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all gold banks.
shall receive at par in the payment of debts the gold notes Gola notes roof every other such banking association which at the time ceivable at par by of such payments shall be redeeming its circulating notes in gold coin of the United States.
Sec. 5. And be it further enacted, That every association National gold organized for the purpose of issuing gold notes as provided banks subject to in this act, shall be subject to all the requirements and pro- law with certain visions of the national currency act, except the first clause exceptions of section twenty-two, which limits the circulation of national banking associations to three hundred millions of dollars; the first clause of section thirty-two, which, taken in connection with the preceding section, would require national banking associations organized in the city of San Francisco to redeem their circulating notes at par in the city of New York; and the last clause of section thirtytwo, which requires every national banking association to receive in payment of debts the notes of every other national banking association at par: Provided, That in applying the provisions and requirements of said act to the banking associations herein provided for, the terms “lawful money," and "lawful money of the United States,” shall be held and construed to mean gold or silver coin of the United States.
DISTRIBUTION OF CIRCULATION OF CURRENCY BANKS AMONG STATES.
circulation to ex. tent of $25,000,000
Sec. 6. And be it further enacted, That to secure a more Redistribution of equitable distribution of the national banking currency there may be issued circulating notes to banking associa- may be made to tions organized in States and Territories having less than banks in States,
&c., not having their proportion as herein set forth. And the amount of their proportion, circulation in this section authorized shall, under the direc- from others. tion of the Secretary of the Treasury, as it may be required for this purpose, be withdrawn, as herein provided, from banking associations organized in States having a circulation exceeding that provided for by the act entitled “An act to amend an act entitled 'An act to provide for a national banking currency secured by pledge of United States bonds, and to provide for the circulation and redemption thereof, " approved March three, eighteen hundred and
How reduction shall bo made from States hav. ing no excess.
sixty-five, but the amount so withdrawn shall not exceed twenty-five million dollars.
The Comptroller of the Currency shall, under the direction of the Secretary of the Treasury, make a statement showing the amount of circulation in each State and Territory, and the amount to be retired by each banking association in accordance with this section, and shall, when such redistribution of circulation is required, make a requisition for such amount upon such banks, commencing with the banks having a circulation exceeding one million of dollars in States having an excess of circulation, and withdrawing their circulation in excess of one million of dollars, and then proceeding pro rata with other banks having a circulation exceeding three hundred thousand dollars in States having the largest excess of circulation, and reducing the circulation of such banks in States having the greatest proportion in excess, leaving undisturbed the banks in States having a smaller proportion, until those in greater excess have been reduced to the same grade, and continuing thus to make the reduction provided for by this act until the full amount of twenty-five millions, herein provided for, shall be withdrawn; and the circulation so withdrawn shall be distributed among the States and Territories having less than their proportion, so as to equalize the same. And it shall be the duty of the Comptroller of the Currency, under the direction of the Secretary of the Treasury, forthwith to make a requisition for the amount thereof upon the banks above indicated as herein prescribed.
And upon failure of such associations, or any of them, to
return the amount so required within one year, it shall be the ed, their bonds to duty of the Comptroller of the Currency to sell at public aucbe sold and notes tion, having given twenty days' notice thereof in one daily redeemed.
newspaper printed in Washington and one in New York city, an amount of bonds deposited by said association, as security for said circulation, equal to the circulation to be withdrawn from said association and not returned in compliance with such requisition; and the Comptroller of the Currency shall with the proceeds redeem so many of the notes of said banking association, as they come into the
If banks fail to return circulation when requir
Treasury, as will equal the amount required and not so returned, and shall pay the balance, if any, to such banking association:
Provided, That no circulation shall be withdrawn under the provisions of this section until after the fifty-four millions granted in the first section shall have been taken up.
Sec. 7. And be it further enacted, That after the expira- Banks in States tion of six months from the passage of this act any banking having excess or association located in any State having more than its pro- remove to States portion of circulation may be removed to any State having their proportion. less than its proportion of circulation, under such rules and regulations as the Comptroller of the Currency, with the approval of the Secretary of the Treasury, may require: Provided, That the amount of the issue of said banks shall not be deducted from the amount of new issue provided for in this act.
Approved, July 12, 1870
ACT OF JULY 14, 1870, CHAPTER 257.
AN ACT TO REQUIRE NATIONAL BANKS GOING INTO LIQUIDATION TO RETIRE
THEIR CIRCULATING NOTES.
money to redeem
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That Banks in liquidaevery bank that has heretofore gone into liquidation under tion to deposit the provisions of section forty-two of the national currency outstanding ci act, shall be required to deposit lawful money of the United States for its outstanding circulation within sixty days from the date of the passage of this act.
And every bank that may hereafter go into liquidation –within six shall be required to deposit lawful money of the United months from dato States for its outstanding circulation within six months liquidationfrom the date of the vote to go into liquidation; whereupon the bonds pledged as security for such circulation shall be surrendered to the association making such deposit.
And if any bank shall fail to make the deposit and take –otherwise up its bonds for thirty days after the expiration of the time bonds may be specified, the Comptroller of the Currency shall have power to sell the bonds pledged for the circulation of said bank
of vote to go in:0 Certain banks exempt from above provisions but to report assets and liabilities.
at public auction in New York city, and after providing for the redemption and cancellation of said circulation, and the necessary expenses of the sale, to pay over any balance remaining from the proceeds to the bank or its legal representative:
Provided, That banks which are winding up in good faith for the purpose of consolidating with other banks shall be exempt from the provisions of this act: And provided further, That the assets and liabilities of banks so in liquidation shall be reported by the banks with which they are in process of consolidation.
Approved, July 14, 1870.
ACT OF JUNE 6, 1872, CHAPTER 315.
AN ACT TO REDUCE DUTIES ON IMPORTS AND TO REDUCE INTERNAL TAXES, AND
FOR OTHER PURPOSES. 37
Taxes on State
Sec. 37. That the taxes imposed by section one hundred banks, bankers, and ten of the act entitled "An act to provide internal &c., to be paid semi-annually. revenue to support the Government, to pay interest on
the public debt, and for other purposes,”' approved June thirtieth, eighteen hundred and sixty-four, as amended by section nine of the act of July thirteenth, eighteen hundred and sixty-six, to reduce internal taxation and to amend the act aforesaid and acts amendatory thereof, upon the deposits, capital, and circulation of banks, or persons, associations, companies, or corporations engaged in the business of banking, shall hereafter be paid semi-annually, on the first day of January and the first day of July; but the same shall be calculated at the rate per month as prescribed by said section, so that the tax for six months shall not be less than the aggregate would be if the said taxes were collected monthly, as prescribed by said section.
And the words "capital employed,” in said section, shall sidered as capital. not include money borrowed or received from day to day,
in the usual course of business, from any person not a partner of or interested in the said bank, association, or
firm. Sayings banks- And the exemption from tax, authorized by said section,
What is to be con.
extent of $2,00) exempt.
of deposits of less than five hundred dollars, made in the deposits to name of one person, in associations or companies known as provident institutions, savings banks, savings funds, or savings institutions, is hereby extended to deposits so made of not exceeding two thousand dollars.
37. By the regulations of the Internal Revenue Bureau, these taxes are to be assessed monthly, and returned to the collector as before, but the collector will collect the same only once in six months.
RELATIVE TO TAXATION OF BANKS UNDER EXISTING LAWS.
On and after October 1, 1872, no tax will be imposed on notes, bills of exchange, etc., except "bank checks, drafts, or orders," on which a two-cent stamp will continue to be requisite. (Act of June 6, 1872, chap. 315, sec. 36.)
The tax on dividends expired December 31, 1871. (Act of July 14, 1870, sec. 15.) The special tax on capital ceased May 1, 1871. (Same act, sec. 1.)
United States taxes are now levied on national banks under section 41, act of June 3, 1864, chapter 106. (See pp. 125, 160.) And on State banks and bankers under section 110, act of June 30, 1864, chapter 173, and section 37 of the act of June 6, 1872, chapter 315. (Scc pp. 142, 158.)
There is also a law imposing a tax of ten per cent. on notes of “persons, State banks, or State banking associations” paid out by national or Stato banks. This is, virtually, a prohibitory tax. (See pp. 145, 146.)
The shares of national banks may be taxed under State authority within a limited extent. (bce p. 126.)