Chapter CCLII. to provide for the Redemption of the three per cent. temporary Loan Certificates, and for an Increase of national Bank Notes
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CHAP. CCLII.— An Act to provide for the Redemption of the three per cent. temporary Loan Certificates, and for an Increase of national Bank Notes.July 12, 1870. *Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,* That fifty-four millions of dollarsAdditional notes for circulation to national banking associations.1864, ch. 106, § 22.Vol. xiii. p. 105. in notes for circulation may be issued to national banking associations, in addition to the three hundred millions of dollars authorized by the twenty-second section of the “Act to provide a national currency, secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof,” approved June three, eighteen hundred and sixty-252FORTY-FIRST CONGRESS.
Sess. II. Ch. 252. 1870.four, and the amount of notes so provided shall be furnished to bankingNotes to be given to what associations. associations organized or to be organized in those States and Territories having less than their proportion under the apportionment contemplated by the provisions of the “Act to amend an act to provide a national currency,1865, ch. 82.Vol. xiii. p. 498. secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof,” approved March three, eighteen hundred and sixty-five, and the bonds deposited with the treasurer of theWhat bonds to be deposited to secure such circulation.New apportionment on basis of census of 1870.If applications for such circulation are not made in one year, it may be issued to, &c.No bank hereafter organized to have over $500,000 circulation.
United States, to secure the additional circulating notes herein authorized, shall be of any description of bonds of the United States bearing interest in coin, but a new apportionment of the increased circulation herein provided for shall be made as soon as practicable, based upon the census of eighteen hundred and seventy: *Provided,* That if applications for the circulation herein authorized shall not be made within one year after the passage of this act by banking associations organized or to be organized in States having less than their proportion, it shall be lawful for the comptroller of the currency to issue such circulation to banking associations applying for the same in other States or Territories having less than their proportion, giving the preference to such as have the greatest deficiency: *And provided further,* That no banking association hereafter organized shall have a circulation in excess of five hundred thousand dollars.
Sec. 2. *And be it further enacted,* That at the end of each month afterComptroller of the currency to report monthly to Secretary of Treasury the amount of circulating notes issued, &c.Secretary to cancel certain three per cent temporary loan certificates;may notify holders that they will not bear interest, nor be longer part of money-reserve of banks. the passage of this act it shall be the duty of the comptroller of the currency to report to the Secretary of the Treasury the amount of circulating notes issued, under the provisions of the preceding section, to national banking associations during the previous month; whereupon the Secretary of the Treasury shall redeem and cancel an amount of the three per centum temporary loan certificates issued under the acts of March two, eighteen hundred and sixty-seven, and July twenty-five, eighteen hundred and sixty-eight, not less than the amount of circulating notes so reported, and may, if necessary, in order to procure the presentation of such temporary loan certificates for redemption, give notice to the holders thereof, by publication or otherwise, that certain of said certificates (which shall be designated by number, date, and amount) shall cease to bear interest from and after a day to be designated in such notice, and that the certificates so designated shall no longer be available as any portion of the lawful money-reserve in possession of any national banking association, and after the day designated in such notice no interest shall be paid onAfter that time interest not to be paid, &c. such certificates, and they shall not thereafter be counted as a part of the reserve of any banking association.
Sec. 3. *And be it further enacted,* That upon the deposit of any UnitedCirculating notes payable in gold coin may be issued to associations depositing U. S. bonds paying interest in gold.Denominations and amount of such notes. States bonds, bearing interest payable in gold, with the treasurer of the United States, in the manner prescribed in the nineteenth and twentieth sections of the national currency act, it shall be lawful for the comptroller of the currency to issue to the association making the same, circulating notes of different denominations, not less than five dollars, not exceeding in amount eighty per centum of the par value of the bonds deposited, which notes shall bear upon their face the promise of the association to which they are issued to pay them, upon presentation at the office of the association, in gold coin of the United States, and shall be redeemable upon such presentation in such coin: *Provided,* That no banking associationCirculation of any such bank not to exceed $1,000,000. organized under this section shall have a circulation in excess of one million of dollars.
Sec. 4. *And be it further enacted,* That every national banking associationSuch associations to keep on hand not less than 25 per cent. of circulation in gold and silver;to receive at par gold notes of other such banks. formed under the provisions of the preceding section of this act shall at all times keep on hand not less than twenty-five per centum of its outstanding circulation in gold or silver coin of the United States, and shall receive at par in the payment of debts the gold notes of every other such banking association which at the time of such payments shall be redeeming its circulating notes in gold coin of the United States. 253 Sec. 5. *And be it further enacted,* That every association organized forSuch associations subject to national currency act, except; &c. the purpose of issuing gold notes as provided in this act shall be subject to all the requirements and provisions of the national currency act, except the first clause of section twenty-two, which limits the circulation of national banking associations to three hundred millions of dollars; the first clause of section thirty-two, which, taken in connection with the preceding section, would require national banking associations organized in the city of San Francisco to redeem their circulating notes at par in the city of New York; and the last clause of section thirty-two, which requires every national banking association to receive in payment of debts the notes ofTerms “lawful money” and “lawful money of the United States” how construed in connection herewith. every other national banking association at par: *Provided,* That in applying the provisions and requirements of said act to the banking associations herein provided for, the terms “lawful money,” and “lawful money of the United States,” shall be held and construed to mean gold or silver coin of the United States.
Sec. 6. *And be it further enacted,* That to secure a more equitable distributionEquitable distribution of currency how to be secured.Excess of circulation not exceeding $25,000,000 to be withdrawn from banks. of the national banking currency there may be issued circulating notes to banking associations organized in States and Territories having less than their proportion as herein set forth. And the amount of circulation in this section authorized shall, under the direction of the Secretary of the Treasury, as it may be required for this purpose, be withdrawn, as herein provided, from banking associations organized in States having a circulation exceeding that provided for by the act entitled “An act to amend an act entitled ‘An act to provide for a national banking currency, secured by pledge of United States bonds, and to provide for the circulation and redemption thereof,’” approved March three, eighteen hundred and sixty-five, but the amount so withdrawn shall not exceed twenty-five million dollars.
TheStatement of circulation in each State and Territory to be made, and of amount to be retired, &c. comptroller of the currency shall, under the direction of the Secretary of the Treasury, make a statement showing the amount of circulation in each State and Territory, and the amount to be retired by each banking association in accordance with this section, and shall, when such redistribution of circulation is required, make a requisition for such amount upon such banks, commencing with the banks having a circulation exceeding one million ofProcess of redistribution. dollars in States having an excess of circulation, and withdrawing their circulation in excess of one million of dollars, and then proceeding pro rata with other banks having a circulation exceeding three hundred thousand dollars in States having the largest excess of circulation, and reducing the circulation of such banks in States having the greatest proportion in excess, leaving undisturbed the banks in States having a smaller proportion, until those in greater excess have been reduced to the same grade, and continuing thus to make the reduction provided for by this act until the full amount of twenty-five millions, herein provided for, shall be withdrawn; and the circulation so withdrawn shall be distributed among the States and Territories having less than their proportion, so as to equalizeComptroller to make requisition forthwith for amount, &c. the same.
And it shall be the duty of the comptroller of the currency, under the direction of the Secretary of the Treasury, forthwith to make a requisition for the amount thereof upon the banks above indicated as herein prescribed. And upon failure of such associations, or any of them, toIf banking associations fail, within a year, to return the amount of circulation required, comptroller to sell equal amount of their bonds, &c. return the amount so required within one year, it shall be the duty of the comptroller of the currency to sell at public auction, having given twenty days’ notice thereof in one daily newspaper printed in Washington and one in New York city, an amount of bonds deposited by said association, as security for said circulation, equal to the circulation to be withdrawn from said association and not returned in compliance with such requisition; and the comptroller of the currency shall with the proceeds redeem so many of the notes of said banking association, as they come into the treasury, as will equal the amount required and not so returned, and shall pay the balance, if any, to such banking association: *Provided,*No circulation to be withdrawn until, &c.
That no circulation shall be withdrawn under the provisions of this sec-254 FORTY-FIRST CONGRESS. Sess. II. Ch. 252, 253, 254. 1870.tion until after the fifty-four millions granted in the first section shall have been taken up. Sec. 7. *And be it further enacted,* That after the expiration of sixAfter six months from, &c. any bank in a State having excess of circulation may remove to State having less, &c.Proviso. months from the passage of this act any banking association located in any State having more than its proportion of circulation may be removed to any State having less than its proportion of circulation, under such rules and regulations as the comptroller of the currency, with the approval of the Secretary of the Treasury, may require: *Provided,* That the amount of the issue of said banks shall not be deducted from the amount of new issue provided for in this act.
Approved, July 12, 1870.