Year: 1866

The creation OF National Banks IS de.
rived from law of Congress, approved in
June, 1868, and entitled the National Cur
rency Act. The first section of the Act
establishes a separate bureau in the Treas.
ury Department, at the head of which an
officer presides, who is denomiuated the
Comptroller of the Currency. The sole Of
ice of that functionary is to supervise the
conduct of the banks inaugurated under
this law, to see that they do not transgress
the regulations imposed upon them, and to
visit upon them, if they do, the penalties
prescribed.


Section five ordains that all associations
under the Act shall be composed Of not less
than FIVE persons. Those thus acting shall
make an organization certificate, which
shall specify-6rst, the name assumed by
such association, which shall be subject to
the approval of the Comptroller. Second,
the place where its operations shall be con-
Quoted. Third, the amount of its capital
stock, and the number of shares into which
the same shall be divided Fourth, the
names and places of residence of the share
holders, and the number of shares held by
each. The certificate shall be acknowledged
before a judge or notary public, and sent,
duly authenticated, to the Comptroller,
who shall place the same on record


In town whose population is not over
5000, an association may be organized un'
der this Act, with capital of not less than
$4,000. Otherwise, the minimum is not
under 500, 600; and in city with a pop
ulatiou exceeding 1000 persons, the cap
ital cannot be less than 100000.


The natural duration of such associations
shall be twenty years. They may be sooner
dissolved, either by forfeiture of franchise
or the voluntary action of shareholders.


The affairs of every association must be
managed by at least five directors, one of
whom shall be the president. Each direc-
tor shall posses, in his own right, at least
ten shares of the capital stock, and declare
on oath, that said shares are not pledged,
or in any way hypothecated for any debt or
loan. Should he cease at any time to own
the requisite amount of stock, he shall
thereby vacate his Office as director.


Capital stock shall be divided into shares
of 500, and be deemed as personal prop
erty Every shareholder shall be held in.
dividually responsible, equally and ratably,
and not one for another, in all contracts,
debts and engagements of bis association,
to the amount of his stock at its par value.


Banks may increase their capital from
time to time. The maximum of such in
crease shall be determined by the Comp
troller, in the articles of association, and
no increase shall be valid until the whole
amount of such increase shall be paid in,
and notice thereof transmitted to the Comp.
troller, and his approval received. They
may also reduce their capital, bat never be.
low the amount required by the Currency
Act for their outstanding circulation, nor
until the proposed reduction shall have been
submitted to the Comptroller, and obtained
bis vise.


At least Is per cent. of the capital stock
shall be paid in before business can com
mence, and the remainder of such capital
must be paid in instalments of 10 per cent
each on the whole amount of the capital,
as frequently as one instalment each month,
from the time the Comptroller shall author
ize the commencement of business.


Before its Inauguration, every association
shall transfer and deliver to the Treasurer
of the United States registered bonds of
the United States, bearing interest, to an
amount not less than one third of the capi-
tai stock paid in. This proportion is to be
vigorously enforced, 90 that in whatever
act, either of expansion or reduction, the
banks will be required to have always on
hand bonds to the extent of one-third of the
stock actually paid in.


The bonds thus deposited shall be held
by the Treasurer of the United States for
the associations delivering them, and no
transfer of such bonds by the Treasurer
shall be valid until the transfer is counter
signed by the Comptroller of the currency.
The latter must keep strict record of all
such transfers, and give prompt advice of
the same to the association from whom the
bonds transferred originated.


Upon delivery to the Treasurer of the