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in circulation is not redeeming its circulating notes in lawful money of the United States.


all times and sent

Sec. 40. And be it further enacted, That the president and List of stockhold

ers to be kept at cashier of every such association shall cause to be kept at all times a full and correct list of the names and residences to Comptroller

annually. of all the shareholders in the association, and the number of shares held by each, in the office where its business is transacted; and such list shall be subject to the inspection of all the shareholders and creditors of the association, and the officers authorized to assess taxes under State authority, during business hours of each day in which business may be legally transacted; and a copy of such list, on the first Monday of July in each year, verified by the oath of such president or cashier, shall be transmitted to the Comptroller of the Currency.


Sec. 41. And be it further enacted, That the plates and Plates and lies, special dies to be procured by the Comptroller of the Cur- how kept. rency for the printing of such circulating notes shall remain under his control and direction, and the expenses necessarily incurred in executing the provisions of this act respecting the procuring of such notes, and all other expenses of the bureau, shall be paid out of the proceeds of the taxes or duties now or hereafter to be assessed on the circulation, and collected from associations organized under this act.

And in lieu of all existing taxes, every association shall Duties or taxes to pay to the Treasurer of the United States, in the months of be paid by banks. January and July, a duty 15 of one-half of one per centum each half year from and after the first day of January, eighteen hundred and sixty-four, upon the average amount of its notes in circulation, and a duty of one-quarter of one per centum each half year upon the average amount of its deposits, and a duty of one-quarter of one per centum each half year, as aforesaid, on the average amount of its capital

15. The regulations and instructions of the Treasury Department in relation to the payment of taxes and duties by banks may be found at the end of the banking laws printed in this volume.

Semi-annual re. turns,

stock beyond the amount invested in United States bonds; and in case of default in the payment thereof by any association, the duties aforesaid may be collected in the manner provided for the collection of United States duties of other corporations, or the Treasurer may reserve the amount of said duties out of the interest, as it may become due on the bonds deposited with him by such defaulting association.

And it shall be the duty of each association, within ten days from the first days of January and July of each year, to make a return, under the oath of its president or cashier, to the Treasurer of the United States, in such form as he may prescribe, of the average amount of its notes in circulation, and of the average amount of its deposits, and of the average amount of its capital stock, beyond the amount invested in United States bonds, for the six months next preceding said first days of January and July as aforesaid, and in default of such return, and for each default thereof,

each defaulting association shall forfeit and pay to the Penalty for de United States the sum of two hundred dollars, to be col

lected either out of the interest as it may become due such association on the bonds deposited with the Treasurer, or, at his option, in the manner in which penalties are to be collected of other corporations under the laws of the United States; and in case of such default the amount of the duties to be paid by such association shall be assessed upon the amount of notes delivered to such association by the Comptroller of the Currency, and upon the highest amount of its deposits and capital stock, to be ascertained in such other manner as the Treasurer may deem best:

Provided, That nothing in this act shall be construed to may be imposed prevent all the shares in any of the said associations, held

by any person or body corporate, from being included in the valuation of the personal property of such person or corporation in the assessment of taxes imposed by or under State authority 16 at the place where such bank is located, and


Taxes on shares

by State author. ity.

16. By act of Febʼy 10, 1868, chapter 7, the word "place," as used in this section, is defined to mean the State within which the bank is located, and further provisions are made authorizing States to tax national banks.

Bank shares may constitutionally be taxed under State authority, with:

not elsewhere, but not at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such State: Provided further, That the tax so imposed under the laws of any State upon the shares of any of the associations authorized by this act shall not exceed the rate imposed upon the shares in any of the banks organized under authority of the State where such association is located: Provided, also, That nothing in this act shall And on real 08exempt the real estate of associations from either State, county, or municipal taxes to the same extent, according to its value, as other real estate is taxed.



Sec. 42. And be it further enacted, That any association Banks may roi. may go into liquidation and be closed by the vote of its untarily go into shareholders owning two-thirds of its stock. And whenever such vote shall be taken, it shall be the duty of the


out regard to the fact that part or the whole of the capital of the bank is invested in obligations of the United States exempt by law from taxation; but an act of the State of New York authorizing taxation of national bank shares, which did not contain a limitation that the tax so authorized should not exceed the rate imposed upon the shares of any of the banks organized under authority of the State, which latter banks were taxed on their capital but not on their shares, was held to be void. (Van Allen v. The Assessors, 3 Wallace, 573; People v. The Commissioners, 4 Wallace, 244; Bradley v. The People, 4 Wallace, 459.)

A State law, requiring national banks to pay the taxes rightfully assessed upon the shares of its stock, is valid. (National Bank v. Commonwealth, 9 Wallace, 353.)

The State of Missouri had two banks of issue, which it had by contract exempted from taxation beyond a limited amount. It had many other banks not of issue, which were by law taxed at a greater amount. Held, that the shares of national banks in that State might be taxed at as high a rate as those of the State banks whose taxation was not limited. (Lionberger v. Rouse, 9 Wallace, 468.)

There is much conflict of opinion in the numerous decisions of State courts in relation to the taxation of national banks, which it would be of little practical advantage to undertake to specify here, as those opinions are binding only in the States where given, and not there even when contrary to the decisions of the Supreme Court of the United States.

They may be found in 53 Maine, 594; 55 Maine, 456; 56 Maine, 274, 310; 99 Mass., 141; 14 Allen, 359; 11 Minn., 500; 44 Barbour, 148; 32 Conn., 173; 16 Ohio State R., 614; 54 Penn. State R., 139; 23 Wis., 655; 27 Iowa, 350; 32 New Jersey Law R., 273. (See also 2 Black, S. C. U. S., 620.)

And after one

draw its bonds.

board of directors to cause notice of this fact to be certified, under the seal of the association, by its president or cashier, to the Comptroller of the Currency, and publication thereof to be made for a period of two months in a newspaper published in the city of New York, and also in a newspaper published in a city or town in which the association is located, and if no newspaper be there published, then in the newspaper published nearest thereto, that said association is closing up its affairs, and notifying the holders of its notes and other creditors to present the notes and other claims against the association for payment.

And at any time after the expiration of one year from the year, on paymeut time of the publication of such notice as aforesaid, the said ot outstanding potes, may with association may pay over to the Treasurer of the United

States the amount of its outstanding notes in the lawful money of the United States, and take up the bonds which said association has on deposit with the Treasurer for the security of its circulating notes ;17 which bonds shall be assigned to the bank in the manner specified in the nineteenth section of this act, and from that time the outstanding notes of said association shall be redeemed at the Treasury of the United States, and the said association and the shareholders

thereof shall be discharged from all liabilities therefor. Redemption ac- SEC. 43. And be it further enacted, That the Treasurer, count to be kept on receiving from an association lawful money for the payby Treasurer;

ment and redemption of its outstanding notes, as provided for in the preceding section of this act, shall execute duplicate receipts therefor, one to the association and the other to the Comptroller of the Currency, stating the amount received by him, and the purpose for which it has been received, which amount shall be paid into the Treasury of the United States, and placed to the credit of such association upon redemption account. And it shall be the duty of the Treasurer, whenever he shall redeem any of the notes of said association, to cause the same to be mutilated, and charged to the redemption account of said association; and 17. Banks are required to do this within six months after voting to go

into liquidation. (See page 157, act of July 14, 1870.) Bonds deposited to secure circulation cannot be retained for other claims of the United States. (Opinions of Attorneys Gencral, vol. 12, p. 549.)

notes to be redeemed and burned

all notes so redeemed by the Treasurer shall, every three months, be certified to and burned in the manner prescribed in the twenty-fourth section of this act.


Sec. 44. And be it further enacted, That any bank incor- State banks, how porated by special law, or any banking institution organ- national banks. ized under a general law of any State, 18 may, by authority of this act, become a national association under its provisions, by the name prescribed in its organization certificate; and in such case the articles of association and the organization certificate required by this act may be executed by a majority of the directors of the bank or banking institution; and said certificate shall declare that the owners of twothirds of the capital stock have authorized the directors to make such certificate and to change and convert the said bank or banking institution into a national association under this act.

And a majority of the directors, after executing said articles of association and organization certificate, shall have power to execute all other papers, and to do whatever may be required to make its organization perfect and complete as a national association.

The shares of any such bank may continue to be for the shares of stock same amount each as they were before said conversion, and may remain tho


18. A national bank organized from a State bank, and receiving its assets, is liable for its debts. (Thorp v. Wegefarth, 56 Penn., 82.)

The right of action to recover damages for the fraudulent misapplication of the property of a State bank by one of its officers passes as assets to the national bank into which it is converted under this act. (Grocers' National Bank of the City of New York v. Clarke, 48 Barbour, 26.)

For minimum amount of capital allowed see section 7, page 104.

The act of March 3, 1865, (chapter 78, section 7,) authorizes State banks having branches to be converted into national banks, and to keep their branches in operation.

That part of section 7 above referred to which allowed State banks for a limited time to become national associations, in preference to new organizations, is omitted, because the time limited has expired.

National banks cannot become State banks and cease to be national, without authority of Congress therefor, which does not now exist. (Official Opinion of Attorney General Hoar, 1869.)

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