Public Law 67.
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/statutes-at-large/vol-48/public-law-67·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(/us/pl/73/66).] *Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled*,Banking Act of 1933. *Post*, p. 888. That the short title of this Act shall be the “Banking Act of 1933.” Sec. 2. As used in this Act and in any provision of law amended by this Act—
(a)Terms construed. The terms “banks”, “national bank”, “national banking association”, “member bank”, “board”, “district”, and “reserve Vol. 38, p. 251. [U.S.C., p. 274](/us/usc/p274). bank” shall have the meanings assigned to them in section 1 of the Federal Reserve Act, as amended.
(b)“Affiliates,” organizations included within term. Except where otherwise specifically provided, the term “affiliate” shall include any corporation, business trust, association, or other similar organization—
(1)Member bank having controlling interest. Of which a member bank, directly or indirectly, owns or controls either a majority of the voting shares or more than 50 per centum of the number of shares voted for the election of its directors, trustees, or other persons exercising similar functions at the preceding election, or controls in any manner the election of a majority of its directors, trustees, or other persons exercising similar functions; or
(2)Shareholders of member bank control. Of which control is held, directly or indirectly, through stock ownership or in any other manner, by the shareholders of a member bank who own or control either a majority of the shares of such bank or more than 50 per centum of the number of shares voted for the election of directors of such bank at the preceding election, or by trustees for the benefit of the shareholders of any such bank; or 163
(3)Of which a majority of its directors, trustees, or other persons Majority directors of, are directors of member bank. exercising similar functions are directors of any one member bank.
(c)The term “holding company affiliate” shall include any corporation, “Holding company affiliate,” organizations included within term. business trust, association, or other similar organization—
(1)Which owns or controls, directly or indirectly, either a When majority of shares of capital stock of member bank owned, etc. majority of the shares of capital stock of a member bank or more than 50 per centum of the number of shares voted for the election of directors of any one bank at the preceding election, or controls in any manner the election of a majority of the directors of any one bank; or
(2)For the benefit of whose shareholders or members all or When capital stock of member bank held in trust. substantially all the capital stock of a member bank is held by trustees. Sec. 3.
(a)The fourth paragraph after paragraph “Eighth” of Vol. 38, p. 255. [U.S.C., p. 278](/us/usc/p278). section 4 of the Federal Reserve Act, as amended (U.S.C., title 12, sec. 301), is amended to read as follows: " “Said board of directors shall administer the affairs of said bank Board of directors. Extension of discounts, advancements, etc., to member banks. fairly and impartially and without discrimination in favor of or against any member bank or banks and may, subject to the provisions of law and the orders of the Federal Reserve Board, extend to each member bank such discounts, advancements, and accommodations as may be safely and reasonably made with due regard for the claims and demands of other member banks, the maintenance of sound credit conditions, and the accommodation of commerce, industry, and agriculture. The Federal Reserve Board may prescribe Federal Reserve Board to prescribe conditions. regulations further defining within the limitations of this Act the conditions under which discounts, advancements, and the accommodations may be extended to member banks. Each Federal reserve Reserve bank to keep informed of amount, etc., of loans. bank shall keep itself informed of the general character and amount of the loans and investments of its member banks with a view to ascertaining whether undue use is being made of bank credit for Purpose. the speculative carrying of or trading in securities, real estate, or commodities, or for any other purpose inconsistent with the maintenance of sound credit conditions; and, in determining whether to grant or refuse advances, rediscounts or other credit accommodations, the Federal reserve bank shall give consideration to such information. The chairman of the Federal reserve bank shall report to Report by reserve bank. the Federal Reserve Board any such undue use of bank credit by any member bank, together with his recommendation. Whenever, Suspension of member bank from use of credit facilities. in the judgment of the Federal Reserve Board, any member bank is making such undue use of bank credit, the Board may, in its discretion, after reasonable notice and an opportunity for a hearing, Hearing and notice. suspend such bank from the use of the credit facilities of the Federal Reserve System and may terminate such suspension or may renew it from time to time.” "
(b)The paragraph of section 4 of the Federal Reserve Act, as Vol. 40, p. 968. [U.S.C., p. 278](/us/usc/p278). amended (U.S.C., title 12, sec. 304), which commences with the words “The Federal Reserve Board shall classify” is amended by inserting Class A and class B directors. before the period at the end thereof a colon and the following: “ *Provided*, That whenever any two or more member banks within Participation by member banks in elections within district. the same Federal reserve district are affiliated with the same holding company affiliate, participation by such member banks in any such nomination or election shall be confined to one of such banks, which may be designated for the purpose by such holding company affiliate. ” Sec. 4. The first paragraph of section 7 of the Federal Reserve Vol. 38, p. 258; Vol. 40, p. 1314. [U.S.C., p. 278](/us/usc/p278). Effective date of amendment. Act, as amended (U.S.C., title 12, sec. 289), is amended, effective July 1, 1932, to read as follows: " “After all necessary expenses of a Federal reserve bank shall have Dividend on stock of reserve bank. been paid or provided for, the stockholders shall be entitled to receive 164Net earnings paid into surplus fund. Franchise tax payments, eliminated. an annual dividend of 6 per centum on the paid-in capital stock, which dividend shall be cumulative. After the aforesaid dividend claims have been fully met, the net earnings shall be paid into the surplus fund of the Federal reserve bank.” " Sec. 5.
(a)Vol. 38, p. 259; Vol. 40, p. 232; Vol. 44, p. 1229. [U.S.C., p. 279; Supp. VI, p. 135](/us/usc/p279/135). Application of Morris Plan banks to become member banks. The first paragraph of section 9 of the Federal Reserve Act, as amended (U.S.C., title 12, sec. 321; Supp. VI, title 12, sec. 321), is amended by inserting immediately after the words “United States” a comma and the following: “including Morris Plan banks and other incorporated banking institutions engaged in similar business.”
(b)Vol. 40, p. 233; Vol. 44, p. 1229. [U.S.C., p. 279; Supp. VI, p. 135](/us/usc/p279/135). State member banks. Power to establish branches. The second paragraph of section 9 of the Federal Reserve Act, as amended, is amended by adding at the end thereof the following: “ *Provided, however*, That nothing herein contained shall prevent any State member bank from establishing and operating branches in the United States or any dependency or insular possession thereof or in any foreign country, on the same terms and conditions and subject to the same limitations and restrictions as are applicable to the establishment of branches by national banks. ”
(c)Vol. 40, p. 233. [U.S.C., pp. 279, 280; Supp. VI, p. 135](/us/usc/pp279/280/135). Section 9 of the Federal Reserve Act, as amended (U.S.C., title 12, secs. 321–331; Supp. VI, title 12, secs. 321–332), is further amended by adding at the end thereof the following new paragraphs: " Mutual savings banks. “Any mutual savings bank having no capital stock (including any other banking institution the capital of which consists of weekly or other time deposits which are segregated from all other deposits and are regarded as capital stock for the purposes of taxation and the declaration of dividends), but having surplus and undivided profits Application of, to become member banks. not less than the amount of capital required for the organization of a national bank in the same place, may apply for and be admitted to membership in the Federal Reserve System in the same manner and Subscription to capital stock of reserve bank required. subject to the same provisions of law as State banks and trust companies, except that any such savings bank shall subscribe for capital stock of the Federal reserve bank in an amount equal to six-tenths of Amount of. 1 per centum of its total deposit liabilities as shown by the most recent report of examination of such savings bank preceding its admission Adjustment semiannually under rules of Reserve Board. Deposit required, if subscription unlawful. to membership. Thereafter such subscription shall be adjusted semiannually on the same percentage basis in accordance with rules and regulations prescribed by the Federal Reserve Board. If any such mutual savings bank applying for membership is not permitted by the laws under which it was organized to purchase stock in a Federal reserve bank, it shall, upon admission to the system, deposit with the Federal reserve bank an amount equal to the amount which it would have been required to pay in on account of a subscription to Adjustment of deposit. Conditions subject to. *Post*, p. 971. capital stock. Thereafter such deposit shall be adjusted semi-annually in the same manner as subscriptions for stock. Such deposits shall be subject to the same conditions with respect to repayment as amounts paid upon subscriptions to capital stock by other Interest payments. member banks and the Federal reserve bank shall pay interest thereon at the same rate as dividends are actually paid on outstanding Application of deposit to subscription, if subscription hereafter legalized. shares of stock of such Federal reserve bank. If the laws under which any such savings bank was organized be amended so as to authorize mutual savings banks to subscribe for Federal reserve bank stock, such savings bank shall thereupon subscribe for the appropriate amount of stock in the Federal reserve bank, and the deposit hereinbefore Termination of savings bank to rights of membership. provided for in lieu of payment upon capital stock shall be applied upon such subscription. If the laws under which any such savings bank was organized be not amended at the next session of the legislature following the admission of such savings bank to When right to subscribe not granted. membership so as to authorize mutual savings banks to purchase 165 Federal reserve bank stock, or if such laws be so amended and such When granted and failure to purchase stock. bank fail within six months thereafter to purchase such stock, all of its rights and privileges as a member bank shall be forfeited and its membership in the Federal Reserve System shall be terminated in the manner prescribed elsewhere in this section with respect to State member banks and trust companies. Each such mutual savings Mutual savings banks to comply with State laws and Reserve Board regulations. bank shall comply with all the provisions of law applicable to State member banks and trust companies, with the regulations of the Federal Reserve Board and with the conditions of membership prescribed for such savings bank at the time of admission to membership, except as otherwise hereinbefore provided with respect to capital stock. “Each bank admitted to membership under this section shall Reports by admitted banks and affiliates. obtain from each of its affiliates other than member banks and furnish to the Federal reserve bank of its district and to the Federal Reserve Board not less than three reports during each year. Such Form of reports. reports shall be in such form as the Federal Reserve Board may prescribe, shall be verified by the oath or affirmation of the president Verification. or such other officer as may be designated by the board of directors of such affiliate to verify such reports, and shall disclose the information Information to be disclosed. hereinafter provided for as of dates identical with those fixed by the Federal Reserve Board for reports of the condition of the affiliated member bank. Each such report of an affiliate shall Report of affiliates. be transmitted as herein provided at the same time as the corresponding report of the affiliated member bank, except that the Federal Reserve Board may, in its discretion, extend such time for good cause shown. Each such report shall contain such information Information required. as in the judgment of the Federal Reserve Board shall be necessary to disclose fully the relations between such affiliate and such bank and to enable the Board to inform itself as to the effect of such relations upon the affairs of such bank. The reports of such affiliates Publication of. shall be published by the bank under the same conditions as govern its own condition reports. “Any such affiliated member bank may be required to obtain from Additional report of affiliate may be required. any such affiliate such additional reports as in the opinion of its Federal reserve bank or the Federal Reserve Board may be necessary in order to obtain a full and complete knowledge of the condition of the affiliated member bank. Such additional reports shall be Transmitted to Federal Reserve Board. transmitted to the Federal reserve bank and the Federal Reserve Board and shall be in such form as the Federal Reserve Board may Form. prescribe. “Any such affiliated member bank which fails to obtain from any Penalty provision. Failure to furnish reports. of its affiliates and furnish any report provided for by the two preceding paragraphs of this section shall be subject to a penalty of $100 for each day during which such failure continues, which, by direction of the Federal Reserve Board, may be collected, by suit or otherwise, by the Federal reserve bank of the district in which such member bank is located. For the purposes of this paragraph and “Affiliate”, construed. the two preceding paragraphs of this section, the term ‘affiliate’ shall include holding company affiliates as well as other affiliates. “State member banks shall be subject to the same limitations and Limitations on State member banks respecting purchasing investment securities. [R.S., sec. 5136, p. 993](/us/rs/s5136/p993). Vol. 42, p. 767; Vol. 44, p. 1226. [U.S.C., p. 260; Supp. VI, p. 129](/us/usc/p260/129). conditions with respect to the purchasing, selling, underwriting, and holding of investment securities and stock as are applicable in the case of national banks under paragraph ‘Seventh’ of section 5136 of the Revised Statutes, as amended. “After one year from the date of the enactment of the Banking State member bank stock certificate. Not to represent stock of other corporation. Exception. Act of 1933, no certificate representing the stock of any State member bank shall represent the stock of any other corporation, except a member bank or a corporation existing on the date this paragraph takes effect engaged solely in holding the bank premises of such State 166Transfer of certificate conditioned upon sale, etc., prohibited. member bank, nor shall the ownership, sale, or transfer of any certificate representing the stock of any such bank be conditioned in any manner whatsoever upon the ownership, sale, or transfer of a certificate representing the stock of any other corporation, except a member bank. State member banks and holding company affiliates. Agreements required. “Each State member bank affiliated with a holding company affiliate shall obtain from such holding company affiliate, within such time as the Federal Reserve Board shall prescribe, an agreement that such holding company affiliate shall be subject to the same [R.S., sec. 5144, p. 994](/us/rs/s5144/p994). [U.S.C., p. 262](/us/usc/p262). conditions and limitations as are applicable under section 5144 of the Revised Statutes, as amended, in the case of holding company Copy of agreement; filing. Penalty on failure to comply. affiliates of national banks. A copy of each such agreement shall be filed with the Federal Reserve Board. Upon the failure of a State member bank affiliated with a holding company affiliate to obtain such an agreement within the time so prescribed, the Federal Reserve Board shall require such bank to surrender its stock in the Federal reserve bank and to forfeit all rights and privileges of membership Reserve Board may require State member affiliates to surrender stock and rights. in the Federal Reserve System as provided in this section. Whenever the Federal Reserve Board shall have revoked the voting permit of any such holding company affiliate, the Federal Reserve Board may, in its discretion, require any or all State member banks affiliated with such holding company affiliate to surrender their stock in the Federal reserve bank and to forfeit all rights and privileges of membership in the Federal Reserve System as provided in this section. Examinations of State member banks. “In connection with examinations of State member banks, examiners selected or approved by the Federal Reserve Board shall make Of affiliates. Relationships to be disclosed. such examinations of the affairs of all affiliates of such banks as shall be necessary to disclose fully the relations between such banks and their affiliates and the effect of such relations upon the affairs Assessments for expenses. of such banks. The expense of examination of affiliates of any State member bank may, in the discretion of the Federal Reserve Board, be assessed against such bank and, when so assessed, shall be paid Penalty upon failure to permit examination, etc. by such bank. In the event of the refusal to give any information requested in the course of the examination of any such affiliate, or in the event of the refusal to permit such examination, or in the event of the refusal to pay any expense so assessed, the Federal Reserve Board may, in its discretion, require any or all State member banks affiliated with such affiliate to surrender their stock in the Federal reserve bank and to forfeit all rights and privileges of membership in the Federal Reserve System, as provided in this section.” " Sec. 6.
(a)Vol. 38, p. 260; Vol. 40, p. 1315; Vol. 42, p. 620. [U.S.C., p. 275](/us/usc/p275). The second paragraph of section 10 of the Federal Reserve Act, as amended (U.S.C., title 12, sec. 242), is amended to read as follows: " Ineligibility to hold office in member banks. “The Secretary of the Treasury and the Comptroller of the Currency shall be ineligible during the time they are in office and for two years thereafter to hold any office, position, or employment in any member bank. The appointive members of the Federal Reserve Board shall be ineligible during the time they are in office and for two years thereafter to hold any office, position, or employment in any member bank, except that this restriction shall not apply to a member who has served the full term for which he was appointed. Terms of office of members of Federal Reserve Board. Upon the expiration of the term of any appointive member of the Federal Reserve Board in office when this paragraph as amended takes effect, the President shall fix the term of the successor to such member at not to exceed twelve years, as designated by the President at the time of nomination, but in such manner as to provide for the expiration of the term of not more than one appointive member in any two-year period, and thereafter each appointive member shall 167 hold office for a term of twelve years from the expiration of the term of his predecessor. Of the six persons thus appointed, one shall be Designation of governor. designated by the President as governor and one as vice governor of the Federal Reserve Board. The governor of the Federal Reserve Board, subject to its supervision, shall be its active executive officer. Oath of office. Each member of the Federal Reserve Board shall within fifteen days after notice of appointment make and subscribe to the oath of office.” "
(b)The fourth paragraph of section 10 of the Federal Reserve Vol. 38, p. 261; Vol. 42, p. 621. [U.S.C., p. 275](/us/usc/p275). Act, as amended (U.S.C., title 12, sec. 244), is amended to read as follows: " “The principal offices of the Board shall be in the District of Principal offices of Board. Chairman. Columbia. At meetings of the Board the Secretary of the Treasury shall preside as chairman, and, in his absence, the governor shall preside. In the absence of both the Secretary of the Treasury and the governor the vice governor shall preside. In the absence of the Secretary of the Treasury, the governor, and the vice governor the Chairman pro tempore. Determination of manner disbursements to be made and obligations incurred. Board shall elect a member to act as chairman pro tempore. The Board shall determine and prescribe the manner in which its obligations shall be incurred and its disbursements and expenses allowed and paid, and may leave on deposit in the Federal Reserve banks the proceeds of assessments levied upon them to defray its estimated expenses and the salaries of its members and employees, whose Salaries, leave, etc. employment, compensation, leave, and expenses shall be governed solely by the provisions of this Act, specific amendments thereof, and rules and regulations of the Board not inconsistent therewith; and funds derived from such assessments shall not be construed to be Government funds or appropriated moneys. No member of the Federal Qualifications of members. Reserve Board shall be an officer or director of any bank, banking institution, trust company, or Federal Reserve bank or hold stock in any bank, banking institution, or trust company; and before entering upon his duties as a member of the Federal Reserve Board he shall certify under oath that he has complied with this requirement, and such certification shall be filed with the secretary of the Board. Whenever a vacancy shall occur, other than by expiration Vacancies. of term, among the six members of the Federal Reserve Board appointed by the President as above provided, a successor shall be appointed by the President, by and with the advice and consent of the Senate, to fill such vacancy, and when appointed he shall hold office for the unexpired term of his predecessor.” " Sec. 7. Paragraph
(m)of section 11 of the Federal Reserve Act, as Vol. 39, p. 752; Vol. 41, p. 1146. amended (U.S.C., title 12, sec. 248), is amended to read as follows: " “(m) Upon the affirmative vote of not less than six of its members Powers of Board. Fix percentage of bank capital and surplus represented by loans. the Federal Reserve Board shall have power to fix from time to time for each Federal reserve district the percentage of individual bank 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 loan shall be made by any such bank to Limitation on amount of loan. any person in an amount in excess of 10 per centum of the unimpaired capital and surplus of such bank. Any percentage so fixed Percentage subject to change. by the Federal Reserve Board shall be subject to change from time to time upon ten days’ notice, and it shall be the duty of the Board to establish such percentages with a view to preventing the undue use of bank loans for the speculative carrying of securities. The Federal Reserve Board shall have power to direct any member bank Power to direct bank from increasing loans. to refrain from further increase of its loans secured by stock or bond collateral for any period up to one year under penalty of suspension of all rediscount privileges at Federal reserve banks.” " 168 Sec. 8. Vol. 38, p. 263. [U.S.C., pp. 277, 281](/us/usc/pp277/281). The Federal Reserve Act, as amended, is amended by inserting between sections 12 and 13 (U.S.C., title 12, secs. 261, 262, and 342), thereof the following new sections: " “Sec. 12A.
(a)Federal Open Market Committee; created. Members. Selection of. Meetings. There is hereby created a Federal Open Market Committee (hereinafter referred to as the ‘committee’), which shall consist of as many members as there are Federal reserve districts. Each Federal reserve bank by its board of directors shall annually select one member of said committee. The meetings of said committee shall be held at Washington, District of Columbia, at least four times each year, upon the call of the governor of the Federal Reserve Board or at the request of any three members of the committee, and, in the discretion of the Board, may be attended by the members of the Board. “(b) Regulations governing open-market operations by Reserve banks. *Ante*, p. 51. Adoption of regulations. No Federal reserve bank shall engage in open-market operations under section 14 of this Act except in accordance with regulations adopted by the Federal Reserve Board. The Board shall consider, adopt, and transmit to the committee and to the several Federal reserve banks regulations relating to the open-market transactions of such banks and the relations of the Federal Reserve System with foreign central or other foreign banks. “(c) *Post*, p. 183. Vol. 38, p. 264. [U. S. C., p. 283](/us/usc/p283). The time, character, and volume of all purchases and sales of paper described in section 14 of this Act as eligible for openmarket operations shall be governed with a view to accommodating commerce and business and with regard to their bearing upon the general credit situation of the country. “(d) Filing decision not to participate in open-market operations. If any Federal reserve bank shall decide not to participate in open-market operations recommended and approved as provided in paragraph
(b)hereof, it shall file with the chairman of the committee within thirty days a notice of its decision, and transmit a copy thereof to the Federal Reserve Board. “Sec. 12B.
(a)Federal Deposit Insurance Corporation; created. Duty to liquidate, etc., closed national and State member banks. *Post*, pp. 279, 969. There is hereby created a Federal Deposit Insurance Corporation (hereinafter referred to as the ‘Corporation’), whose duty it shall be to purchase, hold, and liquidate, as hereinafter provided, the assets of national banks which have been closed by action of the Comptroller of the Currency, or by vote of their directors, and the assets of State member banks which have been closed by action of the appropriate State authorities, or by vote of their Insurance of deposits. directors; and to insure, as hereinafter provided, the deposits of all banks which are entitled to the benefits of insurance under this section. “(b) Management of Corporation. The management of the Corporation shall be vested in a board of directors consisting of three members, one of whom shall be the Comptroller of the Currency, and two of whom shall be Directors, appointment. citizens of the United States to be appointed by the President, by and with the advice and consent of the Senate. One of the appointive members shall be the chairman of the board of directors of the Corporation and not more than two of the members of such board Terms of office; compensation. of directors shall be members of the same political party. Each such appointive member shall hold office for a term of six years and shall receive compensation at the rate of $10,000 per annum, payable monthly out of the funds of the Corporation, but the Comptroller of the Currency shall not receive additional compensation for his services as such member. “(c) Appropriation authorized, payment for Corporation capital stock. *Post*, p. 279. There is hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, the sum of $150,000,000, which shall be available for payment by the Secretary of the Treasury for capital stock of the Corporation in an equal amount, which shall be subscribed for by him on behalf of the United 169 States. Payments upon such subscription shall be subject to call in Payments subject to call. To be additional. whole or in part by the board of directors of the Corporation. Such stock shall be in addition to the amount of capital stock required to be subscribed for by Federal reserve banks and member and nonmember banks as hereinafter provided, and the United States shall be Dividend payments to United States. entitled to the payment of dividends on such stock to the same extent as member and nonmember banks are entitled to such payment on the class A stock of the Corporation held by them. Receipts for payments Receipts for payments. by the United States for or on account of such stock shall be issued by the Corporation to the Secretary of the Treasury and shall be evidence of the stock ownership of the United States. “(d) The capital stock of the Corporation shall be divided into Capital stock, divided into shares of $100 each. Stock certificates, classes. Class A, by which banks to be held. shares of $100 each. Certificates of stock of the Corporation shall be of two classes—class A and class B. Class A stock shall be held by member and nonmember banks as hereinafter provided and they shall be entitled to payment of dividends out of net earnings at the rate of 6 per centum per annum on the capital stock paid in by them, which dividends shall be cumulative, or to the extent of 30 per centum Dividend payments, amount. of such net earnings in any one year, whichever amount shall be the greater, but such stock shall have no vote at meetings of stockholders. Class B stock shall be held by Federal reserve banks only and shall Class B, held by Reserve bank. not be entitled to the payment of dividends. Every Federal reserve bank shall subscribe to shares of class B stock in the Corporation to Subscription for. an amount equal to one half of the surplus of such bank on January 1, 1933, and its subscriptions shall be accompanied by a certified check Payments. payable to the Corporation in an amount equal to one half of such subscription. The remainder of such subscription shall be subject to call from time to time by the board of directors upon ninety days’ notice. “(e) Every bank which is or which becomes a member of the Federal Subscriptions for class A on or before July 1, 1934. *Post*, p. 969. Reserve System on or before July 1, 1934, shall take all steps necessary to enable it to become a class A stockholder of the Corporation on or before July 1, 1934; and thereafter no State bank or Admission to membership thereafter; subscription required. trust company or mutual savings bank shall be admitted to membership in the Federal Reserve System until it becomes a class A stockholder of the Corporation, no national bank in the continental National banks. Certificate to commence or resume banking business denied unless member and class A stockholder. United States shall be granted a certificate by the Comptroller of the Currency authorizing it to commence the business of banking until it becomes a member of the Federal Reserve System and a class A stockholder of the Corporation, and no national bank in the continental United States for which a receiver or conservator has been appointed shall be permitted to resume the transaction of its banking business until it becomes a class A stockholder of the Corporation. Every member bank shall apply to the Corporation Application for class A. Amount. for class A stock of the Corporation in an amount equal to one half of 1 per centum of its total deposit liabilities as computed in accordance with regulations prescribed by the Federal Reserve Board; except that in the case of a member bank organized after the date this Exception; member bank hereafter organized. section takes effect, the amount of such class A stock applied for by such member bank during the first twelve months after its organization shall equal 5 per centum of its paid-up capital and surplus, and Amount. beginning after the expiration of such twelve months’ period the amount of such class A stock of such member bank shall be adjusted annually in the same manner as in the case of other member banks. Upon receipt of such application the Corporation shall request the Certification respecting sufficiency of applying bank’s assets. Federal Reserve Board, in the case of a State member bank, or the Comptroller of the Currency, in the case of a national bank, to certify upon the basis of a thorough examination of such bank whether or not the assets of the applying bank are adequate to enable it to 170 meet all of its liabilities to depositors and other creditors as shown by the books of the bank; and the Federal Reserve Board or the Comptroller of the Currency shall make such certification as soon as Payment if certification affirmative; amount. practicable. If such certification be in the affirmative, the Corporation shall grant such application and the applying bank shall pay one half of its subscription in full and shall thereupon become a class A *Proviso*. Not required before July 1, 1934. stockholder of the Corporation: *Provided*, That no member bank shall be required to make such payment or become a class A stockholder Payment of remainder subject to call. of the Corporation before July 1, 1934. The remainder of such subscription shall be subject to call from time to time by the Denial of application if certification negative. board of directors of the Corporation. If such certification be in the negative, the Corporation shall deny such application. If any Receiver or conservator; appointment. national bank shall not have become a class A stockholder of the Corporation on or before July 1, 1934, the Comptroller of the Currency shall appoint a receiver or conservator therefor in accordance Termination of membership, State member bank not subscribing class A on or before July 1, 1934. with the provisions of existing law. Except as provided in subsection
(g)of this section, if any State member bank shall not have become a class A stockholder of the Corporation on or before July 1, *Post*, p. 180. 1934, the Federal Reserve Board shall terminate its membership in the Federal Reserve System in accordance with the provisions of section 9 of this Act. “(f) Applications for membership on or before July 1, 1936. Benefits to accrue during pendency of. Any State bank or trust company or mutual savings bank which applies for membership in the Federal Reserve System or for conversion into a national banking association on or after July 1, 1936, may, with the consent of the Corporation, obtain the benefits of this section, pending action on such application, by subscribing and paying for the same amount of stock of the Corporation as it would be required to subscribe and pay for upon becoming a member Provisions thereafter applicable. bank. Thereupon the provisions of this section applicable to member banks shall be applicable to such State bank or trust company or mutual savings bank to the same extent as if it were already a *Proviso*. Repayment if membership application not completed or disapproved, etc. member bank: *Provided*, That if the application of such State bank or trust company or mutual savings bank for membership in the Federal Reserve System or for conversion into a national banking association be approved and it shall not complete its membership in the Federal Reserve System or its conversion into a national banking association within a reasonable time, or if such application shall be disapproved, then the amount paid by such State bank or trust company or mutual savings bank on account of its subscription to the capital stock of the Corporation shall be repaid to it and it shall no longer be subject to the provisions or entitled to the privileges of this section. “(g) Deposit by State bank with membership application, when stock purchase unlawful under State laws. If any State bank or trust company, or mutual savings bank (referred to in this subsection as ‘State bank’) which is or which becomes a member of the Federal Reserve System is not permitted by the laws under which it was organized to purchase stock in the Corporation, it shall apply to the Corporation for admission to the benefits of this section and, if such application be granted after appropriate certification in accordance with this section, it shall deposit with the Corporation an amount equal to the amount which it would have been required to pay in on account of a subscription Adjustment of deposit. to capital stock of the Corporation. Thereafter such deposit shall be adjusted in the same manner as subscriptions for stock by class A stockholders. Such deposit shall be subject to the same Conditions subject to. conditions with respect to repayment as amounts paid on subscriptions to class A stock by other member banks and the Corporation Interest payments. Depositor bank deemed class A stockholder. shall pay interest thereon at the same rate as dividends are actually paid on outstanding shares of class A stock. As long as such deposit is maintained with the Corporation, such State bank shall, 171 for the purposes of this section, be deemed to be a class A stockholder of the Corporation. If the laws under which such State bank was Application of deposit to subscription, if subscription hereafter legalized. organized be amended so as to authorize State banks to subscribe for class A stock of the Corporation, such State bank shall within six months thereafter subscribe for an appropriate amount of such class A stock and the deposit hereinafter provided for in lieu of payment upon class A stock shall be applied upon such subscription. If the law under which such State bank was organized be not Termination of State bank to rights of membership. amended at the next session of the State legislature following the admission of such State bank to the benefits of this section so as to When right to subscribe not granted. authorize State banks to purchase such class A stock, or, if the law be so amended and such State bank shall fail within six months When granted and failure to purchase stock. thereafter to purchase such class A stock, the deposit previously made with the Corporation shall be returned to such State bank and it shall no longer be entitled to the benefits of this section, unless it shall have been closed in the meantime on account of inability to meet the demands of its depositors. “(h) The amount of the outstanding class A stock of the Corporation Annual adjustment, amount of class A. held by member banks shall be annually adjusted as hereinafter provided as of the last preceding call date as member banks increase their time and demand deposits or as additional banks become members or subscribe to the stock of the Corporation, and such stock may be decreased in amount as member banks reduce Decrease authorized. Transfer, etc., of shares by member banks, denied. their time and demand deposits or cease to be members. Shares of the capital stock of the Corporation owned by member banks shall not be transferred or hypothecated. When a member bank increases Additional subscription, upon increase of deposits. its time and demand deposits it shall, at the beginning of each calendar year, subscribe for an additional amount of capital stock of the Corporation equal to one half of 1 per centum of such increase Payments. in deposits. One half of the amount of such additional stock shall be paid for at the time of the subscription therefor, and the balance shall be subject to call by the board of directors of the Corporation. A bank organized on or before the date this section takes Amount of subscription for class A; member banks. effect and admitted to membership in the Federal Reserve System at any time after the organization of the Corporation shall be required to subscribe for an amount of class A capital stock equal to one half of 1 per centum of the time and demand deposits of the applicant bank as of the date of such admission, paying therefor Payment. its par value plus one half of 1 per centum a month from the period of the last dividend on the class A stock of the Corporation. When Proportionate surrender of amount of shares, when deposits decrease. a member bank reduces its time and demand deposits it shall surrender, not later than the 1st day of January thereafter, a proportionate amount of its holdings in the capital stock of the Corporation, Total surrender upon liquidation. and when a member bank voluntarily liquidates it shall surrender all its holdings of the capital stock of the Corporation and be released from its stock subscription not previously called. Cancellation of shares. The shares so surrendered shall be canceled and the member bank shall receive in payment therefor, under regulations to be prescribed Repayments; amount of. by the Corporation, a sum equal to its cash-paid subscriptions on the shares surrendered and its proportionate share of dividends not to exceed one half of 1 per centum a month, from the period of the last dividend on such stock, less any liability of such member bank to the Corporation. “(i) If any member or nonmember bank shall be declared insolvent, Cancellation of stock. Member bank, when insolvent or ceases membership. Nonmember bank. Liability not impaired. or shall cease to be a member bank (or in the case of a nonmember bank, shall cease to be entitled to the benefits of insurance under this section), the stock held by it in the Corporation shall be canceled, without impairment of the liability of such bank, and all cash-paid subscriptions on such stock, with its proportionate share of dividends 172Distribution of assets. not to exceed one half of 1 per centum per month from the period of last dividend on such stock shall be first applied to all debts of the insolvent bank or the receiver thereof to the Corporation, and the balance, if any, shall be paid to the receiver of the insolvent bank. “(j)Federal Deposit Insurance Corporation. Corporate powers. Upon the date of enactment of the Banking Act of 1933, the Corporation shall become a body corporate and as such shall have power— “First. To adopt and use a corporate seal. “Second. To have succession until dissolved by an Act of Congress. “Third. To make contracts. “Fourth. To sue and be sued, complain and defend, in any court of law or equity, State or Federal. “Fifth. To appoint by its board of directors such officers and employees as are not otherwise provided for in this section, to define their duties, fix their compensation, require bonds of them and fix the penalty thereof, and to dismiss at pleasure such officers or employees. Nothing in this or any other Act shall be construed to prevent the appointment and compensation as an officer or employee of the Corporation of any officer or employee of the United States in any board, commission, independent establishment, or executive department thereof. “Sixth. To prescribe by its board of directors, bylaws not inconsistent with law, regulating the manner in which its general business may be conducted, and the privileges granted to it by law may be exercised and enjoyed. “Seventh. To exercise by its board of directors, or duly authorized officers or agents, all powers specifically granted by the provisions of this section and such incidental powers as shall be necessary to carry out the powers so granted. “(k) Board of directors; administration of corporate affairs. Determination of manner disbursements made; obligations incurred. Franking privilege. The board of directors shall administer the affairs of the Corporation fairly and impartially and without discrimination. The board of directors of the Corporation shall determine and prescribe the manner in which its obligations shall be incurred and its expenses allowed and paid. The Corporation shall be entitled to the free use of the United States mails in the same manner as the Cooperation of executive departments. executive departments of the Government. The Corporation with the consent of any Federal reserve bank or of any board, commission, independent establishment, or executive department of the Government, including any field service thereof, may avail itself of the use of information, services, and facilities thereof in carrying out the provisions of this section. “(l)Insurance of deposits, member banks; effective July 1, 1934. *Post*, pp. 969, 970. President may fix earlier date. Nonmember banks. Effective on and after July 1, 1934 (thus affording ample time for examination and preparation), unless the President shall by proclamation fix an earlier date, the Corporation shall insure as hereinafter provided the deposits of all member banks, and on and after such date and until July 1, 1936, of all nonmember banks, which are class A stockholders of the Corporation. Notwithstanding Corporation as receiver of closed national bank. any other provision of law, whenever any national bank which is a class A stockholder of the Corporation shall have been closed by action of its board of directors or by the Comptroller of the Currency, as the case may be, on account of inability to meet the demands of its depositors, the Comptroller of the Currency shall Organization of new national bank. appoint the Corporation receiver for such bank. As soon as possible thereafter the Corporation shall organize a new national bank to assume the insured deposit liabilities of such closed bank, to receive new deposits and otherwise to perform temporarily the func-173tions provided for it in this paragraph. For the purposes of this “Insured deposit liability”, construed. subsection, the term ‘insured deposit liability’ shall mean with respect to the owner of any claim arising out of a deposit liability of such closed bank the following percentages of the net amount due to such owner by such closed bank on account of deposit liabilities: Percentages. 100 per centum of such net amount not exceeding $10,000; and 75 per centum of the amount, if any, by which such net amount exceeds $10,000 but does not exceed $50,000; and 50 per centum of the amount, if any, by which such net amount exceeds $50,000: *Provided*, That, in determining the amount due to such owner for *Proviso*. Determination of amounts for fixing percentages. the purpose of fixing such percentage, there shall be added together all net amounts due to such owner in the same capacity or the same right, on account of deposits, regardless of whether such deposits be maintained in his name or in the names of others for his benefit. “Insured deposit liabilities,” construed. For the purposes of this subsection, the term ‘insured deposit liabilities’ shall mean the aggregate amount of all such insured deposit liabilities of such closed bank. The Corporation shall determine as Determination of amounts due depositors. expeditiously as possible the net amounts due to depositors of the closed bank and shall make available to the new bank an amount Amounts made available. equal to the insured deposit liabilities of such closed bank, whereupon such new bank shall assume the insured deposit liability of such closed bank to each of its depositors, and the Corporation shall be Corporation subrogated to rights against closed bank. Entitlement to dividends. subrogated to all rights against the closed bank of the owners of such deposits and shall be entitled to receive the same dividends from the proceeds of the assets of such closed bank as would have been payable to each such depositor until such dividends shall equal the insured deposit liability to such depositor assumed by the new bank, whereupon all further dividends shall be payable to such depositor. Payments to be made in cash. Of the amount thus made available by the Corporation to the new bank, such portion shall be paid to it in cash as may be necessary to enable it to meet immediate cash demands and the remainder shall Credits. be credited to it on the books of the Corporation subject to withdrawal on demand and shall bear interest at the rate of 3 per centum Interest rate. per annum until withdrawn. The new bank may, with the Acceptance of new deposits. approval of the Corporation, accept new deposits, which, together with all amounts made available to the new bank by the Corporation, Investments authorized. shall be kept on hand in cash, invested in direct obligations of the United States, or deposited with the Corporation or with a Federal reserve bank. Such new bank shall maintain on deposit with the Maintenance of reserve with reserve bank. Federal reserve bank of its district the reserves required by law of member banks but shall not be required to subscribe for stock of the Subscription for stock not required. Federal reserve bank until its own capital stock has been subscribed and paid for in the manner hereinafter provided. The articles of Articles of association and organization. association and organization certificate of such new bank may be executed by such representatives of the Corporation as it may designate; the new bank shall not be required to have any directors at Management of new bank. the time of its organization, but shall be managed by an executive officer to be designated by the Corporation; and no capital stock need Capital stock payments by corporation. be paid in by the Corporation; but in other respects such bank shall be organized in accordance with the existing provisions of law relating to the organization of national banks; and, until the requisite Transaction of business. amount of capital stock for such bank has been subscribed and paid for in the manner hereinafter provided, such bank shall transact no business except that authorized by this subsection and such business as may be incidental to its organization. When in the judgment Offers of capital stock of new bank. of the Corporation it is desirable to do so, the Corporation shall offer capital stock of the new bank for sale on such terms and conditions as the Corporation shall deem advisable, in an amount sufficient Amount. in the opinion of the Corporation to make possible the conduct 174[R. S., sec. 5138, p. 993](/us/rs/s5138/p993). [U.S.C., p. 261](/us/usc/p261). of the business of the new bank on a sound basis, but in no event less than that required by section 5138 of the Revised Statutes, as amended (U.S.C., title 12, sec. 51), for the organization of a national bank in Preemption right of stockholders. the place where such new bank is located, giving the stockholders of the closed bank the first opportunity to purchase such stock. Upon Certificate to commence business; when to issue. proof that an adequate amount of capital stock of the new bank has been subscribed and paid for in cash by subscribers satisfactory to the Comptroller of the Currency, he shall issue to such bank a certificate Management thereafter. of authority to commence business and thereafter it shall be managed by directors elected by its own shareholders and may exercise all of the Transfer of business, when stock subscription inadequate. powers granted by law to national banking associations. If an adequate amount of capital for such new bank is not subscribed and paid in, the Corporation may offer to transfer its business to any other banking institution in the same place which will take over its assets, assume its liabilities, and pay to the Corporation for such business Voluntary liquidation of new bank when not transferred. such amount as the Corporation may deem adequate. Unless the capital stock of the new bank is sole! or its assets acquired and its liabilities assumed by another banking institution, in the manner herein prescribed, within two years from the date of its organization, the Corporation shall place the new bank in voluntary liquidation Deposit insurance account. and wind up its affairs. The Corporation shall open on its books a deposit insurance account and, as soon as possible after taking possession Duty of corporation to open. of any closed national bank, the Corporation shall make an estimate of the amount which will be available from all sources for application in satisfaction of the portion of the claims of depositors Debits to. to which it has been subrogated and shall debit to such deposit insurance account the excess, if any, of the amount made available by the Corporation to the new bank for depositors over and above the Additional duties of corporation; liquidation of closed bank. amount of such estimate. It shall be the duty of the Corporation to realize upon the assets of such closed bank; having due regard to the condition of credit in the district in which such closed bank is located; to enforce the individual liability of the stockholders and directors thereof; and to wind up the affairs of such closed bank in conformity with the provisions of law relating to the liquidation of closed national banks, except as herein otherwise provided, retaining for its own account such portion of the amount realized from such liquidation as it shall be entitled to receive on account of its subrogation to the claims of depositors and paying to depositors and other creditors the amount available for distribution to them, after deducting therefrom their share of the costs of the liquidation of the closed bank. If the total amount realized by the Corporation on account of its subrogation to the claims of depositors be less than the amount of the estimate hereinabove provided for, the deposit insurance account shall be charged with the deficiency and, if the total amount so realized shall exceed the amount of such estimate, Powers and rights of corporation as receiver. such account shall be credited with such excess. With respect to such closed national banks, the Corporation shall have all the rights, powers, and privileges now possessed by or hereafter given receivers of insolvent national banks and shall be subject to the obligations and penalties not inconsistent with the provisions of this paragraph to which such receivers are now or may hereafter become subject. Closed State member banks. “Whenever any State member bank which is a class A stockholder of the Corporation shall have been closed by action of its board of directors or by the appropriate State authority, as the case may be, on account of inability to meet the demands of its depositors, the Corporation as receiver of. Corporation shall accept appointment as receiver thereof, if such appointment be tendered by the appropriate State authority and be 175 authorized or permitted by State law. Thereupon the Corporation Organization of new bank. shall organize a new national bank, in accordance with the provisions of this subsection, to assume the insured deposit liabilities of such Purpose. closed State member bank, to receive new deposits and otherwise to perform temporarily the functions provided for in this subsection. Upon satisfactory recognition of the right of the Corporation to Funds to cover insured deposit liabilities made available by Corporation when right to dividends recognized. receive dividends on the same basis as in the case of a closed national bank under this subsection, such recognition being accorded by State law, by allowance of claims by the appropriate State authority, by assignment of claims by depositors, or by 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 insured deposit liabilities of such closed State member bank; and the Management of new bank. Corporation and such new national bank shall perform all of the functions and duties and shall have all the rights and privileges with respect to such State member bank and the depositors thereof which are prescribed by this subsection with respect to closed national banks holding class A stock in the Corporation: *Provided*, That the rights *Provisos*. Determination of rights of depositors, etc. of depositors and other creditors of such State member bank shall be determined in accordance with the applicable provisions of State law: *And provided further*, That, with respect to such State member Powers, etc., of Corporation under State law. bank, the Corporation shall possess the powers and privileges provided by State law with respect to a receiver of such State member bank, except in so far as the same are in conflict with the provisions of this subsection. “Whenever any State member bank which is a class A stockholder Organization of new bank, when appointment of Corporation as receiver unlawful. of the Corporation shall have been closed by action of its board of directors or by the appropriate State authority, as the case may be, on account of inability to meet the demands of its depositors, and the applicable State law does not permit the appointment of the Corporation as receiver of such bank, the Corporation shall organize a new national bank, in accordance with the provisions of this subsection, Functions. to assume the insured deposit liabilities of such closed State member bank, to receive new deposits, and otherwise to perform temporarily the functions provided for in this subsection. Upon satisfactory Funds to be made available when right of Corporation to receive dividends recognized. recognition of the right of the Corporation to receive dividends on the same basis as in the case of a closed national bank under this subsection, such recognition being accorded by State law, by allowance of claims by the appropriate State authority, by assignment of claims by depositors, or by any other effective method, the Corporation shall make available to such new bank, in accordance with the provisions of this subsection, the amount of insured deposit liabilities as to which such recognition has been accorded; and such Assumption of insured deposit liabilities. new bank shall assume such insured deposit liabilities and shall in other respects comply with the provisions of this subsection respecting new banks organized to assume insured deposit liabilities of closed national banks. In so far as possible in view of the applicable provisions of State law, the Corporation shall proceed with respect to the receiver of such closed bank and with respect to the new bank organized to assume its insured deposit liabilities in the manner prescribed by this subsection with respect to closed national banks and new banks organized to assume their insured deposit liabilities; except that the Corporation shall have none of the powers, duties, or responsibilities of a receiver with respect to the winding up of the affairs of such closed State member bank. The Corporation, in its discretion, however, may purchase and liquidate any or all of the assets of such bank. 176 Levy on class A stockholders. “Whenever the net debit balance of the deposit insurance account of the Corporation shall equal or exceed one fourth of 1 per centum of the total deposit liabilities of all class A stockholders as of the date of the last preceding call report, the Corporation shall levy upon such stockholders an assessment equal to one fourth of 1 per Credit to insurance account. centum of their total deposit liabilities and shall credit the amount collected from such assessment to such deposit insurance account. Dividend payment by bank denied until assessment paid. No bank which is a holder of class A stock shall pay any dividends until all assessments levied upon it by the Corporation shall have been paid in full; and any director or officer of any such bank who Penalty provision. participates in the declaration or payment of any such dividend may, upon conviction, be fined not more than $1,000, or imprisoned for not more than one year, or both. “Receiver”, construed. “The term ‘receiver’ as used in this section shall mean a receiver, liquidating agent, or conservator of a national bank, and a receiver, liquidating agent, conservator, commission, person, or other agency charged by State law with the responsibility and the duty of winding up the affairs of an insolvent State member bank. “National bank.” “For the purposes of this section only, the term ‘national bank’ shall include all national banking associations and all banks, banking associations, trust companies, savings banks, and other banking institutions located in the District of Columbia which are members of “State member bank.” the Federal Reserve System; and the term ‘State member bank’ shall include all State banks, banking associations, trust companies, savings banks, and other banking institutions organized under the laws of any State, which are members of the Federal Reserve System. Amounts of deposits, payable in foreign country excluded in determining total deposit liabilities. “In any determination of the insured deposit liabilities of any closed bank or of the total deposit liabilities of any bank which is a holder of class A stock of the Corporation, or a member of the Fund provided for in subsection (y), for the purposes of this section, there shall be excluded the amounts of all deposits of such bank which are payable only at an office thereof located in a foreign country. Rules, etc., by Corporation. “The Corporation may make such rules, regulations, and contracts as it may deem necessary in order to carry out the provisions of this section. Deposit or investment of money by Corporation. “Money of the Corporation not otherwise employed shall be invested in securities of the Government of the United States, except that for temporary periods, in the discretion of the board of directors, funds of the Corporation may be deposited in any Federal reserve bank or with the Treasurer of the United States. Designation of Corporation as public moneys depositary. When designated for that purpose by the Secretary of the Treasury, the Corporation shall be a depositary of public moneys, except receipts from customs, under such regulations as may be prescribed by the said Secretary, and may also be employed as a financial agent of the Government. It shall perform all such reasonable duties as depositary of public moneys and financial agent of the Government as may be required of it. “(m) Authority of Corporation to make loans to national banks, etc. Nothing herein contained shall be construed to prevent the Corporation from making loans to national banks closed by action of the Comptroller of the Currency, or by vote of their directors, or to State member banks closed by action of the appropriate State authorities, or by vote of their directors, or from entering into negotiations to secure the reopening of such banks. “(n) Sale of assets of insolvent banks to Corporation. Permission required. Receivers or liquidators of member banks which are now or may hereafter become insolvent or suspended shall be entitled to offer the assets of such banks for sale to the Corporation or as security for loans from the Corporation, upon receiving permission from the appropriate State authority in accordance with express pro-177visions of State law in the case of State member banks, or from the Comptroller of the Currency in the case of national banks. The proceeds of every such sale or loan shall be utilized for the same Utilization of proceeds. purposes and in the same manner as other funds realized from the liquidation of the assets of such banks. The Comptroller of the Payment of dividends on proved claims. [R.S., sec. 5235, p. 1012](/us/rs/s5235/p1012). [U.S.C., p. 272](/us/usc/p272). Currency may, in his discretion, pay dividends on proved claims at any time after the expiration of the period of advertisement made pursuant to section 5235 of the Revised Statutes (U.S.C., title 12, sec. 193), and no liability shall attach to the Comptroller of the Currency or to the receiver of any national bank by reason of any such payment for failure to pay dividends to a claimant whose claim is not proved at the time of any such payment. “(o) The Corporation is authorized and empowered to issue and Amount of outstanding corporate obligations. Redeemable before maturity optional. to have outstanding at any one time in an amount aggregating not more than three times the amount of its capital, its notes, debentures, bonds, or other such obligations, to be redeemable at the option of the Corporation before maturity in such manner as may be stipulated in such obligations, and to bear such rate or rates of interest, and to mature at such time or times as may be determined by the Corporation: *Provided*, That the Corporation may sell on a discount *Proviso*. Sale of short-term obligations at discount. Security. basis short-term obligations payable at maturity without interest. The notes, debentures, bonds, and other such obligations of the Corporation may be secured by assets of the Corporation in such manner as shall be prescribed by its board of directors. Such obligations may be offered for sale at such price or prices as the Corporation may determine. “(p) All notes, debentures, bonds, or other such obligations issued Corporate obligations, tax exemption. Exception, State and inheritance taxes. by the Corporation shall be exempt, both as to principal and interest, from all taxation (except estate and inheritance taxes) now or hereafter imposed by the United States, by any Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority. The Corporation, including its franchise, its capital, Corporation, including franchise, exempt. reserves, and surplus, and its income, shall be exempt from all taxation now or hereafter imposed by the United States, by any Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority, except that any real property of the Corporation shall be subject to State, Territorial, county, municipal or local taxation to the same extent according to its value as other real property is taxed. “(q) In order that the Corporation may be supplied with such Preparation of note, debenture, etc., forms. forms of notes, debentures, bonds, or other such obligations as it may need for issuance under this Act, the Secretary of the Treasury is authorized to prepare such forms as shall be suitable and approved by the Corporation, to be held in the Treasury subject to delivery, upon Custody of plates, dies, etc. order of the Corporation. The engraved plates, dies, bed pieces, and other material executed in connection therewith shall remain in the Reimbursement for expenses. custody of the Secretary of the Treasury. The Corporation shall reimburse the Secretary of the Treasury for any expenses incurred in the preparation, custody, and delivery of such notes, debentures, bonds, or other such obligations. “(r) The Corporation shall annually make a report of its operations Annual report of Corporation. to the Congress as soon as practicable after the 1st day of January in each year. “(s) Whoever, for the purpose of obtaining any loan from the Penalty provisions. False statement. Corporation, or any extension or renewal thereof, or the acceptance, release, or substitution of security therefor, or for the purpose of inducing the Corporation to purchase any assets, or for the purpose of influencing in any way the action of the Corporation under this sec-178tion, Willfull overvaluation of any security. makes any statement, knowing it to be false, or willfully over-values any security, shall be punished by a fine of not more than $5,000, or by imprisonment for not more than two years, or both. “(t) Counterfeit of corporate obligation, etc. Whoever
(1)falsely makes, forges, or counterfeits any obligation or coupon, in imitation of or purporting to be an obligation or coupon issued by the Corporation, or
(2)passes, utters, or publishes, or attempts to pass, utter, or publish, any false, forged, or counterfeited obligation or coupon purporting to have been issued by the Corporation, knowing the same to be false, forged, or counterfeited, or
(3)falsely alters any obligation or coupon issued or purporting to have been issued by the Corporation, or
(4)passes, utters, or publishes, or attempts to pass, utter, or publish, as true, any falsely altered or spurious obligation or coupon, issued or purporting to have been issued by the Corporation, knowing the same to be falsely altered or spurious, shall be punished by a fine of not more than $10,000, or by imprisonment for not more than five years, or both. “(u) Embezzlement, etc. Whoever, being connected in any capacity with the Corporation,
(1)embezzles, abstracts, purloins, or willfully misapplies any moneys, funds, securities, or other things of value, whether belonging to it or pledged, or otherwise intrusted to it, or
(2)with intent to defraud the Corporation or any other body, politic or corporate, or any individual, or to deceive any officer, auditor, or examiner of the Corporation, makes any false entry in any book, report, or statement of or to the Corporation, or without being duly authorized draws any order or issues, puts forth, or assigns any note, debenture, bond, or other such obligation, or draft, bill of exchange, mortgage, judgment, or decree thereof, shall be punished by a fine of not more than $10,000, or by imprisonment for not more than five years, or both. “(v) Term “Federal Deposit Insurance Corporation.” Exclusive use. False advertising. *Post*, p. 970. No individual, association, partnership, or corporation shall use the words ‘Federal Deposit Insurance Corporation’, or a combination or any three of these four words, as the name or a part thereof under which he or it shall do business. No individual, association, partnership, or corporation shall advertise or otherwise represent falsely by any device whatsoever that his or its deposit liabilities are insured or in anywise guaranteed by the Federal Deposit Insurance Corporation, or by the Government of the United States, or by any instrumentality thereof; and no class A stockholder of the Federal Deposit Insurance Corporation shall advertise or otherwise represent falsely by any device whatsoever the extent to which or the manner in which its deposit liabilities are Penalty for violation. insured by the Federal Deposit Insurance Corporation. Every individual, partnership, association, or corporation violating this subsection shall be punished by a fine of not exceeding $1,000, or by imprisonment not exceeding one year, or both. “(w) Criminal Code of United States. Vol. 35, p. 1108. [U.S.C., p. 475](/us/usc/p475). Applicable to corporate contracts and agreements. The provisions of sections 112, 113, 114, 115, 116, and 117 of the Criminal Code of the United States (U.S.C., title 18, ch. 5, secs. 202 to 207, inclusive), in so far as applicable, are extended to apply to contracts or agreements with the Corporation under this section, which for the purposes hereof shall be held to include loans, advances, extensions, and renewals thereof, and acceptances, releases, and substitutions of security therefor, purchases or sales of assets, and all contracts and agreements pertaining to the same. “(x) Secret Service Division, Treasury Department. Detection, etc., of persons violating. The Secret Service Division of the Treasury Department is authorized to detect, arrest, and deliver into the custody of the United States marshal having jurisdiction any person committing any of the offenses punishable under this section. 179 “(y) The Corporation shall open on its books a Temporary Federal Temporary Federal Deposit Insurance Fund. To be opened on books of Corporation, operative January 1, 1934. *Post*, p. 969. Deposit Insurance Fund (hereinafter referred to as the ‘Fund’), which shall become operative on January 1, 1934, unless the President shall by proclamation fix an earlier date, and it shall be the duty of the Corporation to insure deposits as hereinafter provided until July 1, 1934. “Each member bank licensed before January 1, 1934, by the Secretary Membership or Fund. of the Treasury pursuant to the authority vested in him by the Executive order of the President issued March 10, 1933, shall, on or Executive Order number 6073. before January 1, 1934, become a member of the Fund; each member bank so licensed after such date, and each State bank trust company or mutual savings bank (referred to in this subsection as ‘State bank’, *Post*, p. 971. which term shall also include all banking institutions located in the District of Columbia) which becomes a member of the Federal Reserve System on or after such date, shall, upon being so licensed or so admitted to membership, become a member of the Fund; and State banks not members of reserve system. any State bank which is not a member of the Federal Reserve System, with the approval of the authority having supervision of such State bank and certification to the Corporation by such authority that such State bank is in solvent condition, shall, after examination by, and with the approval of, the Corporation, be entitled to become a member of the Fund and to the privileges of this subsection upon agreeing to comply with the requirements thereof and upon paying to the Corporation an amount equal to the amount that would be required of it under this subsection if it were a member bank. The Corporation is authorized to prescribe rules and regulations Examination rules, etc., to be prescribed. for the further examination of such State bank, and to fix the compensation of examiners employed to make examinations of State banks. “Each member of the Fund shall file with the Corporation on or Certified statement by Fund members. before the date of its admission a certified statement under oath showing, as of the fifteenth day of the month preceding the month in which, it was so admitted, the number of its depositors and the Contents. total amount of its deposits which are eligible for insurance under Payments to Corporation. this subsection, and shall pay to the Corporation an amount equal to one-half of 1 per centum of the total amount of the deposits so certified. One-half of such payment shall be paid in full at the Manner of making. time of the admission of such member to the Fund, and the remainder of such payment shall be subject to call from time to time by the board of directors of the Corporation. Within a reasonable time Similar statement, as of June 15, 1934, required. *Post*, p. 969. fixed by the Corporation each such member shall file a similar statement showing, as of June 15, 1934, the number of its depositors and the total amount of its deposits which are eligible for such insurance and shall pay to the Corporation in the same manner an amount equal to one-half of 1 per centum of the increase, if any, in the total amount of such deposits since the date covered by the statement filed upon its admission to membership in the fund. “If at any time prior to July 1, 1934, the Corporation requires Additional assessments authorized. *Post*, p. 969. additional funds with which to meet its obligations under this subsection, each member of the Fund shall be subject to one additional assessment only in an amount not exceeding the total amount Amount. theretofore paid to the Corporation by such member. “If any member of the Fund shall be closed on or before June 30, Payment of insured deposit liabilities, if Fund member closes before June 30, 1934. *Ante*, p. 172. *Post*, p. 969. Amount to any depositor. 1934, on account of inability to meet its deposit liabilities, the Corporation shall proceed in accordance with the provisions of subsection
(1)of this section to pay the insured deposit liabilities of such member; except that the Corporation shall pay not more than $2,500 on account of the net approved claim of the owner of any deposit. 180Application of subsection (1). *Post*, p. 969. The provisions of such subsection
(1)relating to State member banks shall be extended for the purposes of this subsection to members of the Fund which are not members of the Federal Reserve System; and the provisions of this subsection shall apply only to deposits of members of the Fund which have been made available since March 10, 1933, for withdrawal in the usual course of the banking business. Balance of Fund, July 1, 1934. *Post*, p. 970. “Before July 1, 1934, the Corporation shall make an estimate of the balance, if any, which will remain in the Fund after providing for all liabilities of the Fund, including expenses of operation thereof under this subsection and allowing for anticipated recoveries. Refunds to members. The Corporation shall refund such estimated balance, on such basis as the Corporation shall find to be equitable, to the members of the Fund other than those which have been closed prior to July 1, 1934. Subscription for class A stock, State bank member of Fund. “Each State bank which is a member of the Fund, in order to obtain the benefits of this section after July 1, 1934, shall, on or before such date, subscribe and pay for the same amount of class A stock of the Corporation as it would be required to subscribe and pay for upon becoming a member bank, or if such State bank is Deposit, if subscription unlawful. not permitted by the laws under which it was organized to purchase such stock, it shall deposit with the Corporation an amount equal to the amount it would have been required to pay in on account of a subscription to such stock; and thereafter such State bank shall be entitled to such benefits until July 1, 1936. Purpose of section. “It is not the purpose of this section to discriminate, in any manner, against State nonmember, and in favor of, national or member banks; but the purpose is to provide all banks with the same opportunity to obtain and enjoy the benefits of this section. No bank shall be discriminated against because its capital stock is less than the amount required for eligibility for admission into the Federal Reserve System.” " Sec. 9. Vol. 39, p. 753, Vol. 47, p. 160. [U.S.C., p. 282, Supp. VI, p. 136](/us/usc/p282/136). *Post*, pp. 348, 646. The eighth paragraph of section 13 of the Federal Reserve Act, as amended (U.S.C., title 12, sec. 347; Supp. VI, title 12, sec. 347), is amended to read as follows: " Advances to member banks on their notes. “Any Federal reserve bank may make advances for periods not exceeding fifteen days to its member banks on their promissory notes secured by the deposit or pledge of bonds, notes, certificates of indebtedness, or Treasury bills of the United States, or by the Debentures of Federal intermediate credit banks. Vol. 42, p. 1479. [U.S.C., p. 282](/us/usc/p282). deposit or pledge of debentures or other such obligations of Federal intermediate credit banks which are eligible for purchase by Federal reserve banks under section 13
(a)of this Act; and any Federal reserve bank may make advances for periods not exceeding ninety days to its member banks on their promissory notes secured by such notes, drafts, bills of exchange, or bankers’ acceptances as are eligible for rediscount or for purchase by Federal reserve banks under Rates of advances. Determined by Reserve Board. the provisions of this Act. All such advances shall be made at rates to be established by such Federal reserve banks, such rates to be subject to the review and determination of the Federal Reserve Board. Advances deemed immediately payable, when outstanding loans increased for stock, etc., purchases. If any member bank to which any such advance has been made shall, during the life or continuance of such advance, and despite an official warning of the reserve bank of the district or of the Federal Reserve Board to the contrary, increase its outstanding loans secured by collateral in the form of stocks, bonds, debentures, or other such obligations, or loans made to members of any organized stock exchange, investment house, or dealer in securities, upon any obligation, note, or bill, secured or unsecured, for the purpose of purchasing and/or carrying stocks, bonds, or other investment securities (except obligations of the United States) such advance shall be deemed immediately due and payable, and such member 181 bank shall be ineligible as a borrower at the reserve bank of the Ineligible as borrower at reserve bank thereafter. *Proviso*. Temporary carrying or clearance loans. district under the provisions of this paragraph for such period as the Federal Reserve Board shall determine: *Provided*, That no temporary carrying or clearance loans made solely for the purpose of facilitating the purchase or delivery of securities offered for public subscription shall be included in the loans referred to in this paragraph.” " Sec. 10. Section 14 of the Federal Reserve Act, as amended (U. S. C., Vol. 38, p. 265. [U.S.C., p. 282](/us/usc/p282). title 12, secs. 353–358), is amended by adding at the end thereof the following new paragraph: " “(g) The Federal Reserve Board shall exercise special supervision Supervision by Board, foreign transactions of reserve bank. over all relationships and transactions of any kind entered into by any Federal reserve bank with any foreign bank or banker, or with any group of foreign banks or bankers, and all such relationships and transactions shall be subject to such regulations, conditions, and Regulations. limitations as the Board may prescribe. No officer or other representative Permission to conduct foreign negotiations. of any Federal reserve bank shall conduct negotiations of any kind with the officers or representatives of any foreign bank or banker without first obtaining the permission of the Federal Reserve Board. The Federal Reserve Board shall have the right, in Right of Board to representation during conferences. its discretion, to be represented in any conference or negotiations by such representative or representatives as the Board may designate. A full report of all conferences or negotiations, and all understandings Report to be filed. or agreements arrived at or transactions agreed upon, and all other material facts appertaining to such conferences or negotiations, shall be filed with the Federal Reserve Board in writing by a duly authorized officer of each Federal reserve bank which shall have participated in such conferences or negotiations.” " Sec. 11.
(a)Section 19 of the Federal Reserve Act, as amended Vol. 38, p. 270. [U.S.C., pp. 268, 284, 287; Supp. VI, p. 138](/us/usc/pp268/284/287/138). (U.S.C., title 12, secs. 142, 374, 461–466; Supp. VI, title 12, sec. 462a), is amended by inserting after the sixth paragraph thereof the following new paragraph: " “No member bank shall act as the medium or agent of any nonbanking Member bank as agent in making loans to stock brokers prohibited. corporation, partnership, association, business trust, or individual in making loans on the security of stocks, bonds, and other investment securities to brokers or dealers in stocks, bonds, and other investment securities. Every violation of this provision by any Penalty provision. member bank shall be punishable by a fine of not more than $100 per day during the continuance of such violation; and such fine may be collected, by suit or otherwise, by the Federal reserve bank of the district in which such member bank is located.” "
(b)Such section 19 of the Federal Reserve Act, as amended, is Vol. 38, p. 270. further amended by adding at the end thereof the following new paragraphs: " “No member bank shall, directly or indirectly by any device whatsoever, Interest payments on demand deposits prohibited. *Provisos*. Prior contracts. pay any interest on any deposit which is payable on demand: *Provided*, That nothing herein contained shall be construed as prohibiting the payment of interest in accordance with the terms of any certificate of deposit or other contract heretofore entered into in good faith which is in force on the date of the enactment of this paragraph; but no such certificate of deposit or other contract shall be renewed or extended unless it shall be modified to conform to this paragraph, and every member bank shall take such action as may be necessary to conform to this paragraph as soon as possible consistently with its contractual obligations: *Provided, however*, That this Application to deposit payable in foreign country. paragraph shall not apply to any deposit of such bank which is 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 Public funds. to any deposit of public funds made by or on behalf of any State, 182 county, school district, or other subdivision or municipality, with respect to which payment of interest is required under State law. Regulation of interest rate, time deposits. “The Federal Reserve Board shall from time to time limit by regulation the rate of interest which may be paid by member banks on time deposits, and may prescribe different rates for such payment on time and savings deposits having different maturities or subject to different conditions respecting withdrawal or repayment or subject to different conditions by reason of different locations. Payment before maturity prohibited. No member bank shall pay any time deposit before its maturity, or waive any requirement of notice before payment of any savings deposit except as to all savings deposits having the same requirement.” "
(c)Postal savings depositories. Section 8 of the Act entitled “An Act to establish postal savings depositories for depositing savings at interest with the security of the Government for repayment thereof, and for other Vol. 36, p. 816. [U.S.C., p. 1281](/us/usc/p1281). purposes”, approved June 25, 1910, as amended (U.S.C., title 39, sec. 758), is amended by striking out the first sentence thereof and Withdrawals on 60 days’ notice. inserting in lieu thereof the following: “Any depositor may withdraw the whole or any part of the funds deposited to his or her credit with the accrued interest only on notice given sixty days in advance and under such regulations as the Postmaster General may prescribe; but withdrawal of any part of such funds may be On demand. made upon demand, but no interest shall be paid on any funds so withdrawn except interest accrued to the date of enactment of the Banking Act of 1933: *Provided*, That Postal Savings depositories *Proviso*. Deposits with member banks. may deposit funds in member banks on time under regulations to be prescribed by the Postmaster General. ”
(d)Vol. 36, p. 816; Vol. 39, p. 159. [U.S.C., p. 1281](/us/usc/p1281). Deposit of funds in banks. The second sentence of section 9 of the Act entitled “An Act to establish postal savings depositories for depositing savings at interest with the security of the Government for repayment thereof, and for other purposes”, approved June 25, 1910, as amended (U.S.C., title 39, sec. 759), is amended by striking out the period at the end thereof Security, when deposits insured. *Ante*, p. 168. and inserting in lieu thereof a colon and the following: “ *Provided*, That no such security shall be required in case of such part of the deposits as are insured under section 12B of the Federal Reserve Act, as amended. ” Sec. 12. Vol. 38, p. 272. [U.S.C., pp. 284, 288, 291–292; Supp. VI, p. 140](/us/usc/pp284/288/291–292/140). Section 22 of the Federal Reserve Act, as amended (U.S.C., title 12, secs. 375, 376, 503, 593–595; Supp. VI, title 12, sec. 593), is further amended by adding at the end thereof the following new paragraph: " “(g) Loans to executive officer prohibited. No executive officer of any member bank shall borrow from or otherwise become indebted to any member bank of which he is an executive officer, and no member bank shall make any loan or extend credit in any other manner to any of its own executive officers: *Proviso*. Renewal of loans made prior hereto. *Provided*, That loans heretofore made to any such officer may be renewed or extended not more than two years from the date this paragraph takes effect, if in accord with sound banking practice. Report by officer, when indebted to other member bank. If any executive officer of any member bank borrow from or if he be or become indebted to any bank other than a member bank of which he is an executive officer, he shall make a written report to the chairman of the board of directors of the member bank of which he is an executive officer, stating the date and amount of such loan or indebtedness, the security therefor, and the purpose for which Penalty provision. the proceeds have been or are to be used. Any executive officer of any member bank violating the provisions of this paragraph shall be deemed guilty of a misdemeanor and shall be imprisoned not exceeding one year, or fined not more than $5,000, or both; and any member bank violating the provisions of this paragraph shall be 183 fined not more than $10,000, and may be fined a further sum equal to the amount so loaned or credit so extended.” " Sec. 13. The Federal Reserve Act, as amended, is amended by Vol. 38, p. 273. [U.S.C., pp. 263, 283; Supp. VI, p. 137](/us/usc/pp263/283/137). inserting between sections 23 and 24 thereof (U.S.C., title 12, secs. 64 and 371; Supp. VI, title 12, sec. 371) the following new section: " “Sec. 23A. No member bank shall
(1)make any loan or any Loans, investments, etc., prohibited by member banks to affiliates. extension of credit to, or purchase securities under repurchase agreement from, any of its affiliates, or
(2)invest any of its funds in the capital stock, bonds, debentures, or other such obligations of any such affiliate, or
(3)accept the capital stock, bonds, debentures, or other such obligations of any such affiliate as collateral security for advances made to any person, partnership, association, or corporation, if, in the case of any such affiliate, the aggregate amount of Percentage permitted. such loans, extensions of credit, repurchase agreements, investments, and advances against such collateral security will exceed 10 per centum of the capital stock and surplus of such member bank, or if, in the case of all such affiliates, the aggregate amount of such loans, extensions of credits, repurchase agreements, investments, and advances against such collateral security will exceed 20 per centum of the capital stock and surplus of such member bank. “Within the foregoing limitations, each loan or extension of credit Security. of any kind or character to an affiliate shall be secured by collateral in the form of stocks, bonds, debentures, or other such obligations having a market value at the time of making the loan or extension of credit of at least 20 per centum more than the amount of the loan or extension of credit, or of at least 10 per centum more than the amount of the loan or extension of credit if it is secured by obligations of any State, or of any political subdivision or agency thereof: *Provided*, That the provisions of this paragraph shall not *Proviso*. United States obligations, etc. apply to loans or extensions of credit secured by obligations of the United States Government, the Federal intermediate credit banks, the Federal land banks, the Federal Home Loan Banks, or the Home Owners’ Loan Corporation, or by such notes, drafts, bills of exchange, or bankers’ acceptances as are eligible for rediscount or for purchase by Federal reserve banks. A loan or extension of credit to a Loans to officers of affiliate. director officer, clerk, or other employee or any representative of any such affiliate shall be deemed a loan to the affiliate to the extent that the proceeds of such loan are used for the benefit of, or transferred to, the affiliate. “For the purposes of this section the term ‘affiliate’ shall include “Affiliate”, construed. holding company affiliates as well as other affiliates, and the provisions of this section shall not apply to any affiliate
(1)engaged Affiliates not included. solely in holding the bank premises of the member bank with which it is affiliated,
(2)engaged solely in conducting a safe-deposit business or the business of an agricultural credit corporation or livestock loan company,
(3)in the capital stock of which a national banking association is authorized to invest pursuant to section 25 of the Vol. 38, p. 273. [U.S.C., p. 292](/us/usc/p292). Federal Reserve Act, as amended,
(4)organized under section 25
(a)of the Federal Reserve Act, as amended, or
(5)engaged solely in holding obligations of the United States Government, the Federal intermediate credit banks, the Federal land banks, the Federal Home Loan Banks, or the Home Owners’ Loan Corporation; but as to any such affiliate, member banks shall continue to be subject to other provisions of law applicable to loans by such banks and investments by such banks in stocks, bonds, debentures, or other such obligations.” " Sec. 14. The Federal Reserve Act, as amended, is amended by Vol. 38, p. 273. [U.S.C., pp. 283, 292; Supp. VI. p. 137](/us/usc/pp283/292/137). inserting between section 24 and section 25 thereof (U.S.C., title 12, 184 secs. 371 and 601–605; Supp. VI, title 12, sec. 371) the following new section: " “Sec. 24A. Investments prohibited to national and State member banks. Hereafter no national bank, without the approval of the Comptroller of the Currency, and no State member bank, without the approval of the Federal Reserve Board, shall
(1)invest in bank premises, or in the stock, bonds, debentures, or other such obligations of any corporation holding the premises of such bank or
(2)make loans to or upon the security of the stock of any such corporation, if the aggregate of all such investments and loans will exceed the amount of the capital stock of such bank.” " Sec. 15. Vol. 41, p. 1145. [U.S.C., p. 293–296](/us/usc/p293–296). The Federal Reserve Act, as amended, is further amended by inserting after section 25
(a)thereof (U.S.C., title 12, sec. 611–631) the following new section: " “Sec. 25. (b)Foreign branches. Suits at law, equity. Notwithstanding any other provision of law all suits of a civil nature at common law or in equity to which any corporation organized under the laws of the United States shall be a party, arising out of transactions involving international or foreign banking, or banking in a dependency or insular possession of the United States, or out of other international or foreign financial operations, either directly or through the agency, ownership, or control of branches or local institutions in dependencies or insular possessions of the United Jurisdiction of United States district courts. States or in foreign countries, shall be deemed to arise under the laws of the United States, and the district courts of the United States shall have original jurisdiction of all such suits; and any defendant Removal. in any such suit may, at any time before the trial thereof, remove such suits from a State court into the district court of the United States for the proper district by following the procedure for the removal of causes otherwise provided by law. Such removal shall not cause undue delay in the trial of such case and a case so removed shall have a place on the calendar of the United States court to which it is removed relative to that which it held on the State court from which it was removed. When Federal Reserve bank a party. “Notwithstanding any other provision of law, all suits of a civil nature at common law or in equity to which any Federal Reserve bank shall be a party shall be deemed to arise under the laws of the United States, and the district courts of the United States shall have original jurisdiction of all such suits; and any Federal Reserve bank which is a defendant in any such suit may, at any time before the trial thereof, remove such suit from a State court into the district court of the United States for the proper district by following the Attachment before Anal judgment denied. procedure for the removal of causes otherwise provided by law. No attachment or execution shall be issued against any Federal Reserve bank or its property before final judgment in any suit, action, or proceeding in any State, county, municipal, or United States court.” " Sec. 16. [R.S., sec. 5136, p. 993](/us/rs/s5136/p993). [U.S.C., p. 259; Supp. VI, p. 129](/us/rs/s259/p129). Paragraph “Seventh” of section 5136 of the Revised Statutes, as amended (U.S.C., title 12, sec. 24; Supp. VI, title 12, sec. 24), is amended to read as follows: " Corporate powers of national banking associations. “Seventh. To exercise by its board of directors or duly authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business of banking; by discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits; by buying and selling exchange, coin, and bullion; by loaning money on personal security; and by obtaining, issuing, and circulating notes according to the provisions of this title. The business of dealing in investment securities by the association shall be limited to purchasing and selling such securities without recourse, solely upon the order, and for the account of, customers, and in no case for its own account, and the association 185 shall not underwrite any issue of securities: *Provided*, That the association *Proviso*. Purchase of investment securities. may purchase for its own account investment securities under such limitations and restrictions as the Comptroller of the Currency may by regulation prescribe, but in no event
(1)shall the total Percentage permitted. amount of any issue of investment securities of any one obligor or maker purchased after this section as amended takes effect and held by the association for its own account exceed at any time 10 per centum of the total amount of such issue outstanding, but this limitation shall not apply to any such issue the total amount of which does not exceed $100,000 and does not exceed 50 per centum of the capital of the association, nor
(2)shall the total amount of the investment securities of any one obligor or maker purchased after this section as amended takes effect and held by the association for its own account exceed at any time 15 per centum of the amount of the capital stock of the association actually paid in and unimpaired and 25 per centum of its unimpaired surplus fund. As used in this section the term ‘investment “Investment securities,” construed. securities’ shall mean marketable obligations evidencing indebtedness of any person, copartnership, association, or corporation in the form of bonds, notes and/or debentures commonly known as investment securities under such further definition of the term ‘investment securities’ as may by regulation be prescribed by the Comptroller of the Currency. Except as hereinafter provided or otherwise permitted Purchase of stock shares. by law, nothing herein contained shall authorize the purchase by the association of any shares of stock of any corporation. The limitations and restrictions herein contained as to dealing in, underwriting Obligations of United States, etc. and purchasing for its own account, investment securities shall not apply to obligations of the United States, or general obligations of any State or of any political subdivision thereof, or obligations issued under authority of the Federal Farm Loan Act, as amended, or issued by the Federal Home Loan Banks or the Home Owners’ Loan Corporation: *Provided*, That in carrying on the business *Proviso*. Safe-deposit business. commonly known as the safe-deposit business the association shall not invest in the capital stock of a corporation organized under the law of any State to conduct a safe-deposit business in an amount in excess of 15 per centum of the capital stock of the association actually paid in and unimpaired and 15 per centum of its unimpaired surplus.” " The restrictions of this section as to dealing in investment securities Effective date of restrictions. shall take effect one year after the date of the approval of this Act. Sec. 17.
(a)Section 5138 of the Revised Statutes, as amended [R.S., sec. 5138, p. 993](/us/rs/s5138/p993). [U.S.C., p. 261; Supp. VI, p. 130](/us/usc/p261/130). (U.S.C., title 12, sec. 51; Supp. VI, title 12, sec. 51), is amended to read as follows: " “Sec. 5138. After this section as amended takes effect, no national Capital, national banks. Requisite amount of, on organization. banking association shall be organized with a less capital than $100,000, except that such associations with a capital of not less than $50,000 may be organized in any place the population of which does not exceed six thousand inhabitants. No such association shall be organized in a city the population of which exceeds fifty thousand persons with a capital of less than $200,000, except that in the outlying districts of such a city where the State laws permit the organization of State banks with a capital of $100,000 or less, national banking associations now organized or hereafter organized may, with the approval of the Comptroller of the Currency, have a capital of not less than $100,000.” "
(b)The tenth paragraph of section 9 of the Federal Reserve Act, Vol. 40, p. 234. [U.S.C., p. 280](/us/usc/p280). as amended (U.S.C., title 12, sec. 329), is amended to read as follows: " “No applying bank shall be admitted to membership in a Federal Admission to membership. Paid-up capital required. reserve bank unless it possesses a paid-up unimpaired capital suffi-186cient to entitle it to become a national banking association in the place where it is situated under the provisions of the National *Proviso*. State banks organized prior hereto, etc. Bank Act, as amended: *Provided*, That this paragraph shall not apply to State banks and trust companies organized prior to the date this paragraph as amended takes effect and situated in a place the population of which does not exceed three thousand inhabitants and having a capital of not less than $25,000, nor to any State bank *Ante*, p. 168. or trust company which is so situated and which, while it is entitled to the benefits of insurance under section 12B of this Act, increases its capital to not less than $25,000.” " Sec. 18. [R.S., sec. 5139, p. 993](/us/rs/s5139/p993). [U.S.C., p. 261; Supp. VI, p. 131](/us/usc/p261/131). Section 5139 of the Revised Statutes, as amended (U.S.C., title 12, sec. 52; Supp. VI, title 12, sec. 52), is amended by adding at the end thereof the following new paragraph: " Stock certificates, banking associations. Use to represent stock in other corporation prohibited. “After one year from the date of the enactment of the Banking Act of 1933, no certificate representing the stock of any such association shall represent the stock of any other corporation, except a member bank or a corporation existing on the date this paragraph takes effect engaged solely in holding the bank premises of such association, nor shall the ownership, sale, or transfer of any certificate representing the stock of any such association be conditioned in any manner whatsoever upon the ownership, sale, or transfer of a certificate representing the stock of any other corporation, except a member bank.” " Sec. 19. [R.S., sec. 5144, p. 994](/us/rs/s5144/p994). [U.S.C., p. 262](/us/usc/p262). Section 5144 of the Revised Statutes, as amended (U.S.C., title 12, sec. 61), is amended to read as follows: " “Sec. 5144.Shareholder’s right to vote. In all elections of directors, each shareholder shall have the right to vote the number of shares owned by him for as many persons as there are directors to be elected, or to cumulate such shares and give one candidate as many votes as the number of directors multiplied by the number of his shares shall equal, or to distribute them on the same principle among as many candidates as he shall think fit; and in deciding all other questions at meetings of Non voting shares. shareholders, each shareholder shall be entitled to one vote on each share of stock held by him; except
(1)that shares of its own stock held by a national bank as sole trustee shall not be voted, and shares of its own stock held by a national bank and one or more persons as trustees may be voted by such other person or persons, as trustees, in the same manner as if he or they were the sole trustee, and
(2)shares controlled by any holding company affiliate of a national bank shall not be voted unless such holding company affiliate shall have first obtained a voting permit as hereinafter provided, which permit is in force at the time such shares are voted. Shareholders Proxies. may vote by proxies duly authorized in writing; but no officer, clerk, teller, or bookkeeper of such bank shall act as proxy; and no shareholder whose liability is past due and unpaid shall be allowed to vote. Shares deemed controlled by holding company. “For the purposes of this section shares shall be deemed to be controlled by a holding company affiliate if they are owned or controlled directly or indirectly by such holding company affiliate, or held by any trustee for the benefit of the shareholders or members thereof. Voting permit, holding company affiliate. “Any such holding company affiliate may make application to the Federal Reserve Board for a voting permit entitling it to cast one vote at all elections of directors and in deciding all questions at meetings of shareholders of such bank on each share of stock controlled by it or authorizing the trustee or trustees holding the stock for its benefit or for the benefit of its shareholders so to vote the same. The Federal Reserve Board may, in its discretion, grant or withhold such permit as the public interest may require. In acting upon Application for. such application, the Board shall consider the financial condition of the applicant, the general character of its management, and the prob-187able effect of the granting of such permit upon the affairs of such Conditions. bank, but no such permit shall be granted except upon the following conditions: “(a) Every such holding company affiliate shall, in making the Agreement required. application for such permit, agree
(1)to receive, on dates identical with those fixed for the examination of banks with which it is affiliated, examiners duly authorized to examine such banks, who shall make such examinations of such holding company affiliate as shall be necessary to disclose fully the relations between such banks and such holding company affiliate and the effect of such relations upon the affairs of such banks, such examinations to be at the expense of the holding company affiliate so examined;
(2)that the reports of such examiners shall contain such information as shall be necessary to disclose fully the relations between such affiliate and such banks and the effect of such relations upon the affairs of such banks;
(3)that such examiners may examine each bank owned or controlled by the holding company affiliate, both individually and in conjunction with other banks owned or controlled by such holding company affiliate; and
(4)that publication of individual or consolidated statements of condition of such banks may be required; “(b) After five years after the enactment of the Banking Act Assets to be maintained. *Post*, p. 195. of 1933, every such holding company affiliate
(1)shall possess, and shall continue to possess during the life of such permit, free and clear of any lien, pledge, or hypothecation of any nature, readily marketable assets other than bank stock in an amount not less than 12 per centum of the aggregate par value of all bank stocks controlled by such holding company affiliate, which amount shall be increased by not less than 2 per centum per annum of such aggregate par value until such assets shall amount to 25 per centum of the aggregate par value of such bank stocks; and
(2)shall reinvest in readily marketable assets other than bank stock all net earnings over and above 6 per centum per annum on the book value of its own shares outstanding until such assets shall amount to such 25 per centum of the aggregate par value of all bank stocks controlled by it; “(c) Notwithstanding the foregoing provisions of this section, Shareholders’ liability. *Post*, p. 195. after five years after the enactment of the Banking Act of 1933,
(1)any such holding company affiliate the shareholders or members of which shall be individually and severally liable in proportion to the number of shares of such holding company affiliate held by them respectively, in addition to amounts invested therein, for all statutory liability imposed on such holding company affiliate by reason of its control of shares of stock of banks, shall be required only to establish and maintain out of net earnings over and above 6 per centum per annum on the book value of its own shares outstanding a reserve of readily marketable assets in an amount of not less than 12 per centum of the aggregate par value of bank stocks controlled by it, and
(2)the assets required by this section to be possessed by such holding company affiliate may be used by it for replacement of capital in banks affiliated with it and for losses incurred in such banks, but any deficiency in such assets resulting from such use shall be made up within such period as the Federal Reserve Board may by regulation prescribe; “(d) Every officer, director, agent, and employee of every such Liability of officers, employees, etc. holding company affiliate shall be subject to the same penalties for false entries in any book, report, or statement of such holding company affiliate as are applicable to officers, directors, agents, and [R.S., sec. 5209, p. 1007](/us/rs/s5209/p1007). [U.S.C., p. 291](/us/usc/p291). employees of member banks under section 5209 of the Revised Statutes, as amended (U.S.C., title 12, sec. 592); and 188 “(e)Voting permits, holding company affiliates. Requirements of application. Every such holding company affiliate shall, in its application for such voting permit,
(1)show that it does not own, control, or have any interest in, and is not participating in the management or direction of, any corporation, business trust, association, or other similar organization formed for the purpose of, or engaged principally in, the issue, flotation, underwriting, public sale, or distribution, at wholesale or retail or through syndicate participation, of stocks, bonds, debentures, notes, or other securities of any Agreements. sort (hereinafter referred to as ‘securities company’);
(2)agree that during the period that the permit remains in force it will not acquire any ownership, control, or interest in any such securities company or participate in the management or direction thereof;
(3)agree that if, at the time of filing the application for such permit, it owns, controls, or has an interest in, or is participating in the management or direction of, any such securities company, it will, within five years after the filing of such application, divest itself of its ownership, control, and interest in such securities company and will cease participating in the management or direction thereof, and will not thereafter, during the period that the permit remains in force, acquire any further ownership, control, or interest in any such securities company or participate in the management or direction thereof; and
(4)agree that thenceforth it will declare dividends only out of actual net earnings. Revocation of permit, upon violating Banking Act of 1933. “If at any time it shall appear to the Federal Reserve Board that any holding company affiliate has violated any of the provisions of the Banking Act of 1933 or of any agreement made pursuant to this *Post*, p. 195. section, the Federal Reserve Board may, in its discretion, revoke any such voting permit after giving sixty days’ notice by registered mail of its intention to the holding company affiliate and affording it an Deposits of United States public moneys denied. opportunity to be heard. Whenever the Federal Reserve Board shall have revoked any such voting permit, no national bank whose stock is controlled by the holding company affiliate whose permit is so revoked shall receive deposits of public moneys of the United States, nor shall any such national bank pay any further dividend to such holding company affiliate upon any shares of such bank controlled by such holding company affiliate. Forfeiture of rights, privileges, etc. “Whenever the Federal Reserve Board shall have revoked any voting permit as hereinbefore provided, the rights, privileges, and franchises of any or all national banks the stock of which is controlled by such holding company affiliate shall, in the discretion of Vol. 38, p. 251. the Federal Reserve Board, be subject to forfeiture in accordance with section 2 of the Federal Reserve Act, as amended.” " Sec. 20.Member bank affiliation with stock, etc., sales organization, prohibited. After one year from the date of the enactment of this Act, no member bank shall be affiliated in any manner described in section 2
(b)hereof with any corporation, association, business trust, or *Ante*, p. 162. other similar organization engaged principally in the issue, flotation, underwriting, public sale, or distribution at wholesale or retail or through syndicate participation of stocks, bonds, debentures, notes, or other securities. Penalty for violation. For every violation of this section the member bank involved shall be subject to a penalty not exceeding $1,000 per day for each day Assessment of. during which such violation continues. Such penalty may be assessed by the Federal Reserve Board, in its discretion, and, when so assessed, may be collected by the Federal reserve bank by suit or otherwise. National banks. Forfeiture of rights, etc., if violation continues. If any such violation shall continue for six calendar months after the member bank shall have been warned by the Federal Reserve Board to discontinue the same,
(a)in the case of a national bank, all the rights, privileges, and franchises granted to it under the National 189 Bank Act may be forfeited in the manner prescribed in section 2 of Vol. 38, p. 251. [U.S.C., pp. 268, 275, 277, 288](/us/usc/pp268/275/277/288). State member banks. Forfeiture of membership rights. the Federal Reserve Act, as amended (U.S.C., title 12, secs. 141, 222–225, 281–286, and 502), or,
(b)in the case of a State member bank, all of its rights and privileges of membership in the Federal Reserve System may be forfeited in the manner prescribed in section 9 of the Federal Reserve Act, as amended (U.S.C., title 12, secs. 321–332). Sec. 21.
(a)After the expiration of one year after the date of Vol. 38, p. 259. [U.S.C., p. 279; Supp. VI, p. 135](/us/usc/p279/135). enactment of this Act it shall be unlawful—
(1)For any person, firm, corporation, association, business trust, Unlawful acts. Receiving deposits subject to repayment by stock selling, etc., organization. or other similar organization, engaged in the business of issuing, underwriting, selling, or distributing, at wholesale or retail, or through syndicate participation, stocks, bonds, debentures, notes, or other securities, to engage at the same time to any extent whatever in the business of receiving deposits subject to check or to repayment upon presentation of a passbook, certificate of deposit, or other evidence of debt, or upon request of the depositor; or
(2)For any person, firm, corporation, association, business trust, Receiving deposits without submitting to examination. or other similar organization, other than a financial institution or private banker subject to examination and regulation under State or Federal law, to engage to any extent whatever in the business of receiving deposits subject to check or to repayment upon presentation of a passbook, certificate of deposit, or other evidence of debt, or upon request of the depositor, unless such person, firm, corporation, association, business trust, or other similar organization shall submit to periodic examination by the Comptroller of the Currency or by the Federal reserve bank of the district and shall make and publish Reports required. periodic reports of its condition, exhibiting in detail its resources and liabilities, such examination and reports to be made and published at the same times and in the same manner and with like effect and penalties as are now provided by law in respect of national banking associations transacting business in the same locality.
(b)Whoever shall willfully violate any of the provisions of this Penalty provisions. section shall upon conviction be fined not more than $5,000 or imprisoned not more than five years, or both, and any officer, director, employee, or agent of any person, firm,. corporation, association, business trust, or other similar organization who knowingly participates in any such violation shall be punished by a like fine or imprisonment or both. Sec. 22. The additional liability imposed upon shareholders in Additional liability, not applicable to shares hereafter issued. [R.S., sec. 5151, p. 995](/us/rs/s5151/p995). Vol. 38, p. 273. [U.S.C., p. 263](/us/usc/p263). national banking associations by the provisions of section 5151 of the Revised Statutes, as amended, and section 23 of the Federal Reserve Act, as amended (U.S.C., title 12, secs. 63 and 64), shall not apply with respect to shares in any such association issued after the date of enactment of this Act. Sec. 23. Paragraph
(c)of section 5155 of the Revised Statutes, as [R.S., sec. 5155, p. 996](/us/rs/s5155/p996). [U.S.C., p. 261](/us/usc/p261). amended (U.S.C., title 12, sec. 36), is amended to read as follows: " “(c) A national banking association may, with the approval of the Branches. Establishment by association, upon approval. Comptroller of the Currency, establish and operate new branches:
(1)Within the limits of the city, town or village in which said association is situated, if such establishment and operation are at the time expressly authorized to State banks by the law of the State in question; and
(2)at any point within the State in which said association is situated, if such establishment and operation are at the time authorized to State banks by the statute law of the State in question by language specifically granting such authority affirmatively and not merely by implication or recognition, and subject to the restrictions as to location imposed by the law of the State on State banks. 190Branch outside of city, etc. No such association shall establish a branch outside of the city, town, or village in which it is situated unless it has a paid-in and unimpaired *Provisos*. States having population of less than one million. capital stock of not less than $500,000: *Provided*, That in States with a population of less than one million, and which have no cities located therein with a population exceeding one hundred thousand, the capital shall be not less than $250,000: *Provided*, That Less than one half million. in States with a population of less than one-half million, and which have no cities located therein with a population exceeding fifty thousand, the capital shall not be less than $100,000.” " [R.S., sec. 5155, p. 996](/us/rs/s5155/p996). [U.S.C., p. 261](/us/usc/p261). Paragraph
(d)of section 5155 of the Revised Statutes, as amended (U.S.C., title 12, sec. 36), is amended to read as follows: " “(d) Aggregate capital of association; amount. The aggregate capital of every national banking association and its branches shall at no time be less than the aggregate minimum capital required by law for the establishment of an equal number of national banking associations situated in the various places where such association and its branches are situated.” " Sec. 24.
(a)National banking associations; consolidations. Vol. 40, p. 1043; Vol. 44, p. 1225. [U.S.C., p. 260; Supp. VI, p. 129](/us/usc/p260/129). “State”, added. Sections 1 and 3 of the Act entitled “An Act to provide for the consolidation of national banking associations”, approved November 7, 1918, as amended (U.S.C., title 12, secs. 33, 34, and 34a), are amended by striking out the words “county, city, town, or village” wherever they occur in each such section, and inserting in lieu thereof the words “State, county, city, town, or village.”
(b)Vol. 44, p. 1225. [U.S.C., Supp. VI, p. 129](/us/usc/p129). Capital of consolidated association. Section 3 of such Act of November 7, 1918, as amended, is further amended by striking out the second sentence thereof and inserting in lieu thereof the following: “The capital stock of such consolidated association shall not be less than that required under existing law for the organization of a national banking association in the place in which such consolidated association is located. Merger of corporate existence. Upon such a consolidation, or upon a consolidation of two or more national banking associations under section 1 of this Act, the corporate existence of each of the constituent banks and national banking associations participating in such consolidation shall be merged into and continued in the consolidated national banking association and the consolidated association shall be deemed to be Transfer of rights, property, etc. the same corporation as each of the constituent institutions. All the rights, franchises, and interests of each of such constituent banks and national banking associations in and to every species of property, real, personal, and mixed, and choses in action thereto belonging, shall be deemed to be transferred to and vested in such consolidated national banking association without any deed or other transfer; and such consolidated national banking association, by virtue of such consolidation and without any order or other action on the part of any court or otherwise, shall hold and enjoy the same and all rights of property, franchises, and interests, including appointments, designations, and nominations and all other rights and interests as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, receiver, committee of estates of lunatics and in every other fiduciary capacity, in the same manner and to the same extent as such rights, franchises, and interests were held or enjoyed by any such constituent institution at the time of such consolidation: *Proviso*. Power of court to remove consolidated association from trusteeship, etc. *Provided, however*, That where any such constituent institution at the time of such consolidation was acting under appointment of any court as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, receiver, committee of estates of lunatics or in any other fiduciary capacity, the consolidated national banking association shall be subject to removal by a court of competent jurisdiction in the same manner and to the same extent as was such constituent corporation prior to the consolidation, and nothing herein contained shall be construed to impair in any manner the right of 191 any court to remove such a consolidated national banking association and to appoint in lieu thereof a substitute trustee, executor, or other fiduciary, except that such right shall not be exercised in such a manner as to discriminate against national banking associations, nor Discrimination not authorized. shall any such consolidated association be removed solely because of the fact that it is a national banking association. ” Sec. 25. The first two sentences of section 5197 of the Revised [R.S., sec. 5197, p. 1005](/us/rs/s5197/p1005). [U.S.C., p. 264](/us/usc/p264). Statutes (U.S.C., title 12, sec. 85) are amended to read as follows: " “Any association may take, receive, reserve, and charge on any Right of association to take interest on loans, etc. loan or discount made, or upon any notes, bills of exchange, or other evidences of debt, interest at the rate allowed by the laws of the State, Territory, or District where the bank is located, or at a rate of 1 per centum in excess of the discount rate on ninety-day commercial Commercial paper. paper in effect at the Federal reserve bank in the Federal reserve district where the bank is located, whichever may be the greater, and no more, except that where by the laws of any State a different rate is limited for banks organized under State laws, the rate so limited shall be allowed for associations organized or existing in any such State under this title. When no rate is fixed by the laws of the When no fixed rate. State, or Territory, or District, the bank may take, receive, reserve, or charge a rate not exceeding 7 per centum, or 1 per centum in excess of the discount rate on ninety-day commercial paper in effect at the Federal reserve bank in the Federal reserve district where the bank is located, whichever may be the greater, and such interest may be taken in advance, reckoning the days for which the note, bill, or other evidence of debt has to run.” " Sec. 26.
(a)The second sentence of the first paragraph of section [R.S., sec. 5200, p. 1005](/us/rs/s5200/p1005). [U.S.C., p. 264; Supp. VI, p. 131](/us/usc/p264/131). Limit of liability. 5200 of the Revised Statutes, as amended (U.S.C., title 12, sec. 84; Supp. VI, title 12, sec. 84), is amended by inserting before the period at the end thereof the following: “and shall include in the case of obligations of a corporation all obligations of all subsidiaries thereof in which such corporation owns or controls a majority interest.”
(b)The amendment made by this section shall not apply to such Obligations of subsidiaries. obligations of subsidiaries held by such association on the date this section takes effect. Sec. 27. Section 5211 of the Revised Statutes, as amended (U.S.C., [R.S., sec. 5211, p. 1007](/us/rs/s5211/p1007). [U.S.C., p. 269; Supp. VI, p. 133](/us/usc/p269/133). title 12, sec. 161; Supp. VI, title 12, sec. 161), is amended by adding at the end thereof the following new paragraph: " “Each national banking association shall obtain from each of its Reports of affiliate banks to association. affiliates other than member banks and furnish to the Comptroller of the Currency not less than three reports during each year, in such form as the Comptroller may prescribe, verified by the oath or affirmation Form. of the president or such other officer as may be designated by Verification. the board of directors of such affiliate to verify such reports, disclosing the information hereinafter provided for as of dates identical with those for which the Comptroller shall during such year require the reports of the condition of the association. For the purpose of this section the term ‘affiliate’ shall include holding company affiliates “Affiliate”, consumed. Report transmitted to Comptroller. as well as other affiliates. Each such report of an affiliate shall be transmitted to the Comptroller at the same time as the corresponding report of the association, except that the Comptroller may, in his discretion, extend such time for good cause shown. Each such report shall contain such information as in the judgment of the Comptroller Contents. of the Currency shall be necessary to disclose fully the relations between such affiliate and such bank and to enable the Comptroller to inform himself as to the effect of such relations upon the affairs of such bank. The reports of such affiliates shall be published by the Publication. association under the same conditions as govern its own condition reports. The Comptroller shall also have power to call for additional Additional reports. 192 reports with respect to any such affiliate whenever in his judgment the same are necessary in order to obtain a full and complete knowledge of the conditions of the association with which it is affiliated. Such additional reports shall be transmitted to the Comptroller of Penalty provision. the Currency in such form as he may prescribe. Any such affiliated bank which fails to obtain and furnish any report required under this section shall be subject to a penalty of $100 for each day during which such failure continues.” " Sec. 28.
(a)[R.S., sec. 5240, p. 1013](/us/rs/s5240/p1013). [U.S.C., p. 288](/us/usc/p288). The first paragraph of section 5240 of the Revised Statutes, as amended (U.S.C., title 12, sec. 481), is amended by inserting before the period at the end thereof a colon and the following Bank examinations. Affiliates to be included. proviso: “ *Provided*, That in making the examination of any national bank the examiners shall include such an examination of the affairs of all its affiliates other than member banks as shall be necessary to disclose fully the relations between such bank and such Information required. affiliates and the effect of such relations upon the affairs of such Forfeiture of rights on refusal. bank; and in the event of the refusal to give any information required in the course of the examination of any such affiliate, or in the event of the refusal to permit such examination, all the rights, privileges, and franchises of the bank shall be subject to forfeiture Vol. 38, p. 251. [U.S.C., pp. 268, 275, 277, 288](/us/usc/pp268/275/277/288). in accordance with section 2 of the Federal Reserve Act, as amended (U.S.C., title 12, secs. 141, 222–225, 281–286, and 502). The Comptroller of the Currency shall have power, and he is hereby authorized, Publication, report of examinations. to publish the report of his examination of any national banking association or affiliate which shall not within one hundred and twenty days after notification of the recommendations or suggestions of the Comptroller, based on said examination, have complied with the same Notice of. to his satisfaction. Ninety days’ notice prior to such publicity shall be given to the bank or affiliate. ”
(b)[R.S., sec. 5240, p. 1013](/us/rs/s5240/p1013). [U.S.C., p. 288](/us/usc/p288). Section 5240 of the Revised Statutes, as amended (U.S.C., title 12, sec. 481), is further amended by adding after the first paragraph thereof the following new paragraph: " Powers of examiner. “The examiner making the examination of any affiliate of a national bank shall have power to make a thorough examination of all the affairs of the affiliate, and in doing so he shall have power to administer oaths and to examine any of the officers, directors, employees, and agents thereof under oath and to make a report of Expense of examinations. his findings to the Comptroller of the Currency. The expense of examinations of such affiliates may be assessed by the Comptroller of the Currency upon the affiliates examined in proportion to assets or resources held by the affiliates upon the dates of examination of Assessment on refusal to pay. the various affiliates. If any such affiliate shall refuse to pay such expenses or shall fail to do so within sixty days after the elate of such assessment, then such expenses may be assessed against the *Proviso*. Assessment when affiliation of two or more national banks. affiliated national bank and, when so assessed, shall be paid by such national bank: *Provided, however*, That, if the affiliation is with two or more national banks, such expenses may be assessed against, and collected from, any or all of such national banks in such proportions Employment of examiners, etc. as the Comptroller of the Currency may prescribe. The examiners and assistant examiners making the examinations of national banking associations and affiliates thereof herein provided for and the chief examiners, reviewing examiners and other persons whose services may be required in connection with such examinations or the reports thereof, shall be employed by the Comptroller of the Currency with the approval of the Secretary of the Treasury; the Compensation. employment and compensation of examiners, chief examiners, reviewing examiners, assistant examiners, and of the other employees of the office of the Comptroller of the Currency whose compensation is paid from assessments on banks or affiliates thereof shall be without regard 193 to the provisions of other laws applicable to officers or employees of the United States. The funds derived from such assessments may be Status of assessments. deposited by the Comptroller of the Currency in accordance with the provisions of section 5234 of the Revised Statutes (U.S.C., title 12, [R.S., sec. 5234, p. 1012](/us/rs/s5234/p1012). [U.S.C., p. 271](/us/usc/p271). sec. 192) and shall not be construed to be Government funds or appropriated monies; and the Comptroller of the Currency is authorized and empowered to prescribe regulations governing the computation and assessment of the expenses of examinations herein provided for and the collection of such assessments from the banks and/or affiliates examined. If any affiliate of a national bank shall Penalty, affiliate refusing to permit examination. refuse to permit an examiner to make an examination of the affiliate or shall refuse to give any information required in the course of any such examination, the national bank with which it is affiliated shall be subject to a penalty of not more than $100 for each day that any such refusal shall continue. Such penalty may be assessed by the Assessment of penalty. Comptroller of the Currency and collected in the same manner as expenses of examinations.” " Sec. 29. In any case in which, in the opinion of the Comptroller Resumption of business, by closed association. of the Currency, it would be to the advantage of the depositors and unsecured creditors of any national banking association whose business has been closed, for such association to resume business upon the retention by the association, for a reasonable period to be prescribed by the Comptroller, of all or any part of its deposits, the Comptroller is authorized, in his discretion, to permit the association to Consent of depositors, etc. resume business if depositors and unsecured creditors of the association representing at least 75 per centum of its total deposit and unsecured credit liabilities consent in writing to such retention of Powers of Comptroller not affected. deposits. Nothing in this section shall be construed to affect in any manner any powers of the Comptroller under the provisions of law in force on the date of enactment of this Act with respect to the reorganization of national banking associations. Sec. 30. Whenever, in the opinion of the Comptroller of the Currency, Violations of law by officer, etc., of national bank. any director or officer of a national bank, or of a bank or trust company doing business in the District of Columbia, or whenever, in the opinion of a Federal reserve agent, any director or officer of a State member bank in his district shall have continued to violate When continues unsafe, etc., banking practices. any law relating to such bank or trust company or shall have continued unsafe or unsound practices in conducting the business of such bank or trust company, after having been warned by the Comptroller of the Currency or the Federal reserve agent, as the case may be, to discontinue such violations of law or such unsafe or unsound practices, the Comptroller of the Currency or the Federal Certification of facts to Board. reserve agent, as the case may be, may certify the facts to the Federal Reserve Board. In any such case the Federal Reserve Board may cause notice to be served upon such director or officer to appear before such Board to show cause why he should not be removed Copy to be transmitted. from office. A copy of such order shall be sent to each director of the bank affected, by registered mail. If after granting the accused Removal authorized, after hearing. director or officer a reasonable opportunity to be heard, the Federal Reserve Board finds that he has continued to violate any law relating to such bank or trust company or has continued unsafe or unsound practices in conducting the business of such bank or trust company after having been warned by the Comptroller of the Currency or the Federal reserve agent to discontinue such violation of law or such unsafe or unsound practices, the Federal Reserve Board, in its discretion, may order that such director or officer be removed from Copy of removal order. office. A copy of such order shall be served upon such director or officer. A copy of such order shall also be served upon the bank of which he is a director or officer, whereupon such director or officer 194*Proviso*. Confidential nature of order. shall cease to be a director or officer of such bank: *Provided*, That such order and the findings of fact upon which it is based shall not be made public or disclosed to anyone except the director or officer involved and the directors of the bank involved, otherwise than in. Removed officer, penalty for further participation in bank management. connection with proceedings for a violation of this section. Any such director or officer removed from office as herein provided who thereafter participates in any manner in the management of such bank shall be fined not more than $5,000, or imprisoned for not more than five years, or both, in the discretion of the court. Sec. 31. Board of directors, etc. After one year from the date of enactment of this Act, notwithstanding any other provision of law, the board of directors, board of trustees, or other similar governing body of every national banking association and of every State bank or trust company which Number of members. is a member of the Federal Reserve System shall consist of not less than five nor more than twenty-five members; and every director, Stock ownership requirement. trustee, or other member of such governing body shall be the bona fide owner in his own right of shares of stock of such banking association, *Post*, p. 971. State bank or trust company having a par value in the aggregate of not less than $2,500, unless the capital of the bank shall not exceed $50,000, in which case he must own in his own right shares having a par value in the aggregate of not less than $1,500, or unless the capital of the bank shall not exceed $25,000, in which case he must own in his own right shares having a par value in the Appointment of receiver, when violation by national bank. aggregate of not less than $1,000. If any national banking association violates the provisions of this section and continues such violation after thirty days’ notice from the Comptroller of the Currency, the said Comptroller may appoint a receiver or conservator therefor, Forfeiture of membership, State member bank. in accordance with the provisions of existing law. If any State bank or trust company which is a member of the Federal Reserve System violates the provisions of this section and continues such violation after thirty days’ notice from the Federal Reserve Board, it shall be subject to the forfeiture of its membership in the Federal Reserve System in accordance with the provisions of section 9 of the Federal Reserve Act, as amended. Sec. 32. Member bank officers, directors, etc. Engaging in securities transactions prohibited. From and after January 1, 1934, no officer or director of any member bank shall be an officer, director, or manager of any corporation, partnership, or unincorporated association engaged primarily in the business of purchasing, selling, or negotiating securities, Member bank not to act as correspondent bank. and no member bank shall perform the functions of a correspondent bank on behalf of any such individual, partnership, corporation, or unincorporated association and no such individual, partnership, corporation, or unincorporated association shall perform the functions of a correspondent for any member bank or hold on Permit issued by Board. deposit any funds on behalf of any member bank, unless in any such case there is a permit therefor issued by the Federal Reserve Board; and the Board is authorized to issue such permit if in its judgment it is not incompatible with the public interest, and to Revocation. revoke any such permit whenever it finds after reasonable notice and opportunity to be heard, that the public interest requires such revocation. Sec. 33. Vol. 38, p. 732; Vol. 39, p. 121; Vol. 41, p. 626. [U.S.C., p. 353](/us/usc/p353). The Act entitled “An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes”, approved October 15, 1914, as amended (U.S.C., title 15, sec. 19), is hereby amended by adding after section 8 thereof the following new section: " “Sec. 8A. Clayton Act, amendment. Interlocking directorates and officers. That from and after the 1st day of January 1934, no director, officer, or employee of any bank, banking association, or trust company, organized or operating under the laws of the United States shall be at the same time a director, officer, or employee of a 195 corporation (other than a mutual savings bank) or a member of a partnership organized for any purpose whatsoever which shall make loans secured by stock or bond collateral to any individual, association, partnership, or corporation other than its own subsidiaries.” " Sec. 34. The right to alter, amend, or repeal this Act is hereby Amendment. Separability of provisions. expressly reserved. If any provision of this Act, or the application thereof to any person or circumstances, is held invalid, the remainder of the Act, and the application of such provision to other persons or circumstances, shall not be affected thereby. Approved, June 16, 1933, 11:45 a.m. To encourage national industrial recovery, to foster fair competition, and to provide for the construction of certain useful public works, and for other purposes. Chapter 90 48 Stat. 195 1933-06-16 United States Government Publishing Office text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain. Digitization Vendor 2024-12-11 73 1 public [CHAPTER 90.] AN ACT To encourage national industrial recovery, to foster fair competition, and to provide for the construction of certain useful public works, and for other purposes.June 16, 1933. [[H. R. 5755](/us/bill/73/hr/5755).] [[Public, No. 67](/us/pl/73/67).] *Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled*,National Industrial Recovery Act. TITLE I— INDUSTRIAL RECOVERY title i—industrial recovery. declaration of policy Appropriation for. *Post*, p. 275. Section 1. A national emergency productive of widespread unemployment Declaration of policy. and disorganization of industry, which burdens interstate and foreign commerce, affects the public welfare, and undermines the standards of living of the American people, is hereby declared to exist. It is hereby declared to be the policy of Congress to remove obstructions to the free flow of interstate and foreign commerce which tend to diminish the amount thereof; and to provide for the general welfare by promoting the organization of industry for the purpose of cooperative action among trade groups, to induce and maintain united action of labor and management under adequate governmental sanctions and supervision, to eliminate unfair competitive practices, to promote the fullest possible utilization of the present productive capacity of industries, to avoid undue restriction of production (except as may be temporarily required), to increase the consumption of industrial and agricultural products by increasing purchasing power, to reduce and relieve unemployment, to improve standards of labor, and otherwise to rehabilitate industry and to conserve natural resources. administrative agencies Administrative agencies. Sec. 2.
(a)To effectuate the policy of this title, the President is President authorized to establish. hereby authorized to establish such agencies, to accept and utilize such voluntary and uncompensated services, to appoint, without Appointments. regard to the provisions of the civil service laws, such officers and employees, and to utilize such Federal officers and employees, and, Cooperation of Federal and State officers, etc. with the consent of the State, such State and local officers and employees, as he may find necessary, to prescribe their authorities, duties, responsibilities, and tenure, and, without regard to the Classification Act of 1923, as amended, to fix the compensation of any officers and employees so appointed.
(b)The President may delegate any of his functions and powers Delegation of functions. Industrial planning and research agency. Establishment authorized. under this title to such officers, agents, and employees as he may designate or appoint, and may establish an industrial planning and research agency to aid in carrying out his functions under this title. 196 (c)Termination of agencies, etc. This title shall cease to be in effect and any agencies established hereunder shall cease to exist at the expiration of two years after the date of enactment of this Act, or sooner if the President shall by proclamation or the Congress shall by joint resolution declare that the emergency recognized by section 1 has ended. codes of fair competitionCodes of fair competition. Sec. 3.Approval by the President.
(a)Upon the application to the President by one or more trade or industrial associations or groups, the President may approve a code or codes of fair competition for the trade or industry or subdivision thereof, represented by the applicant or applicants, if the President finds
(1)that such associations or groups impose no inequitable restrictions on admission to membership therein and are truly representative of such trades or industries or subdivisions thereof, and
(2)that such code or codes are not designed to promote monopolies or to eliminate or oppress small enterprises and will not operate to discriminate against them, and will tend to effectuate *Provisos*. Monopolies, etc., not permitted. Right of persons affected to be heard. the policy of this title: *Provided*, That such code or codes shall not permit monopolies or monopolistic practices: *Provided further*, That where such code or codes affect the services and welfare of persons engaged in other steps of the economic process, nothing in this section shall deprive such persons of the right to be heard prior to approval by the President of such code or codes. The President Imposition of conditions for protection of consumers, etc. may, as a condition of his approval of any such code, impose such conditions (including requirements for the making of reports and the keeping of accounts) for the protection of consumers, competitors, employees, and others, and in furtherance of the public interest, Exceptions and exemptions. and may provide such exceptions to and exemptions from the provisions of such code, as the President in his discretion deems necessary to effectuate the policy herein declared. (b)Approved code to be standard of fair competition. Violations deemed unfair practice. After the President shall have approved any such code, the provisions of such code shall be the standards of fair competition for such trade or industry or subdivision thereof. Any violation of such standards in any transaction in or affecting interstate or foreign commerce shall be deemed an unfair method of competition in commerce Vol. 39, p. 717. within the meaning of the Federal Trade Commission Act, as amended; but nothing in this title shall be construed to impair the powers of the Federal Trade Commission under such Act, as amended. (c)Jurisdiction of district courts to restrain violations. The several district courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of any code of fair competition approved under this title; and it shall be the duty of the several district attorneys of the United States, in their respective districts, under the direction of the Attorney General, to institute proceedings in equity to prevent and restrain such violations. (d)Establishment of compulsory code by President. Upon his own motion, or if complaint is made to the President that abuses inimical to the public interest and contrary to the policy herein declared are prevalent in any trade or industry or subdivision Notice and hearing required. thereof, and if no code of fair competition therefor has theretofore been approved by the President, the President, after such public notice and hearing as he shall specify, may prescribe and approve a code of fair competition for such trade or industry or subdivision Effect of code. thereof, which shall have the same effect as a code of fair competition approved by the President under subsection
(a)of this section. (e)Importation of competitive articles affecting maintenance of code. On his own motion, or if any labor organization, or any trade or industrial organization, association, or group, which has complied with the provisions of this title, shall make complaint to the President 197 that any article or articles are being imported into the United States in substantial quantities or increasing ratio to domestic production of any competitive article or articles and on such terms or under such conditions as to render ineffective or seriously to endanger the maintenance of any code or agreement under this title, the President Investigation by Tariff Commission. may cause an immediate investigation to be made by the United States Tariff Commission, which shall give precedence to investigations under this subsection, and if, after such investigation and such Notice and hearing. public notice and hearing as he shall specify, the President shall find the existence of such facts, he shall, in order to effectuate the policy President to prescribe terms, etc., for admission of articles. of this title, direct that the article or articles concerned shall be permitted entry into the United States only upon such terms and conditions and subject to the payment of such fees and to such Limitation of total admitted quantity. limitations in the total quantity which may be imported (in the course of any specified period or periods) as he shall find it necessary to prescribe in order that the entry thereof shall not render or tend to render ineffective any code or agreement made under this title. In President may forbid importations unless importer license obtained. order to enforce any limitations imposed on the total quantity of imports, in any specified period or periods, of any article or articles under this subsection, the President may forbid the importation of such article or articles unless the importer shall have first obtained from the Secretary of the Treasury a license pursuant to such regulations Administration of terms, etc., imposed by President. as the President may prescribe. Upon information of any action by the President under this subsection the Secretary of the Treasury shall, through the proper officers, permit entry of the article or articles specified only upon such terms and conditions and subject to such fees, to such limitations in the quantity which may be imported, and to such requirements of license, as the President shall have directed. The decision of the President as to facts shall Decision conclusive. be conclusive. Any condition or limitation of entry under this subsection Conditions and limitations, effective period.shall continue in effect until the President shall find and inform the Secretary of the Treasury that the conditions which led to the imposition of such condition or limitation upon entry no longer exists.
(f)When a code of fair competition has been approved or prescribed Violations of provisions of code. by the President under this title, any violation of any provision thereof in any transaction in or affecting interstate or foreign commerce shall be a misdemeanor and upon conviction thereof an offender shall be fined not more than $500 for each offense, and each Penalty. day such violation continues shall be deemed a separate offense. agreements and licenses Agreements and licenses. Sec. 4.
(a)The President is authorized to enter into agreements Authority of President to enter trade agreements. with, and to approve voluntary agreements between and among, persons engaged in a trade or industry, labor organizations, and trade or industrial organizations, associations, or groups, relating to any trade or industry, if in his judgment such agreements will aid in effectuating the policy of this title with respect to transactions in or affecting interstate or foreign commerce, and will be consistent with the requirements of clause
(2)of subsection
(a)of section 3 for a *Ante*, p. 196. code of fair competition.
(b)Whenever the President shall find that destructive wage or Licenses. Issue of, to business enterprises when unfair practices in trade or industry. price cutting or other activities contrary to the policy of this title are being practiced in any trade or industry or any subdivision thereof, and, after such public notice and hearing as he shall specify, shall find it essential to license business enterprises in order to make effective a code of fair competition or an agreement under this title or otherwise to effectuate the policy of this title, and shall publicly 198Engaging in business without license prohibited. so announce, no person shall, after a date fixed in such announcement, engage in or carry on any business, in or affecting interstate or foreign commerce, specified in such announcement, unless he shall have first obtained a license issued pursuant to such regulations as Revocation of license. the President shall prescribe. The President may suspend or revoke Finality of revoking order. any such license, after due notice and opportunity for hearing, for violations of the terms or conditions thereof. Any order of the President suspending or revoking any such license shall be final if Penalty for violation. in accordance with law. Any person who, without such a license or in violation of any condition thereof, carries on any such business for which a license is so required, shall, upon conviction thereof, be fined not more than $500, or imprisoned not more than six months, or both, and each day such violation continues shall be deemed a Expiration of authority. *Ante*, p. 196. separate offense. Notwithstanding the provisions of section 2 (c), this subsection shall cease to be in effect at the expiration of one year after the date of enactment of this Act or sooner if the President shall by proclamation or the Congress shall by joint resolution declare that the emergency recognized by section 1 has ended. Sec. 5.Antitrust laws not applicable to codes, agreements, etc. While this title is in effect (or in the case of a license, while section 4
(a)is in effect) and for sixty days thereafter, any code, agreement, or license approved, prescribed, or issued and in effect under this title, and any action complying with the provisions thereof taken during such period, shall be exempt from the provisions of the antitrust laws of the United States. Businesses exempt. Limitations upon application of title. Nothing in this Act, and no regulation thereunder, shall prevent an individual from pursuing the vocation of manual labor and selling or trading the products thereof; nor shall anything in this Act, or regulation thereunder, prevent anyone from marketing or trading the produce of his farm. limitations upon application of title Sec. 6.Statements of trade, etc., associations before benefits to accrue.
(a)No trade or industrial association or group shall be eligible to receive the benefit of the provisions of this title until it files with the President a statement containing such information relating to the activities of the association or group as the President shall by regulation prescribe. (b)Rules and regulations. The President is authorized to prescribe rules and regulations designed to insure that any organization availing itself of the benefits of this title shall be truly representative of the trade or industry or subdivision thereof represented by such organization. Any organization violating any such rule or regulation shall cease to be entitled to the benefits of this title. (c)Investigations by Federal Trade Commission. Upon the request of the President, the Federal Trade Commission shall make such investigations as may be necessary to enable the President to carry out the provisions of this title, and for such purposes the Commission shall have all the powers vested in it with respect of investigations under the Federal Trade Commission Act, as amended. Sec. 7.Conditions required in codes, agreements, and licenses.
(a)Every code of fair competition, agreement, and license approved, prescribed, or issued under this title shall contain the following conditions:
(1)That employees shall have the right to organize and bargain collectively through representatives of their own choosing, and shall be free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection;
(2)that no employee and no one seeking employment shall be required as a condition of employment to join any 199 company union or to refrain from joining, organizing, or assisting a labor organization of his own choosing; and
(3)that employers shall comply with the maximum hours of labor, minimum rates of pay, and other conditions of employment, approved or prescribed by the President.
(b)The President shall, so far as practicable, afford every opportunity Employer-employee wage and hours of work agreements. to employers and employees in any trade or industry or subdivision thereof with respect to which the conditions referred to in clauses
(1)and
(2)of subsection
(a)prevail, to establish by mutual agreement, the standards as to the maximum hours of labor, minimum rates of pay, and such other conditions of employment as may be necessary in such trade or industry or subdivision thereof to effectuate the policy of this title; and the standards established in Effectiveness of approved agreements. *Ante*, p. 196. such agreements, when approved by the President, shall have the same effect as a code of fair competition, approved by the President under subsection
(a)of section 3.
(c)Where no such mutual agreement has been approved by the Code authorized, when mutual agreement not approved. President he may investigate the labor practices, policies, wages, hours of labor, and conditions of employment in such trade or industry or subdivision thereof; and upon the basis of such investigations, and after such hearings as the President finds advisable, he is authorized to prescribe a limited code of fair competition fixing such maximum hours of labor, minimum rates of pay, and other conditions of employment in the trade or industry or subdivision thereof investigated as he finds to be necessary to effectuate the Effectiveness. policy of this title, which shall have the same effect as a code of fair competition approved by the President under subsection
(a)of section 3. The President may differentiate according to experience and skill of the employees affected and according to the locality of employment; but no attempt shall be made to introduce any classification according to the nature of the work involved which might tend to set a maximum as well as a minimum wage.
(d)As used in this title, the term “person” includes any individual, Terms construed. “Person.” “Interstate and foreign commerce”; “interstate or foreign commerce.” partnership, association, trust, or corporation; and the terms “interstate and foreign commerce” and “interstate or foreign commerce” include, except where otherwise indicated, trade or commerce among the several States and with foreign nations, or between the District of Columbia or any Territory of the United States and any State, Territory, or foreign nation, or between any insular possessions or other places under the jurisdiction of the United States, or between any such possession or place and any State or Territory of the United States or the District of Columbia or any foreign nation, or within the District of Columbia or any Territory or any insular possession or other place under the jurisdiction of the United States. application of agricultural adjustment act Application of Agricultural Adjustment Act. Sec. 8.
(a)This title shall not be construed to repeal or modify Provisions not repealed. any of the provisions of title I of the Act entitled “An Act to relieve the existing national economic emergency by increasing agricultural purchasing power, to raise revenue for extraordinary expenses incurred by reason of such emergency, to provide emergency relief with respect to agricultural indebtedness, to provide for the orderly liquidation of joint-stock land banks, and for other purposes”, approved May 12, 1933; and such title I of said Act approved May 12, 1933, may for all purposes be hereafter referred to as the Citation. *Ante*, p. 31. “Agricultural Adjustment Act.”
(b)The President may, in his discretion, in order to avoid conflicts Delegation of functions authorized. in the administration of the Agricultural Adjustment Act and this title, delegate any of his functions and powers under this title 200 with respect to trades, industries, or subdivisions thereof which are engaged in the handling of any agricultural commodity or product thereof, or of any competing commodity or product thereof, to the Secretary of Agriculture. oil regulationOil regulation. Sec. 9.Regulation of oil-pipe lines. Executive Orders Nos. 6199, July 11, 1933; 6204, July 14, 1933. Transportation rates to be fixed.
(a)The President is further authorized to initiate before the Interstate Commerce Commission proceedings necessary to prescribe regulations to control the operations of oil pipe lines and to fix reasonable, compensatory rates for the transportation of petroleum and its products by pipe lines, and the Interstate Commerce Commission shall grant preference to the hearings and determination of such cases. (b)Transportation monopolies. Proceedings against. The President is authorized to institute proceedings to divorce from any holding company any pipe-line company controlled by such holding company which pipe-line company by unfair practices or by exorbitant rates in the transportation of petroleum or its products tends to create a monopoly. (c)Prohibition on transportation of oil in interstate, etc., commerce of quantity in excess of State, etc., limitation. The President is authorized to prohibit the transportation in interstate and foreign commerce of petroleum and the products thereof produced or withdrawn from storage in excess of the amount *Post*, p. 1057.permitted to be produced or withdrawn from storage by any State law or valid regulation or order prescribed thereunder, by any board, commission, officer, or other duly authorized agency of a State. Any Penalty. violation of any order of the President issued under the provisions of this subsection shall be punishable by fine of not to exceed $1,000, or imprisonment for not to exceed six months, or both. rules and regulationsRules and regulations. Sec. 10.Prescribed by President.
(a)The President is authorized to prescribe such rules and regulations as may be necessary to carry out the purposes of this title, and fees for licenses and for filing codes of fair competition Penalty for violations. and agreements, and any violation of any such rule or regulation shall be punishable by fine of not to exceed $500, or imprisonment for not to exceed six months, or both. (b)Amendment of orders. The President may from time to time cancel or modify any order, approval, license, rule, or regulation issued under this title; and each agreement, code of fair competition, or license approved, prescribed, or issued under this title shall contain an express provision to that effect. TITLE II— title ii—public works and construction projects. PUBLIC WORKS AND CONSTRUCTION PROJECTS federal emergency administration of public works Section 201.Federal Emergency Administration of Public Works.
(a)To effectuate the purposes of this title, the President is hereby authorized to create a Federal Emergency Establishment authorized. Administration of Public Works, all the powers of which shall be exercised by a Federal Emergency Administrator of Public Works *Post*, p. 351.(hereafter referred to as the “Administrator”), and to establish such agencies, to accept and utilize such voluntary and uncompensated Appointments. services, to appoint, without regard to the civil service laws, such officers and employees, and to utilize such Federal officers and employees, and, with the consent of the State, such State and local officers and employees as he may find necessary, to prescribe their Duties to be prescribed. authorities, duties, responsibilities, and tenure, and, without regard to the Classification Act of 1923, as amended, to fix the compensation of any officers and employees so appointed. The President may dele-201gate any of his functions and powers under this title to such officers, agents, and employees as he may designate or appoint.
(b)The Administrator may, without regard to the civil service Appointment of experts. laws or the Classification Act of 1923, as amended, appoint and fix the compensation of such experts and such other officers and Compensation. employees as are necessary to carry out the provisions of this title; and may make such expenditures (including expenditures for Expenditures. personal services and rent at the seat of government and elsewhere, Printing and binding. for law books and books of reference, and for paper, printing and binding) as are necessary to carry out the provisions of this title.
(c)All such compensation, expenses, and allowances shall be Funds available. paid out of funds made available by this Act.
(d)After the expiration of two years after the date of the enactment Termination of power. of this Act, or sooner if the President shall by proclamation or the Congress shall by joint resolution declare that the emergency recognized by section 1 has ended, the President shall not make any further loans or grants or enter upon any new construction under this title, and any agencies established hereunder shall Transfer of agencies. cease to exist and any of their remaining functions shall be transferred to such departments of the Government as the President shall designate: *Provided*, That he may issue funds to a borrower under *Proviso*. Issue of funds prior to January 23, 1939. this title prior to January 23, 1939, under the terms of any agreement, or any commitment to bid upon or purchase bonds, entered into with such borrower prior to the date of termination, under this section, of the power of the President to make loans. Sec. 202. The Administrator, under the direction of the President, Program of public works to be prepared. Projects included. shall prepare a comprehensive program of public works, which shall include among other things the following:
(a)Construction, repair, and improvement of public highways and park ways, public buildings, and any publicly owned instrumentalities and facilities;
(b)conservation and development of natural resources, including control, utilization, and purification of waters, prevention of soil or coastal erosion, development of water power, transmission of electrical energy, and construction of river and harbor improvements and flood control and also the construction of any river or drainage improvement required to perform or satisfy any obligation incurred by the United States through a treaty with a foreign Government Construction under treaty obligations. heretofore ratified and to restore or develop for the use of any State or its citizens water taken from or denied to them by performance on the part of the United States of treaty obligations heretofore assumed: *Provided*, That no river or harbor improvements shall be *Provisos*. River and harbor improvements. carried out unless they shall have heretofore or hereafter been adopted by the Congress or are recommended by the Chief of Engineers of the United States Army;
(c)any projects of the character Approval required. heretofore constructed or carried on either directly by public authority or with public aid to serve the interests of the general public;
(d)construction, reconstruction, alteration, or repair under public regulation or control of low-cost housing and slum-clearance projects;
(e)any project (other than those included in the foregoing classes) of any character heretofore eligible for loans under subsection Vol. 47, p. 711.
(a)of section 201 of the Emergency Relief and Construction Act of 1932, as amended, and paragraph
(3)of such subsection
(a)shall for such purposes be held to include loans for the construction or completion of hospitals the operation of which is partly financed from public funds, and of reservoirs and pumping plants and for the construction of dry docks; and if in the opinion of the President Construction of naval vessels. it seems desirable, the construction of naval vessels within the terms and/or limits established by the London Naval Treaty of 1930 and Vol. 46, p. 2858. of aircraft required therefor and construction of heavier-than-air 202Aircraft. aircraft and technical construction for the Army Air Corps and Army housing projects, etc. such Army housing projects as the President may approve, and provision of original equipment for the mechanization or motorization of such Army tactical units as he may designate: *Provided, *Provisos*. Suspension of naval and military construction. however*, That in the event of an international agreement for the further limitation of armament, to which the United States is signatory, the President is hereby authorized and empowered to suspend, in whole or in part, any such naval or military construction or mechanization and motorization of Army units: *Provided further*, That this title shall not be applicable to public works under Construction under Architect of the Capitol. the jurisdiction or control of the Architect of the Capitol or of any commission or committee for which such Architect is the contracting and/or executive officer. Sec. 203.Unemployment relief.
(a)With a view to increasing employment quickly (while reasonably securing any loans made by the United States) the President Agencies to be created. is authorized and empowered, through the Administrator or through such other agencies as he may designate or create,
(1)to construct, Construction of public works project. finance, or aid in the construction or financing of any public-works project included in the program prepared pursuant to section 202;
(2)upon such terms as the President shall prescribe, to make Grants to States. grants to States, municipalities, or other public bodies for the construction, repair, or improvement of any such project, but no such Limit. grant shall be in excess of 30 per centum of the cost of the labor and Acquisition of property.materials employed upon such project;
(3)to acquire by purchase, or by exercise of the power of eminent domain, any real or personal property in connection with the construction of any such project, Sales. and to sell any security acquired or any property so constructed or acquired or to lease any such property with or without the privilege *Provisos*. Use of proceeds. of purchase: *Provided*, That all moneys received from any such sale or lease or the repayment of any loan shall be used to retire obligations *Post*, p. 206. issued pursuant to section 209 of this Act, in addition to any Railroad maintenance. other moneys required to be used for such purpose;
(4)to aid in the financing of such railroad maintenance and equipment as may be approved by the Interstate Commerce Commission as desirable for the improvement of transportation facilities; and
(5)to advance, upon request of the Commission having jurisdiction of the project, the unappropriated balance of the sum authorized for carrying out the provisions of the Act entitled “An Act to provide for the Library of Congress. Annex construction. Vol. 46, p. 583. construction and equipment of an annex to the Library of Congress”, approved June 13, 1930 (46 Stat. 583); such advance to be expended under the direction of such Commission and in accordance Balance of State, etc., revenues and expenditures. with such Act: *Provided*, That in deciding to extend any aid or grant hereunder to any State, county, or municipality the President may consider whether action is in process or in good faith assured therein reasonably designed to bring the ordinary current expenditures thereof within the prudently estimated revenues thereof. The Applicability of provisions. provisions of this section and section 202 shall extend to public works in the several States, Hawaii, Alaska, the District of Columbia, Puerto Rico, the Canal Zone, and the Virgin Islands. (b)Travel expenses. All expenditures for authorized travel by officers and employees, including subsistence, required on account of any Federal public-works projects, shall be charged to the amounts allocated to such projects, notwithstanding any other provisions of law; and Personal services. there is authorized to be employed such personal services in the District of Columbia and elsewhere as may be required to be engaged upon such work and to be in addition to employees otherwise provided for, the compensation of such additional personal services to be a charge against the funds made available for such construction work. 203
(c)In the acquisition of any land or site for the purposes of Provisions applicable to site acquisitions for public buildings. Vol. 47, pp. 722, 724. Federal public buildings and in the construction of such buildings provided for in this title, the provisions contained in sections 305 and 306 of the Emergency Relief and Construction Act of 1932, as amended, shall apply.
(d)The President, in his discretion, and under such terms as Extension of benefits to States, etc. he may prescribe, may extend any of the benefits of this title to any State, county, or municipality notwithstanding any constitutional or legal restriction or limitation on the right or power of such State, county, or municipality to borrow money or incur indebtedness. Sec. 204.
(a)For the purpose of providing for emergency construction Grants to State highway departments. *Post*, p. 993. Limit. Vol. 42, p. 212. of public highways and related projects, the President is authorized to make grants to the highway departments of the several States in an amount not less than $400,000,000, to be expended by such departments in accordance with the provisions of the Federal Highway Act, approved November 9, 1921, as amended and supplemented, except as provided in this title, as follows:
(1)For expenditure in emergency construction on the Federal Emergency construction on Federal aid highway systems. Apportionment of amount. *Post*, pp. 996, 1057. aid highway system and extensions thereof into and through municipalities. The amount apportioned to any State under this paragraph may be used to pay all or any part of the cost of surveys, plans, and of highway and bridge construction including the elimination of hazards to highway traffic, such as the separation of grades at crossing, the reconstruction of existing railroad grade crossing structures, the relocation of highways to eliminate railroad crossings, the widening of narrow bridges and roadways, the building of footpaths, the replacement of unsafe bridges, the construction of routes to avoid congested areas, the construction of facilities to improve accessibility and the free flow of traffic, and the cost of any other construction that will provide safer traffic facilities or definitely eliminate existing hazards to pedestrian or vehicular traffic. No Use of funds for land acquisitions, etc., denied. funds made available by this title shall be used for the acquisition of any land, right of way, or easement in connection with any railroad grade elimination project.
(2)For expenditure in emergency construction on secondary or Emergency construction feeder roads. feeder roads to be agreed upon by the State highway departments and the Secretary of Agriculture: *Provided*, That the State or *Proviso*. Maintenance to be provided. Availability of funds. responsible political subdivision shall provide for the proper maintenance of said roads. Such grants shall be available for payment of the full cost of surveys, plans, improvement, and construction of secondary or feeder roads, on which projects shall be submitted by the State highway department and approved by the Secretary of Agriculture.
(b)Any amounts allocated by the President for grants under Apportionment of funds among States. subsection
(a)of this section shall be apportioned among the several States seven-eighths in accordance with the provisions of section Vol. 42, p. 217. 21 of the Federal Highway Act, approved November 9, 1921, as amended and supplemented (which Act is hereby further amended Amended to include the District of Columbia. for the purposes of this title to include the District of Columbia), and one-eighth in the ratio which the population of each State bears to the total population of the United States, according to the latest decennial census and shall be available on July 1, 1933, and shall remain available until expended; but no part of the funds Matching of funds by States not required. apportioned to any State need be matched by the State, and such funds may also be used in lieu of State funds to match unobligated balances of previous apportionments of regular Federal-aid appropriations. 204 (c)Provisions of contracts involving expenditure of funds. All contracts involving the expenditure of such grants shall contain provisions establishing minimum rates of wages, to be predetermined by the State highway department, which contractors shall pay to skilled and unskilled labor, and such minimum rates shall be stated in the invitation for bids and shall be included in proposals for bids for the work. (d)Limitations of Federal Highway Act not applicable. In the expenditure of such amounts, the limitations in the Federal Highway Act, approved November 9, 1921, as amended and supplemented, upon highway construction, reconstruction, and bridges within municipalities and upon payments per mile which may be made from Federal funds, shall not apply. (e)Terms construed. “State.” “Highway.” Vol. 42, p. 212. As used in this section the term “State” includes the Territory of Hawaii and the District of Columbia. The term “highway” as defined in the Federal Highway Act approved November 9, 1921, as amended and supplemented, for the purposes of this section, shall be deemed to include such main parkways as may be designated by the State and approved by the Secretary of Agriculture as part of the Federal-aid highway system. (f)Agreement for rights of way over Federal property. Whenever, in connection with the construction of any highway project under this section or section 202 of this Act, it is necessary to acquire rights of way over or through any property or tracts of land owned and controlled by the Government of the United States, it shall be the duty of the proper official of the Government of the United States having control of such property or tracts of land with Approval of President and Attorney General. the approval of the President and the Attorney General of the United States, and without any expense whatsoever to the United States, to perform any acts and to execute any agreements necessary to grant the rights of way so required, but if at any time the land Reversion for non-user. or the property the subject of the agreement shall cease to be used for the purposes of the highway, the title in and the jurisdiction over the land or property shall automatically revert to the Government of the United States and the agreement shall so provide. (g)Tolls. Vol. 42, p. 214. Collection of, authorized. Hereafter in the administration of the Federal Highway Act, and Acts amendatory thereof or supplementary thereto, the first paragraph of section 9 of said Act shall not apply to publicly owned toll bridges or approaches thereto, operated by the highway department Condition. of any State, subject, however, to the condition that all tolls Tolls to be applied to repayment of construction costs.received from the operation of any such bridge, less the actual cost of operation and maintenance, shall be applied to the repayment of the cost of its construction or acquisition, and when the cost of its construction or acquisition shall have been repaid in full, such bridge thereafter shall be maintained and operated as a free bridge. Sec. 205.Amount available for national forest highways, trails, etc.
(a)Not less than $50,000,000 of the amount made available by this Act shall be allotted for
(A)national forest highways,
(B)national forest roads, trails, bridges, and related projects,
(C)National park roads. Roads on Indian reservations. Through public lands. Expenditures. Vol. 47, p. 717. national park roads and trails in national parks owned or authorized,
(D)roads on Indian reservations, and
(E)roads through public lands, to be expended in the same manner as provided in paragraph
(2)of section 301 of the Emergency Relief and Construction Act of 1932, in the case of appropriations allocated for such purposes, respectively, in such section 301, to remain available until expended. (b)Construction, Territories and Insular possessions. The President may also allot funds made available by this Act for the construction, repair, and improvement of public highways in Alaska, the Canal Zone, Puerto Rico, and the Virgin Islands. Sec. 206.Contract provisions. All contracts let for construction projects and all loans and grants pursuant to this title shall contain such provisions Convict labor. as are necessary to insure
(1)that no convict labor shall be employed Thirty-hour week.on any such project;
(2)that (except in executive, administrative, 205 and supervisory positions), so far as practicable and feasible, no individual directly employed on any such project shall be permitted to work more than thirty hours in any one week;
(3)that all employees Wage scales. shall be paid just and reasonable wages which shall be compensation sufficient to provide, for the hours of labor as limited, a standard of living in decency and comfort;
(4)that in the employment Preferences. of labor in connection with any such project, preference shall be given, where they are qualified, to ex-service men with dependents, and then in the following order:
(A)To citizens of the United States and aliens who have declared their intention of becoming citizens, who are bona fide residents of the political subdivision and/or county in which the work is to be performed, and
(B)to citizens of the United States and aliens who have declared their intention of becoming citizens, who are bona fide residents of the State, Territory, or district in which the work is to be performed: *Provided*, That these *Proviso*. When preferences applicable. preferences shall apply only where such labor is available and qualified to perform the work to which the employment relates; and
(5)that the maximum of human labor shall be used in lieu of Use of human labor. machinery wherever practicable and consistent with sound economy and public advantage. Sec. 207.
(a)For the purpose of expediting the actual construction Assignments by contractor authorized. of public works contemplated by this title and to provide a means of financial assistance to persons under contract with the United States to perform such construction, the President is authorized and empowered, through the Administrator or through such other agencies as he may designate or create, to approve any assignment Approval required. executed by any such contractor, with the written consent of Consent of sureties.the surety or sureties upon the penal bond executed in connection with his contract, to any national or State bank, or his claim against the United States, or any part of such claim, under such contract; and any assignment so approved shall be valid for all purposes, notwithstanding [R.S., secs. 3477, 3737, pp. 689, 737](/us/rs/s3477/3737/pp689/737). [U.S.C., pp. 987, 1310](/us/usc/pp987/1310). the provisions of sections 3737 and 3477 of the Revised Statutes, as amended.
(b)The funds received by a contractor under any advances made Funds received in consideration of assignment to be trust funds. in consideration of any such assignment are hereby declared to be trust funds in the hands of such contractor to be first applied to the payment of claims of subcontractors, architects, engineers, surveyors, laborers, and material men in connection with the project, to the payment of premiums on the penal bond or bonds, and premiums accruing during the construction of such project on insurance policies taken in connection therewith. Any contractor and Penalty for misapplication. any officer, director, or agent of any such contractor, who applies, or consents to the application of, such funds for any other purpose and fails to pay any claim or premium hereinbefore mentioned, shall be deemed guilty of a misdemeanor and shall be punished by a fine of not more than $1,000 or by imprisonment for not more than one year, or by both such fine and imprisonment.
(c)Nothing in this section shall be considered as imposing upon Assignee not liable. the assignee any obligation to see to the proper application of the funds advanced by the assignee in consideration of such assignment. subsistence homesteads Subsistence homesteads. Executive Order number 6209, July 21, 1933. Loans for purchase of, authorized. Amount available. Sec. 208. To provide for aiding the redistribution of the overbalance of population in industrial centers $25,000,000 is hereby made available to the President, to be used by him through such agencies as he may establish and under such regulations as he may make, for making loans for and otherwise aiding in the purchase of subsistence homesteads. The moneys collected as repayment of said loans shall Repayments to constitute revolving fund. 206 constitute a revolving fund to be administered as directed by the President for the purposes of this section. rules and regulations Sec. 209.Rules and regulations to be prescribed. Penalty for violations. The President is authorized to prescribe such rules and regulations as may be necessary to carry out the purposes of this title, and any violation of any such rule or regulation shall be punishable by fine of not to exceed $500 or imprisonment not to exceed six months, or both. issue of securities and sinking fundIssue of securities and sinking fund. Sec. 210.Power of Secretary of Treasury to borrow. Vol. 40, p. 288.
(a)The Secretary of the Treasury is authorized to borrow, from time to time, under the Second Liberty Bond Act, as amended, such amounts as may be necessary to meet the expenditures authorized by this Act, or to refund any obligations previously issued under this section, and to issue therefor bonds, notes, certificates of indebtedness, or Treasury bills of the United States. (b)Additional amount annually appropriated. Vol. 40, p. 1311. For each fiscal year beginning with the fiscal year 1934 there is hereby appropriated, in addition to and as part of, the cumulative sinking fund provided by section 6 of the Victory Liberty Loan Act, as amended, out of any money in the Treasury not otherwise appropriated, for the purpose of such fund, an amount equal to 2½ per centum of the aggregate amount of the expenditures made out of appropriations made or authorized under this Act as determined by the Secretary of the Treasury. reemployment and relief taxesReemployment and relief taxes. Sec. 211.Revenue Act of 1932. Vol. 47, p. 266. Gasoline tax.
(a)Effective as of the day following the date of the enactment of this Act, section 617
(a)of the Revenue Act of 1932 is amended by striking out “1 cent” and inserting in lieu thereof “1½ cents”. (b)Terms construed. “Benzol.” Effective as of the day following the date of the enactment of this Act, section 617
(2)of such Act is amended by adding at the end thereof a new sentence to read as follows: “As used in this paragraph the term ‘benzol’ does not include benzol sold for use otherwise than as a fuel for the propulsion of motor vehicles, motor boats, or airplanes, and otherwise than in the manufacture or production of such fuel.” Sec. 212.Title IV—Manufacturers’ excise tax. Vol. 47, p. 259. Title V—Miscellaneous taxes. Vol. 47, p. 270. Titles IV and V of the Revenue Act of 1932 are amended by striking out “1934” wherever appearing therein and by inserting in lieu thereof “1935”. Section 761 of the Revenue Act of 1932 is further amended by striking out “and on July 1, 1933” and inserting in lieu thereof “and on July 1, 1933, and on July 1, 1934,”. Sec. 213.Tax on dividends. Vol. 47, p. 178.
(a)There is hereby imposed upon the receipt of dividends (required to be included in the gross income of the recipient under the provisions of the Revenue Act of 1932) by any person other than a domestic corporation, an excise tax equal to 5 per centum of the amount thereof, such tax to be deducted and withheld from such dividends by the payor corporation. The tax imposed by this section shall not apply to dividends declared before the date of the enactment of this Act. (b)Returns of withholding corporation. Every corporation required to deduct and withhold any tax under this section shall, on or before the last day of the month following the payment of the dividend, make return thereof and pay the tax to the collector of the district in which its principal place of business is located, or, if it has no principal place of business in the United States, to the collector at Baltimore, Maryland. 207
(c)Every such corporation is hereby made liable for such tax Liability of corporation. and is hereby indemnified against the claims and demands of any person for the amount of any payment made in accordance with the provisions of this section.
(d)The provisions of sections 115, 771 to 774, inclusive, and 1111 Provisions of Revenue Act of 1932, applicable. Vol. 47, pp. 203, 277, 289. of the Revenue Act of 1932 shall be applicable with respect to the tax imposed by this section.
(e)The taxes imposed by this section shall not apply to the dividends Dividends not taxed. Vol. 47, p. 193. Vol. 47, p. 195. of any corporation enumerated in section 103 of the Revenue Act of 1932. Sec. 214. Section 104 of the Revenue Act of 1932 is amended by Accumulation of surplus to evade any internal-revenue tax. Vol. 47, p. 177. striking out the words “the surtax” wherever occurring in such section and inserting in lieu thereof “any internal-revenue tax.” The heading of such section is amended by striking out “surtaxes” and inserting in lieu thereof “internal-revenue taxes.” Section 13(c) of such Act is amended by striking out “surtax” and inserting in lieu thereof “internal-revenue tax.” Sec. 215.
(a)For each year ending June 30 there is hereby imposed Tax on domestic corporations. upon every domestic corporation with respect to carrying on or doing business for any part of such year an excise tax of $1 *Post*, p. 771. for each $1,000 of the adjusted declared value of its capital stock.
(b)For each year ending June 30 there is hereby imposed upon Foreign corporations. every foreign corporation with respect to carrying on or doing business in the United States for any part of such year an excise tax equivalent to $1 for each $1,000 of the adjusted declared value of capital employed in the transaction of its business in the United States.
(c)The taxes imposed by this section shall not apply— Corporations to which not applicable. Vol. 47, p. 193.
(1)to any corporation enumerated in section 103 of the Revenue Act of 1932;
(2)to any insurance company subject to the tax imposed by Vol. 47, pp. 223, 225. section 201 or 204 of such Act;
(3)to any domestic corporation in respect of the year ending June 30, 1933, if it did not carry on or do business during a part of the period from the date of the enactment of this Act to June 30, 1933, both dates inclusive; or
(4)to any foreign corporation in respect of the year ending June 30, 1933, if it did not carry on or do business in the United States during a part of the period from the date of the enactment of this Act to June 30, 1933, both dates inclusive.
(d)Every corporation liable for tax under this section shall make Returns of corporations. a return under oath within one month after the close of the year with respect to which such tax is imposed to the collector for the district in which is located its principal place of business or, if it has no principal place of business in the United States, then to the collector at Baltimore, Maryland. Such return shall contain such Contents. information and be made in such manner as the Commissioner with the approval of the Secretary may by regulations prescribe. The When tax payable. tax shall, without assessment by the Commissioner or notice from the collector, be due and payable to the collector before the expiration of the period for filing the return. If the tax is not paid when Interest rate, if not paid when due. due, there shall be added as part of the tax interest at the rate of 1 per centum a month from the time when the tax became due until paid. All provisions of law (including penalties) applicable in Penalty provisions. Vol. 44, p. 93. respect of the taxes imposed by section 600 of the Revenue Act of 1926 shall, in so far as not inconsistent with this section, be applicable in respect of the taxes imposed by this section. The Commissioner Extension of time for making returns. may extend the time for making the returns and paying the taxes 208Limit. imposed by this section, under such rules and regulations as he may prescribe with the approval of the Secretary, but no such extension shall be for more than sixty days. (e)Inspection of returns. Returns required to be filed for the purpose of the tax imposed by this section shall be open to inspection in the same manner, to Vol. 44, p. 10. the same extent, and subject to the same provisions of law, including penalties, as returns made under title II of the Revenue Act of 1926. (f)Adjusted declared value. Computation of, first year. For the first year ending June 30 in respect of which a tax is imposed by this section upon any corporation, the adjusted declared value shall be the value, as declared by the corporation in its first return under this section (which declaration of value cannot be amended), as of the close of its last income-tax taxable year ending at or prior to the close of the year for which the tax is imposed by this section (or as of the date of organization in the case of a corporation having no income-tax taxable year ending at or prior to the close of the year for which the tax is imposed by this section). For Subsequent years. Domestic corporation. any subsequent year ending June 30, the adjusted declared value in the case of a domestic corporation shall be the original declared value plus
(1)the cash and fair market value of property paid in for stock or shares,
(2)paid-in surplus and contributions to capital, and
(3)earnings and profits, and minus
(A)the value of property distributed in liquidation to shareholders,
(B)distributions of earnings and profits, and
(C)deficits, whether operating or nonoperating; each adjustment being made for the period from the date as of which the original declared value was declared to the close of its last income-tax taxable year ending at or prior to the close of the year for which the tax is imposed by this section. For any subsequent Adjusted declared value, foreign corporations. year ending June 30, the adjusted declared value in the case of a foreign corporation shall be the original declared value adjusted, in accordance with regulations prescribed by the Commissioner with the approval of the Secretary, to reflect increases or decreases (for the period specified in the preceding sentence) in the capital employed in the transaction of its business in the United States. (g)Meaning of terms. The terms used in this section shall have the same meaning as when used in the Revenue Act of 1932. Sec. 216.Tax on net income of corporations. Computation of.
(a)There is hereby imposed upon the net income of every corporation, for each income-tax taxable year ending after *Post*, p. 771.the close of the first year in respect of which it is taxable under section 215, an excess-profits tax equivalent to 5 per centum of such portion of its net income for such income-tax taxable year as is in excess of 12½ per centum of the adjusted declared value of its capital stock (or in the case of a foreign corporation the adjusted declared value of capital employed in the transaction of its business in the United States) as of the close of the preceding income-tax *Ante*, p. 207. taxable year (or as of the date of organization if it had no preceding Meaning of terms.income-tax taxable year) determined as provided in section 215. The terms used in this section shall have the same meaning as when used in the Revenue Act of 1932. (b)Assessment and collection of taxes. Vol. 47, p. 173. The tax imposed by this section shall be assessed, collected, and paid in the same manner, and shall be subject to the same provisions of law (including penalties), as the taxes imposed by title I of the Revenue Act of 1932. Sec. 217.Proclamations. Revenues of United States exceed expenditures. *Post*, p. 1720.
(a)The President shall proclaim the date of—
(1)the close of the first fiscal year ending June 30 of any year after the year 1933, during which the total receipts of the United States (excluding public-debt receipts) exceed its total expenditures (excluding public-debt expenditures other than those chargeable against such receipts), or 209
(2)the repeal of the eighteenth amendment to the Constitution, Repeal of eighteenth amendment. *Post*, p. 1720. whichever is the earlier.
(b)Effective as of the 1st day of the calendar year following the Tax reductions. Vol. 47, p. 266. date so proclaimed section 617(a) of the Revenue Act of 1932, as amended, is amended by striking out “1½ cents” and inserting in lieu thereof “1 cent”.
(c)The tax on dividends imposed by section 213 shall not apply *Ante*, p. 206. to any dividends declared on or after the 1st day of the calendar year following the date so proclaimed.
(d)The capital-stock tax imposed by section 215 shall not apply *Ante*, p. 207; *post*, p. 771. to any taxpayer in respect of any year beginning on or after the 1st day of July following the date so proclaimed.
(e)The excess-profits tax imposed by section 216 shall not apply *Ante*, p. 208; *post*, p. 771. to any taxpayer in respect of any taxable year after its taxable year during which the date so proclaimed occurs. Sec. 218.
(a)Effective as of January 1, 1933, sections 117, 23(i), Sections repealed. Vol. 47, pp. 180, 207, 222, 223, 227. 169, 187, and 205 of the Revenue Act of 1932 are repealed.
(b)Effective as of January 1, 1933, section 23(r)
(2)of the Revenue Vol. 47, p. 183. Act of 1932 is repealed.
(c)Effective as of January 1, 1933, section 23(r)
(3)of the Revenue Section amended. Vol. 47, p. 183. Act of 1932 is amended by striking out all after the word “Territory” and inserting a period.
(d)Effective as of January 1, 1933, section 182(a) of the Revenue Vol. 47, p. 222. Act of 1932 is amended by inserting at the end thereof a new sentence as follows: “No part of any loss disallowed to a partnership as a deduction by section 23
(r)shall be allowed as a deduction to a Vol. 47, p. 183. member of such partnership in computing net income.”
(e)Effective as of January 1, 1933, section 141(c) of the Revenue Vol. 47, p. 213. Consolidated returns of corporations. Act of 1932 is amended by striking out “except that for the taxable years 1932 and 1933 there shall be added to the rate of tax prescribed by sections 13(a), 201(b), and 204(a), a rate of three fourths of 1 per centum” and inserting in lieu thereof the following: “except that for the taxable years 1932 and 1933 there shall be added to the rate of tax prescribed by sections 13(a), 201 (b), and 204(a), a rate of three fourths of 1 per centum and except that for the taxable years 1934 and 1935 there shall be added to the rate of tax prescribed by sections 13(a), 201(b), and 204(a), a rate of 1 per centum”.
(f)No interest shall be assessed or collected for any period prior Assessment, etc., of interest prior to September 15, 1933. to September 15, 1933, upon such portion of any amount determined as a deficiency in income taxes as is attributable solely to the amendments made to the Revenue Act of 1932 by this section.
(g)In cases where the effect of this section is to require for a Time for making return hereunder. taxable year ending prior to June 30, 1933, the making of an income-tax return not otherwise required by law, the time for making the return and paying the tax shall be the same as if the return was for a fiscal year ending June 30, 1933.
(h)Section 55 of the Revenue Act of 1932 is amended by inserting Revenue Act of 1932, amendment. Vol. 47, p. 189. Inspection of returns. before the period at the end thereof a semicolon and the following: “and all returns made under this Act after the date of enactment of the National Industrial Recovery Act shall constitute public records and shall be open to public examination and inspection to such extent as shall be authorized in rules and regulations promulgated by the President”. Sec. 219. Section 500
(1)of the Revenue Act of 1926, as Vol. 44, p. 91; Vol. 45, p. 863. Tax on admissions and dues. amended, is amended by striking out the period at the end of the second sentence thereof and inserting in lieu thereof a comma and the following: “except that no tax shall be imposed in the case of persons admitted free to any spoken play (not a mechanical repro-210duction), whether or not set to music or with musical parts or accompaniments, which is a consecutive narrative interpreted by a single set of characters, all necessary to the development of the plot, in two or more acts, the performance consuming more than 1 hour and 45 minutes of time.” appropriation Sec. 220.Appropriations. *Post*, pp. 275, 1055. For the purposes of this Act, there is hereby authorized to be appropriated, out of any money in the Treasury not otherwise Amount. appropriated, the sum of $3,300,000,000. The President is authorized Allocation.to allocate so much of said sum, not in excess of $100,000,000, as he may determine to be necessary for expenditures in carrying out the Agricultural Adjustment Act and the purposes, powers, and functions heretofore and hereafter conferred upon the Farm Credit Administration. Sec. 221.Agricultural Adjustment Act. *Ante*, p. 34. Section 7 of the Agricultural Adjustment Act, approved May 12, 1933, is amended by striking out all of its present terms and provisions and substituting therefor the following: " “Sec. 7.Cotton sales. *Provisos*. Total disposition by March 1, 1936. The Secretary shall sell the cotton held by him at his discretion, but subject to the foregoing provisions: *Provided*, That he shall dispose of all cotton held by him by March 1, 1936: *Provided Option contracts of sale authorized. further*, That notwithstanding the provisions of section 6, the Secretary shall have authority to enter into option contracts with producers of cotton to sell to the producers such cotton held by him, in such amounts and at such prices and upon such terms and conditions as the Secretary may deem advisable, in combination with rental or benefit payments provided for in part 2 of this title. Information pertaining to administration of Act. “Notwithstanding any provisions of existing law, the Secretary of Agriculture may in the administration of the Agricultural Adjustment Act make public such information as he deems necessary in order to effectuate the purposes of such Act.” " TITLE III— title iii—amendments to emergency relief and construction act—miscellaneous provisions. AMENDMENTS TO EMERGENCY RELIEF AND CONSTRUCTION ACT AND MISCELLANEOUS PROVISIONS Section 301.Applications for loans to Reconstruction Finance Corporation. Vol. 47, p. 711. Administrator to have access to files, etc. *Post*, p. 1110. After the expiration of ten days after the date upon which the Administrator has qualified and taken office,
(1)no application shall be approved by the Reconstruction Finance Corporation under the provisions of subsection
(a)of section 201 of the Emergency Relief and Construction Act of 1932, as amended, and
(2)the Administrator shall have access to all applications, files, and records of the Reconstruction Finance Corporation relating to loans and contracts and the administration of funds under such subsection: *Proviso*. Issue of funds to borrower. *Provided*, That the Reconstruction Finance Corporation may issue funds to a borrower under such subsection
(a)prior to January 23, 1939, under the terms of any agreement or any commitment to bid upon or purchase bonds entered into with such borrower pursuant to an application approved prior to the date of termination, under this section, of the power of the Reconstruction Finance Corporation to approve applications. decrease of borrowing power of reconstruction finance corporation Sec. 302.Decrease of borrowing power of Reconstruction Finance Corporation. Vol. 47, p. 9. The amount of notes, debentures, bonds, or other such obligations which the Reconstruction Finance Corporation is authorized and empowered under section 9 of the Reconstruction Finance Corporation Act, as amended, to have outstanding at any one time is decreased by $400,000,000. 211 separability clause Sec. 303. If any provision of this Act, or the application thereof Separability clause. to any person or circumstances, is held invalid, the remainder of the Act, and the application of such provision to other persons or circumstances, shall not be affected thereby. short title Sec. 304. This Act may be cited as the “National Industrial Short title. Recovery Act.” Approved, June 16, 1933, 11:55 a.m. To relieve the existing national emergency in relation to interstate railroad transportation, and to amend sections 5, 15a, and 19a of the Interstate Commerce Act, as amended. Chapter 91 48 Stat. 211 1933-06-16 United States Government Publishing Office text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain. Digitization Vendor 2024-12-11 73 1 public [CHAPTER 91.] AN ACT To relieve the existing national emergency in relation to interstate railroad transportation, and to amend sections 5, 15a, and 19a of the Interstate Commerce Act, as amended.June 16, 1933. [[S. 1580](/us/bill/73/s/1580).] [
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