
ports.
preceding paragraphs of this section shall shall be subject to a penalty of of
$100
$100 for each day durin~ during which such failure continues, which, by
direction of the FederalFederal Reserve Board, Board, may be collected,
collected, by suit or or
otherwise,
otherwise, by the Federal reserve bank of the district in which such
member bank is located. For the Rurposes purposes of this paragraph and 5S~!d~liate'" t"ed.liate, con-
con-
the two preceding paragraphs paragraphs of this section, the term 'affiliate' ' affiliate'
shall
shall include holding company
include holding company affiliates
affili::tes as well
well as other affiliates. . . .
"State member banks
" State member banks shall
shall bebe subJect
subject to to the limitations and m~=g:frs°~~~':
same limitations
the same Limbetaios on State
conditions
conditions with respect to the purchasing, selling, underwriting, and ingpurchsing ing purch~i?g invest- invest-
holding· 0off investment
h oId mg .
lnves securities
t ment securItIeS. . andd stock
an stock as as are 1·lca bl·
applicable
are app e In h e mentsecuntles.
in tthe R.seec.5i3,p..
R.S.,sec.5136,p.993.
case of national
national banks under paragraph 'Seventh ' of section 5136 44,44~
paragraph 'Seventh' Vol. p.42, p.80787;
" 2 p.
p., 1226.
767; VoL
Vol.
Sp.
of the Revised
Revised Statutes, as amended. u.s.C..p.260;
U.S.C., p. 260; Supp.
"After
"After one one year from the date of the enactment enactment of of the BankingBanking ~t~t1~ember
State member bank
Act
Act ofof 1933,
1933, no no certificate
certificate representing
representing the stock of any State member member stcJ~tce'1~ca~:present
"Not'to're-present
bank shall
bank shall represent
represent the the stock
stock of of any
any other
other corporation,
corporation except a stock ion. 01
stock of other
other corpora·
corpora-
member
member bank bank or or aa corporation existing on
corporation existing on thethe date this paragraph
date this paragraph tlOE'xception.
Exception.
takes
takes effect engaged solely
effect engaged solely inin holding
holding the the bank premises of
bank premises of such State
such State

HeinOnline -- 48 Stat. 165 1928-1934

166 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933.

Transfer
conditioned ofupon sale, member bank, nor shall the ownership,
Transferofcertificate
certificate ownership, sale, or transfer any
of anv
conditioned upon sale"fi certificate representing
. the stock of any such bank bbee con
conditioned in
t h e stock 0 f any sue h bank d't'
I lOne d'~
etc., prohibited.
etc., prohibited. certI cate representmg HI
any manner whatsoever upon the ownership, ownership, sale, or transfer transfer of a
certificate representing the stock of any other corporation,
certificate corporation, except except a
member bank.
andState
State ~ember
member
holding banks "Each
banks
company "Each State member member bank affiliated with a holding company company
and holdmg company aaffiliate
affiliatesg
affiliates. ffil'late s shall
ha IIoobtain
btam. from
f rom such
such holding
hid'
0 mg company
company aaffiliate,
ffil'1U t e, within
WI'th'm
Agreements required, such
Agreements required. such time time as as the
the Federal
Federal Reserve
Reserve Board Board shall prescribe, an
shall prescribe, an agree-
agree-
lllent that snch holding
R.S., sec. 5144, p. 994. ment that such holding company
company affiliate shall be subject to the same
~lc".~p~~~~: conditions and limitations
u.s.c., p.262. p. 994. conditions limitations as are applicableapplicable underunder section 5144 of of
the Revised
Revised Statutes, as amended, in the case of holding holding company company
~~yCopy of affiliates of national banks. A copy of each such agreement
agreement; affiliat~s
of agreement; ag~eement shall be
Ming.
Penalty on failure
Penalty on failure to to filed wIth
with the Federal Reserve
Reserve Board. UpOll
Upon the failure of a State
faIlure
comply. member
member bank affiliated with a holding company affiliate to obtain obtain
such
such an agreement
agreement within the time so prescribed, prescribed, the Federal Reserve
Board shall require require such bank to surrender its stock in the Federal
Reserve Board
reserve bank and to forfeit all rights and privileges
may reserve bank and to forfeit
privileges of membership
membership
ReserveState
require
require State Board may.in
member
member In the I F
tIe ed era1 Reserve
Federal R eseI've SSystem provi'ded'III
ystem as provided t h"IS sec
in this t'IOn. When-
section. Wh en-
afiitsto
affiliates t<;> surne
surrender ever the Federal Reserve Board shall have revoked the permit
stock and rights.
and rigs.n ever the Federal Reserve . / voting permit
of any such holding company affilIate, affiliate, the Federal Reserve Board
may, in its discretion, require any or all State State member
member banks
affiliated
affiliated with such holding company affiliate to surrender their their
stock in the Federal reserve reserve bank and to forfeit all rights and
privileges
privileges of membership
membership in the Federal Reserve System as provided
Resene System provided
Eta inations oaf
in this section.
In connection with examinations of State member banks, exam-
St~t~~~:;h~.ot
State member banks. "In connection with examinations of State member banks, exam-
. iners selected
selected or approved by the Federal Reserve Board shall make
oaliates,
Of affiliates. to be 8uC'h such examinations
examinations of the affairs of all affiliates
affiliates ofof such
such banks as
Relationships shall be necessary toofdisclose
the affairs
fully of theallrelations between suchbanksbanksas
~f~~~~~nships to be shall be necessary to disclose fully the relations between such banks
and their affiliates and the effect effect of such relations upon the affairs
Assessments for ex- ex· of such banks. The expense of examination
examination of affiliates of any State
es
penses. member
member bank may, in the discretion of the Federal Federal Reserve Board, Board,
be assessed
assessed against such bank and, when so assessed, shall be paid paid
upon aioe by such bank. In the event of the refusal to give any
~~ti
permit e~:,~~:n:;;~
to Permty
to examination, by such db~nkt'h In the evfetnht of the. retf.usal fto give ahn y ffiinl~otrmati<?n information
etc. requested in
requeste In thee course 0of thee examma
examination Ion of
0 any such sue aaffiliate,la e, or illin
the event
event of the refusal
refusal to permit such examination,examination, or in the event event
of the refusal
refusal to pay any expense so assessed, the Federal Federal Reserve
Board may, in its discretion, require any or or all State member banks
affiliated with such affiliate to surrender surrender their stock in the Federal Federal
reserve bank and to forfeit all rights and privileges privileges of membership
membership
in the Federal Reserve System, as provided in this section."
8, p. 260; Vol. in the Federal Reserve System,
Vol. 38,
section."
40,Vol.
40, 1315;p.Vol.
p. 13le; 260;42,
Vol. Vol.
42, p.
p. SEC. 6. (a)
SEO. (a) The second
second paragraph
paragraph of section 10 of the Federal Federal
6M.
620. Reserve Act, as amended (U.S.C., (U.S.C., title 12, sec. sec. 242),
242), is amended
amended to to
{J.S.C., p. 275. read as
read as follows:
follows:
Ineligibility to to hold " The Secretary of the t.he Treasury and the Comptroller Comptroller of the Cur-
office in
office in member
member banks. rency shall
banks. rency shall be ineligible during the time they are in office and for two
be ineligible
years thereafter to hold any office, position, employment in any
position, or employment any
member bank. The appointive members of the Federal Reserve
Board shall be ineligible during the time they theJ are in office and for for
two years thereafter to hold any office, office, position,
position, or employment
employment in in
any member bank, except restriction shall not apply to a
except that this restriction
member who has served the full term for which he was appointed.
Terms
Terms of
of office
office otofUpon
Upon the the expiration
expiration of of the
the term
term of of any
any appointive
appointive member member of of the
the
members of Federal Federal Reserve Board in office when this paragraph as amended
members
Reserve Board.
Board of . Federal F F ed era I R eseI've B oard'In 0 ffi ce w h en t h'IS paragrap h as amen
nprgaha mne d ed
takes effect,
takes the President
effect, the President shall
shall fix fix the term of
the term of the successor to
the successor to such
such
member
member at at not to exceed
not to exceed twelve
twelve years,
years, as as designated
designated by by the
the President
President
at the time of nomination,
nomination, but in such manner as to provide provide for the
expiration of
(·xpiration of the term of
the term not more
of not more than than one
one appointive
appointive member member in in
any
any two-year
two-year period, and thereafter
period, and thereafter each each appointive
appointive member member shall shall

HeinOnline -- 48 Stat. 166 1928-1934

 CONGRESS. SESS.
73d CONGRESS. SESS. I.I. CI.
CR. 89.
89. JUNE 16~ 1933.
JUNE 16, 1933. 167
167
hold office
hold office for a term
term of of twelve
twelve years from the
years from expiration of the term
the expiration
predecessor. Of
of his predecessor. the six
Of the appointed, one
persons thus appointed,
six persons shall be
shall
governor
no~esignation
of nor.
Designation of gover-
ofgover·
designated by
by the
the President
President as
as governor
governor and
and one
one as
as vice
vice governor of
designated
the Federal
the Federal Reserve
Reserve Board. The The governor of the Federal Federal Reserve
Reserve
Board, subject
Board, subject to supervision, shall be its
its supervision,
to its executive officer.
its active executive officer. OathOath ofof office.
office.
member of the
Each member
Each Reserve Board
the Federal Reserve Board shall within fifteen days
within fifteen
after notice
after appointment make
notice of appointment make and subscribe to the
and subscribe oath of office."
the oath office."
(b)
(b) The paragraph of
The fourth paragraph of section 10 of the Federal Federal Reserve
Reserve Vol. Vol. 38,
38, p. 261; Vol.
Vol.
Act, as amended
amended (U.S.C., title 12, sec. 244),
12, sec. 244), isis amended
amended to to read as 42lf.s~6~:
,
U. .6275.
p.
follows:
follows:
"The principal
"The principal offices
offices of the BoardBoard shall be in the District ofBo.Pil of Principal offe offices o.of
Columbia. At meetings of the Secretary of the
Board the Secretary
the Board Treasury BCb~irman
the Treasury Chairman
shall chairman, and,
preside as chairman,
shall preside and, in his absence, the governor
his absence, shall
governor shall
preside. In
preside. absence of both
In the absence both the Secretary Treasury and
Secretary of the Treasury and
governor the vice
the governor governor shall preside. In
vice governor absence of the
In the absence
Secretary of the Treasury,
Secretary Treasury, the governor,
governor, and and the vice governor
governor the Chaiman Chairman pro tM- tern-
Board shall elect a member to act as chairman tempore. The POTetermination
chairman pro tempore. POFetermination of of
B s h a 11 determine
03:1' d shall
Board d et ~rmIne. an and d p~escr~
prescribe'be th manner in
thee manner . which
In whiCISh'tits obli-
0 bl'1- to
maner
manner
to be
be made
disbursment
disbursements
made and obliga-
and obliga.
gatlOns shall be incurred
gations Incurred and Its dIsbursements and expenses allowed tions in-red.
its disbursements incurred.
and paid, and
and and may leave deposit in the Federal
leave on deposit Reserve banks
Federal Reserve banks the
proceeds of assessments levied
proceeds levied upon them to defray its estimated estimated
expenses and the salaries of its members and employees, whose Salaries,
expenses leave, etc.
Salaries, leave, etc.
compensation, leave, and expenses
employment, compensation,
employment, expenses shall be governedgoverned
provisions of
solely by the provisions of this Act, specific
specific amendments thereof, and
amendments thereof,
rules anid regulations of the Board not inconsistent
and regulations therewith; and
inconsistent therewith;
funds derived from such assessments shall not be construed construed to be
Government funds or appropriated
Government moneys: No member of the Fed- members.
appropriated moneys. Qualifications of
membifiations of
Board shall be an officer
Reserve Board
eral Reserve director of any bank,
officer or dIrector bank, bank-
bank-
institution, trust company, or Federal Reserve
ing institution, Reserve bank or hold stock
in any bank, banking institution, or trust company; company; and before
entering upon his duties as a member of the Federal
entering Reserve Board
Federal Reserve
certify under oath that he has complied
he shall certify complied with this require-
certification shall be filed with the secretary
ment, and such certification secretary of the VacaDCles.
Va es.
Whenever a vacancy
Board. Whenever sh all occur, other than by expiration
vacancy shall expiration
of term, among the six members of the Federal Reserve Board
appointed by
appointed President as above provided,
bv the President provided, a successor shall be he
appointed by the President, by and with the advice and consent consent of of
the Senate, to fill such vacancy, and when appointed appointed he shall hold
unexpired term of his predecessor."
office for the unexpired predecessor." Vol 39 p. Vol.
SEC. 7. Paragraph
Paragraph (in) (m) of section 11 of the Federal Reserve Reserve Act, as 41, 41,Vol.
p. 114.
39, p. 7S2; Vol.
p. 1146.
amended (U.S.C., title 12,
amended 12, sec. 248),
248), is amended follows:
votersof to read as follows: Board.
"(in) Upon the affirmative vote of not less than six of its mem- ~l'xwer~~~~~~.
"(m) Fix percentage o! of
bel'S
bers the Federal Reserve Board shall have power to fix from time bank capital and
bank capital sur-
and sur·
. ffor h F of
percentage 0 f III indi- loas.
time
to tIme each
or eac ed era I
Federal d district
reserve
reserve 'IstrlCt
. ttheh e percentage . d'1- loans.
plus represented by

vidual bank capital

yidual capital and surplus which may be represented by loans
secured by stock or bond collateral made by member banks within
such district, but no such such loan shall be made by
be made by any such bank
any such to ~o~ioH;~n~n
Limitation on
any person in an amount in excess excess of 10 per
of 10 centum of
per centum thebank
of the unim-
unim-
to amount ofloan. on
aired capital and surplus of such bank. Any percentage
paired
P percentage so fixed change. Percentage subject
Percentage to
subject to
shall be
Board shall subject to
be subject from time change.
change from
by the Federal Reserve Board to change time
to time upon ten days' notice, and it it shall be the duty of the Board Board
percentages with a view to preventing the undue
to establish such percentages
use of bank loans for the speculative speculative carrying of securities. The
Federal Reserve Board shall shall have power to direct any member bank fr:~i~~r~'l::'f~~ fromincreasing loans.
to refrain from further further increase of its loans secured by stock or or
bond collateral for any period up to one year under penalty of
bond of
suspension of all rediscount privileges privileges at at Federal reserve banks."

HeinOnline -- 48 Stat. 167 1928-1934

 168 73d CONGRESS. SESS. I.
I. CR.
CH. 89.
89. JUNE
JUNE 16,
16, 1933.
38, p. 6. 8. The Federal Reserve Act, as amended, is amended by by insert-
insert-
ingSEC. 8.
Vol. 38,
U.s.c., p.pp.263.
Vol.
277,7 .. between sections
sections 12 12 and
and 13 13 (U.S.C.,
(U.S.C., title
u.s.o., pp. 277,281. ing between title 12,
12, secs. 261, 262, and and
Mar 342), thereof the
342), thereof the following
following new new sections:
sections:
FederalCommittee;
Open e; " SEc. 12A. (a) There is hereby created a Federal Open Market
Market
k!edera.too,g:dt~;
ket "E.1A
"SEC. 12A. (a) There is hereby created a Federal eea Open
created.
created. Committee (hereinafter
Committee (hereinafter referred to as the 'committee 'committee'),'), which
Members.
Members.of. shall consist
shall consist of of as as many
many members
members as as there
there areare Federal
Federal reserve
reserve dis-dis-
Selection
Selection of. tricts. Each Each Federal
Federal reserve
reserve bank bank by by its
its board
board of of directors
directors shallshall
tricts.
Meetings.
Meetings. annually select
annually select oneone member
member of of said
said committee.
committee. The The meetings
meetings of of
said committee shall be held at Washington, Washington, District of Columbia,
at least four times each year, upon the call of the governor of the the
Federal Reserve Board or at the request of any three members of of
the committee, and, in the discretion of the Board, may be attended attended
by the members of the Board.
in~gran~~oa~ef~~~~:
Ien-arket opera- "(b) No Federal
"(b) Federal reserve bank shall engage in open-market opera- opera-
ti tea tions under section 14 of this Act except in
tionsbyReservebanks. tions under section 14 of this Act except in accordance
accordance with with regu-
regu-
~:~t~~:\f regula- lations adopted by the Fed~ral Reserve B?ard. The Board shaH
Adoption of regula- lations adopted by the Federal Reserve Board. The Board shall
tions.
tions. consider, adopt,
consider, adopt, and and transmit
transmIt to to thethe commIttee
committee and and to to the
the several
Federal reserve banks regulations relating to the open-market trans-
actions of such banks and the relations relations of o£ the Federal Reserve System
with foreign central or other foreign banks.
Pest, p.
Post, p. 183.
183. "(c)
" ( c) The time, character, and volume of all purchases purchases and sales
Vol. 38, P.p 254.. 2 ".
U...,S. C., p. 283.
U. 83 of paper described in section 14 14 of this Act as eligible for open-
market operations
operations shall be governed governed with a view to accommodating accommodating
commerce and business business and with regard to their bearing upon the
general credit situation of the country. country.. ..
Fi!i~
Filing decision
decision not not to
to "(d)
"( d) IfIf any Federal reserve bank shall deCIde decide not to partICIpate
participate
partiCipate III open- in
tmarketoperations.
market operatiOns. In open-mark
• open-market '
operations
et oJ?eratlOns recommen d ed an
recommended and d approve
approved d as provI 'ded
provided
in paragraph
paragraph (b) (b) hereof, it shall file with the chairman
chairman of the
committee within thirty days a notice of its decision, and transmit transmit
a copy thereof to the Federal Reserve Reserve Board.
Federal
Federal Deposit
Deposit In-
.In- ""SEC.
SEC. 12B.
12B. (a)
(a) There is
There is hereby
hereby created aa Federal
created Federal DepositDeposit Insur-
Insur-
surance Corporation;
surance
created. Oorporatlon''ance
created C orporatlOn
ance Corporation . ~h . fie r referred
(hereinafter
ereIna re f erre d tto0 as t h
the e ''Corporation'),
Corporat'IOn ') ,
Duty national whose duty it salb
to liquidate, shall be to purchase, hold, and liquidate, as hereinafter
nationai W h ose d u t y 1't Sh a II e t ohl, 0 pu~c h ase, h 0 Id ,and_lqiae l'IqUI'd at e, as h ' ft er
etc., closed
Dutyclosed to liquidate
etc.,
and State member provided, the assets of national
erelna
and State member provided, the assets of natIOnal banks banks whichwhIch have have beenbeen closed
closed by by
b~i.
P st. pppp 279,
279,969.68). action
action of of the Comptroller of the Currency, Currency, or by vote of their direc-
tors,
tors, andand thethe assets of State State member banks which have been closed
by action of the appropriateappropriate State authorities, or by vote of their
insurance of deposits. directors; and to insure, as hereinafter provided, the deposits of all
Insurance of deposits. directors; and to insure, as hereinafter provided, the deposits of all
banks which
banks which are are entitled
entitled to to thethe benefits
benefits of insurance
insurance under this
section.
Mana "(b) The management of the Corporation shall be vested in a
po~~i~~~ement
poration. ofo Cor- board "(b) ofThe management
directors consisting of the Corporation
of three members,shall one be of vested
whom shall in a
board OT directors consisting of three members, one of whom shall
. be be thethe Comptroller
Comptroller of the Currency,
of the Currency, and and twotwo of of whomwhom shallshall be be
m~t~tors,
metors citizens of the United
appOlllt- citizens
appoint- United States
States to be appointedappointed by by: the President, by by
and
and withwith the advice and
the advice and consent
consent of of thethe Senate.
Senate. One One of of the
the appoin-
appoin-
tive
tive members
members shall shall be be the
the chairman
chairman of of the
the board
board of of directors
directors of of the
the
Corporation
Corporation and
and not
not more
more than two
than two of of the
the members
members of
of such board
such board
Terms of o~ce; com- of directors shall be members of the same political party. Each
Terr' of office; com- of directors shall be members of the same political party.
such appointive member Each
such appointive
pens ation.
peDSa lon. member shall shall holdhold office
office for
for a term of six years and and
shall
shall receive compensation at
receive compensation at the
the rate
rate of of $10,000
$10,000 per per annum,
annum, payable
payable
monthly
monthly out out ofof the
the funds
funds of of thethe Corporation,
Corporation, but but thethe Comptroller
Comptroller
of the Currency shall not receive additional
of the Currency shall not receive additional compensation for compensation for his
his
services
services as
as such member.
such member.
Appropriaton a -
th~fJ':g;~~~ent
thorized,
Corporation
payment ~~;
capital
for :r
" (c) There
money ill thewhichthe
is hereby authorized to be appropriated, out of any
"(c) here is hereby authorized t? be appro£riated, out of any
money in Treasury not
Treasury otherwise
notavailable
otherWIse appropriated, the sum
sum of
Corporation capital $150,000,000,
stock. shall be for approprIated,
payment by the theSecretary of
st~~';t, p. 279. $150,000,000, which shall be available for payment by the Secretary
of
of the Treasury for
the Treasury for capital
capital stockstock of of the
the Corporation
Corporation in in anan equal
equal
amount,
amount, which which shall
shall be be subscribed
subscribed for for byby him
him onon behalf
behalf of the United
of the United

HeinOnline -- 48 Stat. 168 1928-1934

 I.
73d CONGRESS. SESS. I. CII. 89. JUNE 16, 1933.
CR. 169
States. Payments upon such subscription shall be subject to call in .,Jayments Payments subject to
call. to
whole or in part part by the board
board of directors
directors of the Corporation. Such T'o Tobe be additional.
additional.
stock shall be in addition to the amount of capital stock required to
be subscribed
subscribed for by Federal reserve reserve banks
banks and member and nonmem- nonmem-
hereinafter provided, and the United States shall
ber banks as hereinafter shall be Div!dend payments
Dividend paymentll
same extent
. d to the
entitled
entitle t he payment
payment 0off dividends
d'IVI'dend s on such
on sue stock
h stoc to the
k to t h e same extent to Umted States,
as member
member and nonmember
nonmember banks are entitled entitled to such payment
payment on the
class A stock of the Corporation held by them. Receipts Receipts for pay- Receipts
R~ceiPtll for
be ments. for pay- pay-
ments by the UnitedUnited States for for oror on account of
on account of such stock shall
such stock shall be men s.
issued by the Corporation
Corporation to the Secretary of the Treasury Treasury and shall shall
be evidence
evidence of the stock ownership of the United States.
"(d) The
"(d) capital stock
T h$e capital of the
stcock ?fif the Corporation
Corporation shallshall be
be div~ded
divided into Capital
vi~:lit~to
into vided into stock,
shares ~(
s;'l:'!:es
di-
of
shares 0off $100100 each. Certificates Corporation shall $100
ertl cates of stock of the CorporatlOn $10o each.
each.
be of two classes-class A and class B. Class A stock shall be held ~~~k Stock certies,
Classs. certificates,
b -ic
by member and nonmember banks as hereinafter provided provided and they baks b~"k to t, ~1dby which
which
shall be entitled to payment
payment of dividends out of net earnings earnings at the se oheld.
e,
rate of 6 per centum per annum annum on the capital stock paid in by them,
cumulative, or to the extent of 30 per centum
dividends shall be cumulative,
which dividends Dividend payments,
Dividend
be theamount.
payments,
of such net earnings in any anyone year, whichever
one year, amount shall
whichever amount shall be the amount.
greater, but such stock shall have no vote at meetings meetings of stockholders.
Class B stock shall be held by Federal rese'rve shall R~~~:e bank.
reserve banks only and shallReserve b~nk,held by
not be entitled to the paymentpayment of dividends. Every Every Federal reserve
shall subscribe to shares of class B stock in the
bank shall tIie Corporation to Subscription
Subscription for, for.
an amount
amount equal to one Ohe half of the surplus
surplus of such bank on January
1, 1933, and its subscriptions
1,1933, subscriptions shall be accompanied
accompanied by a certified check Payments, Payments.
payable
payable to the Corporation
Corporation in an amount egual to one half of such
subscription. The remainder of such subscription shall be subject to
call from time to time by the board
call. board of directors
directors upon ninety days'
notice.
notIce.
" (e)
(e) Every bankbank which is or which which becomes
becomes a member of the Fed- clubsptioo SubScriptions
class A on or before
for
eralI Reserve System
era System on or before July 1, 1934, shall take all steps July 1, 1034.
I, 1934.
necessary to enable it become a class A
it to become A stockholder
stockholder of of the Corpora- P08t,
the Corpora~ Poft, p. 069.
p, 969,
tion on or before JUly 1, 1934; and thereafter no State bank or bership
before July Admison
AdJOllission to mem-
to mem-
thereafter; sub-
trust company
company or mutual .
savings
mutua1 savmgs bbank
ank sshall
h a1I b ad '
bee admitted
mltted to mem. bershlp thereafter; sub-
memo scription required.
required.
bership
bership in the Federal Reserve System until it it becomes
becomes a class A
stockholder of the Corporation,
stockholder Corporation, no nationalnational bank
bank in the continental ~atl~mal
continental National banks.
Cartifiesabanks. to corn-
United
United States shall be granted a certificate Comptroller of me~~~r~~~~b~:
certificate by the Comptroller menceorresumebank-
the Currency authorizing
authorizing it it to commence the
to commence the business
business of banking ing
of banking business denied
~~le~~:~~be~e~~~
unless member and
until it member of the Federal Reserve
it becomes a member Reserve System and a class class AA stockholder.
stockholder.
class A stockholder
stockholder of of the Corporation,
Corporation, and no national bank in in
continental United States for which a receiver
the continental conservator
receiver or conservator
has been appointed
appointed shall be permittedpermitted to resume
resume the transaction
transaction
of its banking business until it it becomes
becomes a class A stockholder
stockholder of the
Corporation. Every member bank shall apply to the Corporation Application Application for Class
(or claso
for class A stockstock of the Corporation in an amount equal equal to one half Ai..mount.
Amount.
of I1 per centum of its total deposit liabilities as computed in accord- accord-
ance with regulations
regulations prescribed
prescribed by the Federal Reserve Board; Board;
except•
member bank organized after the• date this bank
that in the case of a member Exception; member
Exception;
hereafter
member
hereafter organ·organ-
section
sectIOn takes effect, the amount of such class A stock applied applIed for by ;Zed.ized.
such member bank during the first twelve twelve months after its organiza-
organiza-
tion shall equal 5 per centum of its paid-up paid-up capital and surplus, and Amount. Amount.
beginning
beginning after the expiration of such twelve months' months' period the
amount of such class A stock of such member bank shall be adjusted adjusted
annually in the same manner as in the case of other member banks. t
Upon receipt of such application
application
•
Corporation shall request
the Corporation , Certifica
request the mgsuffiClencyo(apply-
Certifi~ation
isg scey respect-
ionofapply-
respect-
Federal Reserve
Reserve Board, in m the casecase of a State member bank, or the ing ing bank's assets.
Comptroller of the Currency, in the case of a national
Comptroller national bank, to cer-
tify upon the basis of a thorough examination of such bank whether whether
or not the assets of the applying bank bank are adequate to enable it to to

HeinOnline -- 48 Stat. 169 1928-1934

 170 73d CONGRESS. SESS. I. CH. 89. JUNE 16, 1933.

liabilities to depositors and other creditors

meet all of its liabilities
moot shown
creditors as shown
by the books of the bank; and the Federal Reserve Board or the
Federal Reserve
Comptroller of the Currency
Currency shall make such certification as soon as as
Payment filiiif cterti.
Pa,yment certi- practicable.
practicable. If If such certification
certification be in the affirmative,
affirmative, the Corpora-
fiflcation affirmative;
catIOn a rmB Ive;. h a 11 pay one
amount.
amount. shaII grant suc
tion shall
tIOn suchh application
app I"!CatIon an
andd tthe
h I ymg
'
e applying
app bbank
an k sshall one
half of its subscription in fullfull and shall thereupon become a class A
thereupon become
Poso.
P7oviso. • d bf stockholder
stockholder ofof the Corporation. Provided,
the Corporation: Provided, That
That no no member
member bank bank
required before
Julyot1,1, reqmre e ore shall be required
. d to make suc h payment or become
b ecome a class
class A k
Not
N
July 1934.
1934. reqUIre such A stoc-
stock-
Payment
d PaYlb:en~ of remain- holder of the Corporation before July 1, 1934.
~f ~'f'ain- holder of the Corporation before July 1, 1934. The remainder ofThe remainder of
der ubjct to
arDenial cl.
su lec of 0 applica-
.
such subscription
such subscription shall be subject to call from time to time by the
shall be
tiPnir~tig~tf~J>~::
tion if certificationneg- board of directors of the Corporation.Corporation. If If such certification
certification be in the
ative.
ative. negative,
negative, the Corporation shall
the Corporation shall deny deny suchsuch application.
application. If If anyany
ateoreaor
Receiver. ente-
or conser- national
national ,bank shall not
bank shall have become
not have become aa class class A stockholder of
A stockholder of the
the
vator; appomtment. of the
ator; appointment. Corporation
CorporatIOn on on oror before
before JulyJuly 1, 1, 1934,
1934, the
the Comptroller
Comptroller of the Cur-
Cur-
eshipo State rency shall appoint a receiver receiver or conservator therefor therefor in accordance
accordance
Terminationofmem-
bership,
bership, State member WIt
State member
. h tthe
with h e prOVISIOnS
' ,
provisions of
0
feXIs
' t'lng l
existing aw.E
law. t as provided
xce:r>
Except provl'd ed In' subsec-
in sub sec-
bank Anot
bank
class or before tion (g) of this section
notonsubscribing
subscribing section, if
if any State member bank shall not have
class A on or before , ,
July 1, 1934.
July 1, 1934. become a class A stockholder
stockholder of the CorporatIOn Corporation on or before before JulyJuly 1, 1,
Post, p. 180.
1934,
1934, the
the Federal
Federal Reserve
Reserve Board
Board shall
shall terminate its membership
membership in
Post, p. 180.
the Federal ReserveReserve System in accordance accordance with the provisions provisions of of
section 9 of this Act.
Appieations
Applic.atlons for "(f) Anv
"(f) Any State bank or trust company or mutual mutual savings
savings bank
membership
membersblp on or orb
be-
on or be-
*
" Statemembership
bank or ,trust
. company orReserve bank
fore July
July 1,1936.
1, 1936. which applies
applIes for membershlp in
111 the Federal Reserve System System or for for
B!"nefits
BeneSts to to accrue conversion into a national
accrue conversion national banking association association on or after July 1,
during pendency of. 1936, may, with the consent of the Corporation, obtain the benefits
durIng pendency of. 1936, may, with the consent of the Corporation, obtain benpfits
section, pending action on such application,
of this section, subscribing
application, by subscribing
and paying for the same amount of stock of the Corporation as it it
required to subscribe and pay for upon becoming
would be required becoming a member
member
thereafter bank.
Pr~visions tbeeafte
Provisio Thereupon the
bank. shall
Thereupon the. provisions
provisions of this
of this section
section applicable to to member
applicable. banks be applicable to such State bank applicable
or trust company member or
banks shall be applIcable to such State bank or trust company or
bank to That extent as if of
Repay.
mutual
member savings
bank: "Provided,
rvdd
the same if theext~mt
application it such
were State
already banka
~';':ment
Repent if mme
mem- member
if mem- ak
bank: Provided, hti if
That the application of such Statt; bank
ship
completed or not or
cappltion
bershlpappliClttio,!notdisap- trust company
or trust companySystem or mutual savings
or mutual savings bank for
bank for membership
membership in the
III the
proved, etc. or dlsap- F
completed
proved, etc.
Federal
ed eralR
Reserve System or
eserve
for conversion
or f or converSIOn . .into a national
Int 0 a natlOna. 1 bbanking
anl'nng
association approved and it shall not complete
association be approved complete its membership in
the Federal Reserve System or its conversion
Federal Reserve conversion into a national banking banking
association
association within a reasonable time, or if such application application shall be
disapproved, then the amount paid by such State bank or trust
disapproved, trust
company or mutual savings bank on account of its subscription subscription to the
Corporation shall be repaid to it and it shall no
capital stock of the Corporation
longer be subject to the provisions provisions or entitledentitled to the privileges of this
section.
Deposit by State (g) If
Ifa any State bank or trust company, or mutual savings bank
b~i~tm~~be~:~t;
bank with membership (g If
"(g) any State bank or trust company, or mutual savings bank
(referred to in this subsection as 'State bank') which is or which
application,
purchase
der
der State laws.
when stok
~~!=o~;U':~.Jt';.~ (referred to inbthis subseFction as 'State Sbank ') ,which is
unlawu un-
becomes a mem member er of the Federalederal Reserve
Reserve Systemystem IS
0: which
permltted by
is not permitted
laws under which it was organized
the laws organized to purchasepurchase stock in the
Corporation, it it shall apply to the Corporation Corporation for admission to the the
benefits of this section and, if
benefits if such application
application be granted after
appropriate certification in accordance
appropriate certification accordance with this section, section, it it shall
Corporation an amount equal to the amount which
deposit with the Corporation which
Adjustment of de- it would have required to pay in on account
have been required account of a subscription
SUbscription
po~1!ustment of de· to capital
posit. capital stock
stock of the Corporation. Thereafter Thereafter such deposit shall
be adjusted in the same manner manner as subscriptions :for for stock by
class A stockholders,
stockholders. Snch Such deposit shall be subject to the same
to:oDditions
to. .. suhject
uhiect conditions with respect to repayment repayment as amounts paid on subscrip-
tions to class A stock by other other member
member banks and
banks and the Corporation
the Corporation
Intere.( \Jar men!". shall
Interest payments. shall pay interest thereon
pay interest thereon at at the
the same
same rate
rate as dividends
as dividends are
are actually
actually
Depositor bank paid outstanding of A As as such
de~;e~ °c~;s;
deemed A S~~~k~
class o.{ stock- paid on outstanding shares shares of class class A stock. As long as such
holder,
holder. maintained with
deposit ij" maintained
deposit with the Corporation, such
the Corporation, such State bank shail,
State bank ~htlll,

HeinOnline -- 48 Stat. 170 1928-1934

 CONGRESS.
73d CONGRESS. SESS. I.
I. CH. 89.
CH. 89. JUNE 16, 1933.
1933. 171
for the purposes of this section,
section, be deemed
deemed to be a class A stockholderstockholder
of the. Corporation. If If the laws under• which such State bank was was
•
pA"it
.\.pplwation. oss o~ de-i
pOSIt to subscnptIOn, if
d~-
organized be amended so as to authorize
orgamzed authonze State banks to subscribe subscnbe subscription hereafter
subscription hereafter
for class A stock of the Corporation, such bank shall
State bank
such State within lgalized.
shall within legalized.
six months thereafter subscribe
subscribe for an appropriate
appropriate amount of such such
class A stock and the deposit hereinafter hereinafter provided for in lieu of of
payment upon class A stock shall be applied upon such sUbscription. subscription. Terination . . of State
If tthe
If h e Ilaw
aw ununder
d er which· h suc
W h IC suchh St at e bank
State b an k was organIze
organized . d be be not bank TermmatlOn
to rights ofmen-
of State
rights ofmem-
amended at the next session of the State legislature following the
legislature following the bership.
bership.
admission of such State bank to the benefits of of this section so
this section as to
to sc~~e~{::;'!~~~.SUb'
yhen right to Sub.
purchase such
to purchase class A
such class stock, or,
A stock, if so
theaslaw
authorize State banks banks to or, if the law
be so amended and such State State bank shall fail within six months fa~~:n When t:;;an~~c~:~
ganted and
purchase such class A stock, the deposit previously
thereafter to purchasE' previonsly made stock.
with the Corporation
Corporation shall be returned
returned to such State bank and it
shall no longer
longer be entitled
entitled to the benefits of this section, section, unless it it
shall have been closed in the meantime on account of inability to
meet the demands of its depositors. Anual adjustment,
"" (h)
(h) The amount of the outstandingoutstanding class A stock :stock of the Corpo- amount a~~~"n~~fcl~~~ent,
of class A.
ration held by member banks banks shall be annually adjusted adjusted as here-
inafter provided
provided as of the last preceding
preceding call date as member member banks
increase their time and demand
increase demand deposits or as additional additional banks
become
become members or subscribesubscribe to the stock rotock of the Corporation, and Decrease Decrease authorized.
antborized.
such stock may be decreaseddecreased in amount amount as member banks reduce reduce Transfer,
Transfer, etc.,etc., of
demand deposits or cease to be members.
their time and clemand members. Shares of bhar~ d b¥
of shares member
by d member
the capital stock of the Corporation
Corporation owned by member mE'mber banks shall badks, ~dd··t·eU1el·
denied. b .
not bbee transferred
trans f erre d or hhypothecated.
ypot h ecate(. 1 "'(Vh
AV
H hen en aanII'm
memberb 1'1' bbank
an J{ Increases
.
increases
Additional
.~
tio, Ilona su
tion, upon
subserip-
pon increase >cnp-
increase o or
demand
its time and dE'mand deposits it shall, at the beginning of
shall. at the bE'ginning of each deposits. each deposits.

calendar year, subscribe

subscribe for an additional
additional amount of of capital stock of of
the
the Corporation equal to one one half of 1 per pE'r centum of such incrE'ase increase Payments.
in deposits. One half of the amount amount of such additional stock shall
be paid for at the time of the subscription subscription therefor, and the bal-
a~ce shall be subject
ance to call by the board of directors ?f
subject t? of the .Corpora-
Corpora- Amount Amount of subscrip-
tion. A bank organized
tIon. orgamzed on or before the date thIS this sectlOn
section takes tion tion for
for class
class A; mem-
man-
membership in the
effect and admitted to membership
effect the Federal Reserve System
Federal Reserve System ber banks.
ber banks.
at any time after the organization
organization of the Corporation shall be
required to subscribe
subscribe for an amount of class A capital stock equal
to one half of 1 per centum of the time and demand deposits de]?osits of the Payment. Payment.
applicant bank bank as of the date of such admission, paymg paying therefor
therefor
its par value
value plus one half of 1 per centum centum a month from the period
of the last dividend on the class A stock of the Corporation. vVhen When Proportionate
Proportionate sur- sur.
a member bank reduces its time and demand deposits it
demand deposits it shall sur- shares,
render
render of of amount
shares, wben
amonnt .of
when depoSits
of
deposits
render, not later than the 1st day 0off JJanuary anuary thereafter, a propor- prop or- decrease.
decrease.
tionate amount of its holdings in the capital capital stock
stock of the Corpora- Total Totalsurrenderupon
surrender npon
tion, and when a member bank voluntarily liquidates it shall liquidation. liquidation.
surrender all its holdings of the capital stock of the Corporation Corporation
and be released
released from its stock SUbscription
subscription not previously
previously called. Oancellation cancellation of of
The shares surrendered shall
shares so surrendered shaH be canceled and the member member bank shares. shr.
shall receive in paymentpayment therefor, under regulations regulations to be pre- Repayments· Repayments; amount
amount
Corporation, a sum equal to its cash-paid
scribed by the Corporation, cash-paid subscriptions
subscriptions of. of. •
on the shares surrendered
surrendered and its proportionate
proportionate share of dividends
not to exceed
exceed one half of 1 per centum a month, from the period of of
the last dividend on such stock, less any liability of such such member
memher
bank to the Corporation.
Corporation. . ofstock.
Cancellation
"(i)i) If
"( If any member or nonmember
IlonmembC'r bank bank shall be declared insol vent, ~e~~~tb':."nk:s':::ti
insolvent, Member hank when
or shall cease to be a member bank (or in the case of a nonmember .membership. insolvent
insolvent. or or ceases
ceases
bank, shall cease to be entitled
entitled to the benefits insurance under this m~m:::~.
benefits of insurance Nonmember bank. b k
section),
section), the stock held by it in the Corporation Corporation shall be canceled, canceled, ~io hTt. e:
Liability nottan im-
...
without impairment
impairment of the liability
liability of such bank, and all cash-paid cash-paid pair~/
paired. I ~ 0 1m
subscriptions
subscriptions on such stock, with its proportionate
proportionate share of dividends

HeinOnline -- 48 Stat. 171 1928-1934

172 73d CONGRESS. SESS. I. CR. 89.
CH. JUNE 16, 1933.
1933.

Distributionof
Distribution o! assets. not to exceed one half of 1 per centum per month from the period of of
last dividend
dividend on such stock shall be first applied to all debts of the
insolvent bank or the receiver receiver thereof to the Corporation, and the
balance, if any shall be paid to the receiver of the insolvent bank.
if any,
FederalCorporation.
Federal
surance DepOSit In-
Deposit In· "(j) Upon the date of enactment of the Banking Act of 1933, the
"(J') U'p0n
surance CorporatIOn.
Corporate powers.
powers. Corporation
CorporatIOn shall become b ecome a bbody d corporate an
0 y corporate and d as suc
such 11 shall
sh a 1I hhave
ave
power-
power-
"First. To adopt and use a corporate
"First. corporate seal.
"Second. To have
"Second. succession until dissolved by an Act of
have succession of
Congress.
"Third. To make contracts.
"Third.
""Fourth.
Fourth. To sue and be sued, complain and defend, in any court court
of law or equity, State or Federal.
"Fifth.
"Fifth. To appoint by its board of directors directors such officers officers andand
employees
employees as are not otherwise provided for in this section, section, to define
their duties, fix their compensation,
compensation, require require bonds of them and fix
the penalty
penalty thereof, and to dismiss at pleasure pleasure such such officers or em· em-
ployees.
ployees. Nothing in this or any other Act shall be construed to
prevent
prevent the appointment
appointment and compensation
compensation as an officer or employee
of the Corporation
Corporation of any officer or employee employee of the United States
in any board, commission,
commission, independent
independent establishment,
establishment, or executive executive
department thereof.
" Sixth. To prescribe
"Sixth. prescribe by its board of directors, bylaws not in- in·
consistent with law, law, regulating the manner in which its general
business may be conducted, and the privileges granted granted to it by law
rna!. be exercised
may exercised and enjoyed.
"Seventh.
, Seventh. To exercise by its board of directors, or duly authorized authorized
officers or agents, all powers specifically specifically granted by the provisions
of this section and such incidental incidental powers as shall be necessary to
carry out the powers so granted.
Board of directors;
administration
Board of directors;
of cor- "(k)
"( k) TheThe board
board of of directors
directors shallshall administer
administer the affairs of
the affairs the
of the
~g:i~j~:~~n
porate affairs. Corporation fairly and impartially
of cor· Corporation impartially and without discrimination. The
Determination
Determination of board of
of board of directors
directors of of the
the Corporation
Corporation shall determine and
shall determine prescribe
and prescribe
manner disbursements
disbursements h . which
manner
made; obligations in- tthe
obligations e manner in In wh'IC h't
1its
S obligations h a 11 b
0bl'Igat'Ions sshall bee 'incurred
Incurred an andd'Itsits ex·
ex-
eu~~';king privilege
Franking privilege. penses allowed and paid. The Corporation Corporation shall be entitled to the
. fTree
ree use of the United States States mails in the same manner manner as the
Cooperation
Cooperation of of ex- executive departments
ex- executive departments of of the
the Government. The
Government. The Corporation
Corporation with with
the consent f any F
t h e consent of any Federal
ed era1 reserve
reserve bank
b an k oror 0off any
any b board, d commIS-
commis- .
ecutive departments.
ecutive departments.
0 oar,
sion, independent
independent establishment,
establishment, or executive
executive department of the Gov-
ernment, including
including any field service thereof, may avail itself of the
use of information,
information, services,
services, and facilities thereof thereof in carrying out out
the provisions of this section.
Insurance of deposits
deposits, "(1) Effective on and after July
"(1) JUly 1, 1934 (thus affording ample
member
memJbelr
tive 1934.; effec-
banks;
July Ibanks
1. etIec: time
time forfor examination
examination and
and preparation),
preparation), unless the
unless the President
President shall l?y
shall by
Post, pp. 969,
1934970. proclamation fix an earlier date, the Corporation shall insure as
tlve
Post,u pp.
Y969, . .970. procI '
amatIOn fi x an earl'ler d at e,h t eeorpora t'Ion s h a 11 Insure . as
President may ftrthifxl
aa~;lg:fet.
mme
hereinafter provided the deposits of all member banks, and on and
earlier date. may fix hereinafter
Nonmember banks.
Nonmember banks. after
after suchsuch date
date andand until
until JulyJuly 1, 1, 1936,
1936, of of all
all nonmember
nonmember banks, banks,
which are class A A stockholders of the Corporation. Corporation. N Notwith-
otwith-
9Corporation
0 rporation as
ceiver of
as re-
closed ns-
re- standing any other provision of law, whenever any national bank
na-
bank
celver
tional
tional of closed
bank. W h'lCh IS
which . a class
is c1ass A A stoc
stockholder 0 f the
kh 0 ld er of t h e Corporation s h a11 hhave
C orpora t'IOn shall ave bbeen
een
closed
closed by action of its board board of directors
directors or by the Comptroller of of
the
the Currency,
Currency, as as the case may
the case may be, be, on
on account
account of of inability
inability to to meet
meet thethe
demands of its depositors, the Comptroller Comptroller of the Currency Currency shall
Organization of
O,rganization appoint the
now appoint
of new the Corporation
Corporation receiver
receiver for such
for such bank.
bank. As soon
As soon as as possi-
possi.
national bank.
natIOnal bank.
ble thereafter the Corporation
ble thereafter the Corporation shall shall organize
organize aa new new national
national bank bank
to assume the insured deposit liabilities liabilities of such closed closed bank, to to
receive
receive new deposits and otherwise otherwise to perform
perform temporarily
temporarily the func-

HeinOnline -- 48 Stat. 172 1928-1934

 73d CONGRESS.
73d CONGRESS. SESS. I.I. CR. 89.
CH. 89. JUNE
JUNE 16, 1933.
16, 1933. 173
173
provided for it
tions provided paragraph. For
it in this paragraph. For the purposespurposes of of this
this ~:J~ed
"Inured depositdeposit I!-Ii-
subsection, the term 'insured
subsection, 'insured deposit liability' shall
deposit liability' shall meanmean with a ty. construed.
with ability", construed.
respect to the owner
respect owner of any claim arising out of
claim arising deposit liability
of a deposit
of such closed
closed bankbank the the following percentages of the
following percentages the net amount amount
due to such owner owner by such such closedclosed bank on account account of deposit deposit lia- Percentages.
Percentages.
bilities: 100
bilities: centum of such net amount not exceeding
100 per centum exceeding $10,000;
$10,000;
and 75
and centum of
75 per centum of the amount, if any, by which
the amount, which such net amount amount
$10,000 but does
exceeds $10,000
exceeds does not exceed $50,000; and
exceed $50,000; and 50 per per centum
centum of of
amount, if
the amount, if any, by which such such net amount exceeds exceeds $50,000:
$50,000:
Provided, That, in' determining
Provided, determining the amount due to such owner for Prvinso.
the amount PrD°tviSO • • •
e ermmstlOn of
Determination 0
(

t h e purpose
the purpose of 0 f fixing
fi xmg such percentage, there shall be added
such percentage, added together
together amounts for for fxing
fixing per-
per-
all net amounts due to such owner
all owner in the capacity or
same capacity
the same or the
the samesame centaes.
centages.
right, on
right, account of deposits,
on account regardless of whether
deposits, regardless whether such deposits
maintained in
be maintained in his namename or in the names of others
in the others for his benefit. abilities," '.'~~m;~d deposit
"Insed deposit li-Ii-
For th e purposes of
F or the 0 f this
· subsection,
t h IS subsect'lOn, the the term ' lllsure
.
term 'insured d deposit
d eposlt . lia-
l'la- ablhtles, construed.
construed.
shall mean the aggregate
bilities' shall
bilities' aggregate amount amount of all such such insured deposit deposit "
liabilities of such closed closed bank. The Corporation Corporation shall determine as an?a~~~~o~epos~~ ts due deposi-
expeditiously as possible the net amounts due to depositors
expeditiously depositors of the tors.
closed bank and
closed and shall make available to the the new bank an amount bfmounts Amounts made made avail-
avail-
equal to the
equal insured deposit liabilities
the insured liabilities of such such closed bank, where- able. a e.
upon such new bank shall assume the insured deposit liability
upon liability of such C Corporationt' subro- b
closed bank to each of its depositors, and the Corporation Corporation shall shall be gatedgated~~r~i~~~s a~;;'
to rights against
subrogated to all rights against the closed bank
subrogated bank of the owners of Cl~~~i~l~:~nt Entitlement to to divi-
divi-
such deposits and shall be entitled receive the same
entitled to receive same dividends from dends. daends.
the proceeds of the assets of such closed closed bank bank as would have been been
payable to each such depositor
payable depositor until such dividends dividends shall equal the
shall equal
insured deposit liability to such depositor assumed assumed by the new new bank,
whereupon all further dividends
whereupon dividends shall payable to
shall be payable to such depositor. iyPYentstobemade
such depositor. in~entstobemade
Of the amount
amount thus made available by the Corporation Corporation to the new
bank, such portion shall be paid to it it in cash as may be necessary necessary to
enable it it to meet immediate
immediate cash demands and the remainder remainder shall
be credited
credited to it it on the books books of the Corporation
Corporation subject to with- Credits. I rate.
drawal on demand and shall bear interest at the rate of 3 per centum Interest Interest rate. new
Acceptance of
annum until
per annum untIl , withdrawn.
WIt. hd rawn. Th Thee new bank b an k may, with WI
. th thet h e deposits.
Acceptance of new
Corporation, accept
approval of the Corporation,
approval accept new deposits, which, together
together
amounts made available to the new bank by the Corporation, ' Investments author-
with all amounts
shall be kept on hand in cash, invested invested in direct obligations of the !Zed. ied.
United States, or deposited with the Corpor~tion Corporation or with Federal Maintenance
witl?- a lfederal Maintenance of re-
of re-
reserve bank. Such new bank shall mamtam maintain on deposit depOSIt WIth with the serve serve with
with reserve
reserve
Federal reserve bank of its district the reserves required required by by law law of of bank.
bank.
member banks but shall not be required required to subscribe for stock of the Subscription Subscription for for
reserve bbank
ed era1 reserve
Federal
F an k ununtilt 1'l'ts
1its own ca pI't a I sstock
capital t ock hhas as bbeen
een susubscribed
b SCrI'bed stock
stock notnot required.
required.
provided. The articles of
The articles of t.oArticles of asoei-
and paid for in the manner hereinafter provided.
organization certificate of such new bank may be ti~~~esorg':[ni:;i~~~­
ion and organiation.
association and
association certificate of such new bank may be
executed by such
executed representatives of the Corporation
such representatives Corporation as it may desig- Manag .nt of ne
. d to at bank.
nate; thet h e new bbank an k shall
sh a II no required
nott bbee reqmre to hhave
ave any d'lrectors at
any directors Management of new
bank.
organization, but shall be managed by an executive
the time of its organization,
designated by the Corporation; and and no capital stock
no capital stock need Capital stock pay-
need m~;~i\a;
officer to be designated bank shall
such bank ment by g;~~~raB~~~
corporation.
Corporation; but
be paid in by the Corporation; but in other respects
in other respects such shall
be organized in accordance with the existing and, provisions of law relat- Trans tion of bsi-
ing
ing to the organization
to the organization of national banks'
of national banks; and until until thethe requisite
requisite Transaction of busi-
such bank been '
has ,been subscribed
. and paid , nes.
ness,
amount of capital stock for for such bank has subSCrIbed and paId
for in the manner hereinafter hereinafter provided, such bank shall transact transact
no business except that authorized by this this subsection and such such busi- Ofer of .
ness as may be InCl " denta1 to 1't
incidental "
itsS orgamza
organization. t'ron. Wh When en In.in ththee lU 'dg- of Offeraofcapltalstock
judg- new bank.
ment of the Corporation it is desirable to do so, the Corporation Corporation shall
offer capital stock of the new bank for sale. on such terms and condi-
such condi-
tions as as the Corporation shall deem advlsa advisable, bIe, .in an
m amount su
an amount ffi - Amount.
suffi-
cient in the opinion of the Corporation Corporation to make make possible the conduct conduct

HeinOnline -- 48 Stat. 173 1928-1934

 174 73d CONGRESS. SESS. I. CR.
CH. 89. JUNE 16, 1933.
1933.
R. S.,se.5138, p.993.
R.S.,sec.5138,p.993. of
of the business
thethat
business of
of the
the new bank
new bank on on a~ sound
sound basis, but
basis,Statutes,
but in in no event less
noasevent less
U.S.C., p. 261.
U.S.C., p. 261.
than
than required
that required by
by section
section 5138
5138 ofof the
the Revised
Revised Statutes, amended
as amended
(U.S.C., title 12,
(U.S.C., 12, sec. 51),
51), for the organization of a national national bank bank in
Preemption
Preemption right of the place where such
right of such new bank is located, giving the stockholders
stockholders of of
stockholders. the closed bank the first opportunity to purchase.
the closed bank the first opportumty to purchase such stock. Upon Upon
Certificate to
CertIficate to con-
com- proof that an adequate adequate amount of capital capital stock of the new bank has
oY usiness; when
~~~;~e~uslDess; when been subscribed and paid for in cash by subscribers
been subscribed and paid hy subscribers satisfactory
satisfactory to the
Comptroller
Comptroller of the Currency, Currency, he shall issue to such bank a certificate certificate
Management there· there- ofof authority to
to commence business and thereafter it shall be managed
Management
after. by directors elected by its own shareholders and may exercise managed
authority commence business and thereafter it shall be all of the
after. by directors elected by its own shareholders and may exercise all of the
wsfer
when stock
Transfer of
of husiness, powers
suhscrip-
busine!'3. powers granted by
granted by
ylwlaw to
law to national
national
ntoa banking
banking
ann associations.
associations .
If ~
If an ade-
an ade~
when stock subscnp- • . ,• •
tion inadequate.
tion inadequate. quate amount of capital capItal for such new bank IS is not subscrIbed
subscribed and paid pard
in, the Corporation
Corporation may offer to transfer its business business to any other other
banking institution
institution in the same place which will take over its assets, assets,
assume its liabilities,
liabilities, and pay to the CorporationCorporation for such business business
Volntary
tion of new hankquida
tio;;;o~~~~Yba';fq~l~~ when suchsuch amount
amount as as the Corporation may
the Corporation may deemdeem adequate.
adequate. Unless Unless the the
transferred.
not transferred. capital
capital stock of the new bank is sold or its assets acquired acquired and its
liabilities
liabilities assumed by another banking banking institution, in the manner manner
herein
herein prescribed,
prescribed, within two years years from the date of its organization,
organization,
the Corporation shall place the new bank in voluntary voluntary liquidation
liquidation
Deposit insurance ac- and wind up its affairs. The Corporation shall open on its books a
Depositinsuranceac-
count,
count.
deposit insurance
deposit insurance account and, as
account and, as soon as possible after
soon aspossible after taking
taking pos-
Duty
Duty of corporation session
of corporation session of any
of any closed
closed national
national bank,
bank, the Corporation shall make
make an
to open.
to open.
estimate of
estimate of the
the amount which will
amount which will be available from all sources
be available sources for
application in satisfaction
satisfaction of the portion of the claims of depositors depositors
Debits
Debits to.to. to
to which
which itit has been subrogated
has been subrogated and shall debit
and shall debit to such deposit insur-
to such
ance account the excess, if if any, of the amountalllount made available by the
Corporation to the new bank for depositors depositors over over and above the
duties of
Additional duties
Additional amount of
of amount of such
such estimate.
estimate. It It shall
shall bebe the duty of
the duty of the Corporation
Corporation
corporation;
corporatIOn; liquida-
tion of closed hCJUlda-bank. to rea l'Ize upon the
realize t he assets 0off suesuchhcclosed
iose
d bbank,
an) k having
h '
aVlng d ue regard
due regal' d
to the condition of credit in the district in which whIch such closed bank
is located;
located; to enforce the individual liability liability of the stockholders
stockholders
and directors thereof; and to wind wind. up the affairs of such closed closed
bank in conformity
conformity with the provisions of law relating relating to the
liquidation
liquidation of closed national national banks, except except as herein otherwise
provided,
provided, retaining for its own account such portion portion of the amount amount
realized
realized from such liquidation as it it shall be entitled
entitled to receive on
account of its subrogation to the claims of depositors
account depositors and paying paying
to depositors
depositors and other creditors creditors the amount available for distribu-
tion to them, after deducting therefrom their share of the costs of the
liquidation
liquidation of the closed bank. If If the total amount realized by the
Corporation on account of its subrogation subrogation to the claims claims of depositors
be less than the amount of the estimate hereinabove hereinabove provided for, the
deposit insurance account shall be charged charged with the deficiencydeficiency and,
if the total amount
amount so realized shall exceed exceed the amount of such esti-
Powers and
Power~ and rights
righ~ ofof mate, such account
mate, such account shall
shall be credited with
be credited with such
such excess.
excess. With With respect
respect
oorporation as receiver. to such closed national banks, the Corporation shall have all the
corporatIOn as reCeiver. to such closed national banks, the Corporation shall have all the
rights, powers, and privileges now possessed possessed by or hereafter given given
receivers
receivers of insolvent national banks banks and shall be subject to the
obligations
obligations and penalties not inconsistent with the provisions provisions of this
paragraph to which such receivers
paragraph receivers are now or may hereafter become
subject.
Closed State
State member "Whenever
Whenever any State
any State member bank bank which is aa class
class A A stockholder
Closed
banks.
~~
member
of" the Corporation shallmember
have been closed which byisaction stockholder
off its board of
of the Corporation shall have been closed by action 0 its board 0 f
directors or by the appropriate
directors appropriate State authority, as the case may may be,
on account
account of inability to meet the demands demands of its depositors, the
ce~~~~ation
Corioration as Corporation shall
re- Corporation
as re- shall accept
accept appointment
appointment as receiver thereof,
as receiver thereof, if if such
such
cver of. appointment be tendered by
appointment be tendered by the appropriatethe appropriate State authority and be

HeinOnline -- 48 Stat. 174 1928-1934

 73d CONGRESS. SESS. I. CH. 89.
89. JUNE
JUNE 16, 1933.
1933. 175
authorized or permitted by State State law. Thereupon thethe Corporation
Corporation
provisions bank. Organization
Organization ot of new
new
national bank,
shall organize a new national
shall bank, in accordance with
in accordance with the provisions bank.

of this subsection, to assume the insured insured deposit

deposit liabilities of such Purpose.
closed State membermember bank, to receive new deposits and otherwise to
perform temporarily the functions provided for in this subsection.
recognition of the right of the Corporation to sured
Upon satisfactory recognition Funds to cover
deposit liabilitiesin-
in-
rece! . ve d"d
receive 1VI en d s on tthe
dividends h e same b" basis in tthe
aSIs as In 1ose d na
h e case 0off a cclosed t'lOna 1 sureddepositliabilities
national made available by Cor.Cor-
bank under this subsection,
subsection recognition being
. , such recogmition . accorded by poration
'. State p~~tion
divIdendswhen rigJ:!t
right to
recogmzed.
to
law, by allowance claims by the approprIate
allowance of claIms appropriate State authOrIty,
authority, by recogd.
assignment of claims by depositors, or by any any other effective method,
the Corporation shall make available to such new national bank, in
the manner prescribed by this subsection, an amount equal to the the
insured deposit liabilities of such clm;ed closed State member bank; and the ba~k~agement banagement of new
of new
Corporation and such new national bank shall perform all of the the
functions and duties and 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 bank~
holding class A A stock in the Corporation: Provided, Provided, That the rights ~~::~ation De nt.
Determination o0 f
f
of depositors and other creditorscreditors of such State State member bank shall be rightsofdepositors,etc.
rightsofdepositors, etc.
determined in accordance
accordance with the applicable applicable provisions of State
law: And provided further, That, with respect to such State member
provided further, ~owers,etc.,ofCorpo·
member Powers,ete.,ofCorpo-
ank , tthe
bbank, he CCorporation.
orporatlOn h a 11 possess
sshall th e powers
possess the powers an and d ' '1eges pro-ration
privileges
PrIVI pro- ratIOn under
under State law.
law.

vided by State law with respect to a receiver of such State member member
bank, except in so far as the same are in conflict with the provisions
of this subsection.
" Whenever
\Vhenever any State member bank which is a class A A stockholder Organization of new
of the Corporation shall have been closed by action of its board of bank, when appoint-
o~ the Corporation shall ha.ve been closed bJ:" action of its board of ~~'orJo~o:.ftf~::; ment of Corporation as
directors or by the approprIate
dIrectors appropriate State authonty,authority, as the case may be, receiver unlawful. unlawful.
on account
account of inability to meet the demands demands of its depositors,
depositors, and
the applicable
applicable State law does not permit the appointment of the
Corporation as receiver
Corporation receiver of such bank, the CorporationCorporation shall organize
national bank,
a new national accordance with the provisions of this sub- Functions.
bank, in accordance Functions.
section, to assume
assume the insured
insured deposit liabilities of such closed closed State
member bank, to receive new deposits, and otherwise otherwise to perform tem-
porarily
porarily the functions provided for in this subsection. subsection. Upon satis- Funds Funds to to be .made
made
, . recognition of the right of the Corporation
factory Corporation to receivereceive divi- whento ngh~
div- available.when
Caie
CorporatIOn right
receive of
of
dends on the same basis as in the case of a closed national bank under dividends recognized. recognized.
this subsection,
subsection, such recognition
recognition being accorded by State State law, by
allowance
allowance of claims by the appropriate appropriate State authority, by assign-
ment of claims by depositors,
depositors: or by any other effective effective method, the
Corporation shall make available available to such new bank, in accordance
with the provisions
provisions of this subsection,
subsection, the amount of insured insured deposit
deposit
liabilities
liabilities as to which such such recognition
recognition has been accorded;
accorded; and such such Assumption
Assumption ofot in-
new bankbank shall assume such insured insured deposit liabilities
liabilities and shall in
and shall in sureddepositliabilities.
sureddepositliabilities.
other respects
respeets comply
comply withwith the provisions of this subsectionsubsection respect-
ing new banks organizedorganized to assume assume insured
insured deposit
deposit liabilities of of
closed national
national banks. In In so far as possible
possible in view of the applicable
applicable
provisions
provisions of State law, the Corporation Corporation shall proceed
proceed with respectrespect
to the receiver
receiver of such closed bank bank and withwith respect
respect to the new bank bank
organized
organized to assumeassume its insured
insured deposit liabilities in the manner manner
prescribed
prescribed by this subsection
subsection with respect respect to closed
closed national banks
and newne", banks
banks organized to assume assume their insured
insured deposit liabilities;
liabilities;
except
except that the Corporation
Corporation shall have none of the powers, duties,
or responsibilities
responsibilities of a receiverreceiver with respect
respect to to the winding
winding up of of
the affairs
affairs ofof such
such closed State State member
member bank. The Corporation, in in
its discretion, however, may
discretion, however, may purchase
purchase and liquidate any or all all of the
assets ofof such
such bank.

HeinOnline -- 48 Stat. 175 1928-1934

176 73d CONGRESS. SESS. I. CR.
CHI. 89. JUNE
JUNE 16, 1933.
1933.
"Whenever
Whenever the net
the net debit balance
debit balance of the deposit
of the deposit insurance account
fourthinsurance
off 1 per account
Levy on class
Levy on class A
A
stockholders.
stockholders. of "the Corporation shall equal or exceed one centum
of the Corporation shall equal or exceed one fourth 0 1 per centum
of the total deposit liabilities of all class A stockholders stockholders as of the
date of the last preceding call report, the Corporation Corporation shall levy
upon such stockholders an assessment assessment equal to one fourth of 1 per per
Credit to insurance centum
Credit centum of their total deposit liabilities and shall credit credit the amount
amount
account.
account. collected from
collected from such such assessment
assessment to such deposit insurance insurance account.
Dividend payment
Dividend paymen.t No bank which is a holder of class A stock shall pay any dividends
by bank denied until
~~.!~~ntd~~l~~
assessment paid. until until all assessments levied upon it by the Corporation shall have
been paid in full; and any director director or officer
officer of any such bank who
Penalty
Penalty provision,
provision. participates in the declaration payment of any such dividend may,
declaration or payment
upon conviction,
conviction, be fined not more than $1,000, $1,000, or imprisoned for not not
more than one year, or both.
"Receiver",
"Receiver", can- con- "" The term'
term 'receiver'
receiver' as used in this section shall mean a receiver, receiver,
ru~ed
strued
liquidating agent,
liquidating agent, or or conservator
conservator of a national bank, and a receiver.
liquidating
liquidating agent, conservator, commission, commission, person,person, or other agency agency
charged
charged by State law with with the responsibility and the duty of winding winding
up the affairs of an insolvent State member bank.
"National bank."
"National bank." "For
" For the purposes of this section section only, the term term''national bank'
national bank'
shall include all national banking associations associations and all banks, banking banking
associations, trust companies,companies, savings
savings banks, and other banking banking insti-
located in the District of Columbia
tutions located Columbia which are members of of
"State member
b~~~~!'te member the, Federal Reserve
th~ Federal System; and
Reserve System; and thethe term
term''State
State member
member bank'bank'
shall include all State State banks, banking
banking associations,
associations, trust companies,
savings
savings banks, and other banking banking institutions organized under the
institutions organized
laws of any State, which are members of the Federal Reserve System.
Amounts
Amounts of deposits, " In any determination
"In determination of the insured deposit liabilities of any
~gJ~ri;
payable
e~~lud~':lei1~
in foreign
country excluded
determining total de- in closed bank or of the total deposit liabilities of any bank which which is
a holder of class A stock of the Corporation, or a member of the
~~;~i'ft~iti~~tal de· a holder of class A stock of the Corporation, or a member of the
postliabilitieso

Fund provided
provided for in subsection (y), (y), for the purposes purposes of this
section, there shall be excluded excluded the amounts
amounts of all deposits of such such
bank which are payable payable only at an office thereof located located in a foreign
country.
Rules, etc., by
Rules, etc., by Cor-
Cor- "" The Corporation may make such rules, regulations, regulations, and contracts
poration.
poration. as it
as may deem
it may deem necessary
necessary in order to carry carry out the provisions of this
section.
ofDepositorinvestment
Depositor
money by investment
Corpora- "Money
"Money of the Corporation Corporation not otherwise employed shall be
of money by Corpora- ll1veste
tion.
tion. •
invested d In. securities
in secun't'les of 0 f th
thee G overnment 0off the
Government th e United
U' nlte d SStates,
tates,
except that for temporary temporary periods, in the discretion discretion of the board board
of directors, funds of the Corporation may be deposited in any
Federal
Federal reserve bank bank or with the Treasurer of the United States.
D~ignation of
Designation Cor- When
of CO!- When designated for
designated for that
that purpose
purpose by by the
the Secretary
Secretary of of the Treasury,
the Treasurv
moneys
moneys
poraton as
poraOon aspublic
public
depositary. the CCorporation .
orporabon s al h
shall I
be a d '
depositary of
eposltary 0 pu hc f b
public . moneys, except
except ~ ,

receipts
receipts from customs, under such regulations regulations as may be prescribed prescribed
by the said Secretary,
Secretary, and may also be employed as a financial financial agent
agent
of the Government. It It shall perform
perform all such reasonable duties as as
depositary
depositary of public public moneys
moneys and financial
financial agent Government
agent of the Government
as may be required of it.
Authority of Corpo- (m ) Nothing herein contained
""(in) contained shall be construed to prevent the
ration to make loanst to
top Corporation
C orpora t'IOn ffrom k'lng 1loans
nationao
ration
nationalto banks,
make loans
banks, etc. rom ma making oans tto0 na t'lOna I banks
national b ank ciose
d bby
s closed t'IOn
action
y ac
of the Comptroller of the Currency, Currency, or by vote of their directors,
or to State member member banks closed by action of the appropriate appropriate State
authorities,
authorities, or by vote of their directors, or from entering into nego-
tiations
tiations to securesecure the reopening of such banks.
Sale of
Sale of assets
assets of
of in-
in- "(n) Receivers
"(n) Receivers or liqnidators
liquidators of membermember banks which are now
solvent banks to Cor-
~~:'~?~n~anks
poration. to Cor- or may hereafter hereafter become insolvent insolvent or suspended
suspended shall be entitled
Permission required.
Permission required, to to offer
offer the
the assets
assets of of such
such banks
banks forfor sale
sale to to the
the Corporation
Corporation or or as as
security
security for loans from the Corporation, upon receiving permission
receiving permission
from the
from the appropriate
appropriate State State authority
authority in accordance with
in accordance express pro-
with express pro-

HeinOnline -- 48 Stat. 176 1928-1934

 CONGRESS.
73d CONGRESS. SESS. I. CI.
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
Comptroller
proceeds of every such sale or loan shall be utilized same Utilization of pro.
of pro-
proceeds
and in the same manner as other funds realized from the ~.fsilization
for the e"
purposes manner as other funds realized from the Payment . of dMvi-
liquidation of the assets of such
liquidation Comptroller of the dends
such banks. The Comptroller d!'nad~e~~ on ~ro~~~
proved
Currency may,
Currency may, inin his discretion, pay
his d~scr~tion, dividends on
pay divi.dends on proyed
proved claims
claims at at claims.
cl~~: sec. 5235, p.
any time after the expirationexplratIon of the penod advertisement made
period of adverllsement made 1012.
1012.
pursuant to section 5235 of the Revised Statutes title 12,
(U.S.C., title
Statutes (U.S.C., u*s c, pp m
12, U.S.C., 272.

193), and no liability shall attach to the Comptroller

sec. 193), Comptroller of the
Currency
Currency or to the receiver receiver of any national bank by reason of any
such payment for failure to pay dividends to a claimant whose
such whose claim
claim
is not proved at the time of any such payment.
"(0)
"(o) The Corporation is authorized authorized and empowered to issue and. and Amount
Amount of outstand-
outsta!'d-
· t"
aggrega t-mg not tions.
amountt aggregating
ing
mg corporate
corporate obhga-obliga-
to have outstanding
outstan d mg at anyone
any one timelme inIII an amoun tions.
more than three times the amount of its capital, its notes, debentures, debentures, mtut m!;~~:T:'~~l~napefore
o efore
bonds, or other such obligations, redeemable at the option of the
obligations, to be redeemable
Corporation before maturity maturity in such manner manner as may be stipUlated
stipulated in in
such obligations, and to bear such rate or rates of interest, and to
mature at such time or times as may be determined
mature determined by the Cor-
poration: Provided, Corporation may sell on a discount Sale
Provided, That the Corporation ::1~vi8~'fof short-term
sbort-term
basis short-term obligations payable at maturity without the interest, obligati!,ns
interest. obligations at discount.
discount.
The notes, debentures, bonds, and other such such obligations of Cor-
obligations of the Cor- SeCurIty. Security.

poration
poration may be securedsecured by assets of the Corporation in such manner manner
prescribed by its board of directors. Such obligations
as shall be prescribed obligations
may be offered for sale at such price or prices as the Corporation
may determine.
determine.
"((p)
p ) All notes,
All no d eb ent ures, bbonds,
t es, debentures, 0 t1ler sue
ond s, or other suchh olga
bl' t-lons issued
obligations .
Issue d tCrpo"xton.
Corporate
tions, obliga-
tax exemption.
by the Corporation shall be exempt, both both as to principal and interest, inheritance
here-
. Exception, State and
Eh xceetPtiont, State and
.
from al1 taxatlOn
all .
taxation ( except estate
(except est ate an
and d'm hentance
.
inheritance taxes)) now
taxes now or or h ere- m en ance axes.
taxes.

imposed by the United

after imposed
after United States, by any Territory, dependency, dependency,
or possession thereof, or by any State, county, municipality, or local Corporation, . inlud-
taxing authority. The Corporation,Corporation, including its franchise, its capi- ini~~~~~~~~n, franhise,
rg e~~~~t
exempt.
tal, reserves, and surplus, and its income, shall be exempt from all '
taxation now or hereafter imposed by the United States, by any
dependency, or possession thereof, or by any State, county,
Territory, dependency,
municipality, or local taxing authority, except that any real prop-
municipality,
erty of the Corporation shall be subject to State, Territorial, county,
municipal or local taxation to the same
municipal same extent according
according to its value
as other real property is taxed. taxed_ Prparation of ot,
c (q)) In
"( q I n order
ord er that thee C
th a t th Corporation
orpora t'lOn may
may be b e supplied
supp l'Ie d WI 'th SUC
with such h debenture,
Preparation
debenture, etc of
etc, note,
ofote.
fonus.
forms of notes, debentures, bonds, or other such obligations obligations as it may may
need for issuance under this Act, the Secretary Secretary of the Treasury is
authorized to prepare such forms as shall be suitable and approved by
Corporation, to be held
the Corporation, Treasury subject to bed
held in the Treasury delivery, upon di~U!~~dY
custody of plate,
of plates,
plates, dies, pieces, and die, etc.
Corporation. The
order of the Corporation. The engraved
engraved plates, dies, bed pieces, and ' .
other material executed in connection therewith shall remain inshall
connection therewith the Reimbursement
Reimbursement for for
expenses.
The Corporation
Treasury. The expenses.
custody of the Secretary of the Treasury.
of the Corporation shall
Secretary of the Treasury
reimburse the Secretary Treasury for any expenses incurred incurred
preparation, custody, and delivery
in the preparation, debentures,
delivery of such notes, debentures,
bonds, or other such obligations.
obligations .
(r) The Corporation shall annually make a report of its opera-
. "" (r) opera- C';;:~~\on:eport
Coo report of of
tions to the Congress as soon as practicable
hons practicable after the 1st 1st dav
day of of
January in each year. •
"" (s) Whoever, for the purpose of obtaining any loan from the Fale
(s) Whoever, °sttement
~:~!);U~~~~itons.
Corporation, or any extension extension or renewal thereof, or the acceptance, acceptance,
release, or substitution of security security therefor, or for the purpose purpose of of
inducing
inducing the Corporation purchase any assets, or
Corporation to purchase for the
or for purpose of
the purpose of
influencing in any way the action of the Corporation
influencing this see-
under this
Corporation under sec-
86637 -34-12
86637'-34--12

HeinOnline -- 48 Stat. 177 1928-1934

 178 73d CONGRESS.
'73d SESS. I. CH. 89.
CR. JUNE
JUNE 16, 1933.

. Willful
tionWillfrull overvalp
t Ion anyovervalna-
0of any
8'
security,
secun t y. valuesmakes
tion, any statement,
any security,statement,
. shall beknowing
punished
.
it tobybea false,
fine of willfully
or not more over-
than
values any securIty, shall be pumshed by a fine of not more than
$5,000, <)r qr by imprisonment
imprisonment for not more than two years,
years, or both.
Counterf~jt .of
Counterfeit of cor·
cot- " (t) Whoever (1)
,. (1) falsely makes, forges, or counterfeits any obli- obli-
porate obligation, etc. uation or coupon, in imitation of or purporting to be an obligation
porate obllgatlOn, etc. gation or coupon, in imitation of or purporting to be an obligation
or C'onpon
coupon issued by the Corporation,
Corporation, or (2) (2) passes, utters, or pub-
attempts' to pass, utter, or publish, any false, forged, or
lishes, or attempts or
counterfeited
counterfeited obligation or coupon coupon purporting
purporting to have been issued
by the Corporation,
Corporation, knowing the same same to be false, forged, or coun-
terfeited,
terfeited, or (3) (3) falsely alters any obligation or coupon issued or or
purporting to have been issued by the Corporation, Corporation, or (4) passes,
utters, or publishes,
publishes, or attempts to pass, utter, or publish, as true,
any falsely alteredaltered or spurious obligation or coupon, issued or pur-
porting to have been
porting been issued by the Corporation, knowing knowing the same
to be falsely altered or spurious, shall be punished punished by a fine of not not
imprisonment for not more than five years,
$10,000, or by imprisonment
more than $10,000,
both.
or both.
Embezzlement, etc.
Embezzlement, (u) Whoever,
"" (u) Whoever, being being connected
connected in in any
any capacity
capacity with the Corpo-
ration, (1) embezzles, abstracts, purloins,
(1) embezzles, purloins, or willfully misapplies
any moneys, funds, securities, or other things of value, whether whether
belonging to it
belonging it or pledged,
pledged, or otherwise
otherwise intrusted to it, it, or (2)
(2) with
intent to defraud
defraud the Corporation
Corporation or any other body, politic or or
corporate, or any individual, or to deceive
corporate, officer, auditor, or
deceive any officer, or
examiner of the Corporation, makes any false entry in any book,
examiner
report, or or statement
statement of or to the Corporation, or without being duly
authorized draws any order
authorized order or issues, puts forth, or assigns any
debenture, bond, or other such obligation,
note, debenture, obligation, or draft, bill of of
exchange, mortgage, judgment,
12xC'hange, jUdgment, or decree thereof, shall be punished
by a fine of not more than $10,000, $10,000, or by imprisonment
imprisonment for not not
more than five years, or both.
Term
Term "Federal I De-
"Feder De- "(
" (v) No0 individual,
V) N'd"d
association,
1 as!'lOCla. t'.lOn, papartnership,
rt ners1Up,
. or or corporation. shall
sh a 11
posit
posit Insurance ~orpo-
Insurance Corpo- In IVI ua, c~rporatIOn
ration."
ration." . use the words 'Federal
nse 'Federal Deposit
DeposIt Insurance Corporation',
CorporatIOn " or a com-
Exclusive use.
ExclUSIve
Fals use.
advertising.
False advertIsing. b" mahon or any
bination th
three
reehe0of h ese ffour
f tthese our words,
wor d s, as theh e name
tNo name or a asso-part
part
Post. p.970.
Post. p. 970.
thereof under
tlwreof under which
which he or it
or it shall
shall do business. No
do business. individual,
individual, asso-
partnership, or corporation shall advertise
ciation, partnership, advertise or Or otherwise
represent falsely by any device whatsoever whatsoever that his or its deposit deposit
liabilities
liabilities are insured insured or in anywise guaranteed guaranteed by the Federal Federal
Deposit Insurance Corporation,
Corporation, or by the Government Government of the United United
States, 01' instrumentality thereof; and no class A stock·
or by any instrumentality stock-
holder of the Federal Federal Deposit Insurance Corporation shall
advertise
advertise or otherwise represent represent falsely by any device whatsoever whatsoever
the extent
extent to which or the manner manner in which its deposit deposit liabilities
liabilities are
Penalty tor
Penalty violation. insured by the Federal Deposit Insurance
for violation, Insurance Corporation. Every
individual, partnership, association, or corporation
individual, partnership, corporation violating
violating this
subsection shall
subsection shall be punished by a fine of not exceeding exceeding $1,000, or
$1,000, or
by imprisonment
imprisonment not exceedingexceeding one year, or both.
Crmn
u£~~~~tes:ode
l Code of
United States. of ""(w) The provisions of
( w) The provisions of sections
sections 112, 113, 114, 115, 115, 116, and 117 117
Vol. 35, p.1108. of the Criminal Code of the United States (U.S.C., title 18, ch. 5,
in.~~:~:m~·
U.S.C., p. 475. of the Criminal ~ode ?f th~ United States (U.S.C., title 18, ch. 5,
Applicable
Applicable to secs. 202 to 207,
corpo- sees.
to corpo- inclusive), In
207, InclUSIve), in so far as applicable,
applIcable, are extended
extended to
~~:em~~~:acts and apply to cnrcso
rate contracta and
agreements. contracts or agreements
agreements with the Corporation Corporation under this
section, which for the purposes hereof shall be held to include loans,
advances, extensions, and renewals thereof, and acceptances, acceptances, releases,
and substitutions
substitutions of secnrity
security therefor, purchases purchases or sales of assets,
. Dia- ., and all contracts and agreements pertaining to the same.
Secret "(x) contracts
ServiceDepart-deirinotefth The Secret Service agreements
Division pertaining
of the Treasury Department is
Si::,cr~~e!~~c:6e~':';::
sion, Treasury ;. (x) The Secret Service Division of the Treasury Department is
ment. f authorized to detect, arrest. and deliver into the custody of the
Detection, etc,
illE';iection. etc , ofat al1t~orized to detect, arres~, a~d ?el.iv~r into the custody 0':£ ~he
persons violating.
persons violating. United States marshal having
Dmted jurisdiction any person committing
haVIng )urlsdlCtlOn comlmttmg
any of the offenses
offenses punishable
punishable underunder this section.

HeinOnline -- 48 Stat. 178 1928-1934

 73d CONGRESS.
73d CONGRESS. SESS. I. CR.. 89.
C 89. 16~ 1933.
JUNE 16. 1933. 179
179
"(y~ The
"(y) Corporation shall open
The Corporation Temporary Federal
books a Temporary
0l?en on its books Federal De D;;;,;~woragsu~e::;-~
IrarF e
DeposIt Insurance
Deposit Insurance Fund
Fund (hereinafter referred to as
(heremafter referred as the
the''Fund'), To be opened o
Fund '), Fund.
which shall become
which become operative January 1,
operative on January 1, 1934, unless the Presi- books
1934, unless bo~~s of ~; Corporation,
c°.f~~~~tio';,~
dent proclamation fix an earlier
(lent shall by proclamation earlier date, and it shall be be the opertive January 1.
operative January 1.
duty of the Corporation
Corporation to insure
insure deposits
deposits as hereinafter
hereinafter provided
provided Pt,
19jt'ost, p.
p. 969.
until JulyJuly 1, 1934.
1934.
January 1,
before January
licensed before 1, 1934, by Secre- Membership of
the Secre-
"Each member bank
"Each bank licensed 1934,in byhim by the ~Jmbershlp 01
pursuant to
Treasury pursuant
tary of the Treasury to the authority vested
the authority vested in him by the .
Executive order of the President
Executive President issued March 10,
10, 1933,
1933, shall, on
shall, on or
or n!;:~~~.
Exer rder
Order
of the Fund; each member
before January
before become aa member
1934, become
January 1, 1934, member of the Fund; each member
bank so licensed after such date, and
licensed after bank trust company
State bank
and each State company or or
mutual savings bank
mutual (referred to in
bank (referred subsection as
in this subsection ' State bank
as 'State bank'~ '. Post,
Post, p.p. 97L
97l.
which term shall also include
which include all banking institutions located in
institutions located
the District
the Columbia) which becomes
District of Columbia) becomes a member of the Federal
of the Federal
Reserve
Reserve SystemSystem on or after such date, shall, upon being being so licensed
licensed States bank, not
admitted to membership, become a member
or so admitted member of the Fund; me::~:rs bgFrese~!
Fund; and members of reserve
any State bank which is not a member of the Federal
any Reserve system.
Federal Reserve system.
Sy·stem,
System, with the approval approval of the authority having
the authority supervision of
having supervision of
such State bank and certification
such Corporation by such author-
certification to the Corporation
ity that such State bank is in solvent condition, shall, shan, after exam-
ination by,
ination by, and with the approval
approval of, Corporation, be
of, the Corporation, be entitled
entitled
become a member
to become member of the Fund and to the privileges of this sub-
the privileges sub-
section upon
section upon agreeing
agreeing to comply
comply with with the requirements thereof and
requirements thereof and
paying to the Corporation
upon paying Corporation an amount equal to the amount amount thatthat
would be required
required of it under this subsection if it were
it under were a member
member
b ank. The Corporation is authorized
bank. authorized prescribe rules and regu-
to prescribe Examination
Examination rules,
ntl
prescrIbed....,
• . bank, and
State bank,
such State to fix etc,
etc, to be prescribed.
lations exammatlon of
lations for the further examination of such and to fix
the compensation
compensation of examiners employed to make examinations examinations of of
State banks.
State
" Each member of the Fund
" Fund shall file with the Corporation
Corporation on or Certlfied certied statement
statement
before the date of its admission admission a certified statement
statement under oath by
under oath by Fund members.
Fund members.
showing, as of the fifteenth day of the month preceding the month
in which it was so admitted, the number number of its depositors and the Contents. Contents.
total amount
amount of its deposits
deposits which are eligible for insurance under rtion. ~ayments
Payments to Como-
to Corpo-
subsection, and shall pay to the Corporation
this subsection, Corporation an an amount equal ratIon.
amount equal
to one-half of 1 per centum of the total amount amount of the deposits so
One-half of such payment shall be paid in full at the Manner
certified. One-half Manner or making.
of making.
admission of such member to the Fund, and the remainder
time of the admission remainder
of such payment shall be subject subject to call from time to time by the the .
board of directors of
board Corporation • Within
of the Corporation. reasonable time
Within a reasonable time of statement, ass
Smnr statement,
of Bnnilar
June 15, 1934, fir
Corporation each such member shall file a similar quired.
fixed by the Corporation quired.
statement showing, as of June 15, 1934, the number of its depositors POM.
statement P"" p ?R9. 99.
and the total amount of its deposits which are eligible for such such
insurance and shall pay to the Corporation
insurance Corporation in the same manner an 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 admissionadmission to membership in the fund.
"If
aIf at any time prior to July 1, Corporation requires Additional.
1, 1934, the Corporation Additional a
assess-
additional funds with which to meet its obligations under this mentst ments utorized.
authonzed.
Post, p. 969.
subsection, each member of the Fund Fund shall be subject to one addi-
tional assessment only in an amount not exceeding the total amount Amount. Amount.
Corporation by such member.
theretofore paid to the Corporation
theretofore
""IfIf any member of the Fund shall be be closed on or before June 30, of insured
Payment 0.f.i!,sure!1
30, PaY:IDen.t
1934, on account of inability to meet its deposit deposit liabilities, the Corpo- ~';fn~'tm~~~!~h~ios~
Fund membercloses
ration shall proceed in accordance with the provisions of subsection subsection before
before Jun~June 30, 1934
30, 1931
(1) of of this section to pay the insured deposit liabilities of such mem- ~:::.' Poet, ri~i.
p. 96.
ber; except that the the Corporation shall pay not more more than $2,500 Amount Amount to dny any dede
on account of the net approved claim claim of owner of
the owner
of the of any deposit. posltor.
any deposit. positor.

HeinOnline -- 48 Stat. 179 1928-1934

180 73d CONGRESS. SESS. I.
I. CR. 89.
CH. 1933.
JUNE 16, 1933.
Application of sub- The provisions
The provisions of such subsection
of such subsection (1) relating to to State member banks banks
purposes(1)ofrelating State to
member
eCipplia')tion
section (1). of sub
Post, p. 96. shall be extended for the this subsection members of
s p~~r. p:969. shall be extended for the purposes of this subsection to members of
the Fund which are not members of the Federal Federal Reserve
Reserve System;
System;
and the provisions of this subsection shall apply only to deposits deposits
of members
members of the Fund which have been made made available since
March 10, 10, 1933,
1933, for withdrawal
withdrawal in the usual course of the banking banking
business.
Balance
Jfuly
Balance of Fund,
1, 1934. of "Before July 1,
"Before 1, 1934, the Corporation
Corporation shall make an estimate of of
J'%it;
Post,p. ~~a:io.
970. balance, if
the balance, which will remain in the Fund after providing
if any, which providing
for all liabilities of the Fund, including expenses of operation operation
under this subsection
thereof under subsection and allowing for anticipated anticipated recoveries.
recoveries.
Refunds to
Refunds meri-
to memo Corporation shall refund
The Corporation refund suchsuch estimated balance, on
estimated balance, on such
such basis
basis
bells
bers.
as the
as the Corporation
Corporation shallshall find
find toto be equitable,
equitable, to the members of the
other than those which have been closed prior to July 1, 1934.
Fund other 1934.
Subscription for for class
class "Each State
"Each State bank which is
bank which is aa member
member of of the
the Fund,
Fund , inin order
order to to
A Subscription
A stock, State
stock, bank
State bank
member
member of of Fund.
Fund. obtain thethe benefits of this section after July 1, 1934,
section after July 1, 1934, shall, on orshall, on or
before such date, subscribe
subscribe and pay for the same amount of class A A.
stock of the Corporation
Corporation as it it would be required to subscribe subscribe and
pay for upon becomingbecoming a member bank, or if if such State bank is is
. Deposit,
Deposit, if subscrip- not
if subscrip· not permitted by the laws
by the laws under
under which it
which it was organized
was organized to pur-
to pur-
tionunlawful.
tlOil unlawful.
chase such
chase stock, it
such stock, shall deposit
it shall deposit with the Corporation
Corporation an amount amount
equal to the amount
equal amount it it would have been required to pay in on account account
of a subscription
subscription to such stock; and thereafter thereafter such State bank shall shall
be entitled to such benefits until July 1, 1, 1936.
Purpose of
Purpose section.
of section. "It is not the purpose of this section to discriminate, in any
"It
manner, against State nonmember, and in favor of, national national or or
member banks; but the purpose is to provide provide all banks with the
same opportunity to obtain and enjoy the benefits of this section. No
bank shall be discriminated
bank discriminated against because its capital capital stock is less
than the amount required for eligibility for admission into the
Federal Reserve System."
Reserve System."
vol.39,
Vol.
p.160. p. 753, Vol. 47,
39,p.753,Vo1.47, SEC. 9.
SEC. The eighth
9. The paragraph of
eighth paragraph section 13
of section 13 of
of the Federal Reserve
the Federal Reserve
P·J~g:c., Supp. Act, as amended (U.S.C.,
.s.C., p. 282, Supp.
Vp. 136.
(U.S.C., title 12, 12, sec. 347; Supp. VI, VI, title 12, sec.see.
VIpcf.i,l~~.
Pest, pp. 348, 646.
348, 646. 347), is amended
amended to read as follows: follows:
Advances to member "Any Federal reserve bank may make
"Any make advances for periods not not
banks on
banks on their notes. exceeding
their notes. exceeding fifteen days to its member banks on their promissory promissory
notes secured by the deposit or pledge of bonds, notes, certificates certificates of of
indebtedness, or Treasury
indebtedness, Treasury bills of the United United States, or by the
Debentures of Fed- deposit or pledge of debentures or other such obligations of Federal
er~e~~~~:~lao~
eral intermediate cred- :r:~: deposit or pledge of debentures or other such obligations of Federal
It banks.2 intermediate credit banks which are eligible
intermediate eligible for purchase by Fed-
for purchase Fed-
Uo. 42,,p.
~ol. 1479.
p. 1479. eral reserve banks
eral reserve under section
banl{s under section 13 13 Ca) of this Act; and any
~ a) of this Act; and any
t.s.C., p. 282. Federal
Federal reserve bank may make advances for periods not exceeding exceeding
ninety days to its member member banks on their promissory notes secured secured
by such notes, drafts, bills of exchange, or bankers' acceptances acceptances as are
eligible for rediscount or for purchase by Federal reserve
forlurchase reserve banks under
under
Rates of advances
Determined by Re- the provisions of this Act. All
advances. 11 such advances shall be made at rates
se~~tir~~d~d
serve Board. by Re- to be established established by such Federal reserve banks, such rates to be sub-
review and determination of the Federal Reserve
ject to the review Board..
Reserve Board
. Advances
Adv,,:nces deemed If
deemed If any member bank to whicb. which any such advance has been made
immediately payable, shall, during the
paya):>le, shall , during the life
or continuance of such advance advance, and despitedespite
unmedIRtely
when outstanding
outstandlllg life or continuance of such ,
an official warning
warning of the
of the reserve bank of the district or of thp
the
to reserve bank ofincrease
the district or of
loans increased
loans increased for for
stock, etc., pureases. F Federal Reserve Board the contrary, its
. outstanding
stock, etc., purchases.
e d era1 R eserve B oard t 0 th e con t rary mcrease . Its ou t st an d'mg
loans secured by collateral in the form for;n of stocks, bonds, debentures,
debentures,
obligations, or loans made to members of any organized
or other such obligations, organized
investment house, or dealer in securities,
exchange, investment
stock exchange, securities, upon any
obligation, note~ unseeured, for the purpose of
note, or bill, secured or unsecured, of
purchasing and/or
purchasing and/or carrying stocks, bonds, or other other investment
investment
securities (except obligations of the United States) such advance
securities
shall be deemed immediately due and payable, payable, and such member member

HeinOnline -- 48 Stat. 180 1928-1934

 73d CONGRESS.
'/3d CONGRESS. SESS. I. CH.
CR. 89. JUNE 16, 1933. 181
bank shall be ineligible as a borrower borrower at the reserve bank of the Ineligible Ineligible as borrow·
as borrow-
district under the provisions . .
prOVISIOns f h'IS paragraph
0of tthis paragraph ffor suchh peno
or suc period. d as thereafter.
er at reserve bank
thereafter.
Federal Reserve
the Federal
the Reserve Board Board shallshall determine: Provided, That
determine: Pro'vided, That no no .re:~~~aryepary carring carrying
temporary carrying or clearance loans made solely for the purpose purpose or clearance loans. loans.
of facilitating the purchase purchase or delivery
delivery of securities offered for for
public subscription shall be included included in the loans referred to in
this paragraph."
paragraph."
SEC. 10. Section 14 of the Federal
SE.c. Federal Reserve Act, as amended (U. S. C., C., vo Vol. 38, p.p.. 265.
265.
353-358), is amended by adding
title 12, secs. 353-358), adding at end thereof
the end
at the thereof the the .... U.S.c" p, 282. 282,
following new paragraph: paragraph:
"(g) The
"(g) Federal Reserve
The Federal Reserve Board
Board shallshall exercise
exercise special supervision Snpervl,sion
special supervision Supervision by
by
Board, foreign trans-
over al all1 re ·
relationships h'
IatlOns IpS and d
an transactions . f
transactIons 0of any kind k' d
In entered d
entere into . b Board,
Into byy actions of offoreIgn
reserve trans·
reserve bank,
bank.
Federal reserve bank with any foreign bank or banker, or with
any Federal
any group of foreign banks or bankers, and all such relationships relationships
and transactions shall be subject to such regulations, conditions, and Regulations. Regulations,
limitations as the Board may prescribe.
limitations prescribe. No officer or other represen- represen-ofd,,, Permission
foreign to con·
con
negotia-
tative of any Federal Federal reserve
reserve bank shall conduct conduct negotiations of g~~. uens. foreign negotia'
any kind with the officers representatives of any foreign bank
officers or representatives bank
or banker
banker without first obtaining obtaining the permission
permission of the Federal
Reserve Board.
Reserve Board. The The Federal
Federal Reserve Board shall
Reserve Board shall have the right,
have the right, inin r Right of Boardu.
RriesghettOt~ Board to to
. d'
its
ItS .
discretion,
IScretlOn, to bebe represented
represente d in . any con
In f erence or negotiatIOns
conference "
negotiations b y representation
by ep n a Ion during
conferences
conferences urmg
such representative
representative or representatives
representatives as the Board may designate.
A full report of all conferences conferences or negotiations, and all understand- understand- Report Report to to be be filed.
filed,
ings or agreements arrived at or transactions transactions agreed upon, and all all
other
other material
material facts appertaining
appertaining to such conferences
conferences or negotiations,
shall be filed with the Federal Federal Reserve Board in writing by a duly
authorized
authorized officer of each Federal Federal reserve bank which shall have
participated in such conferences
participated conferences or negotiations."
negotiations."
SEC. 11. (a) Section 19
11. (a) 19 of the Federal
of the Reserve Act,
Federal Reserve Act, as as amended
amended ~n Vol.
U.S.C., 8, p.
~'~p27&8
pp.270.268, 284
284,
(U.S.C., title 12, sees. secs. 142, 374, 461-466; Supp. VI, title 12, sec. 462a), 462a), 287;SuPP,
287 ; Supp. vi,
Vi, p.'138.'
p. 3s.
is amended
~s amended by inserting
inserting after the sixth paragraphparagraph thereofthereof the follow-
ing new paragraph:
mg paragraph:
""No
No member
member bank shall act as the medium or agent of any non- agent ag~~'f~';,aJ~~oa~
Memb in making bankloans as
banking corporation, partnership,
banking corporation, partnership, association, business trust, or indi- to ~tock brokers
t'? stock brokers pro-
'd ua I'in
vidual
VI k'mg Iloans
making
m rna oans on tthe h e security
security. of 0 f stoc k s, bonds,
stocks, and
b on ds, an d other hibited.
oth er hlblted.
investment securities
investment securities to brokers or dealers in stocks, bonds, and other other
investment securities. Every
investment violation of this provision by any Penalty
Every violation Penalty provision.
provision.
member bank shall be punishable punishable by a fine of not more than $100 $100
per day during the continuance continuance of such violation; violation; and such fine
may be collected, by suit'or suit-or otherwise, by the Federal reserve bank
of the district in which such member bank is located." located."
(b) Such section 19
(b) 19 of the Federal Reserve Reserve Act, as amended, is Vol. 38, P
Vol. 3s, p. 210.
270.
further amended by adding at the end thereof thereof the following new
paragraphs:
paragra phs:
" No member bank shall, directly or indirectly
"No indirectly by any device device what-
what- demand Interestpa~entson
Interest payments on
soever, pay any mterest .
interest on any d deposit' w
eposit h'IC h is
which . payable
IS paya bIe on demand: hibited. demand
hihited, depOSIts pro-
deposits pro-

Provided,
Provided, That nothing nothinf herein contained shall be construed construed as pro- Pr~808, Proviso.
con
Prior contracts. .
h I'b'Itmg
hibiting. tthe h e payment
payment of .
0 interest
mteres tm. accor
in d ance WIt
accordance with terms of
h e terms
. h tthe f any PrIOr
0 any
certificate
certificate of deposit or other contract contract heretofore entered into in in
good faith which is in force on the date of the enactment enactment of this
paragraph;
paragraph; but no such certificate certificate of deposit
deposit or other contract shall
be renewed or extended unless it shall be modified modified to conform to this
paragraph, and every member
paragraph, member bank shall take such action as may be
necessary
necessary to conform conform to this paragraph as soon as possible possible consist-
contractual obligations:
ently with its contractual Provided, however, That
obligations: Provided, That. this A,PPlicatbion
Application teo to do-?e·
paragraph · f . posit
POSIt paya
payable Ie jinn foreign
orelgn
paragrap h sshall h a II not app applyIy to any deposit
d eposit 0of such bank whICh which is IS country.
COllOtry.
payable
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 nor
to any deposit of public funds made by or on behalf of any State, Public Publc f.funds,

HeinOnline -- 48 Stat. 181 1928-1934

 182 73d CONGRESS. SESS. I.
I. CH.
CR. 89. JUNE 16, 1933.

county, school district, or other subdivision or municipality, municipality, with

respect to which payment payment of interest is required under State law.
Regulation of inter- " The Federal Reserve Board shall from time to to time limit byy
"l~afl:;,ne ~~pi!\~~: regulation
est rate, time deposits, " TIh~ Fetdheral
the rateResfe~ve
of interest Boardh~hhall
which may frobm ti~de bby member
be paid timeblimbit banks b
regu atlOn e rate 0 mterest w IC may e pal y mem er an k s
on time deposits, and may prescribe prescribe different
different rates for such pay-
ment on time and savings deposits
inent deposits having different maturities maturities or or
subject to different conditions respecting withdrawal
conditions respecting withdrawal or repay-
ment or subject to different conditions by reason of different different loca-
Paenty before ma-
~ayment. tJ.efore tions. No
ma- tions. No member
member bank bank shall
shall pay
pay any time
any time deposit
deposit before
before its
its ma-
ma-
turityprohibited.
tunty prohIbIted. turity, or waive
• any requirement
• of notice
f' b f before payment off any
turity, or waIve any reqUIrement 0 notIce e ore payment 0 any
savings deposit except as to all savings deposits having the same
requirement."
req uiremen t. "
Postal
Postal savings
sa\"JDgs de- de- (c) Section 8 of the Act entitled
(C) entitled "An Act to establish postal postal
positories.
positories.
savings depositories for
~avings depositories depositing savings
for depositing savings at at interest
interest withwith the the
security
security of
of the
the Government
Government for
for repayment
repayment thereof, and for other
other
Vol. 36, p.. 816.
Vol.
U.s.c.,
U.S.C., p. 12o.
p. 1281. purposes ", approved
purposes approved June 25, 1910, as amended amended (U.S.C., title title 39, 39,
sec. 758), is amended by striking out the first sentence
sec. 758), sentence thereof and
Withdrawals on inserting in
60 inserting in lieu
lieu orthereof the
thereof the following: "Any "Any depositor
depositor may may with-
Withdrawals on 60
draw the whole any part following:
off the funds depositedd to h' his or her
with-
draw the whole or any part 0 the un s deposite to IS or h er d
days notice.
days' notice. f
credit with the accrued accrued interest only on notice given sixty days in
advance and under such regulations as the Postmaster Postmaster General
may prescribe; but withdrawal
may prescribe; but withdrawal of of any part of such funds may be
On demand
made
made upon demand, demand, but no interest shall be paid on any funds so so
withdrawn
withdra wn except interest accrued to the date of enactment enactment of the
.
Proviso.
Banking Act
Banking Act of of 1933: Provided, That
1933: Provided, That Postal
Postal Savings depositories
depositories
i%~~~ts wiTh mem-
D=o,,irh mem- may deposit funds in member member banks on time under regulations regulations to be
her banks.
ber banks.
prescribed by
prescribed by the Postmaster General."
the Postmaster General."
vol. p.6, 816 A.
Vol. 36, p. 816; Vol.
(d)
(d) The The second
second sentence
sentence of of section
section 99 of the Act
of the Act entitled
entitled "An "An ActAct to to
39,U.s.c.
P 159.
u.s.C:.;p. p. 1281.
1281. . esta
bl'IS h
establish postal
posta isavmgs
'
savings . . ffor
ddepositories
eposltones or ddepositing
. . savmgs
eposltmg .
savings .
interest
at mteres t
ba~:f.°slt
pnksi of o funds
f ill with the security
security of the Government
Government for repayment thereof, and for for
other purposes
purposes ", '\ approved
approved June 25, 1910, as amended amended (U.S.C.,(U.S.C., title title
Security, when de- 39, 39, sec. 759), is
sec. 759), is amended
amended by striking out the period perioe} at the end thereof thereof
po~~~e;r.hen
posits insured, de- and inserting
inserting in lieu thereof
thereof a colon colon and the following: "Pro·vIded, "Prav iled,
Ante, p. 168.
Ante, p. 168.
That no
That no such
such security shall be
security shall required in
be required in case
case of such part
of such part of of thethe
deposits
deposits as are insured under section section 12B of the Federal Federal Reserve
Reserve Act, Act.
as amended."
amended." .
i;~~'.~:
vol. 38, p. ~'p~~292. 288, SEC. 12.
SEC. 12. Section
Section 22 22 of
of thethe Federal
Federal Reserve
Reserve Act, Act, afo;
as amended (U.S.C.,
29122;
291-292; supp.supp. vi, w, p.p. title
title 12, sees.
12, secs. 375, 376,
375, 376, 503, 593-595;
503, Supp. VI,
593-595; Supp. VI, title
title 12, sec.
12, 593), is
sec. 593), is
140 further
140 further amended
amended by adding at
by adding at the end thereof
the end thereof the following
following- new
paragraph:
paragraph:
Loans to
l.oans executive
to executive " (g) No
"(~) No executive officer of
executive officer any member
of any member bank bank shall
shall borrow
borrow from from
officer
officer prohibited.v
pr<>bihited.
or otnerwise
ot erwise become
become indebted to any member member bank of which he is is
an executive
executive officer, and no member bank shall make any loan or or
extend credit in any other manner to any of its own executive officers: officers:
Proviso.
PrOvisO'1 f I
Provided,
Provided, That
That loans heretofore
loans heretofore made made to
to any
any such officer
such officer may
may be be
Renewal
R enewa of
0 loans
oans d .
made prior hereto renewed or exten extended ed not more than two years from the date this thIS
paragraph
paragraph takes effect, if if in accord with sound banking banking practice.
Report
Rep!'rt by
by officer, If any
officer, If any executive
executive • officer
officer of of any
any member
member bank bank borrow
borrow from from or or if if
when indebted
when lDdebted to other
member bank.
member hank. he be or become mdebted indebted to any bank other than a member bank
of which he be is an executive
executive officer, shall make a written report to
officer, he shan to
the chairman of the board board of directors
directors of the member bank of which which
he is an executive officer, officer, stating the date and amount amount of such loan
or indebtedness,
indebtedness, the security therefor, and the purpose for which
Penalty
Penalty provision.
protision. the proceeds
the proceeds havehave been or are to be used. Any executive officer of of
any member bank violating the provisions of this paragraph paragraph shall shall
be deemed
deemed guilty of a misdemeanor misdemeanor and shall be imprisoned imprisoned not
exceeding one year, or fined not more than than $5,000, or both; and any
member bank bank violating the provisions provisions of this paragraph paragraph shall be be

HeinOnline -- 48 Stat. 182 1928-1934

 CONGRESS.
73d CONGRESS. SESS. I. CH. 89.
CII. 89. JUNE 16, 1933.
JUNE 183
183
fined not more than $10,000, $10,000, and may be fined a further sum equal
to the amount so loaned loaned or credit
credit so extended."
extended."
SEc. 13. The Federal Reserve Act, as amended, is amended
SEC. amended by by•, ~o~
Vol.38,
U.S.C.,
p.273.
~, p.
pp.27~63
263, 283'
M8;
inserting between
inserting between sections
sections 23 and 24 thereof (U.S.C., (U.S.C., title 12, 12, secs. vI,~~·137.'
supp. vI,
supp: p.137. '
64 and 371; Supp. VI, title 12, sec. 371) section:
371) the following new section:
"SEC.
"SEc. 23A. No member member bank bank shall (1) (1) make any loan or any Loans,prohibited
investments,
investments,
etc., prohibited by
extensIOn
extension. of f cred't
0 credit 1 to, purc1lase securities
t 0, or purchase seeun·t·les under
un d er repurchase
repurch ase agree- etc.,
member banks to afi-
by
afIili.
ment from, any of its affiliates, or (2) (2) invest any of its funds in the the ates.
capital stock, bonds, debentures, or other such obligations
capital obligations of any any
affiliate, or (3)
such affiliate, (3) accept the capital stock, bonds, debentures,debentures, or 01'
obligations of any such affiliate as collateral
other such obligations collateral security
security for for
advances made to any person, partnership,
advances partnership, association,
association, or01' corpora-
tion, if, in the case of any such affiliate, affiliate, the aggregate amount of Percentage
Percentage permit-
permit,.
credit, repurchase
extensions of credit,
such loans, extensions agreements, investments,
repurchase agreements, investments, ted.
ted.
and advances
advances against such collateral collateral security will exceed 10 per per
centum of the capital stock and surplus of such member bank, or
centum or
if, in the case of all such affiliates,
if, aggregate amount of such
affiliates, the aggregate such
loans, extensions repurchase agreements, investments,
extensions of credits, repurchase investments, and
advances against such collateral security will exceed 20 per centum
advances
capital stock and surplus of such member bank.
of the capital
"Within the foregoing
"Within limitations, each
foregoing limitations, each loan or extension of credit secuity.
Security.
of any kind or character to an affiliate affiliate shall be secured collateral
secured by collateral
in the form of stocks, bonds, debentures, debentures, or other
other such obligations
having a market value at the time of making the loan or extension 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 bv by
obligations of any State, or of any political subdivision
obligations subdivision or agencyagenc)-
Provided, That the provisions of this paragraph
thereof: Provided, paragraph shall not IM-oas.
(i~r>i8~.5States obliga-
United .
extensions of credit secured by obligations
apply to loans or extensions obligations of the tionsn:~ic.States
rions, etc. obUgs-
United States Government, the Federal
United Federal intermediate credit banks,
intermediate credit banks.
Federal land banks, the Federal Home Loan Banks, or the Home
the Federal
Owners' Loan Corporation, or by such notes, drafts, bills of exchange,
Owners'
or bankers' acceptances as are eligible for rediscount or for purchase
bankers' acceptances purchase Loans toofficers of
by Federal reserve banks. A. extension of credit to a
A loan or extension atJii~~ to officers ot
affiliate.
director officer, clerk, or other employee or any representative
director representative of of
affiliate shall be deemed a loan to the affiliate to the extent
any such affiliate extent
proceeds of such loan are used for the benefit of. or trans-
that the proceeds
ferred to, the affiliate.
"For the purposes of this section the term'
"For term 'affiliate'
affiliate' shall include "Aff i ate". con-
"Affiliate". con·
holding company affiliatesaffiliates as well
well asas other and the
affiliates, and
other affiliates, the pro-
pro- ""d.
strued.
visions of this section shall not apply to any affiliate (1)
visions (1) engaged Affiliate< Dot in-
AffiUates not in·
solely in holding the bank premises of of the member bank
the member with which
bank with which eluded.
eluded.
it is affiliated, (2) conducting a safe-deposit
(2) engaged solely in conducting safe-deposit busi-
busi-
agricultural credit
ness or the business of an agricultural credit corporation livestock
corporation or livestock
loan company,
company, (3) capital stock of which a national banking
(3) in the capital banking
association is authorized to invest pursuant to section 25 of of the Vol. 38, p.
Vol. 38, 273.
p. 273.
Reserve Act, as amended,
Federal Reserve
Federal amended, (4) (4) organized under section section U.s.c., p.292....
U.S.C.,p.292
25 (a) of the Federal Reserve Reserve Act, as amended, or (5) engaged
(5) engaged
solely in holding obligations of the United States Government, the
intermediate credit banks, the Federal land banks, the Fed-
Federal intermediate
eral Home Loan Banks, or the Home Owners' Owners' Loan Corporation;
Corporation;
affiliate, member banks shall continue
but as to any such affiliate, continue to be subject
subject
provisions of law applicable to loans by such banks and
to other provisions
investments by such banks in stocks, bonds, debentures,
investments debentures, or other such such
obligations."
obligations."
SEc. 14. The Federal Reserve
SEC. Reserve Act, as amended, is amended amended by Vol. 38,
Vol. 38, p. 273.
p. 273.
inserting
inserting between section
between section 24 and section
2.4 and section 25 thereof (U.S.C.,
25 thereof (U.S.C., title
title 12,
12, su~~·~I. ~~i3?f'
supp.'Vi.
U S.e, pp. 283,
P.in MS.-
. 292;

HeinOnline -- 48 Stat. 183 1928-1934

 184 73d CONGRESS.
'l3d SESS. 1.
SESS. I. CH. 89. JUNE 16, 1933.

sees. 371 and 601-605; Supp. VI, title 12,

secs. 12, sec.
sec. 371)
371) thethe following
new section:
section:
Investments prohib·
Investments prohib- "" SEC. 24A. Hereafter
SEC. 24A. Hereafter no no national
national bank,bank, without
without the the approval
approval
ited to national and
Hed
member banks.
State member of thethe 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, bonds, debentures, or other such such
obligations of any corporation holding the premises of such bank
or (2)
or (2) make loans to or upon the security of the stock of of any such
corporation, if if the aggregate of all such investments and loans will
exceed the amount of the capital stock of such bank."
Vol. 41,
Vol. 41, p. p. 1145.
1145. SEc. 15. The Federal Reserve Act, as amended,
SEC. amended, is further amended amended
U.S.C., p. 293-296.
U.S. C., p. 293-296. by inserting
by inserting afterafter section
section 25 (a) thereof thereof (U.S.C.,
(U.S.C., title 12, 12, sec.
see.
611-631) the following new section:
611-(31) section:
Foreign branches..
Fo!eign branches. "" SEC. 25. (b)
SEC. 25. (b) Notwithstanding
Notwithstanding any any other
other provision
provision of of law
law all
all suits
suits
suits at equity. of a civil nature at commOn
t ure at common 1 law or in eqUIty
equity to to wwhich
0 f a CIVI any corpora
Swts at lawlaw, eqwty. "1 na "m h'lCh any corporationt'IOn
, aw or
organized under the laws of the United States shall be a party, aris-
ing out of transactions involving international international or foreign banking, or or
banking in aa dependency
dependency or insular possession of the United States,
or out of other international
international or foreign financial operations, either
directly
directly or through the agency, ownership, ownership, or control of branches branches or
local institutions in dependencies
dependencies or insular possessions of the United
Jurisdiction of
Jurisdiction of States or in foreign countries, countries, shall be deemed to arise under the laws
-g,~~~
u States district of the United
States district United States, and the district courts of the United United States
shall have original jurisdiction
jurisdiction of all such suits; and any defendant defendant
Removal.
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
removal of causes otherwise otherwise provided by law. Such removal shall
not cause
cause undue delay in the trial of such case case and a case so removedremoved
shall have a place on the calendar of the United States court to to
which it is removed
removed relative to that which which it it held on the State court court
from which it it was removed.
removed.
when Federal
Wheu Federal Re- Reo ""Notwithstanding
Notwithstanding any other
any other provision
provision of law, all
of law, all suits
suits of of aa civil
civil
serve bank a prty.
serve hank a party.
nature at
nature at common
common law law oror in equity to which any Federal Reserve
in equity
bank shall be a party party shall be deemed to arise under the laws of the
United States, and the district courts of the United States shall have
original
original jurisdiction
jurisdiction of all such suits; and any Federal Reserve bank bank
which is a defendant
defendant in any such suit may, at any time before the
trial thereof, remove such suit from a State court into the district district
court
court of the the United States States for the proper district by following the
Attachment before procedure for the removal of causes otherwise provided by law. No
fin~f~~~:t d~:I~~: attachment
procehduretfor or the ret~ovalholflcbau~es
execution shall be issued otdherw~setprovidFeddby
any Federal11aRw. No
e Issue against e era Reserve
fnal judgment denied.
attac men or execu Ion s a agams any eserve
bank or its property before before final judgment
jUdgment in any suit, action, action, or or
proceeding
proceeding in any State, State county, municipal, or United United States
States court."
court."
R.S., sec.p. 5136,~.
R.S., see.
U.S.OC., 5136, .3.993.
259; -upp. SEC. 16.
SEC. 16. Paragraph
Paragraph "Seventh"
(, Seventh" of section
of section 5136 of the
5136 VI,
of the Revised
Revised
2 c
VI, p. 1 . Statutes, as amended (U.S.C., title 12, sec. 24; Supp. title 12, sec.
vr::fi/' 259; upp. Statutes, as amended (U.S. C., title 12, sec. 24; Supp. VI, title 12, sec.
24), is amended to read
24), read as follows:
follows:
corporate p!"wcrs
C,orporate powers of of "Seventh. To
"Seventh. To exercise
exercise by
by its
its board
board of of directors
directors or or duly
duly authorized
authorized
national banking asso-
natlOnal bankmg a.'"O· officers b' . .
ciations.
ciations. officers or agents, subjectsu Ject to law,law, all such
such incidental
mCIdental powers
powers as shallshall be
necessary
necessary to carry carryon on the business
business of banking;
banking; by discounting
discounting and
negotiating promissory
negotiating promissory notes, drafts, bills of exchange, exchange, and other other
evidences
evidences of of debt; by receiving deposits; deposits; by buying buying and sellingselling
exchange,
exchange, coin, coin, and bullion;
bullion; by loaning
loaning money
money on personal
personal security;
security;
and
and by by obtaining, issuing, and circulating circulating notesnotes according
according to the
provisions
provisIOns of of this
this title.
title. TheThe business
business of of dealing
dealing in in investment
investment securi-
securi-
ties by
ties by the
the association
association shallshall bebe limited
limited to purchasing and
to purchasing and selling
selling such
securities
securities without
without recourse,
recourse, solely upon upon the order, and for the account account
of,
of, customers,
customers, and and inin no
no case
case for
for its
its own
own account,
account, and and the
the association
association

HeinOnline -- 48 Stat. 184 1928-1934

 'l3d
73d CONGRESS. SESS. I. CH. 89. JUNE
JUNE 16, 1933.
1933. 185
shall not underwrite any issue of securities: Provided, Provided,That the asso- assO- r'::h~~e
eiofne.of invest-
ciation may purchase
ciation purchase for its own account investment securities securities under ment ment securities.
securities.
such limitations and restrictions as the Comptroller of the Currency Currency
may by regulation prescribe, but in no event (1)
regulation prescribe, shall the
any shall the total
one obligor total mitPercentage per-
or mK~centage par-
amount of any issue of of investment securities of
investment securities of anyone obligor or
purchased after this section as amended
maker purchased amended takes effect and held held
by the association for its own account exceed exceed at any time 10 per centum
of the total amount of such issue outstanding, but this limitation shall shall
not apply to any such issue the total amount of which does not exceed exceed
$100,000 and does not exceed
$100,000 exceed 50 per centum capital of the asso-
centum of the capital
ciation, nor (P) (2) shall the total amount of the investment securities securities of of
any
anyone one obligor or maker purchased after this section section as amendedamended
association for its own account exceed
effect and held by the association
takes effect exceed atat
any time 15 per centum centum of the amount of the the capital stock of the the
paid in and unimpaired and 25 per centum of its
actually paid
association actually
unimpaired surplus fund. As used in this section the term
unimpaired term''invest-
invest- "Investment
"Investment securi-oocuri·
securities'' shall mean
ment securities marketable obligations evidencing
mean marketable indebt- t'"
evidencing indebt- construed.
ties," construed.
copartnership, association,
edness of any person, copartnership, corporation in the
association, or corporation
form of bonds, notes and/or debentures commonly known known as invest-invest-
ment securities under under such further definition ' investment
definition of the term 'investment
securities' as may by regulation be prescribed
securities' Comptroller of
prescribed by the Comptroller of
the Currency. Except as hereinafter otherwise per- Sh~~hase
hereinafter provided or otherwise . o stock
of
mitted by law, nothing herein contained contained shall authorize the purchase
by the association of any shares of stock of any corporation. corporation. The
limitations and restrictions
restrictions herein contained as to dealing in in,, under- States,
Obligations
tgatns etc. of i
oftUnited
writing and purchasingpurchasing for its own account, investment securities
shall not apply to obligations of the United States, or general obliga- obliga-
tions of any State or of any subdivision thereof, or obliga-
an;" political subdivision
tions issued under authority authonty of the Federal Farm Farm Loan Act, as
amended, or issued by the Federal Federal Home Loan Banks or the Home
Owners'
Owners' Loan Corporation Provided, That in carrying on the busi- PrOfJisa.
Corporation:: Provided, Sa it
ness commonly known as the safe~deposit safe-deposit business the association
association Safe-deposit buin.
safeeposit business.
shall not invest in the capital corporation organized
capital stock of a corporation organized under under
the law of any State to conduct a safe-deposit business in an amount amount
in excess of 15 15 per centum of the capital stock of the association association
actually paid in and unimpairedunimpaired and 15 centum of its unimpaired
15 per centum
surplus."
restrictions of this section as to dealing
The restrictions dealing in investment
investment securi-
securi- tJ!!~!lCt!ve dat, of r&
Effectie, date -
the date
after the of the
date of approval of
the approval of strictions.
ties shall take effect one year after s rIC IOns.
this Act.
SEc. 17. (a)
SEC. (a) Section 5138 of the Revised Revised Statutes, as amended amended U.s., ~:~:b~~.5::;~u::
P., p..
(U.S.C., title 12, sec. 51; Supp. VI, title 12, sec. 51), is amended
sec. 51), amended to VI, vI,P. 1,0.
p. 130.
read as follows:
follows:
SEC. 5138. After this section as amended
""SEC. amended takes effect, no national ba;:s~ ita 1, national
national bSpitai, national
banking
b1aOnOklO'nogo association shall be
associtatIh'ont shahll be ?rt~anize~ with a3: lless
organized hwith capital than
less capiltal than on~~~~~~~tl:~unt
equ-t-mountoof,
$$100,000,
, ,excepexcept tthat a such associations
suc aSSOCla with a capital
IOns WIt 0 f not less
capi t a of ess than organization.
$50,000 may be organized
$50,000 population of which does
organized in any place the population does
not exceed six thousand thousand inhabitants. No such association shall be
such association
organized in a city the population
organized exceeds fifty thousand
population of which exceeds thousand
persons with a capital of less than $200,000, except that in the out-
districts of such a city where the State laws permit the organi-
lying districts
zation of State banks with a capital
zation $100,000 or les
capital of $100,000 less,, national
national
banking associations
banking associations now organized organized may, with
organized or hereafter organized
the approval of the Comptroller Currency, have a capital of
Comptroller of the Currency, of
$100,000."
not less than $100,000."
paragraph of section 9 of the Federal
(b) The tenth paragraph Federal Reserve Act, Act, ~n.6.~'/2s~·
.. .p.2o..
s.c.,
amended (U.S.C.,
as amended 12, sec.
(U .S.C., title 12, 329), is amended to read as follows: Admission
see. 329), Admission to omo-
to IDem-
"No applying bank shall be admitted to membership
"No membership in a Federal bers~ip. barship. .
reserve bank unless it possesses a paid-up unimpaired capital suffi- ff q::ig~uP capital re-
Paid-up capital re-
reserve bank unless it possesses a paid-up unimpaired capital su f- quire.

HeinOnline -- 48 Stat. 185 1928-1934

186 '(3d
73d CONGRESS. SESS. I. CH.
CR. 89. JUNE 16, 1933.

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

cient
place where it situated under the provisions
it is situated provisions of the NationalNational
Proviso.
~'[a7~8°banks organ Bank Act,
Bank Act., as amended:
as Provided, That
amended: Pro·vided, That this paragraph shall
this paragraph not
shall not
State banks organ
ized prior hereto,
hereto, etc. apply to State banks and trust companies companies organized
organized prior to the the
paragraph as amended takes
date this paragraph effect and situated in a place
takes effect
population of which does not exceed
the population exceed three thousand inhabitants
inhabitants
capital of not less than $25,000, nor to any State bank
having a capital
and having
Ante, p. p. 168.
16. or trust
or company which is so situated
trust company situated and which, while it it is entitled
to the benefits of insurance
insurance under section section 12B of this Act, increases
increases
its capital to not less than $25,000." $25,000."
R.S.,
~l0'e"p 261; p
U.S.C.,see.p.5~~~:
5139,
~u;.;~
Supp Sxc. 18.
SEC. 18. Section
Section 5139
5139 ofof the
the Revised Statutes, as
Revised Statutes, as amended
amended (U.S.C.,
V1, 131
VI, j,: Iii.' ,
p. ; title 12, sec. 52; Supp. VI, title 12, sec. 52),
12, see. 52), is amended by addingadding at at
the end thereof the following new paragraph: paragraph:
Stock
ba~~ certificates,
banking as:ro~ITo~~~'
associations'
"After one
"After one year from the
year from the date
date of of the enactment of
the enactment of the Banking Act
the Banking Act
Use to represent of 1933, no certificate representing the stock of any such association
('sein other
stock corpora- of 1933, no certificate representing the stock of any such association
to represent
prohibited. shall represent the stock of any other corporation, except a member
stock in other corpora- h II
represent t h e stoc k 0 f any oth ' except a member
ton
tlOn prohibited. S a er corporatIOn,
corporation existing on the date
bank or a corporation date this paragraph
paragraph takes effect
takes effect
engaged solely in holding the bank premises of such association, nor
engaged nor
shall the ownership,
ownership, sale, or transfer transfer of any certificate
certificate representing
representing
the stock of any such association be conditioned conditioned in any manner manner
whatsoever upon the ownership, sale, or transfer transfer of a certificate
certificate rep-
resenting the stock of any other corporation, except a member
corporation, except member bank."
R.S., sec. 44, p.4.
R.~.,sec.5144'P.\J94. 19. Section
SEC. 19.
SEC. Section 5144 of
5144 of the
the Revised Statutes,
Revised Statutes, as as amended (U.S.C.,
amended (U.S.C.,
U.S.C., p. 262.
u .. c., p. 262. title 12, sec.
title 12, sec. 61),
61), is amended to
is amended read as
to read as follows:
follows:
Shareholder's right to
v:~eholder'srightto "SEC. 5144. In all
"Svc. 5144. elections of
all elections directors, each
each shareholder shall
shareholder shall
vote. have the right In to vote
vote the
of directors,
number of of shares
have the right to the number shares owned
owned by him for as
many persons as there are directors directors to be elected,elected, or to cumulate
shares and give one candidate as many votes as the number of
such shares of
directors multiplied
multiplied by the number of his shares shall equal, or to to
distri.bute
distribute them on the same principle principle among as many candidates candidates as
he shaH
shall think fit· fit; and in deciding all other questions at meetings of of
Nonvotig
Nonvoting gshare.
shares. shareholders, each shareholder shall be entitled to one vote on each
shareholders,
share of stock held by him; except except (1) that shares of its own stock 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 persons as
trustees may be voted by such other person or persons, as trustees,
other person
in the same manner as if if he or they were the sole trustee, and
(2) shares controlled
(2) controlled by any holding company company affiliate of a national
national
bank shall not be voted unless such holding company
bank company affiliate shall
have first obtained a voting permit
have permit as hereinafter
hereinafter provided, which
permit
permit is
is in
in force
force at
at the
the time
time such
such shares
shares are voted. Shareholders
Shareholders
Proxie,
Proxies.
may vote by proxies duly authorized authorized in writing; but no officer, clerk,
teller, or bookkeeper
bookkeeper of such bank shall act act as proxy;
proxy; and no share-
holder whose liability israst is past due and unpaid shall be allowed allowed to vote.
Shares d~ed
Shares deemed con- con- "For the
"For purposes• 0of this
the purposes this section
section •shares
shares shall be
shall deemed to
be deemed to bebe
trolled by by holding
boldlllg com- •
pany.
panY. controlled by Ita holding
holdIng company affilIate affiliate If
if they are owned
owned or con-
trolled directly or indirectly by such holding company company affiliate, or or
held by any trustee for the benefit shareholders or members
benefit of the shareholders
thereof.
Voting
Voting permit,
permit, bold-hold- "Any such
"Any such holding
holding company affiliate may
company affiliate may make
make application to
application to the
the
ing company affiliate.
ingompanyaffilate. Federal Reserve Board for a voting permit entitling it to cast one
Federal Reserve Board for a voting permit entitling it to cast one
vote at all elections of directors and in deciding all questions at at
shareholders of such bank on each share
meetings of shareholders share of stock con-
trolled by it authorizing the trustee
it or authorizing trustees holding the stock
trustee or trustees stock
benefit of its shareholders so to vote the same.
benefit or for the benefit
for its benefit
The Federal Reserve Reserve Board may, in its discretion, discretion, grant or with-
hold such permit as the public interest may require. In acting upon
In acting
Ap.plication
Aoplication for. for. application, the Board shall consider
such application, consider the financial condition o£ of
the applicant, the general character management, and the prob-
character of its management,

HeinOnline -- 48 Stat. 186 1928-1934

 73d CONGRESS.
CONGRESS. SESS. I. CH.
CR. 89. JUNE 16,
16. 1933.
1933. 187
187
effed of the granting of such permit upon the affairs of such Conditions.
able effect Conditions.
bank, but no such permit shall be granted granted except
except upon the following
conditions:
conditions:
(a) Every such holding
"" (a) affiliate shall, in making the Agreement
company affiliate
holding company required.
Agreement required.
application for such such permit, agree (1) to receive, on dates identical
with those fixed for the examinatIOn examination of banks with which it it isis
affiliated,
affiliated, examiners
examiners duly authorized to examine examine such banks, who
shall
::;hall make such examinations
examinations of such holding company affiliate as
shall be necessary
necessary to disclose
disclose fully the relations
relations between
between such banks banks
and such holding company company affiliate
affiliate and the effect of such relations
upon the affairsaffairs of such banks, examinations to be at the
banks, such examinations
expense of the holding company affiliate so examined; (2)
expense (2) that
that the
reports of such examiners
examiners shall contain such informationinformation as shall be
necessary to disclose fully the relations between such affiliate and
affiliate and
such banks and the effect effect of such relations upon the affairs of such such
banks; (3) (3) that such examiners may examine examine each bank owned owned or or
controlled by the holding company
t:ontrolled company affiliate, both individually
individually and in in
conjunction
conjunction with other banks owned or controlled controlled by such holding
company affiliate; and (4) publication of individual
(4) that pUblication individual or con-
solidated statements
::;olidated statements of condition
condition of such banks may be required; required; kssets. to be
"
,; (b)
(b) After five years after the enactment of the Banking Banking Act tai~~J.ts
tained. to be llllitn-
every such holding company affiliate
1933, every
of 11:)33, affiliate (1) shall possess, and and Post,p. 195.
Post, p. 195.
shall continue to possess during the life of such permit, free and
:,;haU
clear of any lien, pledge, or hypothecation
hypothecation of any nature, readily readilv
marketable assets other than bank
marketable bank stock
stock in an amount not less than thah
12 perper centum of the aggregate par value of all bank stocks con- con-
trolled by such holding company company affiliate, which amount shall be
increased
increased by not less than 2 per centum per annum annum of such aggregate
par value
yalue until such assets shall amount to 25 per centum centum of the
aggregate par value of such bank stocks; and (2) (2) shall reinvest in
readily marketable assets other than bank bank stock all net earnings
over and above 6 per centum per annum on the book value OI of its
own shares outstanding
outstanding until such assets shall amount to such 25
per centum of the aggregate par value of all bank stocks controlled controlled
by it;
(c) Notwithstanding
" (e) N otwithst anding the foregoing provisions of this section,. section, Shareholders'
Sh-areholders' liabil-
liabil-
after five years after the enactmentenactment of the Banking Act of 1933, (1) ItYj,08t. b P.
p. 195
195
any such holding company company affiliate the shareholders
shareholders or members of of
wlich shall
which shall be individually
individually and severally liable liable in proportion to the
number of shares of such such holding
holding company
company affiliate held by them
respectively, in addition to amounts invested therein, for all statutory
respeetively,
liability imposed on such holding holdingcompany
company affiliate by reason of its its
control
control of shares of stock of banks, banks, shall be required only to
establish
establish and maintain
maintain out of net earnings over and above 6 per per
centum per annum on the book value of its own shares outstanding outstanding
a reserve of readily marketable assets in an amount of not less than
12 per centum of the aggregate par par value controlled
value of bank stocks controlled
by it, and (2) (2) the assets required by this section to be possessed by
such holding companycompany affiliate may be used by it for replacement replacement of of
capital in banks affiliated with it and for losses incurred in such such
banks, but any deficiency
deficiency in such assets resulting from such use shall
be made up within such period as the Federal Reserve Reserve Board may
by regulation prescribe;
bv regulatIOn prescribe;
'"" (d)
(d) Every officer,
officer'director agent • and
director, agent, employee of every
and employee every such Liability
Liability of officers,
or officers,
• . " 0{ employees, et~.
holding
holdmg company affilIate affiliate shall
shall be subJect
subject to the same penaltIes
penalties for employes, etc.
false entries in any book, report, or statement statement of such holding com-
pany
pany affiliate
affiliate as are applicable
applicable to officers, directors, agents, and i}:~:'~~p~zggi:'
agents, andU.hR'"e m'07.100•.
employees of member member banks under section 5209 of the Revised Revised
Statutes: as amended (U.S.C., title 12,
amended (U.S,C., 12, sec. 592) ; and
sec, 592) and

HeinOnline -- 48 Stat. 187 1928-1934

 188 73d CONGRESS.
73d CONGRESS. SESS. I.
SESS. CH. 89.
CR. JUNE 16,
16, 1933
1933..

.ingVotingpermits,hold.
mg Voting permits,
company affihates. hold-
affiliates.
"(e)
" (e) Every . such. holding company affiliate .shall
affiliate ' in
shall, in its application
application
~equirements
Requirements of of ap·
ap- for such votmg voting permIt,
permit, (1) show that that Itit does not own, own, control, or
plication.
phcatlOn. have any
have any interest
interest in,
in, and
and is
is not
not participating
participating in in the
the management
management or or
direction of, any corporation, business trust, association, or other other
organization formed for
similar organization for the purpose of, or engaged prin-
cipally in, the issue, flotation, underwriting, underwriting, public sale, or or
distribution, at wholesale or retail or through syndicate participa-
tion, of stocks, bonds, debentures debentures, notes, or other securities of any
Aemets.
Agreements. sort (hereinafter referred to as l securities company'); (2)
sort (2) agree
that during the period that the permit remains in force it will not not
acquire any ownership, control, or
acquire or interest in any such securities
company or participate in the management or direction
company direction thereof;
(3) agree that if, at the time of filing the application for such permit,
(3)
it owns, controls, or has an interest in, or is participating in the
it the
management or direction of, any such securities company, it will,
management
within five years after the filing of such application, divest itself
ownership, control, and interest in such securities company
of its ownership, company
and will
and cease participating
wiH cease participating in in the
the management
management or direction thereof,
and will not thereafter, during the period that the permit remains remains
in force, acquire any further further ownership, control, or interest in any
securities company or participate
such securitles participate in the management
management or direc-
tion thereof;
thereof; and (4) (4) agree that thenceforth it it will declare dividends
only out of actual net earnings.
Revocation of
Revocation of
upon violating Bank·
permit,
permit,
Bank-
""IfIf atat any
any time
time it it shall
shall appear
appear to to the
the Federal
Federal Reserve
Reserve Board
Board that
that
ing Act
ing Act of1933.any
of 1933. any holding company company affiliate has violated any of the provisions of of
the Banking Act of 1933 or of any agreement agreement made pursuant to this
Post, p.
Post, 95.
P.195. section, the
section, the Federal Reserve Board
Federal Reserve Board may,may, inin its discretion, revoke
its discretion, revoke any
any
such voting permit permit after giving sixty days' notice by registered registered mail
of its intention to the holding company affiliate and affording it an an
Deaposits of Unitedtob
S~~O~:bIi~f
Statspublic ~.:i!!~~ opportunity to be heard. Whenever the Federal
moneys opportunity Federal Reserve Board Board shall
denied.
denied. have revoked any
have revoked such voting
any such voting permit,
permit, no no national
national bankbank whose stock
whose stock
controlled by the holding company
is controlled company affiliate whose permit is so
revoked shall receive deposits of public moneys of the United States, States,
nor shall any such national national bank pay any further dividend dividend to suchsuch
holding companycompany affiliate upon any shares shares of such bank controlledcontrolled
by such holding
holding company
company affiliate.
Forfeiture of
Forfeiture of rights,
rights, "Whenever the
"Whenever the Federal Reserve Board
Federal Reserve Board shall have revoked any
privileges, etc.
etc. voting permit as hereinbefore provided, theshall haveprivileges,
rights, revoked andany
voting permit as hereinbefore provided, the rights, privileges, and
franchises of any or all national national banks the stock of which which is con-
trolled by such holding company company affiliate shall, in the discretion of of
vol. s8,
Vol. 38, p.251.
p. 251. the Federal
the Federal Reserve
Reserve Board,
Board, be subject to
be subject to forfeiture
forfeiture in accordance
in accordance
with section
with section 22 ofof the Federal Reserve
the Federal Reserve Act, as amended."
amended."
SEc. 20. After one year
SEC. 20. After one year from the date of the enactment of this Act,
Member bank affili-
atr:~~~~
ation with ~~, stock, a:t~~;
etc., fr0D?- the 4ate of the enactment .of th!s Act,
sales
sales organization,
hibited organization, pro-pro- nono member
tion member bank
bank shall
2 (b) hereof shall
with any
be affiliated m
be affiliated in any manner descrIbed
corporation,any
described in
association, business trust, m sec-
sec-
or
hibited tion 2 (b) hereof with any corporation, association, business trust, or
Ante, p. 162.
Ante, p.162.
other similar organization engaged principally in
other similar organization engaged principally in the issue, flotation, the issue, flotation,
underwriting,
underwriting, public public sale, or distribution at wholesale wholesale or retail or or
through syndicate
syndicate participation
participation of stocks,stocks, bonds,
bonds, debentures,
debentures, notes,
notes,
or other securities.
securities.
Penalty for
Penalty violation. For
for violation. For every violation of this section section the member bank involved involved shall
shall
be subject to a penalty penalty not exceeding $1,000 per day for each day
exceeding $1,000 day
Assessment
Assessment of. of. during
during which which such
such violation continues. Such penalty penalty may be assessed
assessed
by
by the Federal Federal Reserve
Reserve Board,Board, in its discretion,
discretion, and, when when so
assessed,
assessed, may be collected collected by the Federal Federal reserve
reserve bank by suit or or
otherwise.
otherwise.
National
National banks.
banks. If any
If any such
such violation
violation shall
shall continue
continue for for six calendar months after
six calendar after
Forfeiture
Forfeiture of rights,
of rights,t th b er bbank h aII have
k sshall h ave been
been warned d by
by the F ed eraI Reserve
th e Federal R eserve
etc.,
etc., VIOlation
if violation con-
COil- hee member
mem an warne
tius.
tinues. Board
Board to discontinue the
to discontinue the same,
same, (a)(a) in
in the
the case
case ofof aa national
national bank, all
bank, all
the rights, privileges,
privileges, and franchises granted to it under the
granted it under the National National

HeinOnline -- 48 Stat. 188 1928-1934

 CONGRESS. SESS.
73d CONGRESS. I.
SESS. I. CI.
CR. 89. 16, 1933.
JUNE 16,
89. JUNE 1933. 189
189
Bank Act may be
Bank forfeited in the
be forfeited the manner prescribed in
manner prescribed section 2 of Vol.
in section ~o§' 38,
~, 1.p. 251.
251.
U.S.C., pp. 268, 275,
the Federal
Federal Reserve
Reserve Act,
Act, as amended
amended (U.S.C.,
(U.S.C., title 12, secs. 141,
12, secs. 222- 277,
141,222- 28.
277,'288." pp. 268, 275,
225 281-286 and
225,281-286" and 502), (b) in the
502), or, (b) of aa State
case of
the case member bank
State member bank, State member banks.
~~r~:i~~~b~fb~~:
all of its rights and privileges
privileges of membership in the Federal Reserve
of membership Reserve bership
bership rights.
rights.
System may
System may be forfeited
forfeited in thethe manner
manner prescribed
prescribed in in section 9 of of the
Reserve Act, as
Federal Reserve as amended (U.S.C., title 12,
amended (U.S.C., secs. 321-332).
12, secs. 321-332). ~o§' ~8,
Vol. 38, p. 259: s
p. 259.
SEC. 21.
SEC. 21. (a)
(a) After
After the expiration
expiration of one one year afterafter thethe date of vi,' VI, j,: d. .P . 279, UPP.
P';S'.
enactment of this Act itit shall be
enactment be unlawful-
unlawful-
(1) For any person,
(1) association, business trust, Unlawfulacts.
corporation, association,
person, firm, corporation, Unlawful acts.
similar organization,
or other similar engaged in the business
organization, engaged business of issuing, subject R~ceiving
Receiving deposits
deposits
to repayment
underwriting, selling, or distributing, at wholesale
underwriting, wholesale or retail, retail, or by ~~bJ:;;c~oseffi::~~~~
stock saing etc.,
through syndicate
through participation, stocks, bonds,
syndicate participation, debentures, notes, or
bonds, debentures, or organization.
organization.
engage at
other securities, to engage
other the same time
at the time to extent whatever
to any extent whatever
in the
the business
business of receiving
receiving deposits
deposits subject check or
subject to check or to repayment
repayment
upon presentation
upon presentation of certificate of deposit, or other
of a passbook, certificate other
evidence of debt, or or upon request of the depositor;depositor; or or
(2) For any person, firm, corporation,
(2) corporation,
I I
association, business trust, ihut
association, Receiving
.Receiving deposits
.dl!PDSits
submitting to
or other similar organization,
organization, other than a financial institution institution or wl.~n~!t~g~.lDlttmg
nation, to
private banker
private examination and regulation
subject to examination
banker subject regulation under under State
or Federal
Federal law, to engage to any extent extent whatever in the business business of of
receiving deposits subject to check or to repayment upon presentation
receiving presentation
of a passbook, certificate
certificate of deposit, or other other evidence of debt, or upon upon
request of the depositor, unless such person, firm, corporation, corporation, asso- asso-
ciation, business trust, or other similar organization
ciation, organization shall submit submit
Comptroller of the Currency
examination by the Comptroller
to periodic examination Currency or by
the Federal
Federal reserve bank district and shall make and
bank of the district and publish Reports Reports required.
required.
periodic reports of its condition, exhibiting in
condition, exhibiting in detail its resources
examination and reports
and liabilities, such examination reports to be made and pub- pub-
lished at the same times and in the same manner and with like effect effect
and penalties as are now provided provided by law in respect of national
banking associations
banking transacting business in the same locality.
associations transacting
(b)
(b) Whoever shall willfully violate any of the provisions of this Penalty provisions.
willfully violate provisions.
section shall upon conviction
conviction be fined not more than $5,000 $5,000 or impris-
oned not more more than five years, or both, and and any officer, director,
emI?loyee, or agent
employee, agent of any person, firm, corporation, association,
corporation, association,
busmess trust, or other similar organization
business organization who knowingly knowingly par-
ticipates in any such violation shall be punished punished by a like fine or
imprisonment or both.
Tk~e additional
22.. The
SEc. 122
S.EC. additi~:m~l liabbiliht
liability imp?s.ed upon
y imposed st~are5h10511derfsthin
uPfon shareholders in no1~~:A:~e~~~~~rs
Additional liability.
not applicable to shares
natIOna b an mg aSSOCIatIOns
national banking associations byy the t e provisions
prOVISIOns 0of sec IOn 5151 of
section 0 the e hereaftarissned.
hereafter isued.
Revised Reserve R.S., 5151,
.S sec. 5,see. p.995.
995.
Revised Statutes
Statutes," as amended
amended, and section 23 of the Federal Reserve 5151, p.
Vol. 38, p. 273.
Act, as amended (U.S.C., title 12, 12, secs. 63 and 64),
64), shall not apply U.S.C.,P.
U.S.C.,p.263. 26.
with respect to shares in any such association issued after the date
enactment of this Act.
of enactment
SEC. 23. Paragraph
Paragraph (c) (c) of section 5155 of the Revised Statutes, as R.S., R.S.,see. 1,p.996.
sec. 5155, p. 996.
amended (U.S.C., title 12, seC. sec. 36),
36), is amended to read as follows: U.S.C., * p. p.251..
"(c) A
"(c) A national
national banking
banking associatio~
association may, with the
may, with the approval
approval of of the ~~~~1~r.hment by
the Brancbes.
Establishment by
Comptroller of the Currency, establIsh operate new branches:
establish and operate branches: association,
association, upon ap ap
(1)
(1) Within the limits of the city, town or village in which said pro,al. proval.
establishment and operation are at the
association is situated, if such establishment
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-
<I,uestion;
tion is situated, if
tIOn if such establishment and operation are at the time
authorized to to State banks by the statute law of the State State in question
by language specifically granting granting such authority affirmatively affirmatively and
not merely by implication or recognition,recognition, and and subject to to the restric-
tions as to location imposed by the law of the State on State banks.

HeinOnline -- 48 Stat. 189 1928-1934

190 'l3d CONGRESS.
73d T.
SESS. I. CR.
CH. 89. JUNE 16, 1933.
1983.

of No such association shall establish a branch outside of the city, town,

Branch outside ot
villageassociation
Branch
city, etc.
city, etc.
or village
or in which it
in which it is
is situated
situated unless it has a paid-in and unim-
paired capital stock of not less than $500,000: Provided,
less Provided, That in in
'of not
Prta"""'t'°h" •
S oivingpopula
I paired capital stock
tion ofes less
ti<!n.ot
avmgpopua-
Jess than one
than one States WIt. h
with a IatlOn
population
popu off 1ess
0 less
h an one mI
than
t '11'lOn, and
million, an d which
w h'IC hIhave
la,'e no
no
million,
WIlbon.
cities located
cities located therein
therein with with aa population
population exceeding exceeding one one hundred
hundred
thousand, the capital
thousand, capital shall be not less than $250,000: Provided, Provided, That
rrllr
Lew than
million.
than one one half
halt inin States
have
States with
with aa population
population of of less than one-half
less than one-half million,
million, and and which
which
on. have no cities located
no cities located therein
therein with with a population exceeding exceeding fifty
thousand, the capital shall
thousand, shall not be less than $100,000." $100,000."
R.s., sec. 5155,
R.S.,S8C. p. 996.
5155, p.996. Paragraph (d)
Paragraph of section
(d) see.
of section 5155
5155 of the
of the Revised
Revised Statutes,
Statutes, as as amended
amended
U.S.C., p. 281.
U.S.C., p. 261.
(U.S.C., title 12, 36), is amended
(U.S.C., title 12, sec. 36), is amended to read as to read as follows:
follows:
Aggrate capital ot
Aggregate capital of "(d)
"( d) The aggregate
aggregate capital of every national banking association association
oation; amount. and
association; amount.
its branches
and its branches shallshall at no time
at no time be be less
less than
than the the aggregate
aggregate minimumminimum
capital required by law for the establishment establishment of an equal number number
national banking associations
of national associations situated in the various places where
association and its branches
such association branches are situated.' situated."
National
National banking
soeiations; hanking
consolida-as-
as- SEc. 24.
SEO. 24. (a) Sections
(a) Sections 11 and and 33 of
of the
the Act
Act entitled "An
entitled "An ActAct to", pro-pro-
tions.
sociations; i vide for the consolidation off
consolida- national
' " banking associations ap-
tions. vide for the consolidation 0 natIOnal bankmg associations', ap-
Vol. 40, p. 1043; VoU...,l.3
44,v~\~~~.
p.
1225. November 7, 1918, as amended (U.S.C.,
1043; Vol. proved November (U.S.C., title 12, secs. 33, 34,
u.s.c., p.
Vlu.i;.c., p. 260; Supp. and
260; SupP. 34a),, are
and 34a) are amended
amended by striking out
by striking out the words "county,
the words" county, city, town,
city, town,
':£a~~;,
"state", added. or village"
village" wherever
wherever they occur in each such section, and inserting inserting
in lieu thereof the words words""State, county, city town, or village."
State, county, village."
~o~
Vol. ii' p.Supp.
44, Pi;
U.S.C., 1225. VI,
1225. VI (b) Section 33 of
(b) Section
Vi-.' further amended by
of such
such Act Act of
striking out
of November
Novembery,7-, 1918, 1918, as as amended,
amended, is i"
P'. 5., op
p. 129:" upp. further amended by striking out the the second
second sentence thereof and
sentence thereof and
Capital of consoli- *
dSe':f~~ci~~io~nSOb- inserting nle hro h following: " Theh capital tc offsc
dated association. inserting in lieu thereof the following: "The capital stock such
consolidated
consolidated association
association shall not be less than that required under
existing law for the organization of a national banking association
banking association
in the placeplace in which such consolidated consolidated associationassociation is located.
~ferger
Merger of corporate Upon
of corporate Upon such such aa consolidation,
consolidation, 01' or upon
upon aa consolidation
consolidation of of twotwo or or
existence. more national banking associations
associations under section 1 of this Act, the
exIStence. more national banking
corporate existence
corporate existence of of each
each of of thethe constituent
constituent banks and national national
banking associations participating in such consolidation
associations participating consolidation shall be
merged into and continued in the consolidated national banking banking
association and
association and thethe consolidated association
consolidated association shall
shall be deemed
be deemed to to be
be
Transfer of rights,thsaesecho
pr~~~retc~!
property, etc. rights, the same corporation corporation as each of the constituent constituent institutions. All the
rights, franchises, and interests of each of such constituent banks
and national banking
and national banking associations
associations in and to every every species
species of prop-
erty, real,
erty, real, personal,
personal, and and mixed,
mixed, and and choses
choses in in action
action thereto
thereto belonging,
belonging,
shall be deemed
deemed to be transferred to and vested in such consolidated consolidated
national
national banking association
association without any deed or other transfer; and
such consolidated
such consolidated national banking association,
national banking association, by virtue of sllch
bv virtue such
consolidation
consolidation and without any order or other action on the part of of
any court
any court oror otherwise,
otherwise, shall
shall holdhold and and enjoyenjoy the the same
same andand all all rights
rights
of property,
of franchises, and
property, franchises, and interests,
interests, including appointments, desig-
including appointments, desig-
nations,
nations, andand nominations
nominations and and all other rights
all other rights and and interests
interests as trustee,
trustee,
executor,
executor, administrator,
administrator, registrar
registrar of of stocks
stocks and and bonds,
bonds, guardian
guardian of of
estates,
estates, assignee, receiver, committee of estates estates of lunatics and in in
every other fiduciary capacity, in the same manner and to the same
extent
extent as such rights, franchises, and interests were held held or enjoyed
enjoyed
by any such constituent
constituent institution at the time of such consolidation: consolidation:
ra::· of court to
of court
r~o,:econsolidatedas.
remove
to Pro
consolidated as- time
ided,however,
PrO'Vided,
time of of such
howeve', That where any such constituent institution at the
such consolidation
consolidation was was acting
acting under appointment of
under appointment of any
any court
court
as ttrustee, execut or, administrator,
a d" . f stock s and b on ds,
sociation
sOClBtlOn from trustee-
from trustee-
ship, etc.
ship, etc. rustee, executor, mIlllstrator, regIstrar registrar 0of stocks bonds,
guardian of estates, assignee, receiver, committee
guardian of estates, assignee, receiver, committee of estates of lunatics of estates of lunatics
or in
or in any
any other
other fiduciary
fiduciary capacity,
capacity, the consolidated national
the consolidated national banking
banking
association shall be subject to removal by
associatIon shall be subject to removal by a court of competent a court of competent juris- juris-
diction in
diction in the same manner
the same manner and and to to thethe same extent as was
same extent was suchsuch
constituent corporation
constituent corporation prior prior to the consolidation,
to the consolidation, and and nothing
nothing hereinherein
contained shall
contained shall be construed to
be construed impair in
to impair in any
any manner
manner the right or
the right of

HeinOnline -- 48 Stat. 190 1928-1934

 73d CONGRESS.
CONGRESS. SESS. I. CH. 89.
89. JUNE 16, 1933. 191
national banking
consolidated national
any court to remove such a consolidated association
banking association
and to appoint in lieu thereof thereof a substitute trustee, executor, or other other
fiduciary, except that such right shall not be exercised in such a
manner as to discriminate national banking associations, nor ~h~nation
against national
discriminate against Discrimination not not
shall any such such consolidated
consolidated association
association be removed solely because au aUthonS om .
of the fact that it it is a national banking association."
banking association."
SE. 25. The first two sentences of section 5197 of the Revised R.S.,
SEC. R.s., sec. see. 519i,197, p.
Statutes (U.S.C.,
(U.S.C., title 12, sec. 85) are amended amended to read as follows: lOOJ:S.C u.s.c.,.• p. p. 264.
"Any
"Any association
association may may take,
take, receive, reserve, and
receive, reserve, and charge
charge on any Right Right of. of association
association
loan
1 ·
oan or ddiscount
Iscoun t ma de, or upon any notes,
made, b'll
not es, bills
ISO off exc
exchange, 0 ther loans,
h ange, or other to take inerest on
aetc. mterest 0Th

evidences of debt, interest at the rate allowed by the laws of the State,
evidences
Territory, or District where the bank is located,
Territory, located, or at a rate of 1
centum in excess of the discount rate on ninety-day
per centum commercial Commeroial
ninety-day commercial Commercla1 paper. pawr.
paper in effect
paper effect at the Federal reserve bank bank in the Federal reserve
whichever may be the greater, and
where the bank is located, whichever
district where
no more, except that where by the laws of any State a different rate
is limited for banks organized under State laws,
banks organized laws, the rate so limited
shall be allowed for associations
associations organized or existingexisting in any such such
State under this title. When no rate is fixed by the laws of the the 1'\-nen
Whn no fixed rate.
no fixed rate.
State, or Territory, or District, the bank may take, receive,
receive, reserve,
or charge a rate not exceeding 7 per centum, or 1 per centum
or centum in excess
discount rate on ninety-day
of the discount ninety-day commercial
commercial paper paper in effect at the the
reserve bank in the Federal reserve district where the bank
Federal reserve bank
located, whichever may be the greater, and such interest
is located, interest may be
taken in advance, reckoning the days for which the note, bill, or other
taken other
evidence of debt has to run."
SEC. 26. (a) (a) ~he second sentence
The second paragraph of section l00~·.S
sentence of the first _parag.raph RSec. .• sec.s5200, 5200. p. p.
Statutes, as amended (U.S.C., title
ReVIsed Statutes,
5200 of the Revised tItle 12, sec. 84; VIU.S.C.,p.264;
Es.c., p. 264; Supp.
.. , p.
Supp.
Spp
Supp. VI, title 12, sec. 84), 84), is amended by inserting before before the period vI£;ii3~iliability.
Limit 1liabiity.
thereof the following: " and shall include in the case
at the end thereof case of of
obligations of a corporation
obligations obligations of all subsidiaries thereof
corporation all obligations thereof
corporation owns or controls a majority
in which such corporation majority interest."
(b) The amendment made by this section
(b) section shall not apply to such .'pbl!gations
Obligations of sub·
of sub-
date this
the date
on the
association on
such association sidiaries.
obligations subsidiaries held by
obli~ations of subsidiaries by such this 51 lanes.
section takes effect.
sectIOn
SEC.
SEC. 27. Section 5211 of the Revised Statutes, as amended (U.S.C .. lO~:S., sec.2695211,
amended (U.S.C..1007. 521, p. p.
12, sec. 161; Supp. VI, title 12, sec. 161),
title 12, amended by adding vp,s'ri:i
161), is amended vu.s.C.p.
I, p. 133.
p. 26\J.; Supp.
Supp.
at the end thereof the following new paragraph:
new paragraph: . p. . of affiliate
Reports
" Each national banking banking association shall obtain from each of of its ba~~~~~~~iaff:~~at0
banks to association.
affiliates other than member
affiliates member banks and furnish to the Comptroller Comptroller of of
the Currency not less than three reports during during eacheach year, in such .
Comptroller may prescribe, verified by the oath or affir- Form.
form as the Comptroller Form.
mation of the p~esident
president or such othe~other officer may be designated by Verification.
officer as !liay Verification.
the board of directors
dIrectors of such affilIate verify such reports, dis-
affiliate to verIfy
closing the information
closing hereinafter provided for as of dates identical
information hereinafter
Comptroller shall during such year
with those for which the Comptroller year require
association. For the purpose
condition of the association.
the reports of the condition purpose of of
this section the term affiliate' shall include holding company
term''affiliate' affil- st::re~:filiate".
company affil- sAdffiliate
'
con-
eon-
iates as well as other affiliates. Each such report of an affiliate shall t ~epor\ llansmitted
Report transmitted
be transmitted to the Comptroller
Comptroller at the same time as the correspond- amp ro er.
correspond- to0 Comptroller.
ing report of the association, except Comptroller may, in his
except that the Comptroller
extend such time for good cause shown. Each such report
discretion, extend report
shall contain such information as in the judgment jUdgment of the Comptroller
Comptroller Contents. Conts.
of the Currency shall be necessary necessary to disclose fully the relations
between such affiliate and such bank and to enable
between enable the Comptroller
Comptroller
effect of such relations upon the affairs
himself as to the effect
to inform himself affairs ofof
such bank. The reports of such affiliates affiliates shall be published by the Publication. Publication-.
association under the same conditions as govern its own condition re-
Comptroller shall also have power to call for
ports. The Comptroller for additional Addtionalreports.
additional AdditionaJreports.

HeinOnline -- 48 Stat. 191 1928-1934

192 73d CONGRESS.
'(3d SESS. I. CH.
CR. 89. 16, 1933.
JUNE 16,1933.

reports with respect respect to any such affiliate whenever in his judgment judgment
necessary in order to obtain
the same are necessary obtain a full and complete knowl-
edge of the conditions
conditions of the association with which it affiliated.
it is affiliated.
Such additional
additional
SuchCurrency reports
reports shall
shall be
be transmitted
transmitted to the Comptroller of
Penalty provision.
Penalty provision. the Currency in such form as he may prescribe. prescribe. Any such affiliated affiliated
bank which fails to obtain and furnish any report required required under under
this section shall be subject subject to a penalty of $100 $100 for each day during
which such failure continues." continues."
1.01s.,
lofs: S3C. 5240,
sec. 20, p. SEC. 28. (a) (a) The first paragraphparagraph of section 5240 of the Revised Revised
U.S.C.. p. 288.
U.S.C.,p.288. Statutes, as
Statutes, as amended
amended (U.S.C.,(U.S.C., title 12, sec.
title 12, sec. 481),
481), is amended by
is amended by
.
Bank examinaions, inserting before the period
inserting period at the end thereof thereof a colon and the fol-
alite to be in.
~~::~::,a~~onf;.. lowing proviso:
lowing proviso: "Provided,
"Provided,That That in in making the examination
examination of any any
cluded,
eluded. national bank
national bank the examiners shall
the examiners shall include
include such
such an an examination
examination of of
the affairs
affairs of all its affiliates other than member banks as shall be
necessary to disclose fully the relations between such bank and such
necessary such
Informationrequired.
Information required. affiliates and the effect of such relations upon the affairs of such
Forfeiture of rights
Forfeiture 'bank; and in the event of the refusal to give any information
bank;
on refusal.
on refusal. required in
required in the
the course examination of any such affiliate, or in
course of the examination
the
the event of the refusal to permit such examination, examination, all the rights,
privileges, and franchises
franchises of the bank shall be subject subject to forfeiture
Vol.
~o~. 38, p.
~8,
U.S.C., p.
pp. 2liis
2b1.
268, 275,
275 in accordance
in accordance with with section
section 22 ofof thethe Federal Reserve Act,
Federal Reserve Act, as as amended
amended
277,
277,'288." p.
pp. , • (U.S.C., title 12,
(US.C., 12, secs. 141, 222-225, 281-286, and 502).
141,222-225,281-286, 502). The Comp-
troller of the CurrencyCurrency shall have power, and he is hereby author-
Publi~ati~n,
Publication, report
report ized, to
ized, to publish
publish the the report of his examination
examination of any national banking banking
of examinations. association or affiliate
• t IOn or which
h'IC h shall not WIt
within one hundred
ofexammatlOns. aSSOCla a ffil'lat e w s h a 11 not . h'm one h un d re dan d ttwenty
and wenty
days after
days after notification
notification of of the
the recommendations
recommendations or suggestions of the
Comptroller, based on said examination, have have complied
complied with the same
Notice of. to his
to his satisfaction.
satisfaction. Ninety Ninety days'
days' notice
notice prior
prior to such publicity
pUblicity shall
be given to the bank or affiliate." affiliate."
R.s., sec.
R.S., sec. 5240,
5240, p. (b) Section 5240
(b) Section 5240 of the Revised
of the Revised Statutes,
Statutes, asas amended
amended (US.C.,(U.S.C., titletitle
1013.
101.C., p. 288.
U.S.C., 2S. 12, sec.
12, 481), is further amended
sec. 481), amended by adding after the first paragraph paragraph
thereof the
thereof the following
following new new paragraph:
paragraph:
Powers of examiner. "The examiner
"The examiner making making the the examination
examination of of any
any affiliate
affiliate of of aa
national
national bank bank shall have power
shall have power to to make
make a thorough examination of
thorough examination of
all the affairs of the affiliate, and in doing so he shall have power power
to administer oaths and to examine examine any any of the officers,
officers, directors,
employees,
employees, and agents agents thereof under oath and to make a report of of
Expense of
. Expense examina-
of examina· his
his findings
findings to to the Comptroller of the Currency. The
the Comptroller The expense of of
tions.
tlOns.
examinations
examinations of of such
such affiliates
affiliates may may be be assessed
assessed by by the
the Comptroller
Comptroller
of the Currency upon the affiliates examined examined in proportion to assets
or resources
resources held by the affiliates upon the dates of examination of of
Assessment
Assessment
fusal to pay. on
on re-
reo the
the various affiliates.
various affiliates. If any
If any such
such affiliate
affiliate shall
shall refuse to
refuse to pay
pay such
such
expenses or shall f tel' the date of
fusal to pay.
expenses or sh all " fail to do
fall to so WIt
do so h'm sixty days aafter
within of
such assessment, then such expenses expenses may be assessed against the the
Aro affiliated national bank and, when so assessed, shffiall~
shall be paid by such
r.~~~ent eo af-
ssessm ent w hen f
wben af. affit~iatedl bnatkionpal ba.ndkda~d, when Tsohatss~sfsethd,
T a ,i h t o p~id
fi i bt.e s w ~Yhsuch
t w
filiation of two or na lona bank:
national an: Provided, however, That,
rOVl e ,nowever, a ,ifIthe
e affiliation
a la IOn is with two
IS WIt
more
more national
national banks.
banks. or more national banks, such expenses expenses may be assessed assessed against, and
collected
collected from, any or all of such national national banks in such proportions
Employment of ex-
..,:,:~;~~~t of ex·
as
as the
the Comptroller of
90mptroller. the Currency
of the C\lrrency may pres.cribe.
may prescribe. Th~ The examiners
examiners
ammers, etc. and assistant examiners making the examinations of national bank-
and aSSIstant exammers makmg the exammatIOns of natIOnal bank-
ing associations
associations and affiliates thereof herein provided provided for and the
chief examiners, reviewing examiners and other persons whose whose serv-serv-
ices may be required in connection connection with such examinations or the
reports thereof, shall be be employed
employed by the Comptroller
Comptroller of the Cur-
rency with the approval approval of the Secretary Secretary of the Treasury; the
Compensation.
ComJl('nsation. employment and
employment and compensation
compensation of examiners, chief examiners, examiners, review-
ing examiners,
examiners, assistant examiners, examiners, and of the other employees employees of the
office
office of the Comptroller
Comptroller of the Currency whose compensation compensation is paid
from assessments
assessments on banks or affiliates affiliates thereof shall be without regard

HeinOnline -- 48 Stat. 192 1928-1934

 73d CONGRESS.
CONGRESS. SESS. I. CH.
CR. 89. JUNE 16, 1933. 193
19.3

to the provisions of other laws applicable to officers or employees of of

the United States. The funds derived from such assessments assessments may be
Comptroller of the Currency in accordance
deposited by the Comptroller accordance with the the Statusofassessmenb.
5tatusoasscs.e.,i.
provisions of section 5234 of the Revised Revised Statutes (U.S.C., title 12,
Statutes (U.S.C., 12, R.5., sec. 52.4, ,
sec. 192)
192) and shall not be construed to be Government Government funds or 1012. JO~:s., sec. 52.14. 1>
appropriated monies;
appropriated monies; and the Comptroller of the Currency is
the Currency is u.s.c.,
u.s.c .. p.271.
p. 271.
authorized
authorized and empowered
empo'\Yered to prescribe
prescribe regulations governing
governing the
computation and assessment
computation assessment of the expenses examinations herein
expenses of examinations herein
provided for and the collection
provided collection of such assessments from the banks
and/or affiliates examined. If
and/or fiffiliates affiliate of a national bank shall fu~~~a1~~,
If any affiliate fusing to :~~e permit ex- !~:
refuse to permit
permit an examiner examiner to make an examination examination of the affiliate amination. amination.
or shall refuse to give any information required in the course of any
such examination,
examination, the national national bank bank with which it it is affiliated
affiliated shall
be subject to a penalty of not more than $100 $100 for each day that any
such refusal
refusal shall continue. Such penalty penalty may be assessed assessed by the ty.seesment
t/ssessment of ofpenal-
penal.
Comptroller
Comptroller of the CUl'rpncy Currency and and collected in the same manner manner as
expenses of examinations."
examinations."
Src. 29. In
SEC. In any case in \yhich. which, in the opinion ol)inion of the Comptroller nes, Resumption of
Resumption of bn;;i.
busi-
"1 C . ld' . ness. by closed "SSOCIa'
by closed ,issocia-
Or the
of tue Currency,
urrency, itIt would wou be to the advantage depOSItors and tion.b
advantage of the depositors tion.
unsecurerl creditors of any national banking
unsecured association whose busi-
banking association
ness has been closed, for such association to resume business upon the
been closed, the
retention by the association, for a reasonable period period to be prescribed
prescribed
Comptroller, of all or any part of its deposits, the Comp-
by the Comptroller,
authorized, in his discretion,
troller is authorized, discretion, to permit the association to t trs, ConSent 01
Consent
etc.
dejpi-
of ueposi·
resume business
resume business if depositors and unsecured creditors of the associ
unsecured creditors associa- a- ors. etc.
representing at least 75 per centum of its total deposit and
tion representing
unsecured credit liabilities
unsecured consent in writing
liabilities consent writinO" to such retentionany of Powers
Powers of Comptrol-
of Comptrol·
Nth'mg m . thO h a II be
t'IOn sshall construed
°true d to
b e cons to aaffect
fect in
f 'many ler not affected.
d epOSI't S. Nothing
deposits. .L ·0 in this section
IS sec ler not affected.
manner any powers
manner po\yers of the Comptroller under the ,Provisions provisions of law
in force on the date of enactment enactment of this Act WIth respect to the
with respect
reorganization
reorganization of national banking associations.
SEC. 30. Whenever, in the opinion of the Comptroller of the Cur- Violations of law by
SEC. 30. 'Whenever, in the opinion of the Com troller of the Cur- officer, Violations la'Y' hy
etc., of01 ational
rency, anv · toI' or 0officer
d Irec
any director ffi eel' 0off a national.
natIOna 1
b an r, or 0off a bbank
1 bank, a nk or officer.
bank.
etc., of natIOnal

company doing business in the District of Columbia,

trust company Columbia, or when- when-
eyer, in the opinion of a Federal reserve agent, any director or officer
ever, officer
of a State member bank in his district shall have continued continued to vio- ,ahen um-
eontinuesprac-
When conti'!ues un·
· h b k t company h II h sfe,
sale. etc., banking
etc., bankmg rrac·
nte
1bite any Iaw
law re 1a
relating
t mg to such
suc bank
an or trust
trus company or shall
s a have
ave tices.
continued unsafe or unsound practices in conducting
continued conducting the businessbusiness
of such bank or trust company, company, after having having been warned by the
Comptroller of the Currency or the Federal
Comptroller Federal reserve
reserve agent, as the
case may be, to discontinue such violations of law or such unsafe
or unsound practices, Comptroller of the Currency or the Federal
practices, the Comptroller Certification of
Certification
Bard.
of facts
facts
reserve agent, as the case may be, may
reserve certify the
may certify facts to
the facts the Fed-
to the Fed- to to Board.
eral Reserve
Reserve Board. In In any such case the Federal Reserve Board
may cause notice to be served served upon such director or officer to appear appear
before such Board to show cause why he should should not be removed wCtopy
Copy to to be trans-
be trans·
shall be sent to
be sent director of
each director mtted.
office. A copy of such order shall
from office. to each of mltled.
the bank affected
affected,'b~' by registered
remstered mail mail. If If after granting the accused Remov~l
accused afteoheatioied.
alter heanng. authorized,
director or officer a reasonable opportunity
director opportunity to be heard, the Federal
Reserve Board finds that he has continued
Reserve continued to violate any law relating relating
to such bank or trust company or has continued continued unsafe or unsound unsound
conducting the business of such bank or trust company
practices in conducting company
after having been warned warned by the Comptroller Comptroller of the Currency Currency or or
the Federal reserve reserve agent to discontinue discontinue such violationviolation of law or or
such unsafe or unsound practices, practices, the Federal Reserve Reserve Board, in its its
discretion, may order that such director
discretion, director or officer be removed from crre~Y of removal
removed fromcr.° removal
office. A copy copy of such order shall be served upon such director or or
officer. A copy of such order shall also be served upon the bank of of
'which he is a director or officer, whereupon
which whereupon such director or officer officer

HeinOnline -- 48 Stat. 193 1928-1934

194:
194 73d CONGRESS.
CONGRESS. I.
SESS. I. CH. 89.
CH. 89. JUNE
JUNE 16,
16,1933.
1933.

Proviso.
Proviso.
Confidential nature shall cease to be
shall cease officer of
director or officer
be a director of such P1'ovided, That
bank: Provided,
such bank: That
ofof;;~re~aential
order. nnture such
such order
order and the
the findings of
of fact upon
upon which
which it
it is based shall
based shall notnot
be mademade public or disclosed to anyone anyone except
except the director or officer
the director officer
involved and
involved and the directors
directors of of the
the bank involved, otherwise than in
involved, otherwise in
Ren,ovedoflicer,
Bc...ved p~,!, connection
officer, pen- connection with
with proceedings
proceedings for a violation th~s secti(;m.
of this section. Any Any
partici-
aty fo~ further
rJty: for further partICI' such directordirector or or officer
officer removed
removed from from office
office as herein
as herem provided
provIded who who
patlOn in
pation lD bank manage· Such
bank manage- •
Met.
ment. participates in
thereafter participates
thereafter manner in
in any manner management of such
m the management such
bank shall be fined not more than $5,000,
bank imprisoned for not more
$5,000, or imprisoned more
than five years, or
than discretion of
or both, in the discretion of the court.
Boaru of directors,
Board directors, 31. After one
SEC. 31.
SEC. from the date of enactment
year from
one year enactment of this Act,
etc.
etc.
notwithstanding
notwithstanding any any other
other provision
provision of of law,
law, the
the board
board of of directors,
directors,
board of trustees,
trustees, or other similar governing governing body of every every national
association and
banking association and ofof every State bank or trust company
every State c~mpany whichwhich
Nun berof members. is a member
;'\umllerofmembers. member of the the Federal Reserve System shall consist
Federal Reserve consIst of not less less
than five nor more than twenty-five twenty-five members; and every director,
Stock ownership re- trustee, or other member of
Stock of such governing body
such governing body shall be the bona bona
quiroment.
quiroment. fide owner in his own right right of shares
shares of stock of such banking banking asso-
Ps~f, p.971.
Pn.,I, p. 971. ciation, State bank or trust company
ciation, State company having a par I?ar value m in the
aggregate of not less than $2,500,
aggregate unless the capital
$2,500, unless capItal of the bank bank
shall not exceed
shall exceed $50,000, in which case he must own own in his own right right
shares having
shares having a par par value aggregate of not less than $1,500,
value in the aggregate $1,500,
or unless the capital capital of the bank shall not exceed $25,000, in which
exceed $25,000, which
case he must own
case own in his own own right shares having having a par value value in the
Appointment of
Appointment re- aggregate
of re- aggregate of not less than $1,000. $1,000. 1:£ If any national banking associa-
banking associa-
c iver, when violation tion violates the provisions
('eiver,.when provisions of this section
section and
and continues
continues such viola-
viola-
thirty days' notice from the Comptroller of the Currency,
ntonal bank.
by natlOnal bank. tion after
tion after thirty days' notice from the Comptroller of the Currency,
Comptroller may appoint
the said Comptroller appoint a receiver or conservator therefor,
Forfeiture
,rorfeiture of mem- in accordance with
of mem- with the provisions of existing law. If
of existing If any State bank bank
be-Iip, State member
be""hip, member or trust company which which is a member of of the
the Federal
Federal Reserve
Reserve System
System
bok, violates the provisions of this section and continues such violation
bonk. violates the provisions of this section and continues such violation
after thirty days' notice from the Federal Reserve
after Reserve Board, it shall be
forfeiture of its membership
subject to the forfeiture membership in the Federal Federal Reserve
accordance with the provisions
System in accordance provisions of section 99 of the Federal
Reserve Act, as amended.
Reserve
~iember bank
Member bank ofli-
offi- SEC.
SEC. 32. From and after January January 1, 1934, no officer or director director
c('r~.
crs. dir~ctor~, etc. .. of any member bank shall be
directors, etc. be an an officer,
officer, director. or
director, or manager
manager of any
any
Engaging in
hngagmg m secun- securi-
pro· corporatIOn,
•
partnersh'IP, or unincorporated
. officer,
unmcorporate d "
aSSOCIatIon . engageof d'
ti~s. transactions
ties transactions pro- corporation, partnership, association engaged pl'l-pri-
11l:Jlted. marily in the business of purchasing, purchasing.l selling, or negotiating negotiating securi-
ties, and no member bank shall perform pertorm the functIons functions of a corre-
Member bank spondent bank
to spondent bank on on behalf
behalf of of anyany such partnership,
individual, partnership
.such
. individual
!\Iember bank notnotto
at as
ad
bark.
b,H,k.
correspondent
as correspondent
corporatlOn,
•
corporation, or unlncorpora
.
unincorporated
t ed assoClation
association an
d
and no suc
'1'"
such1 Individual,
individual,
,
partnership, corporation, unincorporated association
corporation, or unincorporated association shall perform
the functions of a correspondentcorrespondent for any member bank or hold on on
issued by deposit any funds on behalf of any member bank, unless in any
Prcmit illSued
PNmit
Board.
Board. such case
such case there
there is is aa permit
permit therefor
therefor issuedissued by by the Federal Reserve
Board; and the Board is authorized authorized to issue such permit if in its
judgment
judgment it incompatible with the public interest, and to
it is not incompatible to
Rlevocation.
Rm'ocation. revoke any
revoke any such permit whenever it it finds after reasonable notice
and opportunity to be heard, that the public interest interest requires such
revocation.
Vol. 38,Vol.41,
P.73 2; .Vol.
SEC. 33. The
SEC. 33. The Act entitled "An Act Act to to supplement existing laws
supplement existinO' laws
39,Vol. 3~,
p.121; p. 7:12;
l)Yo!.
i26.
against unlawfulAct entitledand
restraints "An monopolies, and for other purposes ",
unI aw f an d monopo l'les, and f or other purposes
u.s.c,
39,p.121,\ po1.41,ll.h26.
1,3. . l' b
U.S.C., p. 3,,3. agamst u restramts ",
approved October 15, 15, 1914, as amended (U.S.C., title 15, sec. 19), 19), is
hereby amended by adding after section 8 thereof the following new new
section: no
ClaytonAct, amend-
(']~ytonA(;t,amend- ""SEC.
SEC. 8A. That from
8A. That from and after the
and after the 1st day of
1st day of January
January 19341934, no
Interlockirn
ment. directo- director,
• officer,
ffi or employee of any bank, banking association,
. , or
Interlocking directo- dIrector, 0 eel', or employee of any bank banking association or
ates and ofes.
rat"s and oillcers.
trust company,
trust company, organized
organized or operating und~r
or operating under the the laws
laws of the United
shall be at the
States shall the same time aa director,
same time officer, or
director, officer, employee of
or employee of aa

HeinOnline -- 48 Stat. 194 1928-1934

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

[CHAPTER
[CHAPTER 90.]
AN
AN ACT
ACT June 16,
16, 1933.
To encourage industrial recovery, to foster fair competition,
encourage national industrial competition, and to
to [H.R. 5755.]
_rn':[H",';;,:,Rc..,.D",,7::-,5li-';c,.1.,.--_
[Public, No. No. 67.]
provide for the construction of certain
certain useful
useful public works,
works, and
and for other [Public, 67.]
purposes.
National
National Industrial
Be it
it enaoted Senate and House
enacted by the Senate House of Representatives the
Representatives of the Recovery
Recovery Act.
Art.
States of America
United States
United Amerioa in assembled,
Congress assembled,
in Oongress
Z-INDUS-
TITLE I-INDUS'
TITLE
TITLE I-INDUSTRIAL
I-INDUSTRIAL RECOVERY
RECOVERY TITLE
TRIAL RECOVERY.
TRIAL RECOVERY.

Appropriation
Appropriation for.
DECLARATION OF POI..ICY
DECLARATION" POLICY Poet, p. 275.
PO$t, p. 275.

SECTION 1. A national emergency productive of widespread

widespread unem- Declaration of policy.
Declaration

ployment and disorganization of industry, which burdens interstate

commerce, affects the public welfare,
and foreign commerce, welfare, and undermines
standards of living of the American people,
the standards people, is hereby declared
declared
It is hereby declared to be the policy of Congress to remove
to exist. It
obstructions to the free flow of interstate
obstructions interstate and foreign commerce
amount thereof; and to provide for the
which tend to diminish the amount
general
general welfare by promoting organization of industry for the
promoting the organization
purpose of cooperative action among trade groups, to induce
purpose and
induce and
management under adequate
maintain united action of labor and management adequate
supervision, to eliminate unfair competi-
governmental sanctions and supervision,
governmental competi-
practices, to promote
tive practices, possible utilization of the
promote the fullest possible
capacity of industries, to avoid undue restriction
present productive capacity
of production (except as may be temporarily required), to increase
temporarily required),
agricultural products by increas-
the consumption of industrial and agricultural
unemployment, to
ing purchasing power, to reduce and relieve unemployment,
rehabilitate industry
improve standards of labor, and otherwise to rehabilitate
improve
and
and to conserve natural resources.
Administrative
Administrati agen-
ve agen·
AD31INISTRATIVE
ADMINISTRATIVE AGENCIES cies.
cies.

(a) To effectuate
SEC. 2. (a)
SEO. policy of this title, the President is to
effectuate the policy to ~~~Is~. authorized
authorized
establish such agencies, to accept and utilize
hereby authorized to establish
hereby
such voluntary and uncompensated services, to appoint, appoint.... without Appointments.
regard to the provisions of the civil service laws, such othcers officers and
and
employees,
employees, andand to utilize such
to utilize such Federal officers and
Federal officers employees, and,
and employees, and, Cooperation
Oooperation of Fed-
of Fed.
consent of the State, such State and local officers
with the consent officers and elm-
em- eral
eral and
and State officers,
ployees, as he may find necessary, to prescribe
ployees, prescribe their authorities
authorities, etc.
etc.
tenure, and, without regard to the Classi-
duties, responsibilities, and tenure,
1923, as amended, to fix the compensation
fication Act of 1923, compensation of any
officers and employees
employees so appointed. .
(b) The President may delegate
(b) powers tiPn~~egatlOn ofof fun-
delegate any of his functions and powerstin.Dlgain fune·
under this title to such officers, agents, and employees as he may Inddustriahl
and employees Indutrial agency.
an oeerh
planning
planning
· te or appOln
ddesignate
esIgna . t ,an
appoint, andd may establish
esta bl'ISh an industrial
. d ustna
In . I pannIng
l'
planning an d anEstablishment
and researc agencv.au·
E~tabJishment - au-
aid in
research agency to aid carrying out
in carrying his functions
out his under this title. thoried.
functions under this title. thonzed.

HeinOnline -- 48 Stat. 195 1928-1934